Both Brains Required

Not just the one we keep using

Trapped in the Loop of Externality-Denying Capitalism

One of Escher’s themes was the idea that you can set out in a new direction only to find yourself back where you started, because you have failed to break out of some larger encircling loop.

He expressed visually the notion that systems thinkers label a ‘fix that fails’ and that psychologists term a ‘double bind’ – essentially actions that may not only not fix a problem, but inadvertently reinforce it.

The major problem with Voluntary, Market-Led sustainability is that it is failing to ‘break out’ from the underlying dynamic that is ‘externality-denying capitalism’. Because voluntary ESG-type efforts seem able to make only a small dent in this, the vast majority of investment and consumption actions continue to act as daily micro-reinforcements of the underlying externality-denying model…

The problem is multi-layered: ‘externality-denying capitalism’ has been rationalized by ‘externality-downplaying economics’, which has served to amplify deeper ‘Other-dismissing’ and ‘Nature-disregarding’ attitudes of the dominant Western/modern mindset.

Hence, ‘deep’ changes are needed – at the policy and cultural levels beneath, but prior to, the market system.

Becoming Meta-Foolish

Our age in a nutshell: externality-denying capitalism is now spawning reality-denying business models.

In October, Mark Zuckerberg announced the rebranding of Facebook as ‘Meta’, short for ‘metaverse’. Based in virtual and augmented reality, the metaverse (‘beyond the Universe’) will provide a whole new space for human beings to meet, attend concerts and even try on clothes. It has been brilliantly lampooned by the rival offering of Icelandverse.

The announcement of Meta provides just the latest hint that externality-denying capitalism is detaching from reality, and dragging ‘common sense’ with it.

Karl Polanyi warned of exactly this in 1944, with his thesis that markets would slowly ‘disembed’ from social and ecological reality unless they were continually re-grounded by extra-market input. The market system, compellingly logical and ‘complete’ to the producers, consumers and investors acting within, would cultivate a collective decision-making that would progressively favour market signals over non-market signals, to the eventual neglect and erosion of its own social and ecological foundations. Virtual business models – epitomizing a virtual capitalism – would seem to be a near-terminal phase. As Bob Collie has succinctly expressed it, a virtual, or externality-denying, capitalism effectively eats itself.

More recently, Iain McGilchrist has warned that the same pattern appears in our human brains in which the ‘newer’, more abstracting left brain emerges out of the ‘older’ more grounded right brain, only to then deny the dependency.

Behavioural guidance systems – whether left brains or left brain-inspired market systems – that detach from reality risk entering into a self-destructive runaway spiral of eroding their own foundations.   

Alas, the pattern describes our whole approach to the climate and biodiversity crisis. We are seeking to solve real, biophysical problems with a disembedded market logic that solutions must be profitable, denying that it is precisely the pursuit of disembedded, reality-denying, profit that is creating the problem.

We are becoming dangerously meta-foolish without recognizing.

Or perhaps not all of us. A big economy that was pivoting away from virtual business models might be gaining an advantage over those economies content to drift into a make-believe world.

What to do? Re-grounding would seem to be order of the day. Digging back down through the disembedded decision-making structures we have unwittingly developed, to reattach our perception of the world and our values to biophysical reality, before building up again – crudely, working down the left-hand side of this picture and then back up the right-hand side.

The Unmentionable Foot (Again)

By nobody’s explicit design, the socio-economic system most people live under today is ‘externality-denying capitalism’. When people defend today’s capitalism, that is the system they are – almost always unknowingly – reinforcing. 

Of course, we don’t call it ‘externality-denying capitalism’ because acceptance comes slow. While we long ago identified the market’s favourable Invisible Hand, we have resisted recognizing the market’s Unmentionable Foot until circumstances have given us no choice. 

Because incomplete markets must generate non-market social and ecological consequences, a culture of market primacy is a ‘fix that fails’. The market certainly produces a great many ‘fixes’ but, with a delay, the social and ecological ‘fails’ mount. 

We are only about two centuries into the experiment, so we can’t know whether the ‘fixing’ can forever compensate for the ‘failing’, but the latest readings are troubling. With the climate crisis, the Great Acceleration, and persistent social inequalities, it is starting to appear as if capitalism’s fail loops are overpowering its fix loops.  The real concern is that the Foot may have the power to cause damages that are irreversible in nature, such that no amount of subsequent fixing by the Hand can repair them.

To anticipate the obvious riposte, ‘externality-denying socialism’ may be no panacea either, if it denies ecological consequences. It is almost as if our default ‘capitalism versus socialism’ discourse is a false binary that has distracted us from some greater awareness.

Wherever we are headed, and whatever we decide to call it, a sustainable human culture will be much more alive to – and respectful of – its feedback loops than we seem to be today.

Market-led Sustainability is a ‘Fix that Fails’…

…but It May Have Been the Necessary ‘Defence at First Depth’

The story in 12 pictures…

We are a complex system – ‘humankind’ – pitched into adaptive crisis.

