What is the New Economy?
This is a personal exploration of what the “new economy” means to me, drawn from experience at multiple conferences over the past two and half years and various writings from folks like John Fullerton, Gar Alperovitz, and Marjorie Kelly. It is adapted from my personal blog on my website at markjphillips.com
In posting this on Thanksgiving day, my heart is with the Water Protectors at Standing Rock who have taken a stand against an extractive economy that puts financial profit before people and planet. Click here for ways to support them.
What is the new economy? I’ve been asking myself this question since I attended the New Economy Coalition’s Commonbound conference in 2014. The conference was my introduction to the new economy movement and sort of felt like drinking water from a fire hose. I attended to learn more about B Corporations and left with an entirely new perspective on the seriousness of our global social and ecological crises. Most significantly, I was introduced to the overwhelming idea that our global economy is a primary source of ecological destruction and wealth inequality and is essentially driving human civilization and the planet off a cliff. I remember clearly Gar Alperovitz’s call to think seriously about whether or not we (I’m talking to the person in your chair) were prepared to make long term commitments to systemic, tranformative change (the chips for playing this game are decades of your life!).
I attended Commonbound out of a mild obsession with B Corps and social enterprise but left with a shiny new captivation for the work of the Tellus Institute’s Great Transition Initiative and Capital Institute’s Regenerative Economy. Their work, of course, flew far over my head then (and it still does today), but I knew I was on to something. Without realizing it, I had moved into the world of systems thinking applied to our socio-ecological crises, ascending from seeing the individual enterprise unit as a problem solver (my interest in social enterprise) to exploring and addressing the conditions that create the problems in the first place through a whole system lens.
And so what is the new economy? I have encountered many different definitions and interpretations of the “new” or “next” economy and it is beyond the scope of this post to explore them here. Rather, I hope to offer a personal exploration of what the new economy means for me, since I realize I’ve never taken the time to sit down and honestly ask myself this question.
My starting point is rather simple in that the new economy must put people and planet before short term, financial profit and economic growth; it must be ecologically sustainable and socially equitable, in ways that our existing economic system has absolutely failed us. The New Economy Coalition sees justice, sustainability, and democracy as key elements of an emerging new economy: just for those marginalized and exploited by systems of oppression, sustainable for earth’s natural and human communities, and democratic of economic participation and civic life. I like these for starting points.
Applying these principles (sustainability, democracy, justice) to business, finance, and the economy as a whole can get you pretty far, but I would like to specifically incorporate localization, alternative ownership forms, and ecological regeneration as key elements of a new economy.
“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.”
Kenneth Boulding, co-founder of General Systems Theory
Localization is the effort to reposition production, distribution, and consumption of goods, services, and economic activity to the scale of local ecology and community. It does not necessarily mean you can’t have iPhones and Olive Oil, but that a community is more self-reliant when it comes to their basic needs and in better control of the decisions that most dramatically affect their quality of life. Localization responds in large part to the insanity of a petroleum based global economy that, for example, imports almost 1 million tons of beef and exports about the same number from elsewhere (see page 22, the Economics of Happiness). It recognizes that this activity is fundamentally unsustainable and a major contributor to global climate change and income inequality. Globalization alienates us from the human labour and environmental extraction required to produce the goods or services we consume. Localization reconnects us to place, revealing the relationships between patterns of consumption and our social and ecological footprint.
Alternative ownership forms include a broad umbrella of models that place control and, ideally, democratic governance, in the hands of communities. Models like cooperative enterprise, community land trusts, and community supported agriculture provide the opportunity to place ownership in the hands of those most closely affected by the production and consumption of goods or services, the use of land, and the growth of food. Marjorie Kelly’s Owning Our Future, The Emerging Ownership Revolution is the book that solidified for me the importance of ownership as a key variable affecting social and environmental outcomes in enterprise behavior. Simply put, when the people who benefit from a good or service own and control an enterprise, they are able to prioritize social and environmental outcomes like living wages and soil health over financial gain because these priorities are designed into the system from the very start, requiring broad democratic consensus to do otherwise. The enterprise is organized around an explicit social and/or environmental goal which is secured over time through democratic member-ownership and governance.
Localization is an effective response to our global economic imbalance because it returns such activity to an appropriate and manageable human scale, and smaller scale makes it easier to manage complex systems. Localizing the economy goes hand in hand with alternative ownership forms because community scale implies greater control over enterprise behaviour. When combined with the principles outlined above of sustainability, democracy, and justice we start to get a sense of the values that might help define an emerging new economy. These criteria apply equally to finance and investment and manifest themselves in the local investing and slow money movements to relocalize financial capital towards direct human and ecological benefit.
