I have been presenting the Not-for-Profit World model to a wide range of audiences (incl. students, researchers, economists, activists, businesses, investors, policymakers) for over 12 years. Here are the questions that most commonly get asked after my presentations. I have never encountered a question that undermines the model.

I have organized the questions into 3 different categories: FAQs about the Not-for-Profit (NFP) World model, FAQs about NFP business structures, and FAQs about the transition from the for-profit economy to an NFP economy. Within each category, I have ordered the questions according to how frequently I have encountered them.

Most answers are paraphrased from the How on Earth book, so page numbers are given in case you want to find more information. You can access the How on Earth book here (it can be downloaded to your computer and printed). Here is an explanation of why there is only a working draft.

Some answers also draw on my articles: “Fit for purpose” and “Five key dimensions of post-growth business”.

FAQs about the Not-for-Profit World model

Isn’t the profit motive just human nature? How can investment happen without the profit motive?

Answer: 

First of all, it’s important to point out that it’s not whether investment can happen without the profit motive, because it already does. All of the NFP businesses that I have mentioned in my presentations and writing are living examples of investment without the profit motive.

Secondly, this understanding of human nature as greedy, selfish, and acquisitive is a myth. If we look at the real world, we can see that human nature is best described as complex. It includes a wide spectrum of behaviors and motivations, ranging from genocide and serial killers, to people sacrificing themselves to help others or to save a forest – and everything in-between. Our institutions encourage us to act in certain ways, to act from different aspects of our human nature. The for-profit way of structuring the economy encourages people to act in selfish, greedy ways; while the NFP way of organizing the economy would encourage people to act in more caring, socially responsible ways.

Answer with evidence and examples on pages 29 and 129- 130 of How on Earth book.

How can innovation happen without the profit motive?

Answer: 

It’s important to note that the profit motive actually drives very destructive innovation, including addictive junk food, planned obsolescence, and social media apps that keep kids glued to the screen.

Humans are naturally creative problem-solvers. The most important innovations have been created not for profit, but to address needs and challenges. Think, for example, of the first roads and bridges, the first bicycle, the first vaccines, the first computers, and the Internet. These were invented to solve problems, not to make money. Uninhibited by the constraints of having to focus on innovating things that can make money for investors, people and companies can generate innovations that actually meet needs, regenerate ecosystems, and increase widespread wellbeing. Even in the for-profit economy, many socially-useful innovations, like medicine and more efficient wind turbines, are innovated by NFP universities and research institutions. Then, they are taken to market by for-profit companies (which is highly problematic), but the innovation is often done by NFPs.

Answer with evidence and examples on pages 160–162 and 200-201 of How on Earth book.

Wouldn’t the economy be inefficient without the profit motive?

Answer: 

First, it’s worth noting that the profit motive drives inefficiency. It results in the accumulation of wealth in the hands of a few business owners and then relies on governments and philanthropy to redistribute the accumulated wealth. This is very inefficient. The NFP World keeps wealth and resources circulating to where they’re needed most, so it’s much more efficient.

In addition to the accumulation of wealth, the for-profit economy drives material wastefulness, by pushing people to consume more stuff than they need (via ads and planned obsolescence). The profit motive also means that companies in the FP economy are incentivized to increase production and waste, rather than reduce it. In the NFP World, the social benefit motive and “ethic of enough” at the heart of the economy means that companies are incentivized to repair, refurbish and reuse products and materials to meet community needs within environmental limits. And with more layers of transparency, it is much easier to hold them accountable for acting in a sustainable and efficient way.

Answer on pages 168-173 of How on Earth book.

How can we ensure environmental sustainability in the Not-for-Profit World?

My answer: 

Not-for-profit structures are necessary but not sufficient for environmental sustainability. Therefore, in a fully sustainable NFP World, we would need all companies to have ecological responsibility written into their charter and they would have to pursue environmental goals as part of their social benefit mission. They would also be legally required to account for all of their positive and negative environmental impacts in an annual report that would be made publicly available. There are already holistic metrics and indicators that can form the basis for this annual reporting, such as the Economy for the Common Good’s Balance Sheet and the Future Fit Business Benchmark.

