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Ecological Economics 70 (2011) 577–584
Contents lists available at ScienceDirect
Ecological Economics
j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e c o l e c o n
Surveys
Pursuing self-interest or self-actualization? From capitalism to a steady-state,
wisdom economy
Niaz Murtaza ⁎
University of California, Berkeley, USA
a r t i c l e
i n f o
Article history:
Received 20 September 2010
Received in revised form 18 October 2010
Accepted 21 October 2010
Available online 10 December 2010
Keywords:
Self-actualization
Economic systems
Self-interest
Wisdom economy
a b s t r a c t
The co-evolution of capitalism, democracy and science since 1800 has led to enormous progress but also
major existential problems. This article asserts that these problems are rooted in neo-classical economics'
narrow focus within human nature on self-interest, which causes intense conflicts for scarce resources among
people, societies, species and generations. It describes how an emphasis on the totality of human nature in life,
with a focus on self-actualization instead of self-interest as the main driving force and wisdom rather than
wealth as the ultimate aim, can lead to a steady-state, wisdom economy that can simultaneously ensure high
personal welfare and collective sustainability.
Published by Elsevier B.V.
1. Introduction
The co-evolution of capitalism, democracy and science since
around 1800 has unleashed unprecedented progress but also major
existential problems, such as environmental destruction. This article
asserts that while all three have instigated the gains, the negatives
originate primarily from neo-classical capitalism's (unless specified,
future references refer to its neo-classical variety) narrow focus on
self-interest within human values and its domination of society.
Sapience, the root word for Homo sapiens, means wisdom, which
involves transcending narrow personal concerns. However, given
capitalism's dominance, self-interest becomes the primary consideration. Neoclassical writers argue that the focus on self-interest by
individuals automatically leads to the societal good (Lowenberg,
1990). This article undermines this argument by identifying the links
between the major current problems and excessive self-interest.
The steady-state economy (SSE), whose idea goes back to J.S. Mill,
was presented as an alternative to a growth-driven economy to
reduce environmental degradation (Daly, 1991). Its environmental
and economic viability has been elaborated subsequently (Lawn,
2005, 2007; Victor, 2008). However, human values provide the ethical
foundations for economic structures, and are, in turn, affected by them
(Norgaard, 1995). Thus, to make an SSE appealing, we must identify
those values which will lead to an SSE and show how these values will
resolve broader problems while simultaneously ensuring higher
individual welfare than self-interest. This will make it easier to
⁎ 945 Ohlone Ave # 961, Albany, CA, 94706, USA. Tel.: + 1 5105261648.
E-mail address: [email protected].
0921-8009/$ – see front matter. Published by Elsevier B.V.
doi:10.1016/j.ecolecon.2010.10.012
mobilize people around an SSE, just as self-interest has energized
billions around capitalism. This article provides the broad counters of
an alternative economic system, built on the totality of human values,
which achieves these two seemingly contradictory objectives.
2. Human Values and Sustainability: A Theoretical Framework
The linkage between values and economic structures is wellrecognized, though differences exist over its directionality. Marglin
(2008) argues that neo-classical structures exacerbate the tendency
towards selfishness. Gramsci (1959) asserts that the cultural
hegemony and values of dominant classes shape societal economic
relationships. Norgaard (1995) asserts that values and organization
(including economic structures) co-evolve with societal knowledge,
environment and technology. This article adopts Norgaard's two-way
perspective. In its initial phases, an economic system is driven by the
values of its champions. As it expands, it influences the values of larger
sections of the population. However, changed societal values, due to
other factors, can influence structures even later.
The linkages between values and SSEs have received little
attention. Daly (1991), Jackson (2009) and Lawn (2000) discuss
them briefly but do not develop them further. Other authors analyze
the link between values and sustainable and equitable economies and
life-styles. Etzioni (1998) and humanistic economics (Lutz and Lux,
1988) link Maslow's (1970) hierarchy of needs with the simple living
movement and humanistic economic policies respectively but not
with economic structures. Additionally, Maslow's hierarchy does not
cover several important motivations, as shown later. Altruistic
economics (Upton, 2010) and green economics (Cato, 2009) link
altruism (only) and green values respectively to specific policies and
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N. Murtaza / Ecological Economics 70 (2011) 577–584
tools but, again, not to structures. Max-Neef (1991) links values with
community development. Buddhist economics (Schumacher, 1973)
links Buddhist values to intermediate economic size and technology
but also does not discuss structures.
Humans excel in shaping their environment due to their high
intelligence, whose use is influenced by human motivations. Motivations are defined here as the underlying goals one or more of which
drive all human action and reflection. Adapting from Gleitman et al
(2004), Kohn (1990) and Maslow (1970), Table 1 identifies nine basic
human motivations found across different societies. Success on these
motivations results in immediate emotions (flow) and longer-term
capabilities (status). Different societies prioritize these motivations to
varying degrees, depending on societal values. Values (defined here as
the priority attached to different motivations) and practices (defined
as the community specific ways of satisfying different motivations)
are shaped by the hegemony of dominant classes, who present
their values as universally beneficial while they mainly benefit them
(Gramsci, 1959).
