This is the sixth post in our series on principles of the next economy—principles business must embrace if we’re all to #emergestronger after the COVID pandemic.
As the stink of bombs still hung in the air and as the world came to grips with the unimaginable horrors of the holocaust, 730 delegates from 44 countries gathered in July 1944 at the United Nations Monetary and Financial Conference. Over the course of three weeks, they crafted a new international monetary system that has shaped the course of history right up until today.
They gathered in a small, New Hampshire town called Bretton Woods. Their recommendations, later ratified by dozens of governments, formed what would later be called the Bretton Woods System—a system that includes the World Bank, the International Monetary Fund, and is predicated on a commitment to open markets.
Naturally, given they were meeting just as World War II came to a close, one imagines that peace was near the forefront of their minds. Decades later, Paul Volcker (former chair of the US Federal Reserve) is quoted as saying, “Bretton Woods is not a particular institution — it is an ideal, a symbol, of the never-ending need for sovereign nations to work together to support open markets in goods, in services, and in finance, all in the interest of a stable, growing and peaceful economy.”
A ‘stable, growing and peaceful economy?’
Today, as we navigate another traumatic disruption to global affairs, the first truly global pandemic in over a century, one might rightly ask who has benefited from this stability and growth. And has there truly been an enduring peace?
The Bretton Woods institutions have been criticized for promoting privatization of government services, financial deregulation and ‘free market’ economics, and austerity (especially since the financial crisis of 2008). This ‘neoliberal’ system puts finance at the centre of economics, despite significant, negative outcomes that include rapidly rising atmospheric carbon and a deep economic divide between a relatively small number of wealth-holders and a giant portion of the global population that endures struggle or subsistence living, or worse.
Critics of the Bretton Woods system abound—including the UK NGO Bretton Woods Project, which exists to critique the system through research and advocacy. Like an increasing number of NGOs, civil society organizations, academics, and policy analysts, the Project pursues “the development of policies that are gender transformative, equitable, environmentally sustainable and consistent with international human rights norms.”
Move Over GDP. It’s Time for a Wellbeing Economy.
Gross Domestic Product (GDP) is the most frequently cited metric of economic performance. It represents the total monetary value of all final goods and services produced and sold within a country each year. If GDP is growing at a reasonable pace, an economy is widely understood to be healthy; if it shrinks for more than a fiscal quarter, the economy is said to be in ‘recession.’ Given the mention of GDP always tops and tails the evening news, one could be forgiven for thinking it’s the end-all and be-all of economic thinking. But this doesn’t align with what people want—or what the world really needs.
The Wellbeing Economy Alliance (‘WEAll’) is a 10-year project that aims to catalyse systems change toward the realisation of a Wellbeing Economy. Junxion joined WEAll in 2019 and has contributed content, storytelling, and ideas to the network. Our greatest learning?… That abundant alternative ideas, models, and frameworks for economic thinking and policy are emerging from grassroots movements, research, and thinking the world over.
Imagine an economy remade to serve the common good.
Imagine for a moment an economy remade to serve the common good—an economy that seeks to maximize wellbeing for all people and nature. Consider the possibility that economics need not be about zero-sum profit-taking, but positive-sum wellness-building. Such an economy might respond to world events very differently than our current economy. In fact, the WEAll network—some of the world’s foremost economic thinkers—defined ten principles of a wellbeing-based recovery and WEAll published a report that lists examples of initiatives that are already in play around the world to implement the principles. These include Amsterdam’s adoption of ‘doughnut economics,’ the collaboration of Scotland, Iceland, and New Zealand to form the Wellbeing Economy Government group, and much more.
Five Ways to Support a Wellbeing Economy.
In an earlier post in this series, we outlined what it takes to embrace values-based leadership, a practice we believe will be imperative in the next economy. In collaboration with dozens of leading thinkers within the WEAll membership, we contributed to the definition of five universal human needs that each of us needs to experience a good life. If we’re to #buildbackbetter post-COVID, so that all economies, natural systems, organizations and people can #emergestronger, how might your enterprise contribute to these?…
- Connection: Sense of belonging & institutions serving the common good. This aligns with others’ thinking about how organizations must uphold the wellbeing of their staff, customers, and other stakeholders. (We think particularly of the work to ‘use business as a force for good’ and the B Corp Certification.) The next economy demands stakeholders are central to leadership thinking. No longer will shareholder-centricity suffice—or even be tolerated. So how can you planning, hiring, operations, and other aspects of your enterprise be more open and inclusive?
- Dignity: Everyone has enough to live in comfort, safety and happiness. This aligns with movements toward a Living Wage, and access to basic health and social services. While every organization is bound by legal constraints (like the statutory minimum wage, for example), businesses and their policies are more frequently and vocally compared to peers and true, normative requirements, which often run to a deeper moral, ethical, or simply human set of requirements. Do you aspire to sector or community leadership? How might you improve your practices?
- Fairness: Justice in all its dimensions at the heart of economic systems. Each of us has a role to play in asserting equitable treatment across differences and in making restitution in those places where we’ve fallen short of the needs in our communities. Injustices have become glaringly apparent during COVID, as disadvantaged communities have proven more likely to suffer most deeply during the pandemic. If you’re not yet viewing your decisions through this lens of justice, you’re likely falling behind expectations.
- Participation: Citizens are actively engaged in their communities. There are myriad ways we can volunteer in our communities, engage with social impact organizations, or provide other supports in the neighbourhoods where we live and work. Start local. Build from there. (We touched on this in a recent post on local economics.)
- Nature: A restored and safe natural world for all life. We are inarguably in a climate emergency that is potentially devastating beyond the average person’s capacity to imagine. Every enterprise has a role to play in safeguarding nature. Look at your supply chains, your procurement policies, your energy consumption, your carbon emissions. All of these are being considered by leading enterprises around the world. The methods, models, and frameworks are widely published and accessible.
Emerge stronger with better thinking and systems.
We’ve been contemplating an old cliche these past few months: ‘Never let a good crisis go to waste.’ This is not about opportunism in a time of crisis; while we navigate the pandemic, we must do all we can to safeguard people and families. And it’s also true that as our thinking and planning begins to look out beyond COVID, we can—and must—rebuild using better thinking and systems. Junxion is here to help. Whether you’re thinking about how to take first steps in aligning your business with efforts to #buildbackbetter, considering how your strategy should evolve so you #emergestronger, contemplating the B Corp certification, or you’re ready to embark on community engagement through procurement, volunteerism, or otherwise, we’re just a call away.
Just 730 people met at Bretton Woods. In three weeks, they developed an economic system that has endured for nearly a century. WEAll and networks like it are engaging thousands of the world’s best thinkers. Their conclusions about what is right and good for the world are very different than the outcomes reached in the summer of ‘44. Ours is just one of thousands of companies that are working alongside advocates, policy makers, NGOs, and other businesses to take steps toward the next economy.
Let’s be bold as we consider how we can all #emergestronger.
Let’s Be Audacious, Together….
Author Mike Rowlands, President & CEO at Junxion.