Towards a fair and sustainable economy: comparing different approaches

This article summarises the key findings from a comparative study of seven promising recent initiatives aimed at creating a fair and sustainable economy. The initiatives were analysed from different perspectives, such as their position to the future of capitalism and economic growth, and the urgency and fairness of the transition to sustainability. A key question is: is it enough to fix the current economic system’s defects or is a completely different kind of system needed? What kinds of economic policy means and other mechanisms of change should be introduced to support the transition to a fair and sustainable economy?

The study (published in Finnish) was commissioned by Sitra and conducted by the BIOS Research Unit in spring 2022.

The initiatives compared were:

• doughnut economics
• the eco-welfare state
• ecological reconstruction
• the European Green Deal
• the Green New Deal for Europe
• the well-being economy
• the mission economy and mission-oriented innovation policy.

Common goals but different approaches

Science-based initiatives for a fair and sustainable economy share a common goal: to change economic thinking and the operation of the economy to solve the social and ecological problems that affect the sustainability of present and future societies. They all share a view of the present situation where economic growth up to now has been ecologically unsustainable. In addition, they aim for an economy and policies that help to adapt to the planetary boundaries in a socially sustainable way.

Despite common starting points, there are ultimately more differences than similarities between the initiatives. Roughly speaking, the seven initiatives compared can be divided into two groups. The initiatives in the first group (The European Green Deal and the mission economy) are largely based on the premise of current economic thinking and the operating models of the present-day economy.

The initiatives in the second group (doughnut economics, a Green New Deal for Europe, the eco-welfare state and ecological reconstruction) call for a more profound change in economic thinking and operating models. The well-being economy initiative can fit both groups depending on whether the focus is on the deeper reforms called for by NGOs or on the way the initiative has been adopted by states.

The following images provide a more detailed view of the similarities and differences between the approaches.

Enriching the debate

There is already a rush to implement the sustainability transition, so ecological and social issues will inevitably gain more weight in social development and economic policy in the next few years. The initiatives for a fair and sustainable economy contribute to an increasingly important debate from many angles. Although only a few of the initiatives explicitly seek to change the debate on the economy, all of them have the potential to do so. But have they?

They strike at the heart of the current economic debate. They challenge and address established thought and many of them take specific positions on the changes needed in the economy.

The domestic economic debate in Finland rarely manages to surprise. According to a media analysis commissioned by Sitra, the economy – and even its future – is usually examined through traditional measures such as GDP, stock market indices, interest rates and inflation. Forecasts are provided by familiar economists. Considering these findings, it is not surprising that the initiatives are only slowly entering the Finnish economic discourse.

Although there has been a mixed reception and varying degrees of attention paid to different initiatives, almost all have so far remained within the realm of what can be termed “​​elite discussion” and have not reached the general public on a large scale. More profound changes in the economy require a greater interest in the initiatives from different parties, from the media to various institutions, and from individuals to researchers. More energy, a new direction and even profound change may be the result of economic debate and policy, if we only dare to allow it to happen.

Learning from each other

The initiatives are also in dialogue with each other. When discussing the economy of tomorrow, initiatives can at best challenge and learn from one another, creating new ideas and action that contribute to constructing a fair and sustainable economy in a progressive way.

Thanks to its official EU status, the European Green Deal progrmme is a kind of flagship initiative. It attracts the strongest political commitment and has regularly been featured in the news. Although being reformistic, its economic reforms do not go as deep as in some of the other initiatives. It is therefore often challenged by other initiatives. In this way, these initiatives can push each other to take a stand on various issues beyond what is included in the original initiatives. Greater and interesting friction that emerges from such a dialogue can help move the discussion on the economy towards the future.

Which approach should I follow?

The variety of orientations among the initiatives may seem confusing for the average person or organisation working for a fairer and more sustainable economy. Which initiative should we follow when developing our plans for action? The answer is simple. In making the transition towards a fair and sustainable economy, all initiatives are valuable and no single one initiative can do the job. The most important question is not which initiative to follow, but what is stopping us from getting started?