147. Summer flashbacks (episodes that people still talk about)
Regenerative Economics, with John Fullerton
A warm welcome to the new year. We’ll resume normal transmission of the podcast in February. But to gear us up, I thought to release a summer flashback or two, delving way back in the archives to episodes that people still speak to me about today.
First up is an excerpt from the very first episode I recorded, with John Fullerton. He’s the former Wall Street executive who left that life, and through an amazing personal journey ended up founding the non-profit Capital Institute, dedicated to bringing about new, regenerative economic and financial systems.
“Regenerative economies are springing up everywhere ... there are thousands that we could choose from ... they’re doing it off an intuitive pull towards some future that they instinctively know needs to happen without having read any theoretical paper. This is the most powerful and promising sign because it says that this is happening as a response to the broken system.”
We had this conversation back in 2017, but it’s lost none of its currency, and gives wonderful context to the growing influence and activity of the Capital Institute today.
More on John Fullerton: John’s work draws deeply on systems thinking, a broad range of other contemporary and ancient schools of thought, and a range of ‘real world’ case studies, impact investing and other experiments on the ground. All this features in his extensive speaking and writing, including in his booklet, Regenerative Capitalism: How Universal Principles and Patterns Will Shape Our New Economy.
This conversation was recorded in May 2017.
-
Please note this transcript isn’t perfect, but hopefully serves to provide greater access to these conversations for those who need or like to read.
SPEAKERS
Anthony James, John Fullerton
Anthony 00:10
Welcome to the podcast, where you'll hear telling conversations with experts, executives, artists and leaders of all kinds from around the world, to inform and inspire the personal and big picture changes we need to become a just, sustainable and flourishing society.
Anthony 00:34
Hello, my name is Anthony James. Thanks for joining us for the very first episode. To kick off, we're featuring a conversation with John Fullerton, a former managing director of the old JP Morgan, as he puts it, and now founding president of the capital Institute, a nonprofit organization in the US dedicated to bringing about new regenerative economic and financial systems. Given the systems are so fundamental to the civilizational crisis we find ourselves in this is vital work, and a revealing conversation on a personal level as much as professional. John's work draws deeply on systems thinking, a broad range of other contemporary and ancient schools of thought, and a range of real world case studies impact investing, and other experiments on the ground. All this features in his extensive speaking and writing, including in his white paper, Regenerative capitalism: how universal principles and patterns will shape our new economy. Speaking with John was every bit as inspiring and enlightening as we thought it would be. So it's my great pleasure to introduce our first guest, John Fullerton
Anthony 01:40
Hello, John. Welcome, our first guest no less.
John 01:45
Well, it's a privilege Anthony to be with you in general and certainly to be your leadoff hitter, as we say in America.
Anthony 01:53
Terrific our opening batsman, as we would say, down here, but we know what you mean. So John, your personal story is a fascinating one, I'd love to start there. In many ways, it's emblematic of the sort of change we need for many of us at this time. So can I start by asking, how have you come to be doing what you're doing today, and seeing the world the way you're now seeing it?
John 02:14
I guess the short answer is I spent nearly 20 years on Wall Street at what I like to call the old JP Morgan, a firm that had really wonderful values. And it was a firm that I was very proud to work at. And I, I worked there through the mid 80s and 90s, at a time when global capital markets were a new thing. And globalization was a new thing and derivatives was a new thing. And it was a very exciting time. And, and, and it was almost like a drug. You know, it was, you know, young people were, were doing amazing things. Because, you know, it's sort of similar to today that except that the technology that we had was was simply spreadsheets, not you know, the this is pre internet. But I did it and I you know, the short version is I grew increasingly restless about where this work was leading, and what was the purpose in my life. And, and by 2001, when the merger with Chase happened, I pretty much had enough and knew that I didn't want to do that anymore, even though I had no idea what I wanted to do. So a few months after the merger, I took the opportunity just to walk away from it all and, and I was telling myself, I was going to take the summer off, and then get serious about what what would be the next chapter in the fall. And the first day of my getting serious and what would be my next chapter, I had a meeting downtown and near Wall Street, which is near where I worked. So I used to commute there every day. And I had this meeting at 930 in the morning. And it was a beautiful fall day in September. And when I got to the stop, before the stop I was going to, the subway stopped and a guy walked in and announced that they had just flown a plane into the Trade Center. And so I I got to the street right after the second plane hit and you can imagine the, you know, the the impact that had on me and
Anthony 04:21
yeah,
John 04:21
and again, to keep the story short, I ended up spending the next several years in what I sort of refer to as my deep thinking period. And I spent, I probably read more books in the next four years than I had read in all of my life prior to that. And that's how I discovered that there's an environmental systems crisis. And that's how I discovered that there's something called systems science. And that's how I discovered that there were planetary boundaries and that the economic system with all of its benefits was really the root cause of the both the ecological and social crises that were mounting. And, and as a as a finance guy I understood very well that if the economy is, is the problem, then finances is the driver of the problem because finance drives the economy. And so suddenly this sort of young whippersnapper who thought he knew everything about finance in the world, realized that I was complicit, not because I'm a bad person, but because of a system design, that no one really understood the implications of. And so I really set about sort of this, this big rethink is probably the best way to say it.
