SUSTAINABLE LIVELIHOODS: REDEFINING THE GLOBAL SOCIAL CRISIS

A feature of the People-Centered Development Forum,   Release Date May 10, 1994

by David C. Korten

In March 1995, the World Summit for Social Development will bring together heads of state and government in Copenhagen to "agree on a joint action for alleviating and reducing poverty, expanding productive employment and enhancing social integration." These are fundamental needs that stem from a growing global social crisis. Of the three needs, attention is likely to focus on expanding employment as the solution not only to unemployment, but also to poverty and social disintegration. Indeed unemployment a clear, universal and growing problem is almost certain to be a focus of political concern and action at local, national and global levels for many years to come.

This paper presents an argument, emerging out of discussions among a number of grassroots citizen organizations, that attempting to solve the world's employment crisis using conventional job creation measures such as economic stimulus packages that encourage increased consumption and offer incentives to large investors cannot work. To the contrary, such measures will almost certainly deepen the global social crisis and increase the stress on an already overburdened environment. We need to look in a very different place for a solution to our collective social crisis that will lead more directly to eliminating deprivation and mending the social fabric that has fallen into an advanced state of disintegration.

A suggested starting point is to focus not on the need for jobs defined by an English dictionary as "a specific piece of work, as in one's trade; an activity performed in exchange for payment" but rather on the need for sustainable livelihoods defined as "a means of living or of supporting life; of obtaining the necessities of life." In light of current realities it is wholly unrealistic to expect that any available policies will result in providing adequate and satisfying jobs for everyone in the world who might want or need one. However, assuring everyone an opportunity for a satisfying and sustainable livelihood by which they may obtain the necessities of life even while significantly reducing traditional welfare assistance programs is entirely within our collective means.

WHY CONVENTIONAL SOLUTIONS DO NOT WORK

Nearly fifty years of international development effort have focused public policy and resources on efforts to accelerate the growth of monetized economies. These efforts have achieved a five-fold increase in global GNP since 1950. Yet unemployment, poverty, and inequality continue to increase, the social fabric of family and community is disintegrating, and the ability of the ecosystem to support human life is being destroyed all at accelerating rates. Left without adequate opportunities for productive employment, a major portion of humanity is marginalized from the mainstream social, political and economic processes of the societies in which they live, and more than a billion people are consigned to lives of abject poverty. The tragic irony is that while a wide range of essential needs go unmet, hundreds of millions of people have been forced into unproductive idleness or meaningless work.

These economic failures have gripped the world in a deepening social crisis every bit as severe as the parallel environmental crisis. Both crises result from misplaced priorities that are in turn a direct consequence of confusing means with ends. Very simply, we have defined our goals in terms of growing economies to provide jobs a means rather than developing healthy sustainable human societies that provide people with secure and satisfying livelihoods, an end. Consequently, the economic growth of the past twenty years has primarily benefited a tiny elite while leaving the rest of humanity, present and future, with the bill. It is time to recognize that we are getting the wrong answers because we are asking the wrong questions.

Deregulation and Globalization: A Race to the Bottom

The obsessive quest for economic growth has provided the impetus for recent economic policies geared to the deregulation and the integration of local markets into a single global economy. As local economies have been globalized, economic power has shifted from smaller, locally rooted producers to powerful global corporations beyond the reach of government regulation and freed from accountability to the public good. These corporations have in turn used technological advances to shed jobs by the hundreds of thousands producing ever more of what existing markets will absorb with ever fewer workers. They have similarly taken advantage of economic integration to move production to wherever wages, working conditions, taxes and environmental standards allow them to produce at the lowest cost for sale wherever markets exist. The result is to push down wages, weaken the implementation of environmental standards, and reduce their taxes below their fair share of costs of the public facilities they use. Returns to a small number of investors are increased relative to returns to labor, steadily widening the gap between the wealthy and most everyone else. Growing numbers of workers do not earn enough to buy the products they produce, ultimately narrowing the market for the products of the companies that employ them.

