‘Wise capitalism?’ by Tom Atlee
Reposted from: https://philosophersforchange.org/2012/05/10/wise-capitalism/ by Tom Atlee at Philosophers for Change, philoforchange.wordpress.com.
by Tom Atlee
Wisdom involves taking into account the larger truths about what is and why it is that way — and then living into that understanding in one’s everyday actions.
When I speak of ‘wise capitalism’, I’m not speaking of wise business. I’m speaking of the ideology and economic system of capitalism maturing into awareness of what’s happening in the world and its role in that, and having that understanding transform it into a higher form of its own being.
The businesses within it may or may not be wise, themselves. But they will behave in wiser ways because the system in which they are embedded is itself wiser.
This topic is an inquiry – thus the question mark in my title – and I offer it as such. I am new to this worldview myself. Even the readings at the end are part of that inquiry: Some I have read, some I have written, and some are on my “to read next” stack.
I invite you to join me in a truly challenging and hopeful adventure.
I am not one to call for the destruction of capitalism, nor its glorification and laissez faire free rein. I am for considering its gifts and limitations as potential resources for making the world a good and sustainable habitat for human life and all Life.
We humans have evolved into multi-faceted, flexible beings and societies, capable of a wide variety of responses to environmental challenges and possibilities. This is a defining strength of our species – as long as we use it as such. As part of that, we find ourselves to be both competitive and cooperative, greedy and generous, selfish and altruistic.
When seen through the lens of evolutionary survival, these qualities each have gifts and limitations: Under the right conditions each of these tendencies can be a resource for enhancing the quality of our lives. Under the wrong conditions each can become the source of individual and social tragedy. All these qualities occur in different proportions and manifestations in different people and in different times, places, circumstances. Perhaps most importantly, which characteristics dominate and how they manifest are factors strongly influenced by context, by culture and by the political, economic and social systems we live in.
I believe any project to design a totally collaborative and equitable society is doomed to failure. Attempts to create such societies have usually ended up repressing individuality and freedom or falling apart. They do not take into account the power of that other aspect of our being, the more self-centered part of us. On the other hand, efforts to ground our economies in self-interest, greed, and maximized freedom are creating social and ecological disaster – a fact that disturbs and motivates the more altruistic aspects of our being and our society.
So I consider us challenged to design economies that use the best of what each of our capacities has to offer, while constraining its worst tendencies. Beyond that, I think it is possible to actually balance and synergize our competitive and cooperative spirits for mutual benefit, as exemplified by good sportsmanship, charitable races and contests, and the competition for earned status among collaborative open source developers, to name just a few familiar examples.
So how should we think about capitalism – and what it would look like – as we seek a mixed economy for the 21st century that faces the full extent of our collective predicament and promise while welcoming all the diverse angels of our nature?
Capitalism’s strengths and weaknesses
I see the greatest gift of capitalism as its proven capacity to channel the abundant fossil fuels and technologies of the last 250 years into increased material standards of living for billions of people. It has achieved this by helping society-as-a-whole allocate resources in a largely self-organized way, using certain natural human incentives to engage people in productive work that meshes with the work and desires of others, using its mythic “invisible hand”.
Unfortunately this achievement has come at tremendous cost — a toll that more and more of us see as morally unacceptable and increasingly unsustainable. We see our world being torn apart thanks to capitalism’s addiction to “growth” as ever-expanding spending and its profits too often deriving from obsessive material consumption, abusive exploitation of human and natural life, and abstract speculations – from GDP to hedge funds – that are dangerously alienated from the satisfaction of real human needs and from reality itself.
I do not believe this toxic impact of capitalism is intrinsic to its nature, although I would agree that it is intrinsic to the reductionist version of it which, thanks to rapid globalization, currently dominates the globe. So I feel it important to explore how the self-organizing power of capitalism and markets can be reconceptualized into forms more fit to heal the earth, to improve our experienced quality of life, and to secure decent prospects for future generations.
Let me start by highlighting some of the biggest shortcomings of our current form of capitalism:
1. It tends to concentrate unanswerable social power — not only the economic power of accumulated capital, but wealth-derived political power, governmental power, judicial power, organizational power, knowledge power, media power, and coercive power — that increasingly dominate and degrade democracy and the lives of many people and communities.
2. It tends to reduce vast realms of life to a matter of money; to promote the valuing of all things according to the amount of money they represent, cost or generate; and to devalue whatever exists outside its monetized economy, including all that is truly priceless.
3. It drives unsustainable growth and competition by breeding a culture of scarcity and distraction, promoting addictive consumerism and indebtedness based on manufactured cravings that derive their potency from — but seldom satisfy — fundamental human needs.
4. It privileges private property and feeds competition for ownership and exploitation in ways that unnecessarily degrade the commons, undermine healthy society, and/or diminish many lives of those who either create what is appropriated by private interests or need access to it for their survival.
5. Thanks largely to the above dynamics playing out at an increasingly global scale, contemporary capitalism tends to support and reward the externalization of social and environmental costs of economic activity, leaving those costs to be paid by its victims, by taxpayers, by society as a whole, by nature, and by future generations.
The list could go on, but these will suffice for our examinations here.
Of course, capitalism is not the only economic system that does these things or that has shortcomings – not by a long shot. However, it is the dominant system in the world today and is having profound and widespread negative impact. It thus deserves serious critical reappraisal and, where necessary, corrective action and re-imagining – some would say replacement, although I will leave that to them for now. I find making capitalism wise a more compelling challenge.