Anthony 05:39
There's so many aspects of that story that are so interesting to me, the fact that you left what you were doing without a plan is one of those things. What made you I guess, what was that compelling force do you think that made you just take that leap, and create the space I suppose?
John 05:56
Yeah, it is about creating space. And people have told me that, that I was very courageous or, and whatnot. And, you know, the truth is that I did that with the benefit of a quite amount of financial security, having worked on Wall Street for nearly 20 years. So I didn't view it as all that courageous, although, I do think that it does speak to one of our great challenges, though, because what I've learned since then, is that was a pretty weird thing to do. And, and most people can't imagine why someone would do that. And there was something about me that didn't see it as so crazy. But to answer your question, I had no real choice. It was really like a tug, you know, there was like a voice that that didn't allow me to keep doing what I was doing that I couldn't put off any longer. It had been speaking for years. And I, I couldn't put it off any longer.
Anthony 06:52
So there was this environment around you, a number of factors - that professional experience and also 911. I imagine it was quite the difficult period. Would that be right?
John 07:02
Yeah, you know, at the time I quit, it felt freeing. And it was you have to remember, this was pre 2008 financial crisis. So while while Wall Street was far from perfect, Morgan had a culture that was really the best that there was. And it wasn't like, I hated my job, or I hated the work, or I hated the people by any means. I had a lot of good friends. And I really loved the work, but it was, it was just becoming less and less meaningful. And more and more - I used to say it's, it feels like it's just become a fight. Everything's a fight. But it wasn't because I was outraged at the at the ethics. And in fact, I was as shocked at the ethics that came to light in the 2000s, I was as shocked as anyone else was, I could not believe it. So it was really more personal than it was - And you know, in hindsight, I'm really grateful that I walked away when I did, because now when I go around giving talks I can I always say, you know, I left in 2001. So don't blame me.
Anthony 08:15
It opened up a surprising Pandora's Box then in a way that you left with one thing in mind, but soon after, you discovered a much broader picture. So I'm fascinated about what was the trigger that led you into that space? Who did you first come across perhaps or what book?
John 08:35
That's a great question. I don't know if I know the answer that. I tell you I literally started wandering around bookstores and having books enter my hand. The early stuff was philosophical, spiritual. You know, it was definitely kind of this inner search that I was on. And I certainly remember early on in terms of the systemic crises, and its connection to economics, certainly early on was reading Schumacher, reading limits to growth, and reading Herman Daly. But, but there was no - oh and Paul Hawken's book that triggered Ray Anderson's epiphany, but I couldn't point to any one, it was just sort of this Rolling Thunder feeling of, I'd read one thing, and that would give me a desire to read five more things. And each one of those would lead me to five more things, and that'll happened pretty fast. But what started that I don't I don't really know.
Anthony 09:38
I'm curious about, I guess, the insights that you might draw from your experience of that transformation, because we know it's something obviously, that many people are trying to cultivate in other people now. I mean, we sort of have these chance experiences in many ways, but I, I suppose one of the key themes is indeed as we said before, just opening up the space for it if you can - create the context in your life that enables that. And then to trust it.