Over the last half century, we have suddenly noticed and begun responding to a new sense of our external context. We have abruptly perceived that our surroundings are finite and fragile and that we have attained the numbers and technological capacity to destabilize those surroundings in harmful and irreversible ways.

Our ‘first response’ to this crisis has come to be dominated by Voluntary Market-Led (VML) strategies – CSR, SRI, ESG, ‘impact investing’, divestment campaigns, disclosure frameworks and more.

For all the apparent differentiation, these strategies share the view that voluntary behaviour within existing market frameworks will be sufficient for human culture to become ‘sustainable enough before it is too late.’

Alas, after 25 years, it is becoming clear that the VML meta-strategy is a ‘fix that fails‘. A ‘fix that fails’ is a systems archetype in which a first-order solution triggers a less apparent or delayed, second-order unintended consequence.

Too many of our sustainability ‘solutions’ have rebound and backfire effects, while a discourse ‘fix that fails’ sees enthusiasm for market-led solutions continuing to divert energy, attention and resources from policy and cultural change.

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The Unmentionable Foot

A root cause of our persistent sustainability crisis is that Western thinking has not achieved sustained acceptance – very different from mere theoretical admission – of the scale of market externalities, and what that implies for claims made about the superiority of market outcomes.

We have known about market externalities since 1920, but we have accepted them since… when?

In other words, the market system has always had both an Invisible Hand and an Unmentionable Foot. We have celebrated one and, well, simply not mentioned the other. Yet, in today’s shrinking and ever more transparent world, the Foot can no longer kick costs out of sight as it was long able to.

To believe economic growth can solve environmental and social problems is to believe the Hand can repair what the Foot damages before irreversible harm occurs.

A major part of the sustainability challenge is reconciling ourselves to this long overlooked Foot…

(From a forthcoming essay. Thanks to Matt T for illustration).

The Matrix of the Emissary

The market doesn’t know

What the market doesn’t know

Yet we’ve self-organized

To defer to it even so.

Following Iain McGilchrist, have we trapped ourselves in the ‘Matrix of the Emissary’?

I’m delighted to have had my essay, ‘The Matrix of the Emissary: Market Primacy and the Sustainability Crisis’, published on Channel McGilchrist (full essay here).

From Win-Win to Net Zero: Would The Real Sustainability Please Now Stand Up?

Four decades after sustainability first emerged as a concept, we are witnessing a profoundly important ‘net zero moment’. First gradually, and now suddenly, countries and companies are making ‘net zero’ pledges to reduce carbon emissions in line with the temperature goals of the Paris Agreement. This represents a substantial and welcome upgrade of national and corporate ambitions regarding climate change but poses the obvious challenge. In March, a survey by Standard Chartered found that 64 percent of senior corporate executives do not believe that net zero commitments are commercially viable, contradicting the longstanding ESG narrative that ecological sustainability is a ‘win-win’ – good for profit and planet.

The contradiction reveals that there have all along been two fundamentally different interpretations of ‘sustainability’, whose inconsistency is only now finally surfacing because of the severity of our situation.

The win-win claim of sustainable business has always tacitly depended on the ecological ‘win’ being defined as ‘more sustainable than before’.

In contrast, the net zero imperative emanates from the very different perspective that we need to achieve ‘enough sustainability before it is too late’.

I believe much of the ongoing confusion within the sustainability debate arises from individuals and organizations – and even individuals within the same organization – working to conflicting interpretations of sustainability, without fully realizing. Some regard ecological sustainability as a relative concept by which it is sufficient merely to make progress – to ‘become more sustainable’ – while others view sustainability as an absolute concept that demands we be ‘sustainable enough in time’.

In turn, these markedly different perspectives rest upon individuals’ generally implicit views on whether the world does or does not contain real thresholds and limits whose breach may have severe, even existential, consequences for humankind. In other words, though rarely discussed explicitly, the fundamental clash is between limits-denying and limits-accepting worldviews. (See Figure ).


Read more in full 16 page paper here (PDF): “From Win-Win to Net Zero: A Tale of Two Sustainabilities”

Also published in short form by Responsible Investor here.

Illustrations by Matt Tweed.

Can Economics – and ESG – Grasp What Ecology Says?

A delightful story this month: Satish Kumar, the Editor Emeritus of Resurgence & Ecologist magazine, used his invitation to speak at the renowned London School of Economics to challenge them to reconstitute as the London School of Economics and Ecology!

In Kumar’s telling, he enquired, over tea and cake, about LSE’s ecological offerings, to which he was informed there were several courses which integrated environmental issues into economic frameworks.

‘But environment and ecology are not the same,’ he replied. ‘Ecology means understanding of the entire ecosystem and how the diverse forms of life relate to each other.’ To which the response was: ‘That is too broad a concept. Our courses are much more specialized.’

I like the story for two reasons. First, I enjoy the thought of a distinguished guest speaker politely asking his hosts over refreshments whether they have considered being the opposite of what they are! It strikes me that more guest speakers at more events might usefully ask the question.

The more serious reason is that Kumar’s provocative idea, and the defensive response, catches the very essence of our ecological sustainability challenge: that economic thinking still fails to grasp the sort of thinking ecology is, particularly ecology’s focus on relation.