Responses to the depredations of Capitalism
Thankfully, the negative dynamics of global capitalism have begun to stimulate counter-dynamics that offer promising shifts to new forms of economics – including new forms of capitalism – that can provide better outcomes for all concerned. For example, I see:
* The “arrogance of power” — the feedback loop through which concentrated power further concentrates power — has become so blatantly displayed — and even advocated — and so obviously and broadly harmful that an increasing number of mainstream citizens are questioning not just the role of elites — the so-called “1%” — but the legitimacy of capitalism itself.
* People in capitalist societies – especially youth and elders – are being increasingly drawn (or pushed by economic hardship) toward “simple living” that values quality of life over quantities of money and stuff. More people are discovering that less consumptive lifestyles can actually satisfy their deep needs better than consumerism.
* The explosive emergence of technologies of free creation, sharing and exchange are stimulating a new wave of mutuality and co-creativity, often quite outside the corporate-controlled monetized economy. As this technology-enabled subculture of grassroots mutuality evolves, it brings with it more capacity for productive local economies to be free of bondage to global capital and thus more resilient in the face of large-scale economic fluctuations and potential collapse.
As part of the overall globalization of economics and culture, these creative responses are playing out planet-wide, empowered by technologies of communication, networking, collaboration, organization and fabrication. In addition, the fact that elites are themselves becoming more networked in their power– and profit-seeking ventures is balanced by the fact that many elite players — and especially their children — are becoming increasingly involved in co-creative solution-seeking across normal social boundaries.
The situation is becoming quite ripe for some serious change.
New directions for capitalism’s unique contributions
So, given that the time has come, how might we reconceptualize capitalism to make it more benign and wise, to channel its self-organizing power toward more dependable benefits for the earth and society?
There are many definitions of capitalism. For the purposes of this article, I will define capitalism as involving private ownership of the means of production and trade in a relatively free market whose energies largely derive from investors seeking return on their investment.
Many of the emerging economic dynamics — from gifting and gardening to crowd-sourcing and open-sourcing — may play out largely outside this definition. But there is ample reason to believe we can reinterpret capitalism’s definition to include even them — and to open possibilities for more highly evolved and inclusively beneficial forms of capitalism’s traditional dynamics.
I think capitalism is at a re-definitional choice point clarified by two questions:
- What is the nature of capital, in the sense of investable wealth?
- What is the nature of freedom, especially as regards a free market in a free society?
Our current conventional answers to these questions seem to be the following:
a. Capital is money and sellable assets with which to create more money and sellable assets.
b. Wealth is the amount of such capital one owns.
c. Freedom is the ability to do what one wants.
d. A free market is one with little if any government regulation.
e. A free democratic society is one in which all entities — individuals and corporations alike — can exercise their rights of free political activity without government interference.
I offer some alternative framings for each of these concepts:
a. Capital is anything which, when you have it or make more of it, makes life good — and which can be applied in life — that is, invested — to generate more things that make life good. Among the forms of capital most commonly named are the following:
- natural capital — healthy biological populations and biodiversity, natural resources, clean air and water, land, healthy natural systems and their “ecosystem services”, and a stable climate. This is unquestionably the most important form of capital — a lesson we are increasingly being invited and forced to learn.
- social capital — the quality and quantity of relationships within and among groups and communities, the “social fabric” of familiarity, trust, reputation, patterns of interaction and expectation
- human capital — all our individual human capacities and gifts — labor, intelligence, creativity, talent, integrity, diversity, experience, passion, and so much more
- cultural capital –– the collective resources generated by communities and humanity as a whole — the arts, language, collective knowledge, healthy social systems and institutions, ethical codes, familiar rituals and observances, shared assumptions and narratives
- manufactured capital/built capital — useful artifacts and infrastructure — machines, roads, buildings, most things you see in the stores, the economy’s so-called “goods”
- technological capital — proven practical knowledge and tools for achieving specific ends (Note: the knowledge dimension of technological capital is often considered part of cultural capital and the tools dimension part of built capital)
- financial capital — money, debt, financial investments and instruments
Other terms for capital are “resources” and “assets”, although the term “capital” further implies its power to create more capital. In other words it is not merely a storehouse of potential energy or material to grab as needed; it has creative power. Note also that any and all forms of capital can be invested to acquire, improve or increase other forms of capital.
This is particularly worth thinking about when we are dealing with money and other financial instruments. We need to realize that, as powerful and flexible as it is, financial capital is subsidiary to all the other forms of capital. The other forms are far more fundamental to our collective wellbeing and even existence, having been basic to human society for millennia before the advent and ascendancy of money. In a newly wise capitalism, the proper and primary role of financial capital would be understood to facilitate the enhancement of the other forms of capital, rather than simply to increase itself or to control other domains of life.
b. Wealth is the amount of available capital, in the senses described above. Note that the word “wealth” comes from “weal” which refers to wellbeing, health and wholeness. Although wealth can be kept — and setting aside a certain amount is always provident — real wealth, being full-spectrum capital, increases the more active and engaged it is, rather than simply by being accumulated. Disparities of wealth need to be monitored and ameliorated, since concentrations of wealth alongside deficiencies of wealth make a social system very unstable, quite in addition to any human degradation involved. In contrast, “enoughness” makes a system stable — and “abundance” makes it actually vibrant. Therefore the highest form of wealth is common wealth — the co-created wealth available to all to enable them to create good lives, individually and together. Another term for common wealth is the commons.
c. Freedom is the ability to meet one’s needs and pursue one’s interests and aspirations without undermining the ability of others to do the same. Freedom is as much a cultural quality and systems design issue as a personal experience. At a systems level, freedom is not something that can simply be maximized, but rather can be optimized for the whole system in which each participant’s freedom is bounded — and, if designed and practiced well, usually enhanced — by the freedom of others.
d. A free market is a level playing field for the competitive co-creation of greater common wealth, with the minimum government management needed to make it so. This management involves keeping financial capital subsidiary to — or even in service to — other forms of capital and restraining harmful concentrations of economic power that unduly interfere with the freedom of others. (Note: While a free market involves the competitive co-creation of greater common wealth, its complement — a free community — involves the cooperative co-creation of greater common wealth).
e. A free democratic society is one in which all people can exercise their rights of free political association and engagement with only such governmental management and limits as are needed to keep political opportunity fair for all.
