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The South African New Economics (SANE)


09 / 2008

SANE, the South African New Economics, is a group inspired by the writings of E.F. Schumacher and James Robertson. Its mission statement says that: “New Economics’ must not be confused with the more recently introduced concept of ‘The New Economy’ which relates to the economics of globalisation and the information technology revolution.”

SANE aims to work for what Robertson has called a SHE economy (Sane, Humane, Ecological) as opposed to the orthodox HE economy (Hyper-Expansionist). SANE is a network of loosely affiliated individuals and organizations who are worried about the social and ecological consequences of economics as it is conventionally taught and practices.

It, therefore,

  • challenges the narrow way in which most economists have tended to reduce people to economic agents, the environment to property, social institutions to markets and progress to growth in production

  • questions the effectiveness and responsibility of the present world economic system in the face of widespread evidence of worsening income inequality, poverty, unemployment, violent crime, environmental degradation, unfulfilling work and disintegration of traditional values and social systems

  • encourages dialogue on alternative economic theories and practices which are more purposefully designed to promote social equity and justice, community self-reliance and ecological sustainability.

SANE’s work is rooted in a critique of conventional market economics, whose proponents deem it the best available model, however flawed. This conventional view, argues SANE, fails to acknowledge fundamental systemic faults. These faults will always inhibit real progress because the conventional market system promotes perpetual and ecologically unsustainable growth, economic expansion that does not create livelihood for all, centralization of economic power, and the undermining of democracy in order to compete with global market imperatives.

As an alternative, SANE proposes the Six Pillars of Sustainability as the cornerstone of New Economics:

1. Tax on pollution, non-renewable resources, currency speculation and land but reduce income tax

2. Promote local in food, fibre, fuel and furniture

3. Restrict international currency movement by using the Tobin Tax and other ‘speed bumps’ and direct controls. These will generate local capital and direct it to where it is needed.

4. Take control of money creation: revert to the central bank its right and democratic duty to create the money the economy and people need, instead leaving this to debt-based creation by commercial banks.

5. Support local parallel currencies: this would also promote local livelihoods instead of ‘jobs’

6. Issue a citizen’s basic income: it is simple to administer and cuts the bureaucracy of means-testing. It can be issued in the form of a local currency, backed by goods and services offered by local government and financed by affordable formal taxes. The multiplier effect of increased local purchasing power will created work for idle hands and skills.

SANE’s solutions include:

  • Formalised participation and co-operation of all stakeholders, including civil society, in economic policy formulation and decision making

  • Debt-free new money created by Government rather than debt-burdened new money generated via bank lending

  • Issuing new money in the form of a Citizen’s or Basic income, thereby stimulating local economies and eliminating destitution

  • Taxing ‘bads’ rather than ‘goods’, i.e. using taxes on resource use, pollution and inappropriate activities, to shape economic behaviour

  • Responsibility, co-operation and ethical investment and production to meet basic needs

  • Technologies, life styles and environments that support sustainable local development

  • Use of indicators other than GDP to measure real benefits and costs of economic development

  • Complementary currencies and Community Trading Systems to stimulate local economic development.

SANE addresses the systemic and root causes of poverty and unemployment. Its goal is that the Government of South Africa progressively adopts New Economics policies resulting in sustainable and appropriate economic development and poverty eradication.

Key words

economy, alternative development, economics, economic solidarity, economical system

, South Africa


An Economics for well-being


This sheet is also available in French: SANE, la « South African New Economics »

For more information see SANE‘s website

Further readings:

  • James ROBERTSON, The Sane Alternative: A Choice of Futures, Oxon, 1978.

  • E.F. SCHUMACHER, Small is Beautiful: Economics as if People Mattered, 25 years later,with commentaries, Introduction by Paul Hawken, Hartley and Marks, 1999.



Rajni BAKSHI, An Economics for Well-Being, Centre for Education and Documentation, Mumbai & Bangalore, 2007

CED (Centre for Education and Documentation) - CED Mumbai: 3 Suleman Chambers, 4 Battery Street, Behind Regal Cinema, Mumbai - 400 001, INDIA - Phone: (022) 22020019 CED Bangalore: No. 7, 8th Main , 3rd phase, Domlur 2nd Stage, Bangalore - 560071, INDIA - Phone: (080) 25353397 - India - -,

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