Also, the NFP World is a post-growth model, so its main goal is to meet everyone’s needs within the ecological limits of the planet. This includes reducing production and consumption to a level of sufficiency in communities that are currently overconsuming. These reductions allow deprived communities to increase their consumption to a level of sufficiency within ecological limits. It relies more on communities meeting their needs by swapping, sharing, reusing, and repairing existing goods.

From the previous question’s answer: In the NFP World, the social benefit motive and “ethic of enough” at the heart of the economy means that companies are incentivized to repair, refurbish and reuse products and materials to meet community needs withing environmental limits. And with more layers of transparency, it is much easier to hold them accountable for acting in a sustainable way.

Lastly, governments, businesses, and charities can more easily invest in protecting and regenerating ecosystems when the overarching goal of the economy is to meet needs, rather than to make investors money.

Answer on pages of 197- 198 and 203- 204 in How on Earth book.

What about the role of the government in the Not-for-Profit World?

(This question sometimes is framed in terms of the fear that NFPs will replace the state, as has been pushed in some austerity measures in the UK.)

Answer: 

The focus of this model is about replacing the for-profit market, not the state.

The state is not in competition with the NFP market, but rather it is a partner with the market, collaborating to meet needs. There is no one-size fits all when it comes to how big the state should be vis-à-vis the market in the NFP World. The role of the state could diminish in certain places by letting the NFP market provide more education and healthcare, for instance. But the role of the state could also stay big or grow in countries that want education and healthcare and other essential services to be offered only by the state. There is a lot of diversity in the roles the state can play and how big its presence can be in the NFP World. This is something for democratic deliberation in each context.

Also worth noting here, is that the NFP nature of firms in this model makes them more likely to work with, rather than against, taxes and regulations that benefit the greater good.

Answer on pages 208- 210 in How on Earth book.

What if everyone chooses to support some missions and others get totally left out?

My answer: 

If this happens, then the government and charities can cover the gaps. There will be far fewer of these gaps in the NFP World than there are in the for-profit economy. Furthermore, it will be easier to fill these gaps in the NFP World, because there is better circulation of money and resources. An important aspect of the NFP World is that government agencies, civil society organizations, and researchers are all constantly keeping an eye on how well needs are being met in society and that data informs investment, business activities, government policy, and the activities that charities undertake. There are many layers of provisioning that all work together to meet needs.

Related ideas on pages 202- 210 in How on Earth book.

What about taxes in the Not-for-Profit World? NFPs are usually tax-exempt, so won’t that starve the government of the revenue it needs?

Answer: 

Corporate tax usually makes up a very small percentage of state income (only around 6% in Sweden), so it’s not a big loss. Also, the market becomes a safety net itself. Rather than creating problems for the government to clean up (as the FP market does), the NFP market is focused on efficiently and effectively resolving problems and meeting needs. So the government doesn’t need to do as much. It therefore doesn’t need as much revenue as in the inefficient, wasteful FP economy.

Answer on pages 168-173; 190- 193; and 208- 210 in How on Earth book.

What happens to the stock market in the Not-for-Profit World?

(For questions about the stock market in transition, see the transformation FAQs section below.)

Answer: 

There is no stock market in the NFP World. This is part of the increased economic stability in the NFP World, due to less speculation for financial gain. There can still be bond markets to facilitate investment in NFP businesses and projects, as bonds are a debt-based form of investment that does not involve private ownership of the company.

Answer on pages 188- 189 in How on Earth book.

What about pensions, if there’s no stock market?

Answer: 

Pensions never should have been invested in the stock market in the first place. It’s like a casino. So, no matter what you think about the NFP World model, we need to get pensions out of the stock market.