I offer these new definitions as part of the foundation for a wiser capitalism. Grounded in them, I propose that it is possible and desirable to have a healthy, broadly life-supporting capitalism
- that taps into the motivations of mutuality and care as well as self-interest,
- that institutionalizes feedback dynamics that promote common wealth and community power as well as personal and corporate wealth and power,
- that frees the self-organizing magic of the marketplace to serve each and all simultaneously — both using and transcending the medium of money — thereby nurturing a heady mix of individual intelligence and power with the power generated by collaboration and our mounting collective capacities, especially our growing but tragically underused capacity for collective wisdom.
This new vision of capitalism will necessarily expand the definition of “private ownership of the means of production” to include ownership by any and all associations of empowered private individuals — including co-operatives, self-managed collectives, credit unions, common-based peer production activities, credit-clearing systems, peer-to-peer networks, and community-owned institutions in which citizens play an empowered role. It would not, naturally, include the traditionally “public sector” institutions owned, managed and controlled by government bureaucracies.
I would now like to explore two aspects of this new capitalism and what would be involved in reformulating capitalism to more fully manifest them. These two aspects relate intimately to the two definitional questions given above –(a) redefining capital to embrace the fullness of life and common wealth and (b) optimizing power and freedom to serve both private and collective interests. In the following sections I will explore some of the transformational strategies that could be pursued to further each of these larger goals.
Capitalism that embraces the fullness of life and common wealth
Appreciate the economic role and value of the commons
The commons is a generic term embracing all that we hold and use in common. It is most readily understood as our shared lands, spaces, natural resources and natural systems. But it also includes our genes, our culture and institutions, our economics and politics, our sidewalks and streets, our accumulated and co-created knowledge, the human and social resources of our communities and relationships. Whatever we all have access to is our commons.
In our competitive, individualistic culture we often assume that our productive and creative activities arise from and rightfully belong to us alone. We seldom realize or acknowledge how thoroughly we depend on the larger social, cultural, and natural bounty that surrounds and precedes us — so much of which is quite freely available or was freely available to whoever provided it to us.
To be wise capitalism must internalize that reality — and treasure, preserve, and support the commons as fundamental to its existence.
Expand the definition of capital and profit
As noted earlier, capital includes not only money, but nature, culture, our humanity, our social connections, technology, and all that we have built. Embedding this in our new understanding and practice of capitalism is probably the most basic R&D task of a wise economic culture. It is not always clear how to do that, but the truth of it is so obvious and vital to our survival that the challenge should engage our best minds and leaders.
One of the most intriguing areas for development is to re-clarify the nature and role of profit. Profit is the return we get on our investment of capital. “Profit” derives from a word meaning “to benefit” or “to do on behalf of.” Once we have clarified our expanded definition of capital we can return fully to these old definitions of profit. How many ways can we support, heal, sustain, build up or improve natural systems, society, human capacities, practical knowledge and, yes, our finances by investing our finances, our practical knowledge, our human capacities, our social connectedness, and the health of natural systems around us? The answers are truly infinite and quite exciting. It profits us not (as older forms of English would say) to focus totally on merely amassing greater financial wealth.
Fully account for social and ecological costs and benefits
By ignoring the costs of ecological and social damage, corporations and other economic players can give their destructive products lower prices than those of their more socially and environmentally responsible competitors. Pollutants poison, landscapes degrade, poverty grows, small farms and homeowners go bankrupt, resources become scarce, the climate goes crazy — and the profits soar. But the damage remains and the costs are paid by sickened people, by the government (the taxpayers) or by future generations who are born into a more toxic, ugly and chaotic world.
Furthermore, by ignoring the benefits of all the gifted and priceless things we get from each other and nature — the love, the beauty, the companionship, the support, the blessings, the wisdom, the meaningful pleasures — we fail to adequately care for the people and life that are all around us.
This grossly deficient and imbalanced accounting system — which guides so much of human activity — cannot help but degrade human life and natural systems. Seeking statistical growth and maximizing the numbers produced by this accounting system — and calling that “success” or “progress” simply deepens the degradation of our civilization across the boards.
It is hard — though not impossible — for individual companies to correct this error. Stockholder activism, socially responsible investment (especially by giant pension funds), and consumer-citizen awareness can push individual companies to do the right thing. But there are limits to how far these can go when all shareholder-controlled companies are legally required to maximize quarterly financial profits and to compete against other companies who are operating according cut-throat monetized standards. It is vital that we up-level the playing field at the policy level where the rules of the game are determined, so that most economic players are socially and environmentally responsible simply as a matter of course because they receive significant benefits for being responsible and get penalized when they are not. If this new set of rules were broadly applied, capitalism could then redeem the concepts of “growth”, “success”, “progress” and “economic health” as profoundly positive aspects of our economic lives.
A number of important tools exist or have been proposed for furthering this goal:
- Internalize social and environmental costs into market prices. Make sure that when people pay for something, their payment includes payment for what has been damaged. This provides an economic disincentive for harming people and nature. It is usually accomplished with taxes, fees and regulations although there could be other and better approaches.
