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Suicide Economics

There is a growing acknowledgement that something is wrong and will not get better. David Korten notably describes mainstream economics as suicide economics, and suicide economists as notorious for their lack of understanding of life:

“Suicide economics gets it wrong on nearly every major issue because it is built on a foundation of fallacies. It ignores natural limits, confuses means and ends, uses the wrong measure of value and the wrong unit of analysis, and it relies on a single improperly defined criterion function.”

A few months earlier the secretary general of the UN himself had called for revolutionary thinking and action:

“For most of the last century, economic growth was fuelled by what seemed to be a certain truth: the abundance of natural resources. We mined our way to growth. We burned our way to prosperity. We believed in consumption without consequences. Those days are gone.

In the 21st century, supplies are running short and the global thermostat is running high. Climate change is also showing us that the old model is more than obsolete. It has rendered it extremely dangerous. Over time, that model is a recipe for national disaster. It is a global suicide pact.

So what do we do in this current challenging situation? How do we create growth in a resource-constrained environment? How do we lift people out of poverty while protecting the planet and ecosystems that support economic growth? How do we regain the balance? All of this requires rethinking.”

The two suggest that new economic models could help recover a sense of living harmoniously with the world and the Earth. A year later nothing has changed.

Getting to root causes

So how can this be achieved? Both the Institute for Policy Studies in DC co-chaired by Korten and the Global Sustainability Panel of the UN which presented its Resilient People Resilient Planet: A future Worth Choosing report to the Secretary General last January suggest policy frameworks based on new indicators, means for innovation and entrepreneurship, for resilience and empowerment, incentives for long-term investments. The IPC adds banking and market regulations, and more equitable distribution of wealth to the mix. The UN GSP Panel recommends the adoption of some form of externality accounting and activation of political will.

What strikes me in all the discussions, beyond a converging recognition of what is broken, is that very few of the solutions address the multidimensional crisis we are going through and its root causes in systemic and dynamic ways.

This is a question I asked on the Systems Thinking World group on LinkedIn. And the outcome is clear. After more than a year and five thousand posts, we have come up with very few systemic answers capable of effectively turning the vicious circle into a virtuous one (or at least no one has shared such a model in our discussion).

Most of the responses revolved around alternatives aimed to replace the old with the new, or around concepts and paradigm shifts that have no material representation or shared definition and provide little scaffolding to hook applications onto for scope and scale.

The best systemic analysis I have found to date is from Jack Harich from Thwink.org. Jack identifies two major necessary couplings to achieve. A social coupling between corporate and human life forms and an economic coupling between economy and environment. He argues that all the ‘truths’ and solutions necessary to operate these couplings already exist and are well known but that classical activism continuously fails to succeed because it deals poorly with the ultimate root cause of change resistance which is found in the effectiveness of political deceptiveness –and this is where Occupy actually makes a difference because the movement focuses on root causes and leverage points rather than piecemeal demands.

As hinted by the Un Global Sustainability Panel, and in this recent interview of Joe Stiglitz, the issue is above all one of political will and power ascendency in political decision making. It is also one that requires the adoption of a framework that can influence policy and mobilize private initiatives just as ‘growth’ has done in the past decades.

Accelerate coupling & power breakthrough

So how do we accelerate the emergence of new economic models that deal with the challenges we are facing in a systemic way? How do we lay the ground for both a social and economic coupling and a political breakthrough?

What could constitute an effective transformational model? An umbrella under which our aspirations could be gathered? A tree from which to grow a wealth of micro and macro solutions? A social object that could mobilize efforts so as not to leave the healing of our ills to the adoption of scattered and confidential initiatives and to the natural evolution of consciousness and behaviors… while time is running out…

Could a new economic model be built around the commons? Think a minute. What are the commons? All the things that we inherit from past generations that we ‘find’ around us, which enable our livelihood. The natural, genetic, material, physical, social, cultural, intellectual, creative resources; the capital and assets that belong to no one or to humanity collectively, that enable us to become what we can become, live what we can live, access what we can access, accomplish what we can accomplish and evolve as part of an ecosystem. They are the pillars around which the social and economic couplings can be catalyzed, where the corporation can meet society’s needs and where economy can meet ecology.

From straight growth to growth of the commons

This excerpt from poet Stephen Collis’ talk at “The Tragedy of the Market: from Crisis to Commons,” gathering last January in Vancouver nicely brings together commons and living systems around the notion of metabolic commons. He suggests that “Taken as a whole, all life, all production and reproduction, begins in the commons” and asks “what if the goal of our economy, or our social metabolism, was to return to the commons so that the commons at the end of our social metabolism was just as healthy and full, as a totality, as it was at the beginning of our life process?”