In the NFP World, people often want to work later into life if they can, because they derive a sense of purpose and belonging from their work. They have only been working 15- 20 hours per week throughout their adult life, so they’re not burnt-out and longing for retirement as so many people are in the for-profit economy. Furthermore, the cost of living has come down due to fair pricing and higher levels of equality. People also meet more of their needs without money, through sharing, swapping and repairing networks in their community. These factors mean there’s less pressure on the pension system. Pensions are paid by the government. Bond markets can also play some role when desired or needed in certain contexts, but this is not necessary.

Answer on page 186 in How on Earth book.

What about managers paying themselves high salaries?

My answer: 

It’s true that wages could be a sort of loophole for private financial gain in NFP businesses. That’s part of why most NFP forms have a board that is meant to keep salaries in check. Also the government or tax agency can and should intervene if NFP salaries get too high. NFPs should also be required to make their annual financial reports public (incl. salaries paid). There is also some evidence that CEOs at NFP businesses are willing to be paid less than their FP peers in order for lower-paid employees to receive higher salaries, as in one study comparing NFP and FP hospitals in the US (How on Earth, p. 153).

In the worst-case scenario, some CEOs might get overpaid, but it is still nothing compared to the dividends received by business owners and the bonuses received by corporate executives in the for-profit economy. Those would go away completely in a transition to an NFP economy. A maximum salary could also be implemented in the NFP World if it seems necessary.

Answer with evidence and examples on pages 13- 14; 153–155 and 241 of How on Earth book.

What about corrupt non-profits? Can’t NFPs still do bad things?

My answer:   

Yes, NFP is a necessary but not sufficient principle. Most examples of corrupt nonprofits are charities rather than NFP businesses. The problem here is often that they are an extension of the for-profit economy. For instance, rich people often use nonprofits as their personal conduits for channeling resources the way they want to (e.g., the Clinton Foundation, the Bill and Melinda Gates Foundation, lobbying associations that act on behalf of for-profit companies). And the political capture that naturally emerges in the for-profit economy ensures that government agencies often turn a blind eye to this kind of white-collar corruption. It’s also hard to fault these people, because they’re supposed to be pursuing financial gain; that’s rational behavior in the for-profit economy.

There will always be law-breaking and cheating in any system. The real world is messy. But this NFP model raises the baseline of expectations and allowable behavior for all players, not just charities. In the worst case, at least the NFP World doesn’t incentivize such behavior, which is good enough reason to move in this direction. Even in the current economy, the social benefit purpose and non-distribution constraint of NFP organizations keeps their managers working towards social benefit to a greater extent than most for-profit counterparts, as long as they are acting within the bounds of the law. Without an inherent tendency for political capture, laws can be better enforced. If an NFP does not use its resources for its stated social benefit purpose, the government can fine them or even revoke their NFP status. In the NFP World, this would mean revoking their business license.

Answer with evidence and examples on pages 41 (reasons why NFPs are more likely to be sustainable); 121–125 and 241 of How on Earth book.

I also cover the ranges of behavior of FP vs. NFP businesses in “The Five Dimensions of Post-growth Business” paper on page 16.

But what about good for-profits, like businesses that are already small, local and/or sustainable? Why should they have to change their structure from FP to NFP?

My answer: 

For-profit companies that act sustainably today can drift towards a focus on making owners rich or they might sell out to a larger company that is focused on financial gain. The NFP structure locks a business into a social benefit purpose, keeping it from becoming oriented towards private financial gain over time. An NFP cannot be sold to or owned by an for-profit.

In other words, FPs can act like NFPs (e.g., ., sacrificing profit for social benefit), but NFPs can’t act like FPs (e.g, sacrificing social benefit for profit).

On a more systemic level, the entire market has to go NFP so as to get away from the for-profit dynamics of consumerism, inequality, market concentration, and political capture (Fit for Purpose paper, p. 242- 256). These dynamics create a race to the bottom and it is very difficult for businesses to stay small, local, or sustainable amidst such dynamics. Therefore, well-meaning businesses will more easily thrive as the market moves in an NFP direction. This shift is good for them.