- Establish quality of life indicators. Gross Domestic Product — GDP is the primary measure of a society’s economic health and our defining standard for the rise and fall of booms and recessions: It is basically a measure of all the money spent in the economy. Its critics have noted that GDP discounts most of the productive activity of nature, of families and traditional “women’s work”, of volunteers and of people who do things for themselves, as well as the many other priceless riches of life that do not involve monetary exchange. At the same time, it includes all the money spent on cancers, accidents, wars, extreme weather damage and other disasters — as well as junk food, junk bonds, junk political campaigns and many other things that are not fundamentally positive at all but which all serve to increase GDP simply because people spend money on them. Alternative indicators like the Genuine Progress Index or Bhutan’s Gross Domestic Happiness index have been developed to paint a more authentic picture of our collective wellbeing and to augment if not replace GDP as our primary economic statistic.
- Encourage triple bottom line management and support benefit corporations (B corps). “Triple bottom line” means managing an enterprise for financial, social, and environmental returns. Imagine the board of a company, controlled by socially conscious stockholders, offering the CEO super high bonuses for excellent triple bottom line performance, and only mediocre bonuses if he delivers only financial profits. Although this could theoretically be done by any board, this kind of approach is institutionalized in B corporations. B corps are legally chartered to guide their decisions by how they impact their employees, community, and the environment as well as their financial bottom line – and to publicly report their performance using established third-party standards. In the United States, B corporations are charted by the states, not the federal government, and only a handful of states have so far created them. Citizen action could change that.
- Support the concept of total corporate responsibility (TCR), a very advanced form of socially responsible investment that calls on corporations to actually take responsibility to fight for changes in policy that will improve the social and environmental responsibility of all corporations like themselves. For example, an automobile company might lobby for regulations requiring the manufacture of higher mileage cars, to reduce overall carbon emissions. This can have more positive environmental impact than if that one company itself produced more high-mileage cars.
Changing corporate and national accounting systems to include social and environmental costs and benefits changes everything about the way the economy functions. It re-channels the powerful self-organizing ‘invisible hand’ of the market away from doing damage towards creating true value.
Liberate “capital” from selfishness
Our new definition of capital opens up new possibilities for valuing activities that we may have assumed existed only outside of capitalism. For example,
- we can support gifting, sharing, bartering, complementary currencies, and cooperative economics as forms of social capital;
- we can support cooperative economics and crowd-sourced finance as forms of human, social, and financial capital;
- we can support individual and community self-reliance, the DIY “maker movement”, and resilient local economies as forms of human, social and technological capital.
All these depend on and enhance trusting, mutually supportive relationships in a community, which is what social capital is all about. Many invoke creative participation, innovation, and individual development, thus enhancing human and technological capital. And new forms of currency, collaborative financing and credit clearing systems generate new forms of financial capital.
Investment in these things reduces the individual alienation, poor community health and waste of human resources that often accompany increasing dependency on multinational corporate markets under the current form of capitalism. Therefore our new wise form of capitalism would see such investments as having a high return.
Wouldn’t it be great to live in a society where a “high return on investment” meant something unequivocally good for everyone?
Capitalism that optimizes power and freedom
Democratize ownership and control of the means of production
There is nothing about the definition of capitalism that says corporate entities and the means of production cannot be owned by workers, consumers, or other associations of private individuals, and run by democratic or other participatory means. In fact, many corporations are. It is only when a company “goes public” that it becomes owned by stockholders. What capitalism does require is that the corporation or other means of production be privately held (that is, not owned by the government) and be used to make a profit.
Since we have now defined profit in terms of full-spectrum capital, that opens the door to the kind of creative engagement and empowerment that were once only discussed in the context of socialism, communism, anarchism, and other anti-capitalist ideological frames. So we find ourselves stepping into the delicious field of possibilities with which we completed the last section: We can now add all those to our ways to make capitalism wiser:
- Support cooperatives, collectives, credit unions, and community-owned utilities, industries and financial institutions.
- Encourage the development and use of peer-to-peer technologies that connect resources with needs — i.e., that connect providers of goods, services, and credit with consumers who need them — even if it is a thousand people each lending a small business $50 or a neighbor two blocks away lending you their lawn mower so you do not have to buy one for yourself.
- Support the do-it-yourself “maker movement” and the development of its related technologies (e.g., 3D printers) that distribute the means of production broadly into private individual and group hands and promise new forms of grassroots local manufacturing.
- Establish and empower public and citizen oversight of corporate activity: Legislate transparency, encourage consumer and stockholder activism, protect whistleblowers, and empower public review of corporate charters.
Limit the economic and political impact of concentrated financial wealth
There are many strategies for this, including these:
- Strengthen anti-trust laws; laws governing political contributions and lobbying; laws against SLAPP suits designed to censor, intimidate and silence critics; and laws governing ownership of media — especially against local media monopolies.
- Provide special avenues for small businesses to exercise collective power in economic and political realms to balance the power of large corporations, including the ability to sue large corporations for unfair or undue economic or political competition that endangers fair market capitalism, fair competition, and fair and free democratic process (after all, we have weight classes in boxing and rules limiting performance-enhancing drugs in football).
- Utilize citizen deliberative councils both for economic and political oversight and to clarify and pass judgment on the complexities involved in weighing what’s “fair” in the previous bullet point.
- Where necessary, get constitutional amendments passed to limit adverse impact of concentrated economic power on the vitality of the country’s economic and political life.
Localize economic activity through enhanced subsidiarity
Subsidiarity is a principle of organization and governance stating that functions should be performed at the lowest level where they can be successfully performed. It is a vision of decentralization that respects the need for some centralization. For example, a community can monitor its own local community supported agriculture programs while letting answerable international bodies manage their planet’s oceans. Subsidiarity also means that the higher levels of governance or economics are subsidiary to the lower levels, which are considered primary.