All the while the largest and wealthiest corporations are gaining and strengthening monopolistic control over global markets, finance, and technology by buying out, squeezing out, or forming strategic alliances with their competitors. These efforts are often aided by the ability of these corporations to promote favorable legislative treatment for themselves through generous political contributions to those who make the laws. Smaller enterprises that continue to be the primary source of new jobs and technological innovation survive only by filling specialized market niches or servicing the needs of larger corporations on terms largely dictated by the latter. With goods and capital flowing freely across national borders, governments lose the ability to manage what used to be national economies, bargain away their ability to collect taxes, and become increasingly irrelevant.

These processes have combined with population growth and migration to create a growing employment crisis in nearly every nation in the world depriving people everywhere of the personal security of either an adequate livelihood or a secure social support system. A vast global pool of unemployed, underemployed and underpaid workers competing with one another for ever-scarcer jobs, assures that wages will be kept low.

Governments at all levels typically respond to the resulting crisis by offering investment incentives to global corporations searching the world for the lowest cost production sites. By responding to a real need in an obvious way, each locality in turn joins a race to the bottom that pits localities against one another in a global competition for a declining pool of good jobs. A few localities emerge as temporary winners, creating the illusion that such competition is the path to economic security.

In unregulated globalized markets, capital becomes rootless, impatient, and controlled by entities that have no commitment to place or people. Those who make decisions regarding the use of local resources live in distant places wholly insulated from the local consequences of those decisions. Markets respond to money and to those who have money. The most fundamental needs of the poor are ignored for the simple reason they do not have money. Few companies, aside from those selling soft drinks and tobacco, prosper by targeting the poor. The ability of governments to manage national and local economies in the public interest, raise taxes for public needs, and hold inequality within reasonable bounds becomes impaired. More of the costs of production, including environmental and social costs, are passed from the producer onto the community. Toxic contamination, chronic health problems, hunger and malnutrition, deteriorating public infrastructure, increased deprivation among the poor and growing inequality are evident consequences.

A Full World: Destroying Our Nest

Every bit of material and energy used by the human economy comes from earth's ecosystem. Every waste particle discarded by the human economy is returned to earth's ecosystem. The meaning of the term environmentally sustainable is quite clear. Activities that depend on turning the earth's stored energy and materials into wastes faster than the ecosystem can recycle them is inherently unsustainable. Current unsustainable consumption reduces the opportunities available to future generations. A substantial portion of the activity we count as economic growth is in sectors such oil, petrochemical, metal, agriculture, public utilities, road building, transport and mining that involve heavy demands on materials, space, soil and energy and generate enormous wastes. Furthermore, as a general rule, the more resources an activity consumes for example driving a car versus riding a bicycle the more it contributes to GNP and to employment.2

It is evident that the environmental demands of many human activities have reached or exceeded what the ecosystem can sustain. Most of the world's cultivatable land has already been appropriated and the soils of much of the currently cultivated land are being depleted. Many of the world's historically most productive fisheries are collapsing. More and more localities face severe shortages of fresh water. Much of the world's grasslands are heavily overgrazed. Pollution of the atmosphere is thinning the ozone layer and creating a risk of massive climate change. Garbage is accumulating faster than we can find ways to dispose of it, while chemical and radioactive wastes are rendering more and more areas of the earth's surface unusable. And each day adds more people to the global population than were added the day before.3

In an open market economy scarcity is an inconvenience for the rich. It is a disaster for the poor. It has been said that the free market is the most efficient human institution ever devised for assuring that when resources get scarce the rich will get them. In the name of economic growth and job creation, livelihoods are being destroyed at an alarming rate as stable subsistence communities are evicted from their lands to make way for dams, mines, golf courses and luxury resorts, agricultural estates, and forest plantations or their forests, water sources, and fisheries are mined for quick profits by powerful corporate interests.

Roughly 80 percent of the burden on the world's environmental resources is created by the consumption of the 20 percent of the world's population who earn 80 percent of global income. Much of that consumption especially for transportation and packaging is enormously wasteful. Encouraging those with money to consume more than they really need intensifies the competition for limited environmental resources between those who produce luxuries for the rich and the poor who depend on the same resources for survival.

In the end, there are too few people in the world with consequential discretionary income to make a dent in the world's unemployment by increasing their consumption even if they were to devote their total income to wasteful extravagance. The main consequence would be to increase the burdens placed on the environment at the cost of further displacing those whose subsistence depends on those same environmental resources as is already happening.

