1. Nestedness
By starting his list of eight principles with In Right Relationship, it appears as if Fullerton is taking a spiritual perspective, but the truth is more concrete: every system that is relevant to humans is either nested in or interconnected with other systems; when their relationships are out of balance, the health of all the systems suffers. I explored this question in my 2017 pre-capstone OP2 – Business as a Driver of Change:
“The fundamental tension between the current culture of business and that needed to foster a regenerative future leads me to consider what other tensions in society might parallel this one. Through the work of Daniel Christian Wahl, I find myself framing this conversation in the tension between the Narrative of Separation and the Narrative of Interbeing; the question of whether we are all part of a greater whole or separate from it that defines the design of all human activity. The Narrative of Separation that pervades traditional business culture places society, economy, and environment outside of each other. In this model “environment" is seen as meaning “nature” and seen as “outside” of us. A graphical representation might look something like this:”
Image: James M. Edwards
“Placing society outside of the very environment that sustains it presents design challenges, for how can we create a self-sustaining society outside of its own support system? The challenge becomes even greater when we believe that the economy must have primacy in this relationship, the idea being that if humans need a strong economy to survive, then stronger is better. Even a coarse resource flow analysis makes the fallacy clear: In a worldview that values financial capital over all other forms of capital, the resources of environment and society are ultimately extracted for conversion to financial capital. And, since the Narrative of Separation places humans outside of nature we find that society also drains environment. Finally, the interest-bearing financial system that is a key part of this model means that the economy must be in a constant state of growth. The resulting dynamic leads to the inevitable depletion of both the environment and society from extraction along with their degradation from the free creation of externalities this economic model allows.
Image: James M. Edwards
“A more accurate representation recognizes that Economy, Society, and Environment are nested. Nature as a separate idea doesn’t exist at all as long as we continue to depend on the biosphere for our survival. A culture that appreciates this relationship will recognize that designing economies that generate greater health for each element will provide greater wealth for all the elements. The focus of economic activity then becomes salutogenic first, and profitable second."
Image: James M. Edwards
Fullerton adds a layer of resolution to the nested systems model by showing that the financial system is nested within the economy. This addition is important because of the critical role the financial system plays in driving the nature of our economy; if we do not see it as part of the greater whole, it will continue to work at counter purposes with our ecosocial goals.
Image: James M. Edwards based on model by John Fullerton
The key takeaway here is that human economies “are so deeply embedded in both societies and the biosphere that excessive damage to any one part ripples back to harm every other part as well” (Fullerton, P.45). This idea of deep interconnection is so central to all ecological design as to be the core premise. The Doughnut, for instance, represents an effort to integrate as many interrelated metrics as is practical. Likewise, See the Big Picture is Raworth’s representation of the energy flows throughout our nested-systems economy. All of this is so consistent with the Permaculture principles that it is difficult to single out one, but it is Integrate Rather Than Segregate that stands out. David Holmgren tells us that “the purpose of a functional and self-regulating design is to place elements in such a way that each serves the needs and accepts the products of other elements.”(Holmgren, P17) In other words, recognize that everything is interconnected, identify the qualities of these connections, and design accordingly.
3. Diversity
In the Permaculture Principle of Use and Value Diversity we find “the common sense idea that diversity provides insurance against the vagaries of nature and everyday life” (Holmgren, P20). Yet a trait of capitalism’s quest for efficiency is the imposition of one-size-fits-all solutions in an effort to absorb everything into accessible, predictable, controllable markets. We see this homogenization at all scales, from monoculture agriculture to the global proliferation of fast food chains. But what we gain in efficiency with this approach we lose in diversity and therefore in resilience. We now long to recover this resilience as the accelerating degradation of our social and natural systems pushes their responsiveness to its limits. Homogenization, it turns out, is the opposite of Darwin’s adaptability.
In keeping with these ideas, Regenerative Capitalism’s principles Empowered Participation and Honors Community and Place ask us to re-diversify and re-localize, to substitute centralized control with interconnected networks of local business and government. In these ways we not only restore the benefits of commerce to communities and the people in them (Design to Distribute), but also restore the link between local knowledge and solving local problems that is so essential to culturally and geographically appropriate solutions. In what is perhaps her biggest oversight, Raworth offers no explicit instruction to work the diversity of our economies. Instead, these are implicit in her first Way, Change the Goal. The instruction that gender equality, social equity, and political voice are all central to the social foundation of the economy suggests the understanding that valuing diversity is essential to the success of a design. So again we find that both our models of regenerative economy align with permaculture's understanding of ecological design.
2. Holism
Fullerton also entreats us to View Wealth Holistically which, like Raworth’s Change the Goal, reminds us that “what gets measured gets valued.” Here Fullerton invokes the Eight Forms of Capital articulated by Ethan Roland and Gregory Landua in Regenerative Enterprise: Optimizing for Multi Capital Abundance to remind us that there is more to life and more to economics than just money. All of the following forms of capital have intrinsic value in a regenerative economy and work together to create a richer whole.
Credit: ©2017 Copyright Regenerative Enterprise Institute
Roland and Landua, themselves consummate permaculture designers, provide a compelling argument that valuing forms of capital beyond financial capital can create greater resilience for society. “The current global society is organized and controlled primarily through the flow of financial capital, but the survival of any human or society depends primarily on living capital and the material capital that arises from it: food, water, energy, and shelter.” (Roland & Landua, p.83) Whereas our economy has evolved to primarily value that which can be monetized, in order for an economy to be In Right Relationship it must learn how to value its riches holistically, for their inherent worth.
