“When economic behavior and human performance mimic nature’s laws and holistic patterns in such a way that organizes towards maximum renewal of health and vitality.”
-John Fullerton, Founder, Capital Institute
Economy, in Latin, oikonomia, means ‘household management.” One’s “Household management” style is a deliberate choice. Not making a choice is still a choice.
This happens in nested scales from each individual’s household to the entire region as a force to be reckoned with.
At its essence, regenerative economics represents an intention towards a more calibrated and healthy balance of the 8 forms of capital. It represents a move from Extractive activities to Holistic capabilities, with a focus on tapping into the unique story of the place. To do so means personally, organizationally, and systemically working to embody the following principles:
8 Regeneration principles from Capital Institute:
1. In Right Relationship:
Humanity is an integral part of an interconnected web of life in which there is no real separation between “us” and “it.” The scale of the human economy matters in relation to the biosphere in which it is embedded. What is more, we are all connected to one another and to all locales of our global civilization, as both our lived experience and quantum physics tell us. Damage to any part of that web ripples back to harm every other part as well. So the principles of reciprocity and mutualism found in both biology and indigenous wisdom, and even the Golden Rule common across all the World’s religions, are foundational to a regenerative economy.
2. Views Wealth Holistically:
True wealth is not merely money in the bank. It must be defined and managed systemically in terms of the well-being of the whole. This can only be achieved through the harmonization of multiple kinds of wealth or “capital” — to use economic language — beyond the conventional financial, material and technological capital to include social/relational capital, cultural, experiential and yes spiritual capital, however one defines it. But all of these forms of capital rest on the foundation of natural capital and in particular healthy ecosystem function, upon which all life — inclusive of our human economies — depend. Critically, the whole is only as strong as the weakest link.
3. Innovative, Adaptive, Responsive:
In a world in which change is both ever-present and accelerating, the qualities of innovation and adaptability are critical to health. It is this idea that Charles Darwin intended to convey in this often-misconstrued statement attributed to him: “In the struggle for survival, the fittest win out at the expense of their rivals.” What Darwin actually meant is that: the most “fit” is the one that fits best i.e., the one that is most adaptable to a changing environment. Therefore, the entrepreneurial dynamism associated with a free enterprise system and the free flow of capital is essential. Yet both must somehow be channeled in a way that is responsive to the changing dynamics and essential needs of systemic health rather than short term individual desires of wants and greed.
4. Empowered Participation:
In an interdependent system, fitness comes from contributing in some way to the health of the whole. The quality of empowered participation means that all parts must be “in relationship” with the larger whole in ways that not only empower them to negotiate for their own needs but also enable them to add their unique contribution towards the health and well-being of the larger wholes in which they are embedded. Thus while “inclusiveness” may be morally desirable, empowered participation is a non-negotiable quality of systemic health for the entire system.
5. Honors Community and Place:
Each human community consists of a mosaic of peoples, traditions, beliefs, and institutions uniquely shaped by long-term pressures of geography, human history, culture, local environment, and changing human needs. Honoring this fact, a Regenerative Economy nurtures healthy and resilient communities and regions, each one uniquely informed by the essence of its individual history and place. While the pattern of eight universal principles apply to all places, each place must define how the pattern applies based on their own unique contexts. Just as every snowflake looks like a snowflake, every snowflake is also unique.
6. Edge Effect Abundance:
Creativity and abundance flourish synergistically at the “edges” of systems, where the bonds holding the dominant pattern in place are weakest. For example, there is an abundance of interdependent life in salt marshes where a river meets the ocean. At those edges the opportunities for innovation and cross-fertilization are the greatest. Working collaboratively across edges – with ongoing learning and development sourced from the diversity that exists there – is transformative for both the communities where the exchanges are happening, and for the individuals involved. Specialized silos of expertise, while necessary in our complex world, also create barriers to new ways of manifesting regenerative potential.
7. Robust Circulatory Flow:
A living economy demands a healthy metabolism to flush toxins and nourish every cell at every level of our human networks. Just as human health depends on the robust circulation of oxygen, nutrients, etc., so too does economic health depend on robust circulatory flows of energy and materials in a “circular fashion” where waste is food as in all biological systems. But it also demands robust circulation of money out to all extremities of the system, the robust circulation of accurate information enabled by the internet (but severely damaged in our post truth society), and even the circulation of empathy to help raise consciousness, support trust and healthy dialogue. It should go without saying that a healthy economic metabolism also demands healthy, toxin free material and financial inputs, while disposing of wastes in a way and on a scale that does not undermine the health of the whole.
8. Seeks Balance:
Being in dynamic balance is essential to systemic health. Like a unicycle rider, regenerative systems are always engaged in this delicate dance in search of balance. Achieving harmony requires balancing paradoxes with both/and thinking rather than either/or thinking. Healthy systems harmonize multiple variables in a unified whole instead of optimizing single ones at the expense of others. For example, a Regenerative Economy seeks to balance masculine and feminine energy and qualities such as analytical thinking with intuitive ways of knowing, and competition with collaboration. It also balances efficiency and resilience; diversity and coherence; and supports fractal structures that balance small, medium, and large organizations in healthy hierarchy, all in service to the health of the whole.
Regenerative economies look and feel different from what we have previously seen.
In Ray Anderson’s book, “Mid- Course Correction,” he describes an environmental equation that starts to align technology, industry, and environment:
I = P x A / T1 versus I = P x A / T2
Where I is environmental impact (bigger is worse), P is population, A is affluence, and T1 is Technology. The shift that we need to make is from T1 to T2. Where T1 “is simply technology is part of the problem and will not lead us out of the environmental mess. What we need is T2 which is renewable, emulating nature, and circular.”
The big question that continued to drive innovation in their business model was focused on developing T2. “If nature designed an industrial process, what might it look like?” They measured progress through material and energy flows as well as the impact on people and transparently shared their lessons along the way.
How Businesses Can Regenerate the Global Commons
Businesses have played a significant role in degrading the social, economic, ecological, and governance commons, but they can play an equal role in restoring them through the development of seven regenerative qualities.