About Economy and Society Trust

"We believe in economy as if people and the planet mattered"

This is basic information about Economy and Society Trust (EST). Please contact coordinator for more information.

Mission statement

The Trust aims to support experts and interested citizens working on economic and social models, concepts and practical solutions promoting democracy, social justice, sustainability and corporate responsibility. The main mission of the Trust is to propose and implement alternatives to current mainstream policy approaches.

The fundamental aims of the Trust are:

a) to encourage critical discussion of the premises of neo-liberalism and neo-classical economics in academic and public spheres. Such premises have played a key role in shaping policies in the Czech Republic and elsewhere.

b) to contribute to the formation and development of critical thinking in Czech society

c) to analyse social and environmental consequences of current policies and their impact on democracy and on the rule of law.

d) to support the emergence, development, and practical operation of local, ethical, and democratic economic enterprises and systems.

e) to encourage and support the personal development of academics and others who are working to promote theoretical and practical approaches enhancing democracy, social justice, environmental sustainability, and the rule of law; to help increase their numbers, expertise and social status.

f) to encourage the development of economic measures and policies aimed at achieving a balance between human activities and the environment.

1.1. Programmes of the Trust

The activity of the Trust is currently focused in four major programmes. Paragraphes below give a brief account of each of them.

Foreign direct investment

The objective of this project is to systematically and critically evaluate the positive and negative effects of national and regional development strategies reliant on foreign direct investment in the Central and Eastern Europe, the Czech Republic in particular. The aim is to critically evaluate the developmental or modernization impacts of various forms of FDI and juxtapose costs and benefits of different policies aimed at its attraction (competitiveness stimulation). The research project is an element in a broader endeavour aimed at thinking critically through alternative developmental strategies in the region.

Drawing on the work conducted within the GARDE programme of Environmental Law Service, which has been monitoring case studies of investment attraction and has often observed violation of the rule of law, FDI programme strives to open a fair discussion of both economic and political costs and benefits of such strategies reliant on FDI and discuss alternative developmental paths with the aim of sustainable development.

Local ethical and democratic economies

This is a programme aimed at supporting the renewal, strengthening and emergence of local economies and social enterprise in the Czech Republic. We would like to facilitate the emergence of social and localised economies with multiple bottom lines, which we perceive as positive for both people and nature. These might include enterprises with democratic government stuctures, trading arms of non-profit organisations, village and municipal council projects. Community land trusts, local food links as well as non-profit loan funds (re-investment trusts) and other forms of ethical finance could be part of our remit in the future as well. Via our e-mail conference those interested share information on events, projects and publications. We have produced research on legal barriers to localised distribution of produce and a study on the sustainable model village Hostětín in the White Carpathians, as well as a Czech how-to book on implementing the Local Multiplier (LM3) based on the London-based New Economics Foundation booklet The Money Trail . All our publications (which are in Czech) are downloadable free of charge. We have also participated in publishing two books (in Czech), one of which describes pre-war Czechoslovakian rural co-operatives. Each year since 2007, in conjunction with others, we have organised a four-day Open Space event focussed on discussion of what we see as key issues of a new economy. These have so far been: economic localisation, democratic economies and renewable energy de-centralisation. For the year 2010, the planned theme is: Fair Trade, free trade, or something different? and we are looking forward to guests from Austria and Slovakia to enhance the discussions. If you have questions about our programme or have ideas for projects and/or funding, please contact the programme co-ordinator, Nadia Johanisova, at johaniso@fss.muni.cz

(updated November 2009)

Peak Oil

Peak oil programme is monitoring the comming peak in global oil extraction. The growing gap between rising demand for oil and decreasing total extraction volume is likely to bring in unprecedented changes in economy and society as a whole. The aim of this programme is to raise awareness about seriousness of this development and promote adaptation measures that would moderate adverse effects for the society in the future.

Policy Interventions

This programme is a platform for those willing to introduce fresh views in the public debate on socio-economic issues. Its aim is to balance often biased (towards neoliberal and neoclassical view) public debate and media coverage of main issues. This programme has been designed to inter-link other programmes as well.