Answer with evidence and examples on pages 41 (reasons why NFPs are more likely to be sustainable) and 86- 88 of How on Earth book.

I cover the ranges of behavior of FP vs. NFP businesses in The Five Dimensions of Post-growth Business paper on page 16.

What about banks creating money from debt? Even in the NFP World, if banks are creating money from debt with interest, then it will still have to grow, won’t it?

Answer: 

No. Banks are businesses, too, which means they can be for-profit or not-for-profit. It is the for-profit nature of banks that creates this growth imperative in today’s economy, not the fact that they loan money into existence. In the FP economy, the interest paid to banks on loans gets distributed as dividends to private owners. It is this extraction and accumulation of the bank’s profit (from interest on loans) that creates the growth imperative. If the interest is instead circulated back into the community via NFP banks, then that circulation means the interest can be paid without requiring growth in the overall economy. Interest is taken out (i.e., paid to banks) and then put back in via NFPs using their profit for social benefit.

Answer on pages 84- 85 in How on Earth book. This has also been backed up by several studies, including Cahen-Fourot & Lavoie, 2016, “Ecological monetary economics: A post-Keynesian critique”.

What about diversity?

Answer: 

There’s plenty of diversity in NFP frameworks and an NFP market might allow for more diversity to emerge. This is one of the strengths of the model: it allows for lots of diversity. This is in stark contrast to how the for-profit economy concentrates wealth and power in the hands of the few, and this shrinking number of players create a very homogenous market.

Diverse forms of NFP business are discussed on pages 55- 63 in How on Earth book.. A “map” of common NFP forms can be found on page 18 and page 64.

What about the Global South?

My answer: 

Just as the model allows for more diversity, it also allows for the Global South and indigenous communities to regain self-determination after having been under the control of globalized for-profit corporations for many decades (and in some cases centuries). A proper transformation to an NFP World involves truth and reconciliation commissions, debt jubilees, redistribution of wealth and resources (both within and between nations), and reparations for past exploitation.

Answer on pages 212- 214 and 232- 234 in How on Earth book.

FAQs about NFP business structures

Who defines ‘social benefit’?

Answer: 

The government defines what qualifies as “social benefit” and thus eligibility for NFP status. This is then enforced by the tax agency through incorporation documents. This is part of why democracy is also a necessary condition for a sustainable NFP World. The government’s definition of “social benefit” should be subject to revision through democratic processes as the context changes, for instance if it is too narrow or too wide to keep the NFP economy focused on serving society’s needs. As a cornerstone of a more sustainable economy, this definition should also be protected from being used and abused for the benefit of a few. So far, nobody has made me aware of any problems with the definition of “social benefit” in their country’s NFP legislation.

Answer on pages 10- 12 in How on Earth book.

What about cooperatives?

Answer: 

Cooperatives are businesses that are democratically managed by and for their members. Whether they are FP or NFP depends on who their members are. This is part of why I have stuck with NFP as the most important feature of business, rather than cooperatives. NFP also allows for more diversity in business forms.

Most producer cooperatives are for-profit because their members are for-profit companies. This means that the cooperative’s profit can be distributed to the private owners of the for-profit members of the cooperative. An example of this is big dairy cooperatives like Arla.

Worker cooperatives are typically also for-profit, as the worker-owners can receive the profit of the company. This might sound good, but it can be problematic because it still allows for profit-driven growth and wealth accumulation by business owners. Worker cooperatives can be seen as democratizing the profit motive, which is better than what we have now but it’s still not sustainable. In a sustainable economy, all workers make a fair living wage and the profit (which is the extra money after wages are paid) goes to meeting social needs, whether that’s helping disadvantaged people or regenerating ecosystems or some other need. The aim is sufficiency for everyone within environmental limits. Worker cooperatives are not the best fit for that purpose.

