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Circular economyRegenerative economyWellbeing economyDoughnut economyPost growth economyDegrowth economySocio-ecological market economyImpact economyPurpose EconomyEcological economySteady state economyGreen economyUbuntu ‘economy’ (Global South)Buen vivir economy (Global South)Circular Economy
New Economic Schools of Thought
by Renilde Becque
In late 2023 I put together a concise Powerpoint overview of 14 different New Economic ‘schools of thought’ to provide initial insight and context regarding the history, main goal(s), prime constituencies, key messages, and high level challenges of different lines of new economic thinking that can be found in the field today and which can be a source of confusion when we talk about economic transformation.
The different lines or schools of thought covered included:
The findings for the first set of 7 are included here below. The second set of 7 can be found
.
2. Regenerative Economy
3. Wellbeing Economy
4. Doughnut Economy
5. Post Growth Economy
6. Degrowth Economy
7. Socio-ecological Market Economy
8. Impact Economy
9. Purpose Economy
10. Ecological Economy
11. Steady State Economy
12. Green Economy
13. Ubuntu Economy
14. Buen Vivir Economy
From Renilde post on LinkedIn
From: GANE 10 Principles pdf
Table 1. Overview of new economics approaches and principles emphasized in the sources analyzed. An asterisk (*) denotes approaches that bridge conventional and new economics. Principles: 1: Social-ecological embeddedness and holistic wellbeing; 2: Interdisciplinarity and complexity thinking; 3: Limits to growth; 4: Limited substitutability of natural capital; 5: Regenerative design; 6: Holistic perspectives of people and values; 7: Equity, equality, and justice; 8: Relationality and social enfranchisement; 9: Participation, deliberation, and cooperation; 10: Post-capitalism and decolonization. A referenced version of this table is provided in the Supporting Information.
Holistic principles
Two ‘holistic’ principles point out that economies are part of societies, which in turn are part of the rest of nature. Principle 1 argues that economists ‘Recognize that economies are embedded within societies and ecosystems, and that the basic purpose of economics is to support human and planetary wellbeing.’ Many approaches focus directly on integrating long-term environmental, social, and economic value, arguing that economics is fundamentally normative and all economic relations are social-ecological relations. Wellbeing is conceived as embedded in these relationships, with human and planetary wellbeing interdependent. An explicit goal is to align economic welfare with planetary wellbeing, recognizing critical constraints like social capital (e.g., caring and trust essential to healthy communities), Earth’s life-supporting systems, cultural principles that regulate relations between people and nature, intergenerational equity, and social-ecological resilience.
The second holistic principle, ‘Acknowledge complexity and the need for interdisciplinarity in addressing economic problems,’ points out the need for economists and policy makers to integrate diverse scientific, humanities, and local and indigenous knowledge. Economies are complex, adaptive systems. Conventional neoclassical models reduce real-world complexity to an abstract set of production and consumption measures, which narrows possibilities and can drive problematic policy outcomes. Many approaches thus advocate complexity-based, non-linear, integrated social-ecological perspectives, acknowledging interdependencies and dynamics within and between natural and social systems, to inform more holistic policies.
Ecological principles
Building on the principles of embeddedness and complexity, many approaches are grounded in ecological understanding. Regardless of innovation, economic activity (products and services) always draws on natural resources. Principle 3 encourages economists and policymakers to ‘Acknowledge that economies have fundamental biophysical and biochemical limits to growth’. It recognizes that economies are inherently constrained by earth systems. Bio- and circular economic approaches reframe the relationship between economic growth and earth systems as metabolic processes: the conversion of matter and energy, and generation and recycling of material flows. Because entropy means metabolic processes are never completely efficient, growth has fundamental limits. While circular economy perspectives mostly focus on decoupling growth and environmental impacts, steady-state, degrowth, post-growth, and many ecological economists consider that decoupling alone is insufficient to address the climate and nature emergencies. They argue that ecological constraints require limiting affluence, particularly in the global north; using holistic, wellbeing-based indicators to measure progress rather than GDP; and reducing inequality.
