Current economic models put money and income generation as their primary factors in value measurement. However, history tells us repeatedly that when capital is at the hand of a few firms through privilege to credit access, the whole economic climate pivots its primary goal to increase growth through consumption. These companies are usually not efficient but are allowed to do so by the very credit provision they have access to. These companies achieve sustainability by going to the capital market to issue shares, which are bought by retail investors who are now even more driven to consume goods, often unnecessary items, often under the assumption that their 'investment' in the market will satisfy any of their increased appetites - hence higher credit card debts - or the very least, the enemy of us all - higher inflation.
On another flip of the coin, greed as the economics' main driver is often amplified by fear-motivated actions. This is reflected by hedging actions using expensive, unreliable derivatives for big investors. For individual investors, hedging comes in the health and/or education insurance policies they bought for themselves or their families, which unfortunately force them to subconsciously relinquish their abilities to influence schools, community, government, and the market. In this "Bubble/Hubris economy, when real people do not have any say anymore, education is less customized - producing confused graduates without unique talents; goods are mass-produced - often using raw materials that not only are not meant for human bodies but produced using methods that creates environmental damaging by-products. The only' salvation' to cover up many redundant outputs produced in the market is the heavier use of Marketing.
When promises are not fulfilled, the bubble bursts, hence the credit, health, and climate crises. This is certainly not a sustainable business model.
In the modern world, capital accumulation is done in the market, not in the traditional market where people buy and sell real goods, but in the capital market where stocks and their derivatives symbolize asset ownership. The current capital market is flawed because it is designed such that information (private data, speed, etc.) is the currency and its sole function is to generate more money with the help of new money, aided by technology. which gives unfair advantages to some economic actors. In this market mechanism, the smaller and less-informed actors in the economy have to play the losing part in these zero-sum game types of transactions (Panggabean, L.S., 2014).
To remedy these ongoing and unfair economic practices, first and foremost, we need to re-evaluate the function of the Economy. The real functions of the Economy, among other good things, are to assign value to a product/service and to allocate resources according to where the highest value is. This suggests that to avoid the zero-sum pitfalls and realize an Economy that brings abundance to everyone, the talk of the Economy should be accompanied by considerations of every other life aspect. To borrow from the Dutch Philosopher Herman Dooyeweerd's modal aspects, we will take into consideration the following factors as impacts in our model:
Physical (energy + mass, forces)
Biotic / Organic (life functions + organisms)
Sensitive / Psychic (sense, feeling, emotion)
Analytical (distinction, conceptualization)
Formative (deliberate shaping: history, culture, technology, goals, achievement)
Lingual (meaning carried by symbols)
Social ('we': sociality, relationships, roles, respect)
Economic (frugal management of resources)
Aesthetic (harmony, surprise, fun, play, enjoyment)
Juridical (due: responsibilities+rights)
Ethical (self-giving love, generosity)
All human activities always engage all of these 15 aspects simultaneously. Thus, economic activity involves much more than allocating resources in their proper place and time. An economic initiative needs to be evaluated based on the potential impacts it can make in various aspects of life.
With the repetitive market crises and now Covid and Climate crises that we have experienced, it is high time for us to reevaluate the meaning of economic incentives, which have almost always given precedence to money as if it were the sole value determinant. We will discuss how the notion of money can also be re-defined, not as a subject but as the object of a more hopeful economy. To operationalize this concept, we need a new formulation for Economic Value.
Economic Value =Multi-aspectual Impacts/(Externalities + Price)
whereas the goal of any economy is:
Max Economic Value (i,n,m,t) = Multi-aspectual Impacts (n,t)/[Externalities (m,t) + Price (i,t)]
n = An aspect of reality
t = time
m = the impact on the environment; it is negative if it is damaging and positive if it is regenerating the environment
i = An agent, a group of agents, an institution, a country, a global community.
whereas Price (i,t) is the Cost one has expensed to create an impact minus the Sacrifice value. One way a Sacrifice can be calculated is the amount one wants to give away to make the value of the impact(s) even higher. The latter could come from the part or whole amount one spent for R&D that one is willing to ignore, the patent value one is given up, and/or donation/subsidy received to make innovation possible, etc.
Max Economic Value (i,n,m,t) = Multi-aspectual Impacts (n,t)/[Externalities (m,t) + (Cost (i,t) - Sacrifice (i*,t)]
The quality of the Economic Impact should also be measured periodically to measure the level of sustainability of an activity/initiative. This can come by way of growth, whereby positive growth, and most importantly positive growth in all aspects, is desired,
A more advanced way to measure growth is by measuring the correlation in growth between two or more aspects. A positive correlation means a multiplying effect is possible, hence a bigger total economic value.
On the other hand, potential problems related to sustainability can be detected by measuring the difference in speed of growth for every aspect of reality. A good indication of a sustainable initiative is if every aspect grows at about a similar rate, i.e., not one aspect is benefited at the expense of another.
