The Economy of Care

1. The Economy of Care An Economic Approach for a Sustainable Future Thera van Osch (Foundation for the Economy of Care)

2. Conference Counting on WomenGender – Care and Economics • Work-definition Economy of Care • Economy of Care: Paradigm shift • Basic model: Economy of Care vs Neo-liberal • Macro-economic policy based on Economy of Care • Gender effects of multiple crisis • Why neo-liberal economic model cannot solve the multiple crisis • Transition towards a human sustainable future

3. 1. Work-definition: Economy of Care The science of human behaviour focused on maintaining, continuation, and restauration of the planet to improve quality of life for all in a sustainable way.

4. 2. Economy of Care: Paradigm shift • Humans • Production • Consumption • Labour • Distribution (example: Care-labour and income)

5. Paradigm ‘Humans’ ‘Rational Economic Man’: • based on Utilitarianism; • by pursuing self-interest you serve public interest; • explains efficient allocation of scarce goods through the market (subjective value theory) • one-dimensional relations among individuals (exchange of goods and services); • Atomic society ‘Caring human being’: • philosophy on Ethics of Care • by caring for oneself, for each others and for the environment the social formations/cultures will continue • explains survival, especially in times of war and crisis (intrinsic value theory/existential values) • holistic; multi-dimensional human relations; mutual care and responsiveness • Social connectedness

6. Suppositions ‘Production’ Neo-liberal: • Production-unit: Optimal use of production assumes perfect market competition, adverse human and environmental costs are not discounted • Accountability in terms of money; profit is condition for economic sustainability (annual report) • Production organised in enterprises which produce for the market and the profits • Production of exchange values • Production is globalised through the market Economy of Care: • Production-unit: Optimal use of production factors in terms of achieving human sustainable development: human rights (incl. CEDAW) and environmentally sound • Accountability and transparency in terms of achieving equality, fair ecological footprint, besides monetary gains (annual report) • Broader approach: Everyone can produce: for the market, for oneself, for the family or the community • Production of exchange + use values • Production is part of global circulation system, including nature.

7. Suppositions ‘Consumption’ Neo-liberal • Households are consumption units and do not contribute to the production • Consumption is determined by the ‘law of the subjective value theory’ (marginal utility) • Consumers should be encouraged to maintain economic growth (creation of needs in order to stimulate effective demand) Economy for Care • Households produce, consume, and generate current and future people • Consumption is also determined by generational and gender relations (power relations) • Consumers should be encouraged to consume sustainably and contribute to a global social and ecological balance

8. Suppositions ‘Labour’ Neo-liberal: • The value of labour is determined by supply and demand on the labour market • Trade Unions and governmental regulations disturb the the balance of the labour market • Unpaid work has no value Economy of Care • The value of labor is determined by its contribution to human sustainable development • Civil society regulates dialogue on human resources in the process of sustainable social development (participative democracy on micro, meso, and macro level) • Unpaid work is just as valuable as paid work for the economy

9. CirculationMarket economy vs. Economy for care Market-system embedded in circulation system

10. Circulation/distribution Neo-liberal economy • Distribution: market and government • Regulation through monetary system, banksystem and government • Value expressed in prices (money units) • Scarcity: What has no price on the market, has no value and is abundant and free for anyone (such as air, trees, unpaid labour). Economy of Care • Distribution: market, government, reciprocity, solidarity, mutual support, gifts, recycling, LETS • Regulation also through local exchange systems, gender + generational relations (e.g. family, friendship), virtual global exchange systems , participative (gender) budgeting • Value linked to ecological footprint and PUW quote • Scarcity is a relative concept: The perspective of human sustainable development (contributing to quality of life for present and future generations) defines what is scarce/abundant

11. Example: Distribution of care labour based on gender and generational relations • There is a gender-based relationship between care-receiving and care-giving • During their lifecycle, women give more care than they receive, whereas men receive more care than they give • The asymmetrical relations differ between the several age cohorts • Distribution of care labour is inversily related to distribution of income. (Source: Dauvellier, M. , 2008: Equalising Care)

12. For example: Distribution of Care Labour CARE RECEIVING & CARE GIVING

13. ‘Engendered’ income distribution (= function of unpaid care labour) The individual income is inversely proportional to the individual volume of unpaid care work When time spend to unpaid care work is above average, income decreases because carers have to get part-time paid work, to quit their paid job or early retirement. Conclusion: Over-average delivery of unpaid care work is socially punished with income-poverty

14. 3. Basic model: Economy of Care System forProduction of meansfor living (incl. informal and unpaid) Generation of humanlife system (incl. unpaidwork) Political System Circulation System Ecological System System of Civil society

15. Basic model: Market Economy

16. What sees the neo-liberal economist? De Zorgeconomie? $$$ £££ €€€

17. 4. Macro-economic policy based on the economy of care • Balanced growth of social, natural and economic wealth. (= balance between 3 basic systems) Indicators to be used are the PUW-quote and the ESU-indicator (Ecological footprint) in combination with the GDP • The consumption function in the economic model will be replaced by the function of the Environmental Space Used (ESU). Consumptive expenditures will be expressed in ESUs in stead of in money. • Include a PUW-quote in the model to enhance a balance between the paid and the unpaid economy.

