Building the Wellbeing Economy Through A New Economic Model

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Building the Wellbeing Economy Through A New Economic Model

THE PROBLEM WE ARE ADDRESSING

An economic system that has been described as “unstable, unsustainable, unfair and unhappy” (i)

OUR PROJECT

The Commons Equity Society is a new model of company ownership, finance and distribution that addresses each of the above dysfunctions. It is a re-imagination of the mutual ownership tradition of Great Britain.

We are working to establish the first Commons Equity Society – a new form of provident society if you will – that is not driven by the savings of individuals but by the on-going surpluses of for-profit mature companies. It involves a network of for-profit companies held by a charitable organisation. The organisation uses the profits from the companies to build, manage and protect the shared wealth and wellbeing of the community it serves.

Our assertion is that we cannot have a wellbeing economy – that is more resilient, sustainable and fair – without a systemic change in the relationship between companies, finance institutions, charities and communities. ‘A Commons Society” achieves this by harnessing the power of enterprise and channeling the surpluses that profitable companies create towards what we collectively most value. (ii)

OUR ANALYSIS

To transform the economy so that it works for the common-good, we need to solve the power paradox. The power paradox resides in the fact that it is only through people’s personal agency, initiative and power that anything happens. And yet power also corrupts. This has also been referred to in “The Tragedy of the Commons”. (iii)

We are not convinced that any new regulatory framework, regulatory body, law, government policy, or even economic theory of itself will be able to find the balance place between the two polarities of power. Neither do we believe that ethical good intentions are alone sufficient.

The regulatory devices that society currently depends upon to protect us from the excesses of the market – in other words from the over-concentration of power, which results in the benefits of the system being disproportionately shared amongst the few – are often limited in scope and always open to being subverted.

OUR PROPOSAL

We are developing a systemic solution to the problem that will find its own in-built and naturally occurring balance point without additional external regulation. It requires no changes in the current rules governing the economic system.

Through a simple adjustment in corporate structure, applied through already-existing and well-understood legal mechanisms, it is possible to rearrange the relationship between finance institutions, businesses, co-workers, charities/NGO’s and communities to generate a systemic shift in our economy.

BENEFITS & FURTHER CONSEQUENCES

System-wide transformation – The Commons Equity Society will bring an economic transformation in which employee ownership expands, wealth is more widely shared, communities are enriched and entrepreneurship can become a force for wellbeing and social good.

Entrepreneurship recognised for its core societal value -This approach liberates executives of currently listed companies from the tyranny of short-termism (the reality of the current shareholder value model), and that whilst those hoping to make a fortune from parasitic gambling on stocks and shares might lament, the genuinely creative will still be able to make their fortunes and prove their worth through their work.

A legacy solution for exiting entrepreneurs – Such a structure also offers a safe haven, which is not subject to the risks of secondary speculative markets, for the creative fruits that retiring company owners have built up over a lifetime. Their company can be sold or gifted to the Commons offering retiring owners both a fair reward and a viable future for their organisations and their employees that additionally contributes further to the wellbeing of the communities they belong to.

Replicable and Scalable – Because the structure encompasses automatic mechanisms for stability (through the logic of the employee owned organisation) and expansion (by bringing more and more companies into the Commons Society each year) our long-term vision is of a series of such societies in every region of the UK (like Building Societies), of the EU and beyond. We foresee the establishment of an alternative, parallel system within the free market that distributes and shares surplus in a completely different way to companies driven by the logic of shareholder value. Fortuitously, it offers a structure that pensions funds will still be able to invest in but by means of bonds rather than equities.

The Commons Society makes it possible for communities to take the economy back into their own hands. Re-investment of the profit and prudent governance will ensure the new Commons Societies will continue to grow.

i) The New Economics Foundation

ii) The Commons” can be considered as the human, social and natural “capital” that contributes to the common wealth and foundational, shared value that supports the wellbeing of all. David Bollier, an expert on the Commons, suggests that “The commons can be considered as all those things in nature and civil society which we are duty bound to protect and build upon for future generations.”

(iii) https://en.wikipedia.org/wiki/Tragedy_of_the_commons

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