Category Archives: political economy

Video: Industrial Strategy for a Sustainable World (April 2017)

Back in April I did a two hour session for London Futurists, a group for people who are interested in the future and maybe want to help shape it.  David Wood, the smartphone entrepreneur who runs the group, asked me to run a session.

For me it was a chance to try out my latest thoughts on industrial strategy for a sustainable world. I speak for about an hour, and then there’s another hour of questions.

In a nutshell, the talk gives a wireframe which I believe you can use to organise all of the economic elements of the transition to a sustainable world. You can look at the slides here.

Doubtless the talk is wrong about lots of stuff – my aim was to be wrong in useful ways!

I’ve had lots of feedback from the people at the talk, and others to whom I’ve given (shorter) versions. I’d love your thoughts too. Please comment below or get in touch in the normal way.

It’s clearly a work-in-progress but so far people have been finding it useful, especially to see how their work is a contribution to the wider change.

Even so, I know it is far from the finished article. I’ve had thoughts since on where to improve and where to pivot. These will have to wait for another post! In the meantime, enjoy the talk and thank you again to David Wood for giving me the chance.

 

Book review: Alex Evans’ The Myth Gap is brilliant, prompting big questions on how to transition to #sustainability

Alex Evans new book, The Myth Gap, argues that, to address the challenges of sustainability, we need to go beyond technicalities to the very stories we tell ourselves about ourselves. It’s brilliant, urgent, timely. We definitely do need global constellation of myths of a larger us, a longer now and a different ‘good life’ which together shift our collective values base.

But missing for me was the waft and weave of the practice of acting on the ‘myth gap’. How can we learn from experiences of people who’ve already been trying? How else might we generate the stories we reach for to explain the transition we’re facing, especially without requiring a globally agreed assembly of myths or using stories which rely on deadening destinations? 

“People think that stories are shaped by people. In fact, it’s the other way around” Terry Pratchett, quoted approvingly in The Myth Gap.

For the last decade or so, anyone who wants a progressive but clear-sighted view on development and international relations could do worse than read Global Dashboard. One of its founders, Alex Evans, has been an active practitioner in development as a New Labour special advisor to DfID, in international policy setting with as a secondee into UN Secretary General’s office and an academic too. He also co-wrote the super, short think piece ‘Towards a Just and Sustainable Economy’ – one of the best summaries I’ve read.

So I was excited to learn he’d written a book. This review starts by outlining Evans’ arguments, the why, what and how of the myth gap – most of which I basically agree with. But I found that there were more areas to explore, which I cover in the final section.

“On one hand, we’re poised right on the cusp of a genuinely global us – with a global social media network, a global library of knowledge, a global economy, global  governance institutions, a global sense of who we are. On the other hand, we’re also on the verge of an unprecedented  disaster in which we allow climate change – or other areas… – where our technological know-how risks surpassing our ability to use technology wisely….And, while I’m basically optimistic, an extremely bleak outcome is obviously possible…The single factor that will do most to decide how we fare, as we face this test, may ultimately be which stories –  myths –  we reach for to explain the transition we’re facing.

Continue reading

Individuals, stepping out of patterns

Yesterday day I had the fortune of speaking with three people who are agents for a sustainable world. Although I didn’t plan it, and they are all coming from different directions, there is a connection. All three believe that acting so that many individuals can make their own choices is a good thing for the world. Continue reading

#RedefiningProsperity: Persevere or Pivot?

Last night’s Centre for Understanding Sustainable Prosperity (CUSP) dialogue on Redefining Prosperity forced me to ask: should we presevere with our change strategy to date, or should we pivot to a new approach? The decades of self-declared failure of expert-led change tells me we need to pivot. If you have policy proposals, but no means to have them implemented, then you don’t have a transition roadmap. Let’s use those expert insights in a wider social and political process of imagining a tomorrow which is nourishing for all.

The tragedy of expert-led change
Jorgen Randers is amazing. He was part of the original Club of Rome team who wrote Limits to Growth all the way back in 1972. He’s spent decades using systems approaches to create brilliant insights. We all owe him a deep debt of gratitude for his work and efforts. But he is at the heart of a tragedy for us all.

His most famous work is the original Limits to Growth itself. Graeme Maxton, the current Secretary General of The Club of Rome, pointed out last night two crucial features of that report. First, the trend lines match the ‘main sequence’ prediction made all those years ago – a main sequence which has system collapse from poison of pollution in the 2030-40s.

Second, he emphasised again that they said there is a limit to the growth in the ecological footprint of human civilisation. Too often they were accused of saying there are limits to economic growth. What matters is not the increase in the value of market transactions but the increase in throughput of energy and materials. There’s a limit to how much our one planet can provide as raw materials and – much, much more importantly – absorb as pollution and waste. (We’ll run out of climate before we run out of fossil fuels, for instance.)

Our problem is that the economic growth we have at the moment does indeed also increase the ecological footprint. In principle you might have a growing financial value of activity with a reducing volume of resource use, pollution, waste and emissions. In practice, that’s not the world economy we have. (I’ve discussed this in a previous blog.) Also, Maxton claims the type of economic growth we have now does not reduce inequality or extreme poverty. The latter is controversial. World Bank figures show extreme poverty going down. Maxton’s claim is that, if you add inflation to the extreme poverty threshold then the proportion in the world has gone up.

Then Randers shared his experiences working for decades on policy proposals that would work, if only people put them into practice. He was candid that he had failed. He had proposals that would cost Norwegians – rich Norwegians, who’ve had 2 generations of free education and free healthcare – a mere £150 a year to put the country on a sustainable path. Still, people rejected them.

