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Capitalism Has Failed: 5 Bold Ways to Build a New World

Some new ideas and big questions are defining our economic future.

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As noted, this kind of constant growth simply isn't sustainable on a finite planet. People will always trade -- it's an essential human activity -- but going forward, we need small-scale businesses that can stay happy and healthy without being pushed to grow. Worker ownership doesn't really address this problem, though relocalization, which roots businesses deeply in their own local markets, limiting their reach beyond those boundaries, may provide one natural brake on growth.

For many large and necessary enterprises (utilities; essential centralized manufacturing; big, capital-intensive tech industries; and so on) public ownership may be the only way to ensure that they grow no bigger than they need to be to fulfill their mission. If there are other solutions that will allow us to have complex enterprises minus the growth imperative, they're still lurking out beyond the horizon.

Systems Theory

One of the great breakthroughs in human understanding over the past 40 years has been the realization that all complex systems -- economic, political, biological, mechanical, environmental, or social -- behave according to a simple set of common principles. The rules that govern the behavior of one set of systems usually apply to other kinds of systems as well.

For example, much of what we've learned about how ecosystems work is now informing new thinking about the economy. Successful enterprises don't exist in a vacuum. They only thrive in interdependent communities of customers, suppliers, investors, employees, and related businesses. The most economically productive places -- for example, Silicon Valley -- are as dense in these interrelationships as old-growth forests are. This complex landscape allows for endless combinations of new interactions, which in turn leads to constant, easy, productive innovation. At the same time: these ecosystems are every bit as susceptible to thoughtless disruption when some critical element is disturbed.

This new awareness of the intense interdependence within healthy economies undercuts the "rugged individualist/self-made man" story that undergirds conservative economics. Seeing the world in systems makes it abundantly clear that no individual or enterprise ever succeeds on its own, or that one business alone can bring about the kind of change we need. Fostering healthy economies is the work of generations, and thanks to systems theory, we understand more about how to build them than we ever did before.

A World Like the Web

A related framework, which is being driven by technologists rather than economists, posits that economic systems like capitalism, fascism and communism all belong to an industrial age that's now passing. In the old era, we saw the world through the metaphor of the machine. Our systems were static piles of unchanging parts that you designed, defined, tinkered with, and deployed toward a desired result.

This framework argues that our transition to the Information Age (which includes not just the Internet revolution, but other technologies like nanotech, biotech, 3D printing, and so on; and which will be playing out through the rest of this century, at minimum) will require us to rearrange our economic and political orders to more closely fit the Internet metaphor. Closely related to this are emerging human-centered economic models, like behavioral economics, which jettison the mechanistic "rational actor" assumption for a more nuanced and organic understanding of how human decision-making actually works.

In these models, the economy is seen as a series of simultaneously interrelated and self-sufficient nodes, each embedded in a complex matrix of relationships that are redundant and self-healing. These could easily be strong regional economies based on natural bioregional boundaries, which are then bound together in a tight global network that fosters robust trade in goods and ideas. The foundation of capital is ideas and information -- resources that don't deplete the physical wealth of the planet. Membership in the network increases scalability and adds extra layers of resilience.

 
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