Practical Primal Philosophy I: Meaning of “Intrinsic” in ISD

This series of Practical Philosophy posts looks at some of humanity’s current big issues from a fresh perspective. They will also explain key terms and ideas relating to Intrinsic Sustainable Development and the Primal Episteme. This post looks at the “Intrinsic” in Intrinsic Sustainable Development.

The Concise Oxford English Dictionary states that “Intrinsic” means “belonging naturally; essentially”. This is a very convenient definition for our purposes since both natural and essential are very significant words in our fresh perspective. But at face value, the use of “Intrinsic” in Intrinsic Sustainable Development (ISD) means that we are describing a new kind of development, one that is sustainable into the distant future without any extra effort or special considerations. This does not mean that sustainability will just happen without human intervention, concern and effort: it does mean that sustainability and human activity become interwoven, indistinguishable or one and the same as.

Notice that in the paragraph above, we do not say that sustainability and economic activity become one and the same, although “economic” is very close to what we have in mind. The problem with using the word “economic” is that economics has been defined and developed in ways that deliberately separate industrious human activity from the encompassing wider social and ecological worlds. It is almost as if economics, at least in theory, somehow takes place in an isolated vacuum or bubble. So we try and avoid the word “economic” until we have a better understanding of the complete situation.

To get back to the task of this post, we can take “Intrinsic” to refer to that kind of human activity in which social and ecological relations belong naturally or essentially. In some ways this statement has little meaning. Just how, for example, can you have living human beings who depend upon natural resources and other living beings for their own existence conducting activities that do not relate to the society and ecosystem of which they are constituent parts? How long would you last living alone, without prosthetics, on Mars?

But the statement is replete with meaning precisely because some people think social and ecological relations are unimportant. It is not that they would say “I would be okay living alone on a lifeless planet” rather they have not considered, valued or experienced the value of social and ecological relations; they have ignored them or assumed that they would be there forever no matter what they did. This ignoring social and ecological relations or taking them for granted may or may not occur at the individual level – as indeed it does, people are free to think what they like and we would not want to impose upon that. But when it occurs at social levels in societal values and cultures, and hence in the structures and institutions that constitute a society, then that is something that we cannot accept.

Hence the current big issue that is represented by our use of the word “Intrinsic” has to do with the considering or neglecting social and ecological relations in societies and important social institutions. If we go back to economics for example, you may look at any standard economic test book as used in schools, colleges and universities and find social and ecological relations either absent or marginalised by economic theory. The same is true of standard accounting textbooks that provide the skills and procedures to assess the performance of our companies and other organisations. But when it comes to one of the most influential institutions of our day, the stock markets, one that daily shifts millions of dollars around the world, you will find a preoccupation with the abstractions of numeric analysis and wealth measured solely in large amounts of money.

We can now be more specific with our use of the word “Intrinsic”. We mean that sustainable development is a natural and essential part of human activity to be found in a revised understanding and practice of economics, accounting and markets. In turn, for us, this means that social and ecological relations are represented in the theory and practice of economics and, more importantly, in societal values and attitudes.

Practical Examples

There are many examples of initiatives designed to acknowledge and respond to the social and ecological relations that make our lives possible, healthy and fulfilling. Within this category lie environmental management, accounting, regulations and legislation; corporate social responsibility; the Global Reporting Initiative; sustainable development management and accounting; and a huge number of diverse NGOs and charities.

But there are few examples that can claim to have social and ecological relations occurring intrinsically - naturally and essentially - within their activities. The dominant thinking of our age does not have the capacity to do this. We would typically have to look to a time before our own age, to other ways in which knowledge has been possible.

However, there are initiatives that are striving towards intrinsic social and ecological relations either by using ideas from a previous age or by basing their approach on the empirically-grounded science that is now revealing the extent and importance of social and ecological relations. The revival of ancient Chinese thought in initiatives such as “Tian Xia” or all-under-heaven thinking (see PR Blog) is an example of how ideas from an earlier age can be used to take us into the future. Similarly Ecological Economics uses the findings of empirically-grounded science to create fresh economic insights. Whilst in business itself the Phoenix Economy Report from Volans report argues that a new generation of entrepreneurs are starting to embed social and ecological relations in their core values and the emerging Benefit Corporations (see PR blog) in the USA changing laws so that they may work towards a Triple Top Line approach in which social and environmental gains are made along with the economic in everyday business activity.