Development: Strengthening the Market and Weakening Community

Functioning, caring families and households are the foundation of functioning, caring communities, which in turn are the foundation of functioning, caring societies. The strength of the family or household, the community, and the society is dependent on the strength of mutual, cooperative relationships the social economy. Unlike market economies, which tend to join people in purely impersonal and instrumental relationships social economies create a dense fabric of relationships based on long-term sharing and cooperation.

Traditionally most of the productive and reproductive activities that provided people with their basic needs for food, shelter, clothing, child care, health care, education, physical security and entertainment were carried out within the framework of the social economy, largely outside of the market. A substantial portion of production/consumption activities took place within a single household or took place between people who related directly to one another. The productive activities of the social economy met most of the basic needs of its members, the very conduct of these activities served to maintain the social bonds of trust and obligation, "the social capital," of the community.

Social economies are by nature local, non-waged, non-monetized, and non-market. Therefore, they are not counted in national income statistics, do not contribute to measured economic growth, and are undervalued by policy makers who count only activities in the market economy as productive contributions to national output. A considerable portion of the economic growth of recent decades is simply a result of shifting functions from the social economy, where they are not counted in GNP, to the market economy, where they are.

Shifting a basic function like child care, health care, food preparation, entertainment, or physical security from the social economy to the market economy produces no necessary improvement in well-being. To the contrary, the energies once invested in developing and maintaining family and community relationships are simply redirected to generating sufficient income to meet needs the social economy once fulfilled. Left without consequential functions, the social capital of family and community, on which the social economy is based, erodes, social bonds are weakened and whatever economic gains, if any, may have been achieved by shifting functions to the market economy are more than offset by the costs of the resulting insecurity, crime, mental depression, violence, and suicide.

Conventional Solutions Can Only Make the Problems Worse

It should by now be evident that conventional job creation policies cannot work. The efforts by large corporations to improve their bottom line through downsizing renders already highly educated and skilled workers jobless, while government sponsored training programs prepare people for jobs that do not exist or pay too little to provide basic sustenance without government supplements. Capital investment incentives encourage the purchase of more advanced labor saving technologies that allow companies to reduce employment even further. Government fiscal policies aimed at strengthening demand by reducing taxes or increasing government spending often encourage more waste of environmental resources for non-essentials, while depriving the truly needy of their use.

For a given locality efforts to place more money in the hands of consumers may only increase the demand for imported products creating foreign exchange deficits and increasing pressures to sell-off environmental resources such as timber at bargain prices to make up the difference. Reducing trade barriers in the hope of increasing export sales may only displace more locally produced products with imports while encouraging the export of plants, equipment, and jobs to localities that offer cheaper labor. Offering subsidies to firms to locate in a particular locality only moves jobs around, it does not create them. The best that most of these measures accomplish is to further increase corporate profits at the public expense.

Consequently, we must conclude that many current public policies are self-defeating. A global economy that depends on consuming environmental resources faster than they can be regenerated destroys its own resource base. A global economy that pays its workers too little to buy the products they produce destroys its own markets. A global economy that displaces the functions of households and communities destroys the social fabric. A global economy that destroys its resource base, its markets, and the social fabric cannot long survive nor can the corporations whose profits depend on these self-destructive dynamics. Dealing with the world's social crises requires a more holistic approach that views the development of healthy societies to be the goal, deals with the market economy as one of several means to realize that goal, and returns economic and political control to people.

REGENERATING THE SOCIAL FOUNDATIONS OF HEALTHY SOCIETIES

A strong and vibrant social economy is a necessary foundation of a healthy human society. For this reason, the regeneration of social economies is fundamental to any successful effort to address the world's proliferating social crises. Taking appropriate steps requires understanding the nature of social economies and why they have become so dangerously eroded.

Undervaluing the Social Economy

The fact that a market economy depends on a strong social economy to maintain the ethical structure, social stability, and personal security on which the smooth function of a market depends is routinely overlooked by economic policy makers. To the contrary, the destruction of the social economy to advance economic growth is not only accepted, but applauded by most economic planners much as they applaud economic activities that advance economic growth by depleting natural capital.

