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This issue of The Understory takes the format of a letter. The reason is that a few weeks ago I was invited by our provincial Minister of Jobs, Economic Recovery and Innovation to provide a written response to questions framed within Mariana Mazzucato’s consultation on the British Columbia (BC) Economic Plan. When deciding how best to respond, I thought about the templates NGOs often create on a given issue to sign and express concern to our representatives. Perhaps my letter to Minister Ravi Kahlon, if written in an open format, might inspire further dialogue on our provincial issues as well as provide language that other Understory readers can use in your own communities.
Please feel free to use any language that you feel is helpful in reaching out to your own representatives. Each of us as members of communities has a vital role to play in engaging with the future plans of our governments. My hope is that this issue bears fruit not only in British Columbia but in other parts of the world as well.
Dear Minister Kahlon,
Thank you for the letter of August 11, 2021, inviting me to submit written input to inform the development of British Columbia’s Economic Plan. As requested, I am attaching my responses to the questions you’ve sent. I too have found great inspiration in the work of Mariana Mazzucato. Given that we share Mazzucato’s work as a common base of knowledge, I’ll integrate her thinking from Mission Economy into my responses, while also alluding to her foundational work, The Value of Everything as I began to explore in the previous Understory article, “Material of Wealth.”
While I tried to directly address your engagement questions, I did not do so in bullet form. I believe in the power of story and words. Thus, I share this in long-form so as not to reduce the complexities and possibilities of all that lies ahead. I should also state that I am neither an economist nor a policymaker. I am what I guess could broadly be described as a “social entrepreneur” within Solvable working with global corporations to shift corporate strategy and investments toward a regenerative economy. With this, I will be sharing some of what I continue to learn in that work as the new future emerges.
I am writing this letter as an uninvited visitor living on the traditional, ancestral, and unceded territory of the Coast Salish peoples–Sḵwx̱wú7mesh (Squamish), Stó:lō and Səl̓ílwətaʔ/Selilwitulh (Tsleil-Waututh) and xʷməθkʷəy̓əm (Musqueam) Nations. I do my best to be a custodian of the land and of the thriving community of the human and more than human species who also call this place home. In Sacred Instructions, Sherri Mitchell writes,
“We all come into this world with a set of instructions. These instructions guide us toward our highest purpose. They lead us to the essential truths that live deep within us. This truth is encoded into our DNA. It is embedded in our genetic memory. It vibrates within us on a cellular level.”
While my DNA is not indigenous to British Columbia, we now know that our genes activate based on the contexts we find ourselves in. Living in this province actives a deep sense of gratitude for the custodianship of these lands for millennia by Indigenous peoples, and a sense of responsibility for our roles in stewarding the gifts of this province for future generations.
In answer to your question, “What global trends are you watching and how might they impact British Columbia’s economy over the next decade?,” I’d suggest it is not just a coincidence that both Mariana Mazzucato and Mark Carney recently released books with “value” in the title. There is a growing global awareness that the neoliberal economic models of scarcity, separation, and competition have largely failed us. These values create and continuously compound externalities that cause the multiple, concurrent global crises we now face: human health pandemics, climate breakdown, rising social inequality, systemic racism and colonialism, and ecosystem collapse. As Mark Carney writes in Values: Building a Better World for All, “we have moved from a market economy to a market society, and this is now undermining our basic social contract.”
Stewardship of our provincial future must centre first and foremost on the reverence for all life and the reinstitution of that social contract. Kate Raworth offers a picture of an economy that is embedded in rather than outside the biosphere and human society. This picture reminds us that a thriving economy depends on the health of our Earth systems and the biosphere to support all life.
Our Narrative of Recovery
Minister Kahlon, I couldn’t help but notice that you have “economic recovery” in your ministerial title, and that you often speak of the province’s Economic Plan as a “recovery plan for BC.” I’ve often thought of how an economic term—recovery—whose economic origin was in linearity of business cycles has now come to describe a cultural rather than just market condition. It seems significant to cast the term recovery in a broader light beyond contrasting cycles of recession and expansion as we look to create a more innovative, inclusive, and sustainable society for all in this province and beyond. I wonder when we speak provincially of economic recovery plans, what are we recovering from and what we might be recovering towards? How far back in time should we look for inspiration for our recovery?