Randers’ and Maxton’s solution is to come up with better recommendations, ones which do give short-term benefit and politicians should be able to sell, in their new book Reinventing Prosperity. They persevered with their change strategy.

Here are the recommendations, the sustainability transition roadmap for a developed world nation, which they say will cost about 1% of GDP per year for 20 years:

  1. Implement green stimulus packages financed with freshly printed money – pay people to produce a better environment.
  2. Pay workers while they are moving from a dirty to clean jobs – reduce resistance to greener economy.
  3. Pay people who takes care of others at home – reduce burden on public nursing homes.
  4. Restrict trade when needed to protect jobs – keep jobs even if it lowers owners’ profits.
  5. Tax fossil fuel at source, and redistribute the tax money in equal amounts to all citizens – transfer income from those who use lots of fossil fuel to those who use little fossil fuel.
  6. Tax crop and rich – transfer income from rich and poor.
  7. increase inheritance tax – ditto.
  8. Increase pension age – help elderly maintain an income.
  9. Encourage unionisation – increase wages [through greater bargaining power] and reduce owners’ profits.
  10. Shift taxes from income to resource use – reduce tax on work and increase on gasoline and electricity.
  11. Legislate more compulsory vacation – increase leisure, reduce stress, share paid work with more people.
  12. Introduce a guaranteed lovable income from everyone who needs it (below a minimum level) – increase people’s control over their lives.
  13. Pay women to have 1 child or less – increase temptation to have a small family.

Solved, right? Because these do feel like proposals which, if you implemented them, would make a significant difference. Well, not so fast. If you have policy proposals, but no means to have them implemented, then you don’t have a roadmap. You have ideas with nowhere to go.

By persevering, Randers and Maxton have assumed that this is primarily a technical challenge: how can we, as experts, come up with better proposals that others, non-experts, should just accept?

What didn’t occur to them was to speak to the people who kept rejecting the ‘obvious’ policy proposals. It didn’t occur to them that our situation might primarily be a political challenge: how can we, as experts, work with others, non-experts, to create a sustainable future? How can we have a political narrative that gives us all a role in that search?

It didn’t occur to them there might be another way, or that persevering with a failed change model will lead to more failure. Or that acting like technocrats who can just impose solutions actually undermines the trust people have in institutions, and is part of why “people have had enough of experts”. That the way they were acting might be part of the problem.

It didn’t occur to them to pivot. And that is a tragedy for us all.

The audacity of hope
Fortunately the other speaker was former Archbishop of Canterbury Rowan Williams. His perspective was a mediation on the audacity of hope.

For Williams, to prosper is to believe that tomorrow could be nourishing for you and those you care about. Hope is the degree of confidence that I can look forward honestly but without panic. It is not like optimism, re-describing the world in the best possible terms. Instead, Williams’ hope refuses to ignore the world as it is and refuses to accept it must stay the same. This side-steps some of the challenges from Dark Mountain or John Foster’s After Sustainability critique that hope sweeps the bad news under the carpet.

The claim is we need the sense of a tomorrow that’s not empty and not threatening, for ourselves and the lives of others we can imagine. So, for Williams, any project redefining prosperity is a project on imagination: “what sort of imagination do we need in our world today to have hope?”

What if prosperity was about learning how to inhabit our world, including our imaginative world, in tune with the rhythms that are around us, with boundless curiosity and brutal honesty?

Crucial for Williams is imaging others in the future we construct for ourselves, and also imagining with others that future we might share. In this telling, redefining prosperity is a collective, creative act.

He had much more, but this is the flavour. When placed against the decades of failure of an expert-drive technocratic approach, then I hear it as a call to pivot.

As he said, “we are not going to be looked on with gratitude. We are not going to honoured ancestors, the way we are going.” It is our responsibility to change the things with our control – essentially, our way of being and how we try to put change into practice – so we can look our descendants in the eye and say we tried.
It’s not easy to pivot…
Now, I’m not saying it is easy to pivot. Especially when you have spent a lifetime inventing and perfecting specific tools and habits of thought. The Club of Rome is very much in the ‘hard systems’ school: it is possible to perfectly describe a system, and come up with the right solutions. What matters is studying the system. The contrast is with ‘soft systems’ school, which says one’s understanding of the situation depends on your perspective (no perfectly objective God-like view) and any proposed solutions are partial and contingent. What matters is testing your understanding of the system through action with others.

With that background, it’s easy to understand why Randers was tempted to call democracy a stupid approach to decision-making (he didn’t quite say that, he did say “shall we call it stupid?”). Also, one can see why the Chinese government – run, as it is, by engineers – gets Randers approval for just getting on with the right policies.

And I’m also not saying I agree with all that Williams said. His notion of imagining others in our personal future rather begs the question: which ‘others’? Others I am related to? Others I know personally? Others who I culturally identify with (and usually of the same race, nationality and class)? All others today? All others, including those as-yet-unborn?

While I might think it crucial we go for the widest notion of ‘others’, what appeal does that have for someone with a narrow version of ‘others’? Why should they draw their circle of concern (to use Peter Singer’s phrase) as wide as Rowan Williams does, or as wide as I think they should?

…but that’s what’s needed.
What I am saying is that persevering with a technocratic approach hasn’t worked. In a world where people have voted for Brexit and Trump, it’s not good enough to keep on saying they should accept our proposals.

