Sunday, September 1, 2019

Pluralist Economics - Growth or Degrowth? It's not an either or

It must have been a social media post mentioning the announcement of the 3rd Summer Academy for Pluralist Economics that caught my attention some months ago. The thing that let me even dig deeper was the fact that the Club of Rome (initiator of what became quite a famous research study on the current state of the earth, climate change and how business should be done, "The Limits to Growth"; anyone who'd like a quick overview on the book check out the interview between Willem L. Oltmans and Jay W. Forrester, the creator of the field system dynamics and initiator of the report, which gives a quick glimpse).

Having participated in "Transforming Capitalism Lab", a sub-prototype of the MOOC "u.lab - Leading From the Emerging Future" that runs again this September for the 6th consecutive time since 2014, applying for the Summer Academy felt like something "not not to do!" I applied and a few weeks later got the notification that I am in. Can't say how excited I was, especially as my "economics days" were 25 years ago, and focus of work and interest had changed since quite a lot.

What really had drawn my interest was the fact that for the last ten years, since returning to Dresden right in the middle of the bursting Financial Crisis in late 2008, and seeing that "economics 101" neither had produced the "green meadows" of Eastern Germany nor enabled entrepreneurs and visionaries to pursue their dreams for the betterment of society in the region (the complete journey of mine in this context you find here).

Reading into the agenda of the Summer Academy and the previous ones, fond memories of myself sitting in front of Reuters monitors in the trading room of the bank where I did my apprenticeship between 1986-88 and seeing my held stock plunge into a "pit black hole" when the Black Monday happened on October 19, 1987. Not much explanation took place after that time (pretty much like what happened after the Financial Crisis in 2008). As a direct consequence I found myself studying economics afterwards, yet not getting satisfied by the classical curriculum at the university which (back then as still these days) focuses on trying to analyse the developments of the past, missing out the deeper exploration of the "Why?" consequently. Since these days in the late 80's, also experiencing a complete economy (the former GDR) in a massive transition over the last three decades, and having lived in Saxony for half of that time, I am trying to understand and explore other ways of the "natural" growth paradigm which has many "unintended side-effects" that we can see everywhere.

Garden of the Protestant Academy of Thuringia
So the question came up, "Which workshop to take?" amongst almost a dozen ones ranging from Marxist Economics via Feminist Economics to Complexity Economics. To get a glimpse of the variety of economic theory see here the overview at Exploring Economics. It turned out to be "Entrepreneurship and Diverse Economics", making the most sense. Arriving in Neudietendorf and meeting the workshop class on Saturday morning I could not be more thrilled to meet students from various fields (law and medicine including), consultants, policymakers coming from countries such as Colombia, Uganda, Germany, Austria, Germany and the Netherlands. The picture you see is the outdoor area which was going to be filled with people discussing the workshops, exchanging thoughts, playing chess or just having a great lunch or dinner outside over the next couple of days.

The core question that followed our workshop over the week was the following, "Does it always need growth or are there other paths of economic progress and well-being of society?"

However, what we see and quite naturally come about in conversation with colleagues and friends it is all about growth (without any mentioned boundaries). "Bigger is Better" seems to be the thing that drives society and the economy, all around the world - yet there are other approaches for companies.

After we had digged deeper in the theory and different concepts, often overlapping in some essential aspects such as giving back value to the society/community and strongly valueing sustainable processes, we learned about some examples of such companies. More of that including companies/projects to be found in this overview from which we drew much of the basis of our conversations in class.

Package of Amarelli liquorice
However, after returning from Neudietendorf and my mind buzzing with the inputs it gained over the week, memories of the past came back once opening the cupboard holding our tea and coffee: a box of liquorice manufactured by Amarelli. While on holiday in Italy we happened to visit their company, where we learned about the peculiar making of liquorice (Lakritz). The most stunning thing was that this company is in family hand since its founding in 1731. Even more so it is a member of a global community of family-owned businesses that had been founded more than 200 years, called The Hénokiens. What is so amazing about those companies (the oldest, a spa in Japan in family hands for 46(!) generations since the 8th century) is that all have grown to a certain size, ranging from a few hundred to several thousand employees.

Staying for generations in family ownership says one thing for sure, "Growth in numbers is not everything!"

Why not take some of the Hénokien wisdom into account when starting your company or leading an existing one?

For further research and learning around degrowth check out the following links:

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