There’s a neat definition of the foundational economy (FE), put together by the Foundational Economy Collective at Manchester University. They describe at as the infrastructure of everyday life.

There is plenty of debate around growth, degrowth, post-growth and the measuring of economic well-being and understanding the performance of our economies. I like to consider the FE as a part of the family of alternative economic ideas which propose a world beyond the neoliberal system which has become so embedded in our systems and institutions since the 1980s. Like the Doughnut model, community wealth building, and with some shared character to the circular economy too, the FE is a reset for the economy to favour society rather than wealth – when the language of Marx was more current we might have said labour over capital.

The foundational brings to life the functions at the core of our communities, the things many of us take for granted but which are often not delivered in a fair or uniform way. This means wellness, or prosperity beyond notions of income, is even more irregular and unnevenly distributed.

In viewing the economy through the foundational lens, we can see it formed by three pillars: the material (what we need to make our lives liveable, like utilities, banking services, food); the providential (the things provided usually through the government like education and health and social care); and the overlooked (stuff that makes us feel better, like tourist attractions or places to play and have fun). It is this core part of the economy, often neglected, that is central to the improvement of well-being, and the sustenance of a healthy community.

Without labouring on the theoretical, there is plenty more resource on it here by the Foundational Economy Collective, the FE is a critical part of the economy which is largely ignored by politicians who obsess about the tradeable sectors of the economy while overlooking the networks and ecosystems which deliver liveability to populations. Instead of perceiving the economy holistically, it is constructed in silos where primary focus is on competition. You could say the FE is a silo in itself. But I think its value is the platform it provides for human flourishing at a very tangible and understandable level. In that respect, it is about valuing what is really important in making people’s lives better. And it intersects so much of what we think of as the economy, as society and community (OK, this sometimes contested term needs addressing in another post, I think) too.

So why does the FE matter so much? Simply, it means that a functioning and healthy FE is providing for the opportunity for people to flourish. That flourishing liberates individuals, allows them to be free, provides for a society of worth and value and ownership. We’ve had glimpses of this utopia in the past, and in some ways, Thatcherism was thought to be a means of delivering such things in an efficient and comprehensive way because the market could identify needs the state simply could not. Deindustrialisation has really undermined this liberal idealism, it has illustrated how needs cannot be met by capital or the market, that the transactional economy does not function for those who happen to live in peripheral places.

Reinvigorating the FE, investing in the structures, the organisations and the communities through the prism of the FE, provides a progressive and people-oriented alternative to growth-focused levers and interventions.