Values co-evolve with knowledge, technology, environment, and
organization (Norgaard, 1995) to produce results. These results are
reflected in individual welfare, defined here as the balance-sheet of
successes and failures in achieving motivations, and societal sustainability, which depends on the welfare levels of current and future
generations. This depends on the access of members to adequate
resources but also on avoiding infringements on the resources rights
of other members, societies, generations and species to avoid counterattacks. Thus, sustainability is defined here as the ability of a society to
ensure that every member obtains sufficient scarce resources to attain
a satisfactory level of welfare without infringing upon the resource
rights of other members, societies, species, and generations (Adapted
from Murtaza, 1998). Thus, a more useful definition of (sustainable)
economics is proposed as the study of how a society can allocate
scarce resources such that every member attains a satisfactory level of
welfare without infringing upon the rights of other members,
societies, species, and generations.
Motivations differ from each other in key ways. The first difference
relates to the capabilities that develop from achieving different motivations. The first three motivations are self-centered and constitute
self interest (defined here as competing for status or scarce resources): physiological motivations relate to bodily requirements;
security to physical, mental and economic safety; and ‘bad’ selfesteem to our self-image, based on status, competitive accomplish-
ments, possessions, and absolute power. They mainly provide physical
and financial capabilities that ensure the growth of individuals up to a
threshold level but beyond it do not help much in dealing with new
and complex situations. The other six motivations provide social,
intellectual and spiritual capabilities that facilitate growth and help in
dealing with novel and complex situations. The first three of these
motivations are relational. ‘Good’ self-esteem is about our self-worth
based on interacting with others for mutual accomplishments,
competence, influence, respect, fairness, democratic power and
freedom; belongingness is about reproduction, intimacy, socialization,
conformity and group identity, and is conditional on group membership; altruism is about helping vulnerable beings unconditionally,
even strangers and other species. Belongingness helps in transcending
self-centeredness, while ‘good’ self-esteem and altruism help in
transcending group-centeredness. The next two are cognitive motivations. Aesthetics is about enjoying and/or expressing creative arts and
nature, and enhances creativity; while exploration is about understanding nature's mysteries, and helps develop logical skills.
Finally, self-actualization, the meta-motivation, is about realizing
our full inner potential in the form of wisdom, which is attainable by
everyone. Since the growth of the mind depends on its degree of use
and exposure to diverse perspectives, wisdom requires a high degree
of reflection (through cognitive motivations) and transcendence
(through relational motivations). Wisdom cannot be attained if
societal constraints preclude a minimum satisfaction of self-centered
motivations or if a person remains wedded to them excessively. It
provides enormous concentration powers, logical and creative skills
and energy; the ability to deal with the vicissitudes of life serenely; a
mature personality and judgment; and extraordinary knowledge for
the good of self and others (Ardelt, 2004; Baltes, 1993). These
capabilities allow a wise person to discover ‘hidden’ (hidden only
because the mind is focused on self-centered concerns and inadequately applied) and complex relationships and solutions, and make
extraordinary contributions. As such, wisdom represents the highest
form of capabilities. Sen (1999)'s capability theory equates capabilities with freedom, development and wealth. Viewed so, wisdom
represents their highest form.
A second difference relates to the consequences of success and
failure. Physiological requirements and physical security constitute
basic needs since their prolonged non-satisfaction results in death.
Success and failure on other motivations results in immediate emotions. A failure on security and ‘bad’ self-esteem causes fear, anxiety,
Table 1
Motivations and associated emotions.
Motivations
Sub-dimensions
Emotions associated with success
Emotions associated with failure
Self-centered
1) Physiological* (cause sensations)
All bodily requirements
Satiation, warmth, orgasm, comfort
Physical, psychological (order and stability), &
economic security
Desire for competitive achievements, status,
possessions and absolute power
Relief, hope
Suffocation, hunger, thirst, pain, cold,
fatigue, itch, lust
Surprise, disorientation, anxiety, fear
Pride, contempt, arrogance,
Remorse, shame, guilt, anger, jealousy,
greed, envy
Intimacy; conformity, socialization, group
identity and reproduction
Desire for competence, cooperation, fairness,
freedom, influence, and democratic power
Unconditionally helping others, groups, species
and generations
Happiness, love, affection, patriotism
Triumph, exhilaration, confidence
Sadness, sorrow, loneliness,
prejudice, hate
Dejection, regret, disappointment
Magnanimity, fulfillment
Compassion, sympathy, pity, empathy
Enjoying or expressing beauty/art
Investigating places/phenomena
Joy, thrill, admiration
Awe, wonder
Boredom
Curiosity
Discovering one's full mental potential (wisdom)
through introspection and transcendence
Contentment, bliss, tranquility,
exaltation, clairvoyance
Listlessness
2) Security*
3) ‘Bad’ self-esteem*
Relational
4) Belongingness*
5) ‘Good’ self-esteem*
6) Altruism***
Cognitive**
7) Aesthetics
8) Exploration
Meta
9) Self-actualization*
*Adapted from Maslow (1970); **Gleitman et al (2004); ***Kohn (1990).
