The word economy, in etymological terms, means ‘the rules for managing the shared home’. But in practice, this etymological meaning has been lost from sight, giving way to a science and ideology of production and trade systems, often cut off from any general consideration of both governance and other social sciences. This current meaning is so generalized as to make a return to the term’s roots quite difficult. And yet, the challenge in today’s world is precisely to redefine the governance of production and trade as a function of society’s fundamental objectives.
This is why this report presents two extracts from Essay on the Oeconomy:
1. From economy to oeconomy: the importance of vocabulary which justifies the creation of a new word;
2. Oeconomy mission statement which proposes a definition of the word.
1. From economy to oeconomy: the importance of vocabulary
Vocabulary has an essential part to play in the process of constructing any new system of thought. Vocabulary is the key to unlocking thought. I have already mentioned this point in relation to the confusion between economic globalization and societal globalization. And what of the word economy itself? In etymological terms, it comes from two Greek words, oikos meaning household, the shared home, and nomos meaning the law. Strictly speaking, then, the economy is the set of rules that govern the proper management of the household. And, as Mikhail Gorbachev highlighted in his famous speech to the United Nations in 1988, our shared home, our household, is now the planet. We come up against the original meaning of the word economy in terms such as household economy and domestic economy. And it is fascinating to see that the adjective economical, marked by the scarcity of natural resources that has always characterized our societies, now refers to a pattern of behaviour that is exactly the reverse. An economist is someone who seeks to constantly create new needs, to never-endingly stimulate new desires in order to produce the growth without which the system would collapse; in short, to keep the cyclist—victim of the bicycle syndrome—in the saddle. You only have to look at the way in which consumption is spoken of, year after year, in an increasingly martial style reminiscent of military communiqués. We can in all seriousness read sentiments in our newspaper such as “luckily, American consumers are keeping their spirits up and continue to borrow”, “consumers’ confidence is intact” and “the sales have boosted growth”. Down with puritan parsimony. Long live waste.
What can we do when a word has over the years taken on a widely-held meaning that is far removed from its etymology? What can we do when what is really required is precisely a return to that etymology, since we need to totally rethink the rules for managing our shared home and our natural resources and for organizing production, trade and consumption? We have two solutions. Either we wage a battle to give economy back its original meaning, or we create a new term. In the case of governance, even though the word had the connotations of the very restrictive meaning given it by international institutions, I felt that rehabilitating the term, an old French word, was worth the effort, and that we had to fight to give it a new, resonant and global meaning. When it comes to the word economy, it seemed to me that we would necessarily be fighting a losing battle. I have therefore come to the decision to use the term oeconomy to designate the new science and art of organizing material and immaterial exchanges between human beings, between societies, and between humanity and the biosphere. This is the word that I will be using from now on in this text. I will therefore only speak of economy when discussing the current state of economic thought. This will at least have the virtue of signalling my views and aspirations and will avoid time being wasted by putting economy between inverted commas, like the people who flap like penguins during meetings as they use both hands to put inverted commas around the term they are using to show that they are not giving it the conventional meaning.
2-Oeconomy mission statement
« The oeconomy is a branch of governance. Its goal is to create actors, institutional arrangements, processes and regulations aiming to organize the production, distribution and use of goods and services in order to guarantee human beings the utmost possible well-being; it does so by making the most of technical capabilities and human creativity whilst always striving to preserve and enrich the biosphere and protect the interests, rights and power of initiative of future generations, governed by principles of responsibility and equity that everyone can subscribe to. »
a. The oeconomy’s goal is the production, distribution and use of goods and services
This requires us to specify which goods and services are in question: their underlying nature, destined use, and alternative methods for their production, use and management. I will describe them in part four.
b. The oeconomy is a branch of governance
It forms part of the set of regulations created by societies to guarantee their survival and happiness, their permanence and their capacity to adapt—a description that does in fact define governance. We can therefore take the general principles of governance—as described by me in La démocratie en miettes (Fragmented Democracy) for example—and apply them to the oeconomy. I shall do so in the part five.
c. Production, distribution and use of goods and services must be governed by principles of responsibility and equity that everyone can subscribe to
This means that, in a context where the consequences of our acts are not fully predictable and result less from individual intentions that the accumulated effect of millions of similar acts, the exercise of responsibility by producers, distributors and users is an integral part of the oeconomic act. The legitimacy of the system is measured directly by the feeling of equity it conveys.
d. The oeconomy creates actors, institutional arrangements, processes and regulations
We have already talked of the importance of the configuration of actors, particularly pivotal actors. Just as public management cannot exist without administrations, the oeconomy cannot exist without the actors and institutional arrangements that look after the practical organization of combining production factors, put together the range of goods and services and manage their distribution. When it comes to the oeconomy, just as in other areas, we therefore need to take into consideration governance, the importance of institutional engineering, and the factors that will motivate the various actors.
e. The production, distribution and use of goods and services must guarantee human beings the utmost possible well-being
The challenge for the oeconomy is not to endlessly develop trade goods but to guarantee conditions of well-being for humanity as a whole—well-being that is not reduced to the quantity of goods and services consumed. It depends equally on the way in which they have been produced and to what extent participation in the acts of producing, distributing and using integrates each individual into society.
f. The production, distribution and use of goods and services must be achieved whilst protecting and indeed enriching the biosphere
This need is as important as humanity’s well-being. The oeconomy is not based on an arbitration between growth and environmental damage. Protecting the biosphere is a prerequisite, enriching the biosphere is a totally separate goal.
g. Protecting future generations is not enough
Future generations need to have the same power of initiative as we do so they can choose their own path. Assessment of this power of initiative is a separate component of the oeconomy.