Abstract

The imperative to grow is essential to all modern societies; to maintain their welfare infrastructures the economy

of modern societies is expected to increase at a steady pace annually. Consumerism – a steadily growing material

consumption which does not necessarily contribute to increased health or happiness – can be seen as a socio-

cultural development influencing the ecological balance of the earth. The ethical values we treasure most within

our personal lives, such as trust, honesty, respect, empathy and cooperation, are very different from the basic values

of the free market-economy which are based on the idea of maximizing self- interest and competition.

Organizational ethical reporting should measure moral, cultural, social and environmental performances, thus

doing justice to the double imperative of humanizing and naturalizing the economy. The success of such ethical

estar, a economia das sociedades modernas deverá aumentar a um ritmo constante, anualmente. O consumismo -

um consumo crescente de material que não necessariamente contribui para o aumento da saúde ou felicidade -

pode ser visto como um desenvolvimento sócio-cultural que influencia o equilíbrio ecológico da terra Os valores

éticos que valorizamos mais em nossas vidas pessoais, como confiança, honestidade, respeito, empatia e

cooperação, são muito diferentes dos valores básicos da economia de mercado livre, que são baseados na ideia de

maximizar o interesse próprio e a competição. O relato ético organizacional deve medir desempenhos morais,

culturais, sociais e ambientais, fazendo justiça ao duplo imperativo de humanizar e naturalizar a economia. O

sucesso de tais medidas éticas é essencial para começar um processo de transformação de nossas sociedades.

Palavras-chave: Economia Moderna. Competição. Humanização do Mercado.

living of most developed countries, the world economy will ultimately collapse. The imperative

to grow is essential to all modern societies; to maintain their welfare infrastructures the

economy of modern societies is expected to increase at a steady pace annually. It is clear that

the relatively fragile stability of the planetary climate is at stake and a lot of the damage to the

regenerative capacity of our planet is now known to be irreversible. Since the publication of the

Limits to Growth report of the Club of Rome (1972) several updates (RANDERS, 2012;

MEADOWS et al, 2004, 1992) show that, if growth is to continue at current rates, humanity

will overshoot the planetary boundaries and collapse sometime before 2100. In ‘Planetary

Boundaries. Exploring the Safe Operating Space for Humanity’ Johan Rockström, Will Steffen

and 25 other co-authors (2009) identify nine planetary life support systems essential for human

could become seriously unbalanced.

that our economy has exceeded the earth’s carrying capacity is also supported by the

‘Ecological Footprint model’ (MCLELLAN, 2014). This model suggests that we currently

require 1.5 planets to provide the resources we use and to absorb our waste. An estimate of 3

planets is expected by 2050 if current average trends of production and consumption continue.

All this indicates that the notion of infinite economic growth is utterly flawed.

economic and (relatively) new ecological views on growth. Etymologically, both ‘economy’

and ‘ecology’ are derived from the Greek word ‘Oikos’, meaning ‘household’ – and this, of

domain of trade exchanges? Do we mean the domain of human social relations and societal

structures? Or do we mean the economic, social and ecological infrastructure all at once?

financial system, which generates all this debt, can therefore no longer be perceived as

independent and neutral. It is part – both as a cause and as an effect – of our current ecological

crisis (TOXOPEUS & ARKEL, 2014; LIETAER et al, 2012). Also, socio- cultural

developments, such as the growing inequality of wealth distribution, are destabilizing factors

influencing the wellbeing of the planet (PIKETTY, 2014; LIETAER et al, 2012, 2010). And,

of course, consumerism – a steadily growing material consumption which does not necessarily

contribute to increased health or happiness – can be seen as a socio-cultural development

influencing the ecological balance of the earth (JOSEPH, 2014; BREGMAN, 2014;

SCHARMER & KAUFER, 2013; CAPRA, 2009; DALY & COBB, 1989). It is also clear that

an increase of the Gross Domestic Product is not an adequate indicator of wellbeing. Besides

individual and on the social level (2010, p. 21).

that mobilizes people to take action (in forms of civil unrest which are not only of the left) and

this pushes groups against each other. Fritjof Capra summarizes the necessity of a holistic and

complexity approach as follows: “The major problems of our time – energy, the environment,

climate change, population growth, food shortages, economic and financial crises – cannot be

understood in isolation. They are systemic problems, which means that they are all

interconnected and interdependent” (2009, p. 11).

household are not compatible with the ‘logos’ of ecosystems. It is, however, possible to

reconcile economic theory and ecology and we can learn from older paradigms without looking

backwards. This paper is future-oriented and it argues that our economy can develop the

beings. This development is followed by a ‘complementary phase’ which generates a relatively

steady-state configuration and a relatively sustainable relationship between living beings and

their environment. We do not think that this analogy with biological development holds

completely for our modern society, since our culture is not primarily steered by natural selection

but by human decision making and reflection. We will therefore defend the position that a

system theory cannot merely be based on a naturalistic paradigm – be it physical

(thermodynamics) or biological (autopoiesis). In order to understand the transformations that

lie ahead of us, we cannot just start from the idea of a ‘naturalization of the economy’, of an

economy that becomes in tune with nature; we must also introduce the idea of a ‘humanization

of the economy’. Although it is possible and even fruitful to acknowledge the complementary

of nonmaterial goods (the humanization of the economy), which will benefit the ethical, social

and cultural life of everyone.

