Conceptual Framework for Ecological Economics Based on Systemic Principles of Life

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* Article: A Conceptual Framework for Ecological Economics Based on Systemic Principles of Life. By Fritjof Capra and Ove Jakobsen. International Journal of Social Economics, Vol. 44, No. 6, pp. 831-844, 2017



"In this article we suggest a new conceptual framework for economic theory and practice based on systemic principles of life. We refer to ecological economics using two meanings of the term “ecological”. In the strict scientific sense, ecological economics refers to an economic system that is consistent with and honors the basic principles of ecology, which, ultimately, are identical with what we call the systemic principles of life. In a broader sense ecological economics refers to economic theory and practice that see the economy as operating within, rather than dominating, the spheres of nature, society, and culture. We distil four fundamental principles for ecological economics based on the systems view of life and on Whitehead`s philosophy of organism. The four principles are; nested systems, self-generating networks, open systems, and cognitive interactions. We discuss how these principles can be applied to design an ecological economic system that is life-enhancing at individual, social and ecological levels. We argue that ecological economics should give priority to activities that maximize the well-being of human and non-human beings, as well as of entire ecosystems, and that its central purpose should be to serve the life processes in social and ecological systems."


Principle 1: Economy as a nested system

"For economics, the systems view of life is revolutionary. It implies that nature is superior to the economy, not vice versa. In ecological economics, the economy becomes the servant of nature, not the master of nature. The economic system must be integrated into the organic network of reality — the web of life. All actors are integrated in cooperative networks, searching for solutions leading to the enjoyment of life within resilient ecosystems and viable social systems.

The economy is a living system nested in other living systems — society, culture, politics, nature, and ultimately Gaia, the living Earth (see Figure 1). A healthy evolutionary process depends on the harmonious balance between the different systems; no-one dominates the others.


Principle 2: Economy as networks

According to the systems view of life, the basic pattern of organization of all living systems is the network; and since a network is a particular pattern of connections and relationships, thinking in terms of patterns and relationships is the very essence of systems thinking. As we have emphasized, the study of relationships concerns not only the relationships among the system’s components, but also the relationships between the system as a whole and its surrounding systems. The essential properties of a living system arise both from the interactions and relationships among its parts and from the relationships of the whole system to other things.

This view, that all things are integrated in dynamic networks, and that nothing can exist as an isolated atom, is in complete harmony with the philosophy of organism, which sees all organisms as interdependent both spatially and temporally. This interconnectedness between organisms and their natural and societal environment means that every organism is constituted, at least in part, by its connections to other organisms. From this ontological position, it is reasonable to claim that living entities derive much of their character from the social and ecological networks they are integrated parts of.

Such a systemic and “organismic” view of reality has several important consequences for economics. It implies that neither economy nor society are collections of objects, but are based on relationships between subjects. They function as integrated wholes and cannot survive atomized any more than any organism can survive in fragments. This means that economists and other social scientists, following the example of ecologists, need to study all processes as part of the web of life. If economics is studied separately from social and ecological contexts, and knowledge is expressed through narrowly defined mathematical models, it becomes abstract and remote from life. To understand the dynamic interconnectedness in the real world, holistic research models based on transdisciplinarity are of vital importance.

The fact that the basic pattern of organization of all living systems is the network means that an economy will be truly alive — flexible and capable of creative adaptations to changing circumstances — only if it is organized as a network, composed of smaller living networks, and integrated into larger social and ecological networks.

Hence, our environmental and social challenges should be addressed through building integrated local and regional networks where creative thinking is combined with practical experimentation. Dialogues in cooperative networks make it possible to be open for pluralistic values that exceed the economy’s traditional one-dimensional monetary scale. In economics, as in the management of business organizations, everything depends on an open-minded consideration of life as a whole. We must gain a clear vision of the wholeness of life.

An economy based on local networks linked together globally provides the best basis for developing co-responsible human beings. In such an economy, local and national interests will not seem divisive in our shared responsibility as global citizens, while we can also avoid global uniformity. Internationalizing is based upon a cooperative network of small societies while globalization represents membership in an abstract global community. Globalization is not about patterns for diverse interactions; it is about the constitution of a single global economy. Diversity is a guarantee for keeping relations dynamic and avoiding that they harden in a fixed pattern, which could in the long run lead to conflict and disunity.

According to the systems view of life, living organisms interact with their environment through “structural coupling,” i.e. through recurrent interactions, each of which triggers structural changes in the system (see Capra and Luisi 2014, p. 135). Over time, different environments will trigger different structural changes, and as a consequence no organism is exactly the same as any other organism of the same species: individuality is a basic property of life.

For a living economy this means that economic processes directly or indirectly affect and are affected by individuals, businesses, communities, and the environment, depending on local and regional circumstances. Hence, economic practice should always be adapted to changing regional conditions. If economic theory and practice ignore this context, this may cause serious negative unintended consequences, as is evident in today’s environmental, social and financial crisis.

Principle 3: Economy as an open system

Our systemic principles of life concern two main aspects of living systems: networks and flows. These two perspectives are unified in the concept of metabolism, the central characteristic of life. Metabolism, as we have mentioned, is defined as the ceaseless flow of energy and matter through a network of chemical reactions, which enables a living organism to continually generate, repair, and perpetuate itself. In our discussion of the principles of ecological economics we have until now addressed various implications of the network perspective, and we must now turn to the perspective of flows.