John 10:04
And the coincidence that you mentioned. I mean, that's the that's the key, this idea of that Jung termed synchronicity - that's been my guiding light, I would say. And I was in, you know, the despair came after I left my job. And I became more and more confused about, you know, what I wanted to do, and who was I and why was I having such a hard time at age 41 42 43, figuring out what I was meant to do. And I, you know, I have a family and three kids and I didn't leave Wall Street at a time when people made gazillions of dollars. So, you know, while I had a financial cushion, it wasn't like, some silly amount of money. So there's there was a need to be fiscally attuned. But somewhere in that despair, I stumbled upon a book called Synchronicity. And the basic idea is, I'm sure you're aware, is that there are coincidences happening all the time, that we often don't pay attention to. And the idea of synchronicity is you might want to start paying attention to those and see where they lead, and I could write a book about my pathway following synchronicity. In fact, I'm gonna write a book about it. It's, it's extraordinary. And I can speak from direct experience. And it doesn't mean that's the pathway for everyone, I realize, but certainly, as you said, creating the space and then essentially listening to what coincidences show up and and where they might lead has proven to be basically the design of the second half of my life, I guess, is the way to say it.
Anthony 11:48
You got a few days in this case, with your father, I noted in your story. And, and this, so this was really interesting to me, partly because I valued it myself. But also because I think it's part of what our culture needs more of, it's another one of those things that we would do well to restore, I think, are these sorts of connections. And it appears that this was a crystallizing moment really for you. I'd love it if you could relate some of that experience here.
John 12:18
Yeah, first you have to tell me where you heard about that. That's, you've done, you did some digging I guess?
Anthony 12:25
I did do some digging. Now I'd have to remember where I did find this. Amongst all the trenches that I dug into on John Fullerton stuff. Was it in the prologue of the white paper perhaps?
John 12:37
Yeah, I'm thinking I might have written about it in - exactly. Because it does - the conclusion of the story is, is, is kind of the punch line. But the the story is, so I, you know, I grew up - my dad who passed away, I think four years ago, maybe coming up on five, I have to think about it - at the ripe old age of 92. So he was in what in America we call the greatest generation, you know, he fought in World War Two. And was a very kind of traditional father. And so I grew up with very much a, you know, sort of being raised by my mom and my dad went to work. And we didn't have a strained relationship. But we didn't have what by today's standards, I would call a close, intimate relationship. And through my adolescent years, it grew more strained and, but we reconciled very nicely, including my asking him to be my best man in my wedding. So, you know, this is not a broken relationship by any means. But it turns out that I had never actually spent 24 hours alone with my dad that I could recall at any rate. And so when he was still healthy, and, and able to travel and whatnot, we decided to take a trip together. And we spent, I think it was like a three or maybe four day weekend, just driving around southern New England where we both, you know, an area that we both love and have a lot of connection to, with no plan other than just to hang out, you know, and, and my, my plan was to ask him about his life, because my dad was very humble and didn't talk about himself a lot. And I just wanted to get to know him better. And so, over the course of those three days, I would probe about all the topics you might imagine and time and time again, he would come back to his experience in the war. And what struck me is that that at his you know, roughly approaching age 90 with a you know, successful marriage and two young or two now grown up children both doing fine and you know, his business life had its ups and downs, but by and large, you know, he provided for his family and yet what he always wanted to come Back to in the conversation was the war and the twinkle in his eye changed when he talked about the purpose he felt in the war and his buddies and his comrades and whatnot. And he, you know, he was in the Navy and he was, he was on a ship off the Normandy invasion. And so he landed after the beach was secured and drove in a jeep into France and drove it off a cliff and broke his back. And then later, he was in the Pacific running a sub chaser. And he didn't really talk much about the Pacific Theater, which told me that that probably was a very unpleasant experience for him. But the point of it was that - the takeaway for me was that that experience, as hard as it was, is what really gave him meaning gave him a purpose in his life that he was reflecting on at, toward the end of his life. And so I, I use that as a lesson for us all who are wrestling with the really terrifying challenges in front of us with respect to not only climate change, but the the social, the political, the economic, and multiple ecological crises all sort of cascading at one time, it's you know, frankly, if you think about it, and understand it, it's easy to get overwhelmed. And so I hold my father's - the lesson of my father's life, which I'm sure going off to World War Two was no picnic. And so my what my hope is, is that our generation can, despite the hardships that are here and going to be coming find the meaning that I think so many in our generations are lacking without that real purpose.
