Achieving circular economies with innovative thinking and reshaping of whole sectors
4 FEBRUARY 2022, HAZEL HENDERSON
Education is classified as consumption, even though it is the most important investment all societies make in the health and competence of their future citizens
The earliest markets for metaphysical reconstruction evolved continually from changing belief systems, religions, creation stories, cultural fashions, and later from science fiction, futures forecasting scenarios. These changing human styles of being and behaving are ubiquitously and profitably expressed in the arts: paintings, poetry, fiction books, music, dance, and theatrical performances. These markets and new opportunities flourish in all information-based societies and now dominate all other forms of globalization.
In our Information Age, value is shifting from material production and from trading things you can drop on your foot to digital assets: intellectual property, patents, brands, recipes, and reputational ‘goodwill,’ which accountants are still learning to measure. Most mature industrial societies have made the shift and up to 80% of their GDP accounts are for these intangibles. For example: the value of Coca Cola’s caramel-colored sugar water recipe is carried on their books as a primary asset of up to $70 billion, while Donald Trump’s family business brand rose and fell with his reputation. The popularity of non-fungible tokens (NFTs) attests to the rising acceptance of virtual versions of artworks, notional icons, and crypto computer codes as branded tokens valued on proliferating privately-owned blockchains. Even costly, luxury branded handbags are now sold in virtual form, rather than shown off in physical feats of heroic consumption.
Back in the physical world, stock markets based on bouncing fiat currencies are ever more at risk of ‘flash crashes’ and crises as more investors are trading digital assets electronically on private liquidity networks and using cryptocurrencies with no tethers to the real world, as reported in Money Is Not Wealth: Fiats v. Cryptos. Accountants now measure six different forms of capital: finance, built factories and facilities, intellectual capital, social capital, human capital, and natural capital, and measure the performance of corporations as the extent to which they enhance or degrade all these six forms.
GDP is a simple cash flow statement of goods and services transacted in money, which measures all public debts, but not the investments they create: public goods (education, municipal services, R&D), infrastructure and other assets, simply because GDP does not have an asset account, as in formal double-entry book-keeping. Thus, countries’ debt-to-GDP-ratios could be cut by up to 50% with a few keystrokes.
Education is classified as ‘consumption,’ even though it is the most important investment all societies make in the health and competence of their future citizens, as discussed in Education As Investment. All of these shifting forms of metaphysical re-construction are often referred to as ‘paradigm shifts,’ as in Thomas Kuhn’s The Structure of Scientific Revolutions (1962). They are creating thriving new markets for consulting firms, marketers, and internet platforms re-intermediating our complex societies in new ways. For full disclosure, Ethical Markets Media Certified B. Corporation, which I founded in 2004, is such a digital asset-based enterprise, creating intellectual products based on futures research and scenario-building of possible pathways of technological and cultural evolution. Global consulting corporations including McKinsey, KPMG, and the ‘Big Four’ accounting firms, rating agencies, standard-setters, monitoring groups, index-creators like MSCI, FTS4Good, and ESG funds, still dominate these global markets.
These often highly lucrative markets for such metaphysical reconstruction are the necessary foundation for new infrastructure and plumbing for the new technologies and economic activities. All human societies are transitioning from the fossilized Industrial Era of the past 300 years to the cleaner, greener, knowledge-richer and more equitable Solar Age, which I continue to track and document since publishing The Politics of the Solar Age (1981,1988), now in 800 libraries in 20 languages and a free download for aspiring global citizens. Instead of digging in the Earth to produce our goods, we are learning from plants’ photosynthesis how to use the sun’s free photons which have always powered our planet and provide all our food, shelter, and very survival.
These tectonic social transitions feedback to expand human cognitive skills and widen our mental and emotional horizons, as described by Harvard-based systems synthesizer, Professor Joseph Henrich in his monumental The Weirdest People in the World. Henrich ransacks human history, religions, cultural styles, and economies and focuses on this kind of human cultural evolution which outpaces the slower evolutionary process, described by Darwin as evolution by natural selection under changing environmental conditions. Henrich rightly criticizes psychology and economics for their scholars’ cookie-cutter models of human behavior and preferences. These practitioners are blind participants in this same cohort of Western Educated, Industrialized, Rich and Democratic (WEIRD) people acculturated during the Westernized Enlightenment-driven Industrial Revolution. Continue reading