Summary and Conclusion
The old Chinese proverb: “May you live in interesting times” certainly can be attached to the times we’re living in! We stand at the apex of change on so many levels—economic, financial, human and environmental that it has proved to be almost too overwhelming for most of us to deal with. But deal with it, we must. That is the amazing thing about our human journey; it has been a continual process of change and history proves that we are capable of making major changes and coming through it just fine.
We need not become unsettled that change is, once again before us. Instead, it is time to gather our resources and proactively design solutions for these interesting times. We offer an Integrative Economy as one potential solution that will help us move into the 21st century. This is the first time in human history that we have the global capacity to understand how all the major systems—human, earth and economic—can work together. It is in this “integration” that the power for transformation will emerge and produce the solutions we need to this era’s challenges.
An Integrative Economy is truly about re-directing our energies towards building the most innovative economy ever imagined. We have the ability to do this. The question before us is, do we have the will? We believe we do.
Summary
If you look at where we’ve been we can see a time when the Agricultural economy loomed large; then the Industrial/Manufacturing/ Consumer economy overtook it as the primary economic model. From the Industrial/ Consumer economy we now have a Service/Consumer economy as the dominant place where people earn their living. The Knowledge/Service economy has emerged. It is here that we can see the transition is complete because it does not fit into the traditional consumer system. While the Service/consumer economy may still want to dominate, Knowledge/Service is now overtaking it. Yet, remnants of all the previous economies remain essential parts of the whole. That’s why we’re now in an Integrative economy.
Differences in Each Economy and Employment Sectors
The differences in each of these economies are seen in where we put our time/create our lives and the ways that we accumulate wealth. In the Agricultural economy it was mainly on the land and wealth accumulation was primarily connected to trading consumables like food and other necessities to sustain life. As the Industrial/consumer economy crested over the Agricultural, our time was spent in factories and manufacturing centers and our wealth became tied to possessions, property, money and power/status. As the Service/consumer economy began to dominate over the Industrial/consumer, our work was connected to relationships between people and/or machines that enabled far-flung relationships. Rarely did we do the physical work of the previous economy—though clearly some still did. Wealth accumulation remained parallel to the Industrial/consumer economy, connected to possessions, power, property and money. The Knowledge/Service economy exposed cracks in the system as ideas and relationships began to be important ‘wealth’ indicators too. Examples of open-source software given away freely sent shockwaves through the traditional consumer/growth is good/profits are everything system.
Designated employment sectors changed too between these economies. During the agricultural era—the majority of people made their living working on farms and providing for themselves. Small markets began to arise and in a few large cities, the early stages of what would evolve to the Industrial/consumer economy were beginning.
Government was also a sector that has been active. During the Agricultural economy the government sector was relatively small. The rise of the Industrial and Service Consumer economies saw a steady increase in the number of people who work in the government sector.
By the 1850’s, people were beginning to leave the farms in droves and work instead in businesses/market sector and government sectors. One very large reason for this was oil. It literally fueled the production capacity of the Industrial economy. This transition would take another 100 years to complete but by 1950, less than 10% of people made their living from farms and most of the farms that existed were actually part of large corporations where people were employed.
One other sector that has remained steady throughout all of these economies is the illegal sector. If one is not employed in a business or the government, then one generally finds illegal means to generate the funds necessary for living. You can see this in action in Mexico where the drug cartels clearly ‘employ’ many people and wealth creation rivals traditional market sector. Add to this prostitution and black market businesses and the sums transferred in this employment sector are tremendous.
While markets, government and the illegal sectors were the ‘obvious’ employment sectors, starting in the late 1800’s, charity groups began to arise to address the social ills that were becoming more obvious. Over the last 100 years, these not-for-profit groups have grown significantly so that today they actually employ ten percent of the population. Yet because their funding started initially through private donations and then more recently through government funding starting with the 60’s War on Poverty, the non-profit sector has been ignored when it comes to being measured in the GDP. Today there are over 1.4 million non-profits doing very important work, yet they remain a ‘shadow sector’ as far as our economic measurements are concerned. This is going to have to change in an Integrative economy.
