New Wine needs New Wineskins

Relational Thinking and Economic Policy in Europe

ECPM Conference, Munich, May 2015

Dr Michael Schluter

© Relational Research 2015

Christianity is a relational religion

• Creation• Rupture in Eden• Covenant• Incarnation• The Cross• Eternal life

The Book

© Relational Research 2015

Christianity is a relational religion

The Person

• Faith/Trust the key issue• Love & discipleship• Prayer• ‘Poverty’• The Cross

© Relational Research 2015

Christianity is a relational religion

Church Relationships:• With God• With one another• With their leadership• With the State• With other church

communities

The Church

© Relational Research 2015

What is a paradigm shift?

•Financial lens•Environmental lens•Individual lens•Relational lens

© Relational Research 2015

What is Relational Thinking?New categories and new language

Note link to:• Directness• Continuity• Multiplexity• Parity• Commonality© Relational Research 2015

Why the EU Economy is Unrelational

Unstable

Unsustainable

Unethical

© Relational Research 2015

Why is the EU Economy Unstable?

•Financial derivatives•Banks’ balance sheets•Equities trading mechanisms

© Relational Research 2015

•Fertility rates•Family fracturing•Dependence on debt

Why is the EU Economy Unsustainable?

© Relational Research 2015

Unsustainable fertility rates

Lithuania Romania Italy Germany Switzerland Self-sustaining population

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

© Relational Research 2015

Unsustainable family fracturing

© Relational Research 2015

Debt as Percentage of Tax RevenueDebt as percentage of GDP

France

Germany

UK

Spain

Italy

Greece

0% 80% 160% 240% 320% 400% 480% 560%

205%

207%

249%

268%

317%

497%

Source: IMF, Eurostat

Unsustainabledependence on debt

Unfair to young people and to creditors?

Why is the EU Economy Unethical?

•Growing wealth and income differentials•Reward without responsibility•Levels of youth unemployment• Intergenerational inequity

© Relational Research 2015

1 500

Growing wealth and income differentials

© Relational Research 2015

Reward without responsibility

Investment without involvement© Relational Research 2015

Levels of Youth Unemployment

UK France Portugal Italy Spain Greece0%

10%

20%

30%

40%

50%

60%

70%

18%23%

35%

43%

54%58%

Source: Eurostat

Inequities partly caused by single currency

Debt as Percentage of Tax RevenueDebt as percentage of GDP

France

Germany

UK

Spain

Italy

Greece

0% 80% 160% 240% 320% 400% 480% 560%

205%

207%

249%

268%

317%

497%

Source: IMF, Eurostat

Intergenerational inequity

Unfair to young people and to creditors?

Why the EU Economy is Unrelational

Unstable

Unsustainable

Unethical

© Relational Research 2015

A Relational Economic Plan for Europe

1. Embed relational values

2. Equity to replace debt and derivatives

3. Engage capital providers and other stakeholders

4. Empower extended families

5. Entrust welfare to local communities

© Relational Research 2015

Relational Economic Strategies 1

Embed relational values through:

A. A weekly shared day off

B. Relational schools

C. Family and community self-reliance

© Relational Research 2015

Relational Economic Strategies 2

Equity to replace debt and derivatives

A. Replace debt with equity

B. Penalise derivatives

C. Intergenerational accounting

© Relational Research 2015

Relational Economic Strategies 3

Engage investors and other stakeholders

A. Measure stakeholder relationships (IIRC)

B. Limited liability conditional

C. Regional finance institutions

© Relational Research 2015

Relational Economic Strategies 4

Empower Families

A. Colocation of relatives

B. Families to become ‘mutuals’

C. Strengthen Family balance sheets

© Relational Research 2015

Relational Economic Strategies 5

Entrust growth and welfare to local communities

A. Capped welfare budgets

B. Investment and innovation

C. Reduce dependence on the State

© Relational Research 2015

A New Growth Dynamic for Europe

Resulting from:

•Stronger Family relationships•Stronger stakeholder relationships•Stronger community relationships•Stronger regional relationships

© Relational Research 2015

A New Vision for Europe

• Relational vs individual rights• Money as a source of social glue• Capital as a servant, not the master• Progress measured by RWB (not GDP)

© Relational Research 2015

Please visit our websites…

•Relationalthinking.net*•Relationalschools.org•Relationshipsfoundation.org•Jubilee-centre.org

…*and come to our conference