Anthony 16:45
What do you see we're heading for - even just in the financial aspect, I suppose? Let's talk about that for a minute, in the sense that since the GFC, which really blew the lid off any sense of legitimacy to the current system with many, many more people, so it became a - it's become an uncontroversial thing almost to be suggesting that there is a systemic issue there. Yet, we haven't fixed it. And debt has ballooned further, even since then, how are you seeing what we're heading for, just in that domain that you're so familiar with?
John 17:18
Well first I have to correct you. It is controversial to suggest what you just did to those in finance. Everyone else seems to understand it. But I think the leaders in finance today, obviously accepted that there was a problem. But broadly, would say we've gone a large way to fixing the problem, including, for example, Jamie Dimon, the head of JPMorgan, the new JP Morgan, announcing that the banks, I forget whether he said his bank, or all banks now have enough capital, that there's no longer the too big to fail risk. And so, you know, I think the ideology in finance is so powerful, that we've reduced the financial crisis to some imprudent risk behavior, as opposed to there being something systemically wrong with the system. And to my complete chagrin, and feeling of personal failure no one is yet talking about the direct connection between the financial markets and how financial capital flows, and the systemic crises that we're talking about. It's almost as if we can - the financial system issue has been reduced to a regulatory challenge, and not a systemic crisis. But with respect to, you know, predicting the future, I'll take a pass on that. I think it's, I think one of the things we need to understand about working in this complexity space is that it is literally impossible to predict. And so there's sort of no point in trying - if one makes a correct prediction, it's more luck than anything, and chances are, you know, things, I mean, who would have predicted we would have Brexit and Trump a year ago? Which is obviously completely changed the context of what to think about in predicting anything. So that's - how's that for a duck?
Anthony 19:24
No, it's it's very much in keeping with what we're talking about in terms of the way we're thinking about these things.
John 19:29
Yeah.
Anthony 19:30
So it's notable that you wrote about the Edelman Trust Barometer late last year. And that remains one of the more remarkable reports we've seen in recent times to literally have this line in the executive summary - only 15% of the global population (and it's a big survey, obviously) believe the system is working. So in the context of the Trump and other phenomena, we're really talking about trying to elicit a preferable, systemic change?
John 20:03
Yeah, so systemic change is underway, triggered by this, what, you know, speaking for myself is a very unattractive intervention in the system. But maybe that's what it took, because speaking for the United States, four years with Hillary Clinton wasn't going to change much. And, you know, if you burn down a forest, it's not pretty and not fun. But it does, in a sense, as we were saying, on a personal level, it creates the space for what you and I like to refer to as this whole regenerative process. And, you know, when you're dealing with living civilizations, one can't be glib about the near term damage and pain and suffering and death that can happen. But if I sort of put my philosophical hat on, I come from myself with the idea that this was just the the necessary earthquake, to create the space and possibility for for the change, we need to happen. And now it's up to us to make sure the right kind of change fills the vacuum.
Anthony 21:12
And given that the glory days in inverted commas won't be coming back, that space will continue to open, you might imagine. So to have that preferable future ready to step in, so to speak, is so important.
John 21:26
Yep.
Anthony 21:26
So in that sense, starting the Capital Institute to work in this space, was that your sort of cornerstone response to your personal search? And what are you trying to do with that?
John 21:38
Yeah, no, that's a good way to say it. You know, I've been toying with the idea of - well, first, I thought about going back to school, and I tried to figure out where I would go and what I would study. And it became very clear to me that there was nowhere I could go to learn what I knew needed to be figured out. And we could have a long conversation about that. That's not because universities are not good. But it's, you know, we're the whole education system is trapped in the same reductionist paradigm that we're trying to break free from. So I was dabbling with this idea of starting a quote unquote, think tank for lack of a better term. It's funny how that's how I describe it. It's not very powerful.
Anthony 21:42
We went through the same thing.
John 22:09
Yeah, I'm sure - we'll have to compare notes on that.
Anthony 22:25
Yeah!