1.2. Background and rationale for founding the Trust

Public discourse and thinking on social and environmental issues in the Czech Republic has to a great extent been limited by a single world view. The boundaries of the possible are fixed by the dominant neo-liberal paradigm which is based on the conceptual structure of neo-classical economics. Discussions involving social, economic and environmental policies thus tend to be squeezed into the straitjacket of the “objective“ imperatives of globalized market economy. However, such supposedly realistic limits stem from a very specific set of assumptions relating to the functioning of the economy and of society in general and to the economic situation in the Czech Republic in particular. The public discourse remains for the most part captive to neo-liberal assumptions regarding the degree and desirability of Czech integration within a global capitalist system, the meaning of the confusing term „economic globalization“, and the real risks and opportunities which these processes pose for our country. This dominant approach to thinking about economics and society is not value-free, though it is often presented as such. It is based on specific modes of thinking about equity, democratic accountability and environmental sustainability. There is no reason to persist in believing that the values of neo-liberalism are the only right and true values. In fact, we believe it is high time for these to be challenged. We are convinced that a broadening of the public discussion about social and economic policy to include non-orthodox and alternative views is not only in the interest of a more robust democracy, but will also help us advance toward the ideals of equity, the rule of law and environmental sustainability. The power which the neo-liberal economic paradigm wields in the Czech Republic is enhanced by the relatively small circle of experts and organizations commenting government policies in the media, taking part in discussions and even helping to draft individual policies. They include so-called liberal–conservative think-tanks such as the Liberal Institute, the Citizens´ Institute and CEVRO, as well as a small group of experts from financial institutions (Patria Finance and others). The problem is not only that the media tend to turn predominantly to these sources, but also the fact that they do not really have many trustworthy alternatives to turn to. In other countries meanwhile, think-tanks (and „think-and-do-tanks“) have sprung up which offer alternative analyses and practical policy tools for coping with economic, social and environmental issues. Some of these, such as the Irish Feasta and the British New economics foundation, have been a source of inspiration for us. However, to produce knowledge we need an institutional structure. So far, such structures have been available here only for the mainstream point of view. In such circumstances it is no wonder that this point of view dominates the public debate. We believe that democracy, equity, sustainability and the rule of law will all be served if we manage to build up a new institutional infrastructure which would produce knowledge alternative to the dominant neo-liberal paradigm. The Economy and Society Trust, we hope, will be a corner-stone for such an infrastructure.

1.3. Specific issues and goals

Democracy and the rule of law. We are afraid that the current economic system in our country is undermining democracy and the rule of law. Justice can be served only when an independent and accountable entity, the government, exists to ensure law observance and enforcement. However, in the last seven years the Czech Republic has opened itself up to the influence of big multinational corporations which have gradually been taking over the control of the country due to their superior economic power. The authority of legal and political institutions has thus been seriously jeopardized. At the same time, there has been very little discussion in the Czech Republic about the growing problems linked to the increase in corporate power on central, regional, and local levels. Neither the public nor the politicians are as yet informed about the possible impacts and risks of the increasing dependence of society as a whole on big private commercial entities. Our Trust will strive to open a discussion about these issues.

Social justice and equity. Besides democracy and the rule of law, current economic theory and practice also threaten social justice and equity. The simplistic neo-liberal view that a rising tide raises all boats, along with efforts by government to please transnational investors, has led to the gradual dismantling of social and employee securities and to a weakening of the welfare net. The groups most jeopardized by this process are the most vulnerable: the elderly, students, and young and single-parent families. This situation not only negatively impacts on people’s quality of life and perceived feelings of security, but leads directly to growing support for the extreme right and left. The current, ideologically biased emphasis on deregulation and privatization in government policy linked with a neglect bordering on repression of social forms of ownership and administration such as communal/municipal, government, not-for-profit and co-operative ownership and mutualization (based on the concept of stakeholder ownership and management) leads to feelings of powerlessness and to breakdown in community relationships. Our aim is to seek pragmatic and working alternatives to narrow neo-liberal economic models of society. These should be based on the principles of mutual solidarity, decentralization and self-help. Such alternatives would also include the support of small enterprises with local roots, which are often a mainstay of local economic continuity and employment.

The environment. We are further committed to seeking and promoting economic alternatives which would not be detrimental to the environment, and would like to help kick-start a discussion about what entails environmentally-friendly economic theory and practice. A key problem in this respect is the „growth imperative“, i.e. the need for the world economy to remain on an exponential-growth trajectory if it is to avoid collapse. Such growth is unsustainable on a finite planet and destructive of the environment. How do we escape this trap? The issue of economic growth is linked with the monetary system. According to some authors it is the growth imperative of the money supply which determines economic growth. At the same time, a rise in speculation has endangered the stability of economic systems and has drawn money from areas where it is needed. How do we cope with the money issue? Would a multi-currency system including local currencies help? We want to provide space for discussion on these crucial problems.

