Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Inclusive Democracy wikipedia , lookup
Production for use wikipedia , lookup
Participatory economics wikipedia , lookup
Socialist calculation debate wikipedia , lookup
Steady-state economy wikipedia , lookup
Economics of fascism wikipedia , lookup
State capitalism wikipedia , lookup
Welfare capitalism wikipedia , lookup
Economic democracy wikipedia , lookup
The Spirit of Democratic Capitalism wikipedia , lookup
History of capitalism wikipedia , lookup
Perspectives on capitalism by school of thought wikipedia , lookup
This article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors institution and sharing with colleagues. Other uses, including reproduction and distribution, or selling or licensing copies, or posting to personal, institutional or third party websites are prohibited. In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier’s archiving and manuscript policies are encouraged to visit: http://www.elsevier.com/copyright Author's personal copy 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 Author's personal copy 578 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). Author's personal copy 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, 579 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 Author's personal copy 580 N. Murtaza / Ecological Economics 70 (2011) 577–584 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 Author's personal copy 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. 581 • 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. Author's personal copy 582 N. Murtaza / Ecological Economics 70 (2011) 577–584 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). Author's personal copy N. Murtaza / Ecological Economics 70 (2011) 577–584 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 583 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. References Albert, M., 2003. Parecon: life after capitalism. Verso Books, London. Ardelt, M., 2004. Wisdom as expert knowledge system: a critical review of a contemporary operationalization of an ancient concept. Human Development 47 257–285pp. Baltes, P., 1993. The aging mind: potential and limits. The Gerontologist 33, 580–594. Bardhan, P., 2010. Awakening giants, feet of clay: assessing the economic rise of China and India. Princeton University Press, Princeton, N.J. Bardhan, P., Roemer, J., 1993. Market socialism: the current debate. Oxford University Press, New York. Beckerman, W., 2003. A poverty of reason: sustainable development and economic growth. Independent Institute, Oakland, California. Bhagwati, J., 2004. In defense of globalization. Routledge, London. Blanchard, O., 2009. Macroeconomics. Pearson Prentice Hall, Upper Saddle River, N.J. Cato, M., 2009. Green economics: an introduction to theory, policy and practice. Sterling, London. Cavanagh, J., Mander, J., 2004. Alternatives to economic globalization: a better world is possible. Berrett-Koehler, San Francisco, CA. Cook, E., 1982. The consumer as creator: a criticism of faith in limitless ingenuity, Energy. Exploration and Exploitation. 1–3, 194. Costanza, R., Fisher, B., Ali, S., Beer, C., Bond, L., Boumansa, R., Danigelis, N., Dickinson, J., Elliott, C., Farley, J., Gayer, D., Glenn, L., Hudspeth, T., Mahoney, D., McCahill, L., McIntosh, B., Reed, B., Rizvi, S., Rizzo, D., Simpatico, T., Snapp, R., 2007. Quality of life: an approach integrating opportunities, human needs, and subjective wellbeing. Ecological Economics 61 (2–3), 267–276. Daly, H., 1991. Steady-state economics. Island Press, Washington, D.C. Daly, M., Wilson, M., Vasdev, S., 2001. Income inequality and homicide rates in Canada and the United States. Canadian Journal of Criminology 43 (2), 219–236. Deci, E., Ryan, R., 1985. Intrinsic motivation and self-determination in human behavior. Plenum, New York. E.C., 2008. Potential of the ecological footprint for monitoring environmental impacts from natural resource use. European Commission, Brussels. Etzioni, A., 1998. Voluntary simplicity: characterization, select psychological implications, and societal consequences. Journal of Economic Psychology 19, 619–643. Gallup, 2008. Gallup annual lifestyle poll. Gallup, Washington D.C. Gleitman, F., Alan, J., Reisberg, D., 2004. Psychology, 6th ed. Norton & Company, New York. Gramsci, A., 1959. The modern prince and other writings. International Publishers, New York. Gregory, P., Stuart, R., 1985. Comparative economic systems. Houghton Mifflin, Boston. Harwood Group, 1995. Yearning for balance: views of Americans on consumption, materialism, and the environment. Harwood Group, Bathesda, Maryland. Heritage Foundation, 2010. Website: Index of Economic Freedom. Heritage Foundation, Washington D.C. Houston, K., Vavak, C., 