Tuesday, May 24, 2011

Otto Scharmer

Otto Scharmer came up a few times in the Varela thread so why not give him his own esteemed thread (at IPS)? His website is at this link and his blog can be found here. Here is a bit from the site.

From the Projects page:

Transforming Capitalism

The transforming capitalism initiative creates conversations with pioneers for a green, regenerative economy that works for 100% of humanity and earth. We intend to convene conversations that serve as a vehicle for an emerging global shift to a different civilizational model which works in ways that are more environmentally sustainable, personally empowering, socially inclusive, culturally creative, and societally transformative.

From the Publications page, articles and papers, “Seven acupuncture points for shifting capitalism to create a regenerative ecosystem economy”:

1. Coordination mechanisms: Upgrade the economic operating system from one driven by competition and special-interest-group-led legislation (“ego-system awareness”) to one that operates from shared seeing and common will (driven by an intentional “eco-system awareness”).

2. Nature: Design all production and consumption cycles completely earth-to-earth (without the need for landfills and in co-evolution with the natural ecosystem).

3. Labour: Create economic human rights (such as basic income, access to health, education, entrepreneurial opportunity) in order to enable all people to actualize their full creativity for shared wealth generation and social well-being.

4. Capital: Redesign and redirect money and capital flows to serve all sectors of the economic system (and develop commons-based property rights in support of it).

5. Technology: Build communities of creation to generate breakthrough technologies in areas that matter most to societal needs and aspirations.

6. Leadership: Reinvent leadership learning to facilitate “learning from the emerging future” rather than reproducing the patterns of the past.

7. Public Awareness and Conversation: Create infrastructure innovations that allow all citizens to become aware of their real power in co-creating the intentional ecosystem economy and in deepening our democracy.

From his blog:

Food. Finance. Fuel. Fukushima.
Sunday, April 3rd, 2011

Each time another crisis occurs it feels like déjà vu—as if we are not encountering the problem for the first time. But what exactly is it that gives these crises such a familiar ring? Here are a few observations on eight characteristics they seem to have in common:

(1) Efficiency: The pursuit of efficiency is one of the main causes of this 4F system breakdown. Our systems are over-focused on efficiency. These efficiencies tend to maximize a single variable (return on investment; yield per hectare; energy return on investment) instead of optimizing a broader set of variables that would improve the viability and health of the larger ecosystem. This over-focus results in a lack of resilience and a blindness to externalities.

(2) Externalities: Over-focusing on efficiency leads to not seeing the negative externalities in the larger system. A financial sector on steroids inflicts huge negative externalities on nature, on people, and on the real economy. A food sector on steroids inflicts huge costs on nature (soil erosion, groundwater pollution), on people (working conditions for workers, health issues for junk food consumers), and on society and culture (agricultural mono-cultures). A fuel and energy sector on steroids leads to technologies like nuclear energy production that are cheap only when and if all the risks and negative externalities are socialized (while privatizing the profits). In other words, it becomes a business model that the Wall Street oligarchy perfected and deployed leading up to the financial crisis of 2008. Which leads me directly to observation no. 3:

(3) Powerful special interest groups hijack regulation, public investment, and government. We have a revolving-door issue: The offices in Washington, D.C., that are supposed to oversee and regulate Wall Street are often occupied by people who come and go from the Wall Street oligarchy (Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase). They are full of people whose thinking has been framed by these institutions (assuming that what’s good for Wall Street must also be good for America). The same revolving-door issue exists in the FDA (Food and Drug Administration) and the EPA (Environmental Protection Agency) with Monsanto, the agri-business multinational, which is at least as problematic as Wall Street. I don’t know all the facts about the energy sector. But I do know that the nuclear power industry was (along with Wall Street) a major contributor to the Obama campaign. And every dollar really paid off for them when you consider the banks got a bailout package with no conditions attached, and when you consider how quickly Obama returned to business-as-usual, saving the nuclear power industry from what its colleagues experienced in Germany: that the nuclear option for future plants is effectively dead, and that all the old power plants are being taken off the grid right now.

(4) Marginalized people pay the most. In all these crisis situations the greatest pain is suffered and the highest price is paid by those who have the least: the poor. While Wall Street bankers are back to enjoying their bonus payments—for activities that not only don’t help the real economy, but also often harm the people working in it, —most people on Main Street are still suffering the ripple effects of the financial meltdown of 2008. They are paying for it by losing their jobs, losing their schoolteachers, losing nutritional support for their children, losing services that have kept afloat those who are struggling the most. In the food system it’s the same situation. What happens when food prices go up? It hurts those who can’t pay the higher prices: the poor.

(5) Delayed feedback prevents learning. All of these systems operated with delayed feedback loops that prevent decision-makers (in government and at the top of global companies like Monsanto and the Wall Street Big Four) from experiencing the negative externalities that their decisions inflict on the larger system and hence prevent real learning and change from happening. As Vandana Shiva, a global civil society thought leader from India, once put it so eloquently: the raw material streams move from the Global South to the Global North, while the streams of waste (and other negative externalities) move from the Global North to the Global South. That description, with some modifications (mainly through the rise of the emerging economies) still describes today’s situation.

(6) Money flowing the wrong way. Another flow that’s moving in the wrong direction concerns money. Money flows readily to those who already have (lots of) it, while those who don’t have it have to struggle even harder to fund ventures that may be high in positive externalities and low or even negative in financial return. The global agriculture business, the non-renewable energy industry, and traditional Wall Street–type banking all have privileged access to capital and money in all forms. It dwarfs the capital that other sectors (renewable energy, social value-based banking, and organic sustainable agriculture, for example) can attract.

