Economics and the Art of Living

Think about your week. Did you spend time with a good friend? Get a chance to stare out the window or look up at the clouds and let your mind wander? Did you share a meal with somebody you love? Was there an opportunity to learn something new, express your creativity or play with a child? If you were fortunate enough to do any or all of these things you may be surprised to discover that your actions made a positive contribution to the economy. Or at least a certain kind of economy.

Most of us when we hear the word economics think of things like GDP, imports, exports, the banking system, employment rates etc. But in its origin the word economics meant to manage the home, from the word oikos which gives us ecos meaning home (as in ecology) and nomos which means to manage. In ancient Greece this system of economics was the oikonomia, which focused on use values (agriculture, crafts, hunting as well as ethics and aesthetics) and which can be seen as ‘the art of living’. Aristotle made a clear distinction between this oikonomia and chrematistika which focuses on exchange values and the ‘art of acquisition’ through commerce ie ‘the art of making money’. Over time the art of living (oikonomia) gave way to the art of acquisition (chrematistika) until today, when economics has actually come to mean nothing more than chrematistics.

The morphing and changing of words and their meaning happens throughout history, and might be of little interest if it weren’t for the fact that, in altering the meaning of this particular word, we have all but forgotten how to practice this art of living, and living well, of which it speaks. Not only that, but the focus on chrematistics has become so all-encompassing as to endanger the possibilities of practising economics in the true sense of the word. How often do we complain that we would love to spend more time with our families, do something creative or contribute to our communities, but we are too busy making money to pay the bills? The chrematistics get in the way.

In the 1970s, after many years of researching poverty in Latin America, Chilean economist Manfred Max-Neef came to the conclusion that conventional economics, in practising chrematistics, did not have the tools to adequately address the experience of poverty and could not serve to alleviate it. What was needed was a language that allowed poverty and wealth to be understood in much broader terms. Together with his colleagues he developed what is now commonly known as Human Scale Development (HSD).

HSD proposes that there are 9 fundamental needs which are universal across time and space, as opposed to wants which are subject to cultural and historical trends. These fundamental needs are: Subsistence, Protection, Identity, Understanding, Participation, Creation, Freedom, Affection and Idleness. If your needs are satisfied you are wealthy, if you have needs that are not satisfied you suffer from one or multiple poverties. The key to living well, and therefore the purpose of a true economy, is to adequately satisfy these human needs within the Earth’s natural limits. Our role within that economy is not only to seek to get our needs met, but to use our gifts to meet the needs of others. In fact many of the needs he proposes are social needs where both giver and receiver experience satisfaction in their fulfillment. (Think, for example, of the performers in a play, traditional apprenticeships or extended families and communities sharing childcare)

So, by the HSD definition, the time you spent playing with your child and meeting their need for creation, affection and participation creates a positive balance in the economy. As does the meal you made for your elderly neighbour, (meeting the needs of subsistence, affection, understanding, and protection) as does joining a community garden. In fact all the things that the conventional economy ignores create wealth in a Human Scale economy. This can be a liberating and inspiring realization, and a good place to start deepening our understanding of human wellbeing and forging a pathway towards a true economics that serves humans within the Earths limits, allowing all of life to once again thrive.