This holistic approach to valuing the many forms of capital, to measuring the well being of the economy by assuring that all aspects of it are measured, is in perfect alignment with our understandings of ecological health. Several of the Permaculture principles remind us of this. The first is Observe and Interact, the simple act of which would bring us to an understanding of holism. More explicitly, principles such as Use & Value Renewable Resources, Integrate Rather Than Segregate, Use and Value Diversity, and Use and Value the Marginal each in their own way remind us to look at the big picture, appreciate what each element brings to the whole, and design to include those contributions in our valuation of the wellbeing of the ecosystem.
4. Interdependence
A key pattern that emerges throughout the literature of regenerative economics is the importance of networks alongside hierarchies. To an ecological systems designer – such as a Permaculture practitioner – this seems self evident: if Ecology can be defined as “that branch of biology which studies the interactions among organisms and their environment,” then any Complex Adaptive System, such as an economy, can be considered an ecology because it is the interdependence of the elements within it that defines it. It needn’t be biological. Noting that "interactions among organisms and their environment" is the central focus of study, we find that the richness of those interactions, in other words, exchange, is the central measure of wellbeing of the ecology. It cannot simply be some of the elements of the environment taking the most and the best of the resources. And the absence of exchange is stagnation. So the vibrancy of these resource flows is central. Hence, Raworth's Design to Distribute is not merely altruistic, it is a practical way of improving the health of the entire system.
Nevertheless, we are taught to prioritize hierarchy and competition in business. Darwin’s “survival of the fittest” misrepresented again. Besides developing a deep understanding of economic interdependence, shifting this perspective also suggests moving our values around power sharing towards Fullerton’s principle of Empowered Participation. The conventional wisdom of hierarchical governance and extractive economies throughout history is that greater inequality confers better wellbeing to those at the top. The evidence suggests otherwise: “Research by Kate Pickett and Richard Wilkinson shows that extreme inequality, which snuffs our “empowered participation, “ harms overall systemic health, not just the health of the disadvantaged.” (Fullerton, P.59)
Source: Kate Pickett and Richard Wilkinson, The Equality Trust (UK) / Fullerton, P.59
One important change we can foresee as we move away from rigidly hierarchical structures and towards more networked ways of working is the cultivation of genuine servant leadership in business, government, and civil society. These notions are implicit throughout the literature of regenerative economics, and specifically in Fullerton’s principle of Empowered Participation and Raworth’s inclusion of Political Voice in the Social Foundations of the Doughnut.
5. Exchange
Fullerton expressly adapts a foundational permaculture principle to economics: his Edge Effect Abundance is a perfect mirror to Use Edges and Value the Marginal. From a flows analysis of any system we learn that the richest exchanges happen along the edges that bound areas of difference. If the health of a system is measured by the volume and variety of flows, then the more edge or the greater the difference along those edges, the greater the exchange of resources or ideas and the greater the potential for abundance and innovation.
This idea carries through to Fullerton's Robust Circulatory Flow which suggests that the better the circulation, the better the health of the entire system. But in much the same way that hierarchical power structures concentrate power, so capitalism concentrates resources, starving our the marginal and trending inexorably towards monopolies. This is akin to an organism with poor circulation, which inevitably leads to stagnation and ill health. We see this in the resource distribution within our communities as well as globally, between nations. A less obvious link to Raworth's idea to Be Agnostic About Growth is that a system with good circulation needn’t grow in order to be healthy. Permaculture directs us to Use and Value Renewable Resources and Services, and to Produce No Waste. Both of these principles suggest, as Raworth and Fullerton do, that making sure all of the resources in a system flow back into it rather than stagnating at the edges or simply leaving the system will contribute to the overall health of the system. By logical extension, if a system is maximizing its resource flows and losing none of them, it doesn't always have to be growing to remain healthy.
CONCLUSION
Far from a principle-to-principle comparison of these three systems, this analysis was meant to evaluate the ecological validity of our economic models at a pattern level. What we find are two models which represent an understanding of systemic health consistent with one of the most proven methods for ecological design, Permaculture. On what might be a meta level, Fullerton tells us that Regenerative Capitalism Seeks Balance. Indeed, encouraging balanced ecosystems is the purpose of ecological design. What are the three Permaculture Ethics of Earth Care, People Care, and Fair Share if not a call to seek balance? So balance is a value, but it’s also an emergent outcome of applying the other principles of Regenerative Capitalism, of Doughnut Economics, or of any other system of regenerative economics just as it is of applying the principles of permaculture to land or social design.
It is right of Fullerton to draw our attention to this, for the tensions he highlights in his description of this principle – efficiency v. resilience; collaboration v. competition; diversity v. coherence; balancing the presence and needs of small, medium, and large organizations – are presently a struggle: our current business culture favors efficiency over resilience and competition over collaboration. And while size diversity still exists in organizations and needs, capitalism has a propensity to admire and favor the largest among us. Our economy, our society, and our environment are profoundly out of balance. Restoring equilibrium is essential to a vibrant future. Regenerative Economics and the leadership, educational, and business practices that make it possible are pathways to restore that balance which are fully consistent with established ecological design practices such as Permaculture.