International Society for Science & Religion - Library Project

For the Common Good: Redirecting the Economy toward Community, the Environment and a Sustainable Future

by Herman E. Daly , John B. Cobb

Introductory Essay by Philip Clayton

This text has had an immense impact in its call for economic structures that would exist “for the common good.” The book begins with the premise that “the scale of human activity relative to the biosphere has grown too large” [2]. Finite resources mean that growth economics – the framework that dominates virtually all of economic theory and practice – is destined to hit a maximum and then to decline, probably rapidly. The predicted consequences are dire: the weakening and decline of world economic systems, the dissolution of wealth, the bankruptcy of local and national governments, and the likely deaths of hundreds of millions of persons through direct and indirect impacts of economic collapse. Not to prepare for this inevitable outcome of growth economics, the authors argue, will make the consequences all the more severe when they do finally strike.

The authors endeavor to replace the dominant model of homo economicus with steady-state models. They challenge the assumption that self-interest, the pursuit of private gain, is the hallmark of rationality. In this respect they share common ground with newer arguments that cooperation, rather than competition, is the driving force of human evolution.

The new paradigm they put forward links rationality with “other-regarding behavior and actions directed to the public good” [5]. Challenging the widespread assumption that economies must be either capitalist, socialist, or a compromise between the two, they defend a “third model,” which is founded upon a concern for the human community. Here they appeal to what Wendell Berry calls the Great Economy, “the economy that sustains the total web of life and everything that depends on the land” [18].

Part I describes economics as it presently exists as an academic discipline. The analysis is accurate but not complimentary to current assumptions about homo economicus, measuring economic success, the market, and land. Part II offers and defends the authors’ new paradigm. In these pages they seek to move economic thought from an academic discipline to service of community, from individualism to person-in-community, from cosmopolitanism to communities of communities, and from matter and rent to energy and biosphere. Part III advocates a number of specific policies that, if implemented, would help to build these communities. Among the topics discussed are population, land use, agriculture, industry, labor, income tax policies, and natural security interests.

Part IV charts possible steps for achieving this goal. The authors also include a chapter, entitled A Religious Vision on the subject of worldviews, which, they believe play, an important role both in sustaining the currently dominant model and (they hope) in bringing about the transition to a new paradigm.

The volume ends with the famous appendix that presents the Index of Sustainable Economic Welfare (ISEW). It is a sign of the importance of this book that this index (co-authored by Cliff Cobb) has been widely used by other advocates of a sustainable “steady state” economics that includes rather than ignores the actual welfare of humans and the environment. The ISEW continues to stand as perhaps the most important economic alternative to standard measures based on Gross National Product (GNP). The fact that GNP-based measures can claim real economic gain when the real economic welfare of persons decline is one indication of why this book continues to function as a crucial text for undercutting growth-based economics and replacing it with an economics for the common good.