View source for Matrix of Economic Evolution

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=Description=

Presencing Institute:

“The Matrix of Economic Evolution maps both the journey of our economic development and the possible development space going forward.

Here is how we suggest that you read the matrix. Note the highlighted cells in each row of the matrix, indicating the critical factor in each developmental stage. In the 0.0 stage “Mother Nature” is highlighted, indicating that nature is the critical factor for the production function. Then, at stage 1.0, dependent labor (serfdom) became the critical developmental factor. The production function changes from one factor (nature) to two (nature, labor). In stage 2.0, when economies move from state- centered societies to market economies, capital becomes the critical developmental factor. Capital allows the new players in the market economy to be productive, and as a result the production function of the economic system now has three factors (nature, labor, capital).

In stage 3.0, technology emerges as the critical factor, and with that the factors of production evolve to four (nature, labor, capital, technology).
And finally, in the currently emerging stage 4.0, all of the factors become potential bottlenecks, or critical factors, in the emerging 21st-century economy.”
(https://www.presencing.com/ego-to-eco/economic-evolution)



=Discussion=

Presencing Institute:

“Our economies evolved around challenges and responses. Societies responded to the challenges of instability, growth, and domestic externalities by updating their economic logic, by innovating, and by introducing new coordination mechanisms (hierarchy, markets, networks, eco-system awareness). Each new stage came with an evolution in consciousness from traditional, to ego-centric, to stakeholder- centric, to eco-centric.

The 3 divides and eight acupuncture points represent social pathologies that affect our lives today and that originate in the underlying architecture of economic thought.

All economic systems deal with three processes: the (1) production, (2) distribution, and (3) consumption of goods and services. Societies in different regions, times, and cultures have developed different ways of structuring these processes. 


The Ego to Eco framework identifies five approaches to managing them:

0.0 : Organizing around place-based communities (pre-modern) 

1.0 : Organizing around centralized power: the state (one sector, centralized state) 

2.0 : Organizing around competition: state + market (two sectors, decentralized markets) 

3.0 : Organizing around special interest groups: state + market + NGOs (three sectors, conflicting) 

4.0 : Organizing around the commons (three sectors, co-creating) 

The economic logic of each earlier stage continues to exist in the later stages—but mitigated by a new meta-context that is defined by 2.0, 3.0, and sometimes 4.0 practices.

Following Thomas Kuhn’s work on scientific revolutions and Arnold Toynbee’s work on the rise and fall of civilizations, we can state that whenever an economic paradigm is unable to provide useful answers to a period’s biggest challenges, society will enter a transitional period in which sooner or later it replaces the existing logic and operating system with an updated and better one.

What then is the driving force for moving an economy or a society from one operating system to another? We believe that there are two primary ones: exterior challenges (the push factor) and the development of consciousness (the pull factor).

Societal evolution happens when the forces of push and pull meet: the external challenge that can no longer be ignored and the internal resonance with human consciousness and will. Wherever these two forces collide, we see mountains move, as they did in 1989 with the collapse of the Berlin Wall; in 1991 with the collapse of the Soviet Union; in 1994 with the collapse of the apartheid system in South Africa; in 2011 with the collapse of the Mubarak regime in Egypt; and in 2011 with the collapse of the Ghaddafi regime in Libya.

We have seen numerous 1.0 tyrants tumble. And we believe that in this decade we will see many more walls go down. And yet, the eight structural disconnects remind us that there are still major structures that need to be rethought, reinvented, and transformed. Just as a hundred years ago the Western economies moved from 2.0 to 3.0 by inventing mechanisms to mitigate negative domestic externalities, we are again facing the next set of issues: global externalities and an age of disruption that will keep generating systemic breakdowns. It’s not a matter of dealing with one more financial crisis and then we’re done. It’s a matter of addressing the systemic limits at their root.

The Matrix of Economic Evolution (below) looks at the eight elements that together make an economy work and describes their development through the stages of our economic system.
(https://www.presencing.com/ego-to-eco/economic-evolution)

[[Category:Economics]]
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[[Category:Commons Economics]]
[[Category:Evolution]]