Redefining the eco-social market economy

The “eco-social market economy” aims at: higher chances for the brave, more solidarity and more responsibility for natural habitats” states Josef Riegler, the co-founder of the eco-social market economy model. In the light of changing framework conditions and challenges, Ökosoziales Forum puts the eco-social market economy idea up for discussion 20 years after its formulation.

The “eco-social market economy” was formulated by the Austrian People’s Party as part of their party programme in 1989. The main issue is the compatibility of ecological and social aims with the principles of a market economy. The crucial question is: which framework conditions have to be created so that the dynamics of a market economy move within borders that are imposed by ecological and social aspects.

The objective of the project is to update the concept of the eco-social market economy in the light of current challenges such as globalisation, European integration, climate change, demographic and cultural changes of the society etc.

The Austrian Institute of Economic Research and SERI developed two Input-papers for this reason. The papers define the conceptual framework, identify trade-offs between economy, ecology and social sphere, and discuss potential approaches.

The SERI input clearly expresses that current economic growth does in sum not increase quality of life. Raising the amount of capital equipment does indeed improve the objective conditions; the subjective perception of people does however not improve. In an atmosphere of stress, pressure to perform and compete, fear for unemployment, lacking equity and compulsive consumerism, natural, human and social capital gets lost. Therefore, total prosperity decreases over all. All this calls out for a reorientation towards qualitative growth, which aims at creating and fostering natural, human and social capital. The improvement of quality of life is the overall objective in this approach.

The input paper lists measures that focus on quality of life as a strategic goal:

• Increased eco-efficiency through technological change and innovations;

• Eco-social tax reform;

• Certificates for certain resources;

• Re-distribution of work;

• Flexible working time.

For a successful implementation of a resource-gentle, qualitative growth the combination of measures is essential.

Stakeholder meetings serve as a forum for discussion for both input papers. The aim is to agree on shared positions and to identify the crux of the matter. Besides this process, a series of events themed “Eco-social market economy under discussion” was started in order to obtain opinions from politicians, scientists, experts and civil society representatives.

The focus of the first event was on the “true price” of goods. How can consumers find out about the true costs of a product? Currently, the cost of pollution or CO2 emissions due to production or missing social standards etc. is not reflected in the price of goods and services. “Get the prices right” is the request at the national, European and global level. Not till then sustainability will be reckoned. “What does the world cost?” – keyword: cost transparency took place at 7 October in Vienna.

The second event is targeted on the “eco-social agricultural policy” and will be held on 13 November, the third one planned for 26 November focuses on economic growth and quality of life.