Great News about the Common Good!
Philip Kotler
Ever since publishing Advancing the Common Good, I knew that more work needed to be done to increase the visibility and usefulness of the Common Good concept.
I like to pose this question to companies: “Does your product or service have any impact, positive or negative, on the Common Good? Does it make life better for most citizens?”
Many companies make products that have no direct impact on the Common Good. A company that manufactures nuts and bolts would find this question meaningless. A company that manufactures cigarettes would have to admit that cigarettes hurt the Common Good. A company that manufactures a lifesaving drug would say that its business directly improves the Common Good.
Common Good is not only a question for makers of goods and services. The question can be put to public policies and causes. Is the policy of banning books good for the Common Good? Is the policy of banning abortions good for the Common Good? The Common Good doesn’t look for the answer from religious sources. The Common Good simply measures whether more people are helped or hurt by the policy.
I know that we need a tool for measuring the Common Good. Most countries think that the GDP (Gross Domestic Product) answers the Common Good question. If GDP grew this year, it means that the country produced more goods and services and therefore produced more income and wealth. Yet we may notice that more people are less happy and have less well-being. Maybe people worked too hard and were left with little time for leisure.
Two developments have taken place that promise to advance the Common Good.
Christian Feldberg’s Work on the Common Good
I had the good fortune to discover the recent work of Christian Feldberg, an Austrian scholar who initiated the “Economy for the Common Good” movement. So far Common Good principles are applied by 1,400 companies from 20 nations and more than 150 local groups on all continents.
The core insight is that our Capitalist economic system is not only solving problems; it is also creating many problems as well.
The U.S. model of Capitalism is based on these principles:
- utility maximization and egoism
- competition orientation
- financial goals above all else
- consumerism, materialism, and endless growth
The Economy for the Common Good is based on these principles:
- human dignity
- solidarity
- social justice
- sustainability
- democracy
The thesis is that familiar elements — markets, companies, money, credit, even private property — should be designed and regulated for the Common Good, namely the well-being of citizens. This is different than Capitalism, which is based on making money and enriching oneself.
Once the economy is re-centered on the Common Good, there will be:
· a Common Good Product for national accounting,
- a Common Good Balance Sheet for companies,
- and a Common Good test for investments.
Spain Moves Toward a Common Good Economy
Now another big lift to the Comon Good Economy is occurring in Spain. Two people helped to initiate this development.
On the left is Mariana Mazzucato, Professor in the Economics of Innovation and Public Value at University College London (UCL). On the right is Carlos Cuerpo, Deputy Prime Minister of Spain. Both of them announced the formation in Spain of the Global Council for a Common Good Economy.
The word “Capitalism” is set up on the word “Capital” which is one of the factors creating wealth. Wealth is created by Capiltal, Labor, and Land. Capitalism is a system set up to increase the wealth of people who have financial capital. They invest the capital to earn a rate of return that covers the risk. Those without capital only get wages. They don’t earn more unless Capitalists agree to pay higher wages. Normally capitalists try to keep wages down. They tell the working class that as Capitalists make more money, some of it will spill over to the working class.
The Common Good Economy aims to shape policies that support industries, companies, and people whose activities contribute to the Common Good. The aim is to strengthen the welfare state. The welfare state is most visible in Europe, particularly in the Nordic countries of Sweden, Finland, Norway, Denmark, and Iceland. These countries feature high-quality affordable education and health systems and caring systems for children and older people in society. Nordic country citizens have the highest levels of happiness and well-being in the world. And the companies in these countries are highly competitive and pay livable wages.
Spain is likely to achieve the good results found in Nordic countries. Spain will re-examine its policies on taxes, inequality, climate, water, health, education and biodiversity, all to lift up the Common Good.
If Spain, Austria and the Nordic countries achieve excellent Common Good progress, hopefully other countries will consider turning into Common Good Economies.