Why isn't the important output of the social economy recognized in economic statistics? One explanation is that this output is harder to count. Another is that women have traditionally had the primary role in the productive and reproductive activities of the social economy, while men have had the dominant role in the monetized market economy. When male economists decided to develop a measure of economic output, they assigned more importance to things produced in the pursuit of money, traditionally the world of men, than to what was produced as an act of love, mutual obligation, or service to family and community, traditionally the world of women. As any economist will cheerfully point out, economics is about money not love.

It is hardly surprising that predominantly male economic policy makers using indicators that recognized only the male dominated market economy were inclined to believe that moving women into the money economy constituted a real contribution to improved national output and well-being. Many women, eager to escape the inferior status assigned to their roles in the social economy and to have a wider range of opportunity for economic participation, readily embraced the logic of the male dominated market place.

Where Markets are Inefficient

As productive and reproductive functions have been transferred from the social economy to the market economy, more and more of the return from productive activity has been shifted away from the actual producers to those who perform overhead functions that add no real intrinsic value. When family and community members work directly with and for one another there are no taxes, management salaries, lawyers fees, stockholder dividends, middlemen, brokers, transportation costs and other overhead expenses. The full value of the goods and services produced is shared and exchanged within the family and the community among those who actually created the value.4 The result is an extraordinarily efficient use of resources to meet real needs.

Indeed, in many sectors the market economy's overhead costs are so high that, even with two wage earners and longer work hours, many households cannot now adequately meet needs once met quite satisfactorily by the social economy. With no parent in the home, children are sequentially cared for, if at all, by nurseries, day-care centers and schools. Parents, or more often a single impoverished female parent, are left with little time, energy or encouragement to do more than function as income earners and night guardians. The modern urban home has become little more than a place to sleep and watch television if the household can afford one. High rates of deprivation, depression, divorce, teenage pregnancy, violence, alcoholism and drug abuse, crime and suicide are among the more evident consequences in both high and low income countries.5

In general, public policy proposals intended to correct these indicators of serious social dysfunction take no account of the fact that they are a direct consequence of the destruction of the social economy, which is in turn a consequence of the same unsound economic policies commonly favored by efforts to increase employment.

Restoring Roots, Balance and the Social Economy

The market is an important and useful human institution for meeting certain needs to which it is well suited. Unfortunately, we have lost sight of a basic reality that market economies best serve the human interest when they functions as a adjunct to a robust social economy founded on values of cooperation, sharing, trust and mutual obligation. Market economies are most likely to serve such a supportive function when:

  • They are primarily local in character augmented by, rather than dependent on, trading relationships with more remote localities;
  • Capital is rooted in local ownership and most production is carried out by small enterprises;
  • Strong democratically accountable governments set the goals and provide a regulatory framework for the market's socially productive function; and,
  • A strong and politically active civil society holds government accountable to the public interest.

When any of these conditions not met, the market is likely to undermine the social economy and reduce human security. A globalized market tends to negate all of these conditions. The result is enormous social inefficiency as the world is now experiencing.

We must find more holistic approaches to dealing with poverty, unemployment and social disintegration based on restoring the bonds of community and healing the planet. This requires a search for economic policies that strengthen rather than displace the social economy. In addition, such policies must accomplish what contemporary social economies have failed to do support gender equity and a sharing by women and men of responsibility for the functions of both the social and market economies.

EVOKING IMAGES OF SUSTAINABLE SOCIETIES

It is time to move beyond competing globally for a finite pool of formal jobs and think more creatively about ways of engaging people in sustainable livelihoods meaningful productive activities meeting real and otherwise unmet needs of households and communities in ways that are socially and environmentally sustainable. This shift in perspective recognizes that the economic systems of healthy sustainable societies must do a great deal more than provide a favored few with jobs to earn money to buy things they don't need to stimulate the economy to provide a favored few with jobs to earn money to buy.... etc.

In a more holistic vision, sustainable societies:

  • Provide all people an opportunity to contribute meaningfully to meeting the needs of family, community and society;
  • Give first priority to meeting the basic needs of all and provide them security against involuntary deprivation;
  • Live within their means and discourage consumption patterns beyond an equitable per capita share of sustainable ecosystem output;
  • Structure production processes so that environmental resources are used in sustainable ways; and,
  • Contribute to maintaining a strong and dynamic fabric of cooperative human relationships.

