Creating the Structures for a Generative Economy

January 17, 2013 Leave a comment


The following post was written by IISC friend Beth Tener, principal of New Directions Collaborative, with whom I’ve had the privilege of working over the past few years on a few different sustainability-related network building efforts.  Beth and I share a keen interest in supporting the development of new economic structures and flows that bring resources back to communities and keep value grounded in real and sustainable ways.  You can follow more of Beth’s insights on her blog.  

A friend handed me a copy of Marjorie Kelly’s new book Owning Our Future: The Emerging Ownership Revolution; Journeys to a Generative Economy and said he thought it was so good that he had bought a case of them to share with colleagues and friends. By the time I was 50 pages into the book, I had a similar impulse to buy a case. Kelly was the editor of Business Ethics magazine for 20 years and now works at Tellus Institute and has spent years considering how to reform corporations and create enterprises that are socially responsible.

This is one of those books that you read and from there forward, you see the world in a different way. Her book guides the reader in looking deeply within the systems and structures of our organizations and economy, much of which we take for granted, to see the patterns that create outcomes we don’t want and how we can change these to create positive outcomes. Kelly invites us to explore the patterns of organization – the social architectures needed to bring human civilization into harmony with nature.

She writes: “We know the next economy will require things like wind turbines, limits on carbon emissions, and sustainably managed forests…We need innovation not only in physical technologies but also in social architectures. If physical technologies are the what of the economy, social architectures are about the who: who will make economic decisions, and how, using what kinds of organizing structures? Social architectures are the blueprints of human relations.”

As the national debate has focused on the fiscal cliff and these seemingly intractable divisions around free markets vs. regulations, private vs. public, her framework offers an alternative path for creating thriving enterprises that inherently create public good, as their purpose. Through specific stories Kelly contrasts the systems that drove the financial collapse (e.g., predatory mortgage lenders) with emerging enterprises that follow a different model such as co-operatives, community owned banks, B-corps, and social enterprises.

The key ways to shift to an economy that works for all are based within the underlying design of economic power, particularly in how the purpose and ownership of enterprises is established. If the “system” of a business is focused exclusively on maximizing financial income for a few and minimizing risk, it will orient to meet this purpose, with harm to communities, workers, and the earth as by-products that society has to deal with and/or regulate. If the purpose of an enterprise is oriented around “generative” goals, which she defines as “aimed at creating the conditions for all of life to thrive for many generations to come” it will self-organize to achieve that purpose.

Her principles of Generative Ownership (vs. Extractive Ownership) are worth exploring in more detail as a framework for businesses and networks. This link has a 30 page excerpt of the book with more details.

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