July 24, 2008

Economics at the Edge

"Revolution is not something fixed in ideology, nor is it something fashioned to a particular decade. It is a perpetual process embedded in the human spirit.” -- Abbie Hoffman

What is the nature of economic growth? Economist Joseph Schumpeter argued that economic growth happens through a process of 'creative destruction' - a process where old existing social and productive systems transform and give way to new ways of being, doing and relating. These novel ways of living arise to meet the needs and directives (life conditions) no longer met by the former economic activities.

Schumpeter argued that creative destruction has two sides: the costs and results of destruction as well as the benefits of creation. And as creative destruction intensifies, the results of this great tradeoff sharpen. It then becomes important to attempt to understand and track how this tradeoff plays out through the practical, multi-dimensional specifics of any situation. Only through an appreciation of the wider contexts and influencing factors (social, psychological, ecological, cultural, etc.) can we begin to determine whether or not such novel developments can be facilitated to be promote overall individual, group and environmental health

Read about Schumpeter's innovative work here:

'Capitalism, Socialism and Democracy'

So, given the delicate and complex nature of this dual transformative process, how do we begin reorganizing the industrial economy in a way that truly honors and includes the dynamics of 'creative destruction' in an increasingly complex global system? A long and complicated question, we know, but a question which needs to be at the centre of all social policy and reorganizational efforts.

For starters, such reorganization might include a sensitivity to the particular life ways and conditions (capacities and challenges) of the various peoples involved - thereby ultimately affirming the human rights and responsibilities of the most vunerable populations. One way promising way forward is suggested by leading economic consultant and strategist Umair Haque:

"By using markets, networks, and communities to alter the way resources are managed: to weave a fabric of incentives for sustainable growth and authentic value creation into the economy -- a new economic fabric that's meaningful to people."
"Meaningful economics", then, must include the linking of cultural values and worldviews to macro and micro economic processes and policy. This linking must be grounded in efforts to include individual meaning-making (consciousness) - and related processes. In fact, an economics poised to respect all aspects of the human condition would "weave a fabric" of social economics in such a way as to support the integrity of individual human development, ecological systems and social justice.

In this Harvard Business Press Blog Haque puts forth a new manifesto for the next industrial revolution:

Haque's article is a move towards thinking more holistically about the issues, arguing for the importance of providing real tangible and valuable incentives - yet Haque’s central premise of “organize something” still maintains an allegiance to the older Western managerial paradigms - and therefore does not fully respect the more ‘wild’, or unmanagible aspects of human-social evolution.

Perhaps as perspectives shift from the modernist "management" thinking to more holistical and multiperspectival ways of thinking and acting we will begin to see a shift in practice where natural design principles and creative destruction meet to generate a truly adaptive and 'meaningful' economics.

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