Local Community Capacity Employment Sector
We’re proposing the creation of the “Local Community Capacity” (LCC) employment sector with a focus on three distinct employment options within the LCC: Local human capacity development, Volunteer Services and Natural environment integration. Specifically in this paper we explored the “Local Human Capacity Development’ area through the creation of a new business: Integrative Community Ventures (ICV)
We are all products of the Industrial consumer economy and by the mid-70’s a metamorphosis began into what we now call a Service/consumer economy. And from there, it has morphed into a Knowledge/service economy which is where we are right now. The impetus for this was the rising price of oil. As oil prices increased, manufacturing costs increased and profits decreased. Corporations began to look for ways to maintain high profits. Since they could not control the cost of oil, they looked for other parts of the manufacturing costs they could control. The innovation: ship jobs overseas where the cost of labor could be significantly lowered. What seemed like a great solution however has created some unintended consequences—high unemployment—first in blue collar jobs and now in white collar too. Whole towns were reduced to ghost towns as factories evaporated across the American landscape and re-emerged in India, China and Mexico.
The final blow happened in 2008 when the housing/consumer bubble burst, the financial system teetered on the edge of collapse and a recession took over. This recession is a wake-up call. We can go the way of Japan whose economy has declined steadily for the last 20 years as it remains adamantly attached to a consumer economy model resulting in stagnation. Or, we can recognize that our first attempts to fix the Recession—stimulus packages, bank bailouts, cash for clunkers, first time real estate home-buyer credits and interest rates sitting at 0% have failed to produce the results of kick-starting the Consumer engine again. It was a good first try, but reviving the consumer economy is not the answer. Japan proves that we will simply not be able to consume our way out of this; instead, let’s build something new. This transition includes acknowledging the Knowledge/Service economy which opened the door to what will be an Integrative economy. The Knowledge/Service economy has spotlighted the square peg/round hole dilemma we find ourselves in as we continue to try to maintain old measurement systems (GDP) while selling a ‘consumable’ (knowledge) that does not perform according to the traditional consumer economy’s requirements.
We’re suggesting it is time to welcome an Integrative economy as the new model. The new feature of this economy is that it is Knowledge-driven. The accumulated knowledge of the last 5000 years has put us in this position. We can see it in action through all the technology that emerged out of the Industrial/Service consumer economies. Machines now do most of the heavy lifting, computers enable work that might have taken weeks to complete to be finished in minutes.
Knowledge will be a resource that one owns and sells as well as a tool that one uses to help you live your life effectively. This economic shift into a knowledge-driven economy was made possible by all the work/efforts of the previous economies: agricultural, industrial consumer and service/consumer. An Integrative economy will include parts of all of these while transforming them to meet the needs of the 21st century. And through it, we will create the most vibrant economy ever imagined.
We are already in the early stages of an Integrative economy in 2013. We see it in action in all the ‘knowledge-driven’ jobs—technology, medicine, education, entertainment, etc. while watching many of the old industries retract and shrink to a shadow of their former selves. It is a ‘mind and matter’ economy where the quality of life is of utmost importance.
An Integrative Economy is different—but not less. It will require new measurement systems which we have the ability already to create. It will foster a new employment sector which will enable us to pay for work not previously considered as part of the economy but which now provides such important work that it can no longer be ignored. This is essentially the step of pulling the non-profit/NGO work out of the shadows and giving it equal status with markets, government and illegal sectors. Thus, under the Local Community Capacity employment sector—the Local Human Capacity Development, Volunteer Service and Natural Environment integration areas will be delineated as primary employment/career options that are each uniquely their own focus and require this level of specificity. With this new LCC employment sector, new wealth accumulation options will also become possible. Together, the new measurements, new employment sector and new wealth accumulation options will make an Integrative economy come alive.
There are of course, many steps along this path. First, we must recognize that an Integrative economy is dependent on high functioning humans and that is the core-infrastructure we must begin to invest in. Human capacity must be developed and to ensure this, we will build a new employment opportunity called ‘Local Human Capacity.” New businesses will arise to meet this demand. The investment in this infrastructure is no different than what we did to foster the Industrial economy. Then millions of dollars were put into railroads, cars, factories etc. This time, billions of dollars will go into fostering the best in human capacity.