John 22:26
But my friends, my close friends, who knew what I was doing and thinking, they kind of looked at me, like, you know, what are you talking about? And then all of a sudden, the financial crisis happened. And then all of a sudden, they all said, Oh, I guess you're right. And so you should go do that. And it sort of - the financial crisis gave me the confidence to begin, you know, like - there's some famous Goethe quote, the most powerful act or whatever is just to begin, so I just began. And interestingly, the first thing I did, you'll appreciate this as a musician, I went and tried to create a piece of art that would signify or, or, or symbolize the idea of the Capitol Institute. And so the funky hand on our website was what came out of that process.
Anthony 23:16
Ah terrific.
John 23:16
Which is a sort of a distorted human hand, holding the earth and the idea being that the future is in our hands. And yet our hands are distorting the planet. But I, I didn't really have - there's no business plan - there is now although we're about to redo it. But there was no business plan when I started Capital Institute, it started very much in that kind of impulse way. But but the way I like to think about it is it's a place to attract people and work that is wrestling with this great challenge of our time, which I've since learned and understood is actually, you know, as big a shift as the shift from, you know, the ancient period to or the or the Middle Ages to the modern era. And I think 400 years later, we're going through another comparable shift. And someday historians will look at this and as I've written, they'll, they'll call it the second scientific revolution, and they'll probably call it something like, you know, the second enlightenment or something more poetic than that.
Anthony 24:22
Yes. And we certainly found great meaning in the Pope's Encyclical as you did.
John 24:26
Oh yeah!
Anthony 24:27
And how funny that in your white paper, you talk about the economic Copernican moment that we're facing here. And a matter of months later, the Pope, who you've called - with a sense of irony obviously - modernity's Galileo, should write about such things.
John 24:43
Yeah.
Anthony 24:43
How are you seeing that that has impacted? Have you seen that change the context in which you're operating?
John 24:52
That's a great question. And first of all, I I have to say that when I read the encyclical, it brought tears to my eyes.
Anthony 25:00
Yeah,
John 25:00
I mean, it blew, it blew me away.
Anthony 25:02
Yeah. Us too.
John 25:03
And I haven't yet I've been involved in many, many conversations. And I'm very keen to, in a sense, using my old terminology, leverage that opportunity and try to contribute to that platform that's been opened up. One of the interesting things I've learned, and this was at a meeting in Paris around the climate talks that was convened at Notre Dame, and included three people, if I remember correctly, that actually were, were some of the writers of the encyclical, along with, you know, a bunch of very senior, both Catholic and, and Episcopal priests and a bunch of climate people that were there - it was a fascinating meeting. And one of the things we learned is that even in the Catholic Church, there are very few priests that have even read the document, much less preach about it from the Pew. So and now, this is whatever, a year or so out of date, so that I'm sure it's changed to some degree, but but the person that told the story had some data that showed how few people even within the Catholic Church were using, using the document as a platform. So like everything, you know, when you read that, you would think, Oh, this is going to break this wide open, the Pope has more quote followers than most celebrities. But obviously, it's a slower path and a more complicated one, than you would guess. And of course, the pope took a lot of heat for dabbling in the field that he knows nothing about, quote, unquote, which is economics. And so again, we're trapped in this reductionist frame where the economists get to be the experts on economics, and the Pope gets to talk on Sunday and keep his mouth shut every other day is sort of the idea. So no easy answers, but as a kind of fork in the road fundamental shift, I think, slash hope that that document will prove to be a pivotal moment in the history of this work.
Anthony 27:06
And as the pope himself said, he's built upon a series of work in the church prior to that. And of course, it's sort of reflective of a broader emerging new story, as we talk about it that's happening generally. So this is, this is indeed the space we're working in. And when we're talking about imagining a new story, and with new goals - and you mentioned before people like Herman Daly and Schumacher - I'm curious in the context of the fundamental flaw in the idea of exponential infinite growth in an economy in the context of a finite planet. I guess if we're talking about qualitative growth, or optimizing consumption for quality of life outcomes, those sorts of things that would be universally recognized, how important is it going to be to create measures around that stuff to replace GDP as that proxy measure of a nation's well being? I ask that particularly in the context that interests me around how do we cultivate the trust in the transition process to go from that growth system to something that would very much potentially, and probably likely, be slower growth and or contraction, but for positive outcomes! So how can we construct a dynamic that actually develops the trust in a broader populace to be able to shift dynamics of work and debt and all those things that keep us held to the current system? Are the well being measures and quality of life measures - are they fundamental to this, do you think?