18. Macro-economicpolicybasedon the Economy of Care: GOAL 1: Balance between generational, production and ecological system: Target: Social balance with sustainable ESU per capita (Fair Planet Share of 1,7 ha. per capita) Policy instruments: • Eco Tax in stead of VAT • Link income tax to ESU: The bigger the ecological footprint, the higher the tax • Fiscal allowances for investments that promote social balance, ecological balance and the enjoyment of human rights, quality of life and access to natural wealth for all • Support to Technological Innovations which result in social and ecological sustainability and in balanced (m/w) access to and control over sustainable sources and means.

19. Macro-economicpolicybasedon the Economy of Care GOAL2: Promote social sustainability by a balanced development of the paid and unpaid economy Targets: - Social justice and elimination of gender-based poverty - Equal distribution of paid and unpaid work Policy instruments: • PUW-quote • Fiscal allowances for people with a low PUW-quote (under social average) • Pension system linked to paid and unpaid labour • Comprehensive care system which ensures the right for all to receive and to provide care.

20. Paid-Unpaid-Work Quote PUW-quote = VPW x 100% VPW + VUW VPW = Volume Paid Work (in time units) VUW = Volume Unpaid Work (in time units) PUW-quote: Shows percentage of the total labour volume which is paid (recognised with financial remuneration).

21. Trend PUW-quote in the Netherlands (1975-2000)

22. PUW Quote 4 EU countries Source: Dauvelier, M., 2008: Equalising Care. Amsterdam (FNV-Vrouwenbond)

23. Macro-economic policy based on the Economy of Care GOAL3: Ensure equal rights and opportunities for all Target: Equal access to+control over material & immaterial means and resources, equal voice and decision making Policy Instruments: • Gender mainstreaming in all components of public policy, including (participative) gender budgeting • Temporary measures to promote equal representation at all decision making levels (apply CEDAW, art. 4) • Democratisation of fiscal system • Gender-responsive social balance for companies and public bodies • NAP foreffective implementation of UN-commitments (WCAR-Durban-2000, CEDAW, Rio-1992, Beijing PfA-1995, Cairo 1994, CRC, MDGs, UNSCR 1325-1820-1888-1889, etc.)

24. 5. Gendereffects of Multi-crisis • risks

25. 6. Neo-liberal model unable to solve multi-crisis • Poverty crisis: Trickle-down effect of economic growth is not sufficient for structural poverty reduction; it can even increase gender disparities • Care crisis: Market economy is unable to solve the care crisis; mayor part of care remains invisible in the neo-liberal economic model; privatisation of care leads to Taylorism in care sector (dehumanisation and loss of quality of life) • Climate Change crisis: Neo-liberal market model is intrinsically unsustainable; in relation to the ecological system it is a kind of plunder economy; it plunders the planet and its natural resources, leaving future generations with pollution, poisoned waters and dangerous waste • Peak-oil crisis is result of neo-liberal model; you cannot cure a crisis with the same system that has caused it

26. Financial crisis • Financial crisis = crisis in the circulation sphere; banks undermine their own core-function (= facilitating market system) and violate the basic principle of the theory of interest (base for interest is difference in current and future value of the marginal utility of products & services) which links the monetary sphere with the production sphere. • Solutions: • inflation (purchasing power of money reduces), or • evaporation of money (banks going bankrupt) • To prevent the total collapse of the system, governments jump in with tax-money • Who will finally pay the bill of this crisis? • Unpaid sector is the ultimate buffer of the financial crisis (remains invisible in economic statistics)

27. 7. Transition towards an Economy of Care • Base the tax-system on a sustainable model: link the redistribution of income to a balanced PUW-quote and a sustainable ESU-indicator • Fiscal compensation (e.g. care credits, Pension rights) for those with an under-average PUW-quote • Tax allowances for investments which reduce the ESU-indicator and/or promote a balanced PUW-quote • Guidelines for accountability of enterprises on social and ecological results (annual reporting) • Include the ecological and social debt to other countries in the balance of payment (degree of overpassing the fair ecological footprint, and trade that worsens the social situation elsewhere (e.g. child labour, ecological disasters, exhausting natural resources)

28. Finally statements for discussion:New crisis, new chances The crisis offers new opportunities for: • Exchange systems based on reciprocity, solidarity, sustainability and emerging of new social webs (micro-meso-macro) • Introduction of the PUW-quote as an instrument for measuring the ‘engendered’ effects of crisis in the paid and unpaid economy • Decentralisation of sustainable technological development: production of energy, consumption goods, information, media at local level (at home, in the neighbourhood, in the region) • Equal access to and control over sustainable resources; gender balance in sustainable management of resources at local level and decreasing dependence from money and oligopolistic companies • Bottom-up implementation of the Economy of Care by local economy, local companies, and local authorities (annual social sustainable balans, comprehensive care system, local municipality tax based on ESU, etc.)

29. THANKS FOR YOUR ATTENTION Questions and answers?