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Approach to Transformative Economies 02

Unknown Member 22 November 2022

The conventional economy, inherited from industrial society, is conceived as a linear, closed and self-sufficient system that ignores and makes invisible the natural cycles and the physical, social and cultural spheres on which it depends for the economic process itself. This perspective reduces their conception of “work” to what happens in the commercial sphere and is carried out in exchange for a salary, leaving out a huge amount of care work, which disappears because it is not transferable to an income statement and which They are, however, essential for the reproduction of life.

Likewise, it is a system based on a logic of continuous and accelerated growth, which does not recognize the physical limits of the planet and its regeneration needs, and which confuses production with the extraction of resources, to the point that it speaks of ” produce” oil or iron, when in reality what is taking place is the extraction of a pre-existing and finite good. On the other hand, his eagerness to monetize everything reaches situations as paradoxical and lacking in logic as the consideration, via GDP, that phenomena such as wars or meteorological disasters are generators of wealth; because this destruction is a monetarily quantifiable way to generate new activity and, therefore, new benefits.

Social and Solidarity Economy (source: REAS)

Thus, this economic system, instead of satisfying the needs of the entire population in a fair and equitable manner and doing so in a way that is respectful of the environment from which it comes, what it ends up generating is a profound accumulation of wealth for a few people while large layers of the population is exploited, marginalized and excluded, and is destroying the finite resources generated over thousands of years as well as the planet’s biodiversity, changing the climate towards horizons that are difficult to reconcile with life on the planet. But this does not have to be like this. The economy is not something neutral nor is there a single way of understanding it, but rather, on the contrary, there have been many ways of carrying it out throughout history, and as we can see, capitalism is not the least bad of them, as is usually the case. tell.

Currently there are many critical currents that question all these issues and that offer other formulas to satisfy our needs within the paradigm of the sustainability of life. The feminist, ecological or social and solidarity economy are currents of thought, along with social movements, which not only review these myths and precepts, deconstructing and reformulating concepts such as “economy”, “production”, “work ” or “progress”, but rather offer alternatives for the creation of other inclusive, fair and sustainable economic frameworks.

We can encompass these and other critical economies under the term “Transformative Economies”. According to Álvaro Porro, from Barcelona City Council’s Commissioner for Social Economy, Local Development and Food Policy and one of the first theorists of the concept, “Transformative economies are that vibrant ecosystem of economic and business practices that somehow go beyond the most conventional, based on putting in the center elements other than the return on capital. Here we find a very varied and diverse ecosystem, where there are very old and relatively solid realities, or at least with actors with relative economic and financial solidity, and newer or more demonetarized realities, on the border of what we commonly understand by economy that is difficult to define but that undoubtedly contribute transformative practices.” This author elaborated a taxonomy to understand the richness, diversity and complementarity of this ecosystem so that we could also feel that in the plurality there is also something common.

Ecosystem of Transformative Economies (Source: Alvaro Porro)

For a better understanding, we will detail some differential features of some of these currents:

The Solidarity Economy:
Proposes the incorporation into business practice of logics of cooperation, mutual support and participation, which establish fair and proportional salary scales, under transparent and responsible social and environmental practices that do not seek profit and accumulation but rather the quality of life of people and their environment. It is committed to bringing production and consumption processes closer to reduce the environmental impacts associated with transport and distribution and relocate wealth in the territories through short channels that reduce intermediaries and revalue productive activity at source.

As stated in the Solidarity Economy portal : “The Solidarity Economy is an economic model as well as a social movement that seeks to incorporate into the management of economic activity the universal values ​​that should govern society and relations between all citizens: equity , justice, sustainability and direct democracy, thus bringing these values ​​to production, distribution and consumption activities, and thus generating another way of doing economy based on new, fairer, more supportive and sustainable values”. These values ​​are included in the Charter of Principles of the Solidarity Economy , the backbone of this model.

Under this new economic paradigm, we find hundreds of companies that operate under other logics, putting the sustainability of life at the center of their activity and offering ethical, sustainable and supportive alternatives to satisfy the vast majority of the needs for products and services that we have. today. Many of them are grouped into REAS Red de Redes , a confederal network at the state level and the main representative of this economic model with more than 25 years of experience in the Spanish State.

The Ecological Economy:
Establishes the need to incorporate the economic value of the flow of materials, from its extraction to the treatment and elimination of waste, so that it returns to the economic cycle, as well as adapting the logic of production to production processes. functioning of nature and respect and adapt production to its capacities and cycles.