Certain factors support this bias towards economic localization, among them these:
- Feedback loops are tighter locally. The longer the lines of information and influence, the harder it is — and the longer it takes — to correct things that go wrong. Both political power and commons care are easier to exercise locally than over physical and bureaucratic distances.
- Too much dependence on long supply lines and vast economic systems reduces a community’s ability to respond resiliently to local impacts when those systems are disrupted. Local control, local functioning and local mutual aid build the community fabric — the social capital — needed for resilience.
- Shorter transportation distances reduce fossil fuel use, reduce demand for new roads, reduce use of long-distance refrigeration and preservatives, and lessen other environmentally damaging practices.
- We benefit from familiarity and engagement with the place where we live and with the other lives — both human and non — who live there, and with the material cycles (water, climate, waste, etc.) indigenous to that place. This intimacy produces a grounded, embedded sense of belonging that adds significantly to our quality of life.
Regulate and tax unproductive financial speculation
So much of the concentrated financial wealth and suffering characteristic of contemporary capitalism comes from unwise, economically sterile speculation — what essentially amounts to gambling for private benefit in ways that can harm or be catastrophic for others. Much of the dysfunction of the financial sector can be ameliorated through wisely applied taxation and regulation that prohibit the most egregious, unethical and dangerous practices of financial players.
Promote simple living and provide a social dividend
Modern industrial economies were originally built by creating manufacturing and service jobs for people who were farmers or independent craftspeople and shopkeepers. This move from dependence on neighbors and nature to dependence on money-based (and often corporate) industrial systems undermined local community and self-reliance while building more complex societies and technologies. This social evolution made not having a “job” or getting a living wage a serious problem in an economy where working for someone else has been the source of most people’s livelihood. When one satisfies one’s needs primarily by having money — and other ways of satisfying one’s needs have become increasingly unavailable — getting money becomes the focus of one’s life.
But in our era this money-based, growth-oriented industrial economy is reaching the limits of what it can exploit from natural and human communities — most especially the limits of cheap fossil fuels and environmental degradation. This will lead inevitably to increasing disruption in that exploitive economic formula, stifling GDP growth and raising unemployment.
Significantly, as people lose jobs, two potentially positive developments are happening at once:
a. they have more time, which could be — but not necessarily is being — used to relate to their neighbors, get engaged in their communities and social action, and generate new forms of livelihood and
b. technologies are rapidly emerging that enable more local production (especially the maker movement, distributed renewable energy technologies, and advanced organic agricultural methods) and mutual aid (networking systems for gifting, sharing, barter, co-creativity and niche entrepreneurship).
These developments could potentially coalesce into a rebirth of self-supporting communities emerging in response to economic disruption. This would be a refreshing alternative to desperate impoverishment, techno-fascism, and other undesirable response scenarios.
The prospect of more local, small-scale, networked, do-it-ourselves, “de-jobbed” economies — in which national currencies are only one small resource for meeting people’s needs — is a central part of the vision of wise capitalism described here. And central to such economies is “simple living” consciousness — the realization that the vast majority of our needs can be met with far less money and stuff. We can downshift our material requirements by sharing, repairing, and getting more of our satisfaction from non-material sources —
- from spiritual, intellectual, and emotional learnings and pleasures;
- from companionship and co-created culture, entertainment, food and adventure;
- from deepening our relationship with nature and place; and
- from appreciating more fully what we have, rather than consuming it in a rush or totally forgetting it is even there.
A major bridge from our current situation of scarcity to this healthier scenario is the possibility of a social dividend. The idea of a minimalist “guaranteed income” (e.g., $10,000 per year) available to everyone has been floating around the edges of U.S. political discourse for decades, with pockets of support on both the Left and the Right. Richard Nixon was seriously considering it. In our wise capitalism vision, the social dividend is income given to citizens as their share of the yield from their well-managed and well-cared-for commons. Financing for this could come from a number of sources such as these:
- Taxes and fees like those described below. A commonly cited example is the money each Alaskan currently gets as their share of the fees oil companies pay to extract oil from Alaska.
- Radically downshifting militarism, releasing what some call “the peace dividend”. UN development experts have calculated that most major social problems could be solved using the money that countries — especially the U.S. — spend on their military.
- Reductions in centralized welfare systems made possible by enhanced local mutual aid and community resilience. In many areas the Occupy movement modeled how much homelessness and unemployment could be ameliorated cheaply just by people helping each other out and having places to do that. Furthermore, a guaranteed income would itself be a rationale for reducing welfare, amounting to a simple shift of government funds from one program to another.
- Reducing unnecessary public safety expenses by decriminalizing most drugs and “victimless crimes” and radically curtailing intelligence and surveillance activities. Valid public safety and intelligence goals could be better accomplished more cheaply through more democratic, participatory, open-source approaches.
- Reducing corporate welfare and corruption and reclaiming national and community resources currently being siphoned out of the common treasury by special deals between economic, political and military powers and simple theft by those in positions to get away with it.
A guaranteed income would contribute to making employment fully voluntary, reducing unnecessary consumption and consumerist addictions, and stimulating a renaissance of creative grassroots entrepreneurship and innovation in a newly wise capitalist free market. All that would be quite in addition to making communities far more resilient to economic downturns and other disruptions and freeing them from collaboration with and subjugation to the concentrated economic power of global corporations — a freedom within which a far more vibrant and wealth-generating capitalism would flourish.
