What if the elements of a new economic system are already invented, in existence and partly practiced? We need to learn from the innovative transitions that are already taking place at the fringe of the mainstream systems: the modification and remodeling of our economic system has already begun.
All manifestations of economics between capitalism and communism so far had destructive elements, because the link between economic systems, human wellbeing and ecological impact remained unquestioned, ignored or at least insufficiently considered. What we need is gathering the positive elements and stewarding the breakthrough to an economic system that is truly build on taking care of our human and planetary life support systems. The growth focus of the current economic framework at the expense of nature’s integrity and social cohesion is based on centuries of natural and human resource exploitation. It is with no doubt outdated. Although this fallacy still guides minds and drives governments, economic progress metrics, and corporations, its danger has become more than obvious. The climate crisis is just the tip of the iceberg moving towards a hothouse Earth scenario that is hard to navigate.
Shifting these global trajectories is not an easy task, yet it needs to happen much faster than most realize.
For the exponential acceleration we need there is a lot to learn from the innovative transitions that are already taking place at the fringe of the mainstream systems: responsible value chains, circular strategies, sharing economies, value-oriented banking, regenerative communities, or decentralized renewables, among many others. The modification and remodeling of our economic system has already begun.
A lot has been researched and explored about principles that can guide such life economies. What runs through the conceptualization and practice all of these different approaches for a new economy are themes that focus on social and ecological vitality. The underlying commonalities are striking: beneath the variety of proposals, reflections and practices can be captured in six guiding principles for life economies that can be scaled to shift the entire system.
# 1: Regeneration and circularity: Production and consumption cycles are socially embedded and have net-zero negative impact or regenerate life-support systems. This carries through all products and value chains, but also applies to services. Ecosystems are cherished, social systems cultivated.
Pioneering examples:
Regenerative or organic agriculture, agroecology, solidarity agriculture, valuation of ecosystem services, regenerative and renewable energy systems, circularity of materials and biodegradable products; cradle-to cradle approaches; zero-waste approaches, nature conservation and ecosystem restoration; soil management, forest protection and reforestation; rewildering; allocating land portions for nature and national parks; nature-based solutions; land and resources entrusted, not owned; regenerative investments; circular cities; national circular economy roadmaps, responsible value chains; social entrepreneurship; care work and service to society highly valued; reproductive activities valued.
# 2: Localization and contextuality: Economic activities are contextually adapted, locally negotiated and strengthen regional cycles. Globalization and regional cycles are appropriately balanced. Economies are responsive to cultural value systems.
Pioneering examples:
Locally embedded economic cycles; regional bio-economies; community-based economic entities; shared ownership (cooperatives); locally governed commons; healthy balance between small, medium and large economic entities; globally connected values, locally implemented; economic activities organized in networks; from ownership of goods to sharing products; inclusion of weaker and marginalized communities and people.
Thriving markets with healthy competition; regenerative product innovation; guided technological innovation serving principles 1 and 5; economic and resource efficiency; quality standards; valued social innovation; social entrepreneurship; impact investing; business purpose oriented towards value for societies and ecosystems.
# 3: Adaptability and innovation: Learning mechanisms foster life-enhancing technological and social innovation. Such cross-institutional learning takes place localized as well as globally. Governments and corporations invest in life-enhancing innovations.
Pioneering examples:
Thriving markets with healthy competition; regenerative product innovation; guided technological innovation serving principles 1 and 5; economic and resource efficiency; quality standards; valued social innovation; social entrepreneurship; impact investing; business purpose oriented to-wards value for societies and ecosystems.
# 4: Transparency and Accountability: Reporting mechanisms and metrics create awareness of and track systems’ vitality. Societal progress indicators include a variety of aspects that measure social and environmental wellbeing. Trust reduces the transaction costs of societies.
Pioneering examples:
Reporting standards; product traceability; transparent tax systems; progress measurements that reflect contribution to society and ecosystems; wellbeing indicators; nature as part of balance sheet; internalization of social and environmental costs; business accountability for environmental and social impact; digitalization in service of transparency of economic activities; broad access to information.
# 5: Participation and distribution: Governance and distributive measures guide wellbeing for all and ensure gender and social equity. Political participation and economic participation go hand in hand. Markets are guided, societal resource allocations further equality.
Pioneering examples:
Broad access to education and political participation; wealth distribution measures; distributive tax systems; public participation in economically relevant strategies; use of digitalization for participation and tracking of ecosystems and social system’s health; democratic control of economic development and strategies; participatory corporate governance models; social and racial equity as guide for economic activities; peer-to-peer learning mechanisms; affirmative action.
# 6: Regulation and contribution: Voluntary and obligatory agreements (including resource allocations) safeguard commons and contribute to the vitality of social and ecological life-support systems. Business and constitutional laws reflect the importance of everybody’s responsibility for the future.
Pioneering examples:
Finance systems in service of society and nature; tax incentive systems that safeguard nature, commons, and social equity; regulations and laws that create level playing fields for business regarding human rights, workers’ rights and rights of nature; guiding regulations towards improvement of wellbeing; obligatory contribution of economic entities to societal wellbeing and progress; fiscal policies that incentivize regenerative investments; laws governing businesses that include new purpose; sustainable public procurements guidance; taxing resources rather than workers/people
The guiding principles for economies in service of life show that attempts to establish such economies already exist, but need to be amplified, and accelerated. Moreover, they need to be connected in intelligent ways and linked to the underlying new narrative of life-enhancement.
Shifting the global trajectories is not an easy task, yet it needs to happen much faster than most realize.
Pioneering approaches to future economies need to be connected in an intelligent way.
