The BIG news is that “the commons“ got a lot of fresh attention in the 2012 RioDialogues, from the UN Commons Action Group site and its Facebook page, supporting proposals that Helene Finidori (1) and I submitted (2,3) for:
“New institutions.. for commons-based economic models”
a common trust and place to enjoy being at home
Helene’s proposal (1) won the voting for the“Sustainable Development as an Answer to the Economic and Financial Crises” topic in the RioDialogues vote, and good recognition!
The idea is to NOT use development, as the solution to the world economic crisis, but to create new institutions allowing develoment efforts to work together, to serve the whole. It would create a sustainable world using “commons-based economic models”. The idea originates from the examples advocated by the Nobel laureate, Elinor Ostrum, as the collaborative framework that competitive interests need so the whole can thrive.
Helene’s proposal is found on the next page, or by following the links (1). Her new (Aug 2012) collected thinking on it is in,
A comprehensive method guiding investors to compete for profiting the commons
It would not just count profits but also liabilities, in financial terms, using monetized business ESG balance sheets (eco-balance sheets), in combination with normal financial balance sheets.
Then everyone will see the real societal financial costs of making money today, that present or even past investors might well be held responsible for.
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The full application of this principle is “A World SDG“, to provide TRUE MEASURES of sustainability for business, consumer and policy choices, and applying the basic science research for ‘Scope 4’ accounting and the 2011 Systems Energy Assessment (SEA)paper. It is still “new science” though, and so demands fresh questions too. It takes investigating the actual organization of the working systems of our world, looking for regular patters of in the system as a whole, what causes them and how they are change, more than theory. It’s surprising both how little we notice going on around us, and how much we see but don’t notice what is implies. A workshop method for opening people’s eyes to what’s really happening all around them can be found in the 3Step Method of Learning to Work with Nature.
The original version of this proposal was submitted to the Rio+20 Dialogues for comment and voting as: “Budgeting for “the commons” needs business “ecobalance” sheets, to compare environmental liabilities and benefits”. See “News of the Commons” for introductions to the vision and the systems thinking needed for a commons based approach to sustainability. It’s part of my “reality math” series.
It’s proposed as part of the foundation of collaborative free market institutions needed for the health of the competitive free markets, as an element of Helene Finidori’s “Commons-Sense” and the “commons based economic models” she proposed. Their intent is to solve the global economic crisis by making the commons work for the whole, as a replacement for the paradigm of “prosperity” with ever expanding development.
The proposal would accelerate how the business community is responding to their environmental liabilities. They’re hiring teams of sustainabilty experts, using comprehensive sustainabilty reporting (CSR) to track Environmental, Sustainability and Governance (ESG) factors, following both private and public standards, such as for the Global Reporting Initiative (GRI). The reason business has a new interest in environmental liabilities is that they are driving corporate assessed values, as economic liabilities.
To protect natural resources local stakeholders would still need a say in the use of local resources. To protect global resources for the future an equitable way to restrain growing economic demand is needed. World standards for Comprehensive Sustainability Reporting (CSR) wold accurately assess the impacts of business products. Then Economic Liability Assessments (ELA) of their economic costs to our future, would allow the world to act as a resource commons. It would provide equitable market constraints on high impacts would, to suppress demand, and fund investment in alternatives. ELA reports would be the basis of the “Eco-balance sheets” called for below, to be reported in business annual reports and factored into Pigovian taxes/tariffs on their products and services.
The basic scientific methods of doing accurate CSR and ELA assessments are what are discussed below. The current statistical methods of environmental and economic accounting contain a major systematic inaccuracy. Simply said the error is in relying on tracing individual records rather than assessing whole system requirements,
an inaccuracy caused by not asking who sliced up the pie, to check the accuracy of trying to trace all the crumbs.
a scientific method difference
between economic accounting and systems accounting
Slices of a business energy pie mostly go uncounted when relying on traceable records, leaving out all the energy demands of business services.