John 28:38
Yes, it's an area that we're spending a tremendous amount of time on - don't have all the answers, for sure, but do have at least what I would call the sort of the, the first generation of thinking on this that that I think, will be part of the, you know, whatever the new measures system is. And but let me also say that, that, that even though we think we - and I'll explain what I mean by that in a second - even though we think we know how to get started on this path, the piece I don't often talk about, very candidly, but I'll just say right here is that there's a kind of, how do you square the circle? How do you get from where we are to this new space without crashing the plane, so to speak? In other words we're, we're trying to switch out the engines while we're flying. And unfortunately, the greatest societal cost - I'll use a polite word - that I believe the financial crisis, will in the future we'll understand created, is the excess debt required to save the system that now is, has become a huge burden in transitioning the system. And we sort of think the financial crisis is over. But of course, I mean, Greece is obviously the most easily understood case, but every developed country, I don't know what happened to Australia. I haven't studied the fiscal situation there. But but most developed economies are now saddled with somewhere, you know, an order of magnitude of twice as much debt as they had before the financial crisis, which is extraordinary. I mean, just to bail out the banking system, you know, that didn't cost much money, but the impact on global economies was extraordinary. And so we've essentially fired our bullets to save the banking system, rather than to transition the economy. And, you know, given the current monetary system, we've therefore used up vital bullets. And so that then brings up a whole new conversation about the monetary system and how that needs to change that I won't, I won't try to get into. But to answer your question, the key piece that we're working on and I believe is a is a critical first step in this whole measurement thing is to understand the distinction between outcomes measures and measures of intrinsic health. And I always like to use the analogy of you know, when you go to the doctor, so as you know, we're working on a premise that no one's smart enough to figure out how to organize a quote, truly sustainable economy. So we ought to look to living systems and in a sense model, discover the patterns and principles that seem to be repeating themselves and then model the economy around those principles. And if one accepts that hypothesis, then, you know, again, the human body is an example of a living system. And when we go to the doctor, particularly if the doctor is is an integrated medicine doctor, as opposed to a reductionist old school doctor, but even reductionist old school doctors have intrinsic measures of health, like our blood pressure. And you and I don't care what our blood pressure is, other than the fact that it tells the doctor a lot about our intrinsic health. And so an outcome measure for our health might be something like, what's our weight, how fast we can run, you know, a marathon. But there's also intrinsic measures that relate to you know, all kinds of things in our blood and all kinds of things in our circulatory system. And so if that's true around the human body, and my hypothesis is correct, then it must be true about a human economy. For readers in my white paper that came out in 2015, if you go all the way to the appendix, there's our kind of initial ideas on what the 10 top measures of regenerative health would look like. And there are things like whether economic exchanges are win, win or win lose. And they're things like whether materials, and money and information circulate in a healthy way. So the circular economy, the Cradle to Cradle manufacturing, as well as ideas on money circulating in local economies, all fit into that framework. But the the relationship, you know, symbiotic relationships are, are central to all healthy living systems. And it turns out that our financial markets in the pursuit of this quote unquote, Global Efficiency, you know, the speculative capital markets now are by definition, exchanges that are primarily win lose - you know, speculation is a win lose proposition. And so the speculative capital markets are in violation of one of the core principles of regenerative health. And yet no one thinking about how to make big companies sustainable is talking about that, because they're all focused on outcomes, like how much co2 emissions does XYZ Corporation emit, and have they put solar panels on the roof? So we cheer Google that put solar panels on the roof. And we you know, we ridicule Exxon, but the reality is, and I wrote about this with respect to Unilever and the recent attempt by 3G to take over Unilever, until we have a proper relationship reconnected between investors and companies, companies have a massive difficulty in actually behaving in a way that's in line with regenerative health because we've severed this critical relationship between shareholders and and companies. So anyway, long winded answer but to get to the chase, you know, we think that the wet place to start is in places that are concrete - so regions cities bio regions, however one wants to define them and develop these you know, measures of regenerative health. We've got our idea on what the top 10 measures are - we're even working on a way to aggregate them together into an index. So we could put a number on it. And imagine if every city or bio region on the planet had an index of their regenerative health. And policy then was aimed toward improving that index rather than growing GDP. That's the future that we see.