Limiting our recovery to the last pre-recession cycle seems overly simplistic given our provincial aims. By turning our economic clocks back to the last business cycle, we’d be recovering an economy with unacceptable levels of ecological and social harm. To recover is in part an act of historic remembering, of reconciliation, and of future imagination. We need to both envision a more sustainable society while casting forward those elements of our provincial economy that favour reciprocity, generosity, and stewardship of all life. In response to your question, “Where does British Columbia have an advantage and what kinds of goals could be achieved?,” we have historic and contemporary guides indigenous to this province to direct the path away from material wealth and towards relational wealth with each other and the planet. To “re-cover” offers hints into just what kinds of custodial roles we are being asked to fulfill.
Companies, governments, and individuals have accumulated material wealth by maximizing extractive economic models at the expense of human and planetary health. Our provincial economy is no different. Based on her writing, I would assume Mazzucato identified BC as a largely unproductive economy due to our reliance on resource extraction and rent-seeking in the form of real estate and finance. She writes, “by losing our ability to recognize the difference between value creation and value extraction, we have made it easier for some to call themselves value creators and in the process extract value.”
Thomas Berry eloquently described our current situation decades ago as being in a state of unresolved transition: “We are in trouble just now because we do not have a good story. We are in between stories.” Many leaders now recognize that despite their growth models continuing to function through extraction, those models are not sustainable and need to change. This has resulted in cascading commitments from companies and governments, while few have yet to achieve impactful change to one (let alone multiple) crises. This is our between/transition state that we see in so many facets of our economy locally, regionally, nationally, and globally.
We need a new narrative that matches the new economics used to bring it forth. As written in The Economist article “Starting over again,” “The rethink of economics is an opportunity...What is clear is that the old economic paradigm is looking tired. One way or another, change is coming.” We are now seeing a global movement of organizations, regions, and governments whose understanding and strategies are shifting towards complex systems viewpoints that recognize abundance, interdependence, and cooperation. We are also seeing emerging economic models for the new story from Marianna Mazzucato’s mission economies to Kate Raworth’s doughnut cities to Joanna Macy’s Great Turning to well-being economies exemplified by Bhutan to regenerative economics espoused by the Capital Institute amongst others.
In response to your question, “Are environmental, social, and governance values (ESG) important to these trends?,” the answer is yes. The values are indeed important. However, the actions being taken are not creating material impact on the indicators that matter most, while the communications of these initiatives in many cases create further harm through illusion. While we can look to the expansive growth of ESG as an indicator of market desirability, it typically falls far short of the future we are trying to create. ESG is a backward-looking framework that measures year-on-year changes of an organization as a sign of progress. It values incrementalism as improvement, which creates what Ralph Thurm describes in his four-part series as “The Big Sustainability Illusion.” This illusion maintains our destructive direction of travel while telling an illusory story that suggests the opposite—leaving Thurm to describe most ESG reporting as “LaLaLand.” The architect William McDonough has an even simpler way to describe this problematic narrative. ESG typically measures how organizations are less bad than the year before. McDonough reminds us that being less bad is still being bad. What we need are organizations being good and creating a narrative of recovery that demonstrates the aspirations and achievements of this higher standard.
As you shared about the newly established InBC investment fund,
“As we begin to build back from these challenges, we must be bold and lay a solid foundation to position our province’s economy for the long term. InBC’s “triple bottom line” mandate equally values our people and planet while remaining profitable.”