Consumer cooperatives can be considered NFP. This is because the consumer-members always spend more into the company (e.g., a cooperative grocery store) than they will ever receive as a “dividend”. Therefore, the “dividend” is better thought of as a refund on some of the money they’ve spent into the cooperative.

Answer on pages 17-18 and 58- 60 in How on Earth book.

What about freelancers and/or entrepreneurs who are just starting up a business and don’t have an income yet? How can they be compensated later for their start-up efforts if they don’t receive profit from the business?

Answer: 

There is not a good NFP structure for freelancers in most places, but they can still act like an NFP by using a sufficiency-based salary.  They can loan their time into the business (via a contract) that you get paid back as the company progresses, via an invoice. This can also be used by entrepreneurs who build an NFP business without a full salary in the start-up phase.

Also, from a larger economic perspective, the NFP World has strong safety nets from both the market and the government, so someone who is unemployed or receiving only a partial salary will still be able to meet their needs.

In terms of the potential for people to use freelancing to get rich in the NFP World, there are two things to note here. First, a transition to the NFP World entails a major shift in values and motivation as well. So people in this type of economy are not looking for loopholes to get rich, either because of their own values or because getting rich is looked down upon in social norms. Sufficiency, not wealth, is the goal. Secondly, freelancers typically don’t get very rich even in the for-profit economy, aside from profit-focused financial consultants and that kind of consultant has no place in the NFP World.

Answer in footnote xvii on page 264 in How on Earth book. It’s worth noting that the answer I give above is an idea I have developed since we wrote How on Earth and so it is not in the book. It will be in my new book.

What about social enterprises?

Answer: 

“Social enterprise” is a category of businesses that seek to fulfill some social purpose. In many places, it is not a legal category, which is an important difference from NFP. Many places do not have a legal structure specifically developed for social enterprises, so social entrepreneurs use a wide range of structures. In most places, large profit-driven firms can call themselves “social enterprise” or a “social business” because it’s not a legal structure. Thus, the term can easily be co-opted. This is part of why I have stuck with NFP as the most important feature of business, rather than “social enterprise” or “social economy”. NFP also allows for more diversity in business forms.

In places where social enterprises exist as a legal structure, some are for-profit and some are not-for-profit. The Benefit Corporation in the US is for-profit. In the UK, the Community Interest Company limited by guarantee is NFP, while the Community Interest Company limited by shares is FP. In southern Europe, many social cooperative forms are for-profit with a cap on the amount of profit that can be distributed (for example, 30% of profit can be distributed to the worker-owners). These models are a step in the right direction, but don’t go far enough to have a fully sustainable economy on the larger scale.

Answer on pages 17- 18 and 57- 58 in How on Earth book.

Is NFP the same everywhere?

Answer: 

Not-for-profit is a legal category of organizational forms. This category exists around the world and the International Center for Nonprofit Law has assured me that NFPs all around the world have these three properties:

• core social mission
• no profit can be distributed to private persons and
• all resources must be used (directly or indirectly) for the social mission.

Those three features are also necessary conditions for a sustainable economy, which is why I see NFP as a key building block of a sustainable economy.

Answer on page 12 in How on Earth book.

How do you find NFP businesses?

Answer: 

This is still a challenge. Sometimes NFP businesses advertise that they are NFP, but often they are trying to blend in as a business.  That’s why we need to:

– create NFP databases and/or directories at the local and regional levels,

– encourage NFP businesses to label themselves as such, and

– push for policies that make them more easily identifiable (e.g., government database of companies that tells you whether a business is FP or NFP).

NFPs tend to be more locally-based because they are tied to a local mission, so there are not a lot of large, well-known examples. Yet, you can find them in every community. Look for businesses that are foundation-owned, community-owned, consumer-owned, or association-owned. Look for companies that say 100% of their profits go to a good cause. (These are sometimes FPs that act like NFPs. In this case, they should be encouraged to change their legal structure). A good place to start is to see if there are any directories or maps of social enterprises and/or cooperatives in your area, on the local or national scale. Some links to such maps can be found on page 249 in How on Earth book (note these links might be outdated and there are many more such maps and directories now than in 2016, when we wrote the book).

