The Economics of Neighborliness

A Requirement for an Abundant Community

We cannot build strong neighborhoods and communities while laboring under the principles of traditional economics. The dominant economic thinking begins with a religious belief in scarcity and self-interest. This rules most modern economies and continues to dominate what we measure and value. We measure our well-being as a nation by the growth of Gross Domestic Product or Gross National Product. We measure our lives and “standard of living” by family income. We have created a “show me the money” culture; if it has no dollar sign on it, it has no value.

This approach got formalized in 1934 when Simon Kuznets introduced the idea of the Gross Domestic Product to Congress. The GDP is the measure of all the goods and services that change hands in the country in a year. It is the number we use to measure our standard of living. When GDP goes up, we are theoretically doing well. When it goes down, we are doing poorly. That is the theory.

There is a movement to dislodge this measure because it masks the reality of people’s lives.  A growing number of economists are successfully arguing that the scarcity-based, money-centric model is not serving us, but destroying us. It puts no value on generosity, relationship, kindness, cooking, gardening, watching kids and all the non-money exchanges that comprise neighborliness and build community.

One of the voices for an economics of neighborliness is Canadian Mark Anielski. In his book The Economics of Happiness, he gives form to a measure of well-being he calls Genuine Wealth. Early on he quotes Victorian philosopher and artist John Ruskin:

“There is no wealth but life. Life, including all its powers of love, of joy, and of admiration. That country is richest which nourishes the greatest number of noble and happy human beings; that man is richest who, having perfected the functions of his own life to the utmost, has also the widest helpful influence…over the lives of others” (p 19).

Anielski goes on to say that “Ruskin was one of the few writers in modern times to understand that the true meaning of the word wealth has more to do with quality of life than the accumulation of worldly possessions.”

Toward Abundance and Community

What is interesting is that Anielski provides us with alternative measures of well-being. He begins by making the distinction between an Economy of Scarcity and an Economy of Well-Being.

The Economy of Well-Being holds that:

  • All wealth, including money, is abundant since it is a gift from God for all to receive and share.
  • Progress is driven by the pursuit of happiness and genuine well-being.
  • Such progress means that we move from consumer to citizen.
  • We become statesmen instead of politicians.
  • We replace accumulation with sharing, gifting and reciprocity.
  • Sustainability replaces growth (p. 66).

Starting with this set of principles, Anielski has developed an alternative measure to the GDP: what he calls a Genuine Progress Index, GPI. Included in this measure are the very human functions of parenting and eldercare, free time, volunteerism, household infrastructure, savings rate, ecological footprint, air and water quality, fish and wildlife, voter participation — many of the things that John and I say grow out of abundant communities.

Anielski also assesses the usual measures of economic exchanges, employment and income, but they are not the point; they are just some of the factors that constitute the wealth of a family and community.

There is one more turn in his work that is worth noting here: Anielski thinks that each community needs to define for itself what it values and therefore measures. Leduc has its own statement of values and measures.Santa Monica has its own. Alberta its own. In this way an economy is owned locally, defined locally, assessed locally. This supports local identity and ownership.

This book is only one example of the larger movement to put economics back in service of our humanity, which is what Adam Smith held in the first place. A few others in this flow are Bernard Lietaer, Olivia Saunders, the New Economics Institute, Herman Daly and John Kay. They are questioning not only how we measure well-being; they question the purpose of a business, the ways communities are created and they also are interested in caring for the land and the earth and its most vulnerable people. All economists. Who would have thought a concern for abundance would find its way into the world of the dismal science?


Home page photo: D. Sharon Pruitt

About the Lead Author

Peter Block
Peter Block
In addition to The Abundant Community, co-authored with John McKnight, Peter Block is the author of Flawless Consulting, Community, Stewardship and The Answer to How Is Yes. He serves on the boards of Elementz, a hip hop center for urban youth; Cincinnati Public Radio; and LivePerson. With other volunteers, Peter began A Small Group, whose work is to create a new community narrative and to bring Peter's work on civic engagement into being. Peter's work is in the restoration of communities and creating systems that restore our humanity. He is a partner in Designed Learning, a training company that offers workshops he has designed to build the skills outlined in his books.

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