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For the Common Good

Redirecting the Economy toward Community, the Environment, and a Sustainable Future

by Herman E. Daly and John B. Cobb, Jr.

534 pages, paperback, Beacon Press, 1994

For the Common Good outlines a new economics based upon community as an alternative to capitalism and socialism.

Praise for For the Common Good

"An endlessly provocative tour-de-force."--New Options

"A profound critique of conventional economic theories and policies. . . . Few other volumes address these issues with such insight."--Library Journal

"If we are to put the earth and its inhabitants back at the center of the economic universe, For the Common Good is pointing us in the right direction."--World Watch

"If this book were required reading for every graduate student in economics, economics could hardly avoid being much improved. Its critique of economic doctrine is shattering."-- Kenneth Boulding

"A brilliant book."--Paul Ehrlich

"A superb book . . . It offers an understanding of the contemporary economy that is informed by a sophisticated philosophical and theological understanding of the human community."--Journal of Religion

Quotes from For the Common Good

"On every topic we found, in addition to strengths and insights, major weaknesses resulting from the failure to recognize sufficiently the abstract character of underlying assumptions. Economists are no more guilty of the fallacy of misplaced concreteness than other scholars, and economists as a group are not less intelligent, less dedicated, or less thoughtful than others. The problem does not arise from personal weakness; it arises from the nature of academic disciplines in general and from the nature of deductive sciences in particular, especially when the formalizations are applied to a subject matter that changes relatively rapidly."

"If this is so, then there is something wrong with the disciplinary organization of knowledge in general and with the idealization of the deductive method in particular. Accordingly, the economics proposed in this book is not a deductive discipline, although much deduction can be used in its development."

"Although part of the negative relation between economics and the wild facts is due to economics having chosen the deductive rather than the historical approach in its self-formation, not all of the problems would disappear if it became a different kind of discipline. Part of the problem lies in the nature of disciplines as such. We are proposing the dethroning of the disciplinary organization of knowledge. We are proposing in particular a nondisciplinary economics."

The point of these scenarios is simply to show, if it needs showing, that the individualistic model of economic theory leads to advocating policies that weaken existing patterns of social relationships. Since relationships among human beings are not part of the model with which the theory begins, the damaging of these relationships is not signaled by the theory. The destruction of existing societies does not count against the success of policies designed to increase aggregate goods and services.

"Jeremy Seabrook interviewed hundreds of older people from the working class in England. He has written of what he found in an impassioned book, What Went Wrong? Why Hasn't Having More Made People Happier? (1978). For the most part the people he interviewed were better off, by the norms of economic theory, than their parents had been. Yet they were far from pleased with their new situation. They felt a sense of isolation from others, including their children. Seabrook sees the situation of the children as worst of all. In his words:

The child tends to be stripped of all social influences but those of the market place, all sense of place, function and class is weakened, the characteristics of region and clan, neighborhood or kindred are attenuated. The individual is denuded of everything but appetites, desires and tastes, wrenched from any context of human obligation or commitment. It is a process of mutilation; and once this has been achieved, we are offered the consolation of reconstituting the abbreviated humanity out of the things and the goods around us, and the fantasies and vapours which they emit. A culture becomes the main determinant upon morality, beliefs, and purposes, usurping more and more territory that formerly belonged to parents, teachers, community, priests and politics alike."

"The dominant patterns of economic development throughout the world have been quite the reverse of community development. They have consistently and systematically destroyed existing traditional communities, especially in the rural areas were most people in the Third World still live. Urban industrial 'development' has been purchased at the expense of rural communities. Arturo Warman makes this point vividly: 'The principal agent of the exploitation of the peasants is the State, which imposes the general conditions for the distribution of resources, their circulation and valuation, for the dominance of capitalism and its preservation. . . . The principal agents in the exploitation of the peasant, those who confront him in an acute and unadorned contradiction, are the good and the patriotic, the promoters of dependent industrialism, or 'modernization' at any price, of the establishment of growth as a objective in itself, at the expense of the people who produce the wealth." Michael Lipton makes a similar point" ' Resource allocations, within the city and the village as well as between them, reflect urban priorities rather than equity or efficiency. The damage has been increased by misguided ideological imports, liberal and Marxian, and by the town's success in buying off part of the rural elite, thus transferring most of the costs of the process to the rural poor.' "

"When nature and its resources for human use are viewed as concentrations of usable energy instead of as passive matter, it will no longer be possible to ignore the fund-flow model of Nicholas Georgescu-Roegen, to whom we owe the path-breaking analysis of The Entropy Law and the Economic Process (1971), which we have freely drawn from.

