The other economic summit and the New Economics Foundation

The Other Economic Summit (TOES)

In 1983, a smattering of British activists influenced by different shades of the humanist economics tradition came together to organize a counter-summit to the annual gatherings of the G7 nations. They created a platform called TOES, or ‘The Other Economic Summit’. The first TOES was held in 1984 in London, a short distance away from the venue where the G7 leaders were meeting. This platform brought together a diverse group of alternative economists, greens and community activists from across the world. Their purpose was to show that there are other ways of organizing the economy. TOES also challenged the G7 leaders’ right to speak for the world. With the success of that first counter-summit in London, TOES become an umbrella term, with similar meetings organized around the world over the next two decades.

As James Robertson later recalled: “ One aim of TOES was to build an international citizen coalition for a new economics grounded in social and spiritual values to address concerns the G7 consistently neglects – such as poverty, environment, peace, health, safety, human rights, and democratic global governance. TOES has since become an annual companion to the official G7 meetings. Since 1984, the enormous growth in environmental awareness and the collapse of the world communism have demonstrated what effective citizen movements can accomplish and have created important new openings for a post-modern approach to economic policy.”

Among other things, the TOES gatherings demanded that the system of global economic governance be democratized. TOES suggested that the G7 Summits should be replaced by a more representative World Economic Council working within the UN system and responsible for coordinating the work and policies of the UNDP, the World Bank, IMF, GATT and other such organizations. Apart from this official body, the need for an independent citizen forum was also visualized. TOES aimed to play that role as an independent, annual international forum for NGOs, grassroots struggles and concerned citizens from across the world. This civil society platform was able to make room for a more diverse range of views than the official governmental summits because the participants could take a wider view of reality. Their purpose was to ensure that the vital interest of the disempowered were not completely ignored.

The TOES process became one of the nodal points for articulation of new economics thinking and exchange of ideas among its proponents. This included both political activists and academics who were challenging the neo-liberal orthodoxy from various different angles.

Unfortunately much of the broad-based work within TOES for a new kind of economics has been obscured by media reports which misleadingly depict it as just an anti-globalization movement. It is true that TOES was a precursor of the decentralized global process which led to the large and multinational gatherings of the World Social Forum first held in Porto Allegre, Brazil, in 2001. Though the WSF platform is marked by vociferous opposition to capital driven globalization, underlying this is a quest for alternatives to existing ways of organizing economic life.

The process has also made a vital contribution to the creation of an international network of activist groups committed to various shades of perspectives on new economics.

The New Economics Foundation

The formation of TOES led to the birth of the New Economics Foundation (NEF) in the UK in 1986. The NEF is a think-and-do-tank working for a “new model of wealth creation, based on equality, diversity and economic stability.” The NEF’s newsletter carries the logo: “economics as if people and the planet mattered”.

Though it began as a modest organization, the NEF has been intensely engaged on many fronts from the outset: the possibility of sustainable cities; the new economy of information; and a project on religions and new economics involving dialogue with people of different faiths and looking at the economic experiences of children from different faiths. The latter project led to a children’s book on religion and economics. NEF’s work falls into broadly four areas: community, work, democracy and global economy.

A registered charity, NEF is funded by individual supporters, public finance, businesses, and international grant-giving bodies. The radical edge of NEF’s vision may still be out on the fringe, but many of the ideas nurtured within its walls have actually become public policy.

It has promoted the spread of Time Banks, a particular kind of community currency. It has also designed sustainability indicators which measure aspects of life that were earlier inadequately accounted for or never measured at all. For example, the NEF has evolved ways of mapping the value of social connections, justice, participation and environmental sustainability. This work on indicators, though largely focused on the UK, has fuelled a global trend of trying to map how economic growth and sustainability often diverge. The data provided by the alternative indicators plays a key role in measuring the actual, ground level impact of economic policies. Citizens then find it easier to hold policy makers accountable and to generate political opinion to press for changes. Thus well-being and sustainability indicators are simultaneously a means of social engagement as well as a management tool.

Local and small business has been another major focus of NEF’s work. Its 2001 publication, Homeopathic Finance Equitable Capital for Social Enterprises, by Pat Conaty, showed how growth of social enterprise is held back due to lack of finance and appropriate legal structures. Conaty’s report, based on the practical experience of social entrepreneurs, recorded innovative practices which overcome these barriers.

Similarly, the NEF study Low Flying Heroes showed that much of Britain’s economy depends on almost a million ‘off-the-radar’ community-level micro-social entreprises. These entreprises, which range from child-care facilities, to community theater groups and cafés to credit unions, involve up to 5.4 million people. This social capital is not only largely unstudied and undervalued, it suffers due to various bureaucratic obstacles. NEF’s various projects have not only outlines the complex needs of these informal organizations, but also lobbied with government to foster systematic support for them.

NEF’s Local Money Flows measurement program has developed the “Local Multiplier 3” tool, which enables communities to monitor and map how money flows through the local economy. Such monitoring helps to demonstrate how both individuals and local businesses benefit when more money stays within the local community, rather than rapidly moving out.

In collaboration with Friends of the Earth and the Center for Environmental Strategy (University of Surrey), NEF developed the Index for Sustainable Economic Welfare for the UK.

From 1995 to 2000, NEF carried out a series of pioneering social audits of companies. Such audits measured and evaluated a company’s social and ethical performance, thus making it more accountable to its stakeholders. NEF’s work has also demonstrated how such audits enable companies to manage their affairs more effectively. This work was in turn instrumental in the formation of the Institute of Social and Ethical Accountability to promote professional standards around social accounting and auditing.

As a corollary of this, NEF helped to widen the space for discussion about trade liberalization. This naturally meant tackling the resistance, within official and academic circles, to recognizing the theoretical flaws in the neo-liberal model. NEF has been among the most consistent voices on how and why economic growth continues to be defined in unsustainable ways. Years before it was commonly acknowledged, the NEF warned that climate change would soon become the organizing principle of the world economy. NEF’s Andrew Simms pointed out the absurdity of ‘global governors’ – namely the IMF and World Trade Organization – clinging to abstract economic theory as though it were more important than the real world. Simms stressed economic theory’s vulnerability to environmental disasters and even pleaded for a daily prayer to “deliver us from the abstraction”. Within a few years it came to be widely accepted that the monetary toll of climate change could trigger a global economic crisis.

By 2003, the significance of NEF’s various innovations was widely recognized. At the start of the 21st century, NEF could look about with satisfaction to find some of its ideas absorbed into mainstream policy, such as eco-taxation, social reporting, and sustainable development indicators. Time Banks set up with the involvement of NEF were buzzing with activity all over the UK. Ethical investments, a fledging concept in the mid-80s, had taken off. The Jubilee 2000 campaign succeeded in getting commitments for $34 billion worth of debt cancellation for the poorest countries of the world.

NEF has become a resource center for people looking for both conceptual clarity and ‘how to’ advice on many vital areas – such as Social Audit, Community Indicators, Micro Credit, Community Land Trusts, or Cooperatives.

However, visible progress was clouded by the NEF assessment that in the same 15 years the global situation has deteriorated further, with deepening inequality and climate change threatening our long-term survival. Efforts like NEF essentially see themselves as being a work-in-progress. Across the world, there is a wide range of such initiatives today.