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N. Murtaza / Ecological Economics 70 (2011) 577–584
jealousy, greed, guilt and anger, which, while necessary for human
functioning, can lead to serious personality and health problems in
excess (Houston and Vavak, 1991; Matthews, 1988). An over-exposure can occur either when societal constraints preclude a
minimum satisfaction of related motivations or through their
excessive pursuit. Even success often leads to socially undesirable,
short-duration and addictive emotions, such as arrogance and
contempt from ‘bad’ self-esteem. The other six motivations are
associated with less harmful and even socially desirable emotions in
failure (such as boredom and sympathy respectively) and with highly
beneficial, longer duration emotions in success. Self-actualization, in
particular, results in peak experiences encompassing serenity, intense
well-being, and an awareness of transcendental unity (Maslow,
1970). Thus, emotively too, self-actualization leads to the highest
form of human welfare.
The last difference relates to the extent to which a motivation
depends on scarce resources, and, hence, can lead to conflict with
other people, societies, species and generations dependent on the
same resources. Physiological needs depend mainly on such
resources, though within low, scientifically definable limits. Security
and ‘bad’ self-esteem depend mainly on competition for status or
scarce resource, but the absence of objective standards for their
satisfaction leads to greater hoarding of scarce resources for them
than for physiological needs. Conflicts can emerge in pursuing ‘bad’
self-esteem even when scarce resources are not involved. For
example, tying achievements to being better than others (competition) rather than being good at something (competence) or mutually
beneficial interaction with others (cooperation) can undermine
everyone's self-esteem. The other six motivations depend less on
scare resources and more on public, social and free goods, and can
produce public benefits even where the use of scarce resources is
private, such as with science. They only lead to conflicts when fused
with ‘bad’ self-esteem, e.g., its fusion with belongingness can lead to
the neglect of our links to other societies, and prejudice and even
genocide against resource competing groups. Thus, the subjugation of
higher motivations to ‘bad’ self-esteem reduces the quality of
emotions and capabilities available from them.
In summary, the self-centered motivations account for the bulk of
the exclusive use of scarce resources, and their excessive pursuit can
hence undermine the ability of other people, societies, species and
generations to even meet their basic needs. However, their excessive
pursuit also reduces one's own access to highly beneficial emotions,
exposes self to toxic emotions in failure (whose risk is increased by
their dependence on scarce resources that create conflict with others)
and short-duration and, in many cases, socially undesirable emotions
in success. An excessive focus on them also distracts attention from
the development of higher-level capabilities. As such, there is a high
risk of low personal welfare and societal sustainability or 360° (i.e.,
self, other people, societies, species and generations) losses in making
these motivations the main focus of life. Thus, according to this
theoretical framework, the excessive focus on self-interest will cause
360° losses rather than the 360° good predicted by neo-classical
economists. On the other hand, since the other six motivations
consume less scarce resources, the chances of failure on them are
lower, and even failure does not result in toxic emotions while success
results in higher quality emotions. They provide access to higher
quality growth capabilities and are helpful in dealing with new and
complex situations and in ultimately attaining wisdom. Their pursuit
does not deprive, and in fact, can even help others. Thus, they produce
360° benefits.
3. Capitalism and Sustainability
The defining characteristics of capitalism are generally presented
as being private ownership, private economic decision-making,
exchange and allocation of economic resources through markets,
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profit motive and wage labor (Gregory and Stuart, 1985). In addition,
neo-classical economics operates under assumptions such as markets
with high resource-allocation efficiency, value-maximizing individuals, self-regulating invisible hand and perfect information and
competition (Lowenberg, 1990). However, the five market characteristics above have existed to varying degrees even in pre-capitalist
societies. Thus, in line with Polyani (1944), the defining feature of
capitalism for this article is not just the presence of markets but
markets becoming dis-embedded from and dominating other societal
institutions, as today. This domination occurs when economic
motivations become more important than other motivations in
society and the satisfaction of all motivations increasingly depends
on markets rather than other societal institutions, allowing markets to
continuously penetrate newer aspects of human life and expand.
These trends are underpinned by the elevation of self-interest as the
main goal in life. According to our theoretical framework, this leads to
360° losses. The following evidence supports this hypothesis.
The post-1800 period has created enormous wealth for a larger
percentage of people than ever before, mainly in western countries.
Capitalism has contributed to it by mobilizing enormous energies
around self-interest, while science has contributed enormous
increases in productivity through innovations. However, scientific
advancements are generally considered as the most important cause
of material progress (Beckerman, 2003; Sachs, 2005). Without
increased productivity through science, increased self-interest
among people would have likely created more conflict than wealth.
Similarly, democracy has helped spread economic progress widely
through the institution of income taxes and the New Deal, usually
against the wishes of the rich (Krugman, 2007). Increased security
against natural threats and human rights violations represent other
aspects of modern progress. However, scientific innovation and
democracy are the main reason for them respectively; with at best
an indirect contribution from capitalism.