Anthony 35:18
Yes, yes. So you've raised a particular topic there around the structure of organizations. And I guess the structural absolution of responsibility, in a sense. Now, we've been very inspired by your field guide. So we started one of our own, you might have seen.
John 35:33
I saw that.
Anthony 35:34
Yes, that was from you guys. And in that, I guess one of my key questions, because you're looking at actual case studies on the ground, and you're following them and you're working with them, in many instances, to see what it looks like - what this change looks like on the ground and how it's happening, how we can learn from each other and keep it going and build it. Are there any standout case studies or any stand out patterns among several case studies that have struck you, I guess, over the five years or so that you've been doing this?
John 36:04
Yeah. Yeah. So that's a great question. And to affirm the idea in terms of, you know, you, you use the language earlier of, you know, the new story or the new narrative. And our, our belief is that, you know, white papers and academic papers, explaining living systems and regenerative economies is not what's going to, it's gonna, that's not going to launch the parade that we need to have launched. And people want this to be real, and see that it's real. And so so the most important thing to say is that after doing this for over five years now, there is absolutely an emergent phenomenon happening, which is that regenerative economies are springing up everywhere. And we've documented something like 40 projects. But I know that there's 1000s, that, that exist that we have not documented. And you know, how we choose which ones to pick is, you know, there's no huge science around that. It's, but it's not, you know, the main point is, it's not just, there's only that we've only found 40. The point is that there's 1000s that we could choose from. And often, when we write about one, the people leading the projects, they often say things to us, like, yeah, that's what we're doing. In other words, they're doing it off a sort of an intuitive pull towards future that they instinctively know needs to happen, without having read any theoretical paper on how to do this stuff. And that, to me, is the most powerful and promising sign because it says that this is happening in it as a response to the broken system. And the other thing I would say is that, generally speaking, these things are happening, where pressure is high, they're not happening on Wall Street, they're not happening on Park Avenue, not happening in in, you know, where economies are working perfectly or even satisfactorily, they're happening in areas of great stress. And in response to that stress, which, by the way, is what the science tells you will happen - is that, you know, only when pressure is turned up, do systems change. And my colleague, my science colleague, Sally Garner, likes to use a simple analogy or example, if you stick a pot of water on the on the stove, and don't turn the heat on, nothing changes - but you turn the heat on, you apply pressure, water starts to boil. And so it changes the system you know, the structural system changes. And so you know, we find in the places that are under the most economic stress are where the most exciting things are happening. And and what we've done in the field guides, we've showed how how these different examples demonstrate the principles in the framework at work. And it's it's quite exciting and and gratifying to see see that happening and then the next trick is to accelerate the shift and facilitate and and support the change because there's there's typically massive obstacles for this change to be possible. And probably at the top of the list that all of these projects would say is is is figuring out the financing piece of it - you know, there's, the existing system has you know, some combination of getting the finance to flow and getting the the the dominant, you know, ever increasing larger and larger corporations with more and more economic power locked in, you know, with the system locked in and agriculture is probably the best case or the best example. So there's barriers that need to be removed from the current system, while these new green shoots can flourish from sort of a bottom up.
Anthony 36:11
Yeah, terrific insight. So does big business - just to use that term - have a place in this? Or is it just too beholden to those sorts of structures and the power that you're talking about?
John 40:13
No, I absolutely think big business does have a place. In fact, probably, it's impossible to imagine how we will make the shift without at least the support of some big business. And, you know, if for no other reason, you know, we need to shift the energy system, and that's, you know, that involves massive deployment of call it solar, call it whatever renewable you want. And that's a activity that, you know, certainly we can have distributed rooftop, and but you know, we need someone to make solar panels, and that's a big business need, and we need new innovation, and that ultimately, is a, you know, is is a something that big businesses properly incentivized, have a have a great role to play. So I think, I think the thing about big business is that they need to, in a sense, pause and, and grasp in a much more profound and serious way, what the implications of this are for them as human beings first, and then as businesses second. And understand that even their, their business interests are to be part of the solution. And, you know, I'm comforted that more and more big companies are shifting in that direction, even though, by and large, they're still trapped in this quarterly earnings, if they're, if they're public companies, they're still trapped in this quarterly earnings trap, which is, which has to be fixed. I mean it just has to be fixed or we won't succeed.
