Capitalism 2.0: How natural laws can create a more equal economy
Lions, lightning, and rivers all have one thing in common. We can use the laws of nature to build a regenerative economy and fix rampant inequality.
John Fullerton is the founder and president of Capital Institute, a non-partisan organization working to create a more just and sustainable way of living on earth through the implementation of a Regenerative Economy.
After spending years immersed in the sustainability challenge of our age following his Wall Street career, John is now a globally-recognized thought leader in the New Economy space. The architect of the concept of Regenerative Capitalism, John is the author of Regenerative Capitalism: How Universal Principles and Patterns Will Shape the New Economy and the Future of Finance blog.
JOHN FULLERTON: So living systems have—one of my teachers is Sally Goerner. She was our science advisor until she retired and we still draw on her work extensively. She taught us that living systems have what are called healthy hierarchies. So it's not that hierarchy is bad; it's that hierarchy where the top extracts from below is definitely bad and unsustainable.
So, take the lion in the forest or in the jungle; the lion is at the top of the food chain, but the lion sits around sleeping most the day rather than eating and killing all day, and the lion, therefore, serves a very healthy purpose, hierarchical purpose, in the food chain, keeping the balance between smaller animals and large animals. But when the king of the jungle decides to extract as much as possible for its own benefit you have a very unhealthy system, and unfortunately that pretty well describes how the modern capitalist system works where there are benefits of scale, the bigger get bigger, they get more powerful, they get more political influence, but their intention is to maximize shareholder value because that's what we do. So the cycle of growing inequality is sort of locked into the system design.
Now how we deal with that in a human economy is not trivial: the oak tree "knows" in a forest that it serves to support a lot of life. I suspect the only answer in the short-term we have in a human economy is an enlightened regulatory regime that understands these principles and has incentives and disincentives that cause the market players to move toward a more healthy hierarchy. So, for example, in the banking sector—and this actually exists post-financial crisis, it's just not extreme enough—there are disincentives to becoming big and complex, they're just not strong enough. They should, in my opinion, be strong enough that it would force the J.P. Morgans and the Goldman Sachs' of the world to, of their own the volition, become smaller and less complex and become more in alignment in service of the economy. So things they do that are extractive should get penalized and the things they do that are in service of the real economy, which they do do, should get incentivized. So you don't need to "break up the banks", you need to create an incentive system that causes them to behave in such a way that they would be aligned with the principles of living systems—which by the way are fractal.
Every living system, again going back to your body, your cardiovascular system is fractal. You have a few large veins, a lot of medium-sized veins and tons and tons of the capillaries. That fractal system exists in oak trees and in humans and in river systems and in lightning bolts. So it's a strong argument in favor of not allowing the banking system or any sector of the economy to be so concentrated with a few massive firms that then end up undermining the health of the small ones, which is essentially what's happened across our entire economy.
So, my work around this idea of regenerative economics started through this journey of discovery, trying to wrestle with what's actually at the root cause of our modern economic system. And that's a bit of a long story, but I can't really jump to the conclusion without giving a little bit of context. So I think we're in a much bigger shift than most of us yet realize. We're in a shift in an understanding of how our economies actually have to work. And we've been in what is called the modern age since the scientific revolution, and the secret to the modern age or the magic of the modern age was the scientific method and reducing what's complicated into buckets that can be understood. And that reductionist method has been the driver of great progress in many, many areas. An iPhone or a bicycle or a car are all products of a reductionist mindset, and since we've been in that mode for 400 years it's literally baked into our DNA at this point.
The only problem with a reductionist method is that it's not the way the universe actually works. You, as an individual, are not the sum of the parts of your body and you know that you're only healthy if those parts are all working symbiotically together as a whole. The reductionist method, what people refer to as the mechanistic age, doesn't allow us to keep track of the whole. And many of the problems that are manifesting in our economy I believe have a root cause in the limitation of the reductionist method.
