Economics is the system by which we allocate, distribute and exchange resources – a conceptual tool of society. The “triple bottom line” of so called “sustainable development” is usually conceptualised as a “venn diagram” of the three overlapping and interacting spheres of ecology, society and economics.
This is, however a misleading representation of the true nature of the triple bottom line, because ecology, society and economics do not in reality interact as equals at the same level of systemic organisation. A more accurate conceptualisation of the interactions between ecology, society and economics is a “nested hierarchy” or “holarchy”. Human society is “nested within” ecology, because we fundamentally depend on ecosystem services in order to form our society. Economy is depicted “nested within” human society, because economies fundamentally depend on functioning human societies.
A sustainable economy works within such a contextual framework, where the economy is a tool used by the society on which it depends, and societies adapt to care for the environment on which they depend.
Markets as we know them routinely “fail” by failing to appropriately value such infinitely valuable things as “ecosystem services” like breathable air, drinkable water and fertile soil. No “price” can be high enough to accurately reflect the value of such irreplacable resources, but economics as we know it routinely assigns ecosystem services no value at all, or some arbitrary finite value, a fundamental flaw that renders all its assumptions invalid. Corporations, the main structural players in “Market” economies, have impunity and a lack of social and environmental responsibility built into their structure, and can even legally profiteer from war and disaster. The imperative of a corporation is to create profit for shareholders, an activity that is inherently unsustainable and anti-social.
On the other hand, “Command” economies, or state controlled economies, can produce very efficient economic growth and rapid increases in material living standards (for example the rapid growth in Eastern Europe after world war two, and the current rapid growth in China) but the social and environmental side effects are just as devastating (often more so) than the failures of market economies. Any “growth” economy is self destructive by nature – economic growth is an exponential function measuring the transformation of real natural reosurces into depreciating infrastructure and artificial financial capital.
Many economies have a state bureaucracy that to various degrees can regulate the social and environmental excesses of irresponsible, failure-prone markets. This arrangement has achieved some reasonable outcomes, but has two fundamental problems.
One is that “democratic” institutions intended to make the state answerable to its population can be corrupted by corporate power, particularly when centralised political power concentrates into a small number (usually two) of major political parties or coalitions. A common scenario is that working people have limited access to political processes, often limited to an “either or” vote every few years, while corporate players have the resources to continually and constantly lobby for their interests.
At the other end, state power can become overly stifling and interferes excessively in people’s day-to-day lives. This is a particular problem for small business people including family farmers. Big business, with a lot more potential to cause social and ecological harm than small business, can use its influence on the state to circumvent or minimise state interference, and worse, influence the nature of state interference to further big business interests.
The way to a free economy that is sustainable and democratic, is one that bypasses both corporate and government power and their vested interests. Instead of the slave economy characteristics of hierarchy-advantage, self-interest and competition, a free economy is based on mutual respect, responsibility and co-operation. It is based on real physical, ecological and human resources, and conscious, co-operative, convivial means of utilising and sharing these resources. Examples of practical solutions to build such an economy within the shell of the “old” economy are based on grassroots organising for a truly free, socially and ecologically embedded market.