The following 20 principles sum up the proposals and values of the Economy for the Common Good.
- Principle 1: The same collectively shared values that contribute to fulfilling interpersonal relationships are the basis for the Economy for the Common Good: confidence building, cooperation, appreciation, democracy, solidarity. Scientific research proves that fulfilling interpersonal relationships constitute a key factor to happiness and motivation.
- Principle 2: A shift will take place from competition to cooperation, from the pursuit of profit to the pursuit of the common good, established through a new regulatory incentive framework. Companies will be awarded for cooperation and solidarity. Competition will still be possible, but will likely create disadvantages for an business.
- Principle 3: Economic success will no longer be measured with (monetary) exchange value indicators, but with (non-monetary) user value indicators. On the macroeconomic level (national economy) the Gross Domestic Product (GDP) will be replaced – as an indicator of success – by the Common Good Product. On the microeconomic level (company) the financial balance sheet will be replaced by the Common Good Balance Sheet (CGBS). The CGBS becomes the main balance sheet of all companies. The more companies act and organize themselves along social, ecological and democratic lines, the more solidarity they display, the better will be the results of their Common Good Balance Sheet. The better the CGBS results of the companies within a national economy, the higher its Common Good Product.
The Common Good Matrix, which serves as the basis for generating the Common Good Balance Sheet, can be downloaded here.
- Principle 4: The better the Common Good results, the more financial benefits will be accrued by the company: lower taxes, fewer customs duties, lower interest loans, preferential treatment in public procurement and research programs, etc. Market access thus becomes easier for ethical companies, and fair, ethical, regional and ecological products become more economic than unfair, non-ethical and global products.
- Principle 5: The financial balance sheet thus becomes a secondary balance sheet alongside the primary Common Good Balance Sheet. Financial profit is no longer an end, but a means for advancing the common good. Financial surpluses may be used for: investments (with social and/or ecological value), loan repayment, accrued liabilities (to a limited extent), limited distribution of profit to employees and for interest-free loans to other companies. It may not be used for distribution of profit to non-employees, hostile takeovers of other companies, investments in financial markets, and donations to political parties. In return, the tax on corporate profits will be abolished.
- Principle 6: As profit is no longer an end in itself, companies may now aspire to their optimal size. They are no longer in danger of being bought out and they are not forced to outgrow or outperform other companies. Businesses will be freed from the prevailing pressure of continual growth and dog-eat-dog competition.
- Principle 7: Because it is possible for companies to grow naturally to their optimal size, without the pressure of competition, there will be many new companies in every sector. As the pressure to grow ends, cooperation and solidarity with other companies will be a lot easier. Companies can help each other with knowledge, know-how, passing on of clients, sharing of workforce or with interest-free loans. As a result of such activity they will be rewarded with better results in the CGBS. This, moreover, will not come at the cost of other companies, but with benefits for all: companies can start building a learning community based on solidarity, and the economy becomes a win-win-situation.
- Principle 8: Inequalities in income and wealth will be limited through democratic discussion and decision-making: for instance, the maximum salary could be capped at 10 times the minimum wage, individual wealth at 10 million Euros. Transfer of capital and inheritance can be permitted tax-free up to 500,000 euros and in the case of family-owned enterprises up to 10 million euros per child. Any exceeding amount is distributed to the next generation via a “generation fund” as a democratic endowment: evenly distributed seed capital ensures equal opportunities. All exact limits and figures shall be determined by an economic convention.
- Principle 9: Large enterprises with more than 250 employees partially pass over into shared ownership by the employees or by public stakeholders. Elected delegates of “regional economic assemblies” will represent the public. The government does not exercise authority over public enterprises.
- Principle 10: The same applies to democratic commons, the third category of property, next to a majority of small, privately-owned businesses and a minority of large-scale enterprises owned (partly) by employees and the public. Democratic commons are entities which provide basic services in education, health, social welfare, transportation, energy, communication, and banking, i.e. sectors serving the common interest.
