What is the foundational economy?

Introducing the Foundational Economy is a short accessible guide from 2018 which in 10 pages of text explains the basics for an European audience. An up to date account of foundational arguments in slides is presented in the Introducing the foundational economy, February 2019 presentation for Welsh government civil servants. These introductions give an overview of ideas which are developed in the Foundational Economy book which was published in English in September 2018 and appears in Italian in April 2019 and in German in June 2019.

These introductions make two basic points:

  • The foundational economy is about collective consumption through networks and branches which are the infrastructure of civilised everyday life. The foundational includes the material infrastructure of pipes and cables which connect households plus providential services like health and care which citizens rely on; outside the foundational, there is a mundane overlooked economy of haircuts and takeaways.
  • The foundational economy is about universal basic services which are a citizen entitlement and it is therefore about politics as much as economics. From a foundational view point, the distinctive role of public policy is not to boost private consumption by delivering economic growth but to ensure the quantity and quality of foundational services.

All this grows out of earlier, simpler statements of position. The foundational concept was originally presented in the 2013 Manifesto for the foundational economy  This was produced by a group of researchers, mainly based in the CRESC research centre at the University of Manchester. This statement came out of dissatisfaction with generic industrial and regional policy focused on next generation tradeable industries and attracting mobile inward investment through competitivity. Against this, the Manifesto (2013) argued that there was a large, neglected and sheltered economy with around 40% of the workforce engaged in providing households with basic goods and services. In the past five years we have been thinking through how and why this matters.

Public interest reports and team authored books – The End of The Experiment (2014), What a Waste (2015) and Il Capitale Quotidiano (2016) – developed our argument about how foundational provision was compromised when privatisation and outsourcing introduced financialised providers with targets of double digit returns on capital and expectations of growth.

Recent work has been concerned to move beyond critique to thinking through alternatives like new metrics based on analysis of how places work as in our working paper on Foundational liveability (2018). Our emphasis is on engaging specifics and any overview needs to be complemented by national and regional analysis and sectoral study. So readers may find it useful to turn to a recent regional report What Wales Can Do (2017) or the sectoral study of adult residential care  Where Does The Money Go (2016)

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