Profit or the common good?

By Christoph Köhler, March 2017

Economics lessons critical of the system in class 12 at the Waldorf school in Prien.

Photo: © knallgrün /

In the last school year, a number of pupils in class 12 asked me if I could give a main lesson on the subject of economics. The upper school council granted the class’ request and approved a three week long main lesson entitled “Economics: a different way of thinking” as a pilot project, also to help gaining experience about the way in which a main lesson with economic content could be integrated into the class 12 curriculum.

When it comes to the biggest problems faced by our time, it has to be admitted that these problems are not only caused by our current economic system but that a solution will never be able to be found within this system. This is due to the fact that our economy is built on constant growth. The economy can only experience growth at the expense of the environment, limited natural resources and common properties as well as those performing the work. With this in mind, it would be downright irresponsible to design a main lesson on the subject of economics which simply repeats the current dogma when it comes to the way in which we deal with the environment and our fellow human beings, as well as entrenching the supposed logic and lack of alternatives that compose the majority of economic teaching in the growing young person.

With such a critical approach, the aim is to teach the pupils that even when simply dealing with the basic building blocks of economics we will encounter assertions that can barely be justified and are therefore open to argument. The main lesson shouldn’t be limited to just levelling criticism at the currently existing system though. The focus should lie on outlining an alternative intellectual approach that starts from the points of criticism and moves towards formulating a new goal for economics and social coexistence. Therefore, the main lesson is not simply about imparting theories but also about the introduction of specific, successful projects.

The pupils should discuss practicable alternatives and, as a result, be torn out of their economic and social policy lethargy. The best case scenario would be that, after the completion of this main lesson, each pupil would recognise their opportunities for action and the ways in which they can contribute within the system, and would take on the challenge of helping shape the future of our society in a positive manner.

Capitalism’s view of humanity and the solidarity-based economy

I began the main lesson with a Tullock auction of a completely normal one Euro coin. The main principle of a Tullock auction is that every participant has to bid more that the last but also has to pay their bid to me immediately regardless of whether they win or lose. The last one to bid wins the auction. It is possible for a bidder to win the Euro for just one cent, if the next bidder doesn’t offer more for it. When the auction took place in the classroom, the amount of the bids was successively raised by the pupils until the final bidder won the Euro for the price of one Euro. As the auctioneer, I ended up “generating” revenue to a total of € 4.82! At least half of the pupils actively took part in the auction.

How did this happen? Was Adam Smith right when he explained that the pursuit of profit of the individual is the central motive of all human action? All current economic theories are based upon this view of the human being. Or was it perhaps the rules of the auction, the general framework under which they had to operate, that determined the conduct of the participants?

What about the other values that do not accord with the egoism of each individual? The pupils realised that gifts such as the capability to feel solidarity, love, to be able to share, or to find spiritual meaning in things and to make meaningful sacrifices do not play a role in the modern economy. However, both forms of behaviour are there in potential in human beings and the overwhelming majority of the pupils became convinced that the external conditions determine which side of a person emerges. A holistic view of the human being that takes all of a person’s predispositions into account and balances all of them is the approach of a solidarity-based economy.

In what way is it possible to envisage an economy built upon the more comprehensive view of the human being of the solidarity-based economy instead of capitalism? As an initial model, already in its pilot stage, I presented Christian Felber’s Economy for the Common Good. The central element of this school of thought is the common good balance sheet. This is meant to supersede the more ordinary financial balance sheet, or at least complement it.

The common good balance sheet comprises an evaluation and scoring of various aspects of a company’s orientation towards the common good, in particular in the areas of human dignity, cooperation and solidarity, ecological sustainability, social justice, and democratic co-determination and transparency in relation to all contact groups, namely the suppliers, investors, employees and business owners, customers and business partners, and the social environment. A positive common good balance should be a requirement for tax benefits, grants, subsidies, loans, and contracts from the state. This should lead to economic interaction orientated towards the common good being rewarded instead of economic interaction orientated towards profit.

The endlessness of human needs and the post-growth economy

Economic action is a necessity because the endlessness of human needs must be brought into harmony with the scarcity of resources. This assertion, which is barely granted any commentary by school textbooks on economics, for me constituted the central theme of the main lesson.

Are human needs really endless? Economists love to lean on Maslow’s hierarchy of needs as justification for this statement. For every need that is met, a new need emerges, that a person then tries to satisfy with their limited means. However, the line between tangible and intangible needs is unclear. The needs themselves are certainly endless. The longing for recognition, peace, freedom, love, self-realisation cannot be silenced. But what is often overlooked is that social needs, individual needs and the need for self-realisation and finding ourselves have a strongly intangible character.

We are constantly bombarded by advertisements that suggest that the only way that we can meet these intangible needs is though possessing more and more material goods. And this, of course, does not work out. It would be much more sensible to deal with the actual needs themselves, instead of settling for a life under the tyranny of an addiction to consumption.

In the discussion I therefore posed the question that material needs, contrary to the point of view of most economists, perhaps aren’t endless if they aren’t triggered through external means.

An economy without the continual requirement for growth as demanded by growth theory is outlined by Nico Paech in his theory of the post-growth economy. An economic use of resources, self-sufficiency and regionality could all lead to an increase in the quality of life, if we could take leave of traditional societal beliefs and the continual, material need for more.

