The Emerging Economic Renaissance

A new political-economic paradigm is emerging in northern Europe and parts of the Asia-Pacific region that could signal a major turning point in human history. Like the time when humanity awakened to the fact that the world was round, rather than flat, this new paradigm radically challenges our perceptions of reality and the systems we’ve created to guide our lives.

This is a guest blog by author of the new book Economies That Mimic Life by Joseph H Bragdon.

The impetus for this emerging shift is the increasingly catastrophic failure of humanity’s conventional GDP-focused political-economic system. What started in the industrial age as regional and global competitions for hegemony and resources eventually developed into two world wars, expensive military arms races, ecological overstep, climate change, species extinctions and a surge of borrowing as those in power sought to solidify their hold on authority. Over the past year the fragile structure of this debt-driven competition has been exposed by the coronavirus pandemic, causing widespread disruption in global markets.

So what is it about the emerging new paradigm that could reverse this self-destructive trend and alter the course of history? The answer is deceptively simple.

Instead of perceiving economies as bottom-line, capital-driven devices for growing GDP and profit (increasingly at the expense of people and Nature), the new paradigm sees economies as they really are: as sub-systems of life, whose primary assets are people and Nature and whose goals are to preserve the continuous wellbeing of all life on earth. By such means, it resolves into a reinforcing loop, where means and ends serve one another rather than conflict. Simple. Logical. And remarkably effective

Economies That Mimic Life

The wonderful thing about this living system approach is how it generates economic success as it reduces humanity’s ecological footprint. In doing so, it overcomes the increasing frictions between means and ends that have plagued the mainstream “neoclassical” model and driven it to the edge of ruin. This is not to say that transitioning to the life-mimicking model will be easy. But in the final analysis it comes down to whether the citizens and leaders of a country want to go down with a sinking ship or whether they want to find a more secure way forward.

Because the two models are so fundamentally opposite (incommensurable), attempts to find a compromise solution will almost certainly fail. That’s because their foundational assumptions conflict as can be seen in the following table. Consequently, the most promising (and profitable) way forward is to abandon the neoclassical model and adopt the life mimicking one.

That said, it’s important to understand that the life-mimicking model is not a set destination, but an adaptable pathway forward – one that can (and must) be amended by continuous observation and learning as political-economic conditions change.

Comparison of Working Assumptions and Practices

	Living System Model	Neoclassical Model
Economies are:	Sub-systems of biosphere, society	The dominant system
Governance:	Egalitarian, networked, decentralized	Hierarchical, centralized
Mission:	Maintain healthy living systems	Maintain authority, control
Values:	Primacy of living assets (people, Nature)	Primacy of non-living capital
Vision:	Optimize living assets (circular economy)	Optimize GDP, profit
Leverage:	Living asset stewardship (inspiration)	Financial gearing (debt)
Mind-set:	Holistic, qualitative (non-linear)	Reductionist, quantitative (linear)
Metrics:	Focus on learning, adaptation (means)	Focus on results (ends)
Learning:	Multiple loop (open-ended)	Single loop (follow the rules)
Risk:	Being only generally right (Lack of precision)	Being precisely wrong (Climate change)

 As one can easily see, the foregoing assumptions and practices reflect radically different worldviews/paradigms. Historically, each evolved to remediate the failures of a prior system. Therefore, just as the living systems model emerged to redress the failures of the neoclassical (industrial era) model, the neoclassical model emerged in Europe from the 17th Century Enlightenment as Europe sought to break free from the constrictive norms of the feudal system.

The power of the living system paradigm is in seeing the living world as it really is rather than a notional construct for continuous GDP growth and capital accumulation. When we approach economies as sub-systems of life rather than super-systems that transcend life, we attain what Donella (Dana) Meadows called a dynamic leverage point – where “a small change in one thing can produce big changes in everything.”[1]

Such was the case in the evolution of the life-mimicking Nordic Model. Although its holistic approach has ancient roots in teachings of the Buddha and Confucius and in the practices of traditional cultures, the Nordic countries of Denmark, Finland, Sweden, Norway and Iceland are the first to apply it to modern industrial cultures.

The Nordic Model

Nordic countries today are regularly placed at the top of global surveys on prosperity, quality of life, health, democracy, freedom, innovation, productivity and sustainability. As bastions of open, free markets, they have also become global innovation hothouses in renewable energy, bio-tech and circular economy practices.

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In the course of becoming more prosperous, Nordic countries have developed a system of robust universal safety nets. Although supported by high individual tax rates, these strengthen their economies by providing an abundance of healthy, educated, secure and motivated citizens. As a result, Nordic countries today have some of the industrial world’s highest labor participation rates and per capita GDPs – advantages that support the funding of their safety nets. Compared to the lose-lose outcomes of the neoclassical model, this interaction creates a dynamic win-win reinforcing loop.

Which brings us back to the earlier mentioned vulnerabilities of the neoclassical model. As the US and other large industrial economies try to protect their regional and global hegemonies, they exploit the very sources of their strength (people and Nature) and borrow far more than their weakening economies can afford. Consequently, while Nordic economies go from strength to strength by partnering with Nature and nourishing their people, the US and others operating on the neoclassical model fall further and further behind.

This breakdown/breakthrough saga is powerfully transformative, as described in my book “Economies That Mimic Life” (https://www.routledge.com/Economies-that-Mimic-Life-From-Biomimicry-to-Sustainable-Prosperity/Bragdon/p/book/9780367625993). Dedicated to my late friend, Dana Meadows, it offers compelling evidence of her belief in Leverage Points as a way to meaningfully transform systems.