But all these worthy initiatives are just that – there is a long way to go to before social and ecological relations become intrinsic to our society and culture.

Research Example

“New model disentangles interdependencies between social and ecological systems.”

Mapping Social & Ecological Relations in Madagascar

The above figure is a map showing a rural agricultural system in Madagascar as a social-ecological network. The map shows locations of different clans, their social relationships, settlements, forest patches and the ecological links.

Click here to find out more about this research at the Stockholm Resilience Centre

Triple TOP Liners: Benefit Corporations

The Triple Bottom Line (TBL) is a well recognised approach to incorporating social and environmental aspects within the formal decisions making routines of companies. It gives social, environmental and economic aspects of performance an equal status on the bottom line of a company in recognition of the fact that if society and the natural environment suffer adversely, then so do companies.

The problem with TBL is that economics still sits imperiously alone on the top line. Core business and economic values are not challenged with a TBL which means that only economic goals are pursued with vigour whilst the social and environmental impacts are cast as either obstacles and additional costs to be overcome, or ideals to be pursued only if the real business of economics can find the time and resources.

Whilst a TBL is better for the world than purely economic forms of accounting and goal setting, it is an unsatisfactory compromise. For PR, the TBL is a hybrid of two epistemes, the Modern and the Primal (Birkin & Polesie 2011). Since the Modern possibility of knowledge is now being replaced by the Primal, should this not enable a deep rethinking of the fundamentals of corporate performance appraisal and goal setting?

Indeed it should, and it does. As the self-referencing abstractions of Modernity in the human sciences are replaced by knowledge derived from empirically-grounded science of the Primal age, we are can envision corporations in simple, new and totally changed ways. The Modern corporation is a discrete entity seeking power and growth according to its own definitions of its economic self: the Primal organisation on the other hand is a part of a network of relations many of which need to be acknowledge and acted upon for all practical business purpose. The Primal organisation is not an economic entity trying to tread lightly on social and environmental concerns (as in the TBL) but is reconstituted as an economic/social/environmental entity seeking a harmonious balance between a range of equally valid alternatives.

In this way a Primal corporation refines success. A Primal corporation strives to be not the best in the world but the best for the world….. which is precisely the goal of a Benefit Corporation.

In the USA, Benefit Corporations are emerging to change the business world. They are a new class of corporation that:

1) creates a material positive impact on society and the environment;

2) expands fiduciary duty to require consideration of non-financial interests when making decisions; and

3) reports on its overall social and environmental performance using recognized third party standards.

But most significantly, Benefit Corp. status relieves a corporation of its obligation to maximise shareholder profit – this is why PR argues that they are becoming true Triple Top Liners (TTL). (Under current US law, shareholders can sue corporate boards for not maximizing profits.)

Since 2010, Benefit Corporation legislation has been enacted in 12 states, and is under consideration in twenty more. Make no mistake about it, B-Corps are revolutionary and they have their own Declaration of Independence.

B Corps Declaration of Independence

China and the Primal Episteme

The ancient possibility of knowledge that China possesses is well placed to resonate effectively with the Primal episteme. This is because it incorporates a knowledge of mankind alongside that of other things.

The ancient possibility of knowledge that China possesses is best appreciated in contrast to the dominant possibility of knowledge in the Modern Western world. One of the key defining features of the Modern Western world is the Modern episteme as defined by Michel Foucault. Within the Modern episteme the role of “epistemological man” is central and definitive (Foucault 1970; Birkin & Polesie 2011). Briefly the significance of “epistemological man” means that knowledge in the Modern Human sciences is a knowledge that has been created

of man, by man and for man.

This means that knowledge in the Modern Human Sciences is made possible by reflexive self-referencing; a kind of species-solipsism. This helps to explain how Modern progress has benefit man at the expense of the natural world. It has done so because knowledge in the Modern human sciences did not recognise a natural world as may be proven by a quick examination of any standard Modern text explaining how mankind is to be organised to increase its own wealth; i.e. economics, accounting and management where  nature per se does not exist. This is a key driver of unsustainable development.