Economic theory. Economic theory was developed in days when the environment was not perceived as a problem. But today, economics is increasingly seen as the root of a host of environmental problems including the most intractable of them all, global warming. Should economic theory be changed? And if so, how? Where does theory end and ideology begin? The ideology of free trade is omnipresent in the rhetoric of our politicians and in legal documents on national and transnational levels (EU, WTO). To what extent do human and natural communities benefit from the free flow of goods, capital, possibly labour? To what extent do these arrangements enhance or paralyse our social and environmental legislation? We think that an unbiased and cultivated discussion about these sensitive issues is more than needed. We would like to provide a forum for those who wish to contribute to such a discussion both from the Czech Republic and from abroad.

Peak Oil. Warnings of an impending peak in oil production have been multiplying in recent years. We are told to brace ourselves for economic and social upheavals. Is this threat real and if so, which is the best way to face it? How do we avoid a breakdown in agriculture once the cheap oil is gone? Will the principles of so-called localization, (i.e. support of local cycles of production and consumption) help? Also this not-yet-opened discussion is worth kicking off.

The Trust seeks to view economic issues in a wider societal context. Therefore, we cannot ignore another problem which the current economic system has led to: the problem of eroding human rights and freedoms. Political elites, which since the mid-nineties have increasingly aligned themselves with the interests of trans-national corporations, have after 9/11 tended to forge an identity in promoting order and security through the so-called war on terrorism. We are disturbed by attempts, rationalised by the war on terrorism, to dismantle legal boundaries on government infringement of individual rights and liberties. We would like to monitor this situation and to focus on the commitment of governments to basic human rights as enshrined in the Universal Human Rights Declaration and other international documents.

Brief summary of recent activity of the EST (January 2007)

In 2006 the EST has been working on several smaller projects. Brief account of these is given below. A great deal of effort has been devoted to fundraising. As a result the EST has been able to secure resources for basic operation in 2007. This will be covered by an institutional grant from the Open Society Fund Prague (approximately 21,500 EUR). Two smaller projects (Open space about local economies and sustainability workshop and Marketing study of a company selling green energy) have been granted approx. 8,000 EUR in total. The EST also received a considerable funding for its Foreign Direct Investment research project (60,000 EUR for 3 years) from The International Visegrad Fund. These days, we are concluding negotiations about co-operation with the the Centre for Research in European Business and Economy, University of Hertfordshire Business School. This will not only secure co-financing and make it possible to launch the project but also bring prominent researchers, Jane Hardy and Graham Hollinshead, to the project.

Overview of the activities of respective programmes of the EST

Policy Interventions. The aim of this programme is to provide a platform for new views on various socio-economic issues and to promote public discussion.

In the first half of 2006 the EST organized a series of round tables on the Slovak experience with neoliberal economic reforms. The first from the series of discussion papers has been released – Petr Gočev’s „What justifies vertical re-distribution: An immanent critique of neoclassical and neoliberal approach“. Another discussion paper – „Czech pension reform – will it go fundamental?” of Ivan Lesay is going to be published early in 2007. English version of the document will be available.

Foreign Direct Investment. The EST in cooperation with The Environmental Law Service carried out a critical analysis of studies supporting the argument for governmental subsidy for a new automotive plant of Korean Hyundai in Nošovice, Czech Republic and published its findings widely. Considerable effort has been put into seeking co-financing for the project „Foreign Direct Investment“. Its objective is to shed more light upon the current merging of the interests of investors and political elites in our country that has directly and disturbingly led to the erosion of democratic processes and of the rule of law. In this context we would like to spark a public discussion that would weight the pros and cons of direct investment in the Visegrad countries (Czech Republic, Slovakia, Poland and Hungary). Given the funds secured for 2007, this programme will take-off in the near future.

Local ethical and democratic economies. This is a programme aimed at supporting the renewal, strengthening and emergence of local economies and social enterprise in the Czech Republic. Two publications have been prepared to be released early in 2007: a Czech translation of a historical text on Czech rural co-operation, written in the fifties by a Czech co-operative official exiled in the USA, and a collection of Nadia Johanisova´s essays on economic alternatives originally published as a series in the Czech Friends of the Earth magazine and based partly on her book Living in the Cracks (Feasta, Dublin, 2005). An Open space on local economies and sustainability took place in January 2007 and we were happy to had seen Richard Douthwaite, member of EST’s advisory board, as a participant.

Peak Oil. The EST continued in raising awareness of the crucial issue of peaking of oil extraction through articles in popular Czech media and participation on a conference. Fundraising effort for this programme was not as successful as we would wish, nonetheless small funding was attracted for establishing a basis of peak oil web-portal and several small workshops.