Economy, Sustainability

The Common Good Economy

by Robin Raj

My older daughter Shannon first introduced me to the term “tragedy of the commons” after she heard it in an undergrad economics course. I may have missed the concept myself in college but I didn’t miss its relevance to the major challenges that confront us today.  From oil spills to loose nukes to global warming, there are some problems so big that they transcend borders, so seemingly intractable that they invite paralysis. They’re everybody’s problem, so they wind up being nobody’s problem.

Humankind’s next great evolutionary challenge, it seems to me, is to recognize and put in place rational responses to avoid such “tragedy of the commons” before the tragedy part is a foregone conclusion.

This challenge goes straight to the heart of our free enterprise/free market economy. We can debate endlessly about just how free our free market system actually is, but it’s fair to say that in recent years, some corporations have freely pursued short-term profits with little to no regard for the long-term public interest. For them, rules and regulations of any kind represent annoying bureaucratic speedbumps, to openly mocked and scorned. In hindsight, it would seem that BP, Goldman Sachs, and the like may have run a little too “free.”

I’m not interested in engaging in the tired old big government/small government debate. What if we could all simply agree on good governance as a prerequisite for all of our public and private institutions? Good as in “the common good” – the very basis of common law dating back to the Magna Carta.

Simply put, an economy that doesn’t take into account the costs passed downstream to future generations is a sham – a form of collective self-delusion and voodoo economics. How long will we continue to subsidize unhealthy practices? And how long will we kick the can down the road and ignore the cost of so-called “externalities” on our balance sheets? When will we begin to recognize the all-too real value of nature’s services? Our air, water, fish, fauna, birds, bees and biodiversity enrich us all, and cost us profoundly when they are destroyed, yet they are still not reflected in our respective bottom lines.

The northstar that humanity must face up to, and ultimately reach, is something that might be called the Common Good Economy. A set of globally-interdependent national economies based on free enterprise, fair trade, stiff regulation, and – yes – clean energy. Which means an economy wherein everyone is expected (e.g. incentivized or sanctioned) to support the cost of our shared natural resources and pay the price of their own pollution.

Until that day, we are left with only a coalition of the willing – those companies that lean forward on issues of sustainability and good governance because of some built-in sense that it’s the right thing to do, or some idealistic hope that their choices will be ultimately favored by ethical-leaning consumers.

These are the companies that deserve our continued enthusiastic support. Besides, that’s where the life is – the culture, the innovation, the esprit de corps.  And as we’ve experienced with many of our own clients, that spirit can be infectious.

The emergence of a Common Good Economy would be both an enlightened and rational response to our common self-interest and shared preservation. It would allow private enterprise to prosper while respecting the public good. And it would finally acknowledge that unbridled, unconscious, ugly greed comes at a price. 

One that is most definitely not free.

Categorized under: Economy | Sustainability