What's Different About the New Economy?
Written by Economics of Happiness Conference speaker Anthony Flaccavento
While there is no one definition for the “new economy”, most folks working in this field would probably agree on a few basic elements that distinguish this economic approach from the current dominant economic model. I’ve attempted to summarize those below.
Six Elements of Emerging New Economies, Contrasted with the Dominant Economy
1) New economies are more just, work better for people.
The dominant economy has used tax, trade and patent policy to greatly favor huge corporations and the very wealthy over small businesses and working people, leading to extreme levels of wealth concentration at the top alongside stagnant wages for working and middle class people, and growing poverty. The very wealthy pay lower taxes on much of their income than do teachers and truck drivers; giant corporations pay an effective tax rate that is 6 – 8% less than what small businesses pay. Trade policy grants corporations the right to sue nations, states and communities over health and environmental protections. You can’t make this stuff up.
In the new economy, small businesses and family farms create more jobs per dollar of sales; by purchasing from other local businesses, they create ‘economic multipliers’ that add much more value to the local economy than do chains and big boxes. New corporate forms, such as the Benefit Corporation, which commits a business to positive social and environmental outcomes as well as financial profit, are also emerging in the new economy, with over 1000 nationwide. Some localities have begun to use Community Benefit Agreements to hold big corporations legally accountable for the promises they make. These and many other creative measures ensure that economies work for people, not the other way around.