to look into the heart of our socio-economic system. The Aristotelian distinction between

‘Chrematistics’ (the art of accumulation of money by means of commerce and/or speculation)

and ‘Oikonomia’ (the art of household welfare) is still helpful in order to understand what the

heart of our economic system is (STAHEL, 2006; DALY & COBB, 1989; ARISTOTLE, 1967).

Our modern economic system originates in a historical context that can be compared to the

‘competitive development phase’ of living networks. While the current context is rapidly

changing, the competitive rules and aims of the socio-economic system are still in place. The

major problems we are facing today are systemic in nature, taking place simultaneously at three

levels: the ecological, the economic-financial and the socio-cultural level. We can therefore

This is, as we said above, holistic, focusing on nonlinear relationships and systemic structures,

emphasizing interconnectivity and interdependency. We are not approaching nonlinear

relationships mechanistically, but organically, as an organic development (MORIN, 2008B,

1999; CAPRA, 2002; CILLIERS, 1998; GLEICK, 1988; ROSNAY, 1979). We would like to

call this approach the ‘holistic complexity’ paradigm, because on the one hand complexity

perspectives are always holistic and on the other ‘holism’ emphasizes the idea of an organic

economic and ecological perspectives has been growing since the 1980s. Main authors in this

(2007) and Edgar Morin (2008b), who all incorporated thermodynamic models into socio-

complexity’ paradigm we find many authors who have been deepening the critique of modern

economic structures (JOSEPH, 2014; RIFKIN, 2014; SCHARMER & KAUFER, 2013;

ORREL, 2012; ROTMANS, 2012; HEINBERG, 2011; EISENSTEIN, 2009; JACKSON, 2009;

BEINHOCKER, 2007; WIELINGA, 2001). This critique has recently also been extended to the

monetary system and its relationship to forced economic growth (TOXOPEUS & ARKEL,

2014; HO, 2013; LIETAER, 2013, 2012; ROBERTSON, 2012; EISENSTEIN, 2009).

the monetary system. We think that all these approaches converge in the idea of a coherent and

ethical alternative for modern capitalism that has been summarized under the concept of

HEGEL, 1968A). As Joël de Rosnay (1979) has shown, ‘holistic complexity’ research is never

about zooming in on just one issue: its basis is the so-called ‘macroscope’. The macroscope is

neither a microscope nor a telescope – which are merely physical tools – it is, rather, a new way

of approaching things: “The macroscope filters details and amplifies that which links things

together. It is not used to make things larger or smaller but to observe what is at once too great,

too slow, and too complex for our eyes (human society, for example, is a gigantic organism that

us in order to better understand them before they destroy us” (1979, 6/7). We will focus on

global developmental patterns, which despite their unpredictability, may offer some guiding

principles to understand our historical situation (KURZ & SNOWDEN, 2003, p. 468). This

society, specifically economic aspects, on the other. The hierarchies of values are shifting – a

transformation that Hegel describes as the transition from bourgeois society (based on

competition and self-interest) towards an ethical civil society (based on an intrinsic commitment

to the common good). No subsystem of society – neither in its theoretical structure nor in

practice – can be allowed to continue to neutralize moral values. Thus moral values should

become the constitutive principles structuring the core economic processes.

competitive and the complementary – we want to first understand what the limits of an approach

are in which our society and economy are compared to living networks. Such an approach binds

us to a ‘biological reading’ of modern society that emphasizes naturalization, which is only one

element of the ‘moralization of the markets’. In order to understand the transition to the

complementary phase, we need to understand the fact that in the competitive stage competition

transition to a complementary phase (3). In the concluding section we shall briefly discuss the

systemic networks paradigm which limits us to an understanding of the ‘naturalization of the

us to understand the more fundamental change – suggested by Hegel – of a ‘moralization of the

market’. This would also encompass what we have called the ‘humanization of the economy’

(4).

to compare society with a living being. But in order to do this we first have to describe living

systems from a ‘holistic complexity’ perspective. We will see how living networks create

sustainable organizations. Only then it will be possible to apply the living network model to

societies and especially to economics. This will also clarify what exactly it means to speak

about a sustainable society.

living beings both as organizational patterns and as configurations of relationships to their

environment. We do not only focus on what living beings are, but also on how they are. This

means that we not only describe stable patterns, but also dynamic relationships or interactive

structures. Understanding life from a ‘holistic complexity’ perspective requires addressing the

connection with thermodynamics (RIFKIN, 2009, 27). According to Albert Einstein the laws

of nature most likely to withstand the test of time are the first and second laws of

that energy is no longer available afterwards. There is a degradation of potential energy from

available to unavailable. This energy, of course, is not destroyed (first law), but it is dispersed

linearity, one of which is life. We can define life as a natural pattern that (temporarily and

locally) resists entropy. In terms of thermodynamics, life is a non-equilibrium network.