Principle 4 asks economists and policy makers to ‘Recognize that human-derived capital depends on nature’. Conventional economic thinking is primarily concerned with outputs, maintaining that when one form of capital input is diminished, another can replace it. This perspective is strongly challenged. For example, post-Keynesian economists reject direct substitutability of resources in aggregate production functions, while circular and ecological economists emphasize inherent connections between natural resource consumption and production through societal metabolic processes. This principle thus strongly advocates nature and resource conservation, and diverse social innovations for decentralized environmental stewardship like multi-scale networking between businesses, neighborhoods, and cities to manage resource and waste flows.
Principle 5, ‘Design economic systems to be circular and regenerative,’ reflects the design implications of ecological limits and embeddedness, focusing on generating value by reducing material and energy use per unit output and maximizing resource regeneration. Sharing economy thinking looks to manufacturers, retailers, and co-operatives to act as service providers by supplying the use rather than consumption of products. Integrating but also going beyond the circular economy, doughnut economics adds social boundaries, shifting the emphasis to social-ecological regeneration. Flourishing economics emphasizes long-term socioecological benefits generated through collaborations between business and public policy within bioregions. Perspectives such as wellbeing and living economies highlight the importance of designing community-based living infrastructures that generate security, stability, and productivity, decentralising decision-making and shifting emphasis from competition to cooperation and new measures of progress. Many approaches recognise the importance of resilient circular and local economies and supply chains, especially in terms of basic needs like food and energy, to minimise waste, ‘humanise’ productive activities, and improve resource security.
Social principles
Through its social principles, many approaches explicitly consider the relational and societal implications of economic practices. Principle 6, ‘Embed pluralistic models of values and behavior, based on wellbeing, dignity, sufficiency, and holistic freedom, in all economic thinking, decisions, and actions,’ spells out these social needs and implications. Institutions like monetary systems, markets, valuation methods, and economic education, have ‘meta-values’ embedded in their design that determine what values are privileged in decisions. This principle thus recognises the need to embed more relational and sustainability-aligned values in institutional models, e.g., through inclusive community approaches to manage common pool resources and deliberative democratic approaches to social-economic valuation. This principle also invites retirement of the conventional view of homo economicus as a self-interested maximizing agent. Instead, it recognizes the sociobiological reality that humans are diversely motivated, and that values and behavior are grounded in social relationships. It resonates with concepts like humanistic management and homo integralis, expressing people’s wholeness and environmental embeddedness. Holistic freedom here balances ‘negative’ freedom from constraints, such as free enterprise, with ‘positive’ freedoms to be and do what is intrinsically valuable, such as being educated and participating in community life. This understanding encourages interventions focused on needs and capabilities, emphasizing dignity and sufficiency over unconstrained preference satisfaction.
Economics has traditionally focused on growth and efficiency as central goals. This is reflected in many economic and political institutions. Principle 7, ‘Consider equity, equality, and justice as central questions of economic inquiry’, explicitly challenges this emphasis and its association with ‘trickle down’ theory in economic policy, with global wealth inequality persistently increasing in recent decades33,34, despite decreases in between-country income inequality35. Approaches such as wellbeing economics and economic democracy point out that not just poverty, but also inequality undermine wellbeing, including for the better off. Equality, equity, and justice are strongly emphasized by feminist and indigenous economists, advocating rights for social and cultural groups suppressed by conventional economic systems. Caring and feminist approaches challenge the gendered nature of economic relations, exposing assumptions concerning women’s paid and unpaid labour in relation to social reproduction. Sen’s capabilities framework and its extensions constitute an important conceptual lens, redefining progress and development to better integrate social justice. Concepts of environmental justice link environmental impacts and social-economic equality. With growth constrained by earth systems (Principle 3), fair distribution is an urgent environmental matter. Ecological economists thus propose a new hierarchy of concerns, where sustainable scale, equitable distribution, and social-ecological resilience precede efficiency.
Political economy principles
The fourth set of principles expresses ways to reshape the political economy to support inclusion and participation. Principle 8, ‘Embrace pluralistic social and relational approaches that support social enfranchisement, social needs, and the common good,’ encourages more central integration of relational worldviews and values like care, community, love, and reciprocity into economic thinking and policy. Proponents generally see important roles for the state and civil society in securing economic and socio-relational priorities and universal access to basic services. Approaches such as foundational, caring, and diverse indigenous economics advocate repurposing businesses and financial systems to ensure social value, overcoming narrow emphases on financial wealth and surplus generation. This requires more holistic and integrated evaluation and reporting, including metrics that recognise the profound value of unpaid care work, and environmental benefits and damages.