"Georgescu-Roegen's fund-flow model begins with the recognition that nature's contribution is a flow of low-entropy natural resources. These raw materials are transformed by a fund of agents (laborers and capital equipment), which do not themselves become physically embodied in the product. Labor and capital funds constitute the efficient cause of wealth, and natural resources are the material cause. Labor and capital funds are 'worn out' and replaced over long periods of time. Resource flows are 'used up' or rather transformed into products over short periods of time. While there may be significant substitutability between the two funds, labor and capital, or among various resource flows, for example aluminum for copper or coal for natural gas, there is very little substitutability between funds and flows. You can build the same house with fewer carpenters and more power saws, but no amount of carpenters and power saws will allow you to reduce very much the amount of lumber and nails. Of course one can use brick rather than wood, but that it the substitution of one resource flow for another, rather than the substitution of a fund for a flow. Funds and flows, efficient and material causes, are complements, not substitutes, in the process of production.

"From the commonsense perspective it is very difficult to understand the current neoclassical models of production which (a) often do not include resources at all, depicting production as a function of labor and capital only; (b) if they do include resources, assume that 'capital is a near perfect substitute for land and other natural resources'; and (c) fail to recognize any physical balance constraint, that is, do not rule out cases where output constitutes a greater mass than the sum of the masses of all inputs (which would be a violation of the First Law of Thermodynamics)."

"Modern economic theory grew up with industrialization and has focused attention on industrial production. Its thoroughgoing application to agriculture has been late. But now that it has occurred the effects of this application on rural community have been disastrous.

"Policies following from present theory work in three interrelated ways. The commitment to productivity reduces the need for farmers and depopulates the rural area. The commitment to profit maximization, with prices not including, social and ecological costs, leads to unsustainable use of the land. The commitment to free trade leads to specialized production for export and, especially in the tropics, to inability of rural peoples to feed themselves.

"If economics is reconceived in the service of community, it will begin with a concern for agriculture and specifically for the production of food. This is because a healthy community will be a relatively self-sufficient one. A community's complete dependency on outsiders for its mere survival weakens it. It is often unable to develop the policies it desires for the sake of its won members, since its survival depends on terms dictated by others. The most fundamental requirement for survival is food. Hence, how and where food is grown is foundational to an economics for community.

"The conceptual question that must be further clarified is how much self-sufficiency is to be sought at what levels of community. The ultimate end of the new operative policies would be a self-sufficient world in which al less-than-global units would be dependent for their survival on the functioning of the global trading system. The opposite extreme would be a world made up entirely of subsistence farmers and hunters and gatherers. Their community can hardly extend beyond the tribe or the village. Between these extremes is an image of a world made up of communities of communities. The smallest community is the family, the next is the fact-to-face community, and beyond that are towns and cities, larger regions, nations, continents, and the world. Obviously, the degrees of self- sufficiency to be sought at each level vary. What guidelines can help determine what is appropriate?"

Table of Contents of For the Common Good

1. The Fallacy of Misplaced Concreteness in Economics and Other Disciplines
2. Misplaced Concreteness: The Market
3. Misplaced Concreteness: Measuring Economic Success
4. Misplaced Concreteness: Homo Economicus
5. Misplaced Concreteness: Land
6. From Academic Discipline to Thought in Service of Community
7. From Chrematistics to Oikonomia
8. From Individualism to Person-in-Community
9. From Cosmopolitanism to Communities of Communities
10. From Matter and Rent to Energy and Biosphere
11. Free Trade versus Community
12. Population
13. Land Use
14. Agriculture
15. Industry
16. Labor
17. Income Policies and Taxes
18. From World Domination to National Security
19. Possible Steps
20. The Religious Vision
    Afterword: Money, Debt, and Wealth
    Appendix: The Index of Sustainable Economic Welfare

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