Instead, let’s use those insights in a wider social and political process of imagining a tomorrow which is nourishing for all.

Bending the curve on climate change

David Bent writes about the four seminar series, run by Centre for Science and Policy and convened with Prof Charles Kennel. 

Through February and March I made my way to Christ’s College Cambridge on four evenings to hear the latest on climate change, the science, the politics and the possibilities. Suitably, the evenings got lighter as the series went along. Here are some of the highlights, with a particular focus on the final panel session which focussed on the role of universities, along with some reflections of my own.

It was possible to put the insights from the first three seminars into three buckets: the science; the Paris Agreement; and things to do.


The science is evermore certain and frightening.
Dr Emily Shuckburgh of British Antarctic Survey told us that there has been a dramatic increase in risk of impactful events due to climate change already observed , and there is a possibility that catastrophic changes already underway. The Paris Agreement talks of “holding the increase in global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. Dr Shuckburgh’s view was that 1.5°C might not be impossible (but might be) . (It has to be said other voices from the floor were more pessimistic on this). Either way, the timeline is tight even for keeping well below 2°C, and will involve accepting unavoidable impacts, trade-offs and unintended consequences. We should “throw the kitchen sink” at the problem.


The Paris Agreement is not enough, but is different in interesting ways from the past.
In the view of Dr Joanna Depledge of the Department of Politics and International Studies , the agreement will not save the world, whatever the closing rhetoric. Nevertheless, pursuing efforts for 1.5C was a big surprise, and an indication of a shift in attitude from key negotiators. The US, India and China all made an effort (in their different ways) to make sure an agreement was made.

This was part of a changed the “storyline”, with a common global endeavour (compared with North/South blame game) that looks to the future, not the past and which sees climate change as an opportunity to pursue in cross-sectoral partnership, not just a burden for governments to intervene on. There were many more ‘coalitions of the willing’, and the business voice in particular was pushing for action, rather than inaction.

Dr Richard Fraser of the Department of Social Anthropology was able to study Paris negotiations as an ethnographer. Amongst other observations, he spoke of it as a cultural event, where people drawn from many different constituencies from across the world created shared imaginary communities together that were global, and gave the participants a sense of control and optimism. The way he told it, such magical thinking is a positive thing.

Prof Charlie Kennel hopes the COP process will be to the 21st century what the world fairs were for the 19th century: events that both demonstrate and are signals of the world that we want to create, and the future to come.


There are many things to do; we heard three types.

– Change how we do policy analysis to focus on worst-cases. Simon Sharp of the Foreign and Commonwealth Office spoke of his work shift the focus from the average prediction to the worst-case scenario, as it is accepted practise in policy circles to avoid that worst case. He had worked with others to create a report of climate risks exactly to move policy maker attention to that consideration.

– Galvanise the diverse abilities of a large institutions. Prof Kennel described the University of California’s approach. After a period of analysis and deliberation, UC has chosen 10 pragmatic, scalable solutions under the banner ‘bending the curve’. All of these can be implemented immediately and expanded rapidly. They will clean our air and keep global warming under 2 degrees Celsius and, at the same time, provide breathing room for the world to fully transition to carbon neutrality in the coming decades. These ten cover science, economics and more and so draw on the research and development skills from across the whole university.

– Changing how we design and run infrastructure and buildings. Prof Ian Leslie spoke of Smart Buildings, where, amongst other things, the internet of Things would be a profound disruptor of the status quo. Prof Paul Linden described redesigning cities so there was more mixing of green and blue (e.g. parks and canals), reducing the heat that surrounds buildings. The buildings themselves should be redesigned to allow for free flow of air, rather than boxing in the heat form people and their machines and then needing to expend energy to take that heat away.

When it comes to universities, the final session looked at two questions. What is the responsibility of universities, given the societal transformations required to bend the curve on climate? How can Cambridge itself should leadership among universities?

Prof Kennel took us through the relevant history of the University of California, and especially the Scripps Institute of Oceanography that he used to lead. It’s a story of discoveries, such as the realisation oceans don’t absorb as much CO2 as had been thought, and of using those insights to equip students, such as future Vice President Al Gore, and to push climate change up the political agenda. The most recent staging post is the ten scalable solutions mentioned above. The message: addressing climate change is what universities do, as part of understanding the world.

Polly Courtis of the Cambridge Institute for Sustainability Leadership spoke of her experiences being on the interface between the university and industry. For her there are three opportunities. First is what we teach, to make sure all graduates have a basic awareness and to weave these big issues into any executive or business education. Second, is how we collaborate with business, so that the problems that companies are facing can become of interest to academics. Third, is how the university helps to envision the future, by giving the windows of discourse that describe what is needed.

Lord Rees looked for scalability and multiplier effect. He believes that Cambridge has been very successful in innovation, so it should lead the way of clean energy. let’s speed the transition to a low carbon economy by making the costs of production competitive with incumbent energy generation. The other role is to keep it on the political agenda, through education and by making the issues prominent in politicians’ inboxes.

Questions from the floor teased at many of these points. Is it only technological innovation, or is there a need to help diffusion of market-ready technologies and pushing priorities on social change? Could there be a foundation course for all students on sustainability? Should colleges and the university divest their endowments out of fossil fuel assets? How important is it for the university to put its own house in order?

The big picture was that universities are places for ‘big thinking’, as the UC story proves. The square miles around Cambridge have been amongst the most effective in the world over the last few centuries on innovation. So, there’s a clear role accelerating the clean energy revolution. But that needs more than just invention, it needs commercialisation and diffusion too. The final word from a panelist was for Cambridge to make climate change a ‘red thread’ that goes through the activities of the institution.


