
This time is different.
After the 2016 election I wrote a piece titled “Trump: A Gift?” reflecting how the walk down the golden escalator was less about Trump than about us. It was meant to show us our shadow. We missed the lesson. Now the consequences. No need to rattle off the details you are all too familiar with.
Instead, let me take the side of the populists on the right, for they are not entirely misguided. Trump may not know how to read a memo to understand issues, but he knows how to read an opportunity to exploit for his own interests.
Our ultra-elites, now dominated by finance and big tech, are elites within the context of an established worldview that defines the Modern Age. That is the worldview of materialism—what is real can be observed, touched, measured, and modeled. This mechanistic worldview is rooted in Cartesian logic. It is described using the metaphor of a Newtonian “clockwork universe.” This brilliant logic is responsible for the great technological progress of the Modern Age and, not coincidentally, the dominance of finance and tech in our economy
But reality is not like a complicated machine depicted by a clockwork universe. Reality is complex, unpredictable, often unquantifiable. The analytical, materialist logic of the machine explains but a small part of reality. It fails miserably as an approach to manage complexity. Our ultra-elites are not as smart as they think they are, nor as smart as we think they are. More important, they lack the wisdom of understanding the interdependent whole of holism, not the separate parts of reductionism. They lack the wisdom to notice distinctions of category, viewing any challenge as simply a problem to solve using the same approach. They lack the wisdom that comes with contemplation, philosophy, the arts, and literature.
Proof you ask? I’ll offer just two of many examples, both with horrific and long-lasting consequences to society:
After the financial crisis of 2008, the Ayn Rand inspired Alan Greenspan, revered as the “oracle” during his two decades long tenure as Fed Chairman, was humbled into saying his neoliberal free-market ideology was wrong. “I discovered a flaw in the model that I perceived is the critical functioning structure that defines how the world works.” Some flaw. We can draw a straight line between Wall Street’s brazen fraud and sinister deceptions coupled with government’s misguided use of debt as a housing policy to a well-earned complete loss of trust in the institution of finance. Soon this mistrust would metastasize into lost trust in most institutions and as a result, a direct connection within a complexity of causes to that first walk down the golden escalator.
Now just today I read that Bill Gates acknowledges that with the rise of companies like Facebook and Twitter (and scoundrels like Zuckerberg and Musk), “you see ills that I have to say I did not predict.” Political divisiveness accelerated by technology that is used as a weapon against the public good? “I didn’t predict that would happen,” he said.
We in the derivatives markets of the 1990s didn’t predict the financial violence that derivative technology would impose on society when it got into the wrong and unimaginably devious hands either. Notice a pattern?
Lost Leaders and the Chaos Vortex
Let me assert, without space to fully make the case that we have allowed ourselves to be led by leaders who are lost. The proof is the polycrisis, the chaos vortex we can no longer deny.
I ask myself, what now is there to do, both individually and systemically? I’m biased. But as I look at the well-intended but abject failures of the SDGs, the Paris climate goals, the misguided logic of ESG, the revised Statement of Purpose of the Corporation toward “stakeholder capitalism,” the endless corporate pledges now being walked back, the backlash against DEI and “woke” capitalism, I come back to the same conclusion.
We must begin at the beginning. We must walk and chew gum, tactical to buy time and strategic to transform the system. The beginning starts with the tactical—what we know needs to be done. To oversimplify: put up solar panels everywhere we can, convert to regenerative agriculture for crops, meat, and fiber, and get to work investing in restoring ecosystem function at a landscape scale. The first two are economic (with real obstacles to overcome) and can be done relatively fast within the current broken system. Restoration requires a blend of public funds, philanthropy, and careful use of new tools such as carbon credits. If you are a “get-er-done” type, pick a task and go!
The strategic transformation of our political economy is a different sort of project altogether—a project we don’t fully know how to do, but we know, I suggest, directionally where to point. It will require emergence, a true metamorphosis, not ever more incrementalism. As systems scientist and theoretical biologist Stuart Kauffman says, “emergence is not engineering.”
Our task is to create the conditions for such emergence.
This is why the concept of Regenerative Economics offers not only the logical place to begin but also a reason for genuine hope grounded in scientific rigor—the science of living systems, i.e., the science that explains how all life works (to our best understanding). It offers a lens to see what everyone, including our ultra-elites, sees but in a profoundly new way. In other words, it provides us with an accurate compass to navigate the polycrisis, regardless of the challenges we face along the way and no matter how deep the collapse different regions experience. It is grounded not in new metrics or goals but in “first principles”—the idea from physics of our irreducible best understanding of reality, of how an economy designed in alignment with how all life actually works. It’s holistic, not limited to the constraints of materialism.
