The Next System Question and the New Economy Movement


Slowly, quietly, people concerned with achieving a sustainable and equitable society are beginning to get serious about two new challenges. The first involves what is best understood as the next system question. The second has come to be called the new economy movement. Movement forward in both cases is likely to intensify as social, economic, and ecological difficulties worsen. The long-term result could well lay foundations for a potentially far more radical institutional and systemic reconfiguration than many have so far been willing contemplate.

“For the most part, we have worked within this current system of political economy,” former presidential adviser James Gustave Speth observes, “but working within the system will not succeed in the end when what is needed is transformative change in the system itself.” Radical journalist Naomi Klein adds that when conservatives “react to evidence of human-induced climate change as if capitalism itself were coming under threat, it’s not because they are paranoid. It’s because they are paying attention.”

Behind the growing movement to formulate the challenge as systemic, rather than simply a matter of policy and traditional politics are two basic judgments: The first is that corporations in capitalist systems are inherently driven to grow—and growth poses fundamental challenges to global resources as well as other ecological limits such as pollution and global warming. The second is that in many countries—and especially the United States—corporations have long since reclaimed the power they temporarily lost to environmentalists in the 1960s and 1970s, and have been able to minimize or thwart regulatory efforts in an increasing number of critical areas.

Defining the challenge as systemic only begins to open the door to clarifying what a serious answer might entail. Neither of the traditional systems—corporate capitalism or state socialism—offers real answers. Speth’s book America the Possible provides a compendium of policy and institutional elements that might one day contribute to a new design. Klein writes that localist co-ops and other efforts would expand in a new system, and that “sectors that are not governed by the drive for increased yearly profit (the public sector, co-ops, local businesses, nonprofits) would expand their share of overall economic activity.”

Such general efforts suggest we are approaching the time when a multifaceted effort to confront the systemic design challenge head-on is necessary. Which in turn means a self-conscious effort to experiment with (and refine) key elements that might one day become building blocks for the next system—combined with a self-conscious academic effort to deal with the key theoretical, institutional, and policy issues involved. Systems are largely defined by how wealth is controlled, and the basic questions are straightforward: First, if you don’t like corporate capitalism and you don’t like state socialism, what do you want? Second, how do you get from here to there over time?

On-the-ground developments suggest the direction of potential answers to both questions. In the United States, for instance, the new economy movement noted at the outset can point to 130 million members of cooperatives, 10 million participants in worker-owned firms, 25 percent of electricity managed by public institutions and co-ops, hundreds of municipal and nonprofit land trusts, growing efforts to establish state-owned banks like that of North Dakota, and thousands of local food and other ecologically significant efforts. The government even temporarily nationalized General Motors and (in a complicated way) Chrysler before selling them off once profits began to flow.

There is also steadily growing social and economic pain. Growing concentrations of income and wealth amidst unemployment and poverty are increasingly hard to ignore. And Hurricane Sandy did more than a thousand environmentalist tracts to open the eyes of the citizenry—and this is likely only the beginning.

As long ago as the 1980s, studies by two leading sociologists—the late Seymour Martin Lipset and William Schneider—concluded that the “situation is much more brittle than it was at the end of the 1920s, just before the Great Depression, or in 1965, immediately preceding the unrest occasioned by the Vietnam War and the outbreak of racial tension . . . The outcome could very well be substantial support for movements seeking to change the system in a fundamental way.”

Such a conclusion, though premature, stands as a challenge to our own time. At minimum, it suggests it is time for both activists and academics to roll up their sleeves and get serious about work focused explicitly on systemic issues—both in terms of theory and institutional design, and of practical on-the-ground political, economic, and ecological development that can also help deal with growing difficulties no matter what.