Despite this wealth, poverty is still high. Today, almost 40% of the
global population ranks as extremely or moderately poor (Sachs, 2005).
While poverty was widespread even before capitalism, the material
progress means that it can be eliminated easily even if advanced
countries just meet the modest aid commitments made under the UN
Millennium Development Goals (Sachs, 2005). However, self-interest
means that even those modest commitments await fulfillment. Rich
countries and corporations have also worsened poverty in many poor
countries through colonialism and neo-colonialism in their quest for
natural resources based on self-interest (Sachs, 2005). Inappropriate
neoclassical policies forced upon poor countries by multilateral
institutions and the USA (acting in its own interest), have also increased
poverty (Sachs, 2005; Stiglitz, 2006). Foreign aid by rich countries has
reduced poverty (Sachs, 2005). However, aid reflects altruism, not selfinterest. Where aid is based on self-interest, as to corrupt allied
governments, it frequently does not reach the poor (Sachs, 2005).
Overall, self-interest usually trumps altruism, as rich countries receive
more from poor countries (through debt repayment, unfair trade,
international reserves and capital flight) than they give in aid (Stiglitz,
2006). Global inequality, which has grown five-folds since 1820, is very
high with a Gini co-efficient close to 0.65 (World Bank, 2009). The
richest 20% account for three-quarters of global incomes (World Bank,
2009) and the richest 10% own 85% of global assets (UNU-WIDER, 2006).
High inequality reduces trust (Putnam, 2000) and growth (UNUWIDER, 2006) and increases crime (Daly et al., 2001). Neo-classical
policies increase inequality (Sachs, 2005).
For significant proportions of the 40% considered middle-class
(Sachs, 2005), this limited improvement has come through routine jobs
(Cato, 2009). Add to this the long and stressful commutes, many such
people spend 10–12 h daily in boredom. In poor countries, low pay, job
security and safety, especially in sweat shops (some sub-contracted by
large corporations), are on top of this problem (Sachs, 2005). Finally,
around 20% lives in abundant wealth (Sachs, 2005). However, many
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even among them suffer from social problems. The percentage of
Americans happy in life has hovered around 35% since the 1930s, while
incomes have increased four-folds (Myers and Diener, 1996). Nearly
half of Americans report increased stress levels, while 30 percent rate
their average stress levels as extreme (Gallup, 2008). Though it still
suffers from some methodological weaknesses, the Happy Planet Index
(HPI) rates Netherlands as the highest placed rich country at 43 out of
143 countries (NEF, 2009a). Social breakdown is increasing, with 34% of
American families being single-parent ones (Kinnear, 1999). Almost half
of adult Americans may become obese by 2018 (UHF, 2009). Crime is
also generally much higher in large, industrialized cities. All these
problems are rooted in self-interest and materialism as people
increasingly suffer the highly toxic emotions associated with failure
on the security and ‘bad’ self esteem motivations. Materialistic people
are generally more distressed, drug-addicted, sick, manipulative, and
conflict-prone (Kasser, 2002).
The move of just 20% people to prosperity has devastated the
environment. The world has lost 40% of its forests, half its wetlands,
30% of its coral reefs, and 35% of its mangroves, while the humancaused rate of species extinction is 1000 times the “natural” rate
(TEEB, 2009). While the main problem in traditional societies was
protecting humans from nature's threats, the main problem now is
protecting nature from human threats. Climate change threatens the
welfare of the poor and other species and the future of all species.
High consumption within western countries (based on excessive
focus on self-interest) contributes most to environmental destruction
(WWF, 2010). Recent recessions have displayed how the actions of a
tiny elite class can create economic instability globally which
undermines the welfare of all economic classes (Krugman, 2009).
This recurrent instability is inherent to capitalism's emphasis on selfinterest as bankers, in their quest for high returns, invest billions in
marginal ventures which later fail, such as in sub-prime mortgages
recently. These losses undermine capitalism's main justification, i.e.,
the allocation efficiency of free markets. The current global economic
crisis has also displayed the decreasing ability of governments to avert
a global market meltdown given the size and complexity of the global
economy (Krugman, 2009). While much higher than in autocratic
societies, freedom even in rich, democratic societies is still restricted.
The availability of a wide variety of (often trivial) goods under
capitalism is usually portrayed as a sign of freedom. Freedom, most
immediately, is about freedom of action (including choice). However,
if thought is not free, neither will be actions springing from it.
Freedom of thought depends on easy access to a wide variety of
perspectives, which is banned in totalitarian societies. Paradoxically, it
is also curtailed significantly in ‘free’ societies as there is an
information overload, mainstream sources of information mainly
carry commercial perspectives and most people do not have the space
left after their 10–12 h of intellectually crippling work to search for
alternative perspectives.
