Archive for May, 2011 and post-bubble economics

Saturday, May 28th, 2011 | Uncategorized | 14 Comments

We are living in an age of bursting bubbles. The first bubble to burst was the global financial market in 2008. The next bubble is expanding as we speak and is going to explode under the headline of the food security crisis (a mixture of food shortages, water shortages, soil erosion, peak oil, biofuel, and unsustainable farming practices). What do the financial and the food/soil bubbles have in common? Their common denominator is that they extract an unreasonable amount in the present while compromising the future capacity of the system to regenerate itself. This behavior externalizes the real costs to the poor (who won’t be able to pay the resulting higher prices) and to future generations (who will be left to clean up the mess we create).

Another common element is that both of these bubbles or boom-to-bust cycles are closely linked to a third bubble that has been in the making for a long time: the bubble of business schools and conventional economic thought. The essence of the old economic thinking is its blindness to social and ecological “externalities.” Both the financial and agricultural bubbles would have been unthinkable without modern economic thought and its whole set of management tools. It’s time to seed the beginnings of a new, post-bubble era of economics and management practice.

My colleagues and I are trying to contribute to post-bubble economics and management practices in two ways: by writing a book on the mindful transformation of capitalism, and by initiating a project we are calling the, which would convene key innovators and leading institutions from business, civil society, and government around a platform for creating profound societal innovation and building personal and institutional capacity. Here is a link to a first concept paper on that initiative. Let us know what you think!


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