An economic system is a means by which governments organize and distribute available resources, services, and goods across a given country. Economic systems regulate factors of production, including capital, labor, physical resources, and entreprises. An economic system includes a body of laws and regulations and an institutional architecture.
Across different ages of human development, we have seen different economic systems. These can be categorized in four main types:
Traditional economies – Agriculture and Commerce – It is based on goods, services and work. It relies on people and there is very little division of labor or specialization. It is basic and belongs to ancient times. It is highly sustainable with very little wastage production and everything is recovered or recycled. It lacks the potential to generate a surplus.
As a very small boy I grew up in a farm. We ate only what the land was providing and I do not remember to throw garbage. All waste was going to animal feed or to compost for the land. We were practically a zero waste family in the XX century.
Command economies – Communism – The Political Party controls government and the economy. It is a planned economy. The Party should have the general interest in mind but it is rarely the case. They are autocratic and they have many difficulties to react to changes. It is practically impossible to operate in a volatile environment. It also stifles innovation.
Market economies – Capitalism – Private entities gather a lot of power based on the concept of free market. Distribution of resources is not equitable. Favors inequality and social unrest.
Mixed economies – Coronalism. Traditionally, authors have considered mixed economies as regulated market economies. Therefore, this term would apply to most western world, especially after WWII. The two ingredients of this mix have been Market Economy and Command Economy, each country adding the ingredients according to the various national circumstances: history, geopolitical aspects, tradition and culture, etc. However, I posit to you that with Coronalism, we shall bring a third ingredient to that cocktail, which is the forgotten Traditional Economy. A system that has been the “natural” way of organizing resources and ensuring our survival of our planet until the XX century.
We have plenty of experience on which doses of Command and Market economies may be appropriate for a democratic society, according to various national realities. Then, we realize that sustainability and environmental protection is a need for the survival of the species in this beautiful planet. We needed to accommodate that requirement to our existing system, so we tweak it to have the system providing that additional need. The way we did this was though measures regulating the market. Already in 2002 in an article published on the Oxford Journal of Environmental Law I wrote:
“However, the increasing environmental preassure caused by waste is not, in itself, a decisive element in judging the effectiveness of the EC waste policy. Social trends and consumption patterns have encouraged a massive generation of waste, which has been partially controlled through waste legislation. It is commonly perceived that the present legislative framework for waste policy has many serious flaws. Stakeholders call for a more comprehensive, effective, realistic and coherent set of measures for products entering the waste phase. In order to do this, it is necessary to identify the problems with the current framework.” .
For those interested in waste policy see: “LIFE AFTER END OF LIFE: The Replacement of End of Life Product legislation by an European integrated Product Policy in the EC”
https://academic.oup.com/jel/article-abstract/14/1/33/416404
In this contribution, I pointed out that command and control mechanisms for regulating certain aspects of the product will not bring the required benefits. I then advocated for the use of voluntary instruments. Hard rules on products to regulate waste is something that belongs to the Command System and we could not think out of that box. Since the 70’s, we have seen the development of a body of environmental legislation reaching all industrialized countries in various degrees. No doubt that it has been useful but the real question is: Is this enough?
Sustainability was one of the main characteristics of the Traditional Economy. Nobody told my grandpa in the farm that he was not allowed to produce waste. He was the first interested in not doing so, because resources were scarce and they did not live under the illusion of infinite planetary wealth.
Am I then advocating to artificially impoverish the population? Isn’t this going against progress? Am I saying that we should go back to tan age prior to the industrial revolution? No, no and no. Today most of our resources are wasted. We live in a world of use and throw. This principle obviously applies to products, although, in the XXI century, some cultures make me think that it applies to people in different circumstances: friends, couples, workers, etc. With less resources, used more efficiently, we can maintain our quality of life and significantly increase developing countries’ living standards. Of course, the Traditional system had tones of problems such as inequality leading to misery and even famines. What I am suggesting is to introduce parts of that system to create a balance blend with the other two. This cocktail is to be served chilled, if we want to avoid global warming. In conclusion, the “Real Mixed Economy” system should find the way to integrate certain aspects of the Traditional Economy.
Who is saying this? Who is proposing this system? Are they philosophers and scholars drafting volumes about this new Coronalism system? Where are the Karl Marx or the Adam Smith of Corionalism? Well, there aren’t. This system is based on each person evolution after decades of democratic systems. It is very much a bottom up approach driven by people in industrialized nations. That is why the Western world is leading this movement based on the capacity of each individual to transcend. Why do not hear more about it? Because we do not listen hard enough. This is not something trumpeted by the establishment, be it the media, big business, or the ruling political class. See, for example, the entire revolution that some guys in the US have started with their Minimalist approach to life and consumption.
“The most sustainable purchase is left on the shelf.” —Joshua Fields Millburn. See more about the Minimalists on https://www.theminimalists.com/
This is due to a paradigm shift based on the most inner person’s evolution: consciousness. The power of consciousness is truly awesome and that makes me optimistic about our blue planet. After all, the best way to protect the material world is to understand that there is something else beyond matter, that our life is a path to attain a certain state of consciousness, that we are all one with this cosmic Conscience.
Some of you may be wondering what do I mean by consciousness. Words can be frustrating at times, because there are nothing more than pointers towards a reality. When that reality is something we cannot experience with our senses, words become a constraint to encompass a cumbersome concept. Other words around consciousness are awareness and spirituality. By spirituality, I do not mean religion. Religions are forms to express spirituality and share it with others. In my business career I have met persons from different origins and religions. My old friend Hans is a Buddhist, my pal Said is a Muslim and my former boss Ramon is now a Catholic Deacon. They all have something in common, they are aware that there is something else than the material world. That surely reflects on their leadership style and their business decisions. One can also be agnostic and have that awareness. He or she will then talk about energies or different dimensions of reality. External expressions of that inner awareness are different but there is a common idea to transcend. Everything that we go through and all our interactions must be seen as path to achieve consciousness, to transcend, to learn.
The material world also offers us some gates which they can offer us a glimpse of consciousness. Nature, forests, mountains, landscapes, open spaces, the sea, silence, acts of love, living the present moment in an intense way, sacred spaces, meditation, praying, overcoming challenges, etc. Each person has his or her own gate towards consciousness, but undoubtedly, when we look inwards and we find ourselves. We find consciousness. We find meaning. We find purpose in our life. We find happiness.
I said this is a revolution because most people in the XX century were focused outwards, on material things. This is not good or bad, it was just like that. We have really created tools that help us to do things and go to places much faster than ever before. The challenge of the XXI century is to be able to know why and where. I can go very far and very fast but it is meaningless if I do not know why I am going there. Among many other things, our focus on the material world, has led us to spend huge amounts of money, resources and brain power to make weapons to self-destroy ourselves many times. This proves the disconnection of humankind with its conscience. Now, it is time to awaken to that cosmic intelligence that has always been with us and we have chosen to neglect.
In my opinion, this is the context in which we need to lead individuals and organizations. Those who do not understand this cocktail, they will definitely miss the party.
