An Economy for HUMANITY

BY HANS-PETER PLAG AND SHELLEY-ANN JULES-PLAG
WWW.ECONOMY4HUMANITY.ORG

HUMANITY AND THE EARTH’S LIFE-SUPPORT SYSTEM

The notion of our planet being a life-support system for all life plays a central role in understanding humanity’s relationship to the planet. Humanity is embedded in, and dependent on, the “Earth’s Life-Support System” (ELSS). Communities of human and animals interact with the ELSS through flows of energy and matter (Figure 1); they take from the ELSS what they need to sustain the population, and they give back to the ELSS what remains after they have processed matter and changed the state of energy. All communities impact the ELSS in a complex way, and their interactions can improve or degrade the state of the ELSS with consequences for all other communities depending on the ELSS.

FIGURE 1.
Humanity and the Earth’s Life-Support System (ELSS): Most interactions between human communities and the ELSS are economic (left). Human communities interact with the ELSS through flows of energy and matter (right), and these flows are under the influence of economic rules, which in turn are impacted by social and ethical norms.

Humanity has achieved a unique position in the ELSS and has the means to significantly change the state of the ELSS. Propelled by access to seemingly unlimited energy and technological progress, human population growth, with associated resource consumption, habitat transformation and fragmentation, and climate change, have degraded the ELSS. This degradation has pushed the system out of an exceptionally stable state that has provided a “Safe Operating Space for Humanity” (SOSH) during the Holocene (Rockström et al., 2009) into a rapid transition to a new but yet unknown state. Humanity is “reengineering” the ELSS at global scale and changing its physiology fundamentally (including but not limited to the energy, water, Carbon, Nitrogen, and Phosphorous cycles), is mobilizing and adding new constituents into these cycles, and is rapidly reducing the number and diversity of non-human animals.

A large fraction of the Earth surface has been changed to meet our needs, and as a result, the extinction rate is accelerating and is now at an unsustainably high rate (Barnosky et al., 2012). In an analogy to medicine, humanity has developed into the “anthropogenic cataclysmic virus” (ACV) in the ELSS (Plag, 2015). To reach sustainability, this virus is challenged with a transition into the healer. This transition requires overcoming the current inconsistency between normative ethics and the prevailing economic, social and governance practices.

For a species as powerful and impactful as humans have become, safeguarding the ELSS has to be a core concern if survival of our species matters. Since Adam Smith 240 years ago laid out the basis for economies as we know them, almost all interactions of humanity with the ELSS are governed by economic rules. Consequently, the extent to which communities safeguard the ELSS depends crucially on the economic model. Safeguarding the ELSS has to be inherent in the economic rules. Safeguarding the ELSS requires an economy that understands the ELSS and aims at a healthy ELSS in the same way health sciences and practitioners understand human health and aim at safeguarding our individual life-support systems.

Although the vast majority of normative ethical accounts demand that the human population transition to a fair, sustainable lifestyle, the economic rules that require perpetual growth are in tension with this moral requirement. In fact, the current rules are sustaining growth by accelerating the main mass and energy cycles in the ELSS. However, being successful for some time does not equate to being sustainable. The acceleration of the flows is leading to a cataclysmic degradation. Making progress towards an economy that satisfies our needs while safeguarding the ELSS requires a fundamental transformation of the paradigms upon which our economies are based. In an “Economy for Humanity” (E4H), the overarching goal is to ensure thriving communities by satisfying the needs of the present while safeguarding the future.

“Somehow, we have come to think the whole purpose of the economy is to grow, yet growth is not a goal or purpose. The pursuit of endless growth is suicidal.”

–David Suzuki

A GROWTH-ADDICTED ECONOMY
AND UNSUSTAINABILITY: THE STATUS QUO

“Global sustainability is an emerging system property of the Earth’s Life- Support System (ELSS), which can only be obtained if economy has the dual purpose of safeguarding the health of the ELSS while ensuring the well-being of human communities.”

For more than 200 years, almost all interactions of humans with the ELSS have been controlled by economic models that disregard the wealth of the non-human environment. Adam Smith (1776) defined the purpose of economy to be the creation of human wealth, with no regard for the impact this creation of wealth might have on the ELSS. As John M. Greer (2011) states, “it would be by no means inappropriate to define all of modern economic thoughts as footnotes to Smith.” One of those footnotes is the work of Milton Friedman, who redefined in 1970 the purpose of business as maximizing profit for the shareholders. Focusing totally on making money, and forgetting about any concerns for employees, customers, society or the ELSS, amplified the impact of Adam Smith’s original idea. In connection with the easy access to energy and new technologies, it accelerates the degradation of the ELSS.