In summary, only 20% have achieved high wealth since the advent
of capitalism. However, widespread social problems caused by
excessive focus on self-interest affect the welfare of large proportions
even among them despite the trillions spent on security and ‘bad’ selfesteem. In achieving these mixed outcomes for 20%, enormous
environmental destruction, economic instability and inequality have
occurred that threaten the welfare of other members, societies,
generations and species. Clearly, the outcomes from the focus on selfinterest are closer to the 360° losses predicted by this article than the
360° benefits predicted by neoclassical economists. Additionally,
while all three have contributed to the positives (science and
democracy more than capitalism), the negatives are the result mainly
of capitalism's excessive focus on self-interest. Thus, capitalism has a
much lower benefits–cost ratio than science and democracy, and
reduces their beneficence. This is not surprising as they are rooted in
different motivations: capitalism in lower, self-centered ones, and
democracy and science in higher relational and cognitive motivations
respectively. In fact, capitalism has been lucky that it coevolved with
democracy and science. Without the two crutches, capitalism may
have fulfilled Marx's predictions about its demise a long time back.
Democracy and capitalism are often presented as twin souls as both
emphasize individual freedom. However, democracy emphasizes
‘good’ self-esteem, while capitalism emphasizes ‘bad’ self-esteem.
In the face of these problems, capitalism's supporters provide
several counter-arguments. First, they argue that poverty and
inequality exist due to capitalism's insufficient application, as only
half the countries are considered free or mostly free by the Index of
Economic Freedom (Heritage Foundation, 2010). However, Sachs
(2005) finds no positive relationship between rank on this index and
economic growth, let alone poverty or inequality reduction. Extreme
poverty has reduced recently, mainly in China and India (Sachs, 2005).
This is not due to neo-classical free market principles however, since
both countries are classified as ‘mostly unfree’ by this index. Second,
the greater environmental regulation in rich countries is given as
proof that capitalism reduces environmental destruction (Bhagwati,
2004). While they reduce local-level environmental destruction, rich
countries remain the biggest polluters per capita of carbon dioxide
which destroys global environmental commons (World Bank, 2008).
Third, they now increasingly present technology (i.e., science) as the
panacea for the problems created by capitalism. However, many
proposed technological solutions have high environmental, social and
financial costs, such as carbon capture and storage (Porritt, 2007).
Also, until values related to endless consumption change, resources
saved through better technology soon get used up by increasing
overall consumption. Technology may have disproved Malthus on
population growth to-date but will unlikely disprove environmentalists on consumption explosion. Fourth, they argue that scientific
advances occur only due to capitalism's funding and its competitive
environment (Beckerman, 2003). This argument is weakened by the
scientific progress during the Renaissance before the advent of
capitalism, under even stagnant communism, and in non-profit
centers. True, capitalism has played a funding role, but its role is not
indispensible if replaced by a system that ensures continued scientific
funding and individual creativity.
Fifth, Keynesianism is presented by its supporters as a capitalist
answer to neo-classical excesses. Recognizing that markets are not
always efficient, Keynesians advocate significant state intervention
(i.e., democracy) to resolve the problems created by free-market
capitalism (Stiglitz, 2006). Increased regulation can help in reducing
some of the problems discussed earlier, especially economic instability and inequality, as during the 1950–1973 Keynesian period
(Stiglitz, 2006). However, other problems will still remain high. For
example, even European countries like Sweden, with much higher
regulation than the USA, have high per capita carbon dioxide
emissions (World Bank, 2008). Moreover, it is difficult to increase
and maintain regulation unless there is a change in values, as
highlighted by the displacement of Keynesianism by neo-classical
economics in the 1970s and by the current right-wing backlash in the
USA against modest increases in regulation even while the recession
caused partially by deregulation is ongoing. Finally, capitalism's
supporters invoke the TINA (there is no alternative) argument. The
next section undermines this argument.
4. Human Values and Sustainability for the Future
The following set of underlying values is proposed to help ensure a
high level of individual welfare and collective sustainability:
1. Bounded self-interest: The focus on self-centered motivations is
essential for survival up to a threshold level. The Ecological
Footprint (EF), which measures the amount of biologically
productive land and sea area needed to regenerate the resources
a human population consumes and to absorb and render harmless
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N. Murtaza / Ecological Economics 70 (2011) 577–584
2.
3.
4.
5.
6.
7.
the corresponding waste (Venetoulis and Talberth, 2005), provides
a fair reference point for this threshold level as it ensures a
comfortable material life style within ecological limits. While the
potential of the Ecological Footprint to measure sustainability is
acknowledged, improvements in data quality, methodology and
basic assumptions are recommended (EC, 2008). Beyond their EFs,
human beings can maximize both their personal welfare and
societal sustainability by focusing on public, social and free goods
linked to the higher motivations.
‘Good’ self-esteem: Individual freedom, fairness and achievements
benefit self and others. However, competition must be used in
combination with competence and cooperation-based strategies
for enhancing self-esteem.
Enlightened belongingness: Individuals should immerse themselves freely into idiosyncratic cultural practices while retaining
the ability to critically evaluate and improve them with others. This
helps optimize the benefits from individual freedom and belongingness, and inculcates respect for other groups as we view them
objectively.
Universal altruism: Altruism must extend universally and unconditionally to all human beings, generations and species.