(7) Consumer awareness. Consumer awareness, of course, is the key to turning all of this around, which is precisely why the traditional vested interests do everything possible to keep consumer awareness at the lowest possible level. Yet the more consumer advocates succeed in creating transparency about the ecological and social footprint of products in the marketplace, the more numerous and influential will conscious consumers become – gradually shifting and rebalancing the distribution of power between producers and consumers.

(8) Arenas of Awakening. What is it that we have not seen in any of these crisis situations? Arenas of Awakening. Places that facilitate the process of the system becoming aware of itself. The Tahrir space of the food system, of the banking system. Etc. Which is why we haven’t yet seen the toppling of the old tyrants in these systems (as of yet).

What does all of this have to do with Fukushima? Everything. (1) The nuclear power industry is an example of extreme efficiency that makes total sense as long as you disregard all of the (2) negative externalities. (3) It is facilitated by a regulatory framework that privatizes the benefits and socializes the risks. (4) In the case of disasters like Fukushima, the industry put the biggest burdens on the poor, who pay with their health and their lives. (5) The overall structure of the system prevents learning because the negative externalities do not affect the decision-makers themselves (the people who die from radiation overdoses are the workers, not management). (6) Money keeps flowing in the wrong direction, e.g., federal funds continue to be poured into old industries instead of into new, renewable energy technologies. (7) The current structure prevents consumer awareness by not allowing people to choose between nuclear and renewable energy. (8) We also do not see any attempts to create Arenas of Awakening. By contrast, the press conferences of government and Tepco officials are a painful example of communicating the truth too little and too late. Even today the Japanese and the world community have not heard the true and complete story from the leaders of the system.

How can we turn things around? Just reverse all the above principles: (1) multi-variable health (instead of mono-variable efficiency), (2) internalize externalities, (3) use transparent and inclusive multi-stakeholder processes to develop regulatory frameworks, (4) give special attention to and co-create with those who live on the margins of the system, (5) close the feedback loop between decision makers and those impacted by these decisions, (6) reverse the flow of money, (7) empower consumers and citizens, (8) create Arenas of Awakening where the whole system can see itself – and leverage the collective awareness that flows from that.

1 comment:

  1. More from the 7 acupunture points linked above:

    "The crisis of our time is not about financial or economic bankruptcy. The real crisis of our time is about an intellectual bankruptcy: the bankruptcy of mainstream economic thought over the past three decades and beyond. Just as the crumbling of the Berlin Wall in 1989 marked the end of one fundamentalist approach to society and the economy— socialist statecentric fundamentalism—the toppling of the Wall Street house of cards marked the end of another—neoliberal market-centric fundamentalism.

    Yet the public debate and crisis response continue to be framed by the same old categories of economic thought that got us into the whole mess in the first place.

    In a primitive political system...power is transmitted through violence (military coups, militias, etc.). In a more developed society, power is transmitted through money (bribes, kickbacks, campaign contributions). But in the most advanced societies...power is transmitted through cultural capital such as belief systems. “Over the past decade,” says Johnson, “the attitude took hold that what was good for Wall Street was good for the country.” That belief system has given Wall Street a de facto veto right over public policymaking that no other group or industry enjoys. Since the beginning of the crisis in fall 2008, this unparalleled influence from Wall Street on Washington has only increased.

    It seems as if there are two main forces or factors that are getting in the way: power and paradigm.... In this paper I focus on...paradigm—how the taken-for-granted assumptions of conventional economic thought prevent us from asking the tough questions that, if explored, could help us to see the root issues of the economic crisis, how it is connected to the need for global transformation, and how we can shape it in a more intentional way.

    Capitalism 1.0: The original “free-market” or “laissez-faire” capitalism that has produced phenomenal growth as well as massive negative externalities in the form of poverty, environmental destruction, and periodic currency crises. The societal response to these crises led to …

    Capitalism 2.0: A more regulated stakeholder capitalism in which the major areas of negative externalities are addressed through social security systems, labour unions, international labour and environmental standards, Federal Reserve banks, etc. All these institutions are designed to do the same thing: limit the “free” markets such that negative externalities are minimized.7 While the main focus of capitalism 1.0 is on growth, the main focus of capitalism 2.0 is on redistribution in order to sustain society as a whole. The problem with capitalism 2.0 is twofold: one, it never really worked outside the boundaries of the OECD countries. And two, it does not appear to be working to mitigate the current global externalities. Which brings us to our current transformational phase, moving toward …

    Capitalism 3.0: An (as-yet-unrealized) intentional and inclusive ecosystem economy that upgrades the capacity for collaboration and innovation across all sectors and systems.

    The main point about the evolutionary stages of capitalism is that each system is based on a different state of awareness among its players. In capitalism 1.0, it is an ego-system awareness: In capitalism 2.0, this elf-interest is widened and mitigated by the self-interest of other stakeholders that organize for collective action to bring their interest to the table through labour unions, government, non-governmental organizations, and so forth.

    In the emerging 3.0 stage of our economy, there is a shift of awareness that extends the natural self-interest of the players to the entire ecosystem. Ecosystem awareness means having the ability to operate with a mind that perceives a problem from all of the perspectives in a given social-ecological system (rather than only from one’s own) and to internalize the concerns and issues of the other players in one’s own decision-making."


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