In what may actually be an understatement, Olaf Storbeck qualifies a new paper from John Joseph Wallis called “Did the New Deal Save Democracy and Capitalism” as having “stunning implications for economic policy.” I would go even further. Wallis may just have uncovered the insight that could help us reconcile sustainability and economic theory, and thus help us get off the crazy roller coaster that the global economy has become.
What is extraordinary it has taken us to get to one of his fundamental insights: growth can be totally offset or outstripped by the damage done by periods of crisis. Now that he has made the point, it seems blindingly obvious. After all, if you are trying to grow the membership of an organization, you cannot focus solely on your recruitment; you also need to look at your retention rate in order to make sure that you are not losing more members than you are gaining.
Economic policy needs to consider the balance. It’s as if we’ve been designing economic policy simply by looking at operating revenues without considering expenses.
I believe in the potential of capitalism as an agent for furthering people’s well-being.
I also believe in sustainable development and the Triple Bottom Line.
From a business point of view, I have long been perplexed by how to build the momentum for more balanced management indicators, not just at the level of an individual organization, but at the level of a country, a society, a global economic system. After all, each entity within the system is subject to the constraints of the framework in which it operates, so the changes made by businesses will be tempered by the system’s inertia. I have puzzled over how we can change a system that seems to have taken on its own, mad logic, and I have seen mounting evidence that the more things change, the more they stay the same. John Joseph Wallis may just have connected the necessary dots, and this gives me a renewed sense of hope that we are going to be able to correct the excesses of the global economic system and help bring its benefits to more people. It won’t happen overnight, but we may just have figured out how to start.