‘Degenerative’ Capitalism

Abstract

Global threats – from climate change and accelerating inequality, to the financial crisis of 2008 – have led an increasing number of thought leaders and policymakers to question the long-term viability of today’s dominant form of capitalism3. Even the rise of terrorism is fueled, at least in part, by the repression and exploitation of the economically and politically disempowered. At the same time, a multitude of innovators and entrepreneurs around the world are experimenting with practical ways to reimagine capitalism so that it works for all levels of society, as well as for the planet. In our terms, their common goal is to create a self-organizing, naturally self-maintaining, highly adaptive Regenerative form of capitalism that produces lasting social and economic vitality for global civilization as a whole. Over the last two years, Capital Institute has been working with many of these thought leaders and entrepreneurs in a quest to understand what a theoretical framework for regenerative economies would look like, and what conditions and processes contribute to their long-term systemic health. We also explored how a Regenerative Economy would differ from today’s flawed theory of capitalism, and how it would compare to other New Economy ideas such as natural capitalism, sustainable capitalism, conscious capitalism, doughnut economics, circular economies, sharing economies, steady-state economies, etc. Where today’s mainstream economic debates are usually couched in liberal versus conservative ideology, we felt a much deeper inquiry was required, one that examined the unquestioned assumptions of both the left and the right. For instance, does exponential, undifferentiated economic growth — the still largely unquestioned objective of liberal and conservative economists alike — really define the path to long-term prosperity? Is such constantly expanding growth even possible given the already massive scale of today’s global economy and our planet’s finite resources? And, what role does modern finance play with its single-minded pursuit of optimizing returns, in driving the systemic outcomes that are unsustainable?