Regenerative Economies

A Design Framework for Place-sourced Regenerative Economies

We are in a time of breakdowns and breakthroughs. The experience of the global covid19 pandemic has cast a bright light on the frailty in our global economies, our ability to adjust to complexity, uncertainty and volatility, and accelerated the conversation about what needs to change. Not just to adjust to the possibility of future viral anomalies, but to the greater challenges following in its wake. Climate change. Biodiversity. Economic collapse.

A key aspect of how we design regenerative economies to address the imbalances in our current thinking – is the power of place. This is the work of Really Regenerative.

The global economy we have built is fundamentally designed to foster constant growth. The idea that constant growth is possible on a finite planet under the multiple existential threats of climate change, biodiversity collapse, food system fracturing, deforestation, ocean acidification – all of which are driven by the consumption that is required for the economic model of constant growth – has now been under question by leading economic thinkers like Mariana Mazzucato and Kate Raworth for some years. Before them there was Donella Meadows who, when she published the seminal work Limits To Growth in 1972, foresaw the environmental and economic collapse that was to come.

The complexity which accompanies the global economy, the interconnectedness of systems it has created, is not easily unpicked, especially since it is bolstered by powerful vested interests. We have been building a global economy so long, it’s almost hard to remember economies that were not tied to the relentlessly extractive process of more.

Yet there are many theories and models emerging that offer light at the end of this dark tunnel. They offer ways in which we might change our global economy to halt the extractive and divisive economies which offer opportunities of exponential wealth and power to so few, and leave the rest of the world struggling to get by. Many of the most hopeful are focused on changing our places. They range from upgrading the failed idea of sustainability to a circular economy; to smart cities with better relationships to their rural surroundings; to doughnut economics, to human-centred incremental improvements and the wellbeing economy. And then there is regenerative economy design.

We work with economic change that is sourced from place, a foundational pillar in designing regenerative economies. It deals with the varying aspects of bringing our economies back towards a localised, place-sourced design that derives its thrivability from the interconnected thrivability of the five key ‘capitals’ that surround it – ecological, social, human, production, financial – whilst still operating inside our existing global economy as it slowly transforms. It’s a g-local approach. It is an economy that is rooted in the natural geology, geography, topography of place, alongside the unique cultural heritage that each and every region on this earth can draw upon.

What is regenerative economics?

To understand in depth what we mean by regenerative economics, take a swerve to the perspective paper series at the Regenerative Economy Collaborative.  For a quicker summary, read on.

According to many different dictionary definitions regeneration is an act or the process of regenerating : the state of ‘something’ being regenerated. It is also described as a spiritual renewal or revival; and the renewal or restoration of a body, bodily part, or biological system (such as a forest) after injury or as a normal process.

If we look at its ancient Greek roots – as both Carol Sanford and Kate Raworth have reminded us – economics was a term first coined by Aristotle who ‘defined it as the pragmatic science of living virtuously as a member of the polis (or community) through wise household management.’

Thus regenerative economics is the restoration of intelligent and wise management of our global planetary ecosystem whilst re-igniting a spiritual renewal or developmental growth stage of the human species.

If we contrast that statement with our understanding of existing economics, we can perceive an immediate and powerful difference.

Our modern economic system grew from the iconic diagram of the circular flow of income drawn by Paul Samuelson. Households supply their labour and capital in return for wages and profits. Households then spend that income buying foods and services. Voila – the interdependence of production and consumption that is the marvellous market.

There are three other loops. They are banks, governments and trade. Banks take some of the income and use it as savings which they invest, and return some of the money as interest (but not all). Governments extract taxes from income but put it back into the system as public spending (but often not enough). International trade balances imports with exports (but not always, hence trade defacits).

But it was arch-neoliberalists Friedman and Hayek who constructed the narrative that has underpinned the laissez-faire economics we know today. It is a school of thought that allows for minimal interference by government in the economic issues of individuals or society. It is free market capitalism that favours reduced government spending, deregulation, globalisation, free trade, and privatisation. It is focused on the production of goods and services for profit which necessitates extraction from both natural and social capital for the benefit of a minority and without taking into account the systemic impact – either on ecological or social capital.

This is where Samuelson’s model falls flat on its face. The energy and natural resources on which this economy and consumption depend are missing from the model. So too are the people who live in societies that consumption affects – whether that effect is on their mental or physical health. There is no incontestable data that shows just how much impact a high consumption lifestyle has on both these aspects of humanity.

This is what a regenerative economy seeks to adjust and change. It fundamentally seeks to create an economy in which the planetary ecosystem and its resources are respected, not depleted beyond the ability to sustain planetary health, and in which the human experience is one which allows humans to achieve their highest potential through constant development and growth. A regenerative economy would recognise the right to life not just of humans but all species – in a state of constant evolution

Why Is Place Important?

What does macroeconomics have to do with the power of place?  Why is place important in activating the kind of regenerative economy we are talking about?

Places are living organisms that are all each completely unique. They are unique in biology, ecology, and geology. They are unique in their cultural heritage. In regenerative practice we describe places as having a unique bio-cultural identity and potential. Lisbon is different to London. The Bay of Plenty is different from the Bay of Biscay. Mallorca is not Madeira.

Some economies are built on the heritage of the land like Russia and New Zealand, others on pivotal geological and political positions across different cultures and regions – like Istanbul. Each watershed we live in has a unique potential to grow a flourishing economy based on its particular ecological and cultural heritage.

Our place can be a small village tucked away in the countryside. It can be a hillside farming community in a protected natural landscape. It can be a bustling city or a suburb. It can be a working farm or a grand estate. It can be new housing development or a whole new town. It can be an island community or it can be nested in an entire watershed the size of the Mississippi or Volga basin.

Whilst the idea of changing global systems can be overwhelming as a challenge and in its complexity, there is something altogether more possible in our minds when we consider systemic change from a perspective of place. Although our globalised economy – where we have the opportunity to travel to and live and work almost anywhere – has diminished our potential to be connected to place, we humans can still best experience intimacy, connection, consideration and caring for our natural surroundings from a perspective of place. Bill Reed of Regenesis International puts it very well:-

“We can’t save the planet. It’s too big; it’s an aspiration, but how do we work on it? …But when we work in place we can see the impact and respond. Place is the one unit of measurement that allows us to change our behaviour. If we save the places of the world, we save the planet.” Bill Read, Regenesis Institute.

For the purposes of understanding its relevance to place, let’s look at some key principles of regenerative economics and place-sourced potential.

The Principles of Regenerative Economics