Our modern concept of a "job" is imbedded in a complex set of values, institutions and relationships that are leading us into ever deeper social and environmental crisis. The concept of a "sustainable livelihood" is similarly imbedded in a complex, but quite different, set of values, institutions and relationships suited to a sustainable post-modern society. While there are groups all around the world working to create the future within their local settings and who are seeking out appropriate guidelines for policy and constructing possible scenarios for a sustainable future, these remain speculative and fragmented. We are of necessity engaged in an act of creation, not replication.

For most of us, the topic of jobs brings to mind primarily images of people working in the plants and facilities of world's largest transnational corporations for which localities around the world are competing. The term sustainable livelihoods is meant to evoke very different images of people and communities engaged in meeting individual and collective needs through the cooperative use of local resources in environmentally sustainable ways.

As the unfolding image takes on ever greater definition, we may begin to discern an organizational structure that links the local with the global in a multi-level system of human habitats organized as continuously self-renewing, self-governing, self-reliant eco-communities. Household eco-communities might be clustered into neighborhood eco-communities, clustered into village eco-communities, clustered into regional eco-communities, and so forth, to the level of a global eco-community. A system goal would be to concentrate decision-making authority at local rather than global levels, with the result that those who make decisions would be more likely to bear their primary consequences and it would be more difficult for one group to pass the environmental or social costs of its decisions onto another group.

Since the few examples we have in our modern world of societies that practice sustainable living are found among remote peoples and cultures, often living under primitive conditions, there are those who dismiss any talk of sustainability as calling for a return to living in trees and caves and hunting wild animals. It is an uninformed charge that bears no relationship to the vision of those who point to the need for economic justice and a balanced relationship between people and environment as necessary conditions for the survival and continued progress of our species.

The challenge is to make full, but selective, use of our technical and organizational capabilities in taking a new evolutionary step toward the creation of human societies that define their well-being not by the size their garbage dumps, but rather by their success in assuring the physical security of all their members and in achieving ever higher levels of intellectual, social, cultural and spiritual development.

ECO-COMMUNITIES: POSSIBLE SCENARIO6

The ideal of neighborhood and village eco-communities envisions the melding of human and non-human systems in co-productive processes of continuous regeneration by recycling sewage, solid waste and even air through fish ponds, gardens and green areas to produce much of the local requirement for food, energy, clean water, fresh air and recreational spaces. Generally we think of such processes entirely in terms of rural areas, however, proponents of urban agriculture and ruralized urban design believe that even urban spaces can be made far more self-reliant than at present. Urban agriculture, urban aquaculture, repair and reuse, and the intensive recycling of wastes would provide new sustainable livelihood opportunities, while renewing family and community ties, decentralizing administration, and allowing greater sharing of family responsibilities among men and women.

With time we may find traditional types of cottage industries existing side-by-side with urban agricultural and recycling activities and with electronic cottage industries of the high technology age. Family support services such as community-based day care, family counselling, schools, family health services, and multi-purpose community centers could become integral neighborhood functions, engaging people in livelihoods within easy walking distance of their homes. Many eco-communities may issue their own local currency to facilitate local transactions and limit the flow of money out of the community.

Continuing the current trend toward home based part-time employment, many households might combine salaried employment with urban subsistence agriculture, recycling and voluntary community service leading to a return of the multi-functional home that serves as a center of family and community life. This would be consistent with the call to design human habitats such that residential, work, recreation and commercial facilities are within walking distance of one another, reducing much of the energy and other environmental costs of transportation.

Promoting sustainable livelihoods rather than jobs will not in itself change the powerful and deeply imbedded values and institutional structures that sustain the present economic system, but it will suggest that we recognize the need for unconventional solutions a first step toward corrective action. At last we might begin to ask the right questions.

What is the prospect for such a fundamental redirection? While we must continue to hope that there are enlightened power-holders willing to come forward and provide real leadership, our major hope for change is found among ordinary people all around the world who are awakening to the basic reality that the mega-institutions that have consolidated their hold on the instruments of economic and political power do not, and will not, serve their interests.

TAKING BACK RESPONSIBILITY

January 1, 1994 was the inaugural day of the North American Free Trade Agreement (NAFTA), an agreement intended to complete the integration of the economies of Mexico, Canada, and the United States. The corporate elites of the three countries congratulated themselves on the new opportunities the merger created to expand their profits and market share. Among the most jubilant were the 36 Mexican businessmen who own 39 Mexican conglomerates that collectively account for more than 54 percent of Mexico's Gross National Product.