Liberating aesthetics: Engagement with the fine arts and nature
reduces stress, adds diversity to life and facilitates the unleashing
of our inner potential.
Unappropriated exploration: Scientific investigation is crucial for
human sustainability and must not be excessively appropriated for
private use. Indigenous knowledge is often valid contextually.
Unbounded self-actualization: The focus on wisdom and not
wealth is the ultimate objective of human life and the pinnacle of
human evolution. The focus on self-actualization by the Wise
person (Homo sapiens) must replace the focus on self-interest by
the Rational person (Homo Economicus) as the driving force in
society. If everybody pursues their self-actualization, this will
automatically lead to the societal good. Each person has to find
their own path to it. Religious and philosophical teachings can
serve as food for but not as alternatives to thought. A sustainable
society is a collection of self-actualized individuals.
With these values, people will focus on the most beautiful things in
life (which are mostly free), such as social activities, aesthetics,
understanding interesting phenomena, helping others and enhancing
their wisdom. This will lead to a change in attitudes and behaviors as
follows:
• Consumers will rely less on private goods and debt, and more on
public, social and free goods based on bounded self-interest and the
shift of focus to higher motivations.
• Workers will prefer more interesting and less stressful work but also
exhibit more commitment, creativity and productivity based on
bounded self-interest and ‘good’ self esteem.
• Investors will place premium on stability and socially appropriate
endeavors based on bounded self-interest.
• Corporate managers will optimize the interests of all stakeholders
and not just shareholders, leading to multiple bottom lines, and
work to enhance job enrichment based on bounded self-interest.
Profitability will be a key concern, but not excessive profitability.
• Public officials will adopt a longer and more rounded perspective, be
responsive to voters and resolve problems with other societies
through negotiations and compromise based on bounded selfinterest, altruism and ‘good’ self-esteem.
• Scientists will collaborate more across disciplines, work for the
public benefit, and be supportive of indigenous knowledge based on
un-appropriated exploration and bounded self-interest.
• Community members will value strong community support while
keeping a critical eye on the desirability of community practices and
respect other cultures based on enlightened belongingness.
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• Citizens will emphasis compromise and negotiations, helping other
people, and societies, protecting nature and above all the attainment
of wisdom based on all the values above. People will follow intrinsic
incentives, i.e., those driven from within rather than external
pressures such as love for art (Deci and Ryan, 1985).
• Voters will elect politicians who support the preferences above and
work transparently, push for the simultaneous development of
democratic global governance to deal with global commons and
devolved international and national structures in other areas, based
on the principle of subsidiarity (Cavanagh and Mander, 2004).
These changes will reduce all the problems discussed in Section 2.
Bounded self-interest will reduce environmental degradation, economic instability and personal stress. Increased altruism will reduce
poverty and inequality, and consequently, crime and conflict. Access
to varied perspectives and freedom will increase as the size of the
market and its projection in mainstream informational sources
reduces. Economic instability will reduce as investors prefer safer
investments. Finally, job enrichment and satisfaction will increase due
to greater democracy in the workplace and the focus of companies on
multiple bottom-lines and the concerns of all stakeholders rather than
just shareholders.
What will an economic system based on these values look like? An
economic system is seen here as including: i) underlying values; ii)
growth profile (steady-state vs. growth-oriented); iii) structures,
which include decision-making, coordination, ownership and incentive patterns (Gregory and Stuart (1985), and iv) a flexible range of
policies and tools. Starting with growth profile, the reduction in
consumption by individuals within their EF will lead to an SSE where
the use of natural resources does not exceed regeneration or waste
assimilation capacities and where irreplaceable ecosystems are
preserved (Daly, 1991; Lawn, 2009). An SSE also ensures that the
extinction rate of species does not go beyond natural rate. Economic
growth is theoretically possible under an SSE through technological
and productivity improvements and an expansion of low resourceintensive industries. While growth is possible under it, given that
currently many countries operate beyond their EFs, an SSE will lead to
an initial GDP contraction in such countries. Once there, they could
grow again through productivity increases and low resourceintensive industries. Countries below their EFs could expand their
resource use until they reach their EFs. An absolute SSE will also
require population stabilization globally, which is projected to
stabilize by 2050 and may stabilize sooner if poverty reduces faster
in poor countries through larger aid from rich countries as they
contract to their EFs.
These values will also lead to significant changes in structures,
reflecting the behaviors and attitudes mentioned against consumers,
managers, investors and workers earlier in this section. Egalitarianism,
efficiency, decentralization, job enrichment and personal freedom and
incentives will be key features of such structures. However, a blueprint
for such structures is not presented here, as they must emerge in each
society based on its own context through a bottom-up incremental
process as people signal their changed values through their votes,
money and opinions. Instead, this article briefly evaluates whether
certain existing theoretical or in-practice structures could emerge
within societies professing these values, to give some sense of the type
of structures compatible with these values. Neo-classical capitalism is
incompatible at the level of values (excessive focus on self-interest).
