We offer a new equation for managing the world’s economies by valuing Natural Capital as the primary capital that Human Capital “values” into Financial Capital. The full presentation can be found on SlideShare. The simple equations are presented below: ___________________________________________________________________________________________ … Continue reading →
When I was working on my MBA in Sustainable Enterprise back in 2007 I remember the first time that Adam Smith popped into my consciousness. It was a typical Sunday afternoon class. We’d been in classes since Friday morning at … Continue reading →
I had the pleasure to attend this for the second time last year. Overall, it was a fascinating look into the world of money, transactions and exchange. The Summit brings together the best and brightest visionaries around money, including startups entrepreneurs, developers, press, investors, authors, service providers, and solutions providers. They meet to discuss the evolving money ecosystem in a proactive, conducive to dealmaking environment.
I had the opportunity to share some thoughts on Adam Smith. You can listen to this audio recording by clicking on the audio bar below:
This winter has been no exception to Alaska’s long term warming trend. A ski resort near Juneau closed due to lack of snow and the state’s famed Iditarod race, which begins today, was moved north to Fairbanks due to lack of snow over the traditional race course.
Alaska’s winter warming was twice the national average in the last 50 years, and average annual temperatures in the state are projected to increase 3.5 to 7 degrees by 2050. This has devastating impacts for those living in Alaska.
Yet in his less well-known 1759 book “Theory of Moral Sentiments,” Smith is quite skeptical of the notion that acquiring wealth leads to happiness. In this work Smith sees the pursuit of wealth as a rather vain and futile endeavor. Those who succeed in amassing great fortunes end up with mere “baubles and trinkets” that although likely to impress other people do little to promote the true happiness of the person who acquires them. Rather, Smith argues that human satisfaction emerges from the knowledge of being “beloved” by others, which is only achieved by being truly lovable and truly virtuous.
Michael, thanks for starting this intriguing dialogue. And, as many commenters have already stated we need many of these micro “Sustainable Valley” communities around the world. In fact, in many communities these are already de-facto happening lead by ardent and passionate activists. Bravo to them!
When you look at Silicon Valley, the nexus of global innovation, it’s been primarily fueled by one institution: Stanford University. Why? Because Stanford has always welcomed, nee championed, innovative thinking. As a result it has been able to attract world-class talent whose thinking has not been limited to common notions of innovation, but in breakthrough ideas with bold effects. To have Sustainable Valley really drive global innovation the need for a center post institution that rewards true innovation seems like a necessary part of any strategy. Thinking of localities that have this type of institution begins to limit specific geo-centers. Nevertheless, any community can diffuse their innovations if they are relevant and can scale to many like-minded communities.
Adam Smith, the moral philosopher who has been mistakenly labeled the “founder” of modern capitalism lead by the Invisible Hand theory, would embrace your idea for a Sustainable Valley. In fact, he wrote in The Theory of Moral Sentiments (1759) that:
“The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining.
The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements.
They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of society, and afford means to the multiplication of the species.”
Looking at Smith in a new light would be a wise idea for anyone considering building a Sustainable Valley. Why? Because Smith opined that “consumption is the sole purpose of all production” in An Inquiry Concerning the Nature and Causes of the Wealth of Nations (1776). He also went on to say to be wary of the producer for they will want you to consume more than you need to fulfil their rapacious desire for profit.
In Smith’s view there is a limit to growth: soil. Thinking of sustainability going forward should really be a consumer movement. If we were to to be “led by an invisible hand to make nearly the same distribution of the necessaries of life” we’d view consumption in an entirely different light.
Finding an institution that embraces this core philosophy would be a requirement in any Sustainable Valley. The challenge before us is real. We are not only threatening our own lives with our current consumption patterns and mindless pursuit of the duality of growth/profit, we are ruining our children’s future. That is a travesty and in my mind a wholly immoral lifestyle. It’s time for a recalibration of our expectations based on Smith’s 255-year old insight: there’s only so much natural capital to go around. Finding a centerpiece institution that recognizes this basic fact would be an ideal for any Sustainable Valley.