Low-impact economy: introduction

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” – Dan Millman

What is it?

A low-impact economy is an economy that doesn’t destroy nature – which is essential, because an economy that destroys nature can only end up causing societal collapse and possible extinction for humans.

How are we doing?

Our current, high-impact, corporate-dominated economy destroys nature, and is therefore driving us down the path to collapse. Globally, humanity has a 1.7 planet ‘footprint’ – i.e. to continue consuming as we do, we would need 1.7 planets. The ‘footprint’ for the UK is around 3 planets, and for the US, around 5. As we only have one planet, we need to reduce the global footprint to below 1. Unfortunately, we’re moving in the opposite direction.

Communism (or state capitalism, or whatever label you want to give it) is another example of a high-impact economy. Under communism, the economy is centrally-planned by a relatively small group of communists. In capitalism, the economy is centrally-planned by a relatively small group of capitalists. And under both capitalism and communism, the aim is growth. And it’s the cancerous growth of the human economy that’s destroying nature. Nothing else is causing it. Nature shrinks as the human economy grows, and what’s left of it is degraded and toxified. We’re expected, and persuaded, to consume more each year. That’s how we measure how well we’re doing – in terms of GDP, money and possessions, rather than happiness, secure and strong communities, meaningful work and a healthy ecology. We need a low-impact alternative, urgently.

1.7-planets

We don’t have 1.7 planets to continue living as we do.

What’s the alternative?

A low-impact economy:

Low-impact institutions are always democratic – from self-employment to federations of co-operatives. Capitalist / communist institutions are not democratic – it’s one share, one vote, or no vote at all. But in low-impact institutions, it’s one person, one vote.

worker-co-ops

Workers’ co-operatives form the backbone of the low-impact economy. Decisions are made democratically, and rewards are distributed depending on your own work.

Similar ideas

Solidarity Economy: a still-evolving concept, Wikipedia tells us that some regard the Solidarity Economy as a replacement for capitalism, and others think it is for ‘humanising’ capitalism. Those two positions are very different. The question is – at what point would the ‘humanisers’ want it to stop growing?

Non-corporate economy: an economy that doesn’t include multinational corporations – which is a great start. However, some small companies will turn into the multinational corporations of tomorrow, so it’s much better to support co-operative / mutual institutions.

Conviviality: a term coined by Ivan Illich, based on technologies – although the same concept works for an economy. A convivial economy would be based on institutions and technologies that can be controlled by individuals and communities rather than giant corporations. So, a wind turbine, yes; a nuclear power station, no.

Distributism: an early 20th-century movement that wanted power to be distributed thinly through society, to small businesses, family farms etc. Again, it includes the corporations of tomorrow, with no mechanism to stop the growth of companies. (Distributism was also discredited due to antisemitic remarks by some of its main proponents).

linux-mint

Free & open source software and operating systems, like Linux, provide an alternative to the corporate sector – and they’re free.

Mutualism: the institutions of an economy should be mutually owned, which includes self-employment. The main principles are that decisions are made democratically and no-one gets rewarded for anyone else’s work. Mutualism is a flavour of anarchism – a word that isn’t yet in the Overton Window (although it may be close) – because it sees the state as an ally of the corporate sector, as it allows corporations to avoid taxes (that small businesses can’t); it builds large infrastructure and carries out research and development with taxpayers money that disproportionately benefits corporations; it tolerates the virtual slave labour of their sweatshops and plantations; it protects their patents; it prioritises them for contracts; it takes their money and jobs, and listens to their lobbyists; and it bails them out when they fail. They argue that corporations have no ‘economies of scale’ without the state.

Post-growth economy: a system in which investors always want more (spending power) out than they put in will require constant growth, which is not possible on a finite planet. Advocacy for non-hierarchical institutions.

A low-impact economy is stable rather than growing, non-corporate, convivial, based on solidarity and mutualism, and with distributed wealth and power. It doesn’t have a maximum size, and so it has to be seen ultimately as a replacement for capitalism, not a plug-in, like an air freshener.