Final reflections

As someone who attended all of the seminars I had some other reflections.

In 1997 I distinctly remember my atmospheric physics seminar when the lecturer said that “climate change is happening”. Through my work at Forum for the Future I’ve tried to get companies to act on that science, a minor part compared to others’ efforts on many levels. Even so, few would say we have acted at the pace or scale required so far. It is not fanciful to say that that runaway climate change is possible, and could degrade the foundations on which global civilisation sits.

The seminars reinforced for me the observation that climate change is a such a profound problem because it sits in the blindspot of our current way of doing things. Cognitively, economically, politically we respond quickly to things that are immediate and obvious. The effects of climate change are diffuse and long-term, the causality of any one climate event tangled, the response required complicated. Problems that we can solve with our current way of doing things get solved; those that we cannot solve remain.

 

So, if climate change could be addressed by individual choices in free markets framed by stand-off governments, then we would have done it by now. My conclusion is that we need to change how we arrange the interplay of economics, law, politics and more that set the operating context for individuals and organisations, and that are expressions of dominant beliefs in society. In short, we need to change our current political economy.

It seems likely to me that the best of the responses to climate change can be the seeds of that new political economy, and will be used to address other public policy questions. If we find that government-business alliances can drive the technological innovation we need on renewable energy, say, then we’re likely to use the same vehicles for water, biodiversity and social questions too. As it happens, since the seminar series, Michael Jacobs of the Grantham Institute has written about how civil society created the Paris climate agreement. He argues a similar point: the Paris Agreement set in train a process where, by tackling climate change, we can change capitalism.

The implication is that we have the agency to act, today, in ways that can develop and scale the best of the responses to climate change to craft the political economy we need for a sustainable economy. We should expect those responses to challenge one or more fundamental assumptions about how things are done, whether that’s ‘market incentives can solve all problems’, or ‘governments only provide framing conditions’.

Finally, I was struck by how important universities are incubating the ideas that can create the world we need. In the conversations around the seminars it is clear many people are doing brilliant work in their fields, from the scientific like fluid dynamics through to an anthropological understanding of the global social process. There was enthusiasm, there was deep knowledge.

It all points to the strong, positive role that a world-leading university can play in that transition to a safe climate. In the desperate situation we are in, I hope that any and all universities can find their own way to ‘throw the kitchen sink’ at the problem.

Can addressing the productivity crisis address ‘limits to growth’?

Earlier this week I was at the launch of the All Party Parliamentary Group on Limits to Growth. Its mere existence is a sign that the subject is no longer taboo. I left with worries – will it get lost in defining terms? how will it get credibility beyond the usual suspects? are we trapped? – and one big hope. There’s a tantalising prospect that solving the productivity puzzle might tickle the Treasury’s fancy, and require a shift to a sustainable soci-technological basis. 
 
Let’s start with Prof Tim Jackson’s very useful summary of where the limits to growth debate has got to, and then move on to the wider reflections.

Tim Jackson and Robin Webster had written a short report called Limits Revisited for the launch, which considered the limits to growth debate some 44 years after the original Club of Rome report. It has three ways that limits to growth is relevant to today.

1. Resource constraints. The original argument is that, as resources are used up, there is ever-extra effort to get hold of what you need, which has a lower quality anyway. You find yourself over-allocating productive resources to getting more resources, rather than into new or different resources. Economic collapse comes when you can no longer get at the quality resources you need at a level of effort you can sustain. The report talks of oil and minerals.

I’ve always found this an under-whelming argument, and still do. Fundamentally, yes, the Earth is not an infinite source. But this is the sort of threat that our current system should be able to respond to, though doubtless with much pain for incumbent companies and dependent countries. Past oil shocks have been because producers wanted to constrain supply deliberately or we were constrained by refining capacity, not running out of oil. Rising prices pushed people to use more efficiently (e.g. shift in car sizes), invest in expanding processing capacity, invent ways of extracting previously too-hard sources (e.g. shale gas), look elsewhere (e.g. the Arctic), or find substitutes (e.g. move to solar). The Simon-Ehrlich Wager shows we cope.

Also, thinking in terms of traction, this is a non-starter. Some people have been saying “we’ll run out of X material in Y years” for decades, and have a record of being wrong. The original Limits to Growth Report wasn’t guilty of that, and said these effects start in 50-100 years time. But I think this angle, for better or worse, is discredited.

2.Planetary boundaries.  We cannot treat the Earth as an infinite sink. We’ll run out of the ability to deal with pollution and waste before we run out of stuff to turn into pollution or waste. The key example is the greenhouse gas effect. We’re releasing more greenhouse gases than the climate can handle. Result: temperature rises and, potentially, runaway climate change.

For me, this is the scary one because there are no price signals until the impacts hit the economy, by which time it is too late. My memory of the 30 year update of the original Club of Rome report, has soil erosion as the key cause of collapse. The increase in food production uses the soil faster than it can regenerate, and pollution erodes it even further. This fundamentally reduces the scale and quality of food production possible, and so reduces the scale and complexity of global civilisation that is possible.

