One of the underlying issues with our society is this notion that there is no limit to our societal growth. Whether it comes to economic growth, population growth, energy, wealth, travel, age, etc., the human race will continue to find solutions to break through limitations in the name of progress.
Well, we are again at one of those societal historical tipping points where it feels like we will either hit the limit or we will discover technological breakthroughs. I for one don't want to count on technological breakthroughs. I have witnessed and studied too many examples of how this earth operates to know that there are limits to humanity's dominance and we need to be in tune to them. We need to seek balance, not pretend that there are no limits. As I half jokingly say, the greatest trick that religion played is convincing most of humanity that there is an afterlife separate from this earth so people can do things to the earth to make their time more comfortable while not worrying about the impact it has on other humans and species in their lifetime or future lifetimes.
In thinking about capitalism which is today's main global organizational structure, it is dependent on the idea of boundless growth. It requires an infinite supply of resources and money (aka debt) to keep values going up, income going up, jobs to provide that income, returns to investors to provide jobs, and interest to banks to provide money to investors, all backed by the government and central banks to make sure none of it collapses.
However, if we are beginning to learn that one of the key requirements of capitalism, resources, are in fact limited, what this means is that the other requirement, money creation, will just go towards inflationary wealth instead of generating real wealth through resource growth. And if all we get is inflation, that means we are just redistributing the global wealth "pie". This is exactly what has been happening over the last 40-50 years where as resources become more limited but the money printing continues (and even accelerates), real wealth goes to fewer and fewer people who are in control of those limited resources.
Capitalism without resource growth means that the only way to improve profit/wealth, is to have more power. That power is earned/taken by becoming bigger and having more influence. That is why our society is dominated by larger and larger institutions - businesses, governments, political parties, etc. There is no longer diversity and "smallness", it is either grow or become extinct. But by the very nature of that "growth at all cost" mentality, those institutions become more and more disconnected from sustainability. The investors become passive and disengaged, the business leaders become more greedy because the personal wealth benefits are so excessive comparatively, the employees become exploited or displaced, the real estate values become prohibitively expensive, the environmental costs go unmeasured, the laws change or don't change to perpetuate this, and the individual/citizen morphs into becoming a consumer. This is all a death wish for us as a species. We need to recognize this and do something about it.
You might be asking, well, if capitalism is broken, aren't the alternatives only communism or fascism? I personally don't think so. There appears to be another version forming. In fact 20% of our GDP is already done in this way*. It is a society organized around consumer owned business, mutual companies, not for profits, community organizations, co-ops, and the like. It is about giving the people that are either the customers of the business or the employees of the business or the community at large the economic benefits of that business.
If we put the principle of "benefit for all" above the capitalist principle of "profit for a few", then we still have the makings of a democratic society, but one that is far more balanced, just, equitable, diverse, "small", and sustainable. Instead of the notion of scarcity of resources that dominates current capitalism (and creates only few who are wealthy through their control of that scarcity), this new economic order will create abundance through that very scarcity in the way of ingenuity. We as humans will thrive again in our collective allocation of resources and time. Our very nature of being disruptors on this planet will shift from destruction/depletion/hording to enhancing/thriving/sharing.
As I alluded to above, 20% of our GDP is already being done in these better organizational structures. In fact, did you know that the home furniture and décor company, Ikea, is one such organization? They are a non-profit foundation, not a company. Similarly outdoor recreation companies, REI and Patagonia, are structured in a way to not have a profit motive that benefits few investors. Many insurance companies, credit unions, and even utility companies are set up this way where the customer is the owner, not investors since there are none, and receives a dividend check for their share of the leftover profits from the year. Why couldn't this model also apply to real estate? Perhaps having tenants own the apartment building they live in or shopkeepers own the real estate their shops occupy.
Let's recognize now that the way our society is structured is not working and we can't rely on technology to save the day. Let's seek out and support the organizations that are already setup in new ways that are encouraging this more equitable and balanced business model. And let's be the generation that finally puts greed and "keeping up with the Jones's" aside to make sure we still have a magnificent planet and thriving society generations from now.
Additional Resources to learn more:
- Accounting Alchemy Network trying to change the way we count and measure business activity
- Article about Accounting Alchemy Network
- Accounting Alchemy Lyceum Discussion about ESG Reporting and Post Growth Capitalism
- Triple Bottom Line Accounting
- Post Growth Institute
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