Empower public wisdom to innovate and oversee the system
Briefly, the idea is that relatively small groups of ordinary citizens (a few dozen to a few hundred) can generate considerable public wisdom on public policy issues if
- they are randomly selected to embody the diversity of their community or country
- they are adequately informed with briefing materials and expert witnesses that fairly cover the spectrum of public debate about the issue
- they are given adequate time to consider what they are learning and discussing — usually from five to fifty days — after which they disband
- they are well facilitated to hear each other well and come to coherent conclusions together.
To most people’s surprise, this is a proven model. Diverse forms of such “citizen deliberative councils” — citizens juries, citizens assemblies, consensus conferences, planning cells and Creative Insight Councils — have been held hundreds of times around the world. Their “public wisdom” is derived from the fact that their members are diverse (as diverse as their community), the information they are given is diverse (as diverse as the public dialogue) and they interact productively with each other. Their diverse perspectives and information cover the complexity of the issue, and in their deliberative, creative conversations they work through that complexity to find approaches that serve the legitimate interests and deep needs of all involved.
Although our familiar political battles seldom produce wise outcomes, such outcomes frequently emerge from conversations that use diversity creatively. There are theoretical explanations for that, but the important fact is that this approach offers a way to generate public wisdom that can be adapted to virtually any political task, from creating policy to evaluating candidates to examining corporate behavior. The next challenge is to combine this wisdom-generating capacity with crowd-sourced political power so that public wisdom routinely produces dependable positive impacts in the real world.
I see citizen deliberative councils as one of the most potent and trustworthy sources for the kind of wise power we need in order to monitor and moderate corporate power and facilitate the transition to a wiser capitalism that can be a co-creative partner through the turbulent times ahead.
Wise capitalism’s perspective on taxation
Taxes have been mentioned a number of times in the preceding sections. This focus isn’t about “raising taxes.” It is about shifting taxes from penalizing productive economic activity to penalizing economic activity that undermines or endangers the commons. This is an approach to taxes that makes wise capitalistic sense:
- Personal income, inheritance and capital gains taxes would simply be eliminated for at least 95% of the population. Sales taxes on extreme luxuries would join income taxes on the highest income brackets to ameliorate the toxic effects of unanswerable concentrated wealth. This frees productivity from the burden of taxes while increasing the health and stability of the society.
- Financial transactions would be taxed when they do not directly support productive industry or if they actively hinder or endanger that productive capacity. The global casino of currency exchanges, hedge funds, derivatives, credit default swaps, commodities markets, stock trades, etc., would be taxed – especially the ongoing instantaneous computerized transactions such as spot conversions in currency markets – because they use up and concentrate financial capital away from productive economic activity, distort prices and can destabilize entire economies, as we have recently seen. Even minuscule taxes on instantaneous computerized currency trades would reduce their profitability, volume, speed and volatility, thereby stabilizing financial markets. Financial transactions that would not be taxed would include original stock purchases and other loans to and investments in individual and corporate enterprises which support productive economic activity.
- Economic activities that deplete or degrade the commons would be taxed. Obvious examples of this kind of taxation would be “carbon taxes” on fossil fuel use and other non-renewable or toxic power sources, pollution, formerly free or subsidized extraction of minerals and biomass, depletion of topsoil and aquifers, paving over wetlands and farmlands, and disposal of non-recyclable or toxic garbage. The impact of such taxes would be to internalize the environmental and social costs of these activities into the prices of the goods and services they provide, thereby increasing the price of harmful products which, in turn, would inspire purchasers to buy more benign or healthy products in a fully accountable free market.
A thought experiment: Triple bottomline currency
Imagining capitalism being wise requires stepping far out of some familiar boxes. It occurs to me that perhaps we could internalize the social and environmental costs of products and services into money itself — in effect cross-breeding the triple bottom line with traditional currency. What would such a hybrid look like?
Although I would be fascinated if someone actually tried to do this in some small country, I offer it here mostly as an example of the kind of thinking we need — the kind of radical thought experiments which take us into profoundly different economic landscapes and assumptions. So just imagine….
Having three kinds of official dollars — ecodollars, socialdollars, and olddollars – a sort of “triple bottom line” monetary system. The olddollars would be the kind we have now. The ecodollars would be associated with ecologically responsible work and products, and the socialdollars would be associated with socially responsible work and products.
Every product would be rated for its ecological and social responsibility — as many are rated now by various rating systems (e.g., organic or fair trade) — and would normally be purchased with that proportion of the various dollars. For example, if a product had a 30% ecological rating and cost $100, your payment would need to include at least 30 ecodollars.
For a short time while the system was being developed, I imagine all the dollars would be equal and convertible. So during that time they wouldn’t have much impact except on people’s consciousness and relationships. For example, environmentalists would take pride in buying environmentally responsible products with ecodollars, and would use peer pressure to get others to do the same.
However, after a few years — either on a certain date or progressively over a period of time — I am imagining the olddollars would cease to be convertible to the responsible ecodollars and socialdollars, while the responsible dollars would be convertible to olddollars.
That is when the impact would start to bite, because you would be able to buy more things with responsible dollars than with olddollars.
At least for a while longer, socialdollars and ecodollars would be convertible to each other. For example, if something cost $100 and was rated 40% social and 20% eco, you could pay for it all in ecodollars. Still, many people, groups, communities and organizations could be making choices or setting policies that privileged ecodollars or socialdollars. For example, a union might bargain to be paid totally in socialdollars, or a “green” company might only take ecodollars as payment for shares and then pay executive bonuses with ecodollars.
