OIKOS– New Economic Development

Well-before being the name of a popular yoghurt brand, òikos represented the basic unit of society in ancient Greece– a household. The management of an òikos was termed oikonomìa, which gives the origin of the word “economy”. The study of a household in relation to its pyshicial and human environments is that of “ecology”. More recently, Oikos has been used in sociology to define an indiviudal’s social circle. The centrality of this ancient term in households’ economic life is still relevant today: people manage their means and needs within economic systems, integrated in the web of social networks, and rooted in their local physical environment. They operate in an ecosystem (no points for guessing its root).

Yet our current economic frameworks do not factor households within any such ecosystem. Homo economicus is modelled as a rational household that optimally allocates consumption and leisure given constraints so as to match an underlying equilibrium of individual “utility” (roughly “value”). This has been shown again and again to be an inaccurate simplification.

On the news we continually hear of rising income and wealth inequality, of disenfranchised and marginalised populations, and of unequal access to the traditional forms of development (education, jobs). We are reminded daily of the fragility of our environment and of the drastic consequences that changes are having on livelihoods, especially as those less-equipped to front them are most impacted. Individual wellbeing is multifcated, but is quite clearly decoupling from material gain. All the while, our economies reach new heights of aggregated prosperity.

Applied economic development work from community-based organisations, community colleges, workforce boards, and other direct service providers elevate the foundational role that basic needs, social networks, and community engagement play in providing households the means to manage their livelihoods, and grow. The access to these is especially crucial for overcoming barriers to inclusive, shared prosperity. In other words, some of the ecosystem’s fundamental elements providing support and onramps to economic development are social and human, not economic.

Part of the reason why past and current economic models do not factor much of this (if any) is ideological, and another part is because of its sheer difficulty (empirical evidence and mathematical proof require good data and significant computing power). Yet they are nonetheless not succesful in yeilding equitable, sustainable, and resilient development. So, how can we engender new economic development models rooted in these pluri-dimensional factors while still promoting prosperity?

Oikos is a workstream that is being developed to fill this hole. Rooted in novel, rigorous economic and social science research as well as in the lived experience of communities, new evidence-based frameworks centered around households’ ecosystems can show a way forward. Check out my most recent work, the New Economic Development Dashboard, an interdisciplinary quantitative assessement tool for exploring economic development status along dimensions that better represent households’ enablers for equitable, durable development.