If in doubt, do an Internet search of the company’s name followed by the word “owner”. If it is partially or fully owned by an individual, a family, shareholders, or a hedge fund, it is FP. If it is owned by a charity, a foundation, an association, the government, a community, or consumers, then it is NFP. It usually only takes a minute or two to find out if a company is FP or NFP by searching in this way.

You can also ask them if they are not-for-profit. If the person you talk to doesn’t know the incorporation structure, ask where the profits go and if there is a legally-binding social benefit mission.

Answer on page 248- 249 in How on Earth book.

How can large companies be transformed?

My answer: 

They can shift the way that Patagonia did, which is to transfer all financial ownership to an NFP entity, such as a charitable foundation. The steward-ownership movement is helping for-profit companies move in an NFP direction, although they don’t always go fully NFP (i.e., they sometimes stipulate distribution caps rather than a non-distribution constraint).

The largest challenge is probably when it comes to shareholder companies that are publicly traded on the stock market, because the ownership is so spread out. However, there are plenty of precedents of shareholder companies being nationalized (see this Wikipedia list for examples: https://en.wikipedia.org/wiki/List_of_nationalizations_by_country). Therefore, it is possible to “not-for-profitize” stock market companis in a similar way, transferring ownership rights to either the government (as in nationalization) or to another type of NFP entity, or break them up and transfer ownership to several different entities. The issue of whether and how shareholders can or should be compensated during such a process is a matter for democratic negotiation and public policy. Answer on pages 253- 255 in How on Earth book. (Note that the steward-ownership movement is not mentioned in the book, as we had not yet heard of it.)

FAQs about transitioning to an NFP economy

My answers to these questions are informed opinions rather than the result of thorough research, so feel free to also chime in here. This kind of transformation needs to be a democratic process, so these are questions that we all need to think about. I’ve just been thinking about them longer than most people, so I have some well-formulated ideas.

Can such a transformation happen? How? Top-down or bottom-up?

My answer: 

Due to how unsustainable the for-profit economy is, the question for me is not “Can we transform the economy?” but “How can we transform it?”. Because we must. And we are a very creative species, so I have no doubt that we can find solutions to these issues.

Both top-down and bottom-up changes are necessary. This kind of societal transformation requires a shift in worldviews, shifts in consumption patterns, shifts in business, shifts in not-for-profit organizations, policy reforms, and a large social movement to spread the model and push for all of the above.

I envision a globally connected social movement; an alliance of a wide variety of existing social movements including: environmental and climate activists, social justice activists, workers’ movements, racial justice activists, women’s movements, Indigenous rights movements, and peace activists. This sounds difficult, but I don’t see how any of the changes we need can happen without such a movement. Luckily, there are already existing movements working for economic democracy and change and they are increasingly creating alliances. We can raise awareness among these existing movements about the critical importance of our society’s relationship-to-profit and the possibility of shifting to a sustainable, desirable NFP World. We must do this while keeping in mind that we also have a lot to learn from these movements and their perspectives, which can improve the NFP World model and vision.

Chapter 6 in How on Earth puts forward a vision of how such a transformation could happen. Chapter 7 offers practical steps that people can take in all of the different kinds of roles they inhabit in the world.

What if large companies and their owners don’t want this transition? Why would they?

My answer: 

There are reasons to expect that companies will increasingly want to shift in this direction, as evidenced by Patagonia and the many other companies that are shifting to steward-ownership structures. The Good Ancestors movement and similar initiatives could also play a role in this. Younger generations of big business families are more aware of the extractive and exploitative nature of their family’s companies and may be more willing to transition the company to an NFP structure.