While I applaud the creation of patient capital through the new $500 million investment fund, it is the guiding principles of the fund that will be most important in determining its impact. I would advocate that InBC’s principles need to go beyond the Triple Bottom Line (TBL) as I think would its creator, John Elkington. On the 25th anniversary of the TBL, Elkington calls for its recall in this Harvard Business Review article. He writes,
“Success or failure on sustainability goals cannot be measured only in terms of profit and loss. It must also be measured in terms of the wellbeing of billions of people and the health of our planet, and the sustainability sector’s record in moving the needle on those goals has been decidedly mixed. While there have been successes, our climate, water resources, oceans, forests, soils and biodiversity are all increasingly threatened. It is time to either step up—or to get out of the way...Fundamentally, we have a hard-wired cultural problem in business, finance and markets. Whereas CEOs, CFOs, and other corporate leaders move heaven and earth to ensure that they hit their profit targets, the same is very rarely true of their people and planet targets. Clearly, the Triple Bottom Line has failed to bury the single bottom line paradigm.”
Elkington reflects on the failure of TBL due not to its conception but rather its translation and implementation. His intention was a new genetic code for “tomorrow’s capitalism.” Instead what he finds 25-years into the project is a reductionist new accounting system when what is needed is a regeneration of economies, societies, and our biosphere.
Despite widespread implementation, the impact of the TBL did not move the needle on human and planetary health. Elkington’s sentiment has unfortunately been validated by Standard Chartered who found in their Zeronomics survey of the senior leadership of 250 large companies and 100 investment specialists in the fall of 2020 that most companies are delaying significant action towards their net-zero targets until after 2030. InBC is aligned with one of the critical areas needed for progress, as SC found 85 percent of companies need medium or high levels of investment to transition to net zero.
I think the lesson on looking back on broad new sustainability systems such as the TBL is that we need a set of first principles that create operating boundaries. Otherwise, we will continue to mistake profitability for impact and make no further progress on the social and ecological determinants of societal well-being that are so critical for this next era.
Revisiting First Principles
Minister Kahlon, you might already be familiar with the Economics of Mutuality by University of Oxford professor Colin Mayer. In the recent paper by Robert Eccles, Colin Mayer, & Judith Stroehle in the Harvard Law School Forum on Corporate Governance, the authors build on Mayer’s basic distinction of sustainability. They write:
“The purpose of a company ‘is to produce profitable solutions to problems of people and planet,’ while at the same time ‘not profiting from producing problems for people or planet’—a failure in sustainability. Companies that are making investments in sustainability while failing to produce profitable solutions to people and planet are also failing in purpose. Companies that are profitable while degrading the environment and society are focused on profits, not purpose.”
For our discussion, I’d like to put the conversation of profitability aside so we can consider it within the context of the provincial government and the InBC investment fund. If we recognize that an organization is only sustainable if 1) they are solving problems of people and/or planet, 2) while not harming either, we can begin to envision a richer ecosystem of contributions that support a healthy economy. This may serve as a first law, or guiding principle as you look to fund organizations and catalyze various missions. Mazzucato explicitly supports this distinction as she sees “driving governance structures of organizations, and relationships between organizations, through a notion of 'purpose' is the key to a mission-oriented approach.” Sustainable purpose then becomes the lens for how the government is structured and businesses operate in a recovering economy.
In responding to your question, “What actions would you prioritize to support equity and inclusion in the economy?,” I would advise that we can learn a great deal from the Gross National Happiness journey of Bhutan who ensures the enabling conditions for happiness are the sole purpose of development. We are fortunate to have the leader of the GNH Centre, Julia Kim, now living in our province who brings a wealth of knowledge and understanding with her. In the chapter “In Pursuit of Gross National Happiness” from Well-Being: Expanding the Definition of Progress, Kim explains that GNH is an ecocentric rather than anthropocentric model that links individual and collective well-being together by recognizing that all beings and the natural world are interdependent. Thus, a decline in well-being for any part of the interdependent system means a decline for all. GNH prioritizes societal happiness and well-being rather than the singular goal of economic prosperity. Due to limited notions of “happiness” in many parts of the world, Bhutan’s concept is often misunderstood. Bhutan’s first prime minister, Jigme Thinley describes the nation’s aspirational happiness as:
“We have now clearly distinguished the ‘happiness’ in GNH from the fleeting, pleasurable, ‘feel good’ moods so often associated with that term. We know that true abiding happiness cannot exist while others suffer, and comes only from serving others, living in harmony with nature, and realising our innate wisdom.”
