Beyond Capitalism and Socialism: Could a New Economic Approach Save the Planet?
Beyond Capitalism and Socialism: Could a New Economic Approach Save the Planet?
By Jo Confino / theguardian.com
Apr 30, 2015

To avoid social, environmental and economic collapse, the world needs to move beyond the standard choices of capitalism or socialism. That’s the conclusion of a new report released Wednesday by US think tank Capital Institute.

The non-partisan think tank argues that both systems are unsustainable, even if flawlessly executed, and that economists need to look to the “hard science of holism” to debunk outdated views held by both the left and the right.

Jan Smuts, who coined the term “holism” in his 1926 book, Holism and Evolution, defined it as the “tendency in nature to form wholes that are greater than the sum of the parts”. For example, in the case of a plant, the whole organism is more than a collection of leaves, stems and roots. Focusing too closely on each of these parts, the theory argues, could get in the way of understanding the organism as a whole.

Viewed through this perspective, the capitalist tendency to isolate an economic process from its antecedents and effects is fundamentally flawed. The Capital Institute, created by former JP Morgan managing director John Fullerton, says that society’s economic worldview has relied on breaking complex systems down into simpler parts in order to understand and manage them.

For example, this traditional economic view might view automobile manufacturing separately from the mineral mining, petroleum production and workers on which it relies. Moreover, this view might also not acknowledge the impact that automobile manufacturing has on the environment, politics and economics of an area. Holism, on the other hand, would view the entire chain of cause and effect that leads to – and away from – automobile manufacturing. 

The Capital Institute report, titled Regenerative Capitalism, emphasizes that the world economic system is closely related to, and dependent upon, the environment. “The failure of modern economic theory to acknowledge this reality has had profound consequences, not the least of which is global climate change,” it says.

A long chain of cause and effects

According to the Capital Institute, the consequences of this economic worldview are vast and far reaching, encompassing a host of challenges that range from climate change to political instability.

For example, the current capitalist system has created extreme levels of inequality, the report says. This, in turn, has led to a host of ills, including worker abusesexismeconomic stagnation and more. It could even be considered partly responsible for the rise of terrorism around the world, the report claims. In other words, this inequality has become a threat to the very system that is creating it. Without radical change, the report warns, “the current mainstream capitalist system is under existential threat”.

What is needed now, the Capital Institute argues, is a new systems-based mindset built around the idea of a regenerative economy, “which recognizes that the proper functioning of complex wholes, like an economy, cannot be understood without the ongoing, dynamic relationships among parts that give rise to greater wholes”.

In practice, this might lead to close analysis of supply chains, investigations of the effects of water use, circular economy initiatives, community economic development work or a host of other sustainability efforts.

While some people associate holistic thinking with mystics or hippies, the worldview is borne out in ways that are measurable, precise and empirical. “Universal principles and patterns of systemic health and development actually do exist, and are known to guide behavior in living systems from bacteria to human beings,” the report says.

Holism also can be used to study “nonliving systems from hurricanes to transportation systems and the internet; and societal systems including monetary systems”. Not surprisingly, the theory underlies other scientific and social tools, such as system theory and chaos theory.

A radical shift

This holistic approach flies in the face of a great deal of long-held beliefs. For example, while decision makers usually focus on finding a single ‘right’ answer, holism focuses on finding balanced answers that address seemingly contradictory goals like efficiency and resilience, collaboration and competition, and diversity and coherence. Taken from this perspective, holism wouldn’t approach global economics from a capitalism-or-socialism perspective, but rather from a capitalism-and-socialism perspective.

The report emphasizes the importance of innovation and adaptability over rigid structures and belief systems. It also embraces diversity, suggesting that, instead of trying to find a globalized one-size-fits-all approach to change, it is vital to recognize that each community consists of a “mosaic of peoples, traditions, beliefs, and institutions uniquely shaped by long term pressures of geology, human history, culture, local environment, and changing human needs”.

Ultimately, the report argues, a holistic perspective emphasizes that we are all connected to one another and to the planet, and therefore need to recognize that damaging any part of that web could end up harming every other part.

In business terms, what would this sort of revolutionary shift in business look like? The Capital Institute, which presented a white paper at Yale University’s Center for Business and the Environment on Tuesday, says innovators and entrepreneurs around the world are already responsible for thousands of sustainability initiatives and movements that are helping to re-imagine capitalism, such as social enterprises, B Corps, impact investing, slow food and localism.

The report says that, while some critics view these as “disconnected feel-good activities outside the mainstream capitalist system”, they are, in fact, “in alignment with the regenerative economy framework”. Collectively, it claims, “these forces provide living proof that a new regenerative economy is emergent”.