We offer Integrative Community Ventures (ICV) as a prototype for this new business. Implemented as a pilot project, it could provide a replicable model that could be used throughout the country to support the local human capacity arena all the while taking into consideration cultural and regional differences. The benefits of ICV are numerous—for our children, elderly and those with disabilities who will be served through ICV. As well, economically, the millions of people who could potentially work in this employment sector would reset the imbalance created by the massive unemployment out of the declining manufacturing and service/consumer industries. Gainfully employed in knowledge-driven industries, the quality of life improves for all. Another benefit is to the environment as millions of people work in and close to their homes—the days of long commutes and high carbon emissions transforms to little or no commute and reduction in carbon emissions.
As we consume less products and use more information to build our economy (and our lives), we realize that wealth accumulation does not have to remain tethered to money, possessions and property. Now, we can trade our knowledge and time as a valuable form of wealth. Volunteering will become an option for accumulating a ‘social safety net’ of wealth through the exchange of one’s giving during their young years while knowing that if they are someday in need—their volunteer time offers the ability to ask for assistance knowing that this enables the next generation to build their own social safety net’ of wealth. Thus, wealth accumulation options can be expanded and adjusted to fit into an Integrative economy. This frees us to further our knowledge accumulation and improve quality of life for all. As the happiness studies have shown, after a certain level of traditional wealth accumulation—money, possessions and power, no increased levels of happiness occurs. What increases happiness after the basics are met are relationships, community and meaningful engagement in the world. This is a ‘wealth’ not previously measured but it now can be.
And then finally, the natural environment integration is factored into our decision making as we become well aware that we are interdependent with the earth as part of an Integrative economy. This makes sense and is possible because the knowledge/technology accumulated from previous economies provides the capacity to do this. For example, closed-loop production methods compensate for natural resource assessments that are figured into production costs. The resulting increased profit centers more than make up for the higher upfront costs in the natural segment. We now value the natural environment as a unique part of the “Local Community Capacity” employment sector because it too fosters a high quality of life.
So, who will lead the way?
We believe the United States—despite a Great Recession that rivals the previous Great Depression—should take the lead. Since the birth of this country—we have been innovators with a high capacity for change. We’re also one of the largest economies in the global configuration. If we can begin to implement this new economic model—others will follow. In many ways, this is a new form of Capitalism. Integrative capitalism is where natural, social and business systems merge together as a new model. Through the act of creating new measurement systems for our economy, a new employment sector called LCC to compensate for the shift away from the Industrial and Service consumer economy and new wealth accumulation options as we realize that we are not tied to money, possessions, property and power to support our lives. Now, relationships and community rival money and stuff!
We have a choice: to see the challenges ahead of us and create a viable solution that works for humans and the planet. An Integrative economy is that solution—and our children are depending on us to take that step and build a world they can live in.
Conclusion
We have no delusions that what we’ve written here will be readily picked up and implemented. But it could…because we know that the social, financial, environmental and economic systems that we’ve been comfortably living in for the last 100 years are now undergoing significant challenges. These challenges can’t be ignored and though we’ve been attempting to for the last several years. The stark reality is that all our attempts to get the old systems back on track are not working.
We’ve listened to economists on both sides of the spectrum tell us that it’s a ‘new normal’. We’re not going back to the heady days of 2005-2006 when it appeared that our economy was thriving with no end in sight. In 2013, thriving doesn’t even come up. For many people, it really comes down to being happy merely to survive.
We offer an Integrative Economy as a new way to thrive.
It won’t look like the old ways of thriving by accumulation of mass quantities of stuff. Thriving will connect to a high quality of life that, along with some quantity of stuff, is balanced with healthy relationships, connection to the community and respect for the earth. If we will give ourselves permission to unlock from the limitations of trying to squeeze a consumer economy into a knowledge-driven Integrative economy, we will discover that we are on the threshold of the most vibrant economy ever imagined.