Soviet-style communism, with its lack of personal incentives (not even
‘good’ self-esteem) and centralized decision-making (Gregory and
Stuart, 1985) has incompatible structures. Those traditional economies based on exploitation and autocracy (e.g., feudalism, kingdoms or
empires) or on traditions that undermine personal freedom, noninstrumental exploration and human rights (e.g., of women) have
incompatible structures and values respectively. Non-democratic
societies also have incompatible values.
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Several socialist structures aim to combine the strengths of
capitalism and communism. Under economic democracy, each productive enterprise is controlled democratically by workers, and interacts
with other enterprises and consumers in markets (Schweickart, 2002).
Participatory economics envisages autonomous workers' and consumers' decision-making councils without markets, with the coordination
functions performed through participatory planning at the local,
regional and national levels (Albert, 2003). Market socialism is a
broader concept and includes structures exhibiting varying degrees of
worker control and ownership, competition and market mechanisms
(Bardhan and Roemer, 1993). Given their decentralized nature and
emphasis on egalitarianism and personal incentives, these structures
are all compatible with these values. The same is true for market
structures with ownership not restricted to workers but widely
distributed. However, this does not mean that this article necessarily
recommends any of them. Ultimately, each society has to make its own
selections. None of these structures has attained widespread acceptance, and will likely not unless basic values change. Additionally, even if
they are adopted with values unchanged, some will not resolve many
present-day problems. Thus, China, where worker cooperatives have
played a significant role in economic development, is rapidly becoming
the world's worst environmental polluter and is plagued by corruption
and distributive conflicts (Bardhan, 2010). However, once these values
are accepted, these structures will become more appealing and
sustainable.
Thus, several compatible economic structures already exist and
more will likely emerge as these values become widespread. Under
their influence, all these structures will result in SSEs. Even though the
article cannot discuss their details here due to space limitations,
compatible policies and tools (some already performing well in
limited practice) are also available from various sustainability fields to
support such structures. These include, among many others, Job
Guarantee Schemes (Lawn, 2009), ecological macro-economic models
(Jackson, 2009), intermediate technology (Schumacher, 1973),
carbon-trading, shorter work-weeks, earlier retirements, local currencies, revised city lay-outs and pollution taxes (Cato, 2009).
Will an economic system that includes markets constitute
capitalism if based on these values? The defining characteristic of
capitalism here, in line with Polyani (1944), is not the mere presence
of markets but their overwhelming domination of other societal
institutions. This will not be true for any economic system underpinned by these values, as the focus of people will shift from economic
motivations to the higher six motivations. There will be a sharp
reduction in material consumption and people will derive their
welfare not only through private goods from markets but also, equally
and increasingly, through public goods from the state, social goods
from community networks and free goods from nature. Markets will
not dominate other societal institutions but will be under their
control. Thus, any system underpinned by these values will not
represent capitalism even if it has markets. Table 2 highlights the
significant differences between it and certain other economic systems.
In summary, this article has presented an economic system which:
i) possesses well-defined underlying values, ii) specifies an EF-based
SSE growth profile; iii) provides broad criteria for possible structures,
is compatible with several current ones but also allows societies to
develop their own contextually-appropriate structures reflecting
these broad criteria; and iv) is compatible with a variety of specific
already existing policies and tools. Capitalism and communism both
also encapsulate variations in structures, and of course policies and
tools. While this system will encapsulate a wider variety of structures,
this actually being its strength, the well-defined values, growth profile
and the broad criteria for structures will provide the common thread.
This leaves the matter of an apt name, for a system without it is
stymied in its recognition and growth. Systems are named after their
dominant force, e.g., capitalism and communism. Since that will be
wisdom or sapience here, this article proposes Sapienism. This name
also reflects its placement of Homo sapiens at its center. This wisdomand people-focused system will be a more natural partner for reasonoriented science and people-oriented democracy than greed-oriented
capitalism. This will create a wisdom economy (term coined by Cook,
1982), going beyond a knowledge economy. Science will likely
flourish more under Sapienism given the heavy emphasis on
exploration and the allocation of substantial resources from the
savings on consumption and defense expenditures.
Will Sapienism succeed in practice? The first issue is how success
is defined. New criteria will be needed to measure its new vision of
welfare and sustainability. The Happy Planet Index, EF, the Genuine
Progress Indicator (Talberth et al., 2007), the Quality of Life Index
(Costanza et al., 2007) and multiple bottom-lines provide some such
indicators. However, they need refinement and expansion to fully
capture its main criteria of success: high individual welfare and
sustainability reflected by success on higher motivations and the
absence of major existential problems. The immediate question is
whether Sapienism can ensure economic efficiency for it can resolve
the other problems associated with capitalism, as discussed earlier in
this section. However, if it cannot maintain efficiency, then the other
problems will re-emerge. There is growing evidence about the likely
efficiency of Sapienism's various levels. Unemployment falls to 4%,
poverty, inequality and green house gas emission reduce significantly,
and fiscal deficits remain low under an SSE simulation exercise for
Canada (Victor, 2008). Social and environmental value in UK will
increase by GBP 8.65 trillion by 2050 in a SSE even as GDP falls by onethird (NEF, 2009b). The Genuine Progress Indicator will increase in
both cases. The earth can provide a comfortable material life to around
eight billion people within the global EF under an SSE (Meadows et al.,
2004). Even neo-classical analysis holds that rich countries are
currently tilted on the consumption side of the optimal balance
between consumption and savings (Blanchard, 2009).
