The Market Economy is easy to understand due to its reliance on money, which allows for simple quantification and record-keeping. It’s about measurements, which appeals to the simple yet competitive parts 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,” he 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 notions of family and community 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 could not survive.
“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.”