3. Secular stagnation. This did not feature in the original report, and has come to prominence from mainstream economics in the last few years. One part of this says that growth since the 1990s relied on borrowing, which popped so spectacularly in 2007. Another part says that in the past there were General Purpose Technologies (GPTs) like steam, electricity and internal combustion engine, which increased labour productivity and therefore growth. These have run their course and there are no new ones to replace them. That’s why labour productivity has been going downing the US and UK, why wages stagnated, why people had to borrow to increase their standard of living. The emerging technologies might even decouple economic activity from jobs, which then undermines a broad mass of people having wages with which to buy stuff. We may be going ‘post-growth’.

This where I think there is juice. I was at a Cabinet Office event last year on the Future of Productivity. The all-powerful Treasury is worried about where productivity is going to come from, are most Western governments. So, addressing this challenge at least stands a chance of being heard, while the other two just bounce off people’s cognitive frames (regardless of evidence that the planet is not an infinite source or sink).

There are two explanations in play. The lesser, but still useful, is that we’re measuring the wrong thing. GDP is calculated from the financial value of transactions in the formal economy. Famously it misses the informal (like childcare) or things that aren’t in prices, like environmental externalities. That hasn’t mattered too much to policy makers in the past.

But many emerging technologies have near-zero marginal cost, which means the financial value of formal transactions is basically nil even though they are helping people live their lives. Once you put up your solar panel, you don’t pay the sun for its rays. When you have fun on-line you pay very little (especially if you are the product, meaning the company is getting value from the data about you) compared to the off-line activity you would have been doing 20 years ago (think YouTube vs cinema trip). So, GDP is under-stating the welfare from new technologies.

Also, people pay a lot of attention to labour productivity, but almost none to resource productivity. In the past that might have made sense. Going forward, we have many people but not enough planet. So attention needs to shift.

Reforming GDP has been the least successful change effort in recent times. Everyone knows its at best partial, if not downright misleading. The standard sustainability-related arguments have had no impact. Perhaps the productivity crisis – which governments do care about – gives a chance to augment GDP.

The second – and much more important – explanation for the productivity crisis: it’s exactly what you would expect if we are the trough before new technologies are properly taken up. I have to thank the European Futures Observatory for this insight. An established order has grown around the established technologies, including physical infrastructure, skills and schooling, regulation and more. So moving from one GPT to another is painful. You have to dis-assemble lots of how stuff gets done economically and socially before then be able to reassemble around the new GPT. These cycles are known as Krondatiev waves and have been much studied by Carlotta Perez.

If this is true, then the way to solve the productivity crisis is by shifting to the new technologies, especially around digital and renewables. For instance, on energy we keep building a grid for a small number of large generators. That model has had several decades of learning effects; any improvements are incremental at best. We won’t get the full benefits of solar until we we build for a large number of small generators. Because it’s new, it has decades of improvements to come. But it requires incumbents shifting their production basis, or getting out of the way. Frankly, they find it easier to lobby government for the status quo.

That’s not to say digital revolution is a straight win. There’s lots of difficult questions – how to have worthwhile jobs to what does it do to our identities – which I’ve written about elsewhere. Given that its inevitable (try putting that genie back in the lamp) we need to answer those questions, and we need to surf it to a sustainable future.

So, there’s a tantalising prospect that solving the productivity puzzle might tickle the Treasury’s fancy, and require a shift to a sustainable socio-technological basis.

But there there are worries too.

Will it get lost in defining terms? Part of the evening was spent saying how people didn’t like the presentational effect of the term ‘de-growth’ but that some sort of reducing the scale of some sectors was necessary. I liked what Kate Raworth said: we need to move going for growth, with a side-effect of whether people thrive or not, to focusing on people thriving, whether or we’re growing or not. It’s important to find a framing that will speak to where people are starting from. I worry about the need of some (not, I think the secretariat of the APPG) for purity.

How will it get credibility beyond the usual suspects? There are lots of fixed positions on growth. To caricature only slightly: environmentalist say its always bad; economists say its always good. A lot of pro-sustainability folk saying that sustainability is important may be satisfying but it will have no effect. So, the APPG will need to reach beyond the usual suspects. Can it bring in the best and interesting business voices? What about influential commentators? The FT’s Martin Wolf was been important in broadcasting the Stern Review. In his new book about the recent financial crisis he says he “lacked the imagination to anticipate a meltdown of the Western financial system” and praises heterodox economists for getting it more right than the mainstream.

Are we trapped? The final worry is not about the APPG, but about our global situation. Through the debate two things became clear:

  1. There is no path forward which has growth as we’ve known it within planetary boundaries
    AND
  2. There is no path forward for the required de-growth within the politics we have.

Basically, we’re trapped into a civilisation-degrading pattern at a global scale which will take a massive crisis before we act with the urgency and scale required. That is frightening, and depressing, prospect.

The mere existence of Group is a sign that we’re realising we’re in this trap. The Group might be able to spread understanding and acceptance amongst a crucial audience: MPs and senior policy-makers. That is a very worthwhile thing to do. And there is so much more that we must be doing too.

 

We should all embrace ‘Embracing Complexity’

Occasionally you come across a book which says all that you wanted to, only better, and with more proof and analysis than you could hope to assemble yourself. Well, Embracing Complexity is that book for me. It brilliantly describes the technical background to complexity, then argues forcefully that we should adopt a complexity worldview. In this review I’ll summarise the writers’ key points, and pull out some implications of what I currently think of as a modern masterpiece.

 

complexitymapofireland

 

Twenty years ago I was studying to be a physicist. I soon realised I didn’t have the deep maths to do anything valuable in the field, and so I moved on. Back then I had read about complexity. James Gleick’s book on Chaos had popularised many elements. Once I joined Forum I and a few colleague tried to bring complexity thinking into our work, but without great success. We knew we wanted to get beyond a mechanical approach to change but it wasn’t clear what complexity was, especially when compared to systems thinking, nor how to put the principles into action.