Anthony 41:44
Yep. And in terms of organizational structures, are there certain structural shifts, other structural shifts that you're imagining are also necessary, for example, is the cooperative structure - which seems to be undergoing a huge resurgence at the moment with some astounding success stories - is that a part of the picture in your mind?
John 42:03
Yeah, I think it's a part of the picture. So the way I think about this is, is again, to go back to the principles. So certainly, collaboration, cooperation are central to healthy living systems. But that doesn't mean that you can't have collaboration with privately owned companies, whether they're individually owned or owned by a few pension funds, or owned by 1000s of shareholders. It's more about, you know, getting the incentives aligned, so that, so the companies do what, what the system needs them to do. But you know, I can't imagine a world where, you know, the automobile manufacturing industry, for example, is owned in a cooperative, you know, where, where businesses need large amounts of capital, cooperatives are at a disadvantage, where businesses are primarily in the service sector, then you see some amazing success stories, using cooperative models. So to me, it's more about the principles than the model. And I would, I would want to see a world where lots of different models are experimented with and, and what works in Australia. I mean, there's a there's a great model in Australia, the - I'll probably mispronounce this, so you'll correct me - Bendigo Bank?
Anthony 43:29
Bendigo. Yes.
John 43:30
Bendigo Bank.
Anthony 43:31
I love that you tried that. That was terrific.
John 43:34
I've been corrected on that more than three times.
Anthony 43:36
Sure.
John 43:36
I keep butchering it. But we wrote a story about them. And they've got this amazing model in Australia of in a sense, the the language we use is working at the edges between the for profit and nonprofit sector where they've, you know, they've figured out a way to create bank branches in communities, they, you know, in a conventional sense, couldn't afford to, to support a branch, the branch would have been unprofitable. And they're this cooperative model that then requires the profits of the bank to be reinvested through nonprofits in the local economy. And it's, last I heard, I think, they've they've redistributed something like $40 million into small communities. So it's, and that's a for profit, publicly owned bank that's doing that. So if they can do it, why can't other banks do something like that?
Anthony 44:28
We actually had the CEO Mike Hirst introduce our launch the other week.
John 44:32
Beautiful.
Anthony 44:32
So yeah. Nice, nice little way to finish as it happens, I reckon, John, I've kept you longer than I promised, but it was so riveting I couldn't stop it any earlier. You know that I flagged with you that we were going to play a song of your nomination and you came up blank, but you did say you're a big fan of Bruce Springsteen.
John 44:49
I did.
Anthony 44:49
Which establishes your rock cred instantly, so well done.
John 44:53
Good New Jersey boy.
Anthony 44:55
Yeah, there you go. Yeah, terrific. Okay, if you don't have a favorite song that you'll nominate, I could suggest one?
John 45:02
Please do.
Anthony 45:02
Alright. You know what really occurred to me and it came out of the story
John 45:06
You're the musician, so this'll be helpful.
Anthony 45:08
You'll get a sense of how you're projecting anyway. Yeah. So the story with your dad, and a sense of that regeneration and sense of place.
John 45:16
Yeah.
Anthony 45:16
The song My Hometown was just in my mind all afternoon leading up to this conversation.
John 45:22
Really? Neat.
Anthony 45:22
So how does that song strike you?
John 45:24
That sounds great. In fact, let me let me throw in one last comment. I, when I was running years ago, in Florida, I was listening to a Springsteen tape. And I was listening to the lyrics more carefully than I normally would, because that's not something I'm very good at. And I had the idea that boy, you know, these are all basically love songs. Wouldn't it be cool if we could get Springsteen to write a love song to humanity and the planet as opposed to you know, on a more individual level? So it's a very fitting, very fitting choice of artists.
Anthony 45:56
Very good, very good. It's been a great pleasure, John, thanks a lot for spending the time and I'm looking forward to continuing our connection.
John 46:04
Absolutely. Thank you, Anthony.
Anthony 46:11
That was John Fullerton, founding president of the capital Institute online in New York. My name is Anthony James. Thanks for listening.
Find more:
Enrolments are now open for the third running of the flagship course of the Capital Institute: Introduction to Regenerative Economics (featuring a number of guests from this podcast).
Hear the rest of our conversation, including more on the role of big business and other business structures, in the last 10 minutes or so of episode 1.
Music:
43, by Owls of the Swamp.