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Sustainability vs. The Invisible Hand

Saybrook University | Tuesday June 15th, 2010 | 11 Comments

The following is a guest post by our friends at Saybrook University’s Organizational Systems Program (a 3p sponsor) – designed for students who want to understand the nature of organizations, collaborative practices, and transformative change.

by Rachel Geiger

The triple bottom linepeople, planet, profit … is well established among the social systems most interested in sustainability.  But why does it never go further than the edges of mainstream attention?

It’s not that most people don’t care about the planet, or that they’re not smart and talented.  So why hasn’t the intellectual foundation of the sustainability movement expanded into conventional thought?

I propose that it involves a paradox at the heart of our society. Centuries ago, human civilization began to focus on specializing, on breaking things down into their parts in order to understand and build better machines and technology.  The people most successful at this–at getting their needs met–turned into specialists, who have the tools to solve specialized problems.  But when they try to apply those tools to systemic problems, general problems, those tools are no longer effective.

The people most in a position to help the planet as a whole are often the least intellectually prepared to see how to do it. This system paradox comprises most of what we have considered progress over the last few centuries.  Even progress in social and economic systems.  We developed economic systems that live on their own and now have become global.  We developed corporations to fulfill the economic needs of society.  These systems are not “bad” in and of themselves – the challenge is that because of all this specialization, there is no one who looks out for the whole – which has become the planet, on a level that our ancestors could never have imagined.  We have lost the human in human civilization:  it has become a machine that exists to fulfill many separate, specialized purposes.  But each part of the machine of civilization expects the other parts to take care of the needs of the whole.  Each seeks to optimize its own welfare – whether its focus be people, profit or planet – and nothing else.

So, what will allow for change to happen?  A broader awareness of the need for stewardship would be a good start.   Stewardship would require a shift from some of the major social principles of Western society, like Adam Smith’s “invisible hand.”  Far from needing an “invisible hand,” our society has become complex enough that we need to explicitly make the way we do business visible at all levels. The complexity of modern social systems led by the invisible hand leads to system participants destroying each other’s ability to fulfill their needs. Small systems are able to be optimized through participants looking out for themselves and finding a natural balance.  The invisible hand worked when all parts of the system were visible to participants.  Transparency tends to support stewardship.  Now, most of the system is invisible to most participants.  No longer can we count on an invisible hand to fix “invisible” problems.

Human need, our own humanity and connection to all others in our global system, is the fundamental connection between the parts of this system.  We can no longer allow our needs to be compartmentalized and the way we do business to be invisible.  For it to become a sustainable system, we must work holistically to satisfy human needs and do so in a manner that is visible to all. If what I do to satisfy my needs inhibits anyone’s ability to satisfy other needs, I need to step back. We need to change the paradigm and find a way to generate “synergic satisfiers” that allow multiple needs to be fulfilled.  This will be the new generation of progress and technology:  finding ways to look out for the whole, rather than the one.

***

Rachel Geiger is a PhD student in the Organizational Systems program at Saybrook University and works full-time at Ford Motor Company in HR strategy.  She also has an MBA with an emphasis in Organizational Behavior.  Her current research focus is in creating sustainable systems to meet human needs now and in the future.


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  1. June 15, 2010 at 3:51 am PDT | Hoahman writes:

    What do you mean by “make the way we do business visible at all levels” ?

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  2. June 15, 2010 at 6:26 am PDT | Bruce Ralph writes:

    You have put your finger on part of the problem here. Unfortunately there are a lot of forces working against transparency in society where knowledge often equals power. It might be more realistic to have technical structures in place to review specific system dynamics where required. A structure like this, for example, could have reviewed this current oil spill. If necessary, it should have the the power to call in additional worldwide expertise to work on the problem. I have proposed a technical body to track systems approaches to ecological protection in my book “CONNECT with Planet Earth” at Lulu.com

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  3. June 15, 2010 at 8:24 am PDT | nickaster writes:

    I'd like to think there's a way to incorporate new media into this puzzle – the transparency of online publishing and the ability of the internet to make available and connect extraordinary amounts of data. That has to offer a huge potential here. I wonder if there are ways to make the transparency naturally enforceable – as opposed to some kind of top-down approach that would be met with resistance?

    Here's a classic example – Some office buildings in Germany now display floor-by-floor energy use data in the elevator or lobby of the building. Simply by making this data visible, they've reduced resource consumption by a combination of awareness and the natural competition that emerges when one's data is visible as a comparison with others.

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  4. June 16, 2010 at 14:22 pm PDT | Jnail78 writes:

    The Invisible Hand isn't wrong, it is how society and business has interpreted it and twisted it into laissez-faire trickle-down economics. That's now what Smith said. The posited that the free market was the best system and the invisible hand would obtain the best outcome for the most people, given certain pre-conditions: perfect information, pursuit of rational self-interest, and price fully reflecting the cost of the good or service. We all know this is an ideal and doesn't work in the real world. We need to make the case that cap-and-trade is the perfect Adam Smith, free market mechanism: it is a way of incorporating the full cost of energy into the price so people can make better decisions. Adam Smith would support it, I think. I've just started a blog along these lines…http://incompletecapitalist.wordpress.com/

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  5. June 18, 2010 at 9:14 am PDT | Rgeiger writes:

    As a clarification . . .I do not believe that everything about the “invisible hand” is completely wrong. But when it is the only thing we rely on to create sustainable social systems, it is incomplete. Adam Smith's original writing, you're right, had pre-conditions, which we tend to forget about. Also, it was focused on economic systems, which are but one type of social system.