Ecologically, our goal in building a new economy must now be not just sustainability but, ultimately, regeneration. The word regenerative seems to be popping up all over the place, but here I am referring to a specific understanding of the way living systems self-organize with an inherent, evolutionary capacity to thrive. This understanding of nature has emerged out of the new scientific understanding of reality of the earth (and universe) as a unified, interdependent whole. I strongly recommend resources from Regenesis Group and Integrative Design Collaborative to understand “regenerative”, and specifically this presentation from Bill Reed, From Sustainability Through Regeneration: Whole and Living System Design. The work of Bill McDonough and Michael Braungart on Cradle to Cradle design is also an important contribution for exploring this concept.
A regenerative relationship with natural systems produces a sustainable economic system as an outcome, not a primary goal. Bill McDonough likes to say that if you’re in a car and you’re driving to Canada but need to get to Mexico, the car needs to be turned around. If Canada is business as usual, and Mexico is a regenerative economy, then our current sustainability mindset is the equivalent of reducing the speed at which we drive to Canada through incremental change. And this is a necessary first step. Getting to Mexico requires an entirely new direction, but of course we need to slow the car down to turn it around. We need to “do less bad” while transitioning to a relationship that views social and natural system health as one co-evolutionary process. Within this paradigm, conventional sustainability initiatives are a part of a larger developmental process towards regeneration. Conventional reduction in environmental impact (energy use, zero-waste, etc.) are rungs on the ladder that will lead us towards an integrated and beneficial relationship with nature.
Ecological regeneration is a daunting topic that can be approached from a variety of different ways. In tracking my own thought in this space, I’ve found that a useful starting point for framing this conversation is agriculture, and specifically soil health. Agriculture is the area where we most directly engage with the living systems that sustain us, and therefore offers great opportunity for reframing our relationship with nature by looking to “regenerative” ecological agricultural methods like agroecology and permaculture that enhance the health of ecosystems while also growing food for humans. As I recently wrote in another recent piece on soil carbon sequestration, there is an emerging global movement behind “regenerative agriculture”, which seeks to popularize methods of growing food that emphasize the health of the agricultural site as a whole ecosystem. Resources on this subject include Terra Genesis International’s recent white paper and the work of organizations like Regeneration International and Kiss the Ground.
But to focus on agricultural alone would be reductionist, as regeneration is inherently a whole systems approach that requires us to elevate our consciousness to all elements of the system we’re working with. So, if the new economy is to be regenerative, it would need to optimize the health of all aspects of social and environmental systems, from the community and bioregional scale all the way up to the Earth as a whole. This is why I advocate for localization as a strategy, because the community scale is the appropriate level at which we can functionally address the complex intersection of human systems (cultural, political, economic, etc.) and the living ecosystems of the more-than-human world. And on a cultural note, I believe a regenerative relationship with nature must also emerge from a new consciousness of our membership in a larger community of life on earth, otherwise we’re simply applying the same industrialist, consumptive* mindset to satisfying human needs that got us into this mess in the first place. The ecological paradigm provided by the new scientific story opens human consciousness to membership in the larger Earth community as one single, unfolding process.
(*Google offered this appropriate definition of consumptive when I checked to make sure it was a real word: affected with a wasting disease, especially pulmonary tuberculosis. Let us escape the pulmonary tuberculosis economy!)
Localization and alternative ownership forms represent ideal strategic frameworks for addressing the new economy values of sustainability, democracy, and justice because they allow us to simultaneously reintegrate with local ecosystems while rooting democratic ownership in the hands of human communities. A regenerative economic relationship with natural, living systems requires an intimacy with and deep knowledge of place that our globalized economy has severed. Equally, the application of justice to those marginalized by systems of oppression such as American slavery emerges from a historical understanding of the unique cultural and social events that define a place. Understanding the essential ecological and social characteristics of a place are the basis of giving democratic control of economic activity to its human community through alternative ownership models.
The vision that begins to emerge is one where communities organize economic activity around fundamental needs and ecological stewardship, achieving a new economy that serves life, not money. In addition to localization and alternative ownership models, I also believe that new economic activity must emerge from a new consciousness of our membership in one community of life. The earth community, as popularized by the work and writing of cultural historian Thomas Berry, is not a new-agey concept but a profound philosophical revelation offered by our new scientific understanding of the universe. The systems view of life makes clear the need for a new economy that integrates human and natural systems as one living process. It is within this new paradigm of understanding the world that we must reimagine and recreate a new economy that serves people and planet.