The Economy of Care

An Economic Approach for a Sustainable Future

Thera van Osch (Foundation for the Economy of Care)

Conference Counting on WomenGender – Care and Economics

1. Work-definition Economy of Care 2. Economy of Care: Paradigm shift3. Basic model: Economy of Care vs Neo-liberal4. Macro-economic policy based on Economy of

Care5. Gender effects of multiple crisis 6. Why neo-liberal economic model cannot solve

the multiple crisis7. Transition towards a human sustainable future

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.

2. Economy of Care: Paradigm shift

HumansProductionConsumptionLabourDistribution (example: Care-

labour and income)

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 Careby 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

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.

Suppositions ‘Consumption’

Neo-liberalHouseholds 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

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

CirculationMarket economy vs. Economy for care

Market-system embedded in circulation system

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

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)

For example: Distribution of Care Labour

CARE RECEIVING & CARE GIVING

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

‘Engendered’ income distribution (= function of unpaid care labour)

3. Basic model: Economy of Care

Generation of human life

system (incl. unpaid work)

System for Production of

means for living (incl.

informal and unpaid)

System of Civil society

Circulation System

Political System

EcologicalSystem

Basic model: Market Economy

What sees the neo-liberal economist?

De Zorgeconomie?

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.

Macro-economic policy based on 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 VATLink income tax to ESU: The bigger the ecological

footprint, the higher the taxFiscal 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.

Macro-economic policy based on the Economy of Care GOAL 2: 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 labourComprehensive care system which ensures the

right for all to receive and to provide care.

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).

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

PUWPUW

quotequote

19751975 19801980 19851985 19901990 19951995 20002000

TotalTotal 34%34% 32%32% 32%32% 37%37% 39%39% 43%43%

MenMen 61%61% 58%58% 56%56% 58%58% 58%58% 60%60%

WomenWomen 8%8% 9%9% 12%12% 16%16% 20%20% 25%25%

PUW Quote 4 EU countries

Countries Women Men

Spain 33% 74%

Poland 33% 64%

UK 37% 65%

Netherlands 37% 60%

Source: Dauvelier, M., 2008: Equalising Care. Amsterdam (FNV-Vrouwenbond)

Macro-economic policy based on the Economy of CareGOAL 3: 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 budgetingTemporary measures to promote equal representation

at all decision making levels (apply CEDAW, art. 4)Democratisation of fiscal systemGender-responsive social balance for companies and

public bodiesNAP for effective implementation of UN-

commitments (WCAR-Durban-2000, CEDAW, Rio-1992, Beijing PfA-1995, Cairo 1994, CRC, MDGs, UNSCR 1325-1820-1888-1889, etc.)

5. Gender effects of Multi-crisis

risksMulti crisis

Gender effect

Poverty crisis

Women 70% of poorest due to gender-based discrimination in access to and control over resources and decision making

Care crisis Women doing over 2/3 of unpaid care labour; globalisation of care labour; imbalances due to demographic development; gender impact of pandemics (HIV/AIDS-orphans, increased care of survivors), etc.

Climate change crisis

Increased environmental health risks; disasters and corresponding social disintegration; loss of biodiversity (including herbs, medical plants and millenarian knowledge of generations) ;

Peak oil crisis

Increasing risks of wars to ensure control over oil-fields (disintegration of communities, GBV as tactic of war, women and children majority of refugees)

Financial crisis

Imbalance between monetary sphere and real sphere. Governments spending billions to cover the risks of the bank crisis; cuts in public health, education and other social programmes, resulting in an increase of unpaid care sector

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

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)

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)

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.)

QUESTIONS AND ANSWERS?

THANKS FOR YOUR ATTENTION