As collected by Ecologists in Action,“Ecological economics is a science that studies the viability in terms of sustainability of the economic model, through the flows of materials, energy and waste that are needed. Unlike the conventional or neoclassical economy that aims to pursue economic growth through the optimal use of inputs and factors of production. Ecological economics is not a branch of economic theory but a transdisciplinary field of study, so that different areas of knowledge are merged so that complex problems can be faced. The center of the approach is sustainability, through knowledge of the interaction of the economy as a subsystem of the biosphere on which it depends from the biophysical point of view and the need for the economy to develop within the ecological limits of the Earth (…) Therefore, the economy Ecology studies the relationships between the natural system (biosphere) and the social and economic subsystems that develop within it, with special emphasis on the unfeasibility of continuous economic growth that collides with the physical and biological limits of ecosystems. An economy that develops within the limits of nature and in terms of social justice are central to ecological economics, aspects that are not central to conventional economics. Ecological economics studies the relationships between the natural system (biosphere) and the social and economic subsystems that develop within it, placing special emphasis on the infeasibility of continuous economic growth that collides with the physical and biological limits of ecosystems. An economy that develops within the limits of nature and in terms of social justice are central to ecological economics, aspects that are not central to conventional economics. Ecological economics studies the relationships between the natural system (biosphere) and the social and economic subsystems that develop within it, placing special emphasis on the infeasibility of continuous economic growth that collides with the physical and biological limits of ecosystems. An economy that develops within the limits of nature and in terms of social justice are central to ecological economics, aspects that are not central to conventional economics.

Feminist Economics:
Calls for expanding the concept of economics beyond what happens and is exchanged in the market, including all care work without which life would not be possible and which in most cases remain outside of consideration. economic, such as unpaid domestic and care work. Incorporate a gender perspective, taking into account the unequal impact of economic activity between men and women and between them from an intersectional perspective.

In general terms, as noted by the Sevillian economist, Astrid Agenjo, there are three key aspects on which the different perspectives that we can include within Feminist Economics would pivot:

  1. The intention is to underline the limits of what is precisely understood by “economy” (we have already argued that the economy goes “beyond the market, but how much “beyond”? Or “beyond here”?).
  2. It seeks to analyze the role of gender relations in it (is it about adding one more variable that allows us to obtain disaggregated data or questioning the analysis as a whole using gender as a central category? How do we introduce other axes of oppression?) .
  3. It raises the feminist commitment that the theory itself has with the transformation of inequalities, with political action (but what is the degree of transformation that we are considering? And what knowledge is considered valid for it? Who generates it? From where?)

Circular economy:
You can define as: “a regenerative system in which the input of resources and waste, emissions and energy leakage are reduced to a minimum by slowing down, closing and narrowing the circuits of material and energy” , in the words of Martin Geissdoerfer.

The Circular Economy is not subject to a specific socio-technical system, but rather implies a transformation of all production and consumption processes. In the business world, the Circular Economy has mainly shaped waste management and recycling practices, while practices of reusing or remanufacturing materials and systematic reduction of material consumption are still rare. However, some companies are increasingly working to extend the life cycle of their products by offering maintenance and repair services.

Economy for the Common Good:
The Economy for the Common Good places the human being and all living entities at the center of economic activity. It translates standards for human relations, as well as constitutional values, into an economic context and rewards economic actors for behaving and organizing in a humane, cooperative, ecological, and democratic manner.

The basic operation is as follows: Companies produce a balance sheet of the common good: using the common good matrix, the results show the contribution of a company to the common good. It is clear how fair, sustainable and transparent they are. Products receive an ECG label with the Common Good score – this enables customers to make truly informed decisions about the products and services they purchase and consume. Economic policies provide advantages to ECG companies: Through taxes and incentives, ECG companies become price competitive and more successful in the market.

Matrix of the common good (Source: Economy for the Common Good)

Popular and informal economy:
The popular or informal sector of the economy is very important as many people, particularly in the global South, depend on it for their livelihoods. For example, three quarters of Mali’s population is involved in the informal economy.

The popular economy consists of economic activities that are not covered by formal arrangements such as taxes, labor protections, minimum wage regulations, unemployment benefits, or documentation. Many self-employed workers, micro-enterprises, merchants, and mutual aid practices are part of the popular economy. The popular economy is not the same as the solidarity economy, but it is aligned in many ways because actors often find collective ways to meet social and economic needs, such as lending circles, soup kitchens, mutual aid, mutual insurance systems, etc. etc. .

Sharing Economy:
An economic model defined as a peer-to-peer (P2P) activity of acquiring, providing, or sharing access to goods and services that is often facilitated by a community-based online platform. Communities of people have shared the use of assets for thousands of years, but the advent of the Internet has made it easier for asset owners and those seeking to use those assets to find each other. This type of dynamic can also be called the sharing economy, collaborative consumption, sharing economy, or peer economy.

Gift Economy:
The gift economy refers to economic activity characterized by offering services and goods to other members of the community without the expectation of monetary reward. Giving things to other people can be based on pure altruism, the desire to gain status in society, the hope of reciprocal gifts in the future, or out of a sense of mutual obligation. A gift economy challenges conventional economics that assumes that individuals maximize utility based on observable monetary gains. The gift economy gives greater value to qualitative relationships between dependent people. Commodity economics places greater value on quantitative trade in goods.


In conclusion, all these trends and proposals highlight the need to address the social and environmental impacts of the current economic system and together make up a battery of formal and informal economic models and practices that propose alternatives to the economic model. dominant and that put the care of people and the planet above the economic balance.