There are many examples of the misguided or blatantly wrong understanding of ideas that guide our ultra-elites and the politicians held captive under their boots that explain why we are so lost. I have seen, under glass case in the offices of a hedge fund high above Manhattan, an original edition of both Adam Smith’s Wealth of Nations and Charles Darwin’s On the Origin of Species. Why are they showcased there? Because they offer a worldview that celebrates the “invisible hand” of unregulated markets and a Darwinian battle of the “survival of the fittest.” You can smell the smugness of the owner of these volumes ostentatiously displayed. One problem: Neither author intended the use of these ideas in the way the hedge fund guy assumes. The word for this is ignorance. It is the profound and systemically dangerous ignorance of a smart, “educated” man. He is not alone.
The Illusion of Free Trade and the Consequences of Globalization
Let’s reflect on just one current issue that has taken center stage with the rise of Trump2, and the misguided understanding of our ultra-elites: Trade and tariffs.
We have been told since Ronald Reagan became president that 19th-century British economist David Ricardo’s “law of comparative advantage” ensured globalization would be good for the prosperity of all. Until Trump, due to corruption dating back to the Powell Memo in the 1970s, our elites on both sides of the political spectrum—including Clinton, two Bushes, and Obama—naively embraced globalization and the benefits of free trade as an unquestioned absolute truth. The result? Corporations and private equity outsourced the manufacturing sector largely to China, the middle class was gutted, inequality soared, deaths of despair are on the rise, and the ground became fertile for the rise of populism from both sides. The brazen malfeasance and financial violence leading to the financial crash of 2008 was the final straw. In systems science, we call this a “disturbance.” Living systems cope with them all the time. Machines break down.
Trump probably never heard of David Ricardo’s comparative advantage. But he does understand absolute advantage and competition, and he has eyes to see the carnage. Ricardo’s “law” assumed capital would not cross national borders since, in his day, no Brit would trust his money to be invested in France. So the Brits could make wool sweaters while the French could make wine, and both would be better off doing what they were comparatively better at and trading with each other. But today’s context is one of freely mobile capital. The economics profession led both conservatives and moderate liberals down a deadly dead-end path that turned out to be very advantageous for highly mobile capital (and the donor class, it must be said) but a disaster for the common good.
The global “free trade” regime is blatantly in conflict with the first principles of how regenerative systems work. Had we understood a living-systems worldview and managed our economic policy accordingly, it is fair to say we could have avoided massive destruction of people’s livelihoods and lives—but at a cost. The cost of lower financial returns to capital. Hmm… seems like a reason for a populist revolt to me. Are massive across-the-board tariffs the answer? Of course not. But that’s not the point.
A Paradigm Shift: From Mechanistic Thinking to Living Systems
Despite my very real struggle to process what is happening in the world and in our young experiment with democracy, I am emboldened to press forward with the strategic imperative of shifting paradigms. Limits to Growth lead author Donella Meadows advised us decades ago that this was the highest leverage point for shifting a system, and I believe she was right. The metamorphosis awaiting us is from mechanistic materialism to holism, from the machine age to the living network age—to see the world as it is: a complex, interconnected, and interdependent whole, not an aggregation of parts.
Our latest science affirms this worldview, remarkably aligning with the intuitions of our Indigenous elders and many of the world’s wisdom traditions. The project we face while the legal battles rage to defend democracy in the United States is an education project. We need a new and accurate compass. I chose to reaffirm my work on that project while the cannonballs fly. It gives me purpose and some peace of mind. Regardless of the path ahead, it’s still the work. It’s the Great Work of this perilous moment.
So rather than just putting blame on the current polycrisis and succumbing to the dysfunction, we invite you to come find hope and direction amidst the chaos.
Regenerative Economics provides a real, actionable alternative to the extractive systems that we know are at the root of the collapse. It provides a credible and scientifically sound framework—a roadmap if you will—for redesigning our economic, environmental and societal systems for true prosperity and long-term wellbeing of all.
Enrollment is open for the next edition of our Introduction to Regenerative Economics live cohort → Learn More & Enroll
The community of practice we are building—of unlearning and relearning, of sense-making—is a small island of coherence in the chaos. And such islands of coherence can shift the entire system when it is far from equilibrium, as Nobel chemist Prigogine taught us.
The system is now far from equilibrium. Join us in the Great Work!
About Capital Institute
Capital Institute is a 501(c)3 nonprofit non-partisan think tank working to create a more just and sustainable way of life on earth. Together with our collaborative network, we combine modern science, storytelling, and the knowledge of timeless wisdom traditions to illuminate the path from an extractive economy to an emerging regenerative economy that supports the long-term well-being of people, planet and business.