This is one of the foundations of my sabbatical. I have three months exploring how we can create systemic change in business for a sustainable future. This post gives my naively simple starting point on the political economy we need.
First a step back, why am I thinking about ‘political economy’ anyway? Well, after 13 years at Forum for the Future and 2 years as a Policy Fellow at the Centre for Science and Policy at the University of Cambridge, it is clear to me that we cannot rely on ‘business-as-usual’ to get to a sustainable future. There are patches of great effort and potential, but I don’t think they will scale with the urgency we need.
As much as I think business has a role to play, we cannot be dependent on charismatic CEOs and the usual suspects. We need to change the enabling conditions for business — and others — so that all are playing their part in creating a sustainable future.
Therefore I find myself drawn to a deep question: What is the political economy we need for a sustainable future? By ‘political economy’ I mean the way we organise ourselves in society — the interplay of economics, law, politics and more that set the operating context for individuals and organisations, and are expressions of dominant beliefs in society.
Over the coming 3 months I’ll be investigating what new political economies are emerging in the domains of climate change, innovation policy, the digital revolution, and the narrative for business.
But before I got too deep into that, I wanted to articulate what I thought so far. From several decades of reading and practice, what would I guess is the political economy we need?
So, what follows is my starting point for the rest of the sabbatical. I call it naively simple because I hope to start here, go through some mess, and then end up with something profoundly simple. So, the below is definitely ‘wrong’, but it still is the best summation I can pull together of what i think (and what i think others think) right now. The next few months will be about testing, sharpening and improving.
The political economy today.
One part of this has to be what I think is the political economy today. Now, there is lots of variation, but I think the there is s set of beliefs that have been dominant. According to David Harvey these have been critical in the US, the UK, China and elsewhere since the mid-70s. He — a Marxist — calls them ‘neoliberalism’. John Kay — an economist who is a commentator in the Financial Times and absolutely not a Marxist- critiques the American Business Model. But they are talking about pretty much the same thing, with these core beliefs (here following John Kay in The Truth about Markets):
- Greed is overwhelmingly the most important reservation in economic affairs
- You should impose as few restrictions and limitations as possible in the operation of markets
- A successful business needs a minimal state
- There is an overriding need for low taxation
The political economy we need for a sustainable future (naively simple version)
Below I put the simplest version I can in one place. I haven’t put all the references, you can see a bibliography at the bottom. I’ve chosen to structure it according to Donella Meadows ‘Leverage Points — places to intervene in a system’. I had thought that would make it easier, but playing around with it all today, I’m not so sure. Anyway, here goes
Let’s unpack that just a little, shall we?
Paradigm — the mindset out of which everything else arises
- People are complex and should be give the chance to flourish in their own way, without impairing others chance to flourish, now or in the future. Therefore, we should act so the following are true:
- Ensure people have the capabilities they need to make their own choices.
- All fundamental needs are met
- Avoid concentrations of power that crowd-out chance for others to flourish
- Have diverse ways of flourishing, to avoid being reliant on accumulation of material things for as everyone and anyone’s goal.
- Economic growth as a means which allows more people to have more ways to flourish.
- Complexity worldview: our world is systemic, path-dependent, sensitive to context, emergent and episodic. Therefore, we should act so the following are true:
- A stoic attitude: seeing change and shocks as inevitable challenges to rise to.
- Be long-term: our intentions, methods and outputs now will effect on flourishing of future generations
- A systemic understanding: history and the pattern of relationships are better ways to understand what’s happening than looking at individual elements of the whole..
- A proactive learning stance: long-term success more possible from failing fast and cheap, loving the insights that gives, and applying them to do things better, do better things and choose a new ‘better’.
- We are part of the natural world (not separate to it), and we are dependent on it. Therefore, we should act so the following are true:
- Model, and be inspired by, natural processes, whether on the ‘human-rest of nature’ interface or within the human sphere.
- Interdependences and interconnections between individuals, their local context and the world Some call this empathy, or compassion or love.
- Competition is only part. There are important limits to what can be achieved through competition or everyone trying to ‘win’.
Goal — the purpose of function of the system
- Meet the needs of the current generation without compromising the ability of future generations to meet their own needs.
Self-organisation — the power to add, change or evolve system structure
- Social technologies’ that have a track record that deserves of our trust. Therefore, we should act so the following are true:
- SDG16. Institutions — Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- SDG17. Sustainability — Strengthen the means of implementation and revitalize the global partnership for sustainable development
- People who have the skills to act. Therefore, we should act so the following are true:
- There are sufficient creative and critical thinkers
- Organise for experimentation and change. Therefore, we should act so the following are true:
- Look to learn and adapt as you go: 1. go slowly at first; 2. try things out; 3. collect results and welcome them either way; 4. act on the insights to do things better; do things better; choose a new better.
- Allow for customisation so we can reach common goals in local circumstances
- Build readiness in: create situations that benefit from shocks and variability.
- Avoid collapse by preventing rigidity: open up new and different channels through which we can change incumbents and power structures
- Apply evolution and other natural processes through markets and more. Therefore, we should act so the following are true:
- Use markets where they can accelerate evolutionary progress (variation, selection and amplification)
- Diversity of approaches: sometime better to start small, or have a portfolio of options,
- Allow variability now rather than be overwhelmed by shocks later. Support risk-takers now (rather than be overwhelmed.
- Requisite variety: Organise for functional redundancy not for efficiency
- Circular economy: the waste from one process in the human sphere is food for another process (whether in the human sphere or in the rest of the natural world).
I know this is wrong. I know it needs to be better. There’s so much more in my head, but I can’t quite get it out right. And I’ll spend the next 3 months on this.
But I would be delighted to hear from you, if you have thoughts, ideas, improvements, disagreements, agreements or whatever. Just comment below and I will get back to you (unless you’re a troll, but you know what I mean).
Beinhocker — The Origin of Wealth
Boulton, Allen and Bowman — Embracing Complexity
Meadows, Randers, Meadows — Limits to Growth 30 year update
Porritt — The World We Made
Taleb — AntiFragile
Forum for the Future — Sustainable Economy Framework
Forum for the Future — EU Innovate scenarios and analysis (not published yet)
Note: this post has been updated to make it slightly (!) easier to read. None of the content has changed.