As we have mentioned, all living systems need to be open to continual flows of energy and matter, and all living systems produce wastes. In nature, however, organisms form communities, the ecosystems, in which the waste of one species is food for the next so that matter cycles continually through the ecosystem, while energy is dissipated at each stage. The only waste generated by the ecosystem as a whole is the heat energy of respiration, which is radiated into the atmosphere and is replenished continually from the sun through photosynthesis.

For a living economy this means that all economic processes need to be circular in three dimensions. Referring to the Gaia theory by James Lovelock and Lynn Margulis, we argue that ecological economics recognizes that economy, nature, and culture are integrated parts within a ‘living’ organism (Lovelock 1988). The art of progress is to preserve order amid change (Whitehead 1967). First of all, economic value chains must change from linearity to circularity. Retro-distribution, connecting consumption and production, consists of several sub-functions, including collecting, sorting, and reprocessing of various materials (see Figure 2.). Circular value chains make it possible to reduce both the consumption of virgin natural resources and the amount of waste that goes back to nature. To establish efficient material cycles in practice, collaboration between governments, manufactures, distributors and consumers are required.

Secondly, circularity is the basis of the connection between economy and nature. Sustainability depends on our ability to discover the connections between input and output of natural resources in the economic value chains. To develop a life-enhancing economy it is necessary to cooperate with nature on both sides. In this perspective, CO2 is not a cause; it is a symptom of a carbon based economy. In other words, to handle climate change we have to be aware of the patterns of interconnectedness between the input and the output side of the economy.

Finally, economy and culture also have a circular connection. Knowledge and values are essential to develop a life-enhancing economy. “On the one hand, knowledge exerts influence on the innovative processes in the economy and on the other hand changes in the economic sector influence cultural development” (Ingebrigtsen and Jakobsen 2007, p. 289). To understand how the economy works, contextual thinking, including nature and culture, is a prerquisite.

Principle 4: Economy as cognitive interactions — A sense of ethics

According to the systems view of life, all living systems interact cognitively with their environment in ways that are determined by their own internal organization. This is our fourth systemic principle of life. In the human realm, these cognitive interactions involve consciousness and culture, and in particular a sense of ethics. Our global economy, by contrast, is a network of financial flows that has been designed mechanically without any ethical framework. In fact, social inequality and social exclusion are inherent features of economic globalization, widening the gap between the rich and the poor and increasing world poverty. It is therefore most urgent to reintroduce an ethical framework within the context of communicative cooperation between co-responsible economic actors on all levels.

Ethics is usually associated with philosophy or religion, but it can also be considered from a scientific — or, perhaps, from a scientific and spiritual — perspective. When we study the long history of the evolution of life on Earth, we come to realize that nature sustains life by creating and nurturing communities. As soon as the first cells appeared on Earth, they formed tightly interlinked communities, known as bacterial colonies; and for billions of years, nature has maintained such communities at all levels of life. Natural selection favors those communities in which individuals act for the benefit of the community as a whole. In the human realm, we call this ethical behavior. So, ethics always has to do with community; it is behavior for the common good.

Today, we belong to many different communities, but all of us have two communities in common. We are all members of humanity, and we belong to oikos, the Earth Household, which is the Greek root “ecology.” In other words, we all belong to the ecological community of the global biosphere. As members of humanity, we need to respect human dignity and human rights; as members of the Earth Household, we need to respect nature’s inherent ability to sustain life.

Thus, ethical behavior today should be based on the two fundamental values of human dignity and ecological sustainability. If we do not succeed in incorporating these ethical values into our personal lives, businesses, politics, and our economies, natural selection will see to it that humanity does not survive. To establish principles for global ethical behavior — behavior for the common good of humanity and the Earth Household — is quite a challenge, but fortunately we have a magnificent document that covers the broad range of ecological sustainability, human dignity and human rights. It is the Earth Charter, a global declaration of 16 values and principles for building a just, sustainable, and peaceful world (see

The Earth Charter makes it evident that the principles of sustainability, justice, and peace are all interconnected. Truly sustainable development demands more than reducing our negative impact on nature. Equally important measures are contributions to fairness and to reducing the gap between rich and poor. Justice is a necessary condition for peaceful development.

From a systemic perspective, it is easy to see why a more equal economy functions better. The market is a network of integrated actors where customers, suppliers, competitors, communities, and other stakeholder groups are depending on each other. In such a situation, trust and responsibility are essential values. Cooperation, based on dynamic dialogue, allows more integrated solutions than the mechanisms of an atomistic and competitive economy. Equality and mutuality among the involved actors are necessary conditions for constructive cooperation. “When competition is replaced by cooperation as the main principle for interaction in the market, the development of solutions based upon the common good will gradually take place” (Ims and Jakobsen 2006). As sociologist and philosopher Jürgen Habermas explains, “cooperation presupposes that the partners disclose relevant and valid information without strategic action” (Habermas, 1982, pp. 263-271).

In ecological economics, cooperation is the fundamental principle for the coordination of activities, while competition has a subordinate function. “The competitive autonomous economic man has to be replaced by a cooperative social ecological man” (Ingebrigsten and Jakobsen, 2009). We claim that the systems view of life provides a better and more accurate description of the interplay between the actors in the market than an atomized description referring to autonomous actors in a competitive markets do. Market behavior based exclusively on competition will often lead to disintegration and egocentric behavior. We must replace greed, competition, and growth with solidarity, cooperation, and compassion."