Enter Embracing Complexity: Strategic Perspectives for an Age of Turbulence by Jean G. Boulton, Peter M. Allen, Cliff Bowman. As it happens, I know one of the authors, Jean, and was at the book launch back in September 2015. But when I read the book it really resonated with my past reading and current experiences of trying to create profound change. The effectively has a series of big claims, and then applies those claims to the domains of management, strategy, economics and, politics.

Let’s start with the big claims. The first, and the foundation stone for the rest of their thesis, is that we can treat complexity as a worldview, one which “sees the world as essentially interconnected, and rich with forms and patterns that have been shaped by history and context…[it] reminds us of the limits of certainty, it emphasises that things are in a constant process of ‘becoming’ and that there is potential for startlingly new futures where what emerges can be unexpected and astonishing”.

The primary contrast, of course, is with the mechanistic worldview we have inherited from Newton, that the world is just a clock that will predictably tick round. The other contrast is with a worldview inherited from a later physics, that of thermodynamics. Thermodynamics says the best way to understand a liquid or a gas is by treating the very large number of molecules as independent agents. Predicting an individual agent is hard, but the sheer statistics of their bouncing off each other like billiards balls, mean you can predict how the gas or liquid will move towards equilibrium. (In this sense, thermodynamics is Newton plus statistics, and is a subset of mechanistic worldview.) Beinhocker shows in The Origin of Wealth it is thermodynamics that inspired the orthodox economics that we know.

What do the authors mean by a complexity worldview? In a nutshell, they are saying the world is:

  • Systemic: the world cannot be understood through taking apart he bits and understanding them separately. Factors work together synergistically, that is, the whole is different from the sum of the parts. We live as part of patterns of relationships.
  • Path-dependent: history matters and the sequence of events is a key factor in giving shape to the future.
  • Sensitive to context: one size does not fit all, and the way change happens and the way the future emerges is dependent on the detail and particular events and patterns of relationships and particular features in the local situation. By generalising, we risk throwing out the very information that sheds light on why things happen and what might happen next.
  • Emergent, uncertain, but not random: although the future does not follow smoothly from the past, neither is what happens random. The world is neither chaotic not predictable but somewhere in between.
  • Episodic: things are becoming, developing, and changing but change happens in fits and starts. The intriguing thing about the world is that on the surface patterns of relationships and structures can seem almost stable for long periods of time, although micro-changes may be going on under the surface. And then radical change can happen suddenly and new patterns of relationships can self-organise and some completely new features that could not have been predicted may emerge.”

 

Individually and collectively, these aspects are strongly at odds with the mechanistic worldview, where the whole is the sum of the parts, where there is no past contained in a situation, just the current dynamics, where the same starting point should merely wind forward again and again. The authors claim that their complexity worldview is many ancients had already intuited and what Darwin recovered when he wrote about evolution. Their main descriptions of complexity rely more on ecology than on physics, perhaps because the maths is just too hard to translate into English.

Here is their central tenet of complexity theory:

“it is in the detail and variation, coupled with interconnection, that provide the fuel for innovation, evolution, change, and learning.”

Any proposed worldview has to do a few things. First, how is it different and bette, than others? As well as the contrast to the mechanistic worldview, the authors contrast with systems thinking:

“systems thinking deals with stable patterns and history deals with the particularity of events, conditions and individuals – but complexity thinking marries the two and provides us with a sophisticated and unique theory of change.”

Which leads to the key weakness of systems thinking: “simple systems analysis are helpful in describing stability, they tells little about change – what may cause it, and what may emerge as a result”.

The other thing a worldview must do – especially one that claims to ‘include and transcend’ the previous ones – is explain how the others can give useful explanations. If the mechanistic worldview is built from the wrong foundations, why hasn’t it simply fallen over? Why can it be useful? Here is their answer:

“When things are very stable over a long time, the macro-characteristics of complex systems tend towards behaviour that looks machine-like and predictable”

 

Why does this matter for sustainability? Well, if you take the mechanistic worldview then we can solve the sustainability question one issue at a time. You don’t need to look for a deep layering of causes behind, say, climate change. And the way to solve problems is simple. You just reduce your emissions and move on to the next problem. Any attempt at change which has a list of things to do, in order, that can be written in advance and then never changed is subscribing to this worldview (though they may not know it). In a mechanistic worldview holistic is so much horseshit.

But people know intuitively that “sustainability is a property of a web of relationships means that in order to understand it properly we need to shift our focus to the whole, and learn to how to think in terms of relationships, in terms of interconnections, patterns and context” (Boulton et al quoting Evitts, S., Seale, B., Skybrook, D. (2010)). Developing an Interconnected Worldview: A. Guiding Process for Learning). That cannot be done within a mechanistic worldview. It needs something more.

What Boulton et al is that something more, the worldview through which we can address the sustainability crisis of our times.

 

The complexity worldview gives us two new lenses onto change.

First, it allows us to understand change as a cycle of an ecology. Let’s imagine there is an absence of order. From this period of chaos there is self-organisation, patterns of relationships between the different parts that emerge and sustain. These parts and their relationships start to co-evolve, that is changes in one induce in and are the response to changes in another. Over time the web of web of relationships becomes mutually sustaining. This is a period of self-regulation where incremental differences lead to incremental changes. Without further external shocks this moves to lock-in, as the  relationships become tighter, more rigid, more efficient. But they are so finely tuned that a shock from outside the immediate system leads to collapse. And we start again.

