Last month I pondered the extent to which the Arab Spring and Occupy Everything are socially-driven acts of creative destruction. Creative destruction is defined as a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” The mutation, in this case, is reactionary responses to established interests, mostly driven by or assisted by social media. Governments and power structures are falling, but the replacements aren’t immediately ready in the wings.
Creative destruction implies something better rises out of the process (digital cameras instead of polaroid cameras). Yet it’s not always possible to clearly see the new thing being created. Planned change is driven by discrete goals, but creative destruction isn’t. For example, the shared angst of the Occupy movement is pretty clearly understood and most of us can relate to it in whole or in part. But the movement’s goals are fuzzy things like “fairness” that are not easily actionable.
There are a lot of reasons to start talking about what we’d like to form out of the other side of this set of changes/drivers. One thing to hope for is a new economy.
Our current economic model is not working for most people. Entrenched economic interests drive a death grip on oil — in spite of clear evidence that oil is a poison. The American election is largely funded by corporate interests. The Euro-zone is unstable and keeping the rest of the world on edge. Corporate profits are way up in some industries. Today’s economy works for the .001%, but not for the vanishing middle class.
The 2012 Davos Forum was called “The Great Transformation: Shaping New Models.” As the UN gears up for its 2012 signature conference, Rio +20, the main website says the focus of conversation at the conference will be “The implementation of a sustainable new economy, on a global scale, to achieve well-being and social equity.” The Nation website is running a whole emphasis section on “Re-imagining Capitalism.”
So what might we get? What forces might shape a new economy?
“We would like to draw up our blue print for a sustainable new model economy with a view to the future needs of our globe, social and environmental concerns, woven into food, water and energy needs.” – Aung San Suu Kyi, a Nobel Peace Price winner, as she addresses Davos in 2012 (speaking about Burma).
A lot of people are asking for a similar framework: an economic model that links the cost of commerce to its affect on the environment. I suspect that as climate change has more and more real impact, we’ll see this linkage get stronger and more global, and go beyond cap and trade. A fresh example is the new fee that European airports are charging all airlines for carbon offset.
Linkage between environment costs and revenue are the part of the new economy that people are attempting to plan. There are other forces in play:
- Transparency is rising, and transparency begets accountability. Today’s digital tools, high-speed communication, and generally adopted model of openness are forcing more and more deals and decisions into the light of scrutiny. The Komen / Planned Parenthood controversy in the US this week is just one example.
- Power is shifting. A globally depressed economy is better for business than for governments. It would be much harder to find a government that has grown in power or budget over the last few years than to find a multinational company with record profits.
- Things happen faster. The accelerating rate of change means that the days of deliberative processes working well are behind us. Frameworks and rules might help encourage change to move in particular directions, but decisions need to be made faster than they used to be by governments, corporations, and citizens alike.
- In spite of the recession, we’re living in an insanely creative time. In most of the world, people can transact business via hand-held devices. The iPad has changed portable computing. Faster wireless networks are making sophisticated amounts of data available on street-corners in major cities. At the same time, all of this new capability is driving efficiency more than jobs, and the world population is rising.
These are just some of the trends I see. They are related – transparency is driving accountability into corporations, who are funding governments, and social movements are driving change in governments and corporations. This is making for some weird linkages, although I’m not sure they are all bad.
Whatever the biggest forces for economic change are, they’ll surprise us like the Internet or social media surprised us. Let’s just hope the next new economy is a good one.
If you want to read more:
- 5 Big Ideas for a New Economy at Co-exist: http://www.fastcoexist.com/1679221/5-big-ideas-for-a-new-economy
- Davos: http://rbth.ru/articles/2012/01/26/davos_participants_look_for_new_economic_model_14255.html
- One of my favorite columnists call for a new economic model: http://www.chron.com/opinion/outlook/article/Thomas-Friedman-New-economic-model-a-must-in-1693070.php
Brenda Cooper’s latest science fiction novel, Mayan December, is out now from Prime Books. For more information, see her website!