The Blind Spot in Economic Thought

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katyan's picture
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The Blind Spot in Economic Thought

I had the privilege of attending a workshop led by Otto Scharmer of MIT's Presencing Institute a few years ago. Seventy people ranging from a group of nuns to corporate executives spent a week with Otto and people such as Peter Senge, Adam Kahane and Joseph Jaworski exploring mechanisms for "deep dive" change in individuals, organizations and society.

I recently ran across a draft document written by Otto that uses the analogy of updating a computer operating system to the need to update our economic "operating system" of thought and infrastructure. The basic concept is borrowed from the book Capitalism 3.0 by Peter Barnes, but Scharmer builds on it to suggest key leverage points for change.

Capitalism 1.0: The original “free-market” or “laissez-faire” capitalism that has produced phenomenal growth as well as massive negative externalities in the form of poverty, environmental destruction, and periodic currency crises. The societal response to these crises led to …

Capitalism 2.0: A more regulated stakeholder capitalism in which the major areas of negative externalities are addressed through social security systems, labor unions, international labor and environmental standards, Federal Reserve banks, etc. All these institutions are designed to do the same thing: limit the “free” markets such that negative externalities are minimized.7 While the main focus of capitalism 1.0 is on growth, the main focus of capitalism 2.0 is on redistribution in order to sustain society as a whole. The problem with capitalism 2.0 is twofold: one, it never really worked outside the boundaries of the OECD countries. And two, it does not appear to be working to mitigate the current global externalities. Which brings us to our current transformational phase, moving toward …

Capitalism 3.0: An (as-yet-unrealized) intentional and inclusive eco-system economy that upgrades the capacity for collaboration and innovation in all sectors and systems.

Here's the link to the full text:

The Blind Spot in Economic Thought: Seven Acupuncture Points for Shifting to Capitalism 3.0


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