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Catalyzing worker co-ops & the solidarity economy

Seven Key Elements of an Economy of Abundance

April 1, 2014
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by Wolfgang Hoeschele

Our present economy is an economy of scarcity – only scarce commodities have economic value. Therefore there are strong incentives to make everything into a scarce commodity - first by making it into a commodity, and then by assuring that the demand for that commodity exceeds its supply, either by controlling supplies or by inflating demand, or doing both at the same time. This economy of scarcity leads to environmental destruction because the natural environment is treated as a “free” good to consume or pollute until it becomes scarce enough to commodify and monopolize. It also leads to social inequality because the major avenue to wealth is to control key assets and then make them scarce for everyone else, thus extracting profits.                                                                                                

An economics of abundance would instead organize people and resource uses in such a way that all people and an abundance of other species on this planet would be able to thrive, not only in the present, but in the future as well. It would have to be based on institutions that, instead of creating scarcity, align the interests of individuals with the common good and thus promote cooperation and mutual aid.

To change our present economic system, we need to have a vision of what we are working for, even if that vision cannot be realized right away, and even if it will never be realized in quite the way that we can now imagine. In this spirit, I here offer some thoughts as to what an economy of abundance would look like, with seven key elements that I consider crucial.

1. Natural Resource and Land Commons

Natural resources (the land, air, water, the diversity of living things, mineral resources) are all things none of us have created; they are the gifts of nature. We have an obligation to treat these gifts with the respect they deserve, and to share them generously as the gifts they are. The way to do this is by creating commons, in which we as communities share in the responsibility and care as well as the benefits derived from nature and those parts of it that we make into resources for our use.

The specific institutional forms that natural resource commons can take vary by culture, geographic scale of social organization, technological development, and numerous other factors. I will therefore not suggest any “timeless” model for such commons, but one approach that I think is particularly appropriate for a path out of early 20th century capitalism would build on proposals by Peter Barnes. It involves taxing the use of natural resources and distributing the revenue from that tax equally among all people who live in the area from which those natural resources are drawn (for example, an administrative district, a river basin, or a country). The natural resources of an area are essentially treated as the common property of all the people who live there.

The most important natural resource uses to tax are those with greatest impact on the environment – so for example, fossil fuels could be taxed at the mine on the basis of how much carbon dioxide will be emitted once they are burned. Land could be taxed along the ideas of Henry George.

The tax revenue would be used in two ways: first to take care of the natural resources involved, and second to equally distribute among all co-owners of the resource (the residents of the area in question). This mechanism would lead to greater social equality because everybody would pay into this fund according to their use of natural resources, while getting paid out of it on an equal per capita basis. Those people above the median income would therefore generally pay more into the fund than they receive, and vice versa for those at less than the median income (which is the majority of the population). This mechanism would make natural resources more expensive, leading to their more careful use. If the revenue generated was large enough, it could provide a (culturally defined) subsistence-level income for everybody and obviate the need for many of the taxes on labor, while also allowing people the freedom to refuse excessively low-paid jobs.

2. Cooperative Business

Our wealth does not just consist of the gifts of nature – it also consists of the goods and services we create by our labor. Businesses that provide goods and services by rights belong to all those who contribute to their production, meaning their employees. In many cases, it is also important that businesses belong to those whom they serve, i.e., their customers, particularly in those cases where customers cannot easily switch from one provider to another (for example, utilities, insurance, and financial services). For each type of business, it is thus important to develop and promote worker, consumer, or hybrid cooperatives with effective methods of participatory decision-making that enable the co-owners to arrive at mutually satisfactory methods of allocating the benefits as well as the responsibilities of running the business.

Government policies in an economy of abundance would favor those businesses where there is no effective distinction between owners and workers – that is, cooperatives and the self-employed. It could do this for example through providing help for cooperative start-ups (provision of advice and information, of cheap work-spaces, low-interest loans etc.), reducing the tax burden on such businesses compared to corporations, and creating tax incentives for individually owned businesses to be converted into cooperatives after their owner retires or dies. If cooperatives became the dominant business form, even individually owned or corporate businesses would have to adapt, because they would have a hard time attracting good employees otherwise.

3. Energy for Everyone

A very important area for cooperative or self-provisioning business is in the area of energy supplies. If electric utilities were generally customer-owned, those customer-owners would not be interested in constantly building new power plants and then finding the market for their electricity, but in finding ways to lower the total cost of energy provision. Among the best ways to do this is to increase energy efficiency. Once fossil fuel use is properly taxed as a natural resource commons, it will also be much more expensive than renewables, leading to a rapid transition to dispersed networks of renewable energy generation in every locality.