1991. Cynical hostility: developmental factors, psychosocial correlates, and health behaviors. Health Psychology 10 (1), 9–17. Jackson, T., 2009. Prosperity without growth: economics for a finite planet, Earthscan. London, Sterling, VA. Kasser, T., 2002. The high price of materialism. MIT Press, Cambridge, MA, USA. Kinnear, K., 1999. Single parents: a reference handbook. ABC-Clio, Santa Barbara, CA. Krugman, P., 2007. The conscience of a liberal. W.W. Norton & Company, New York. Krugman, P., 2009. The return of depression economics and the crisis of 2008. W.W. Norton & Company, New York. Kohn, A., 1990. The brighter side of human nature: Altruism and empathy in everyday life. Basic Books, New York. Lawn, P., 2000. Toward sustainable development: an ecological economics approach. CRC Press, Boca Raton, FL. Lawn, P., 2005. Is a democratic-capitalist system compatible with a low growth or steady-state economy? Socio-Economic Review 3, 209–232. Lawn, P., 2007. Frontier issues in ecological economics. Edward Elgar, Northampton, Massachusetts. Lawn, P., 2009. Environment and employment: a reconciliation. Routledge, London. New York. Lee, R., 1979. The !Kung San: men, women and work in a foraging society. Cambridge University Press, Cambridge and New York. Lowenberg, A., 1990. Neoclassical economics as a theory of politics and institutions. Cato Journal 9 (3), 619–639. Lutz, M., Lux, K., 1988. Humanistic economics: the new challenge. Bootstrap Press, New York. Maslow, A., 1970. Motivation and personality. Harper & Row, New York, N.Y. Matthews, K., 1988. Coronary heart disease and Type A behaviors: update on and alternative to the Booth-Kewley and Friedman (1987) quantitative review. Psychological Bulletin 3, 373–380. Author's personal copy 584 N. Murtaza / Ecological Economics 70 (2011) 577–584 Marglin, S., 2008. The dismal science: how thinking like an economist undermines community. Harvard University Press, Cambridge, Mass. Max-Neef, M., 1991. Human scale development: conception, application and further reflections. The Apex Press, New York. Meadows, D., Randers, J., Meadows, D., 2004. The limits to growth: the 30-year update. Chelsea Green Publishing, White River Junction, Vt. Murtaza, N., 1998. The pillage of sustainability in Eritrea, 1600s-1990s: Rural communities and the creeping shadows of hegemony. Greenwood Press, Westport, CT. Myers, D., Diener, E., 1996. The pursuit of happiness. Scientific American 274 (5), 70. NEF, 2009a. The happy planet index 2.0: why good lives don't have to cost the Earth. New Economics Foundation, London. NEF, 2009b. The Great Transition. New Economics Foundation, London. Norgaard, R., 1995. Development betrayed: the end of progress and a coevolutionary revisioning of the future. Routledge, London. New York. Polyani, K., 1944. The great transformation. Rinehart & Company, Inc., New York. Porritt, J., 2007. Capitalism as if the world matters, Earthscan. London, Sterling, VA. Putnam, R., 2000. Bowling alone: the collapse and revival of American community. Simon & Schuster, New York. Sachs, J., 2005. The end of poverty: economic possibilities for our time. Penguin Press, New York. Schweickart, D., 2002. After capitalism. Rowan and Lttlefield, Lanham, MD. Schumacher, E., 1973. Small is beautiful: a study of economics as if people mattered. Harper & Row, New York. Sen, A., 1999. Development as freedom. Knopf, New York. Stiglitz, J., 2006. Making globalization work. W.W. Norton, New York. Talberth, J., Cobb, C., Slattery, N., 2007. The genuine progress indicator 2006: a tool for sustainable development. Redefining Progress, Oakland, CA. TEEB, 2009. The economics of ecosystems and biodiversity for national and international policy makers. United Nations Environmental Program, New York. UHF, 2009. America's health ranking study. United Health Foundation, Minnetonka, MN. UNU-WIDER, 2006. The world distribution of household wealth, World Institute for Development Economics Research of the United Nations University, Helsinki. Upton, R., 2010. Development of altruistic economics. www.altruists.org2010October 16, 2010. Venetoulis, J., Talberth, J., 2005. Ecological footprint of nations 2005 Update. Redefining Progress, Oakland, CA. Victor, P., 2008. Managing without growth: slower by design, not disaster. Edward Elgar, Cheltenham, UK. Northampton, MA. World Bank, 2008. World Development Report 2008. World Bank, Washington D.C. World Bank, 2009. Global inequality recalculated the effect of new 2005 PPP estimates on global inequality. World Bank, Washington D.C. WWF, 2010. Living planet index report 2010. World Wildlife Fund, Washington D.C. Young, S., 2003. Moral capitalism: reconciling private interest with the public good. Berrett-Koehler, San Francisco.