Minister Kahlon, I cannot imagine a more inclusive and equitable governing principle than this version of societal happiness. Bhutan’s ancient legal code going back to 1629 states that “if the government cannot create happiness for its people, then there is no purpose for government to exist.” Furthermore, the country maintains a GNH Policy and Project Screening Tool here which could be of great value as British Columbia creates our next set of First Principles.
Kate Raworth complements the work of the GNH in Doughnut Economics with eleven parts of “The Twenty-First Century Story in which we create a thriving balance”:
EARTH, which is life-giving—so respect its boundaries
SOCIETY, which is foundational—so nurture its connections
THE ECONOMY, which is diverse—so support all of its systems
THE HOUSEHOLD, which is core—so value its contributions
THE MARKET, which is powerful—so embed it wisely
THE COMMONS, which are creative—so unleash their potential
THE STATE, which is essential—so make it accountable
FINANCE, which is in service—so make it serve society
BUSINESS, which is innovative—so give it purpose
TRADE, which is double-edged—so make it fair
POWER, which is pervasive—so check its abuse
In responding to your question, “what are the conditions that need to be in place for innovation and growth to happen?,” British Columbia can create the structural conditions of play that answer Raworth’s question of a region that is “a home to thriving people, in a thriving place, whilst respecting the wellbeing of all people, and the health of the whole planet.” I applaud your commitment that:
“The recovery plan for BC will be built by BC for BC. But it's important to note that we are competing with the world. My time in sport has taught me that when you're competing against the world, you want to learn from other people's experiences, other jurisdictions' experiences.”
I found great resonance in Mazzucato’s efforts to set missions at the high-street level with the examples she describes ranging from Glasgow’s Buchanan Street to London’s Oxford Street to small local neighbourhood streets. Similar to the Core Design Principles for common-pool resources espoused by Elinor Ostrom (see Issue Twenty-Six), Mazzucato finds that placed-based missions that incorporate estates and streets within communities result in rooting the missions in long-term citizen governance who monitor public value and innovation. The projects began by asking questions like, “Who are the streets for? How are their benefits distributed? Is the wealth created reinvested back into the street or siphoned off?” Mazzucato advocates for the institutionalization of citizen participation rather than leaving it to the temporal goodwill of certain politicians. It is on the high streets where public and private investment meets citizens, and where BC can learn from other jurisdictions’ successful innovations.
Inevitably the question is going to arise about what we as a province should do as the rest of the world largely continues on with business as usual. George Monbiot recently shares in his article “Dead Line” that:
“The global emergency requires a new politics, but it is nowhere in sight. Governments still fear lobby groups more than they fear the collapse of our living systems...No government, even the most progressive, is yet prepared to contemplate the transformation we need: a global programme that places the survival of humanity and the rest of life on Earth above all other issues. We need not just new policy, but a new ethics. We need to close the gap between knowing and doing. But this conversation has scarcely begun.”
Fortunately, we have these ethics residing deep in our own lands and stories in this province, which can provide for a wellspring of innovation by embracing them. Indigenous cultures have long recognized that it is the circulation of wealth that actually makes one wealthy, while simultaneously advancing the well-being of all life. Just like our own circulatory systems, the health of a region is determined by its ability to stay in motion. As Victoria-based Carol Anne Hilton describes in Indigenomics: Taking a Seat at the Economic Table, the concept of wealth within an Indigenous worldview sees value in “relationships, universal connection, continuity across generations and connects abundance to giving.” We displaced this virtuous cycle of reciprocity through our desires for personal accumulation. By restoring continuous loops of generosity within our communities, we can create what Janine Benyus describes in Architectural Digest as generous cities whose “Cambrian explosion of innovation” is that they become net producers of ecosystem services.
