NEW ECONOMIC
We seek to contribute to the construction of a New Economic Paradigm that helps create an increasingly democratic economy.
For years we have focused on the defense of human rights, reacting to violations. However, the objective must be to create different conditions, by and with grassroots movements. Let's imagine structural changes and a fair and democratic economy as our answer to the dominant paradigm. The current one has shown us that big business and financial capital threaten democracy and that the public good is subordinated to private economic interests. It's time for a change!
What do you imagine?
- Can the economy be democratic? How can it be achieved?
- What would be the important characteristics of a democratic economic society?
- If some characteristics of democratic capitalism already exist, what are they?
– Who are the different possible actors in a democratic economic society?
- What are the roles, rights, and responsibilities of distinct actors in a democratic economic society?
Reflecting on and answering these questions help contribute ideas for the New Economic Paradigm. It also leads us to think about the checks and balances to economic power.
How can we create checks and balances to economic power and ensure democracy?
The solution is to empower citizens to participate and become checks and balances to big business. Citizen empowerment through mechanisms of political inclusion is essential since, in order to generate fundamental changes in capitalism-democracy relations, we must first pave the way for basic participation and then for participatory constitutional, economic, and fiscal decision-making processes, etc.
Civil society action is important because it produces information that contrasts with that published by governments — and that which companies usually disclose —, generating debate, different ways of addressing problems, and the nucleus for taking collective action.
At Empower, in addition to betting on a strong civil society to create the New Economic Paradigm, we articulate five pillars that should characterize a democratic economy:
- Civil society as corporate transparency and accountability guarantor
- Strengthened democracy and rule of law
- Responsible financial industry
- Sustainable businesses
- Corporate governance in a participatory society
Theory of Change for Achieving Democratic Economies
The successful transition to a New Economic Paradigm will depend upon many stakeholders transforming society together in different ways. Civil society organizations, governments, businesses, investors, and others can all shape the building blocks of a democratic economy.
Below, across the five pillars of a New Economic Paradigm, we envision different ways that these agents of change can contribute:
Commitment
Coordinación
Creativity
Curiosity
Economic resources
Human resources
Interest
Participation
Collective power
Purpose
Build community
Educate and learn
Research
Experiment with new models
Defend human rights
Strategic litigation
Social entrepreneurship
Socially responsible investing
Communities of practice
Updated pedagogical approaches
Community-based economies
Innovative business models
Multi-stakeholder partnerships
New knowledge about democratic economies
New rules of the game
Strong institutions for corporate transparency and accountability
Triple bottom-line investment
PILLARS OF A DEMOCRATIC ECONOMY
Civil society as corporate transparency and accountability guarantor
Strengthened democracy and rule of law
Responsible financial industry
Sustainable businesses
Corporate governance in a participatory society
Civil society as corporate transparency and accountability guarantor
OUTCOMES
Civil society actors are organized around the objective of guaranteeing corporate transparency and accountability.
Civil society actors are strong, numerous, and informed.
Civil society actors think creatively and strategically, effectively using existing mechanisms and possibly creating new mechanisms for ensuring corporate transparency and accountability.
IMPACTS
People hold businesses accountable to higher standards for human rights, labor, and environmental compliance.
Strengthened democracy and rule of law
OUTCOMES
Civil society actors are capable of acting as watchdogs against state capture by the private sector.
Transparency exists about the overlap and relationships between the public and private sectors, including how businesses and investors influence public decision-making.
Corporate transparency is mandated and enforced by law, and governments compel disclosure of companies' social and environmental responsibilities.
Laws require businesses to respect human rights and adhere to corporate accountability standards.
Enforcement mechanisms provide strong incentives for compliance with corporate accountability standards
IMPACTS
Businesses answer to the state and to citizens, and the state answers to citizens.
The outer limits of free markets and the growth economy are respect for human rights and protection of the environment
Responsible financial industry
OUTCOMES
Regulation curbs socially harmful speculation and enforces better risk management.
Investors adopt and adhere to higher standards of transparency with regards to their investment activities.
Investors heed environmental, human rights, and corporate governance due diligence standards, and commit to respecting and protecting human rights and remedying those human rights violations for which they are responsible.
IMPACTS
Improved regulatory framework, greater transparency, and more responsibility in the financial sector serve the public interest.
Sustainable businesses
OUTCOMES
Business reporting in the public interest is standardized, accessible, comprehensive, and constant.
Businesses protect and respect human rights across their value chains, and remedy human rights violations to which they contribute.
Corporate social responsibility entails obligatory commitments to norms of transparency and accountability.
Businesses champion the integration of and adherence to norms of environmental, social, and financial value.
IMPACTS
Improved corporate transparency and accountability serves the public interest.
Corporate governance in a participatory society
OUTCOMES
The shareholder primacy norm transforms into a stakeholder governance norm.
Affected stakeholders participate in decisions linked to environmental, social, and governance factors.
IMPACTS
Companies are also governed by stakeholders, not only stockholders.
MONDRAGÓN
The largest cooperative in the world, based in the Basque country.
TELPIN TELECOMMUNICATIONS COOPERATIVE
Created by a group of neighbors in Pinamar, Argentina to fill a gap in the provision of this vital service following the privatization of the telephone industry.
COMMUNITY BANKS
In Brazil, alternative currencies and community banks promote solidarity economies, such as Banco Bem and Banco Verde Vida.
BENEFITCORP
This charitable group seeks to create a positive material impact on society and the environment.
PASCUAL
This journey is an inspiring story of how a Mexican soft drink tangled in labor conflicts and bankruptcy became what may be the most successful cooperative in the country.
PUEBLOS MANCOMUNADOS DE OAXACA
They merge community entrepreneurs and ecotourism
TOSEPAN TITATANISKE
This is an indigenous cooperative movement that has managed to consolidate itself in the Union of Tosepan, an area of influence that integrates 290 communities in the mountains of Puebla. It has managed to build a fair, solidarity economy in accordance with its form of government.