The Preston Model. The local authority in Preston employed CLES to help build a network of local ‘anchor institutions’, such as hospitals, university and the police, to redirect their spending to local businesses, including the council food budget, which prioritised food provided by Lancashire farmers. There’s a new Preston Co-operative Network, and new co-ops and food hubs are developing. The local authority is now looking at setting up a local bank to fund local businesses, and becoming a municipal energy supplier to provide an alternative to the giant energy corporations. Preston was voted the best town to live in in the North-west, and other local authorities around the country are taking an interest in the model.

How do we get there?

Although some policies can help the development of the low-impact economy, we can’t transition via the electoral process. Politicians have taken too much corporate money, too many corporate jobs and listened to too many corporate lobbyists for that to happen. And governments know that if they don’t tailor the economy for the corporate sector, their money and jobs will stop, and international investors will remove their money from of the country, causing a recession that will ensure that they lose the next election. And it won’t be brought about by violent revolution either – which requires soldiers to seize power, after which they always keep it.

We have to grow the low-impact economy from grassroots, bearing in mind that the state will almost definitely provide more barriers than assistance, and there will be ridicule and hostility from the corporate media. However, capitalism grew in the cracks in feudalism, and at the time, no-one believed that moneylenders and the first itinerant merchants would rise to take power from monarchies and the church. But they did. Now the low-impact economy is growing in the cracks in capitalism.

comm-energy

Community energy schemes are springing up around the country, generating energy from wind, sun and water. Regulations make it difficult to supply energy directly to their members locally, but you can support community energy by switching to Co-op Energy.

Small is beautiful

Scale is very important. Businesses that grow too big develop hierarchies that increase inequality and reduce democracy. For example, John Lewis/Waitrose is an employee-owned company, but it’s so large that it has to pay similar salaries and bonuses to top executives as other large supermarkets, and workers don’t really appreciate that they’re part-owners of the company. [Cath Muller of Radical Routes told us that a good test of the democracy within a co-operative organisation is to ask the workers in a branch about the principles of the organisation. Our rudimentary research found that workers in the Co-op and the Nationwide had no idea, and Waitrose – about 50:50.]

It’s true that the Co-op, Nationwide, John Lewis/Waitrose have no external shareholders to serve, their boards are elected and they’re not multinational, which is a step in the right direction. But we believe that the principle of subsidiarity is important. Let’s keep businesses and institutions as small and local as possible. The Phone Co-op is a national organisation, but it’s the only option in the UK for co-operative telephony. Food, on the other hand, can be obtained from an enormous range of community-supported schemes, farmers’ markets, veg boxes, meat boxes, fish boxes, farm shops, buying groups, independent shops, gardens and allotments.

We think it’s better to network small, local institutions than to allow single institutions to grow to giant size – it keeps staff engaged in the democratic process, reduces product miles and doesn’t concentrate wealth. Mondragon is a network of small and medium-sized co-ops in Spain, encompassing manufacturing, education, software and distribution. It produces high-tech electrical goods, amongst other things, and employs over 75,000 people in small, co-operative businesses. It’s not perfect by any means, but it’s an example that shows that the co-operative sector can scale up by federating rather than centralising.

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Community-supported agriculture is a way to provide guaranteed income for small farmers and nutritious, local food for the community.

What the low-impact economy is not

It’s not the ‘sharing economy’. There’s a big difference between platforms like Über, that suck money from taxi drivers all over the world to enrich shareholders, and platform co-ops owned by the drivers, who retain all the fares. it’s all about ownership.

It’s not ‘corporate’, as in multinational corporations. ‘Corporate social responsibility’ means corporations giving smart young graduates lots of money to find ways to reduce the environmental and social damage that they do; good in itself, but the aim is to increase market share for the corporate sector, which inevitably means restricting market share for the low-impact economy.

It’s not anti-competition. If there’s no competition, what are you going to do if your local baker (say) doesn’t make very good bread? You need other bakers to keep them on their toes. The opposite of competition isn’t co-operation, it’s monopoly.

It’s not about companies with external shareholders, otherwise we’ll be helping to nurture future corporations, or corporate acquisitions. People were enthusiastic about the Body Shop, Green & Blacks, Ben & Jerry’s and Innocent Drinks because of their social and environmental ideals, but they’re now owned by L’Oreal, Mondelez International, Unilever and Coca-Cola respectively. Fairphone and Ecotricity may go the same way, who knows? [Community shares are a different beast. Returns are limited, as is the number of shares held, and they can’t be sold for more than face value. There’s no stock market for community shares.]

