Capital for Surviving and Thriving
Invigorate Individuals and Institutions with Information and Incentives
INVIGORATION
Re-thinking what capital is needs to go hand in hand with re-thinking what it is for. It used to be straightforward: as a means of production, capital should be multiplied by investing and generating returns. Only relatively recently, the understanding of what capital is expanded from purely financial towards multiple forms, usually including natural, manufactured, human and social capital. Consequently, the desired ‘return on capital’ could also be environmental or human or social, in addition to economic: So-called ‘triple bottom line’ considers not only profits, but also people and planet. From this perspective, the target outcome might not even be growth, but minimizing, healing or transforming.
I propose that rather than mere multiplication, the expanded purpose of capital is invigoration of individuals and institutions to ensure our human society can survive and thrive. Invigoration has uplifting connotations: ‘giving life and energy’ and ‘making feel fresher, healthier.’ This broad aspiration for humanity can be articulated more clearly in several mutually reinforcing goals: Firstly, to survive, we need to truly appreciate our interdependence, on each other and on our planet. This should motivate us to invest, create and consume mindfully and sustainably. Furthermore, to thrive, we should develop modernized approaches to governance and education — but also re-examine what a human life worth living could mean in our time.
To achieve these goals on a global scale, innovative uses of all forms of capital are needed. We can explore ‘the adjacent possible’ by combining the ever-increasing technological capacities — especially in data collection, processing and sharing — which have the potential to increase transparency in human endeavors, with new insights from science and research, which can guide us and help create the right incentives for change. These approaches to channeling the world’s capital can underpin a powerful, purpose-driven strategy of invigoration, or life-giving.
Interdependence: World’s Largest Marketing Campaign
‘To regain our full humanity, we have to regain our experience of connectedness with the entire web of life.’ If we want to thrive, we first need to survive. Although this sounds trivial, we can no longer take long-term survival of humanity for granted. We face risks threatening our existence in an uncomfortably foreseeable future. This is largely caused by our activities, often profit-seeking, and negligence about their consequences. Therefore, to prevent human civilization from destroying itself, people need to realize that what they do, even the ‘externalities’ they create, matter on a large scale because we are all interconnected. Not only with each other as humans, but also with the rest of living and non-living nature, sometimes misleadingly labelled ‘the environment’. In fact, ‘we are made of it; we eat, drink, and breathe it.’
Interdependence is not just a fluffy, heart-warming concept. It does have this aspect, since the need to belong to a larger community is an essential part of being human. Nevertheless, it also shows a darker side, as it speeds up and multiplies the global reach of dangerous phenomena: from climate change to financial crises, to infectious diseases and cybersecurity breaches. Interdependence is therefore less a value, as sometimes suggested, than simple reality to be acknowledged if we want to solve problems intelligently. You and I do not have to like each other, or even agree on everything, but we need to be aware that our fates are tightly interlinked and to search for a way to work together. Alarmingly, mainstream popular opinion seems to be shifting away from appreciation of interdependence towards parochialism, isolationism and protectionism. Mindsets are changed more effectively by convincing rather than by force: ‘The necessary changes have also to be seen as desirable changes: good for people, their health and their quality of life’.
I therefore propose running a large-scale ‘marketing’ campaign with the aim of raising awareness about our interdependence. Why use our capital to promote something seemingly so self-evident? We are in an environment of ideological competition. ‘End of history’ has not happened and values such as
sustainable development, human rights or liberal democracy are far from being universally accepted. In contrast, our societies are becoming ever more polarized. Therefore, for those of us — especially the leaders — who acknowledge the need to start doing ‘business as unusual’ in defense of these values, it is essential to publicly claim and speak up about what we believe in. Even if we choose not to, we can be sure that our ideological competitors (comprising many shades of destructive, anti-systemic forces) will heavily advertise their alternative worldviews. (Mis)information campaigns influence people’s minds to an extent that has long been underappreciated. It is not a coincidence that in very competitive industries, companies spend large proportions of their earnings on flashy marketing. Complacency is self-defeating.
This has obvious implications for capital: financial, human, technological and social. Let us employ the most cutting-edge communication technology and the best of human talent — artists and designers, copywriters and public relations specialists. Importantly, the message should be endorsed by prominent leadership figures, since they have the necessary social capital — popular recognition, access to media platforms and influential social networks — to make a significant impact. Ultimately, however, campaigning should be accompanied by leading by example. People will end up following and imitating what leaders do, not just what they say.
Sustainable Capitalism
Economist Robert J. Shiller wrote that the purpose of finance is ‘stewardship of assets’ for ‘achieving human goals’. Financial tools can be used to incentivize investment in sustainable and socially responsible ventures — and deter damaging ones. Ideally, instead of a ‘triple bottom line’ tallying up results at the end, a project’s effects should be holistically evaluated even before it is funded and realized. This can be achieved by quantifying positive and negative externalities to be created and ‘internalizing’ them, that is, adding them into the cost of financial capital. It is therefore necessary to expand the understanding of the ‘riskiness’ of an investment: In addition to the economic risk of not realizing expected returns, environmental and social cost of endangering the planet and its inhabitants should also be included. Consequently, it would become harder to invest in harmful businesses and they would become less attractive even from a financial, profit-oriented perspective.