However, at some point the government might stimulate a further shift, altering the convertibility factor to promote social or environmental goals. In other words, if at some time there was a policy reason to especially promote either ecological responsibility or social responsibility, the federal government could say that a certain percentage of your taxes would have to be paid in ecodollars (and/or socialdollars), or that federal contractors would have to pay their employees in ecodollars (and/or social dollars). Or the government might recruit certain businesses to accept ecodollars in payment for socialdollar charges, but not vice versa. The government (or corporations or philanthropists) could give prizes (for races or contests or Pulitzers) in one currency or the other. In an extreme case, the government could mandate a tax on the use of socialdollars (or ecodollars) — so, for example, you would have to pay 22 ecodollars to amount to 20 socialdollars, which would effectively lower the value of ecodollars in relation to socialdollars
As people became aware of the flexibility and potential change in their currency, consumers and corporations would begin seeking a balance of currencies — an effort which would, itself, improve the social and environmental responsibility of the economy as a whole. This balance-seeking would essentially be no different than people who today hedge or balance their investments across levels of probable risk and dependability, as with stocks, bonds, gold, etc. — in the face of fluctuating markets and inflation. But this responsible-dollar version of fluctuation would have a consciously positive impact on the society.
As a side effect, we would then probably see new currency and futures markets emerge around these new currencies!
This would obviously need a lot of computer modeling and experiments to work out the bugs in advance — and a lot of political/economic organizing to make it happen. But it seems to me it would serve to realize that most important of purposes in a wise capitalism: To internalize the social and environmental benefits (and, by contrast, the costs). Its novelty is that it would do this internalization into the currency itself rather than through government taxes and fees on harmful extraction, production and products.
All of this is part of a larger picture.
Evolution is the mother of all change processes: All changes are aspects of that larger evolutionary unfolding. All change agents, whether they know it or not, are manifestations or agents of that larger process which, depending on one’s perspective, is as old as life on earth (about 3.8 billion years) or as old as the universe (about 13.7 billion years). The universe, the earth, life, and humanity have been evolving for a long, long time. There’s considerable wisdom and power latent in that heritage awaiting our attention and application.
In my view, to the extent we are aware of all this and take it seriously in our change efforts, we are evolutionary activists. One of my favorite applications of this understanding is to look to the evolutionary process for lessons about how we might consciously and choicefully do what evolution has been doing relatively unconsciously for those billions of years.
Whether we’re talking about physical evolution, biological evolution or cultural evolution, evolution functions by generating novelty from the interactions of diverse entities in challenging and supportive contexts. Some observers see this as a battle — a “fight for survival” — but it can just as easily be seen as a dance or dialogue. In human life it is all of those things, and we can do all those things more consciously, learning and evolving as we go.
One of the things evolution does most persistently is make increasingly complex entities and systems out of simpler entities and systems. The simpler things — subatomic particles, atoms, molecules, cells, organisms, words — remain, but each becomes raw material for the next bit of complexity to weave itself out of – we are talking ecosystems, human brains, global networks, Wikipedias and biospheres.
Significantly, one of the main methods evolution uses to accomplish this miracle of elegant emergent complexity is to set things up so that the self-interest of the parts (the simple entities) gets aligned to the wellbeing of the whole (the complex entity they are part of). Sometimes the simple entities remain quite capable of independent existence, and sometimes they become so immersed in their role in the whole that they lose their independence. Their meaning and function become totally dependent on being a participant. But the whole only comes into being to the extent its parts-to-be have the motivation and the capacity to meet their needs in the context of the whole and its ongoing success in life.
At this stage of human evolution we, as parts, face a challenge of weaving nature, humanity, and technology into a coherent, healthy, sustainable global whole — a planet-sized organism, if you will. Much of today’s activism is about developing the networks, tools, rules, consciousness and other means to enable (or pressure) people, countries, corporations, and other entities to actively participate in this weaving process and pursue their self-interest in the context of this vital sustainable planetary whole. Much of what I have written here is part of that project — perhaps most notably the internalization of social and environmental costs into the prices of goods and services. That systemic change creates a market — a challenging and supportive context — within which diverse people and corporations, by simply interacting according to their individual self-interest, heal the planet and make a good society.
Some say that when people or corporations pursue their self-interest without regard to the health of the planet, they are like a cancer growing in a human body, a metastasizing growth that can kill that body. This is a useful metaphor with much truth in it — a truth painfully present in the jets-eye view of a sprawling, smoking skyscraper-concrete-ghetto-mall-industrial-suburban megalopolis expanding into the succumbing farmlands and forests.
However, nature offers a bigger truth about extreme growth that we would be wise to keep in mind: Rapid growth ends in transformation. Let us consider a specific example, close to home. In human life we see two periods of rapid, intense growth: Birth and adolescence. For obvious reasons, the baby has to stop growing in the womb and the youth has to wrap up his or her adolescent growth surge. But there is more to it: They do not simply stop growing — they transition into a whole new stage of life. When babies hit a point it their growth, they are born. When adolescents hit a point in their growth, they shift into adulthood. The end of growth is not death, but transition into a new state — a transformation.
Our economy’s GNP — and profit-driven growth — which played such a potent and often positive role in our specie’s evolution — has brought us to a stage where a new civilization needs to be born — or our current civilization needs to mature into adulthood — or our systems need to shift into some new mode of being — a mode where the self-interest of people and corporations meshes with the wellbeing of the whole earth.
As conscious evolutionary agents who have the accumulated experience and energy of billions of years of evolving stars and sentient lives built into the very atoms and cells of our 21st century body-minds — what can we now learn about our mission and purpose in this remarkable time in our species’ evolution? Who do we have to be, newly, now?
The Occupy movement
The Occupy movement did not come out of nowhere. It is a manifestation of the needs and energies of our times.
So I always feel a bit odd and somewhat misguided when I or someone else suggests what the Occupy movement “should” do. Occupy is an emergent phenomenon finding its own myriad paths in its own organic way, in many ways pioneering the social DNA of a new civilization while being grounded in humanity’s most ancient cultural DNA. It is a distributed, self-organizing learning community evolving through passion, mutual aid, and experiments in collective intelligence and wisdom.
