Award-winning author Christian Felber believes the coronavirus outbreak is the perfect moment to question the entire system, after advocating for years to switch from capitalism to a public-interest economy. He explained his ideas in an interview.
Christian Felber is an award-winning author, university lecturer and freelance dancer in Vienna. He is the initiator of the Cooperative for the Common Good and the Common Good Economy. He has written several bestsellers, most recently “Ethical World Trade” and “The Common Good Economy”.
What distinguishes public interest economics from classical economics?
I’d dispute that: what is practiced and taught in business today is not economics at all. According to the original Greek definition, the goal of “economy” is the good life of all, or rather the common good. Money and capital were only means to this end.
Aristotle said at the time that if the focus were instead on the pure increase of money, this would no longer be an economy, but its opposite: Chrematism, the striving for wealth for the sake of wealth. You could also call it “capitalism”.
And what would your alternative model look like?
It would be wiser to design from the outset an economy that aims to achieve the common good, for example, protecting the climate and biodiversity, strengthening democratic participation or the fair distribution of resources. At the macroeconomic level, the achievement of these goals is measured by the democratically composed public good product that replaces GDP. Companies could draw up a “public welfare balance sheet” that records contributions to the public welfare product in quantified form. Higher contributions should result in competitive advantages for the companies concerned and poor balance sheets should result in disadvantages. In the public-interest economy, companies must also make profits, but profit maximisation at the expense of the actual goals and values would backfire and lead to insolvency.
During the coronavirus pandemic we often hear that health is now being weighed against economics. Is this not in line with the basic idea of the public good economy?
That’s an imprecise dichotomy. One has to ask: what does “economy” mean? When jobs are lost, when companies go bankrupt and there is a recession, this leads to destroyed livelihoods, and thus to physical and mental illness.
So there too, the health of people is at stake. In fact, the government should present figures every day to show whether the number of deaths prevented is greater than the number of illnesses caused by the measures, because it must be proportionate.
So you are asking for a quantification of the damage caused by the measures. Is that even possible?
You have to at least try. When fundamental rights are encroached upon, it is essential to weigh up the options carefully and in a differentiated manner. The German Ethics Council recently pointed this out.
Is the crisis with its economic upheavals a curse or a blessing for the vision of the common good economy?
It’s an opportunity. The Austrian government has provided support to companies with the €38 billion aid package. These are services provided by democratic society to a specific subgroup: the business community. The state should attach conditions to them, such as the public good balance sheet mentioned at the beginning.
What would that look like exactly?
You could stagger it. Companies with a good public-interest balance sheet – as well as system-relevant companies – are saved 100%. Companies with at least one form of public welfare balance sheet, including non-profit organisations, are saved to 90%, 80% will be reimbursed if there is an obligation to prepare a balance sheet starting next year. Only 70% of all SMEs without a public benefit balance sheet will be saved. On the other hand, public limited companies could be saved by an obligation for wealthy owners to make additional contributions.
As things stand today, how many companies would that be that have a balance sheet in the public interest?
In Austria 200, internationally 500, so one could link the amount of state aid to a binding commitment to start a public good balance sheet next year.
Now there is a massive shortage of funds. Would this not force companies to do something they would not accept under normal circumstances?
That’s why it must remain on a voluntary basis, since companies without a balance sheet in the public interest will receive a 70% rescue.
However, it would only be a temporal advance of something that is coming anyway. The European Non-Financial Information (NFI) Directive has already been implemented in all member states and applies to the largest companies since 2017. This is the counterpart to “Financial Information,” the financial balance sheet, the disclosure of which has been mandatory for some time now.
NFIs are, for example, labour and human rights or climate protection. NFI disclosure would have long since been equated with the financial balance sheet if lobbies had not opposed it. The coronavirus crisis could accelerate this legal development if state aid were to be linked to the disclosure of such information. The next step would then be the aforementioned incentives in public procurement taxes or in international trade.
And how else could we use the disruption from the coronavirus to orient our economy towards the common good in the future?
We are now realising that people seem to accept that they should limit their consumption to prevent harm to the general public. I am sure that the majority of people would be willing to limit their consumption also for the goal that our children will have the same life chances on this planet as we do.
My proposal in this regard are ecological human rights: A per capita consumption law could regulate that each person consumes only an eight billionth of what the earth provides sustainably every year, about 1.7 hectares per capita. Within these limits, freedom of consumption and economic freedom would then apply.
On the social level, I propose a threefold approach. Through the crisis we saw which professions are really systemically relevant. A minimum wage of €2,000 net should be introduced for these sectors, and €1,500 for all other sectors. And in addition, all adults should receive an unconditional basic income of €1,000. This would mean that unemployment, homelessness, but also badly paid junk jobs would be history.