While projects at the intersection of finance and environmental policy are already under way, they are relatively recent inventions, focusing mainly on carbon emissions. They need to be developed further,with a broadened scope. Green finance tools such as ‘climate bonds’, ESG (environmental, social,governance) investing and ethical investment funds should become the norm rather than a nice-to-have. Finally, to truly democratize sustainable investing, it should be made more accessible (well-known and affordable) to retail investors.
Furthermore, in a continuation of the capitalist journey, responsible investment and production should be followed by responsible consumption. Globally, many people like me realize the importance of interdependence and wish to contribute to regeneration of nature and society — or at the very least not to contribute to their destruction. However, we feel we lack appropriate tools for making well-informed purchasing decisions. Knowing about problems without being able to act on them does not help — and makes us feel powerless and anxious. Sustainability-minded consumers need to be empowered with information to live by their values in their everyday life.
If sustainable investment guidelines fail to deter irresponsible companies, higher supply chain and product lifecycle transparency would enable customers to vote with their feet (and wallets) on the types of businesses they wish to support. For example, retailers could develop shopping applications that would allow scanning any product, be it a can of beans, a pair of shoes or a smartphone, and offer a comprehensive and visually appealing summary of information on how the product was made. This would include the origin of materials from which it was produced, who put them together and under what working conditions, how it was packaged, how it travelled on its way to the retailer and what will happen to it once it is discarded. It would essentially disclose the product’s total cost and footprint. Thus, any shopping trip could become an educational experience, helping customers to appreciate the consequences of purchasing a product or service and prevent feelings of guilt about sponsoring manufacturers that cause pollution or human suffering.
Innovative Governance
Human beings are not only consumers, producers and investors. We are also citizens and members of many interconnected institutions. Well-functioning institutions reduce the costs of governing a complex society and ultimately enable individuals to lead a happier, hassle-free life. To support more effective governance, capital should be channeled into minimizing bureaucracy and maximizing transparency and participation. We can identify best practices in e-government from smaller countries like Estonia and invest into scaling them up to make them viable also in Egypt or India. With the help of technology, digitally-enabled participation in decision making could even be extended from the national level to supranational bodies, making them more democratic and connected with citizens across the globe. Moreover, we can adopt management innovations from the private sector and repurpose them for delivering public goods. Since many policy solutions for today’s world require coordination of multidisciplinary capabilities, ‘agile policy making’ can be encouraged. In this setup, diverse teams of experts from fields like public policy, technology, psychology and economy would work together to create, test and refine ‘minimum viable products’ in iterative cycles and experiment with simulations in ‘policy sandboxes’.
In addition to optimizing governance, knowledge and capabilities of citizens should be kept up-to-date by our education systems. Participatory democracy can only function if people have a good fundamental understanding of how the world works. I would emphasize teaching about information technology, since we have come to depend on IT in nearly all aspects of our modern civilization. A better grasp on the functioning of IT components, systems and data transmission mechanisms could result in more appreciation of the potential dangers of technology and personal data misuse, leading to strengthened cybersecurity. A second underdeveloped area of practical knowledge is finance: from understanding how the global financial system works, to managing one’s own financial assets in the face of disintegrating social security and overwhelming numbers of available fintech solutions. Strengthened skills in technology and finance would empower individuals as well as whole societies.
Happy Humans
Finally, investments in digitization need to be balanced with investments in ‘re-humanization’ of our society. While psychological research tells us more and more about what makes us humans happy, we seem to move further and further away from it in our lifestyles. Energy drinks have grown increasingly popular in recent years: We are permanently so drained of energy that we are compelled to drink it out of a can. It is therefore striking that in many lists of urgent challenges of today, there is hardly any mention of funding humanities, elevating our culture and curing the ailments of our psyches. We need to re-focus on the wellbeing of the individual and upholding human dignity.
The biggest source of invigoration for the individual would be giving back to them their most precious asset: their time. As discussed in last year’s Symposium essays, technological advances in automation have the potential to replace much of human labor, often thankless monotonous work. We could therefore significantly reduce people’s working hours without sacrificing productivity. Since more leisure would mean more time to rest and reflect, individuals would certainly become more deliberate about the way they lead their lives. They would be able to dedicate time to learning life skills which are nowadays often outsourced, such as cooking nutritious meals and maintaining their homes. They would also be able to stay informed about global issues, pay attention to sustainable consumption, participate in civil society and improve the quality of their relationships. Ultimately, having more time would enable people to engage more fully in all the actions suggested in this essay. For this reason, I believe that re-claiming time would be the most transformative use of capital.
FULL OF LIFE
Rather than introducing one simple cure-all solution, this essay has offered a multifaceted and deliberately idealistic big-picture framework for broadening the ambitions for world’s capital, consisting of a strategically structured web of action points: Promote awareness about interdependence, advance interdisciplinary work on sustainable finance and encourage responsible consumption to ensure the survival of human and other forms of life on our planet. Invest in innovative governance and education and use work automation to free up people’s time so we can thrive as well-informed and well-rounded human beings. Directing the various forms of capital into these endeavors would hopefully make our lives not only more sustainable, but invigorated — refreshed and full of life.
Bibliography
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