So how does ancient China differ? It differs in many ways that for the moment we can represent simply by Tian Xia which may be translated as “All under Heaven”. The concept of Tian Xia is closely associated with civilization and order in classical Chinese philosophy, and it has formed the basis for the world view of the Chinese people and nations influenced by them since at least the first millennium BC. A first point to notice is the age of this concept - the first millennium BC - which is indicative of its intrinsic sustainability. (In contrast the Modern episteme in the West lasted a mere 200 years old before it undermined its own existence with unsustainable forms of development.)

We should be aware that Tian Xia in its application and development in China was not of course all good. It did for example underpin the idea that the Chinese emperor acted with a Mandate from Heaven and as such was effectively the centre of the world and all powerful.

However, the significance of Tian Xia for present purposes is that it was not based on a possibility of knowledge that referred its own origins back to itself as in the Modern episteme’s knowledge of man, by man and for man. Tian Xia embraced – as it says – “All under Heaven”.

Tian Xia or "All under Heaven"

Getting over Financial & Economic Crises

The Financial Crises of 2007/08 is judged by many economists to be the worst financial crisis since the Great Depression of the 1930s. As a result of the 2008 crisis, significant financial institutions, notably banks and stock markets, lost trillions of $US. In turn housing markets lost value resulting in evictions, foreclosures and unemployment. People saw their savings, pensions and endowments loose overnight the kind of money that takes decades of hard work to save. We are still suffering from this crises as more key business suffer or fail, high street shops and house-hold names go out of business; and  the European sovereign-debt crisis has ruined countless lives  in Greece, Portugal, Spain, Ireland and now Cyprus.

The 2008 crisis took much of the Financial & Economic world by surprise in spite of global studies and close attention from all quarters. The causes of the crisis are difficult to identify and has given rise to extensive debate. It is a global crisis and all of us are involved. The search goes on for ways to stop it happening again.

A significant amount of blame for the crisis has to be the “financialization” of the economy:

Transition to Sustainable Business

PR identifies how the world is changing. The most fundamental change that PR identifies is one that lies at the foundation of our knowledge. This fundamental change determines how knowledge is made possible. This is in essence a very simple kind of change – BUT it is difficult to perceive and accept that so much can change as a result of so little!

Intrinsic Sustainable Development (ISD) (2011) is grounded in a change of “what makes knowledge possible”.  To explain this kind of change, ISD relies on the work of Michel Foucault (1970) who called the “possibility of knowledge” an EPISTEME.  Foucault described only three different epistemes in European history from Renaissance times to Classical and then the Modern. Foucault died in 1984 before any evidence of an emerging episteme to replace the Modern was available.

In ISD, an emerging episteme is identified and called “Primal”.  On a technical level, the change from the Modern to the Primal episteme is equivalent to going from abstract belief systems to empirically grounded science (or to be even more technical from an epistemology to an ontology). On a day to day level, this means that we shift from living according to overarching societal beliefs (in notably economics and free markets) to becoming part of the living world once more.

Such changes will have a huge impact on business. John Elkington (2013, p. 62) observes: “We need to redesign our, economies, politics and culture.” Elkington gave the world the “Triple Bottom Line” approach so that businesses would acknowledge their dependence upon achieving good social and environmental performances as well as economic. But in his review of “Corporation 2020: Transforming Business for Tomorrow’s World” (Sukhdev 2012), Elkington admits his approach has been wrong.

Elkington’s approach had been to tweak corporations, change their performance at the margins to improve social and environmental conditions without a change in business core values and activities.  But Elkington now sees this as the wrong approach and he writes “The challenge is now ecological, in a broader sense: we must reshape the context within which both the corporations and the investors operate…” (Elkington 2013, p. 62).

Reading “Corporation 2020: Transforming Business for Tomorrow’s World” (Sukhdev 2012) changed Elkington’s mind. Corporations 20:20 argues that we must as a matter of some urgency shift from a 1920’s corporate model of “free-market-capitalists” and “cost-externalising” to a 2020 corporate model with the following mission: 

            Corporation 20:20 MISSION

1. The purpose of the corporation is to harness private interests to serve the public interest.

2. Corporations shall accrue fair returns for shareholders, but not at the expense of the legitimate interests of other stakeholders.