It’s not a planned economy. It’s a market economy – but a really free market, rather than a market rigged to favour multinational corporations. That’s still not good enough for some – who would like to see an economy based on love, rather than exchange. Maybe one day we’ll transition to that – when we’re a bit more enlightened. But there doesn’t seem to be a way of transitioning to an economy like that in one step. Maybe those people can be persuaded that the low-impact route is a step in the right direction.

The Ecological Land Co-op helps to set up organic smallholdings in England and Wales. The Scottish Farm Land Trust is being established to do the same in Scotland.

What are the benefits?

Sustainability

The main benefit is of course that we can stabilise the global economy (and shrink to below a one-planet footprint). We could live in harmony with nature, which would be nice – rather than the suicidal situation that we find ourselves in now.

Democracy

In a low-impact economy, wealth doesn’t concentrate – so no corporate political donations or corporate jobs for politicians, and no professional lobby industry. So we could have an uncorrupted, democratic political system. We can’t have a truly democratic society unless the constituent parts of that society are themselves truly democratic.

mutual-credit-businesses

Mutual / collaborative credit is an idea to allow businesses to trade with each other in ways that strengthen communities and don’t require banks.

Community well-being

The corporate sector extracts wealth from communities, via its corporate branches, from both workers and consumers in those communities, to give it to shareholders. We believe that this is morally wrong. The low-impact economy retains wealth in communities, where it can be spent over and over again, to strengthen and build unique local communities and economies, with closer social bonds. [Corporate apologists will say that more members of the public are becoming shareholders, and although this is true, their role is to be more-or-less fleeced by corporate algorithms, in a brand new form of extraction.]

Individual well-being

Personal freedom is only fully appreciated when it is threatened. Centralising power in the state or the corporate sector always runs the risk of its being seized by people who really shouldn’t have it. This has happened repeatedly in all eras and in all geographical areas.

Personal freedom to do our own thing, including setting up in business, is vitally important, as long as we don’t exploit anyone else (i.e. profit from someone else’s work). We believe that taking the value that someone else has worked to produce is morally wrong. It doesn’t matter how it happens – for example, if someone creates a piece of work, and you claim that you did it, and get paid for it, you know that you’re doing wrong. Bakunin said that things become much clearer at the extremes, so if you think of companies that extract value from the work of sweatshop and plantation workers, to pay huge dividends to majority shareholders, who control the companies; or if you think of aristocratic landowners living lavishly on the rent from farmers who work ‘their’ land to produce food, it’s pretty obvious that exploitation is taking place. However, the stock market, private employment or private rent are really only smaller steps on the same road. It’s all the road to serfdom, in the end. Not making money from other people’s work seems like basic morality to us.

self-employment500

Self-employment is an important part of the low-impact economy.

Strategic

The strategic benefits of moving towards a low-impact economy include the fact that there’s no blueprint for what society will look like – we’re talking about a process rather than a blueprint. Many ideas around systemic change are pie-in-the-sky, but you can see that a low-impact economy is achievable, and is in fact already being built.

Another strategic benefit is that the approach is neither left nor right. Socialism is where ownership of the means of production is vested in the community as a whole, rather than with a few private individuals. Great, but it doesn’t rule out centralised control. And (right) libertarianism is where political freedom and autonomy are maximised. Great, but it doesn’t rule out ‘extraction’ (being rewarded for other people’s work). But the low-impact economy is a free market, decentralised, unplanned, but with no opportunities for extraction.

Glen Wyvis, in Dingwall, Scotland, is the world’s first community-owned distillery.

Neither side can ever win the left/right battle – they cancel each other out. It doesn’t matter if you’re socialist, conservative, liberal, libertarian, green or anarchist – life would be better without the corporate sector. Of course there is the risk that the left will be turned off by the idea of a free market, but we’re not at all talking about the rigged corporate market. Markets are only a problem in the context of corporate capitalism. A corporate sector that dominates an economy in the way that ours is dominated will always use its influence and wealth to skew the market. In themselves, and without external influence, markets are just an efficient and convenient way of exchanging goods and services that don’t require central planning. Opponents of markets are often really opponents of corporate capitalism. Let’s not throw out the baby with the bathwater. But if the approach is not ‘mutualist’ – in other words, if the idea is to ‘humanise’ capitalism, then there will still be private employment, tradeable shares and landlordism – a slippery slope back to full-spectrum exploitation and perpetual growth fantasies.

