The use of the term
is ambiguous and is used in confusing ways. The
following comment focuses on the meaning that is very important in the
discussion of the economy. The
economy assumed in The Simpler Way is a subsistence economy.
The term is commonly taken to indicate a situation in which
very poor tribal or peasant families barely survive by just producing enough to
feed themselves. Modernisation and
development’ are essentially thought of
as requiring the replacement of subsistence economies.
However if we consider what the economies of tribes and
peasant villages were like before
being impacted by Western society we see that these were typically complex,
integrated at the village level (as distinct from being about an isolated
family), and satisfactory and effective in meeting needs.
Following are the characteristics of a subsistence economy
as the term is used here.
- The crucial themes
is producing with the intention and expectation that the product
will be used by the individual or his community to satisfy need,
not with the intention of selling it to receive money. The focus is not on the production
of commodities, items to be sold into the market in order to be
able to buy products from the market.
- Subsistence is
best thought of at the communal level, not that of the individual. In the subsistence economies of
tribes, monasteries, peasant villages and communes the intention is to
produce what members of the community want and to distribute those things
to them via mutually beneficial procedures. These may involve selling but
if so the point is only to facilitate exchange and accounting. There can also be trade between
communities, and trade with an external conventional/modern economy, but
these are minor elements and are engaged in to secure small quantities of
locally unavailable items and are not engaged in to accumulate monetary
- The concern is to suffice,
to produce just enough for a satisfactory life. Production, work, sales and consumption are minimised rather than maximised.
Non-market and non-monetary processes are maximised,
such as production within households, mutual exchanges, giving and
assisting. Modern economies
are obsessed with a fierce determination to maximize, income, profits,
sales, GDP, trade, investment, wealth…
considerations such as tradition, rights and justice take precedence in
production, distribution and development decisions. The distinction
between this situation and the modern economy is enormous. In a capitalist economy the only
consideration is the maximization of profit, income, and monetary
wealth. This is the basic
cause of most of our problems. Many bad things happen because the moral, social, ecological etc
costs involved can be ignored because the only factor that has to be taken
into account by an investor, seller or purchaser is what will maximize
monetary benefit to him. (Governments curtail the process and stop the
market having effects that are too destructive, but this is the extent to
principles restrain the operation of raw captalism.)
- The overriding
element is that production is not carried out in order to make profits
or accumulate wealth, or to invest a surplus in order to increase
wealth or capital stock. Accumulation is the defining characteristic of capitalism, and
shows its essential link with growth. Subsistence economies are stable and their participants
are not seeking to accumulate.
- In a subsistence
economy capital is of little or no importance. Development depends on whether the community has the labour, land, stone, timber, seeds, knowledge etc. necessary for the project, not on whether a sum of money can be
therefore involves independence from the global economy and its sources of
capital, and the resulting debt and entrapment.
- A major
characteristic of subsistence economies is security. Communities are
independent of the normal national or international economies, being able
to produce necessities for themselves, having inter-dependence and mutuality,
and focusing on effectiveness and sufficiency rather than efficiency and maximising. These provide high levels of safety in the face of adverse natural
events or the devastation that the fickle and predatory national and
international economies can inflict. What matters is being able to continue to provide, to get by, no
matter what happens and no matter if production is
Simpler Way is based on an analysis of the global situation which stresses the
coming era of intense and irremediable scarcity. Growth and affluence society is grossly unsustainable and
unjust and there is no possibility of maintaining the levels of resource use
typical of rich countries today must be replaced by mostly small, localized and
highly self-sufficient economies run by participatory processes, and based on a
culture of frugal, cooperative non-material values. The argument is that we can live well in these societies. These economies are well-described as subsistence economies according to the above list of criteria.