The Next Evolution in Economics: Rethinking Growth

[G_j]

http://blogs.harvardbusiness.org/hbr/hbr-now/2009/08/a-new-approach-to-economics.html


The Next Evolution in Economics: Rethinking Growth
1:30 PM Wednesday August 19, 2009
by Stan Stalnaker


The credit crunch has forced people across many sectors to rethink their assumptions about how they do business, the roles of the individual in the larger system, and the very future of the system itself.

These reflections are beginning to bear fruit. We've begun to see a shift from the old, linear transaction-based approach to business toward a new, circular view, in which shared resources can better benefit all in a way that adds depth (and value) to this future economy.

Economists describe this new model in many ways. One way is to use human cellular structures as a metaphor for economic growth. Call it cellular economic theory.

What do cells tell us about business? Well, consider that cells that grow continually and exponentially (like we've been taught our economies should grow) are a form of cancer. We know intuitively and logically that continuous growth can't be sustained in living things. It's likewise unsustainable (and undesirable) in business.

But that's our current model--to just keep growing. And in this model there's no alternative to growth, only stagnation which leads to death. The result of this is policy at every level (micro, macro, corporate and public) that champions growth at all costs.

..more..

[NYC_SKP]

1. I'm glad someone has finally figured this out and is putting it out there.

I've been saying this for decades.

Once upon a time, a good business just stayed busy to be successful.

Then the definition of success change to include the requirement for growth; if it isn't growing, it's dying.

I like the cancer analogy, it's quite apt, I'll have to remember that one.

:patriot:

[G_j]

4. theoretically

cancer cells could live forever..
if they didn't kill off their host..

apt indeed

[RaleighNCDUer]

2. Wasn't this first explored thirty years ago, on a micro-scale,

with 'The Peter Principle'?

If a person will rise in management to exceed his own capabilities, getting promoted into incompetence, it is not much of a stretch to apply the same principle to an organization - it will grow until it gets too big, too ungainly, and then becomes uncompetitive and unprofitable. At that point it collapses of its own weight, gets broken up and sold off to other organizations.

That was seen in the collapse of the Bell system, of the Soviet Union, of the CIA - eventually the goal becomes the sustaining of the organization rather than the goal the organization was created to reach.

[NYC_SKP]

5. I was thinking about Starbucks as a good example.

And I have always avoided them because of their conceptual model requiring the closure of independent coffee houses.

I need to look up a guy, Edward Demmings, I think, who had some interesting ideas.

[Festivito]

3. Why, isn't the world getting bigger... Oh, guess not, nevermind. /nt

[Uncle Joe]

6. Kicked and recommended for sustainable growth and regeneration based on biology.

I believe we would do well to study Mother Nature's most efficient systems; for lessons in all manner of endeavor as these have evolved over hundreds of millions if not billions of years, we can take advantage of lessons learned long before humanity ever came on the scene, and thus greatly magnifying our collective wisdom.

Thanks for the thread, G_j.:thumbsup:

[G_j]

7. that is what sustainability means to me at least

and sustaining means surviving. We can fiddle plenty with nature, but it is still vastly more intelligent than we will ever be.

[RaleighNCDUer]

8. Change and growth for its own sake is really not necessary -

the Brown Pelican is such an efficient occupier of its ecological niche that it has not changed in 20 million years. The horseshoe crab hasn't changed in 100 million years.

You don't have to be Microsoft, and try to do EVERYTHING, and wind up doing it all, badly.

Find what you are good at, and do it.

It's as simple as that.