Also, some on the right will be turned off by the lack of opportunity to extract wealth from others; but ‘personal responsibility and hard work’ is a mantra of the right – so let them demonstrate it. And no-one really likes corporations, apart from corporate executives and teenagers with brand loyalty. We can live with that kind of opposition.

clt-butchers-arms

Community land trusts are local, not-for-profit organisations that steward land and property (such as local pubs threatened with closure) democratically for their local community.

What can I do?

First – believe. We can do this. As mentioned above, there’s an alternative economy growing within the cracks in capitalism, and you can help widen those cracks and grow it.

Second – have solidarity. The corporate advantage is ownership of the media, advertising, the lobby industry, jobs and money for politicians, ownership of the energy, finance, transport and food sectors, as well as almost everything else. Our advantage is solidarity. In other words, if I’m in solidarity with you, I’ll consume what you produce even though it takes more of my work to do so. This isn’t true in every case however – housing co-ops tend to have below-market-rate rents; free and open source software and operating systems are free; and ‘community-supported’ schemes are a way of getting food more cheaply than from supermarkets – especially if there’s a glut. But if you find that purchasing from the low-impact economy is more expensive, and do it anyway because you prefer their values, then you have solidarity.

People who want a safer, friendlier or just better-off community could come next, when they see that this is a viable alternative that doesn’t suck wealth out of their town. Local authorities can be attracted to this idea too – see ‘the Preston model’ that many councils are looking to imitate. If we can really get things moving, then we can attract the majority who will be motivated largely by prices, but are not antagonistic to alternatives.

mondragon

The Mondragon Corporation is a famous federation of worker co-ops in the Basque Country, employing 75,000 people in manufacturing, retail, banking and a co-operative university. The ratio of highest-paid to lowest paid is 5:1, and is decided upon by a vote of all members (in comparison, corporate wage ratios are around 200:1).

Third, see our books and links for much more on alternatives to the corporate system. When you’re ready, go to NonCorporate.org, where you’ll find lots of ideas to help you move to the low-impact economy. You’ll find help to move away from the corporate sector for all the things that you consume. Eventually, you could do the same for housing and employment too, although those things are more difficult. But if the low-impact economy gains more customers, then it will provide more jobs. We’ve also got lots of ideas on Lowimpact.org to help you provide things for yourself rather than paying the corporate sector to provide them.

Mutual / collaborative credit is an aspect of the low-impact economy that could start to replace the money system. If exchange is carried out via mutual credit rather than money, then it will be more difficult for wealth to concentrate in very few hands, and overflow into the political system.

phone-coop-1

The Phone Co-op is the only co-operative phone and broadband provider in the UK.

Some believe that it’s already too late to avoid catastrophic collapse. If we look at the credible research into biodiversity loss (and it’s really painful reading), and if we’re rational and honest, then it seems very likely that they’re correct. But let’s imagine that we have enough time to replace the capitalist economy with the low-impact economy (or whatever you want to call it). What can it hurt? And it’s much more fun than working in corporate accounts, law, management, sales, advertising, human resources or the oxymoronic ‘corporate social responsibility’.

The low-impact economy is sustainable, non-corporate, and brimming with conviviality, solidarity and mutualism. What’s not to like? If it gets traction, it’s going to become the economy of the future. We don’t have to attack anything – the future is going to be more decentralised, open source and co-operative, which suits the low-impact economy (e.g. Wikipedia has finished the corporate encyclopedia industry). Giant corporations are inefficient, undemocratic, unsustainable, provide ‘bullshit jobs’, and would fall over without state assistance. Let’s not have any more companies that are ‘too big to fail’.

We invite you to help the great people working in the low-impact economy to build it. Go to Noncorporate.org for lots of ideas about how you can support the non-corporate, low-impact economy.

 


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Dave Darby is the founder of Lowimpact.org and NonCorporate.org. ‘Specialist’ is definitely the wrong word, as this is a huge topic, with many component parts. If you post queries on specific topics in the ‘economy’ section, we’ll try to get specialists to answer them for you. This page is for general comments and queries, and discussing how we build the low-impact economy overall.


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