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Redirecting the Economy Toward Community,
the Environment, and a
Sustainable Future
By Herman Daly and John Cobb Jr.
Boston: Beacon Press, 1989, 492 pages

When For the Common Good appeared in 1989, reviews were decidedly mixed. New Options called it the best political book of the year and "an endlessly provocative tour-de-force." Newsday called it "refreshing and provocative." But the book was scorned by academics. The scholarly reviews were full of foul adjectives like "ponderous" and "inconclusive." One reviewer even called it "dangerous." Many academic journals simply ignored it.

The varied response to the book seems fitting considering what Herman Daly and John Cobb set out to do here. Their main goal is to deconstruct neoclassical economic theory and set forth a more holistic model that more fully accounts for the individual, the community, and the natural world. Since the book is aimed chiefly at economists, it achieves this through very detailed and closely reasoned arguments. It makes for tough but very rewarding reading.

In the first half of the book, Daly and Cobb discuss the implicit assumptions and theoretical fallacies governing contemporary economic scholarship; in the second half, they discuss numerous policy changes toward their economic goal of a society based on community and ecological balance. The book also includes an appendix where they construct an "Index of Sustainable Economic Welfare" intended to supplant Gross National Product as a measure of economic well-being.

According to Daly and Cobb, contemporary economic theory holds to a crude, mechanistic worldview of homo economicus as an autonomous individual driven solely by self-interest and of society as an aggregate of such individuals. This view tends to equate gains in society as a whole with the increases in goods and services acquired by its individual members, but it says nothing about the changes in the quality of the relationships that constitute that society. They therefore propose a "paradigm shift" from economics conceived as "crematistics" (maximization of short-term monetary gain) to the sort of economics Aristotle called "oikonomia" (management of a household aimed at increasing its use value over the long run for the community). In "economics for community," their term for the latter alternative, there is no aim for unlimited accumulation or "growthmania." Instead, "true wealth is limited by the satisfaction of the concrete need." Such a conversion entails a departure from radical individualism to the notion of a "person-in-community," as well as a fundamental shift away "from cosmopolitanism to communities of communities."

In a wide-ranging survey of contemporary economic policies, Daly and Cobb cover international trade, population, land use, agriculture, industry, labor, taxation and income, and national security. Their chief argument throughout concerns the need for realigning government and social structures toward smaller social and economic units. In their discussion of free trade and the international marketplace, for instance, they argue that it becomes difficult, if not impossible, for governments to perform their essential non-market functions when economic power is centralized at the global level, while political power is decentralized to national and local levels. For the system to function in the interests of community, economic and political power must be in balance at any given system level. While this appears to leave only two choices — either to centralize power in a global government or to decentralize the economy and make economic actors more accountable at the national and sub national levels — Daly and Cobb claim that it is not an either/or choice. The emerging global society must develop democratically controlled institutions at all levels: international, national, and local. It also needs to create a decentralizing context for economic activities that returns institutional control to people, roots economic interests in local soil, and reestablishes some sense of human community.

Daly and Cobb are somewhat tentative in discussing how their programs may be put into practice. They suggest five activities which could be undertaken now, leading to an overall policy shift: 1) significant university reforms; 2) local community-building; and steps toward 3) a relatively self-sufficient national economy; 4) bringing the question of scale into public consciousness; and 5) changing the way we measure economic success. In general, they concede, the first step in any serious change will have to involve education and consciousness-raising. The all-important notions of scale and sustainability need to be deeply rooted in public awareness. The dangers of free trade dogma and the fallacies of measuring economic welfare according to GNP will also have to be made evident, they observe. Above all, steps need to be taken toward envisioning a future built on the principles of community, harmony with the environment, and indefinite economic sustainability.

What is most impressive about For the Common Good is the way Daly and Cobb give "a compelling theoretical edge to the tenets of environmental faith," in the words of the Utne Reader. The magazine listed Herman Daly among their "100 visionaries" for his "careful," "lucid" and "compelling" work in economics. While Daly has developed quite a following as a "green" economist, I think it's well-deserved, and this book proves it. Cobb, who is the lesser known of the two (and a theologian rather than an economist), has also generated a bit of attention around what he calls "economism" (see, for instance, Timeline, November/December 1995 and September/October 1996).

Together with books like Hazel Henderson's Paradigms in Progress and Elinor Ostrom's Governing the Commons, this book is pointing the way toward a new kind of economics for the 21st century, an economics in service to community, the environment, and future generations.

Copyright 1995 by Scott London. All rights reserved.