This is the story of a little tree in the forest. It grows strong by taking nutrients from the soil, photons from the sun and carbon dioxide from the air. In return, it holds the terrain, generates fresh oxygen and houses animals. The more these complex relationships between the tree and its environment happen, the more the tree grows and flourishes. When does this growth end?
There will come a time when that tree is no longer in harmony with its surrounding. One of its relationships has gone sour. It lacked a vital element. Or on the contrary it had too much of something. In the end, the tree dies and releases the carbon it captured during its life.
One way to look at the economy is simply as a way to keep score on the exchanges we make. This is worth that amount to you, and that is worth this amount to me. We can agree on the value of things. We do it every time we pay for something. We encapsulate that agreement in the form of a financial transaction. The more we agree on the value of something, and then the more we trade capital, the more we are generating growth. The first path to growth is generating more exchanges.
Let’s track back to the agreement within a transaction. We acknowledged that for a transaction to happen both parties must agree on the value of things. A second path for growth is in increasing the very amounts that are traded. That is to say that the initial value is now perceived as higher. To create such an exchange, more capital is required. For growth to happen in this case, the frequency of exchanges doesn’t need to increase, but the value in the exchange does.
Allow me to share a parallel thought here. This second aspect of growth is where a new narrative will change our sense of the “imperative to growth”. In the future, we cannot continue to agree to attribute value on the same things as in the past. This value shift should stunt old growth by a reframing of values fit for the 21st century anthropocene. Then again, it will simply shift value elsewhere and new growth will continue in other places.
In business terms, the two paths to growth come from either more sales or better margins. But what about in nature? How does a forest manage growth? Do these 2 aspects of growth apply? Is there an imperative to growth? And end?
There is no end to growth, the same way there is no end to life in a forest. Sure some trees die. They gave birth to other trees in the mean time. And if ever the mature forest wasn’t able to fulfill the needs of so many trees. Naturally, more would die. A forrest fire would reboot the system. And growth would start over from new exchanges with what lived on. In the end, exchanges and thus the first path to growth continues to occur.
If growth is simply an effect of the amount of exchanges amongst parties, the more an economic exchange occurs, the more capital it creates. Then when ressources get scarce, a second form of growth takes over. A value shift occurs and a smaller frequency of exchanges hold greater value. Then the ressources run out or the relationships sawer. That day, one party can not respond to the offer. That party dies. New opportunities arrise. Somewhere exchanges are multiplying. Growth happens elsewhere. And the growth cycle continues.
This is the story of a little economy in the global market. It grew strong by taking elements from the soil, energy from the crust and fresh water from the lakes. In return, it offered stakeholder dividends, generated jobs and housed the wealthy. The more these complex relationships between the economy and its environment happen, the more economy grows and flourishes? But what will happen when the values shift and a second path to growth begins? Which economy will thrive on frequency of exchanges? What will happen to the old economies?
There will come a time when that old economy is back to a harmony with its surrounding. All of the relationships must be managed with an eye on good growth. That old economy should find the right amount not to lack or supersede anything. That is without falling into scarcity and a major value shift. In the end, if that old economy continues to grow in balance, it will have learned to manage the carbon it generated during its life and replenish its resources and relationships.