So, for example, we discover oil, we burn oil, we have all this great growth and all this great progress, but we didn't know burning oil would release gases to the point that we would heat the climate, so it's an unintended consequence that only with a holistic understanding of how gases in the atmosphere affect the weather systems that are linked to our energy use could one have seen that problem.
So now we're trapped in a system that is burning fossil fuels at greater and greater rates, and yet we already have the consequences of climate change with predictions that are literally dire for humanity and other living species on the planet. So, to get to a regenerative economy you first have to say, well, that system is fundamentally unsustainable, it cannot go on forever. And we will either burn up the planet or on the social side, we will increase inequality to the point that we have civil strife and civil wars.
And so my search was really for how could one design an economic system that didn't have those outcomes? And I know I'm not smart enough to figure those out so the idea is really very simple: living systems that sustain themselves in the natural world work in accordance with certain patterns and principles. Your body does, an entire rainforest does. And so the work we're doing at Capital Institute, which is building on the shoulders of many, many people that have been thinking this way for literally centuries, this holistic approach to understanding systems is really the root or the source of what this idea is that we call regenerative economies.
So, think of a regenerative economy as the design principles that work in sustainable living systems, it's the process that allows a system to be sustainable. As opposed to sustainability, which is kind of a goal, which is—boy if we could just reduce these problems we can get to sustainability. We believe you only have a sustainable system—whether it's a human person or an entire ecosystem or a business or an entire economy—if it follows the same patterns and principles that living systems work in accordance with. And what's magical about it is that it turns out those principles and patterns are very aligned with the wisdom traditions, eastern, western, but eastern in particular, and indigenous that have been around for many, many thousands of years.
So, at the end of the day, my argument is: either make the case that the human economy is the only example of a system that doesn't need to obey the same patterns and principles that all other living systems—that sustain themselves—follow, or we better figure out how to get the human economy in alignment with those principles. And regenerative economics is the beginning of an inquiry into what that looks like and how one might actually manifest that in the world.
- The modern economy is an example of an unhealthy hierarchy, says John Fullerton, founder and president of Capital Institute. Unlike all other living systems, its design is not sustainable.
- The laws of nature show how hierarchies can be healthy: "The lion is at the top of the food chain, but the lion sits around sleeping most the day rather than eating and killing all day," says Fullerton. All nature is hierarchical, but sustainable; look at the similar branching patterns of tree roots, river systems, lightning bolts, and our own cardiovascular system.
- How can we modify capitalism to become self-sustaining? Financial incentives and disincentives could create a regenerative economy that reduces inequality. If we do not design a better kind of capitalism, "we will increase inequality to the point that we have civil strife and civil wars."
To create wiser adults, add empathy to the school curriculum.
- Stories are at the heart of learning, writes Cleary Vaughan-Lee, Executive Director for the Global Oneness Project. They have always challenged us to think beyond ourselves, expanding our experience and revealing deep truths.
- Vaughan-Lee explains 6 ways that storytelling can foster empathy and deliver powerful learning experiences.
- Global Oneness Project is a free library of stories—containing short documentaries, photo essays, and essays—that each contain a companion lesson plan and learning activities for students so they can expand their experience of the world.
Numerous U.S. Presidents invoked the Insurrection Act to to quell race and labor riots.
- U.S. Presidents have invoked the Insurrection Act on numerous occasions.
- The controversial law gives the President some power to bring in troops to police the American people.
- The Act has been used mainly to restore order following race and labor riots.
It looks like a busy hurricane season ahead. Probably.
- Before the hurricane season even started in 2020, Arthur and Bertha had already blown through, and Cristobal may be brewing right now.
- Weather forecasters see signs of a rough season ahead, with just a couple of reasons why maybe not.
- Where's an El Niño when you need one?
Welcome to Hurricane Season 2020. 2020, of course, scoffs at this calendric event much as it has everything else that's normal — meteorologists have already used up the year's A and B storm names before we even got here. And while early storms don't necessarily mean a bruising season ahead, forecasters expect an active season this year. Maybe storms will blow away the murder hornets and 13-year locusts we had planned.