Only recently have we started to realize that the disregard of non-human wealth actually not only threatens our survival as a species but also endangers our economies (Heal, 2017; Korten, 2015). As summarized by Costanza et al. (2013), “the current mainstream model of the global economy is based on a number of assumptions about the way the world works, what the economy is, and what the economy is for.” These assumptions originate in an earlier period, when human wealth and capital were very limited, extreme poverty was a widespread problem, and human impacts on the planetary system were minor and at local scales. Planetary non-human capital was abundant, and there was little reason for Adam Smith and others to consider any limitations of the non-human capital in developing the economic model that became the origin of today’s global economy and society.

With less than a billion people on the planet, with limited access to energy and means to change the environment, with most people in extreme poverty, often exposed to famine, epidemics, and wars, it made sense to see the sole purpose of economy in as increasing human wealth and to focus on the growth of the market economy. By thinking of the economy as only marketed goods and services, the means for growing the market became increasing the amount of the products and services that were produced and consumed. Thus, increasing the flows in the ELSS became synonymous to increasing the growth of human wealth.

The current mainstream economic system leads to basically unconstrained use of natural resources and their depletion. Long-term impacts and the resulting unsustainability are largely ignored and the hope is that lost ELSS functions can be replaced by technology, generating the requirement for continuous innovation. “More is always better.” Degradation of non-human capital and the loss of functional value of the ELSS are not considered in the measure of growth being the Gross Domestic Product (GDP, Costanza et al., 2014).

The current trajectory of the ELSS points to major shifts in the system-state with unknown and uncontrollable outcomes for humanity, and to existential threats for our global civilization. The ACV is causing massive degradations of the ELSS. Changing the trajectory of the ELSS to more desirable and less threatening futures requires disturbances that exceed the resilience of our society and challenge our basic paradigms (Figure 2).

FIGURE 2.
The iterative nature of bending system trajectories towards desirable futures: Achieving the transformation from the current state and trend to a desired future requires an iterative process of disturbances exceeding the system’s resilience and corrections to bring the system’s trajectory closer to the desired future.

Only a transition to a fundamentally new economic practice, an E4H that inherently safeguards the ELSS, can divert the system trajectory towards more desirable futures. To guide our communities and economies towards this transition, it is essential to:

The impacts of ethical, social, and economic rules on the ELSS physiology result from governance decisions. Although normative ethics demand otherwise, the current descriptive ethics are focused on growths of human wealth measured by inappropriate metrics favoring the acceleration of all flows between human and non-human components. Rieder (2016) identifies three normative ethical principles that are relevant to sustainability:

Based on the notion that the “climate change crisis” is actually a “population crisis,” the author uses these principles to conclude that in the current situation of a rapidly growing population having a severe degrading impact on the sustainability of the global society, the number of children a family can reasonably have is limited to zero or one, and any larger number would need thorough justification. Applying the same ethical principles to the current economic practices shows that there is what could be termed a “production crisis,” in which much of the current economy violates at least the first and second principle by causing massive harms and severe injustice due to the degrading ELSS, climate change, and the distribution of wealth.

A number of alternative economies have been proposed. For example, Jackson (2009) discusses ways to prosperity without growth. Utting (2016) argues that for the implementation of the U.N. Sustainable Development Goals (SDGs) a “Social and Solidarity Economy” (SSE) has a potentially important role to play and can lead to a reorientation of economies and societies toward greater social and ecological sustainability. The principles and practices of SSE aim to reintroduce justice and to humanize economy with innovations grounded in people’s agency. The transformative potential of SSE is considered crucial for achieving the SDGs. The current mainstream economy and its wealth creation seem no longer to serve humanity (Ruggie, 2003).

Those benefitting from the discounting of natural capital in the current economic model, which allows individuals and companies to gather seemingly unlimited human wealth in money, are likely to resist any transition to a novel economy consistent with the ethical principles. Any transition from the current infinite-growth economy to one that safeguards the ELSS will be resisted by many individuals, companies, and to some extent governments. However, increasingly people across the planet understand that the current development is unsustainable and threatens the well-being of current and future generations. Many of those who realize that we are taking away the future of our children are engaging in the global unrest. Engaging them in the transition to E4H will help to overcome the resistance by those who want to keep the short-term benefits of the current system for themselves.

