| Abstract |
Global threats – from climate change and accelerating inequality, to the financial crisis of
2008 – have led an increasing number of thought leaders and policymakers to question
the long-term viability of today’s dominant form of capitalism3. Even the rise of terrorism is fueled, at least in part, by the repression and exploitation of the economically and politically disempowered.
At the same time, a multitude of innovators and entrepreneurs around the world are experimenting with practical ways to reimagine capitalism so that it works for all levels of society, as well as for the planet. In our terms, their common goal is to create a self-organizing, naturally self-maintaining, highly adaptive Regenerative form of capitalism that produces lasting social and economic vitality for global civilization as a whole.
Over the last two years, Capital Institute has been working with many of these thought leaders and entrepreneurs in a quest to understand what a theoretical framework for regenerative economies would look like, and what conditions and processes contribute to their long-term systemic health. We also explored how a Regenerative Economy would differ from today’s flawed theory of capitalism, and how it would compare to other New Economy ideas such
as natural capitalism, sustainable capitalism, conscious capitalism, doughnut economics, circular economies, sharing economies, steady-state economies, etc.
Where today’s mainstream economic debates are usually couched in liberal versus
conservative ideology, we felt a much deeper inquiry was required, one that examined the unquestioned assumptions of both the left and the right. For instance, does exponential, undifferentiated economic growth — the still largely unquestioned objective of liberal and conservative economists alike — really define the path to long-term prosperity? Is such constantly expanding growth even possible given the already massive scale of today’s global economy and our planet’s finite resources? And, what role does modern finance play with its single-minded pursuit of optimizing returns, in driving the systemic outcomes that are unsustainable?
Let me say up front very clearly: Regenerative economics is not about the well-worn debate of capitalism versus socialism. Both systems, even if flawlessly executed, are unsustainable. Nor is it a proposal for incremental change to a system that is fundamentally sound but for a few glitches.
What I am saying is that the history of economic theory is not over with Keynes and Hayek (or Minsky and Friedman), leaving their disciples to squabble on the public square indefinitely into the future. In fact, recent events including the 2008 financial collapse, the (under) statement by pre-eminent economist Sir Nicholas Stern that climate change represents the largest market failure in the history of capitalism, and the phenomenon surrounding the release of Thomas Piketty’s Wealth in the Twenty First Century, collectively signal the end of the beginning. Regenerative Capitalism aims to contribute to the vital shift in thinking that is a precondition for us to embark on what follows the beginning.
What is Regenerative Capitalism? We began our quest for deeper explanations with biomimicry4 in mind. That is, since living systems are both sustainable and regenerative over long periods of time, we began exploring whether following nature’s rules of health and development might lead to sustainably vibrant economies as well. But, the more we explored this thesis, the bigger and more diverse the picture became. We discovered that what we call “systemic” or “holistic” approaches could be seen in work ranging from Jane Jacobs’ on-the- ground urban observations in Death and Life of the Great American Cities, to Herman Daly’s theories of steady-state economics. Indeed, close examination showed holistic concepts emerging in almost every field imaginable, from agriculture and healthcare to monetary systems, urban planning, and network-centric technology.
This broad form of holism grew out of the observation that everything in the universe is organized into “systems” whose interlinked parts work together in some larger process or pattern. The incredible range of holistic work we were encountering reflected a common quest to understand the reasons for such “systemic behavior,” a pursuit that stretched from the sacred geometries of the ancient Greeks to the study of ecosystems and social media today.
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