Any economic agent, regardless of his/her talents, age, or other natural attributes, can be evaluated with this formula because one's impact on the 15 aspects will always be calibrated by how many externalities one causes to one's environment and how much one is renumerated for one's efforts, and last but not least, by how much Sacrifice one or other(s) makes for him/her to flourish in the society.
THE IMPORTANCE OF HARMONY
In music, harmony is defined as "The relationship of pitches as they sound simultaneous. - Harvard Dictionary of Music. Harmony can sound CONSONANT, meaning the pitches sound pleasant together, or DISSONANT, meaning the pitches sound unpleasant together,
For a consonant harmony of economic values by various economic agents or groups to exist, there need to be two things:
All agents or groups of agents produce high economic values. But similar to a chord that uses a Triad, the value delivered by each economic entity comes from the lowest to the highest.
All agents or groups of agents are showing an increase in economic values through time through collaborations that increase total economic value.
Understanding economic activities as if they are musical scores, with Rhythm, Melody, Harmony, Timbre, Dynamics, Texture, and Form. played by various economic entities can help us re-think economics not only for sustainability but also for regenerative results.
Some Samples of Concept Implementation
How Justice (Juridical Aspect) plays in moderating & increasing the economic value when economic agents are of different level playing fields
One important note about Sacrifice is that this model is very useful where i and i* as economic agents are of differential states of strength or advantage. It is morally wrong to create economic value by exploiting the poorer, the weaker, and the less-informed groups in society. Thus, when one calculates the value of a person or a group of persons from a less endowed background, one should take greater care to ensure that the increased impact in the Justice modality is considered and measured properly. This can be achieved through various modality empowerment of the weaker partner to the point that it can finally start collaborating with the stronger one.
On the hand, one can immediately see a more holistic impact, hence an increase in economic value, when help (a.k.a. "sacrifice") is given by a person or a group of persons who come from more fortunate circumstances (higher wealth, higher knowledge & technology, higher security) to the least fortunate ones. These forms of help can come from technical assistance, lowered barrier-to-entry, grants, free promotions, and many other creative avenues.
Unpaid household workers
This formula is best explained in the presence of unpaid household workers simply because one can eliminate the monetary incentive in it. This type of worker can jump-start the economy to reach its abundance if the nature of actions covers all of the 15 aspects, including the very top aspect - Pistic - in the form of Sacrifice. In these kinds of works, all aspectual boundaries just collapse as one who works in these areas is constantly collaborating and negotiating with all institutions, making multi-aspectual value-based decisions all the time for the benefit of future generations. In operationalizing their economy, the trade-off is no longer money; in fact, this type of work gives the highest value to the Economy for the sole purpose of not paying workers. The trade-off is time. Time will play a major role in allowing all aspects to work and impact any life form. In this economy, the Sacrifice is no longer by letting go of potential gain in the form of money but by waiting for all aspects of the family members to bloom and then mature. The outcome is abundant in human relationships, not only within the family but also in a wider community. A high-value-based family that takes care of what each member consumes, produces, and grows will also ensure the natural resources they use are efficiently consumed and flourish, a.k.a minimum externalities.
Entrepreneurship as an economic activity that recognizes Pistic and justice aspects should recognize the sacrifice one made with a proprietary right. This is where the element of price (money) properly come to play. In making the Economic Value high, one can make the selling price low enough to serve the mass but high enough to serve every stakeholder involved in making the product/service well.
Money can play an active and passive role in justifying an economic activity. It is a constant while simultaneously a constant in valuing an activity. When it is a constant, as its position as a dominator, it determines whether the overall impact of economic activity in various life aspects (the nominators) is high enough. When it is a calibrator, it works to aid in making a certain product or service offering give a high value upon judging how big its impact is on various life aspects.
Food is one of the biggest global contributors to carbon emissions and biodiversity loss. Our society relies upon complex food systems, which have developed over time to ensure that the greatest number of people have the easiest access to the cheapest goods. While this has led to the growth of economies and populations, the costs for communities and our natural environment have been vast because of the lack of sustainability in our current food practices. Food loss and waste account for a quarter of global greenhouse gas emissions on a rapidly heating planet. Meanwhile, nutrition and health in communities still vary considerably depending on socio-economic status. This is why a circular economy in the food supply chain should not stop at waste re-purposing. Wastes should be able even to regenerate nature. Furthermore, the lives of every party involved in the supply chain, from the raw material suppliers, workers, and distributors, to the customers, should also flourish.
Next Imminent Discussions
In light of the directions of this new concept, the followings are the steps to operationalize it further:
Elaborate on who should play a role in improving each aspect and how each party's action can make a change in the other aspect as well
Decide how to quantify the size of an impact in each aspect and their dynamic to heighten and/or reduce positive impact amongst various aspects.
Discuss examples of country-wide or individual motivations that can camouflage to act like aspects of lives but impending long-term growth. For example, greed, fear, shame, guilt, anger, etc.