From the perspective of sustainability, including poverty eradication and equality, humanizing the economy is perhaps the greatest challenge facing the international development community (Restakis, 2010). The efforts focusing on innovations and practices related to public-private partnerships, philanthropy, corporate social responsibility, social impact investment, the promotion of small-and medium-sized enterprises, and integrating small producers in the supply chains of global corporations often result in piecemeal or incremental reforms (Utting, 2013). Exploring ways to implement fundamental transitions is therefore a necessity.

As a consequence of our unparalleled but unsustainable success, there is a need to reconceptualize the purpose of economy. Considering that at any time the flows between human and non-human components of the ELSS take place in the context of the prevailing economic model, we postulate that “a sustainable economy is one that safeguards the Earth’s life support system while satisfying the needs of the present and ensuring the well-being of human communities.” This definition implies that economy can be sustainable only if it takes responsibility for the health of the ELSS and makes safeguarding the health of ELSS and ensuring the well-being of human communities a dual purpose of economy. Our definition is aligned with that of sustainable development given in Griggs et al. (2013).

“We define a sustainable community as one that satisfies the needs of the present while safeguarding the ELSS on which the welfare of current and future generations depends.”

TRANSFORMING THE WORLD BY
TRANSFORMING ECONOMY: A PLAN

For civilization to prevail, we need to transition to an Economy for Humanity that sustains and creates thriving communities embedded in a healthy ELSS. E4H (http://economy4humanity.org) aims to initiate this great transition by implementing a pledge for investors, producers, traders, and consumers to participate responsibly in economic activities with the mission to safeguard and restore the life-support system. Based on a holistic measure of the state of humanity and the ELSS, E4H is developing a certification system with comprehensive criteria as a basis on which those participating in economy activities, be it as consumer or producer or trader, can make decisions on which products to produce, trade and consume. The certification system recognizes the degree to which we all live up to this pledge.

The development of criteria and best practices for an E4H supports those who take the pledge. By recognizing and rewarding those who do most to safeguard the ELSS as part of their participation in economy, E4H enables a new economic framework and a societal dialog about an economy for humanity that recognizes the fundamental role of the health of the ELSS for our civilization.

E4H urges all those who partake in the economy, be it as producer, provider, or user, to take a pledge that underlines the dual purpose of economy. At the core of the transition is the certification of producers, traders, investors, and consumers as responsible participants in E4H following up on their pledge. In many societal areas, voluntary and mandatory certifications have proven to be transformational, for example, for safety of work processes and products, the environmental quality of buildings, and to some extent “green businesses.” This societal validation of the effectiveness of certification as a means to guide societal development in desired directions provides a solid basis for the approach of E4H.

The approach of medicine to safeguarding the health of individuals and communities has proven to be extremely successful over many centuries. The “Hippocratic Oath” was fundamental for the development of medicine in service to humanity. Applying a similar approach to safeguarding the ELSS by developing a basis for a pledge to an economic practice in service for humanity, with the health of the ELSS being inherent in economy, has very high potential to change the future of humanity and increase the prospects of our civilization. E4H aims at engaging global expert communities as well as a wide range of NGOs and intergovernmental organizations in the development of a planetary medicine and a laboratory for “patient Earth.” The development and validation of a planetary medicine that understands the physiology and processes that maintain a “healthy” ELSS addresses questions including:

In addressing these questions, E4H reviews the current ethical, social and economic norms and rules, and identifies core impacts on the ELSS. Realizing that the flows between human communities and the non-human components of the ELSS are controlled by fully mind-dependent ethical, social and economic concepts, rules, and practices, it becomes obvious that we have a mind-based system that is coupled to a mind-independent “real world.” It is this understanding of humanity embedded in the ELSS that provides the basis for the approach of E4H: the ethical, social, and economic rules are the “software” or “brain” representing the governance impacting the behavior and development of the “hardware” or “body” that represents the ELSS. By changing the rules and governance, the health of the body can be impacted.

THE E4H VISION:
To facilitate great transition from the present “economy against humanity” to one for humanity, an economy that meets the needs of the present while safeguarding Earth’s life-support system, upon which the welfare of current and future generations depends.

THE PLEDGE:
I will carry out economic activities with the goal of meeting the needs of the present while safeguarding Earth’s life-support systems, upon which the welfare of current and future generations depends.

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