Building a Caring Economy and Society* Beyond Capitalism, Socialism, and Other Old Isms


Old economic approaches are not capable of meeting our economic, environmental, and social challenges. To effectively meet these challenges, we need a perspective that goes beyond the conventional capitalism vs. socialism debate. This paper places economic valua- tions in their social context from the perspective of two new social categories. It describes building blocks for a new paradigm for economics, focusing on new measurements, policies, and practices that support caring for people, starting in early childhood, as well as caring for our natural environment.

All around us are signs that old approaches are not capable of adapting to new circumstances. While many people still talk about returning to normal, there is growing recognition that we actually need a whole new way of thinking about economics and society.1

But what should our direction be at this time of extreme social, environmental, and economic challenges? What do we need as we shift from the industrial to the post-industrial knowledge/service era? How do we build a more equitable and sustainable world?

This paper addresses these questions. Its point of departure is a key issue for our future: what kind of economic system helps, or prevents, children from developing their full potentials for consciousness, caring, and creativity – the capacities that are essential in the new knowledge-service era; the capacities that make us fully human?

1. Where We Are

Today, economic health is still measured by Gross Domestic Product (GDP). This measure pays no attention to poverty, hunger, or environmental degradation. Nor does it give any indication of the human and environmental damage caused by a large portion of the activities GDP includes as “productive” – damage that is still clumped under the quaint rubric of “externalities.”

For example, in the United States, where consumer spending accounts for no less than 70 percent of GDP, much of what is produced and consumed is known to cause disease – even death. Multi-billion industries – ranging from the chemical pesticide and fast food industriesto the cigarette, alcohol, and gun industries – lead to enormous medical and funeral costs, all of which, in turn, are also included in GDP.

A growing segment of GDP consists of financial speculations that produce no real value. In the U.S. the financial sector is now almost ten percent of GDP, with its value fluctuating wildly, as when 3.6 trillion dollars of “wealth” disappeared into thin air through the Great Recession.

Not only that, appliances, electronics, and other products deliberately manufactured for planned obsolescence clutter up our landfills. And that is only a small part of the devastating environmental impact of current patterns of production and consumption.

On top of this, automation and robotics are taking over more and more jobs formerly held by people – making it even more doubtful that economies driven by consumer spending are sustainable.

Figure 1: Old Economic Map

Reprinted from Riane Eisler (2007) The Real Wealth of Nations: Creating a Caring Economy, San Francisco: Berrett-Koehler.

Yet other than calls for environmental protection and a more equitable distribution of resources, most discussions about a new economics are still primarily based on the premise that capitalism and socialism are our only alternatives. So, while some prescribe a return to unregulated capitalism, others again argue that socialism is the solution.2

This antiquated debate fails to recognize that our mounting global crises and the current technological shift from the industrial to post-industrial era require new thinking: that neither capitalism nor socialism can lead us to a truly new economy.

2. The Limitations of Capitalist and Socialist Theory

The theoretical foundations of capitalism and socialism came out of the 18th and 19th centuries, from early industrial times. 3 While both theories were attempts to improve people’s lives,4 both were constrained by the cultural environments in which they arose.

One of the most harmful limitations of these theories is that neither gives real value to the work of caring for either nature or people. Rather than recognizing environmental limita- tions, Smith’s message was that wealth would grow endlessly thanks to the division of labor, technical advances, and the accumulation of capital governed by the invisible hand of the market powered by self-interest. Marx’s scientific socialism gives nearly exclusive import- ance to the commodification of labor, with hardly any attention to the devastating impact of industrialization on nature – an industrialization that was then vigorously pushed in the former Soviet Union and China.5

As for caring for people starting in childhood, Smith and Marx considered this merely “reproductive” labor – not part of their “productive” economic equation. This distinction between “productive” and “reproductive” labor has been at the core of both capitalist and socialist thinking, which hardly ever considers the value of care and caregiving. And this distinction persists – despite its lack of accuracy, despite mounting evidence that not caring for our natural environment is potentially suicidal, and even despite findings from neuros- cience that caring for people, starting in early childhood, is key to producing the “high quality human capital” essential for the post-industrial knowledge/service economy.

3. Reframing the Domain of Economics

Standard economics and business texts and courses do not teach us to think of economics from the perspective of caring for people or nature. Indeed, they fail to take into account the enormous economic value of the work of care, even though a growing number of studies are showing that companies that care for their employees and their families are actually more successful than those that do not.6

When caring for people starting in early childhood and hence human capacity development are the starting point for economic thinking, we can see that a basic problem in both capitalist and socialist theory is that neither is based on a full-spectrum economic map.7

The focus of both capitalist and socialist thinking has been on only three sectors: the market economy, the government economy, and, more recently, the illegal economy.

This old economic map fails to include the real value of the three life-sustaining economic sectors: the household economy, the natural economy, and the volunteer economy. In other words, in accordance with the view that “productive” work is limited to paid work, the conventional economic map gives no visibility to the largely unpaid work that has been termed “reproductive” work.8

An essential step toward a more systemic approach to economics is therefore a new economic map that includes these sectors. Using this systemic perspective, we can begin to design an economic system that effectively addresses the unprecedented social, economic, and environmental challenges we face: one that not only promotes human survival but full human development.

Figure 2: New Economic Map


Reprinted from Riane Eisler (2007) The Real Wealth of Nations: Creating a CaringEconomy, San Francisco: Berrett-Koehler.

This does not mean we should discard everything from earlier economic theories. But moving forward requires an economic system that gives real visibility and value to the most essential human work: the work of caring for our natural environment and caring for people, starting in childhood.

Moving forward also requires that we recognize that economic systems do not arise in a vacuum. They are influenced by, and in turn influence, the larger social system in which they are embedded. As Ian Johnson and Garry Jacobs note, “The time is ripe for a new narrative, new metaphors and a new story line for humanity.”9

4. The Interconnection of Economics and Society

Answering the fundamental question of what kinds of social systems support or inhibit our human capacities for consciousness, caring, and creativity requires that we move beyond conventional thinking. To paraphrase Einstein, we cannot solve problems with the same thin- king that created them.

We are used to classifying societies into categories such as religious vs. secular, rightist vs. leftist, Eastern vs. Western, or industrial vs. pre- or post-industrial. But none of these categories describes the totality of a society’s beliefs, institutions, and relationships, as each focuses on a particular feature of society. Moreover, societies in every one of these categories have been unjust, violent, and destructive of our natural environment.

The new categories of the partnership system and the domination system reveal the configuration of two very different forms of family, educational, political, and economic structures and relations.10 Depending on the degree to which a society orients to either side of the domination/partnership continuum (and it is always a matter of degree), these categories also describe two very different systems of values, which in turn directly affect a society’s guiding beliefs and policies.

* Portions of this article are adapted from articles by the author in Challenge /March–April 2012, Cross-Cultural Management/2013, and Tikkun Magazine,
November/December 2009.
Riane Eisler: President, Center for Partnership Studies; Fellow, World Academy of Art and Science.
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9. I. Johnson and G. Jacobs, “Crises and Opportunities: A Manifesto for Change,” Cadmus 1, No. 5 (2012): 11-25.
10. Eisler, The Real Wealth of Nations; R. Eisler, The Chalice and the Blade: Our History, Our Future (San Francisco: Harper and Row, 1987).

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