3. Corporations shall operate sustainably, meeting the needs of the present generation without compromising the ability of future generations to meet their needs.

4. Corporations shall distribute their wealth equitably among those who contribute to its creation.

5. Corporations shall be governed in a manner that is participatory, transparent, ethical, and accountable.

6. Corporations shall not infringe on the right of natural persons to govern themselves, nor infringe on other universal human rights.

For more about Corporation 20:20 visit their website here.

The Transition of Industry

Is Sustainability still Possible?

You could be forgiven if you thought that the world was moving towards sustainable development. There is so much going on to improve our relations with nature and society. But if you look closely this is not the case. We are still heading towards a future of disasters large and small.

The World Watch Institute in Washington DC looks closely at sustainable development. In their State of the World 2012 report they write: “Despite multiplying numbers of solemn declarations, plans, and goals, no nation is even close to evolving toward a sustainable economy.” (Renner 2012, p. 3).

There are many reasons for this inability to realise sustainable development. The first may be that the required changes are so significant and the problems so intractable that much time is needed for changes to take place. We do not have the luxury of time!!

Sustainable Business Models: what can change?

The book “Intrinsic Sustainable Development: epistemes, science, business and sustainability” (Birkin & Polesie 2011) is about the impact of an emerging episteme upon ourselves, society and business. Basically an episteme is what makes knowledge possible. It can seem disturbing, even frightening, to think that our world – our whole world – can change because of a change in the possibility of knowledge. But other people see this as liberating: an exciting opportunity to venture forth into new unexplored territories just as the explorers of old.

But consider too that the world does change for individuals and groups in accepted ways. Although PR does not subscribe to any revealed religious orthodoxy, consider how the members of a religious groups, even the humbling Methodists, may regard themselves as “reborn”, “renewed” or “saved” when they accept the Faith for this brings with it a new episteme – a new possibility for knowledge; caused in this case by the recognition that we live in a God-made world. In a way, Buddhism owes its whole existence to overcoming whatever “episteme” makes knowledge possible in an individual’s life – the Buddhist seeking enlightenment and freedom from this world is doing nothing less than overcoming the episteme by means of which a world is brought into existence. Finally, every page of the holy book of Islam, the Koran, exhorts followers to “know yourself” – excellent advice and you can think of this as getting to know the knowledge that that has created our view of ourselves and the world.

But you may ask what has this got to do with business?

Quiet Revolutions

Revolutions can be bloody as the Arab Spring and Syria demonstrate but revolutions can also be quiet events. Quiet revolutions do not involve guns and bombs but are arguably far more effective in bringing about lasting change.

A change in values for example can change the world in which we live. This happens because we never see or know everything that we encounter: we always select information, images, sounds and ideas. This selection has its roots in a natural process called “autopoiesis” which literally means “self-making-poetry”. We effectively make up poems and stories about ourselves and the world in which we live. In this sense we create our own worlds and this is done in accordance with the values we posses. So changing values does change worlds.

At a deeper level still, changing knowledge changes worlds.

Returns on Growth Pains

ROCE stands for Return On Capital Employed. It underpins economic growth and is the most important equation of our times.

All accounting students learn how to calculate and use this equation within the details of corporate finance but we are all familiar with the concept. ROCE is stated as follows:

ROCE        =             Returns

                                                       Investment

It calculates the ratio between an investment and the amount of increase the investment earns. It is better known as a percentage rate of return. For example a company investing $10 million in a new product and making $2 million profit a year enjoys a 20% ROCE. If PR can afford to invest £10 in a savings account, he might make 20 pence in a year; a 2% ROCE.

If more people are to enjoy getting returns out of investments, then our economy needs to grow. This is the theory that motivates pretty well all business people and political leaders in the West and in the East. This makes ROCE an important equation – it represents our increasing prosperity and source of additional wealth.

Populating the Steady State Economy (SSE)

The Steady State Economy (SSE) as proposed by Herman Daly is a great and essential idea. He defines a SSE as: "an economy with constant stocks of people and artifacts, maintained at some desired, sufficient levels by low rates of maintenance throughput, that is, by the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption."

The above definition is taken from the website of the Center for the Advancement of the Steady State Economy (CASSE) whose webpage may be found here.