Economic and ecological visions. We are ‘biperceptors’

I believe this remains poorly understood because I, too, missed it for a long time. Twenty-five years ago, I attained one of the first ‘environmental economics’ degrees (at another London university then unique in offering such a course). With best of intentions, we all – professors and students alike – believed that environmental economics was a proper union of economic and ecological thinking, but it is now clear to me that it was no such thing. Instead, it was the appropriation of some ecological concerns into a way of thinking that remained steadfastly economic.

The real significance of this is less about improving university programs and more because it is exactly this misunderstanding that underlies our continued failure to solve major ecological problems despite considerable attention now paid to them. 

Today, we live in a market-centric society, profoundly informed by – and so daily reinforcing – an economic mindset. Economic thinking is what powers the business and investment worlds. We have become ‘consumers’ and ‘human capital’.

Consistently, we are trying to solve our sustainability problems in market-friendly or market-tolerable ways, spearheaded by an ESG (environmental, social and governance) movement within the private sector and by related ambitions for ‘green growth’ and ‘more sustainable capitalism’. Alas, these ideas are simply real-world manifestations of ‘environmental economics’ thinking. They represent a comprehension of the problems to which ecology points, but a failure to grasp the form of remedy to which an ecological perspective leads.

Full 35 page paper here (PDF): Can Economics Grasp What Ecology Says?

The conclusion (!):

As published by Responsible Investor, February 2021:

RI long read: Can ESG grasp what ecology says? (

Trump Happens When Cultures Believe Private Can Cover for Public

Shocking as last week’s events in Washington D.C. were, it has all been seen and said before. WB Yeats’ lines from a century ago read like a dispatch from the steps of the US Capitol:

Things fall apart: the centre cannot hold;

Mere anarchy is loosed upon the world,

The blood-dimmed tide is loosed, and everywhere

The ceremony of innocence is drowned;

The best lack all conviction, while the worst

Are full of passionate intensity

WB Yeats

Even an ‘innocent ceremony’ – the certification of the Electoral College results that in most years is a procedural non-event.

Yeats powerfully captured the two dynamics that repeatedly enable demagogues like Trump: the emptying of society’s middle ground and that: ‘all that is required for the triumph of evil is for good men to do nothing.’

The latter is the troubling dynamic of tacit complicity. Psychologists talk of the ‘bystander’ effect in which most human beings – us? – avoid taking responsibility for problems in the hope that others will step up. So dangerous is this instinct at large scale that JFK used unusually strong language to condemn it: ‘The hottest places in hell are reserved for those who, in times of great moral crisis, maintain their neutrality.’

But what if our norms make us all complicit?

The Sack of Rome
Washington D.C., January 6th 2021

The violence Trump incited last week is just one aspect of a daunting set of inter-related social and environmental problems that continue to mount in plain sight. Political chaos in the US arises from the same desertion of the middle ground and erosion of civic spirit that also thwarts efforts to address social and environmental problems of increasing scale. That such problems mount – and stubbornly defy our efforts to resolve – is because we are all effectively complicit in their propagation, in turn because our current norms, narratives and social structures make it almost impossible not to be complicit.

What connects Trump’s demagoguery with environmental and social problems is that both flow from the contemporary neglect of ‘public’ in favour of ‘private’. Societies have always grappled with the innate tension between public and private, but history shows that when cultures privilege private too much, tyrants emerge and public problems accumulate beyond the capacity of private to fix.

Today’s lurch to private has been rationalized by the ‘modern’ belief that markets ‘have it all covered’ and, hence, all the public we need is ‘minimal government’ to uphold property rights. Public is simply the sum of all private, we told ourselves, and markets can do the adding up for us to create the best of all possible worlds. The mantra of our times: ‘markets are the solution/government is the problem’.

Hence, we have felt it safe to encourage the pursuit of self-interest at large scale – as ‘consumers’, not ‘citizens’ and also, in super-sized form, as corporations duty-bound to maximize profit.

Alas, markets are failing much more than their advocates had promised. Markets seem not to add everything up, but rather to leave a growing mass of social and environmental problems in their wake. ‘Markets are the solution’ has been false advertising.

Yet, ‘government is the problem’ has proved a self-fulfilling prophecy. Persistent discrediting of government has driven the best of society into the silos of private business and a vacuum has slowly formed in the public square into which ambitious men have been emboldened to venture. Tyrants emerge when everyone is lulled into thinking it is safe simply to ‘mind their own business’. 

At the same time, the ‘anti-public’ narrative leaves society increasingly forced to address mounting ‘public goods’ problems from within the private structures that have been favoured, but which may be no match for the scale and severity of those problems.

But none of this is new. It has all happened before….

Full article here in PDF: Trump Happens When Cultures Believe Private Can Cover for Public

Sustainability is a Quicksand Problem

The exquisite dilemma of quicksand is that you must escape as quickly as possible but anything you do to escape only drags you further down. Our ecological crisis is a quicksand problem, but our disconnected economic system conceals the fact.

(This article first appeared in Responsible Investor on October 12th, 2020)

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