Conventionally, economics has emphasized modelling and analytical, data-driven methods. Several approaches expand their scope to recognise complex systems and coupled ecological economic models. Principle 9, ‘Embed participation, deliberation, and cooperation as core to economic thinking and policy,’ advocates integrating analytical approaches with more inclusive social processes in research and policy. It is not possible to fully separate analytical from normative research when considering complex systems. Any choice of technical parameters is ultimately value-based and conflicts between values cannot be fully resolved through optimization but must be democratically deliberated through methodologies like participatory action research, participatory systems modelling, creative modelling, and deliberative valuation. In relation to policy, deliberative economic approaches envisage an active role for citizens participating and cooperating to improve quality of life, and advocate for the rights of workers and citizens affected by economic policies to have a genuine opportunity to participate in those decisions. New municipalism and cosmolocalism focus on institutionalising participative platforms and practices involving collaborations among citizens, municipalities, and other levels of governance, and through effective cooperative institutions serving local economic development needs. While cooperative perspectives have received some scepticism in conventional economics, institutional and feminist economists have pointed them out as common practice, benefiting sustainability, productivity, and equality.
Finally, Principle 10, ‘Take post-capitalist, decolonized economic perspectives,’ underpins diverse models and applications that disrupt conventional relationships between capital and labor, with particular regard for the views of marginalized and previously colonized peoples. Concepts of production conventionally build on labour-capital dichotomies and the concentration of power and capital, reflected in the post- colonial export of Western mass consumption lifestyles to the Global South. Decolonization and postcapitalism are thus linked in their analyses of ‘unmaking’ colonial and capitalist institutional configurations. Rather than providing a single ideological post-capitalist blueprint, diverse approaches, applications, and perspectives on markets and monetary and financial systems are advocated. At the microeconomic scale, sharing economy and post-capitalist approaches envisage economic practices based on new technologies and a reduced need for labour, including new currencies that embed social and ecological values, communal ownership, new forms of cooperatives, and online networking spaces to promote non-profit forms of work and address labour mobility, empower disadvantaged individuals and support capabilities. Cosmolocalism envisages collaborations between globally connected citizens and grassroots movements to transform consumption-production regimes through digital innovation, strengthening both local, social-ecologically embedded economies, and global citizenship and multilateralism. At the macroscale, degrowth, post-growth, ecological, steady state and post-Keynesian economics provide new analytical tools in areas like monetary and physical input-output and system dynamics modelling, while the embrace of post-development theory affirms cultural diversity, aligns new economics with indigenous philosophies, promotes democracy, and provides social spaces for conflict resolution and social protocols associated with reciprocity and respect for nature.
In summary, these ten principles explicitly shift attention in economic thinking and policy towards holism, heterodoxy, plurality, interdisciplinarity, equity, wellbeing, participation, and aligning economic activities with natural systems. They recognize the context-specificity of institutions, values, and culture, and the need for relational and complexity-based thinking to achieve inclusive and just transformation towards sustainability.
Methods
We conducted an inductive, qualitative content analysis32 to understand the scope of new economic approaches by identifying core principles and systematically synthesizing them across a large number of economic approaches. Figure 1 provides an overview of the sampling, screening and analysis process and Table S2 (Supporting Information) provides the data extraction form.
The initial set of sources was provided by members of the Leadership Team and Advisory board for the Global Assessment for a New Economics (GANE) project (http://neweconomics.net). Advisory board members were affiliated with diverse well-established organizations that embraced or promoted new economics in science, business, and policy, such as the Club of Rome, Wellbeing Economy Alliance, World Future Council, World Resources Institute, the Capital Institute, Catalyst 2030, Better Nature, Ethical Markets, the Gross National Happiness Centre, and the Green Economy Coalition. 11 of 24 members of the board were based in the Global South, whilst 17 of 24 members were affiliated with organizations with a global remit. Because of this diversity of backgrounds, we could draw on a mix of sources across research and practice.
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