4. Finance as Servant, not Master

Natural resource commons and cooperative business would do much to counteract the current growth imperatives, but they would not be sufficient as long as the money system enforces the “need” to pay back the banks, venture capitalists and the like. In other words, nowadays financial “services” are the masters of the world, not its servants. This needs to change.

A partial solution is to leave money as it is, but to transfer financial institutions into the hands of their customers (in the form of credit unions or publicly owned banks). This would mean that their profits would be distributed among the customers or be used to finance public services, rather than being accumulated by people who do nothing to actually produce real goods or services. If customers controlled the financial institutions, they would probably ensure that the profits would be small to begin with, in order to reduce the fees they have to pay up front.

Beyond the solution of customer-owned banks, we can also create currency and exchange systems based on principles other than interest-based fiat currencies. These need to be designed around the real needs of participants in economic exchange, such as to buy things (without having to rely on one-to-one barter exchange or mutual aid among friends and neighbors), to obtain investment funds, to weather times of hardship, or to have a secure source of income in old age. A lot of innovation is occurring in this area, and different modes of exchange need to be adapted to particular purposes.

5. Livable Cities

Too many cities and towns have been constructed not for people, but for cars (as if those were animate beings with needs). Even cities that have not been built for cars often are constructed in ways to serve the convenience of centralized authorities and housing developers, rather than of the people who actually live there. They also enforce consumption, because as conviviality in the streets and public places is destroyed, people rely more on individualized consumption in search of happiness.

What we need is a revival of vernacular building, and of urban public spaces that invite people to stay, to meet people and talk, rather than to hurry on. To create such places, we need to pay attention to ideas of people like Christopher Alexander with his design/build methods that involve future users in a decision-making process that is intimately attuned with the local environment. We also need to eliminate incentives that promote urban sprawl (for example, new housing developments at the urban periphery rarely pay the full costs of extending utility lines to these areas).

6. Liberated Learning

Education tends to be organized as a method of providing credentials for a limited number of graduates to enter the job market and sell their labor to the highest bidders. Meanwhile, all the non-graduates have to compete for the low-paying jobs that are left over. Too much research gets organized as a way to generate patented knowledge that helps some companies gain monopolies, while withholding that knowledge from everyone else. This is learning in a straightjacket.

Natural resource commons with their guaranteed basic income, complemented by many more opportunities to get together with people one knows to create a co-operative enterprise, would do much to reduce the sway of this educational model. The abundant availability of knowledge on the internet, as well as in brick-and-mortar libraries, also helps to counteract the hierarchical transmission of knowledge. Beyond that, we need the numerous initiatives for co-operative schools, learning networks, and knowledge sharing commons in order to truly liberate learning (even while more traditional schools experiment with different educational methods). Then, people will be able to learn for the purpose of personal growth and for answering the practical questions they face in the life and career paths they have chosen.

7. Truly Caring for Health

Health “care” today is oriented more to the enrichment of doctors, pharmaceutical companies, hospitals, and insurance companies than it is to actually taking care of patients’ health. The needs of the world’s poor are largely neglected. Among the global middle classes, health “care” costs are escalating, while life expectancies are only inching upwards, and people are kept alive with chronic disabilities. As populations age, it is increasingly vital to make sure that the health “care” industries do not take over our lives.

The above-mentioned elements of an economy of abundance would already do a lot to improve people’s health, by reducing pollution, ensuring greater social equity (poverty is among the greatest health hazards), reducing stress in the rat race, creating livable places. The knowledge commons approach could help generate innovations in medicine that are not centered on getting people hooked on costly drugs that they have to consume for their remaining life-times. If hospitals were owned by the people in the communities they served, they would also presumably become more interested in cheap remedies that actually work. Health policy would have to focus on integrating efforts in all these areas to ensure that people are less likely to fall ill in the first place, and that medical care focuses on their true needs so that they recover quickly when they do suffer from disease.

This is a very brief sketch of an “economy of abundance.” It would of course look different in every place, and depend on the unpredictable creative contributions of millions of people. But another world is indeed possible, and we must envision that possible world before we can make it real. There are alternatives, and we need to keep them in mind as we work for change!

GEO blogs are part of our mission to provide a platform for co-op practitioners and solidarity economic organizers to share their thoughts and experiences with a wider audience.  Any views and opinions expressed are those of the author and do no necessarily reflect the views of the GEO Collective.  If you would like to start a blog on GEO, please contact

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