The review of “The Alternative” by Nick Romeo discusses ethical replacements for the dominant free market system.
I struggled with how to approach this review. On one hand, The Alternative presents a diverse range of approaches used by people in the western world to actively contest the norms of modern capitalism. There is a yearning for improvement, for more equitable ways of organizing work and finding fulfillment in our lives. Nick Romeo should be commended for highlighting viable alternatives to capitalism and the moral motivation driving them, including changes in company structure and fair compensation for employees who contribute to the value created. It is unnecessary for workers to be mere pawns in a system that prioritizes profit and self-interest over humanity and ethics.
Is it worth more than a simple can of beans? How can small-scale initiatives come together and challenge the current organizational system? As a teenager, I was fascinated by the Mondragon co-operative movement that Romeo praises for its virtues of fair treatment, decent treatment, and respect towards workers. The hope was that these values would lead to increased engagement, productivity, and purpose, ultimately driving out any negative aspects. The idea of a more moral economy, with the capitalist pluralism but without its exploitative nature, seemed attainable. However, even after 50 years, Mondragon remains one of the top 10 companies in Spain with few followers in its own country. This book offers hope, but the question remains: why has there been such little progress in implementing more viable alternatives when the evidence against the current work and welfare system is so strong?
In his exploration of various options, he introduces us to the Marienthal employment assurance program in Austria. For those unfamiliar, Marienthal was the subject of a research project in the 1930s investigating the severe social, psychological, and collective effects of widespread joblessness. Currently, the town is conducting a trial of a universal guarantee of employment for all of its unemployed residents. Essentially, there is a job available for anyone who has been out of work for more than 12 months – individuals can even have a say in designing their tasks – and they receive up to £2,000 per month. Many people choose to work instead of receiving welfare benefits, and there is substantial evidence that this boosts their self-esteem while also providing a valuable service, such as caring for the elderly or maintaining cleaner parks. Furthermore, this program is virtually cost-free for the government since the funds for unemployment benefits are simply redirected to the employed worker’s salary.
After the financial crisis, Britain implemented a program called the Future Jobs Fund which provided grants to employers who hired long-term unemployed individuals. This program was successful, similar to Austria’s welfare benefits, but on a smaller scale due to lower benefits. The evaluations of the program were positive as it created meaningful employment opportunities by using welfare benefits as wages. However, the program was eventually scrapped by the coalition government due to ideological beliefs that state initiatives are not effective and that only the private sector should drive the economy. This belief was also seen in Rishi Sunak’s attempt at the Kickstart program during the pandemic, but it did not have much success. This experience showed that a public authority needs to take charge and act as the main source of funding and organization for employment programs. However, even in Austria where similar programs have been successful, there has been no replication of the success of Marienthal and it is uncertain if it will continue beyond 2024.
Romeo presents a series of inspiring examples, such as the Purpose economy programme in the US where companies prioritize purpose over profit and pay living wages to their employees to foster commitment. However, while these examples are commendable, they fail to have a widespread impact. The author criticizes economics for prioritizing selfishness in decision-making and disregarding values. He acknowledges the ongoing debate in academia, highlighting the efforts of UCL’s Prof Wendy Carlin to redefine economics by acknowledging the complexities of human motivation, the ambiguity of market behavior, and ethical concerns. Carlin’s Core program, which Romeo praises, is now included in the curriculum of almost 400 universities worldwide. The foundation of economics is being shaken, although it has yet to crumble.
The focus on purpose as a driving force for business has not made significant progress. Approximately 7,000 B Corporations, who prioritize social objectives over profits in their foundational documents, now operate in over 90 countries – a significant increase from none 25 years ago. However, their combined revenue only accounts for 0.1% of the world’s national income.
The Alternative represents a glimmer of hope. However, without the support of a fresh economic approach, a feasible political ideology, and a significant number of influential thinkers and individuals in the realms of politics, economics, and society, these ideas will continue to be in the early stages of development. Romeo has contributed by organizing our understanding of the diverse opposing forces present – but there is still much work to be done in order for any of this to become the norm.