However, such an important transformation cannot rely only on the willingness of a handful of wealthy, powerful people who have benefited the most from the for-profit way of organizing the economy. This is where the importance of social movements and policies comes in. Policies can push and incentivize companies to move from FP to NFP structures. This includes shifting support (i.e., subsidies, public procurement, start-up grants, etc.) from favoring FPs to favoring NFPs. In places where there are limits to the amount of business income an NFP can make, that needs to stop. A national government could even issue the decree that all companies must make this transition within the next 5 years if they want. But a government will not implement these policies without its constituents pushing for it. Social movements and vocal citizens must push governments to implement these kinds of policies, as well as to put pressure on businesses themselves to shift. This may be difficult, given the level of political capture, but radical societal transformations have happened in the past (e.g., women’s right to vote, Indian independence from British rule, end of Apartheid in South Africa, Civil rights movement in the U.S.), so we know it’s not impossible.

Answer on pages 253- 255 in How on Earth book. Chapter 6 in How on Earth puts forward a vision of how such a transformation could happen. In trying to be realistic, we did include some crises as well as backlash from vested interests.

Will the transformation make us all poor and miserable? Will it cause an economic crash?

My answer: 

The for-profit economy is caving in on itself, due to unsustainable levels of inequality, debt, power concentration, and having outstripped the ecological basis for economic activity.

So although it might be a bumpy transformation, with challenges and even some crises, it will be worth it. And it will be better than trying to survive the collapse of the for-profit economy without building up alternatives. The more that we build up the NFP economy, the better able we will be to navigate the crises that we are already locked into (e.g., climate change, pension shortfalls, financial crises, etc.).

Chapter 6 in How on Earth puts forward a vision of how such a transformation could happen. In trying to be realistic, we did include some crises as well as backlash from vested interests.

What happens to the stock market and pensions in the transformation?

My answer (it’s long, but that’s because people generally don’t know much about the stock market, so I need to clarify why it’s so messed up): 

This question is often framed as if the stock market is actually a secure and sustainable place to invest pension funds in the first place. But of course, it is not. The stock market is likely to suffer from crises and crashes frequently in the coming decades if this kind of transition doesn’t happen.  It is highly speculative, volatile, and insecure for most investors.

It was never a good idea to invest pensions in the stock market. First, it makes pensions dependent on economic growth, which is not environmentally sustainable. Furthermore, economic growth is stalling out due to secular stagnation. Second, the stock market is very volatile and sensitive to many variables, from speculators’ perceptions of risks and returns, to overleveraged companies, to stock buy-backs, to levels of consumer debt, to crop yields, to supply chain fluctuations. Furthermore, the ownership of stocks is highly concentrated in the hands of a small number of investors (mainly hedge funds), exactly because of how the for-profit economy drives inequality, market concentration and political capture. Since the crash of 2007, and punctuated by the pandemic, the potential of these variables to crash the stock market (and wipe out pension funds) has become painfully clear.

Due to the issues outlined above, we must wean pensions off of the stock market in any sustainable economy scenario. So, this is not just a question for my work, but for anyone who is interested in having a functional society in a few decades’ time.

Transitioning out of the stock market does not have to cause a huge crash if it is done in an intentional, planned way. We can (and should) start transitioning pensions away from stocks to bonds and other debt-based instruments (preferably funding not-for-profit businesses and social enterprises). Eventually pensions will come only from the government and potentially partly from NFP investments.

As investment and consumption shifts from FP companies to NFP companies (and policies increasingly support the latter over the former), large FP companies will lose market share and their stocks will lose value. This would lead to an ever-increasing shift from for-profit to NFP investment channels. In other words, part of the shift from the stock market will happen organically. The government can also intervene to nationalize and not-for-profitize the rest of the companies on the stock market.

There would likely be a major crash or two in this process, due to speculative investors getting scared of losing money. But the guiding principle should be to make sure that the richest are the ones who bear the brunt of it (as they are also the people who own the most shares in the stock market, by far) and middle- and low-income people will be ok.

Answer on pages 253- 255 in How on Earth book. Chapter 6 in How on Earth puts forward a vision of how such a transformation could happen. In trying to be realistic, we did include some crises as well as backlash from vested interests.