NOAA expects a busy season
According to NOAA's Climate Prediction Center, an agency of the National Weather Service, there's a 60 percent chance that we're embarking upon a season with more storms than normal. There does, however, remain a 30 percent it'll be normal. Better than usual? Unlikely: Just a 10 percent chance.
Where a normal hurricane season has an average of 12 named storms, 6 of which become hurricanes and 3 of which are major hurricanes, the Climate Prediction Center reckons we're on track for 13 to 29 storms, 6 to 10 of which will become hurricanes, and 3 to 6 of these will be category 3, 4, or 5, packing winds of 111 mph or higher.
What has forecasters concerned are two factors in particular.
This year's El Niño ("Little Boy") looks to be more of a La Niña ("Little Girl"). The two conditions are part of what's called the El Niño-Southern Oscillation (ENSO) cycle, which describes temperature fluctuations between the ocean and atmosphere in the east-central Equatorial Pacific. With an El Niño, waters in the Pacific are unusually warm, whereas a La Niña means unusually cool waters. NOAA says that an El Niño can suppress hurricane formation in the Atlantic, and this year that mitigating effect is unlikely to be present.
Second, current conditions in the Atlantic and Caribbean suggest a fertile hurricane environment:
- The ocean there is warmer than usual.
- There's reduced vertical wind shear.
- Atlantic tropical trade winds are weak.
- There have been strong West African monsoons this year.
Here's NOAA's video laying out their forecast:
ArsTechnica spoke to hurricane scientist Phil Klotzbach, who agrees generally with NOAA, saying, "All in all, signs are certainly pointing towards an active season." Still, he notes a couple of signals that contradict that worrying outlook.
First off, Klotzbach notes that the surest sign of a rough hurricane season is when its earliest storms form in the deep tropics south of 25°N and east of the Lesser Antilles. "When you get storm formations here prior to June 1, it's typically a harbinger of an extremely active season." Fortunately, this year's hurricanes Arthur and Bertha, as well as the maybe-imminent Cristobal, formed outside this region. So there's that.
Second, Klotzbach notes that the correlation between early storm activity and a season's number of storms and intensities, is actually slightly negative. So while statistical connections aren't strongly predictive, there's at least some reason to think these early storms may augur an easy season ahead.
Image source: NOAA
Batten down the hatches early
If 2020's taught us anything, it's how to juggle multiple crises at once, and layering an active hurricane season on top of SARS-CoV-2 — not to mention everything else — poses a special challenge. Warns Treasury Secretary Wilbur Ross, "As Americans focus their attention on a safe and healthy reopening of our country, it remains critically important that we also remember to make the necessary preparations for the upcoming hurricane season." If, as many medical experts expect, we're forced back into quarantine by additional coronavirus waves, the oceanic waves slamming against our shores will best be met by storm preparations put in place in a less last-minute fashion than usual.
Ross adds, "Just as in years past, NOAA experts will stay ahead of developing hurricanes and tropical storms and provide the forecasts and warnings we depend on to stay safe."
Let's hope this, at least, can be counted on in this crazy year.
Philosophers like to present their works as if everything before it was wrong. Sometimes, they even say they have ended the need for more philosophy. So, what happens when somebody realizes they were mistaken?
Sometimes philosophers are wrong and admitting that you could be wrong is a big part of being a real philosopher. While most philosophers make minor adjustments to their arguments to correct for mistakes, others make large shifts in their thinking. Here, we have four philosophers who went back on what they said earlier in often radical ways.
Got any embarrassing old posts collecting dust on your profile? Facebook wants to help you delete them.
- The feature is called Manage Activity, and it's currently available through mobile and Facebook Lite.
- Manage Activity lets users sort old content by filters like date and posts involving specific people.
- Some companies now use AI-powered background checking services that scrape social media profiles for problematic content.