If we treated commons as assets that must be preserved and nurtured, then they would gain some tangibility as socio-economic objects -even when they are intangible-. And if we take this principle of growth of the commons as a starting point for an economic model, we could derive a value and accounting system to measure inventories, flows and variations, we could create all kinds of economic instruments.

Setting up accountability against free rides, i.e. the depletion of the commons, and accounting for externality costs is easier on the basis of asset or risk management systems than it is on the basis of sustainability reporting.

If as the saying goes, anything that can be measured can be improved, taking a commons approach to the economy would enable the creation of a systemic macroeconomic conceptual framework and value system based on the growth of the commons that would help the development of an effective microeconomic sustainability practice.

A new narrative

The conceptual framework of a commons based economic model would enable a series of narratives anchored in the socio-political-economic-environmental and integral spheres…

It would bridge and provide a coherence and mutual-reinforcement to a variety of concepts and perspectives such as life, living systems, sustainability, thrivability, alternatives, edge & mainstream, corporate social responsibility, well-being, millennium goals, development, ecology, economy, community, relationships, gift, shared & sacred economy, circular economy, big & small, local & global, old & new economy… It would find some form of mainstream legitimacy in the metrics and mechanics of an economic model, but it would also be truly systemic because it would address the ‘why’ rather than the ‘what’ and the ‘how’. It would be dynamic because it would incorporate a time intergenerational dimension.

Last week, I discovered a description of the demise of capitalism somewhere I wouldn’t have suspected it: the news letter of Jeremy Grantham, founder of the $100bn GMO asset management firm summarized in this BusinessWeek article. In particular, Grantham takes a stance against damage to the commons and discounted future values, which threatens future livelihood and assigns no value to our grandchildren…

“Damage to the “commons,” known as “externalities” has been discussed for decades, although the most threatening one – loss of our collective ability to feed ourselves, through erosion and fertilizer depletion – has received little or no attention. There have been no useful tricks proposed, however, for how we will collectively impose sensible, survivable, long-term policies over problems of the “commons.” To leave it to capitalism to get us out of this fix by maximizing its short-term profits is dangerously naïve and misses the point: capitalism and corporations have absolutely no mechanism for dealing with these problems, and seen through a corporate discount rate lens, our grandchildren really do have no value.”

Assets speak to asset people. This is a direct invitation for a conversation on the emergence of a commons-based economy outside of the traditional market vs state political polarization.

A kick-off Conversation

The conversation will receive a great boost during a series of 12 seminars on the Emergence of a Commons-Based Economy in London in May (7th-18th).

The event will be facilitated by James Quilligan, Chairman for the Secretariat of Global Commons Trust and Managing Director of the Centre for Global Negotiations, currently collaborating with several United Nations agencies on global commons issues.

The seminars will be convened by participating organizations such as NEF, the Finance Innovation Lab and the Civil Society Forum around questions such as:

• How would a commons approach shape the future of finance?
• What power does the concept of the “commons” have for creating a world that sees wellbeing, social justice and environmental limits as central to its modus operandi?
• Can science of complex systems help us manage the local and global commons better?
• How can we adjust our organizational models, systems and ways of working to better steward the commons?

James Quilligan’s overview of the focus themes selected by the convening participants shows how these themes inter-relate in the context of the key economic, political, and social issues of the Commons.

The closing seminar will be the articulation of a Convergence vision, building on materials from the event, to develop practical, workable proposals for the a ‘commons for the commons’, not a set of solutions but a process for reaching such solutions, a meeting place for educational, research and project cooperation among interested individuals and organizations. This includes reflecting on new forms of commons-based social institutions, new engines of innovation and value creation.

Providing for the next steps

The School of Commoning who is the co-organizer of the event has set up a crowdfunding site to collect funds for a free, educational “commons economy” toolkit, downloadable worldwide, which will be comprised of videos, an e-book and a knowledge map.

I am participating in this initial project by volunteering and giving as this is the first step of an ambitious plan to roll out the platform project to engage for the commons that I refer to in my previous posts, and create the ecology for conscious evolution and transformative action around the commons that I have been dreaming of for the past year.

The commons is what gives life to WE, all of us. Adopting a commons based economy is what will transform the finite game into an infinite game, the tragedy of the commons into the triumph of the commons.

Please join us in the adventure! Help us fund the project, enter the conversation, share your dreams, passions and intentions. How would you envision a new commons-based economy?