PR encourages everyone to become familiar with the SSE because it is quite simply the only way mankind can survive! Elementary arithmetic plus a recognition of physical reality reveals that we cannot continue indefinitely taking resources from our planet. We are already witnessing this overconsumption right now and it is causing social stress and deprivation worldwide… imagine what problems there will be if we pursue economic growth for another hundred, or two hundred, or three hundred years! The kind of economics that now dominates our thinking has no future.

But what if economics thinking itself is the root cause of our present problems? If economics is a cause then presumably more economics, albeit of a different kind, is not the solution.

Get Real! –John Gray on Capitalism’s Delusions

John Nicholas Gray (1948 -) is a former London School of Economics and Political Science Professor. He is a well-published author of books and he contributes regularly to the UK national press including the Guardian newspaper.

John Gray promotes realistic thinking: “The meltdown of financial markets has done more than wipe out wealth on an unprecedented scale. It has also destroyed the neo-liberal belief in progress through ever expanding production and consumption, and an anxious search is under way for a replacement creed. Religious fundamentalism is one result of this quest, Green utopianism another. Intelligent improvisation – using technical fixes to reduce the human impact on the Earth, for example – is more likely to yield results that the search for solutions. But realistic thinking goes against the grain. It is easier to inhabit an imaginary future than deal with the intractable present.” (Gray 2009, p. xxv).

The above quotation was written in 2009 in a new preface to his book “False Dawn: The Delusions of Global Capitalism” which was first published in 1998. Gray’s 1998 prophetic vision on the delusions of global capitalism was proved to be correct one decade after publication.

In “False Dawn” Gray had argued that the effect of unrestricted international free enterprise will be socially and culturally destructive. It is also unsustainable. But Gray cannot be classified as a Green, as anti-growth, or as a return-to-nature thinker. Indeed Gray argues that a Green agenda, an anti-growth recognition of physical limits and a natural utopia are not tenable. He also argues not for sustainable development but for a “sustainable retreat”. (ibid.).

If Gray is against free enterprise, greens and sustainable development, what is it precisely that he does want?

Professor John Gray

John Gray wants realism; a knowledge and action undistorted by utopian ideals and beliefs. In particular he wants to rid the world of the propaganda that free markets are a natural state of human affairs. This is also a core argument of Primal Reporter.

 In “Straw Dogs: Thoughts on Humans and Other Animals”, John Gray (2002) challenges what it means to be human. He thereby touches upon another key PR idea – that the world is changing, and a new world, or episteme (Foucault 1970), is emerging. The book “Intrinsic Sustainable Development: epistemes, science, business and sustainability” (Birkin and Polesie 2011) is about the emerging episteme.

By referring to a new world, we have not of course found a new geographical expanse to enter. However, it is arguable that PR’s new world is an even more momentous event than that. What makes our knowledge possible is changing; and this changes what we know of the world and of ourselves. In this way a whole new world is made available to explore and with that all the thrills and opportunities of pioneering and discovery. Professor John Gray is yet another a harbinger of this change.

References

Birkin, F.K., and Polesie, T.  Intrinsic Sustainable Development: Epistemes, Science, Business and Sustainability. Singapore, World Scientific Press.

Foucault, M. (1989[1970]). The Order of Things: An Archaeology of the Human Sciences. London, Routledge.

Gray, J. (2002). Straw Dogs: Thoughts on Humans and Other Animals. London, Granta.

Gray, J. (2009[1998]). False Dawn: The Delusions of Global Capitalism. London, Granta.

Sustainable Business Models: A Working Concept

It took many years for the older boy and Greybeard to accept the implications of the transition to a new, Primal episteme. It took even longer for them to work out the implications of this change.

Hence as they sat with QC in a small boat crossing the sound from Helsinki in Finland to the island fortress of Suomenlinna, the reviews they gave of their work was actually the result of decades of difficult work. For example, the older boy had prepared graphic illustrations of some of the consequences for business of the transition to a Primal episteme. In the following figure, the older boy represents Modern companies with a bulldozer motif and Primal ones with a sailing dinghy.