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Our Economic Liabilities for Environmental Damage
are direct costs of prior profits for business
that went unaccounted for.
New systems physics (3) would now allow the development of model “eco-balance sheets” to be placed along side normal “financial balance sheets” in annual business reports. That would provide a clear and quicker way than others for using market forces to correct our systemic problem of unaccountable impacts on our future.
Businesses have long accumulated unaccountable impacts by investing in growing irreversible exploitation, and now accelerating depletion, of what once seemed limitless capacities of people and the earth. It’s enormously costly for our future.
Investors and business managers can make better investing decisions if ESG measures capture the whole impact.
Those investment strategies incurred very costly economic damage to our future economy, that the businesses that created them were not charged for. For estimating environmental impact costs like that there are various methods, and some major recent innovations. Continue reading Budgeting for “the commons” needs business “eco-balance” sheets→
To transform the economy to become self-regulating will require our learning how to make accurate physical measurements of our environmental impacts, and associate them with the dollars spent that paid for them. That’s not yet being done, far from it.
Nature builds economies with whole working parts: people, businesses, independent service providers, etc.,. They only deliver their products if all their parts work together, like machines and operators making a working unit. Our traditional measurement methods have just ignored that arrangement of the natural world. Understand our impacts we need our units of measure to match nature’s units of organization, otherwise our errors of measurement become extreme.
The following short article was submitted for the June 1 “Energy” issue of the UNCSD Rio Outreach Forum, but too technical for those discussions.
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It would seem odd, wouldn’t it,… to not count the charcoal used for a family barbeque in its energy use, because a neighbor brought the grilled burgers and vegetables over from their yard…? That’s almost exactly what happens when businesses don’t count the energy used by their outsourced services.
They’re treated as having no demand on nature, according to the ISO 14000 and LCA rules. The real error is evident comparing estimates by the normal rules with the global average and finding nearly all of them far below average, a sign of missing data.
The true totals show dramatically higher levels of real impacts for business
compared with estimates using the standard method people are using
My recent scientifically recognized paper, Systems Energy Assessment (SEA) (1) shows a corrected method, but making sense of such a big error is still a problem. It’s evidently exposing some enormous blind spot(s). The new method used my work on how economies naturally work, with businesses and their services working as individual self- organized units. That’s the critical insight that allowed making a closed account with the parts adding up to the total. Continue reading Our curious missmeasure of impacts (and silver linings)→
Using a new paradigm of biomimicry
to create a global self-regulating financial commons.
This proposal was submitted to the Rio+20 Dialogues for comment and voting. See “News of the Commons” for introductions to the vision and the systems thinking needed. It’s part of the foundation of collaborative free markets needed for the health of the competitive free markets, as an element of Helene Finidori’s “Commons-Sense“. In this case to recognize that the profitability of the whole is threatened by a continued common investment strategy for growth, and needs a way to change to a common investment strategy for well being.
Nature systems initially develop using a “bootstrap” mechanism, growth, that continually expands their control of their environment. For any system’s own internal as well as external needs that self-investment strategy needs to become responsive instead ever more controlling to survive.
See UN Proposal to guide the UN SDG’s by this principle for OWG 7 & 8
Early version: Jan 2014 – A World SDG- and way to thoughtfully manage global systems This and the earlier versions contain a lot of good thinking…
the Most polished final version is a Feb 2014 proposal to the UN: A World SDG
I’ve found that it eventually pays, to let my moral dilemmas hurt my feelings if I actually want to know the answer. I don’t ever dwell on emotional pain. I just know I can learn from it if I attentively listen to what it’s about. Our world is spiraling out of control, yet again, as if people had no clue as to why.
The Pentecostal anthem “May the Circle be Unbroken” contains a kernel of systems physics I hadn’t noticed until recently, in a spiral the circles don’t connect, but are eve more separated. It came to mind when a question led me to think about the heartbreak of alienation that people all over the earth feel so personally, when they realize that are living in societies leading them into desperate troubles.
