Friede-Gard-Stiftung is a 2020 founded charitable foundation endowment.
It annually endows a prize for scientific achievements,
The only aim is the re-orientation of research in economics towards securing the basis for (human) life on earth, i.e. respecting the limits of our „spaceship earth“ (an expression coined by Kenneth Boulding) instead of promoting everlasting and infinite growth.
This purpose is realized especially by the annual endowment of an award (prize) for scientific achievements which demonstrate specific progress in the evolution of economics towards an economics for a sustainable economy and society – meaning an economics which not argues for a ‘business as usual’, but takes serious all the threats for our world, especially those of climate change and global warming, and delivers helpful answers.
Research and teaching in economics so far is very little oriented on sustainability, but largely on continued growth, which is one of the biggest drivers towards environmental damage and climate change.
Because of this we need as soon as possible an economy and society shaped for ecological, economical, and social sustainability; and moreover also in parallel an economics theory is needed which can model and help design such an economy and society.
Of course there are researchers working towards these goals, but they are outnumbered by far by those adhering to the neoclassical mainstream. As a consequence they cannot offer so far an economic theory as detailed and impressive as the mainstream, and therefore they are not perceived as an alternative in public and are seldom asked for comments on the economic problems of our time.
The situation is like that of David versus Goliath; and can be seen with respect to university seats, scientific journals/ publications, and especially so when it comes to funding of their research. The same is valid with regard to the appearance and the relative weight in public discussion. Overall, the neoclassical mainstream holds a monopoly-like position in research, and influence in political decisions.
At the same moment, the lack of meaningful advice from the mainstream with respect to the threats of climate change and global warming is obvious, as the mainstream permanently offers the same recipes aiming at perpetual growth which have over the past decades resulted in our present critical situation, against the promises always been made. WE therefore urgently need alternatives, developed and detailed from promising ideas which are present and new ones to be found. The results need to be broadly communicated to the public. This needs resources which have to be newly supplied or taken away from the mainstream.
We welcome every support that helps to make our work more efficient and visible in public. You can help via money or personal input (e.g. with regard to public relations, collecting of helpful material from the scientific community).
Friede-Gard-Stiftung is ‚certified‘ from the German authorities as charitable, so that financial donations can be subtracted from income in the tax declaration in Germany.
Our account is:
IBAN: DE68 5625 0030 0001 1683 12 - Kreissparkasse Birkenfeld (Birkenfelder Landesbank)
Friede-Gard-Stiftung – Im Eck 16, 55758 Allenbach – Tel. 06786 / 2909817
Our e-mail address is mail(at)Friede-Gard-Stiftung.de
Old School Thinking
In the course of the past four decades the neoclassical mainstream (with ist various sub-schools) has conquered the dominant position globally, thereby marginalizing alternative schools of thinking (or even making them suspect). This is not (only) the result of (pseudo)scientific achievements but more so of economic and political support by influential circles, which in turn take profit from the economic advice that the mainstream brings into politics.
The thinking of the neoclassics is largely based on highly unrealistic assumptions, these assumptions being critical to the deductions, i.e. violation of these means invalidity of the results.
That no fundamental help for today’s problems can be expected from this school becomes obvious for anyone with some commonsense from the following three points:
- The scholars of neoclassics propagate growth as a universal remedy of any economic problem. And they hold that this growth is possible for the next years and decades (or even necessary to finance the protection of the environment or the repair of its damages).
- In contrast with a bit of commonsense it is clear, that on a finite planet no infinite growth is possible – obviously many ecosystems are even close to collapse due to the collateral environmental damages of the growth of the last decades.
- No one from the neoclassical mainstream has seen the economic crisis coming that stroke globally after the Lehman breakdown in 2008 – on the contrary, many from this school have proclaimed a bright economic future until some months before that (some even argued that thanks to their insights and policy tools there would never again be recessions and financial crises).
- Actually there were about a dozen economists ‚who saw it coming‘, thanks to their reality-based better theories.
- The neoclassical mainstream economists are not a bit scared by climate change and global warming – because they have models that incorporate these changes into the economy and deliver as results that 1 degree of global warming will only reduce the global welfare (as measured by gross national product) by 1%. And if mankind does not succeed to limit the global warming to 2 degrees (as agreed in the Paris convention), this will not matter much, since even a 5 degree global warming will only mean approximately 5 % welfare loss – which is in the range of normal business cycles, and less than recently experienced in the corona pandemics). Such smart forecasting has earned the ‘Nobel prize’ in economics in 2018. And this clever reasoning enters into the IPCC reports which are a prime basis for political decision-making around the world.