This cycle is familiar to anyone in an organisation as it starts, finds its niche, grows, standardises, becomes more rigid and then struggles to change until too late. The move to self-regulation is ‘needed’ for efficiency but contains the seeds of the organisation’s failure. My point of view on why there are so many business books on leadership and change is because lots of people find themselves in charge in that ‘self-regulation’ or lock-in phase. They are trying to do something about it, but it is hard, because the organisation is defined now by the self-sustaining, self-reinforcing relationships – by what made it successful until now. It’s why we shouldn’t expect the current incumbents to be the source of fundamental change.

Embracing Complexity says that the lock-in is not inevitable, it happens when the framing context is stable, and so no push to keep self-organising. The suggestion is to keep in changing more than the context might otherwise need you to, so you don’t become fixed. There’s an interesting parallel here with Taleb’s notion of AntiFragile, where things get better when stressed. His point of view is that change and shocks are inevitable, and so better to design situations to benefit from that, rather than merely recover (his take on resilience). Needless to say, any senior manager will tell you how much attention and sheer willpower is required to avoid useful ways of getting things done from becoming standardised routines of thought and deed.

The authors are keen to address one pervasive mis-understanding: self-organising “does not necessarily imply that the situation [is] just left to itself”. Self-organisation occurs when there are top-down intentions, as well as bottom-up activity. As such, enabling self-organisation is not just a case of senior managers or government getting out of the way.

Second there is describing change. This is a bit technical, but very much worth it. There are some definitions that we need:

  • “State space – a representation of the information in a situation or system through looking at the set of its constituent dimensions or variables rather than representing it in time and space. Contains a map of attractor basins and areas where there are less definite features.”
  • “Attractor basins (or attractors) – Stable configurations of interacting variables which show what combinations of factors mutually reinforce each other.”

These two terms help us unpack three types of change (examples are mine, which means they might be wrong): within attractor basins, between existing ones and evolution of new ones.

  1. “Unfolding change” staying in the same attractor basin. Through the 90s Tescos simply beat Sainsburys in being an out-of town supermarket, with a mix of brands, a mix of price points and a great variety of choice.
  2. “Self-organisation – in to a new attractor basin. giving different configuration of relationships but no new dimensions.” Lidl and Aldi have a different formula compared to the existing grocers: low cost, all own-brand, less variety.
  3. “Evolution (or emergence) – the process of variation, self-organisation and selection that leads to emergence of new qualities and types.” On-line retailing is a massive disturbance, adding new factors to include in what makes you successful (i.e. new dimensions in state space), which means that new configurations of mutually reinforcing factors (i.e. new attractor basins) are there to find. These new attractor basins will also affect the supply chains and the customers, who will all co-evolve as the basins do.

Another way in to this (again, my example) would be Brian Eno. In the early 70s he started treating the studio as a musical instrument, not just a passive way of recording other instruments. This change the number of dimensions in the state space: different sounds were available, as were different compositional structures and very different results. I’m listening to one of those results as I type, Music for Airports. This is widely credited with forming a new genre – ambient. In the terms above, in the new, enlarged state space there are new configurations that work – new attractor basins. He found one of those with this album, and then others followed, further developing (i.e. self-organising) the genre.

 

What are the implications?

The authors have a list of principles for how project mangers should behave, given this worldview. But I think it could apply to anyone:

  • Aspire
    • Take a wide, systemic view of emerging trends
    • Articulate long-term goals and intentions and use these to prioritise actions, and determine which opportunities to seize
    • Judge whether to persist when there is little evidence of change
  • Anticipate
    • Think a few steps ahead during implementation. What might be the consequences of actions…or events in the wider context?
    • Thank through where critical junctures / possible tipping points might occur
    • Scan for changes in the context
  • Adapt
    • Adapt to unexpected events and unintended outcomes as they happen
    • Seize opportunities, making choices in line with the long-term goals
    • Plan activities and projects but review progress regularly, take note of changing circumstances and modify if necessary
  • Customise
    • Take account of contextual and historical factors in developing plans and programmes. Do not expect there to be a universally applicable best approach
    • Experiement – plito approaches, learn from what works.

 

When it comes to organisational strategy, the fundamental insight is to remain ambidextrous: “An organisation needs both to be effective in competing in today’s market with today’s economic and social and political conditions, but also to have the ability to make judgements about the future in order to be able to adapt to any changes as well as to, in some cases, catalyse change.”

But attending to both today and tomorrow is tough. Their conclusion is the importance of constantly testing how dynamic your contest tis. If it is stable, then you can bias toward effectiveness (mostly today, and a little of considering tomorrow). If it is fluctuating, then develop a core competence of entrepreneurialism, anticipating future trends and tastes. If unstable then build for emergence.

For all these, it is crucial to keep experimenting, seizing opportunities, learning and adapting to circumstances — it’s just a question of degree.

The implications for economics get the most hefty treatment from the authors. Neoclassical thinking is attacked for requiring an equilibrium which will never come, for seeing futures as independent of the past, of relying on a super-rational decision-maker (Homo Economics) that is a dangerous fiction, and for separating economics from society, and growth from development.

They stress two things that come from ecology. First, that in nature there is both competition and collaboration:

“Ecological competition is a common feature of the bio-economic relax, but so also is inter-dependency, cooperation, symbiosis and division of labour. Moreover, competition is not the fundamental ‘organising principle’ in the economy of nature, as many theorists have asserted. The touchstone is the problem of earning a living an reproducing – adaptation – and both competition and cooperation are subsidiary phenomena. The are contingent ‘survival strategies’.”

