Crash, Bang, New Economics (and How We Can Build It)

Our economic models have failed us. Anyone who has lived with the aftermath of the 2008 financial crisis knows that. Many have lost their jobs, or lost their investments and even their future prospects. Many who expected to have a smooth career path are getting by from contract to contract, or may even be chronically unemployed. The gap in income inequality widens by the day.

What happened to progress?

In the western world we expect every generation to progress, and instead today, the world that was rebuilt after the devastation of World War II sees many people achieving less in material terms than their parents and grandparents. We all know something has changed for ever. We all know decisions and policies cannot be repeated if we want to avoid the same catastrophic results. We sense that resources, both human and natural, are being squandered because of short-term thinking. What are the alternatives?

We need to adopt a systemic approach to management and economics, based on cooperation, where everybody can win.

Back in 1993, Dr. W. Edwards Deming, the founding father of the Quality movement, published ‘The New Economics’. It was already obvious to Deming what was going wrong and what needed to be fixed. Competition was destructive. We needed to adopt a systemic approach to management and economics, based on cooperation, where everybody can win. 

Sustainability through networks of cooperation

Resources are scarce, so the name of the game has to be about sustainability. How do we create economies that are sustainable? Deming has pointed the way, and the discoveries of life sciences underline his point. Life, as we experience it on this planet at every level, is based on interdependencies and interconnections. We exist, as physicist Fritjof Capra brilliantly pointed out, within a “web of life”, a network of interdependencies that cannot be understood solely in terms of its basic components but has to be studied in terms of its interrelations.

Win-Win conflict resolution, cooperation instead of competition, symbiosis instead of survival of the fittest, patterns not just structures; these today are some of the basic, well understood elements that make up a society that can sustain its ambition to evolve and prosper, as well as the founding elements of our biological existence. 

What do we need?

There are three fundamental things we need in order to put solutions for a prosperity into action.

1. A theory – this means profound understanding of interdependencies and the implications of our actions
2. A mindset – in other words the ability to think systemically to continuously develop robust solutions
3. Tools – practical aids to foster systemic thinking and action

We have the theory, the knowledge and the tools to create a new economics. All of these things exist for us to tap into, and in this blog we will be constantly referring to them.

As we learn to recognize and act within the interdependencies that exist, as we increasingly adopt a systemic understanding and approach to our markets, organizations and governing policies, we increase our ability not just to survive but to prosper in our current world.

Coming in August! Our new business novel The Human Constraint is an e-book that takes the reader on a roller-coaster ride through the financial crisis and towards a new model for future business. The e-book comes with an accompanying website highlighting chapter by chapter  the thinking, methods and tools to achieve a new economy of sustainable wealth.