What If the Economy Was Modeled After Ecology?
In the 18th century, Scottish economist Adam Smith wrote of an “invisible hand” in market economies. Others used the metaphor to express the idea that market-led economies are fundamentally benevolent or logical. This notion persists today. Mainstream economics tends to assume that current economic trends can be used to forecast future outcomes in an orderly, linear fashion.
But this understates the intensity of climate impacts. In 2018, for instance, William Nordhaus won the Nobel Prize in economics for his climate-modelling work. His model suggested that an optimal global temperature rise above pre-industrial levels, balancing the costs and benefits of climate mitigation, is over 3 degrees Celsius—far beyond the 1.5 degrees that global leaders aligned on at the Paris Agreement. In the era of climate breakdown, economic models like these are less appropriate, and potentially more dangerous, than ever before. Climate scientists recognize that a warmer world will be a fundamentally more unstable world, with complex interactions. Many effects will be exponential, not linear. This calls for climate action that is transformative, not just incremental.
John Fullerton is one of the people urging alternatives to the status-quo economic frameworks that are out of step with a rapidly warming world. He has built his second career from his disillusionment with mainstream economics: For two decades, Fullerton worked at the heart of the capitalist economy, in various managerial roles for JPMorgan. But he came to feel bored and unfulfilled there. In 2001, he left without a plan. He enjoyed some adventures during this time, such as sailing across the Atlantic. (In the middle of the ocean, as he was reading Herman Melville’s Moby-Dick, a humpback whale smashed into the sailboat’s rudder, making it necessary for the Canadian Coast Guard to rescue Fullerton and his friends.) But mainly, Fullerton immersed himself during this post-Wall Street period in reading and thinking about systems change. He concluded that exponential economic growth was going to break our finite planet.
In 2010, Fullerton founded a think tank called the Capital Institute, dedicated to sustainable economic principles, and he has since published multiple books and taught courses on the regenerative economy.
Regenerative economics, Fullerton’s preoccupation, is a radical reframing of economic principles inspired by diverse and resilient living systems. It is a hopeful vision. As Fullerton and coauthor Faye Cox write in Regenerative Economics: Creating Conditions for Health and Abundance on a Living Planet, “a regenerative economy is an integrated network of healthy local and regional economies, all creating and exchanging value with their integrity intact.” This “aims to circulate wealth through all levels of the economy, with all stakeholders able to contribute to its success and receive the benefits.”
Atmos called Fullerton up to discuss degrowth, capitalism, and the role that big banks could play in building a better world—if they were willing.