| 6 min
The Larger Conversation (II): The Economic System
„Are you calling for revolution of consciousness? a reporter once asked Peter Sloterdijk – „The call lies in the circumstance“, he said.
The main problem with economics today (and the political economy that emerged) are some fundamental misunderstandings of the purpose of the economy, how humans behave, the moral and practical limits of markets, what we measure (and don’t), how we resolve issues of power and agency, and how to manage within planetary boundaries.
We have established economics and economic competition as the essential measure of human success. We have put profit above all and introduced economic incentives where a dead tree is worth more than a healthy tree, where war is more profitable than peace, and where sick people are more profitable than healthy ones. Even if most of this has not emerged with bad intent initially, by now the consequences are severe and the negative impacts on people and planet are becoming ever more obvious.
Unsurprisingly, more and more people are wondering about a system that seems mainly preoccupied with protecting individuals in the accumulation of extreme wealth and that legitimizes massive levels of income and wealth inequality at the same time that it legalizes large-scale hazards, imposing them on everyone without a chance to escape. The list of disappointments at the personal level is also getting longer. People are waking up to the flawed promise that limitless happiness can be achieved through excessive consumerism. Many find themselves disillusioned, exhausted or burned out by the corporate game. Particularly millennials are less and less willing to accept the absence of purpose and meaning in their careers, let alone subscribe to crazy working hours or rigid hierarchies.
There is hope: Contrary to common belief and attempts to establish economics as a natural science alongside physics and other natural sciences, there are no iron laws of economics that prevent us from creating a more just, responsible, resilient and sustainable model. Of course, this realization is not new. Even on the world’s center stage top political and economic authorities seem to increasingly agree: To safeguard human civilization as we know it, we must fundamentally change the way our economies operate and move on from extractive, exclusive, and fragile, to respecting the natural boundaries of the planet and our own.
The growing number of systemic and holistic frameworks that aim to overcome the one-sidedness of the current system and establish a balanced economic model and reality is remarkable. Ideas such as Regenerative Economy, Sustainable and Conscious Capitalism, as well as Doughnut, Circular and Sharing Economy are gaining more and more traction. Numerous economists, scientists and policymakers have started to pool resources and offer new platforms such as the Wellbeing Economy Alliance, the Global Commons Alliance, the Next System Project or the Global Citizen Initiative. In Finance people with a lot of depth and experience are joining forces to change the paradigm beyond the ESG hype – the Capital Institute, Future Capital, AQAL Integral Investing, and Conscious Capital being examples of that.
On the corporate side the number of Certified B Corporations, social ventures, and organizations developing and promoting responsible business practices is growing rapidly. Commons are gaining traction and large-scale cooperatives, such as the Mondragón Cooperative in Spain, are demonstrating that it’s possible for companies to prosper without utilizing a shareholder-based profit model. Legislation authorizing the incorporation of “benefit corporations” is on the rise in the US and elsewhere. France has enacted legislation for the so-called “Entreprise à Mission” with Danone being the first listed company to apply the new framework to its articles of association and governance. In Germany, a civil society initiative for the introduction of a Gesellschaft mit gebundenem Vermögen has stimulated a most promising and constructive cross-party dialogue at the highest level.
Business leaders going down that path tend to share the belief that „business as usual” isn’t working. They are convinced that those who are building and scaling businesses have a responsibility to address urgent social and environmental inequalities, actualize a more just world and make business part of the solution. It comes with the willingness to change priorities, restructure the business model, shift the way business is done and be prepared to follow through personally, practically, and systemically. In traditional business, cases of ex-bankers, ex-managers, ex-C-Suite leaving highly paid positions are on the rise. The strait jackets of incremental budgeting, cost cutting, and a focus on short-term results over real progress towards sustainability and fundamental change is not cutting it for them anymore.
Momentum is clearly building, but a lot of these developments can easily be missed if one is stuck in the rat race, caught up in outdated models of success, or generally too preoccupied with not being thrown off by the ever-accelerating pace of a changing world – and many are. As a result and despite a lot of encouraging developments, truly progressive leadership continues to happen mainly at the edges. Center stage continues to be primarily occupied with analysis, logical arguments, and strong forces preserving the status quo while half-heartedly adding a “sustainability” label to the next marketing campaign. Bottom line: Meaningful real-world action is rare while the clock is ticking.
How to move from „knowing more“ to „knowing and doing better“? How to build tipping point momentum? No doubt, for all the ones who already feel called — from Business Leaders, Senior Executives and Managers to Solo Entrepreneurs and Tech Players — now is the time to step up in big and small ways, and rise to the occasion! Real world action based on a solid grasp of the problem. Once that happens, it will change the world!
For all the ones just waking up or still having reservations: Sustainable and regenerative economic frameworks and respective business models will be at the core of the „next normal“. The question is not „if“, but „when“ and „how“. What business leaders need to answer for themselves is: Will I be part of shaping the future or will I risk being left behind?
There are no passengers on spaceship earth! We are all crew! –Marshall McLuhan