The foundations of well-being: foundational economy

What is economic success? The foundational economy collective provokes us to reconsider what matters in our economies.

Do you know this moment, when you realize you have avoided taking care of some important tasks that actually matter a lot to your life: medical check-ups, maintaining your apartment or caring for your loved ones? You can neglect these short-term, but at some point, they begin to affect your health, well-being and relationships. Now imagine we are doing the same thing large scale in our economies: We are not paying enough attention to life’s essential tasks and the people performing them. Think of childcare, waste disposal or food supply without which we would be in serious trouble. 

To highlight both the importance and the precarious conditions of essential work in our economy a group of social scientists invented the term Foundational Economy [1]. The foundational economy is the economy of everyday needs: energy, water, housing and food supply as well as education, healthcare and child care. The term is a provocation to the market fundamentalist’s belief that we are living in “one single economy” where market prices and GDP reflect what we value. Interestingly, during the corona pandemic we could clearly see how governments across the globe actually prioritized critical infrastructures and essential workers instead of other parts of the economy. In the ongoing and deepening social and ecological crises, prioritizing and investing in the foundational economy will play a key role to achieve a just and sustainable society [2]. Let me give you three reasons why. 

First, everyone knows we can hardly postpone consuming basic goods and services like food, energy, health care or local mobility services (without causing harm). The foundational economy accounts for a large share of what people spend money on, in particularly in low-income households and the current cost of living crisis is playing out in these sectors. How we organize the foundational parts of our economy therefore affects how much money we actually need to live decent lives (what the collective calls “livability”). To ensure that everyone in our societies is safe on a basic level (while drastically reducing carbon emissions) requires that we make the foundational services accessible for everyone via more public ownership, low taxes for basics or even a right to universal basic services [3]. Making private business in critical sectors that everyone depends on is a privilege that needs to come with social and ecological responsibilities (what the collective calls “social licensing”). 

Secondly, the foundational economy contains what all people share from conservatives to leftists, which is even more important in times of crisis when fear and polarization tend to increase. Expanding shared infrastructures, affordable housing or public transport can increase social cohesion and trust. 

Thirdly, the climate crisis requires a deep transformation of harmful economic sectors, which brings up the fear of widespread unemployment. While these sectors (like the fossil fuel industry) get a lot of attention, we underestimate how many people work in the foundational economy: they make up between a third and half of all paid jobs in most economies [4]. Moreover, consider the large extent of un-paid reproductive work (the overlooked part of the iceberg sustaining the paid economy) and you see: There is enough essential work to do that cannot be automatized (without harm) and the crucial questions are the conditions and the distribution of work. The pandemic highlighted the desperate state of essential jobs and reproductive working conditions: being un(der)paid, overworked and weakly protected, and migrant workers and women* most severely affected [see 4]. We could flip this around, make the foundations of our well-being the center of attention and create a more caring economy. I guess, it requires a very different idea of what economy means: that “economy is care” [5]. 






Image credits:  Scott Blake on Unsplash

Author: Sven-David Pfau, Wirtschaftsuniversität Wien / Austria

This text is published under the terms of the Creative Commons License: CC BY-SA 2.0. The name of the author shall be as follows: CC BY-SA 2.0, Author: Sven-David Pfau, funding source: Erasmus+ Programme for Adult Education of the European Union. The text and materials may be reproduced, distributed, made publicly available, shared and adapted under the following conditions: In any case shall the name of the author, the license as well as the website’s address of the original source be published.

The European Commission’s support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.