That was one of the common recognitions among the generation born after WWII, and the popular impetus for the “counter culture”. The sense everyone seemed to share was that the post war culture seemed like it would just repeat the same sort of horrible sequence of global catastrophes it had just experienced, and might learn nothing from it at all. That time lots was actually learned from the experience, of course. Only thirty years later, though, world society is clearly creating conditions for the same scale of mega-catastrophe for mankind again.
It helps to face the fact “we’re doing it again”.
We have an economy requiring everyone’s energetic cooperation, running into destabilizing limits in virtually every direction at once, with no offer of a solution but “try harder”… That’s a total formula for disaster. It helps to face the fact “we’re doing it again”. The “circle” today is ever more broken.
Growth is a chain of events for creating an ever more broken circle. It's a construction process leaving ever more unbuilt, to be completed or the spiral goes out of control.
People keep making cultures and economies that spiral out of control. They abuse the love, cooperation and talents of their people, steering their lives toward performing tasks leading to great evil. But.. who is society but a consensus on common purposes? No one is “in change”. Still people somehow build great societies with all good intent, that contain an internal logic that is “broken”. Gradually over time we just notice them “spiraling ever further out of control”, each loop an ever further break from the past.
These aren’t metaphors, really. Growth is a spiral process. It physically builds upon the changes of to past to create ever greater changes in the future, diverging ever further from its prior path on every cycle. That we’re now losing control of it is generally felt. It’s also accurately observed in the “fishtailing” of over-corrections and panicked avoidance of terrible consequences, dodging the consequent failures of guesswork on which excess reliance was placed.
Economic planners are “shooting from the hip”, unsure what to do, because nothing is really working. The general progression is of events becoming ever more unmanageable. Having things spiral out of control is a very natural process, like some cosmic storm of misfortunes, that happens in environments. The error if there is one is our failing to notice it in time to reign it in, to make our “circle” unbroken again.
There are quite a number of “systems of systems thinking”, that I broadly describe the history of in my entry in the Encyclopedia of the Earth on Complex Systems. Every science made up its own, for example, which are sometimes linked and sometimes not really linked much at all. The introduction to the “Natural Systems Theory” behind it, a scientific method for studying naturally occurring systems, is found on the research archive site. The subject could also be called “General Behavioral Economics” or for its focus on the complex development of local systems of organization serving as the working “capital” of nature and apparently all kinds of energy using systems, or a “General Systems Ecology” as another name for the same thing.
The thinking somewhat overlaps with “General Systems Theory” and “Complexity Theory” but doesn’t focus as those fields do on inventing theories for nature. The focus on theoretical models, that people have often quite ingeniously developed, if for creating a substitute way to represent physical behavioral systems. The study here is more focused on the organization and transformations of nature, the ones we cannot define. So it might then be called a “Real Systems Theory” or “Non-theoretical Systems Theory“. The focus is on studying actual individual systems of the natural world, in their own innate forms and locations. It still uses recorded information, but for study of where the information came from rather than how we can turn it into something else, using abstract models to represent it. Carefully defined abstract models are certainly used, …but mostly to help expose and clarify the quite different means and different patterns of organization found in the intermittent relationships we find systems around us formed by, and how they behave as wholes.
This change in thinking is a sometimes confusing problem, which also displays “systems thinking” (as a culture and language) as going through evolutionary stages of emerging forms, like the great eruption of new biological forms called the Cambrian Explosion. Here the struggle is to move from a “modeling” to a “learning” approach to the complex organizations of nature, and how that will settle will not be clear for a while. This site records but one example of the struggle it involves, but clearly one of the places “where the action is”, at present. ed 9/23/14
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Many “systems of systems thinking” represent the accumulation of an individual person’s work over decades, and may be original enough to not have apparent connections to other languages for how things work other than how they individually have learned to use them. So as a “discipline” Systems Thinking is a “silo” with lots of “micro-silos”. Being thrown into them is a little “sink or swim”, with little to grab onto.