I would like to conclude with passages from Benyus’ article that paints a picture of an innovative and generous British Columbia working collectively to regenerate all life:
“Decades later, the city is self-sufficient in food, water and energy, yet productive enough to give back to the rest of the biome. Homes and offices have ventilating skins that triple-cleanse the air, releasing oxygen and sequestering carbon dioxide in building materials. Absorptive sidewalks and plazas store water during storms, using peristaltic motion to slowly release it back to aquifers. Undulating roof canopies return water vapour to rain clouds, nourishing drier communities downwind. The brownfields are abloom, and roadways have sprouted linear parks. It is a city in a forest and a forest in a city, embroidered with strands of migratory paths and agricultural corridors that mend the region whole.
Our cities are as natural as nests, we realised. The more they function like native pinelands and prairies, taiga and tundra, the more lush and liveable they become. We are a part of nature, and our cities can create goodness too. And then, as generous as grasslands, they can gift it away.”
My hope is that we can achieve Benyus’ picture of regional health by catalyzing a perpetual motion machine of reciprocity. To create an economy based on interconnectedness rather than dispossession through extraction and rent-seeking. This is our future picture of provincial innovation.
Minister Kahlon, I wish you great success in your efforts moving forward and will do all I can as a business owner and citizen of this province to bring forth a more regenerative future that benefits all British Columbians. As GNH reminds us, “true abiding happiness cannot exist while others suffer, and comes only from serving others, living in harmony with nature, and realising our innate wisdom.”
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We have crossed the climate-change threshold from emerging to urgent, which demands a transformative response. The scale of the issue demands not only continuous focus but also the courage to take bold action. I've found that the persistence of climate consciousness improves resilience to the noise and distractions of daily life in service of a bigger (and most of the time invisible) long-term cause.
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Great response. The BC government is lucky to have such considered input to its questions. I hope that this kind of expansive thinking - about what forms of productivity we should value, and what systemic changes should be considered to enable that - is met with the critical thought and patience required to embark on the level of change that required to address the present overlapped crises. I am drawn most particularly by your observation of how far much of BC’s current economy - as characterized by rent-seeking and value-destroying resource extraction - is from Mazzucato’s description of true value creation. I applaud their desire to engage this expertise and wish them courage when realizing the implications for an economy that has historically struggled to create value (even as measured by employment, profit, or growth) outside of the resource and real estate sectors. Companies that can offer real solutions to the current problems while operating in non-destructive ways require an active state able to set clear rules and incentives for competition that can benefit the world, not merely a handful of shareholders. I hope BC takes on this challenge of setting an effective playing field with the boldness required.
[This is me standing and cheering - this was very well done and well writtn.]
You wrote: "If we recognize that an organization is only sustainable if 1) they are solving problems of people and/or planet, 2) while not harming either, we can begin to envision a richer ecosystem of contributions that support a healthy economy. This may serve as a first law, or guiding principle as you look to fund organizations and catalyze various missions. " Mac Macartney in his book The Children's Fire, talks about the Native American traditional dictum that no rule shall be made, and no activity shall be pursued that could harm the children. Our friend Elliot Hoffman commented that we might amplify that to "only rules shall be made or actions taken that ensure that the children thrive." I submit this may be a better first law or guiding principle, though harder to put in business-speak. Mac had at least one CEO and Chairwoman of the Board adopt the Children's Fire as their guiding corporate principle, so we know it is possible.
Wonderful to read your admonition that the Minister look into the work of Dr. Julia Kim and Gross National Happiness. I would recommend her outstanding Club of Rome presentation to anyone seeking to understand the absolute relevance of this work to our current time and challenges: Beyond GDP, Beyond Numbers https://usaclubofrome.org/videos-of-our-meetings/
Monbiot wrote: "The global emergency requires a new politics, but it is nowhere in sight. Governments still fear lobby groups more than they fear the collapse of our living systems..." As I have mentioned, it may well be that such governments will fall to overwhelming public pressure and the weight of natural and related disasters and mass migrations before we see action. I should hope not. The times call for a new generation of leaders who get all of these issues and lead from a place of embodied and centered connection to the Earth. To get there we need positive visions of the future, such as Benyus' breathtaking description -- for which I thank you.