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What Does The Core Economy Provide?

What Does The Core Economy Provide?

The Market Economy is easy to understand due to its reliance on money, which allows for simple quantifications and record-keeping. It’s about measurements, which appeals to the simple yet competitive part of ourselves. The Core Economy is not as easily measured, and although it may actually be much more simple than the Market Economy, it is not as easy to understand.

The Core Economy is what Professor Edgar Kahn calls that 40-50% of productive economic activity that takes place outside of the market and is not measured by traditional indicators. “It probably doesn’t do anything important from the point of GDP,” Kahn says. “It just raises children, makes neighborhoods safe and vibrant, raises strong families, takes care of the elderly, gets involved in things like elections, tries to make democracy work, tries to make officials accountable, fights for social justice, tries to keep the planet sustainable, but nothing of economic importance you understand.”

Ultimately, the Core Economy is what drove human civilization for almost 200,000 years until we invented money and developed the Market Economy in order to keep track of things. The Core Economy isn’t as insistent on keeping track of things. It’s largely grounded in the idea of family so there’s not a real strong push to account for who owns what when everything is shared, or for who owes what since everything is forgiven.

In large part, the Core Economy is what empowered the Traditional Economic System, and continues to empower it today in a number of communities and less developed countries around the world. And even in technologically advanced countries that more fully embrace the ideologies of the Market Economy, the Core Economy still serves as the foundation upon which the Market Economy exists. It is important to remember that without the Core Economy, the Market Economy would have no foundation upon which it could build.

“By largely ignoring the core economy, mainstream economics has also overlooked just how much the paid economy depends upon it,” says Kate Raworth in Doughnut Economics. “Without all that cooking, washing, nursing and sweeping, there would be no workers – today or in the future – who were healthy, well fed and ready for work each morning.”

Because caring for one another cannot be quantified, because there are parts of existence we do not wish to offer up as commodities and sell, because we intrinsically want to operate out of love and give more than we receive, the Core Economy is simultaneously too complex and simple for the methodology of the Market Economy to process. And of course, it is completely incapable of factoring in the Planetary Economy, without which, neither the Core Economy nor the Market Economy would exist.

This is an excerpt from the book Steve McAlphabet Explains ABC Squared Economics. Go to to find out more.