Although this seems to contradict the second law of thermodynamics Ludwig von Bertalanffy

has shown in his famous General Systems Theory (1968) that living organisms need to feed on

a continual flux of energy and matter in order to withstand entropy. Living beings cannot be

described as closed systems, since closed systems necessarily move towards a thermodynamic

equilibrium. Bertalanffy therefore defines living beings as open systems which maintain

themselves in a non-equilibrium steady state. These open systems constitute, he says, a

temporary break of the second law of thermodynamics. In his famous article ‘What is Life’

(1944) Erwin Schrödinger states that if an open system is capable of keeping its internal entropy

open systems are ‘dissipative structures’ using energy from the environment to decrease internal

entropy. He describes the emergence of stability in dissipative structures as a process of self-

organization – a term coined by William Ross Ashby in 1947. This process is the spontaneous

creation of a higher level pattern out of lower local interactions (HEYLIGHEN, 2001). Entropy

can be seen as a form of dissipation of energy, which in classical thermodynamics is always

associated with waste, that to open systems can be a source of energy to build organized

structures without equilibrium with the surroundings (CAPRA, 1996, p. 89). Dissipative

structures thus not only maintain themselves in a stable state, they can also increase their

complexity as a response to an increasing flow of energy. Prigogine also emphasizes that the

general patterns of dissipative structures cannot be derived from the parts. These forms of

organization emerge spontaneously at the supra-molecular level. According to François

Roddier (2012), we should in fact speak of a third law of thermodynamics based on these

its environment can assimilate – the system collapses into a state with reduced entropy

production. Arto Annila and Stanley Salthe indeed argue that the principle of increasing

entropy, when given as an equation of motion, reveals that expansion, proliferation,

differentiation, diversification, and catalysis only leads to a stationary state if there is an

entropy- absorbing capacity of the surroundings (ANNILA & SALTHE, 2010).

thermodynamics is insufficient, because it says nothing about how living systems reduce their

own internal entropy. To understand this ability to reduce entropy, we need to look at the

internal organizational pattern and process of living systems (CAPRA, 1996, p. 156). This

organizational pattern is the autopoietic metabolism that constitutes the essence of life. It is a

capable of maintaining their energy by internal regulation and cooperation of the parts

(Maturana & Varela, 1980, 9). An autopoietic network is always an open system that requires

a continual flow of energy and matter. But it is also in a certain way closed, because it is self-

organizing and self-producing: “It is continually regenerating its own productive organization”

(CAPRA, 1996, p. 163). A ‘healthy’ system is a system of unaltered autopoiesis. When the rate

of entropic decay becomes faster than the autopoietic regeneration, a system falls apart. It is

then visibly taken into the never ending flow of the second law of thermodynamics.

of interaction, a general capacity of responsivity. Living systems have an active interaction with

further competition and selection. Maximizing consumption also leads to exponential growth

to interpret the whole history of world economy in terms of living networks, at least the

capitalist economy is certainly competition, but over the years this system has developed an

reinforcing and supporting each other. According to Eric Beinhocker (2007), economists like

as a closed system comparable to the motion of the planets. Impressed by the progress of

of thermodynamically closed systems. However, this perspective, according to Beinhocker, is

fact that the economy is an open (living) system affecting its surroundings and having a major

strong complementary organizational structures.

competitiveness. Smith’s theory is based on notions that characterize the competitive stage of

living networks. Economic wealth, according to Smith, is created when raw materials taken

from the environment are used by labor to satisfy human desires. If this conversion of natural

capital into man-made capital is what creates wealth, then an increase of wealth will be attained

by converting more natural capital through labor productivity into man-made capital. In order

to increase this productivity, specialization of labor is necessary (1776). This dynamics of

and growth. This can best be pictured if we take one of the main elements of the complementary

system and due to the financial crisis it has now been severely criticized by many authors

amount of gold it possessed. This is where the name ‘fractional’ reserve comes from. Borrowers

would then repay the bank with an interest.

currency’ – referring to the fiat lux, the creation of light by God out of nothing (LIETAER et

large scale. An important consequence is, for example, debt creation (2012, p. 159-160).

Interest charges create a situation in which the total sum of debts is higher than the existing

money. This shortage stimulates competition among economic instances (people, companies),

stimulating specialization and complementarity in the system. Of course, more generally it also

causes accelerating economic growth. From a systemic point of view the monetary system

creates a self-inflating closed system (DALY, 1993, p. 814).

exchange, man-made capital, in fact everything that can be priced and bought). To consider the

economy as a closed system excludes important elements of interdependence, such as ethics,

rights, (non-financial) social relations, cultural beliefs and, of course, the environment.

However, these interdependencies really exist: people have social feelings, they have notions