- A layman with commonsense (so perhaps one of our political decision-makers), who has seen the recent sequence of years with maximum heat and dryness, leading to large losses for farmers worldwide and disastrous forest fires, listens to this unbelieving – but then gives in to the unison massive economic intellectual brilliance of these scholars of the top universities (giving no chance to the few heretics).
In the four decades of the triumph of neoclassical mainstream economics the global sum of the gross national product has multiplied; alas, the collateral effects on the environment have more than multiplied, and brought about an abundance of threats, and lead human civilization right to the abyss (and we should be scared of the old recipes which promise to ‚bring us one step forward‘.
In the 1970’s the clever neoclassical theoreticians smiled and mocked at prudent researches which warned with sound arguments against the ‚limits ot growth‘, and diagnosed them for economic incompetence. At that time it would have been very ease to correct the direction of the economic evolution with almost no effect on welfare – it only would have meant boundless profit making without caring for environmental damages. But in the contrary, everything was done to accelerate all business.
Even with the resulting damages to the environment, the necessary effort to cope with climate change and global warming would have been only some percent of the global sum of the gross national product, according to the Stern Report. As an answer to the warnings and proposals of this report there have been lots of words and even some conventions, but too little of relevant action.
Today we are confronted with an impending climate catastrophe, which not only will cost us some percent of welfare, but will demand us totally. Loosely stated, we have entered the era of the fight for survival: as individuals (as corona teaches us), as a liberal and democratic society (as the global tendencies towards authoritarianism show), and as a market-based capitalistic economy (as the combined subprime-finance-state debt-crises since the Lehman breakdown demonstrate), and perhaps even as a species and life itself (if global warming is not controlled and progresses to four, five, or even six degrees).
Avoiding this catastrophe necessitates alternative routes than those used in the past, and foremost in our economy. This needs also a different economics – not sticking to the neoclassical beliefs. There are promising alternatives – but they have to be developed and detailed, which needs resources, financial and manpower (instead of putting them into ‘repairing’ neoclassic).
Hopefully the prize (award) will produce incentives for that, and help to re-orientate economics and economic research.
The prize will be awarded for scientic achievements which represent specific progress of economics with regard to establishing a sustainable economy and society.
Economy and society can only be declared as ‚sustainable‘, if it is in economical, ecological, and poltical respect in a constellation that could last indefinitely in principal. This means especially that the planetary boundaries are not exceeded, and that human rights are respected globally. In addition conditions should be socially balanced, and meaningful and productive economic and political participation enabled.
Work worthy of the prize should demonstrate theoretical new and practically relevant results for at least one of the following fields:
- Incorporation of the ecological and social aspects into the model of the economy,
- Modeling of the (national or global) economy with explicit consideration of all aspects relevant for sustainability (e.g. nature/ land/resources ; money) with regard to real-world applicability,
- Conceivable is also that model-building on company or sector level (e.g. agriculture) results in achievements worthy of the prize.
- Theoretical tools for developing economic advice for practical political decision-making, e.g. for
- Complying with the climate targets of the Paris convention,
- Transformation of an existing growth-dependent economy into a post-growth economy (‚zero growth‘ or even de-growth),
- Socially balanced implementation of the shrinking of an economy in the case this is required by the ecological situation,
- Compensation of growing, stationary and shrinking economies on the global level.
The board of the foundation makes the decision about who is the prizewinner. It is supported by a committee which includes past prizewinners and possibly further qualified persons.
The foundation collaborates with the university of applied sciences Trier/ Umweltcampus Birkenfeld (UCB), which especially hosts the website of the prize and organizes the annual prize awarding ceremony.
For further details see the UCB’s website: www.umwelt-campus.de/friede-gard-preis
The Friede-Gard-Preis 2021 was awarded to Prof. Dr. Dr.h.c.mult. Hermann Haken and Prof. Dr. Peter Flaschel. The prize awarding ceremony was held at Umwelt-Campus Birkenfeld on 14th october 2021.
Professor Haken received the prize for his outstanding merits as the founder of Synergetics, a suitable foundation for an Economics of Sustainability, especially for the creation and elaboration of concepts and methods for the modeling and analysis of complex nonlinear systems with dynamic non-equilibria and self-organization.
Professsor Flaschel was honored for his outstanding merits with regard to the ‚Bielefeld School‘, a suitable foundation for an Economics of Sustainability, especially for the modeling and analysis of social sustainability in macroeconomic models of the Keynesian type.
For further details to the prizewinners and the prize awarding ceromony see the website oft he prize at the Umwelt-Campus Birkenfeld: www.umwelt-campus.de/friede-gard-preis