(As an aside, the Occupy movement fascinates me in how it is almost more a process than an event or even a movement. It continually morphs and shows little sign of “stopping”. It seems intrinsically evolutionary, ongoing…)
In the face of the aforementioned oddness I feel whenever I presume to advise the Occupy movement, I remind myself that Occupy arose out of us and our times. There is a sense in which we are all part of it, stretching from the 99% to the 1%. Anything we say about Occupy — or about any other social issue or phenomenon — is, in a very real sense, a part of the Occupy movement. When we speak out we are occupying our role as engaged citizens, being members of our world together. We are all emergent phenomena of the unfolding, urgent evolutionary process, occupying our way into the future.
So into this fertile soil, this bubbling pot of evolutionary possibilities, I offer a perspective that makes sense to me, in the spirit of invitation, possibility, and conversation — one more diverse entity tumbling in this supportive and challenging context of our mutual evolution.
The perspective I want to offer is an evolving systems perspective. I want to note the way evolving systems shape the consciousness and behaviors of the entities that live in them and make them up. For us humans in this time, I would like to suggest that our political, governance, and economic systems are particularly potent shapers of human thought, behavior, and response. By “systems” here I mean the way things are set up that shape our relationships, our interactions, our decisions, and the stories we tell ourselves and each other, stories that are embedded in the roles we play and the institutions and rituals through which we play those roles.
To block the clearcut and the eviction, to help the homeless and the marginalized as part of our publicly visible community, to make our decisions only when we all agree — these actions challenge some of our society’s fundamental stories while simultaneously serving and protecting life. These are profoundly positive efforts.
At the same time I invite us all to note that the harms, suffering and destruction we see around us — the evils that we protest — do not happen so much because of evil people as because of systems blind to their larger impacts, systems whose functioning does something else than heal, protect, enhance and meet the deepest needs and aspirations of life. I join those who point out that we need different systems, evolved systems, wise systems. I honor those who have the courage to publicly critique the system of capitalism — while I urge them to move beyond protest to co-create what is trying to be born at the whole-system level.
So I offer this essay in particular to the thousands of occupiers around the world. I offer it as an opportunity to consider what it would mean to help create the wiser systems we so desperately need. I know most occupiers will not cease their protest and resistance, and that is as it should be, and very urgently needed. But in and around the far-flung occupations are those who are not satisfied with protest, resistance, and serving those who have been degraded and neglected by our existing systems. There are those who aspire to design and realize the trimtab shifts that will cause the larger society to alter its course in increasingly life-serving directions — not because everyone saw the light, but simply because things are set up differently, and this new way is the way we each make it through life. We will go in a different direction because the ship we are on is going in a different direction. We will live more sustainably and justly because that is what everyone else is doing and it is much cheaper and easier to live that way.
Because, as evolutionary agents, we are capable of envisioning a capitalism that is no longer a burden to the world and future generations because it has become wise and would not even think of making a buck off the suffering of some person or the destruction of some ecosystem, because there just isn’t profit in it any more.
References for further study
Anielski, Mark. The Economics of Happiness: Building Genuine Wealth (New Society Publishers, 2007)
Atlee, Tom. “Using Citizen Deliberative Councils to Make Democracy More Potent and Awake” (Nov 2003), downloaded April 22, 2012 from http://co-intelligence.org/CDCUsesAndPotency.html
Atlee, Tom. The Tao of Democracy: Using Co-Intelligence to Create a World that Works for All (Writers Collective, 2003)
Atlee, Tom. Reflections on Evolutionary Activism: Essays, Poems and Prayers from an Emerging Field of Sacred Social Change (CreateSpace, 2009)
Atlee, Tom. Empowering Public Wisdom: A Practical Vision of Citizen-Led Politics (North Atlantic Books, Evolver Editions, forthcoming Aug 2012)
Benkler, Yochai. The Penguin and the Leviathan: How Cooperation Triumphs Over Self-Interest (Crown Business, 2011)
Cortese, Amy. Locavesting: The Revolution in Local Investing and How to Profit From It (John Wiley and Sons, 2011).
Eisenstein, Charles. Sacred Economics: Money, Gift and Society in the Age of Transition (Evolver Editions, 2011).
Hawken, Paul, Amory Lovins and L. Hunter Lovins. Natural Capitalism: Creating the Next Industrial Revolution (Little, Brown and Company, 1999)
Hopkins, Rob. The Transition Companion: Making your community more resilient in uncertain times (Chelsea Green, 2011)
Korten, David. Agenda for a New Economy: From Phantom Wealth to Real Wealth (Berrett-Koehler, 2010)
Lawton, Kevin and Dan Marom. The Crowdfunding Revolution: Social Networking Meets Venture Financing (Self-published, 2010)
“More than just digital quilting: Technology and society: The ‘maker’ movement could change how science is taught and boost innovation. It may even herald a new industrial revolution.” Technology Quarterly (4th Quarter 2011), downloaded April 22, 2012: http://www.economist.com/node/21540392
[Thank you Tom for this contribution despite the many challenges in-between]
The writer is founder and research director of the Co-Intelligence Institute www.co-intelligence.org. He is author of The Tao of Democracy, Reflections on Evolutionary Activism, and the forthcoming Empowering Public Wisdom (Aug 2012). He explores how we might help our political and economic systems evolve into catalysts for collective intelligence and wisdom.
If publishing or re-posting this article kindly use the entire piece, credit the writer and this website: Philosophers for Change, philoforchange.wordpress.com. Thanks for your support.