    One of the challenges is that we tend to compartmentalize our needs into economic, social and environmental needs. In reality, sustainability is about meeting the full spectrum of human need, of recognizing that economic actions can affect people ability to create, participate, have identity and more. When we recognize the full spectrum of human need, rather than simply having a single focus on fulfilling an economic or environmental need, then we can find the next generation of innovation, technology and progress. We need have stewardship for the needs of all – meaning that we seek awareness and understanding of those needs and find solutions that do not dismiss the needs of participants in the system.

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  6. June 18, 2010 at 10:33 am PDT | Jnail78 writes:

    Absolutely right! And this spectrum is recognized in fundamental economic theory as the three inputs into production: land, labor, and capital. But we obsess over capital and are inclined to ignore, or at least only grudgingly pay attention to, labor and land. If you really believe in these three factors of production, triple bottom line isn't some exotic concept — it should be a natural way of managing a business. But I guess since they are termed “inputs” it implies a transactional relationship, not an ongoing one. If you want to get new workers, just fire the ones you have because you can always recruit more. If the land you are on runs out of resources, just go somewhere else because there is always another place to go. Only now are we beginning to realize this no longer holds given the human population and the size of the human economy….

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    • June 18, 2010 at 15:44 pm PDT | Rgeiger writes:

      Something else to consider is the expansion and relationship of fulfillment of economic need with other human needs. Many change efforts are directed at products or services within the economic system, or the way that we use tangible assets such as land, labor and capital. However, these products and services have become, in many ways, satisfiers of less tangible needs, such as the need for identity, understanding, participation, creation and more.

      For example, some support getting rid of large vehicles like trucks in order to improve progress in CO2 emissions among other things (I am not saying that's right or wrong here). But there is large resistance from truck buyers, owners and manufacturers. Owning a truck fulfills their needs – it is fairly easy to understand needing to haul things around in businesses like construction. Others who don't work in such industries and have obvious need come under fire. But the truck market, for some, fulfills much more than a need to run a business and subsist. For many, it provides a satisfier for the need for identity, participation in a community and more.

      So, understanding the spectrum of human needs becomes even more important as it expands beyond economic and environmental.

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  7. June 18, 2010 at 16:14 pm PDT | Rgeiger writes:

    As a clarification . . .I do not believe that everything about the “invisible hand” is completely wrong. But when it is the only thing we rely on to create sustainable social systems, it is incomplete. Adam Smith's original writing, you're right, had pre-conditions, which we tend to forget about. Also, it was focused on economic systems, which are but one type of social system.

    One of the challenges is that we tend to compartmentalize our needs into economic, social and environmental needs. In reality, sustainability is about meeting the full spectrum of human need, of recognizing that economic actions can affect people ability to create, participate, have identity and more. When we recognize the full spectrum of human need, rather than simply having a single focus on fulfilling an economic or environmental need, then we can find the next generation of innovation, technology and progress. We need have stewardship for the needs of all – meaning that we seek awareness and understanding of those needs and find solutions that do not dismiss the needs of participants in the system.

    Reply Or REGISTER HERE if you are new.

  8. June 18, 2010 at 17:33 pm PDT | Jnail78 writes:

    Absolutely right! And this spectrum is recognized in fundamental economic theory as the three inputs into production: land, labor, and capital. But we obsess over capital and are inclined to ignore, or at least only grudgingly pay attention to, labor and land. If you really believe in these three factors of production, triple bottom line isn't some exotic concept — it should be a natural way of managing a business. But I guess since they are termed “inputs” it implies a transactional relationship, not an ongoing one. If you want to get new workers, just fire the ones you have because you can always recruit more. If the land you are on runs out of resources, just go somewhere else because there is always another place to go. Only now are we beginning to realize this no longer holds given the human population and the size of the human economy….

    Reply Or REGISTER HERE if you are new.

  9. June 18, 2010 at 22:44 pm PDT | Rgeiger writes:

    Something else to consider is the expansion and relationship of fulfillment of economic need with other human needs. Many change efforts are directed at products or services within the economic system, or the way that we use tangible assets such as land, labor and capital. However, these products and services have become, in many ways, satisfiers of less tangible needs, such as the need for identity, understanding, participation, creation and more.

    For example, some support getting rid of large vehicles like trucks in order to improve progress in CO2 emissions among other things (I am not saying that's right or wrong here). But there is large resistance from truck buyers, owners and manufacturers. Owning a truck fulfills their needs – it is fairly easy to understand needing to haul things around in businesses like construction. Others who don't work in such industries and have obvious need come under fire. But the truck market, for some, fulfills much more than a need to run a business and subsist. For many, it provides a satisfier for the need for identity, participation in a community and more.

    So, understanding the spectrum of human needs becomes even more important as it expands beyond economic and environmental.

    Reply Or REGISTER HERE if you are new.

  10. July 01, 2010 at 16:23 pm PDT | Eric J. Lindblom PhD writes:

    I'd like to respond to: “
    “Centuries ago, human civilization began to focus on specializing, on breaking things down into their parts in order to understand and build better machines and technology.”

    http://www.triplepundit.com/2010/06/sustainabil

    It is true that the whole is more than the sum of its parts, I believe. As well, there are emergent characteristics. That thinking has expanded considerably with concepts such as quantum consciousness so that there are fuzzy logic areas as well as the parts. Together, those characteristics make a complex system approach very practical. Eric J. Lindblom PhD

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