Second, that evolution is “about the survival of the fittest ecology rather than the survival of the fittest individual. The evolutionary process becomes ‘variation—self-organisation—selection’, rather than ‘variation—selection’.”

This has big implication for innovation. We should not look to individual companies for innovation. Instead, innovations come from the competition between, and collaboration within, whole ecosystems of organisations. These innovations are driven by the factors pushing on an ecosystem, whether that is competition from another or an incentive from a customer or a regulation from government or more. Innovation is not manna from heaven, or the result of one lone genius. I’ll be returning to this when I write about Grubb’s Planetary Economics, and when thinking about a pro-sustainability innovation policy.

It also has big implications for competition policy. “One thing Smith seems to have concluded is that this process [of self-organising] works best when the players in the system are of similar size, where there is equal power and diversity of choice, and potential for interconnectivity.” When that is not the case, then we move into a situation where the big can use their dominance to get bigger. If business leaders are told that the purpose of private enterprise is to make profit, then they will use their dominance to remove risk, “to simplify their markets and make suppliers and supply chains and even consumers act in the way that suit them. Indeed, an unregulated market…tends to allow ‘lock-in’ – the big get bigger, and the dominant more dominant.such dominance can ‘win’ in the short-term or even in the medium-term, such organisations are less able to adapt to changing circumstances. They be more efficient but they are less resilient”.

Hence the need for all those books on change, leadership and innovation. Hence, also the case for an active government: “Regulation is needed to counter the tendency for the big to get bigger, the powerful to get more powerful, the risks taken to get more risky, and economic forces to win over concerns for equality and sustainability.”

 

What does all this mean for growing the political economy we need for a sustainable future?

There’s a lot to unpack and explore. Some things that come to mind now, and doubtless will develop and change:

  • I’ll try to use ‘state space’ to describe the possible ways of 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 (that is, the political economies).
  • The complexity worldview provides a theoretical basis to my experience and intuition that the mechanistic worldview is part of the problem, and needs to be replaced with something that allows for humans acting as part of nature, not separate.
  • We need to organise ourselves for evolution, to create a variety of ecologies that can self-organise, then select on the basis of ‘fit’ and then develop further. It all points to the  importance of learning from experiences, plus using and developing what is there already. We need to accept there is no single, perfect answer but there are always unintended consequences.
  • That will require removing the existing lock-in – which crowds-out the evolution in the short-term but makes the chance of collapse higher in the medium-term.
  • Part of the existing lock-in is an inner dynamic of ‘big get bigger’ (what in system archetypes is called Success to the successful). The implication is a need for all players to have relatively similar power, rather than a small number who win big.
  • One of the dimensions in state space for us to play with is the type of actor that is important in a political economy. Political economy has traditionally considered actors of nation-states and individuals 9then, depending on your flavour, perhaps class). My thinking has been that we’re seeing the emergence of a different sort of political economy, made up of collaborations between non-state actors. Don Tapscott calls these Global Solution Networks, and claims these are new multi-stakeholder models for global cooperation, problem solving and governance. In the language of Embracing Complexity these are ecologies that are evolving, and which then frame the behaviour and incentives for businesses, other organisations and people.  They may be the vehicle to promoting well-intentioned send-organisation, and fulfil the author’s call-to-arms: “We have a responsibility for ‘seeding the system with good ingredients’, for shaping intention, for surfacing values, and for spotting where the powerful are ‘winning’ at the expense of the less powerful — and by so doing locking-in resources and locking-out competition”.
  • We’ll have to address the profit motive. I’ve had a belief up until now that what matters is outcomes, not motives. So, if someone made the pro-sustainability investment for commercial reasons or ethical reasons, what matters is they made the investment. Embracing Complexity says that’s not good enough. Jean in particular (in conversation with me) has said that the end can never justify the means as it is the means that are added to the system and we may never reach the end. Putting that into practice means, I think, accepting the starting motive someone has as inevitable, but trying to change that motive – and the beliefs underlying it – over time.

 

I’m sure that list will be longer by the time I finish my sabbatical! There are also two ironies I’m aware of. The first is one core message of Embracing Complexity is to avoid universal claims, while using a complexity as a worldview is to have a universal claim. The other is that the authors warn “we should not assume that the patterns that emerge at a one scale will necessarily be repeated at a larger scale”. Just because science can ‘prove’ the natural world is best understood through complexity, doesn’t mean that automatically it is the best way to understand the human world.

The authors do address this head on in one chapter, and draw the conclusion that although humans are not molecules, the extra features we bring (like intention) can be brought into a complexity worldview. Of course, when considering beliefs it is impossible to stand back and make an objective appraisal. What are you now standing on, from which you compare mechanistic vs complexity worldview? There complexity one has a couple of things in its favour. One is that it can explain why the mechanistic worldview works where it works, and also why it doesn’t in other circumstances. The other is that a ’experiment-and-learn’ approach at complexity worldview’ core means it is not fixed, but constantly being tested and refined. Therefore, it contains within it an inner dynamic to adapt with experience, not passively stay the same.

As such, I want to experiment with it for now. Over the coming weeks I’ll be applying it directly to questions of bending the curve on climate change, a pro-sustainability innovation policy, an enabling narrative for business, the digital revolution – and how we can grow the political economy we need for a sustainable future. It’s going to be fun!