Is the term ‘compassionate economy’ an oxymoron?
When people think about the economy, they usually think of decisions about investment, markets, or numbers on electronic charts. Maybe they have an image of people – probably suited men – in a boardroom taking decisions about closing factories or increasing the CEO’s pay. Or they picture frantic shouting and hand waving on the stock exchange floor.
Compassion is not usually part of such images and connotations.
Yet how we provide for each other and distribute resources – the essence of economy – is a terrain in sore need of compassion. Decisions taken about pay, prices, investment, and about what ‘counts’ have consequences far beyond the rooms they were taken in. These decisions shape what sort of economy prevails, and this in turn, shapes whether people and planet flourish and thrive or struggle to survive.
So far, the result of those decisions has generated an economy that is not only not working for enough people, but is pushing the planet beyond what she can handle. There is ample evidence that the way things are operating today needs to change: from the warnings of scientists that acting to address environmental breakdown is beyond urgent, to communities across the globe who all-too often face precariousness and struggle navigating the impact of decisions taken elsewhere. The 2022 UN Human Development Report describes ‘three volatile and interacting strands: the destabilizing planetary pressures and inequalities of the Anthropocene, the pursuit of sweeping societal transformations to ease those pressures and the widespread and intensifying polarization’.
It is the economy, not the world, that lacks compassion
There is a fear that humanity has lost its way, and that people crave the wrong things. This implies that the existential crisis facing the world emerges from people writ large. Looking at these crises, some call for a shift in people’s values. The assumption then seems to be that if people change, one-by-one, then things will get better, things will not be so dangerous, and our planet will not be so precariously close to being pushed beyond her limits.
What this calculation doesn’t take account of is the swathes of evidence that people’s values are already largely aligned with what humanity and the planet need (see here for a collection of research and here). Instead, it is the economy that is misaligned. Poll after poll of public opinion indicates that people, around the world, want the post-Covid world to be one where health and the planet are elevated above goals such as economic growth. These polls are underscored by rich participatory deliberations such as Citizens Assemblies. And these articulations of what humans want and most value are, in turn, reinforced by the findings of psychologists, sociologists, neuroscientists, and scholars in development and human need.
Distilling the messages from these diverse quarters leads to a picture of what people need: trust and cooperation in relationships; security and sufficiency in work and income; purpose and dignity in how time is spent; and presence in healthy environments.
But what has happened is not so much that people’s values have gone awry, but the way the economy has been designed – dependent on growth and its success largely measured by GDP – is like a heavy cloak laying across these values, masking and undermining them. So these human needs – familiar across cultures, locations and politics – are inhibited, at best, by an economy which is constructed with 20th century thinking, which judges itself against measures that contain many perverse incentives, and which treats people and the planet as mere factors of production.
So is it surprising that people, faced with an economy so misaligned to their needs, reach for coping mechanisms – at the shopping mall, the gym, the pill box or the ballot box?
Is it surprising that people, with their profound and ingrained need to belong and avoid shame, grasp for control of their image, as economic hierarchies so harshly translate into social hierarchies?
Is it surprising that in a world of rapid change, sound bites, twitter bubbles, and insecurity about the future, that people look to steady their own identities and hold onto what they know?
Can economic change and compassion chime together?
So, it is not necessarily that people have lost their compassion, but that the economy of today, built up over several decades, has trampled over people’s values.
Nor is it that people make bad choices as individuals, but they are constrained by their contexts and circumstances from building the lives they want to live.
What could – needs to – emerge instead?
What is needed is an economy fit for the 21st century, designed with compassion (as in understanding others’ needs and working to deliver them), not extraction at its heart, and thus aligned with what people and planet need.
This compassionate economy would speak to the common core messages contained in a diversity of voices calling for a different sort of economy: encapsulated by the idea of a wellbeing economy. Whether regenerative economics, solidarity economics, doughnut economics, buen vivir, degrowth, participatory economics, economies for the common good, and so on, they all add brushstrokes to a beautiful and rich alternative vision to the economy of today that sucks so much life out of people and planet.
When it comes to individual businesses, the idea of compassion entails that instead of
giving back what we’ve received, we need to give first…We need companies set up with the purpose of returning to the integrity of humanity and caring for our planet…Allowing the profit-motive to be supreme is unbalanced: it tips the scales against humanity and the planet. We need to find a new role for business in which…it also builds a healthier society.
Getting there is going to involve a plethora of changes: in business models, tax systems, product design, pricing mechanisms, distribution of paid work, valuing of unpaid work, procurement, planning, metrics, bureaucratic systems, governmental budgeting and so on. A 1000+ piece jigsaw puzzle.
Clustering the pieces of a jigsaw puzzle into four corners ‘4Ps’ (Purpose, Prevention, Predistribution, and People Powered) can help make sense of the task of system change:
- Purpose: This is about realigning the goal of the economy and the entities that comprise it with the needs of people and planet. Think of the gathering momentum of the ‘Beyond GDP’ movement or the fact that over half of OECD countries have multidimensional wellbeing frameworks. Outcomes budgeting – that look at what is being achieved, rather than just what is being spent and done – is another example.
- Prevention: Tackling things at their root cause is better than constantly putting sticking plasters on the damage done. This is about asking why a problem emerged? And keep asking ‘Why?’ until the upstream drivers are understood and then designing and delivering action there. The more circular an economy, the less need for beach clean ups; the more people can earn enough to live on, the less need for food banks and tax credits to top up wages; and so on.
- Predistribution: This is about getting the economy to do more of the heavy lifting, so less government intervention is necessary to redistribute between rich and poor. Businesses whose mission is something other than short term profit are vital; wage ratios, Living Wages, community wealth building, and flourishing local enterprises also fit near this corner.
- People Powered: Putting people at the forefront of shaping economic systems is the only antidote to an economy designed by and for a narrow group who do very well out of the current state-of-affairs. Who is at the table when budgets are designed? When economic strategies are written? When policies are prioritised?
Tangible examples of each of these pieces of the jigsaw are not hard to find: for Purpose look at New Zealand’s wellbeing budget or Scotland’s National Performance Framework. For Prevention businesses moving to 4-day weeks or six-hour days and the Government of the State of Victoria embedding early intervention show changes are entirely do-able. For Predistribution, there are worker cooperatives such as the global engineering firm Arup, and in the UK businesses such as John Lewis and GoApe where workers are partners and the purpose of the enterprise is to deliver benefits for them. The community wealth building efforts of towns such as Preston in north England or Cleveland in the US show how to keep money circulating locally. Participatory budgeting is happening from New York to Brazil and citizens assemblies being used in France, Scotland, Ireland and beyond to bring deliberative conversations to the heart of government decision making and make it just a little more people powered.
Compassion means upstream economic change
Perhaps it is time to stop blaming people for bad choices or the wrong values, and instead view their situation through compassionate lenses. Doing so will bring firmly into view the structures of the economy that shape and constrain choices. Compassion means taking action there.