The illusion of scarcity and how it can be overcome

The children’s game “Musical Chairs” offered a nice, rhythmical intermission in this predominantly cognitively informed main lesson. As the game master I demonstratively piled up the discarded chairs into a tall tower, in front of which I posed as the victor of the game. Was there a scarcity of resources in this game? Only the small prompting question of what this game had to do with reality was needed and a string of profound insights burst out of the pupils. Examples such as the destruction of foodstuffs to create price stability or the scarcity of water in Africa due to the business practices of Nestlé were just two of the many, varied aspects brought up on the topic of scarcity.

It is another dogma of economic theory that we have to make do with an insufficient number of available goods. In reality, in a lot of areas of business, scarcity is artificially created; through speculation, through hoarding, through property ownership rights, through extravagance, through usage of resources that is not orientated towards meeting the needs of people, and through destruction of the environment, all of which are a result of the capitalist way of doing business.

It is not only goods that suffer such scarcity but also the money which is needed to acquire them. As Mahatma Ghandi put it, “the world has enough for everyone’s need, but not enough for everyone’s greed”.

All over the world there are movements seeking to escape this artificial scarcity. The open source movement (free software, Wikipedia, open technology) is a prime example of how to make use of abundantly available resources for the benefit of all. The freshly emerging share economy is a new approach in which purported scarcity is counteracted through the sharing of goods, even if I had to point out to the pupils that due to commercialisation, this fundamentally positive concept is being twisted into its opposite.

Taking it even further is the concept of the gifting economy, which is working towards the complete abolition of scarcity. This, however, was evaluated by the pupils as being too far removed from reality and, based on their own backgrounds and experiences of this world based on material commodities, not in the least bit viable or practicable.

Greed is good and other forms of the economic principle

If we accept the economic objective of satisfying as many endless needs as possible with scarce resources, the next step is logical. The economic principle is that you should aim to achieve as much as possible with the least amount of resources. The only thing that matters here is the efficiency of the satisfaction of needs – not the feeling of satisfaction gained when working.

With the aid of a small management simulation game, I tried to illustrate the effect of this fixation on the needs of the consumer: I let the pupils spend five minutes drawing on their mobiles with the instruction that they should make their drawing as beautiful as possible. Then I had them repeat this, but this time with the aim of completing as many as possible. The economic principle leads to efficiency, lowered costs and also, in certain circumstances, economical usage of energy and resources. However, it also leads to streamlining, wage dumping, environmental damage and the attitude that “greed is good”. It literally forces us to pass the costs on to others. The economic principle is also hard to square with responsible conduct towards the environment.

As an approach to solving this problem I put forward the idea of internalising the external costs, as is already being implemented, for example, in the case of emission allowances. However, it also needs to be made clear to the pupils that, in doing so, we have left the path we have been on up till now of trying to think differently about economics, and are attempting to solve the problems of the economic principle within the confines of the system. This is also understandable.

The economic principle is the inevitable result when we work with the fundamentals of needs and scarcity. It is only possible to think differently about economics when we do not just simply criticise the symptoms, such as the excesses of the economic principle, but also scrutinise the goals.

Globalisation versus fair trade and regionalisation

The same applies to proposed solutions discussed within the context of globalisation. Globalisation is treated as an aspect of the extreme division of labour. I examined the fascinating aspects of this worldwide division of labour through reading aloud Leonard E. Read’s essay “I, Pencil” which demonstrates just how many people all over the word have to work together without any form of central management to produce even such a simple product as a pencil.

I examined the negative sides to the worldwide division of labour through showing a short film on the development and production of a pair of jeans. I then let the pupils directly experience the problems of the worldwide division of labour through a management simulation game on the topic of the production of mobile phones.

The discussions on the many negative consequences of worldwide globalisation were threatening to get out of hand and so I explicitly started to direct and thereafter limit them. It was also a concern for me that the pupils should not sink into hopelessness in place of being shown and discussing alternatives. Therefore, I offered the pupils another option and showed them some short films on the topics of fair trade and regionalisation.

Afterwards I had them complete some group projects on these issues. Fair trade is the concept that the people who are actually producing the products we make use of in everyday life should be ensured a level of income that allows them to survive. This is made possible through forgoing intermediary trade and boycotting exploitative firms, but also through making sure that fair prices are paid for the products produced.

Unfortunately, there was not enough time in the main lesson left to discuss the fact the fair trade on a large scale can only be financially viable if we reduce the excessive demand of consumers. I also addressed one of the central elements of regionalisation, namely the use of complementary currencies, the use of which ensures that the money is retained in a region and the need for growth is overcome through the principle of circulation safeguarding in place of compound interest. The fact that the most well-known and successful regional currency in Germany, the Chiemgauer, was created at our school, as well as the way in which it functions, was not actually known by all pupils in the class.

Not relevant for exams, but still essential

The economics main lesson addressed pupils of all levels of ability and ways of learning. Economics is a central theme in life and even those pupils who struggle with academic subjects were able to take something away from the main lesson. Every pupil who is concerned about social and societal issues, and that is no small number at a Waldorf School, cannot escape the subject of economics.

Only one group of pupils were unable to gain anything from this main lesson, namely those who evaluate the usefulness of a main lesson solely on how relevant its content is to the passing of their exams. As economics is not included in our exam syllabus, this main lesson did not have much to offer these pupils in that respect.

However, I do not view our school as simply being a replacement for other schools but rather as a Waldorf school. Class 12 plays a central role in young people’s development. This is the point at which they are released into the adult world and therefore they should be taught content that makes it easier for them to find their place in the world, in their social environment and in society.

About the author: Christoph Köhler is a physicist and teaches mathematics and physics in upper school at the Chiemgau Free Waldorf School. The author would be happy to respond to critiques, suggestions and discussion. Specific teaching materials can also be supplied.



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