The indigenous peoples of Chiapas State in Southeastern Mexico on the border with Guatemala took a strikingly different view of this new step toward economic integration and globalization. Calling NAFTA a death sentence for the people of Chiapas, some four thousand Indians celebrated the occasion by launching an armed rebellion against the Mexican government. Mexican political analyst Gustavo Esteva called it the first revolution of the 21st century. Unlike most revolutions of the 20th century, it was not aimed at capturing state power. Its goal was rather to secure the right of people to govern themselves within the borders of their own communities. They demanded only greater local autonomy, economic justice and political rights.

The Chiapas rebellion was only one of the more visible manifestations of similar social forces that are emerging almost everywhere in the world with a potential to redefine the face of politics and economics well into the 21st century. These social forces grow out of two realities that give a distinctive quality to this moment in human history.

Institutional Legitimacy and Local Responsibility. In democratic societies it is expected that the institutions in which political and economic power have been vested derive their legitimacy from being duly constituted by and accountable to the sovereign people, conducting their operations according to an appropriate code of morals and ethics, and producing desirable consequences for the whole. The world's dominant mega-institutions both public and private currently fail on all three counts and their legitimacy in the eyes of the public is at a near historic low.

Reform is becoming less and less an issue. They are simply too big, too distant, too beholden to special interests and too costly to respond in any useful way to the broader human interest. Instead of looking to them for solutions, the impulse of those who have been discarded or marginalized by the globalized economy is increasingly to dismiss such mega-institutions as hopelessly unresponsive and get on with taking back responsibility for their own lives. In the spirit of earlier frontier communities, they are saying, "If our needs are to be met we will have to get together and figure out how to meet them for ourselves."

Global Interdependence. Modern communications technologies have created awareness nearly everywhere that all people share one fragile planetary ecosystem and are suffering in similar ways from the failure of the mega-institutions that govern the planet. This awareness along with the ability for instantaneous communication through phone, fax, and computer has created a foundation for cooperation and solidarity among the world's people wholly without precedent in human history. A sense that the well-being of each increasingly depends on the well-being of all is beginning to take hold as the foundation of grassroots alliances aimed at strengthening local control and the rights and well-being of ordinary citizens everywhere.

The emergent social forces find expression in local initiatives aimed at regenerating local economies, ecosystems and communities. As people reclaim responsibility, they are also reclaiming their sovereignty, reasserting their basic rights over local resources, challenging the abuses of absentee corporations, and telling non-performing governments to reduce their tax burden. They are also beginning to reach out in search of new alliances, both nationally and internationally, with those engaged in similar self-help initiatives.

These countless initiatives and the cooperative networks that are melding them into a growing political force are the building blocks of a process of globalization-from-below that may well result in a bottom-up reconstruction of our dominant political and economic institutions. As this process unfolds, it will become increasingly clear that the mega-institutions that have broken free from their own roots cannot long survive. Floating in space they can only consume themselves while the people they have abandoned work to fill the gap left in the social ecology with new institutions rooted in place and community.

We have come to see that even when our governments invite citizens organizations to join them in global conferences such as the Social Summit to craft declarations of commitment to addressing pressing social and environmental needs they are engaged in little more than public posturing. We know the more substantive international agreements that define the priorities and commitments that create the human crisis are being crafted behind closed doors in secret consultations with the world's most powerful corporations in fora such as the World Trade Organization.

When the heads of our governments gather for the Social Summit in 1995, we might hope that at least a few among them will recognize that the path to a more promising human future lies with the people and the process of globalization-from-below through which the seeds of new and strongly rooted human institutions are being planted and nurtured. Perhaps at least one or two may speak not of jobs, but of sustainable livelihoods. While a small step, it may give us hope that the people are not entirely alone in their historic struggle to regain control of their local political and economic space.


This paper was produced as a cooperative undertaking that involved important contributions from a substantial number of the contributing editors of the People-Centered Development Forum. It also benefited from extensive critical feedback from participants in a joint PCDForum-IGGRI workshop organized in conjunction with the 21st Global Conference of the Society for International Development held in Mexico City in April 1994.

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