GOING A DONUT THERE?
14 from November 2020
How simplification is an alternative to growth at any cost.
All of these titles are books that have become must-read on the business and corporate scene in recent years. But it is not only in this scenario that we are reflecting on "what really matters". In fact, the corporate scene came late in this conversation. People who work with social representation, economics, politics, equality and reparatory models have been talking about this for a LONG time.
And I can understand why we, from the business scene, arrived late in this conversation: we were always in a model that growth should be achieved at any cost; therefore the only thing that "mattered" was profit. If I made a profit, it was fine.
However, it is already very clear that profit alone does not deliver what we really want. And do you know why it became clear? For the simple fact that many profit-only companies are failing to deliver "what really matters" to the world. Want an example?
Reading Piauí magazine, issue 168, there is an excellent report by Consuelo Rodriguez on oil companies making a move to remove inputs that generate pollution from their business models and insert clean energy models .
This is ample proof of how WE NEED to make this move; how business models have a huge responsibility in addition to generating profit. I see two main reasons:
Our business models were designed excluding the impact on Earth and the beings that inhabit it (including our species, human). By excluding these two factors from the equation, we naturally do not measure the impact on them and therefore we have a VERY negative impact on this ecosystem;
There is a generational pressure (Y and Z, mainly) that demands this movement. In my view, we only have the choice whether we are going to facilitate or complicate this paradigm shift, as it will happen one way or another, for these generations.
So better start our homework, right?
BUT WHAT ARE WE TALKING ABOUT?
In a practical way, we are saying that we need to change the principles that govern business models and economic models; whereas before our business models and their metrics (GDP and EBITDA, for example) pressured us to grow at any cost, now we need other principles that lead us to generate an integrated economy (where everyone wins), distribution and regeneration of our ecosystem and social patterns.
I talked complicated, but here is the icing on the cake: our economic principles need to be aimed at ensuring that all beings on Earth have physical space to inhabit, water and food, and above all: that our impact is positive, not derogatory.
For this to be done, there is no playbook: we will need to build one that makes sense. And for that to be done, we're going to need to redo some basic assumptions that we blindly believe, and my goal here will be to deconstruct some of them:
"GROW AT ANY COST"
Folks, this one is easy: our sons and daughters have already understood that this statement doesn't make any sense. But if we adults don't understand this, just a simple exercise - the "5 whys" is enough.
Imagine the dialogue:
- "We need to grow at any cost!"
- "We need to deliver profit to our organizations!"
- "So that the company sustains itself and generates profit for the shareholders."
- "To generate more jobs and shareholders are satisfied."
- "That way we will all have money to eat and pay for housing and our shareholders will be richer than they already are".
- "That way everyone can live and our shareholders have more money than the average in the world."
Very well, we have arrived at an important point that exposes two problems of "growth at any cost": regardless of whether the GDP grew or not, in the history of this economic model, we have never been able to solve unemployment; in fact, at the height of neoliberalism (last 20 years), unemployment has only grown.
The second point is the cause of the first: our economic model has the essence of generating inequality - while shareholders get richer than they already are, the average gets poorer, as more people will be employed and money is finite.
We found the root: our economic model of generating growth at any cost can only be viable if there is accumulation of wealth and poor distribution.
How would an economic model be different from this one? Perhaps one that is biased by a different premise: prosperity in balance.
How can we declare an economic system that generates prosperity for all beings that are part of it?
"WE ARE RATIONAL BEINGS THAT WE ALWAYS WANT TO BE RICHER"
We lost the thread of the skein. Our economic model, which was created from mercantilism (15th century), was only viable from a history of exploitation, slavery and land invasion (if you want to know more about it, I recommend this article from the first edition of Ride ).
Therefore, it is not us, the human species, who are rational and want to accumulate wealth, but the economic model that we have created.
So what are the values that guide our species? To answer this question, we will need to go back in time a little bit.
We are derived from primates, a tribalist species that bands together in a few and struggles for space and to satisfy its hunger. Very well, we can say that primates represent this being that is always competing for life. But look, our last ancestor that resembles us primates, more precisely monkeys, lived 25 million years ago.
Deriving from apes, we went through an evolutionary process over millions of years in the ape family and our last ancestor that resembles a chimpanzee lived 6-8 million years ago.
It is only from this moment that we begin the evolution of the homo species, as we recognize ourselves today. One of the main assets that made us reach homo sapiens sapiens were two, in fact: (1) the possibility of adapting to different scenarios and (2) collective work as a way to resist the extinction of our species.
Speaking a "street" Portuguese: what differentiates us from chimpanzees (that species that competes to live) is the fact that we are social, collectivist and adaptable beings. Looking at this, it is hard to believe this narrative that we are rational beings who always want to make more profit.
To me, this reasoning only makes sense from the point of view of a 19th-century mercantilist. XV who wanted to justify the invasion of other nations to explore their lands, without running the risk of arrest. And, after all, that's what happened.
"THE LAND MUST BE EXPLORED"
Retracing this story, we need to make a theoretical anecdote: we are moving from a period of the Holocene, where the Earth remained for years in constant equilibrium without major natural revolutions that annihilated species (ice age, for example) to a period that can be called the Anthropocene, which basically explains itself as follows: the human being impacts the Earth System in such a negative way that he suffers the natural consequences of it.
You want an example: we human beings generate so much Co2 from burning carbon that we are increasing the Earth's temperature, which is generating very serious consequences in our daily lives.
So the premise that Earth must serve us is totally twisted, wrong, inconsequential and part of a tremendous disintegration of us with Earth. And this disintegration is not "natural" for the human being, it was created. And it's worth revisiting this reasoning.
When we discovered that our plantations could generate raw material that, when manufacturing, would have added value to market, we realized that we could benefit from the Earth. This took on a greater proportion, after a few centuries: we created factory scale models that could plant more, harvest more, manufacture more, generating more sales and more damage to the Earth. We didn't stop there, we went further: we invaded land, we destroyed land (see Brumadinho and Mariana, for example) we killed people and created diseases.
I don't think that's how we're going to be able to survive the next 50 years as a species. We need to reshape the way we relate to the Earth, reaching a balance where we can benefit from what it proposes to us while reversing our impact and being an aggregating species to the Earth System, not a destructive one.
After all, we are only advancing the extinction of our species if we continue with this tune.
BUT AND NOW?
"Nice Pedro, you made an analysis (somewhat pessimistic), but how then can we start this remodeling?"
Different from what is usually said, I see that this remodeling must start from a systemic view, not an individualist one. There are several ways proposed to start this movement: from the Green Deal model, Circular Economy among other very interesting movements to go deeper.
I recently went into the Donut Theory, organized by Kate Raworth, where the theory is explained in this book .
Do you want to know how this theory is being applied in practice and how it works? I'll explain it to you in the audiocase of this issue .
We have some tips to give you the next Pico .