Modern and Primal Business Models Illustrated

The ‘‘Bulldozer’’ company image captures the Modern episteme’s forceful, invasive institutional growth. Since such companies have defined their origins in their own terms, they cannot be anything else. Leaders, the ‘‘drivers,’’ of such companies need to learn only how the company works, its ‘‘mechanics.’’ Then they are obliged to develop the company by growing it and moving it forward as the distinct and separate entity that it is. In effect, this kind of management forces an understanding of companies and their roles onto the world. Much power is required so that this forceful act can overcome any social, environmental or ecological resistance as well as constraints on company
growth.

Hence the desired direction in which the ‘‘Bulldozer’’ company heads is determined by the internal functions of the company itself. This is still the standard model in existing Modern business as far as you may judge from the content of books in mainstream management schools, where businesses appear to operate in social and ecological vacuums.

In contrast, the ‘‘Dinghy’’ company is vulnerable and far out at sea; this is a company operating in the Primal episteme. In this image, the fate of the company is uncertain and dependent on factors external to the company (as winds, tides, currents and weather in the illustration). To direct this kind of company, knowledge of its constitution and capabilities is certainly essential; but just as essential are the diverse crafts, skills, knowledge and needs that staff possesses or may acquire for harnessing multi-sourced extrinsic energy and materials together with knowledge and experience of the external systems and forces that contribute to the being and becoming of the company.

The desired direction in which the ‘‘Dinghy’’ company then heads is hence to be determined by collective personal, social, and ecological knowledge, needs, capabilities and potentials in addition to the company’s own. In this way, the reality that ‘‘Dinghy’’ companies create seeks to be as close as possible to what is known of the ways the company intervenes in existence; it is no longer the imposition of a company-made reality onto different worlds.

The Emerging World

By changing the foundation for knowledge, we change knowledge of the world in which we live…. This is as good as changing the world itself.

Whilst it is easy to write and understand how the world may change in this way; it is not at all easy to live through such a change. The reason why this is so difficult is because we have so much knowledge and understanding derived from the old world. It is not so much the big ideas that we find difficult to change: it is the small, everyday, assumptions that we hold to be true about our world and about ourselves that keep us embedded at heart in the old world.

Children may be more easily introduced to the new world – indeed children always enter a new world, one of our and their creation. Students too may vigorously enquire and challenge the world in which they are growing intellectually. But nonetheless the established world, the world that is embedded in existing institutions, practices, cultures and beliefs is hard to displace.

In the ISD book (Intrinsic Sustainable Development, World Scientific Press, 2011) the two main characters take a life-time to leave the old world and discover a little about the new. The book is in this way a journey through knowledge; it is also a journey through the physical world. In the following extract from the book these two characters, the older boy and Grey Beard, are in Helsinki, Finland. They take the 14.10 ferry from the jetty at Skatuddskajen to the island fortress of Suomenlinna, a world heritage site.

“The Older Boy had Diagrams

In the plastic sleeves that now lay inside the cases of QC and Grey Beard were a series of diagrams and notes. They had been taken directly from teaching material that the older boy had used to illustrate the development of the Primal episteme and its consequences to management and accounting undergraduates.

In Figure 1 the older boy had wanted to show something of ‘Worlds in Transition’. He used this diagram to provide a basis for discussions. It was based on Venn diagrams in which the area occupied by an item was representative of the importance of that item.

Adapted Venn diagrams showing how the world of business is changing

The first part of Figure 1 shows the Inherited Business World in which an important, white businessman (for the older boy also intended to draw attention to the dominance of males in establishing traditional business practice) in a large, hence important, self-made area. The Natural World is located at a distance — quite separate from the Inherited Business world. The area of the traditional business world has a regular, formal shape to represent a little of its assumed certainty and control.

The second part of Figure 1 shows the Business and Environment World in which we currently live. The Natural World has here grown in importance but it has been transformed into the Environment. It overlaps the Business World in the small oval of environmental economics and business but much of the Inherited Business World remains unaffected.

The third part of Figure 1 shows the older boy’s vision of the emerging world of Primal Business in an Economic Ecology. Here, the Business World has been embedded in the ecosystem and the areas defined by all worlds have become uncertain and irregular. In this

part, the older boy introduced non-whites and females to represent increasing diversity of participants and the end of the dominance of the white businessman.”

The emerging world is based on the scientific knowledge that we now possess. This knowledge is very different from that which was available when the old world was established. It is time to move on.