Table 2
A comparison of economic systems.
Underlying values
Main motivation
Main consumption goals
Growth profile
Structures
Dominant societal institution
Economic decision-making
lies with
Coordination through
Property rights
Main incentives
*Traditional foraging economies
**Soviet Communism
**Neo-classical Capitalism
Sapienism
Belongingness
Survival; mass social consumption
Per capita SSE
Belongingness
Mass material consumption
Growth-focused
Self-interest
Mass material consumption
Growth-focused
Self-actualization
Mass social/intellectual consumption
Absolute SSE
Community
Village elders or family heads
State
State
Market
Big companies and rich people
Society
Many smaller firms & all stakeholders
Social networks and small markets
Family or collective at village level
Plan
Collective at state-level
Moral
Moral and material
Prices and markets
Privately owned (10% people
own 85% of assets)
Material
Markets, plans and social networks mix
Mix of private (well distributed),
public & social ownership
Intrinsic
Adapted from: *Lee (1979); **Gregory and Stuart (1985).
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Worker cooperatives competing in markets, a structure compatible with Sapienism, have performed well in China since the 1980s
(Bardhan, 2010), despite the many problems in China discussed
earlier related to unchanged overall values. Finally, firms that
emphasize stakeholder value excel those focused on management
and shareholder value (Young, 2003). Meaningful jobs and employee
participation increases productivity and loyalty, as in Japan. Firms
pursuing multiple bottom-lines increase productivity and market
share (Porritt, 2007). Firms can remain profitable and expand under
SSEs, through resources shifts from preventative and rehabilitative to
welfare-enhancing activities (Lawn, 2005) and carbon-trading. As
mentioned earlier, many compatible tools and policies are already
working well in practice locally.
The final test of efficiency for Sapienism is the ability to mobilize
individual energies and creativity given the lessons from Soviet
communism. This will actually be its most important strength,
especially with its emphasis on ‘good’ self-esteem and exploration.
History shows that the higher motivations have, more so than selfinterest, mobilized enormous energies and creativity from millions
repeatedly to produce huge benefits for individuals and societies.
Thus, Sapienism retains the mobilizing strengths of capitalism
without its weaknesses. Personal incentives under Sapienism will
remain high as it is not based on a philosophy of self-denial or mere
duty for others, for our existences in separate bodies and consciousnesses means that individual welfare ultimately depends on our own
separate experiences. Sapienism pursues all the different and superior
emotions and capabilities available instead of restricting itself to the
basic ones provided by self-interest. Thus, Sapienism increases real
choice and provides the potential for leading a diverse and fulfilling
life without usurping the ability of others to do so. Its ability to ensure
360° benefits is its biggest selling point which increases its chances of
widespread acceptance. However, this will require widespread
awareness-raising about its 360° potential since it cannot be imposed
from the top but must develop organically through the adoption of its
values widely through society. People are starting to realize the limits
of materialism. Almost 95% Americans characterize most Americans as
materialistic, while 82% agreed that people consume excessively and
that there is a need for change (Harwood Group, 1995). Thus, the time
seems ripe to mobilize support for a designed alternative to
capitalism. Otherwise, it may emerge, perforce, following a major
environmental disaster (Lawn, 2005).
5. Conclusions
Human beings are endowed with high intelligence. Unfortunately,
nature does not have the ecological capacity to satisfy the excessive
focus on self-interest by a highly intelligent species. However, it has
included a broad range of motivations in the Homo sapiens genome to
provide ample avenues for utilizing this high intelligence. Under
capitalism, this intelligence has focused excessively on self-interest,
causing enormous progress but also huge existential problems. Using
the enormous human intellect in the pursuit of self-interest mainly
causes conflicts with others as well as a wasted life as we lose the
chance to attain our full potential in the form of wisdom. Several
alternatives to capitalism have emerged over time. However, they
failed to replace capitalism by not basing their structures on the
foundations of clear and appealing values. They represented buildings
without foundations that could not sustain.
Capitalism based its structures on values that appealed to people
given the widespread poverty then, but it also inflicted enormous
costs. Thus, we need a system based on the highest reaches of human
nature. Social scientists from different disciplines over time have
developed various pieces of the jig-saw puzzle representing a wisdombased alternative. However, academic specialization means the pieces
are scattered widely. This article addresses this problem by drawing
upon ideas from different disciplines to present a system whose main
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strength is its base in appealing values which simultaneously help
ensure individual welfare and resolve major existential problems. Its
basic message is that the win–win potential of self-interest is illusory.
However, there is an alternative: if everybody pursues self-actualization, this will lead to the individual and societal good. Homo sapiens
will then justify their species name and make Homo economicus
extinct.
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