Beyond movements of change, the institute points to a number of individual initiatives that show how the world could change for the better. For example, Mexico’s Grupo Ecologico has worked to fund impoverished small farmers and ranchers, giving them the economic freedom to preserve and regenerate their own land.

Similarly, Australia’s Bendigo Community Bank splits its net income with local community enterprises. It directs a portion of community branch earnings toward grant making, giving local leaders the opportunity to become active players in their communities.

Community development is also a primary concern for Chicago’s Manufacturing Renaissance, which is forging unusual partnerships among government, labour unions, educators, the private sector, and civil society to create programs that support the region’s advanced manufacturing sectors.

Fullerton says there is great potential ahead if society can change its collective mindset: “This is a monumental challenge that holds the promise of uniting our generation in a shared purpose. We now have a more rigorous understanding of what makes human networks healthy – this alone constitutes an amazing opportunity. It is time to act. Our actions, now, will most certainly define the nobility of our lives and our legacy. This is the great work of our time.”

4.0 ·
1
Trending Today
How a Lack of Touch Is Destroying Men
Mark Green · 4,879 views today · Why Men Need More Platonic Touch in their Lives
How Comedy Can Disarm Bullies
3 min · 3,057 views today · As long as you're funny, it can get you out of almost anything - even getting mugged, as co-founder of Between Two Ferns Scott Aukerman recounts. Unfortunately, not everyone...
Globalization Makes No Sense
Chris Agnos · 2,523 views today · When I lived in San Francisco, I often would marvel at the movement of goods through the ports across the bay in Oakland. Full container ships would enter the bay one after...
Immigrants For Sale (2015)
33 min · 2,336 views today · The detention of migrants has become a multi-billion dollar industry in which immigrants are sold to the highest bidder and traded like mere products. The Corrections...
Proof of Evolution That You Can Find on Your Body
4 min · 1,903 views today · Vestigial structures are evolution's leftovers — body parts that, through inheritance, have outlived the context in which they arose. Some of the most delightful reminders of...
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 1,664 views today · Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months...
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 1,071 views today · This is easily the best comic strip ever made.  Pabl
Compassion, the Antidote
Martin Doblmeier · 1,045 views today · Thich Nhat Hanh has published nearly 100 books and is one of the best-known teachers of Zen Buddhism in the world today. In the early 1960s his practice of what he termed...
A Hauntingly Beautiful Short Film About Life and Death
5 min · 926 views today · The Life of Death is a touching handdrawn animation about the day Death fell in love with Life.
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 835 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
Without Saying a Word This 6 Minute Clip From Samsara Will Make You Speechless
6 min · 774 views today · Can you put this video into words? It's a clip from the phenomenal documentary Samsara, directed by Ron Fricke, who also made Baraka.  If you're interested in watching...
Those That Did Not Seek Revenge
Dr. Ann Russo · 758 views today · Dr. Ann Russo on violence, healing, and transforming justice.
How Wolves Change Rivers
4 min · 712 views today · When wolves were reintroduced to Yellowstone National Park in the United States after being absent nearly 70 years, the most remarkable "trophic cascade" occurred. What is a...
Touch Isolation: How Homophobia Has Robbed All Men Of Touch
Mark Greene · 660 views today · Homophobic prohibitions against male touch are hurting straight men as well.
Stunning Small Homes Form Part of a Communal Compound for Best Friends
Lighter Side · 644 views today · If you’re lucky enough to have longtime friends even as an adult, then you know probably already know how much it means to be able to spend time together. Maybe you even have a...
DAPL Opponents Vow to 'Rise' From Ashes of Oceti Sakowin and Keep Fighting
Lauren McCauley · 636 views today · 'They cannot extinguish the fire that Standing Rock started,' Dallas Goldtooth declared
The Foiled Bomb Plot in Kansas That Didn't Make Trump's Terror List
5 min · 555 views today · When a plot by a pro-white militia to bomb a Somali mosque in Kansas was foiled by the FBI last October, the aborted conspiracy received little national coverage - nor did it...
Where the Term "Redneck" Came From
15 min · 508 views today · If you don't know this story, you'll never look at the word the same again.  This is just a window into the sometimes shocking, subversive and untold history of the United...
10 Words Every Girl Should Learn
Soraya Chemaly · 356 views today · "Stop interrupting me."  "I just said that." "No explanation needed." In fifth grade, I won the school courtesy prize. In other words, I won an award for being polite. My...
The Most Astounding Fact about the Universe
3 min · 238 views today · This is Neil Degrasse Tyson's response when asked to describe the most astounding fact about the universe. Background music is the cinematic orchestra - To build a home.
Load More
What's Next
Like us on Facebook?
Beyond Capitalism and Socialism: Could a New Economic Approach Save the Planet?