Like most systems themselves, though, most people have some “starting point” for their organized way of thinking about systems. It might be the nesting of small operations/management units within large ones, for example, as you might find in studying how a business works. I look at those common units of organization as a “cybernetic body parts” to be use to help understand the observed systems around you. That treats systems thinking as a “learning process”, though, rather than as a a way to define the mechanisms of systems , though. Real systems work in more complex ways than our mental models can describe.
My main focus in on natural systems that are identifiable “self-managing units” of organization (natural systems). For them the “management” of the system becomes a role for the loops of relationships that are also the system’s “operations”, so operations and management are not separated, but the same. The loops of relationships define the “body” of its organization as a whole individual working unit. That definition by observation also provides an observable “natural boundary” to locate in the environment, and a way to define individual systems for research studies by their own unique shape and location.
Maybe the following summary would offer a kind of “life preserver” for the “sink or swim” task, that the somewhat unwieldy accumulation of my work presents. ;-) My approach starts with recognizing that growth, for a business, social or physical system, is itself a:
a self-managing system for building whole systems,
starting from a seed of organization
using existing resources in an open environment
that I can observe closely, and
helps me pick out simple models of working parts
to then better understand the full relationships of the things seen in their real contexts
importantly for understanding the transition between growth and maturation
when the system’s surplus resources change use
from first developing internal relationships to then develop external relationships
from first building the scale of the growing system
and then to maturing its relationships
Systems develop on a path of changing organizational stages
My materials are kind of scattered all over my site and blog.
Bill Rees asked some excellent questions about my submission to the Long Term Capitalism Challenge to use natural principles for managing growth to sustain the profitability of our economic system. I think I made good responses too.
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Hi Jessie –
Thanks for the opportunity to review your proposal.
I agree with your diagnosis of our economic malady but admit to struggling a bit with the remedy. Let me start with this sentence:
“When people spend their financial profits on good works it also [reduces the growth of money], with the added advantage when spent as for endowments instead of to compound profits, of doing a lot of good.”
Now, at the limits to material growth, the goal of policy should be to reduce the throughput of energy and materials to biophysically sustainable limits. So the above passage raises two questions. First, what do you mean by ‘good works’? and second, would the redirection of profits from investment in productive capital to ‘good works’ reduce total throughput?
/When financial earnings are not compounded to multiply investment, and the returns are not added to savings, it stops the automatic compound growth of investments. I’m using “investment” more broadly than usual, to make my statements inclusive, to include all ways in which money is spent with the intent of having it return profits. I then break spending and investing in components if I want to study the details, using a “figure 8” model. That’s a way to construct a global model of how income is allocated and returned as income, as a closed system with regulated money supply (Concept$).
/So, “spending” then means the opposite of investment, as money spent without an expectation of return, i.e. final consumption. Then “good works” most generally means final consumption used to maintain the profitability of the economy, as a universal good and necessity for survival. One thing that economists would recommend, it think, if the added spending seemed to increase aggregate demand, is to make sure enough of it was used for non-consumption expenses like to retire debt. The intent is to have investors treat their financial investments as endowments, and think of themselves as fiduciaries for the earth in general, to keep it profitable and using their money as the world is best served.
/Spending financial returns would reduce total throughput if it kept the funds available for expanding production systems from growing. How the restraining aggregate savings would affect the movement of funds between ‘producing’ and ‘non-producing’ investments I have not really thought through. One part seems to be that businesses would need to give their profits to their shareholders, to be spent, rather than to use them to grow while the whole economy is trying not to.
Our current growth course, growing resource depletion
Please leave comments for reviewers on The official competition entry at the MIX site (here too is fine for conversation). If you request information I’ll respond as I did for Bill Rees, and post it if it’s OK with you.
It’s a nice new version of the long series of proposals for using natural economies as models for better ways to organize ours, a kind of systems biomimicry.
General References: (added proposal references at the end)
I got very good detailed questions on the MIX proposal from Bill Rees, and posted my responses as Questions from Bill Rees.