- Principle 11: The democratic bank is a major democratic commons. Like every enterprise it serves the common good and is subject to the control of the democratic sovereign (the people) - not the government. Its core services include guaranteed savings, loans on favorable terms, eco-social high risk loans and free personal bank accounts. The state will be financed primarily through interest-free loans from the Central Bank. The Central Bank exercises the exclusive right to the creation of money and controls the cross-border movement of capital to end tax avoidance. Financial markets as we know them today will no longer exist.
- Principle 12: Based on a proposal by John Maynard Keynes, a global currency cooperation will be established with a global currency to finance international trade and investment. On the local level, regional currencies can complement national currencies. To avoid unfair trade, the European Union shall establish a fair trade area (Common Good Area) with equal standards. For companies which import goods, the tariff correlates with their respective results from the Common Good Balance Sheet: the better the result, the lower the tariff. The long-term goal is a Global Common Good Area as a United Nation's resolution.
- Principle 13: The intrinsic value of nature is recognized, natural resources can therefore not be privatized. An individual, a family or a company who wants to use a piece of land for the purpose of living, farming, or production, will be assigned what they need free of charge. The assigning of land is tied to ecological management and the concrete need. As a consequence, land grabbing, huge land owndership and real estate speculation will end. In return, real estate property taxes will be abolished.
- Principle 14: Economic growth is no longer a political goal. Instead, it is replaced by the reduction of the ecological footprint to a globally sustainable level. The categorical imperative will be extended by an ecological dimension: one person's standard of living could be equaled by everyone in the world without diminishing the chances of others to choose that same standard of living. Individuals and companies will be encouraged to reduce their ecological footprint to a globally just and sustainable level.
- Principle 15: Average working time will be reduced to a level which is generally considered desirable: 30 to 33 hours per week. As a consequence, people will have more time at their disposal for other essential types of work, such as human relationships (care for children, the sick and the elderly), self-realization (personal development, arts, education, gardening, etc.) as well as community and political work. Due to this more balanced distribution of labor time, the living standard will become less resource-intensive and more sufficient and ecologically-sustainable.
- Principle 16: One in every ten years of employment will be a free year, financed by a kind of unemployment insurance. During this free year, people can do whatever they want. As a consequence, demand on labor markets will decrease by ten percent - the present unemployment rate in the European Union.
- Principle 17: Direct democracy and participatory democracy will complement representative democracy. The democratic sovereign will be able to regulate its representatives, initiate and pass laws, change the constitution and control important economic domains, such as railways, utilities or banks. In a “real democracy”, the needs and interests of the people and their representatives are identical. Basic conditions for real democracy are comprehensive rights to co-determination and the control of power.
- Principle 18: All 20 principles shall be developed in a broad, bottom-up process, before they are handed over to a democratically-elected economic convention. This convention proposes laws that are submitted to a referendum. Those principles, which are approved by the people, will be anchored in the constitution and can be changed and improved upon by the people themselves. Alongside the economic convention, a number of other assemblies are summoned to further develop democracy, for example an education convention, a media convention, a democratic convention.
- Principle 19: To anchor the values of the Economy for the Common Good deeply into future generations, the educational system also has to be constructed along the principles of the the Economy for the Common Good. This requires new forms of schools and new content, e.g. values and ethics, “emotionology“, communication, democracy, nature and environmental education/experience, and self-awareness.
- Principle 20: As the parameters of entrepreneurial success are redefined in the Economy for the Common Good, different leadership skills will be required. Those who are socially responsible, competent, empathic, compassionate and ecologically-oriented will be the highest in demand and will serve as the new role models for business leaders.
The Economy for the Common Good is neither the “best” economic model nor a finished product. It is a next possible step into a better future. It is a participatory and open process that seeks synergy with similar social movements. Thanks to the collective commitment of a growing number of courageous and resolute activists, we will be able to create something fundamentally new. Implementation depends on intrinsic motivation and personal responsibility, economic incentives, a legal framework as well as awareness raising. Every person, company, organisation and community can take part in the reorganisation of the current economic system towards an economy dedicated to improving the lives of everyone and protecting our environment.