For an introduction to the physics and general systems theory of natural open systems, see Natural Systems Thinking
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The Summary
A good goal for growth would be to end at a stable peak of vitality providing a sound capital endowment for life on earth. That would be better than ending at a peak of exhaustion, like other “tower of Babel” societies of the past such as Rome and the Mayans.
It can also be thought of as a change of “ism’s”.
It would also represent a change in form for our economic system, while still being the very same economy with the same people and rights, and reliance on creative innovation funded by investors. By giving profits an end purpose, of caring for things rather than just for multiplying profits, it woud give the whole economy a very different purpose. So, it can also be thought of as a change of “ism’s”. Continue reading Adopt natural system principles to keep economies profitable at their limits→
A pair of systems thinking posts on how why the natural way to reform capitalism and bring about its stable and healthy climax. is to turn the world’s accumulated investment funds (the savings of individuals) endowments for their owners purposes other than piling up more money. JLH
@Helen, My systems thinking aptitude is simple minded. Follow the medical practice that cannot fully undersatnd what is going on in a living organism, has no clue of the causation chain of all diseases, but they heavily rely on the self-corrcting and healing nautre of organisms and time as the only cure without telling us how it works. Therefore I see humanity as the disease, but as we are successulf as parasites and society is built on parasitism, it is is difficult to get the message accross: stop being a parasite and acccept that you need to work to get rewarded. Go bakc to the Garden of Eden, check out what the knowledge of good and bad is really about and accept that life on earth is not optimised for the life span of individuals, not veent a happy life, but on the growth of species and offsrpings in a growing variety which was halted by hmans presence and growth in number. Surely, that will not go on like that, Nature will teach you by taking sanity away from us first. the rest will be easy. We are already insane in pursuing excitement, show and appearances and covering up knowledge and giving up common sense.
Jessie Henshaw • @Ferenc – You said to Helene, “Therefore I see humanity as the disease, but as we are successful as parasites and society is built on parasitism, it is difficult to get the message across: stop being a parasite and accept that you need to work to get rewarded.”
Why it’s “difficult to get the message across” is partly the difference between “feedbacks” as “ratios” and “feedbacks” as “investment choices”. That’s what I had mentioned, to which William Ross said “You have succeeded in expressing it well and succinctly.” as “one of the more fundamental differences between how models of systems and real physical systems actually operate. Particularly for growth systems that represent complex construction processes.” Continue reading Why real economic ‘feedbacks’ are investment choices, and Keynes knew→
There have been three posts on Dot Earth on a strategic change taken by some leading conservation advocates, led by Peter Kareiva, chief scientist of the Nature Conservancy. His view presented in Peter Kareiva, an Inconvenient Environmentalist is that environmental conservation is meeting less success due to “doom and gloom” advocacy, that turns business and the public off, and it would be more productive to work cooperatively with business.
Just ignoring the deep conflict between conservation and business purposes, because it’s good for the business of conservation, doesn’t make the problem go away.
It’s very curious. This is Kareiva’s second round of explaining his approach to being more cooperative with business. I understand a lot of why that is good for conservation, as a business itself. He still leaves out the big contradiction of that for the environment, though.
Businesses around the world are indeed now trying to learn how to avoid environmental liabilities of all kinds. They’re now hiring teams of in-house consultants to guide their sustainability policies and practices to do that. Their purpose has not changed yet, however. Their purpose is to sustain their growing rates of profit, not the earth. Their impact reductions inherently involve only slowing the rate of accelerating increase in using resources and the environment.
Maximum rates of growing profits simply never come from reducing or even stabilizing business impacts. I do actually applaud his engagement with business but it needs to be a far more open and honest effort to educate, still. Nothing has really changed. Just ignoring the deep conflict between conservation and business purposes, because it’s good for the business of conservation, doesn’t make the problem go away.
Jessie Henshaw
way uptown
New systems science, how to care for natural uncontrolled systems in context
