One question on everyone’s mind this year is “What is our future going to look like after all of these crisis events begin to subside?” Between a pandemic, a highly-divided country in terms of politics, and a powderkeg of social justice issues, it can be difficult to feel confident about the future. Economically speaking, one way we can move forward collectively however is through what’s known as a “Regenerative Economy.” Let’s consider this topic and how we can participate in it in a way that can create a better future for all of us.
In its simplest form, a regenerative economy is one that prioritizes sustainability by investing in continued growth. It is a multifaceted concept, and the exact details you get regarding what it is come down to who you ask and what their priorities are. For instance, some economists speak specifically of human capital, while others highlight the importance of renewable resources.
These and other aspects of a regenerative approach come together to create a system of commerce where business fuels more business instead of cannibalizing itself to create individual profit. To some people, this may seem like an unattainable utopia from a science-fiction novel. Even so, there are ways to instill these principles into commerce at the individual, business, industry, national and global levels.
The Main Pain Points a Regenerative Economy Addresses
In 2017, one report shared that just eight men owned wealth equivalent to 3.6 billion of the world’s poorest people. Since then, the gap between the haves and have-nots has only continued to widen. Ideally, a free market system allows true competition to take place, but the fact remains that people have different starting points. This provides the resources and opportunities for the wealthy to retain and improve their economic position at the cost of others.
In turn, this creates the cannibalism effect mentioned earlier. When half the global market has less money to put back into the system, it limits the regenerative properties of the economy. If the rich then hoard the money they own in cash or in assets or only recirculate that wealth among their own wealthy circles, the shortage grows worse as it feeds on the poor but feeds only itself.
The environment also takes an immense hit when it comes to sustainability. Producers who do not have the means to better protect themselves and their own resources may turn to unsustainable means of making a living because they can only plan for short-term survival. This can lead to harmful farming practices and other problems that make it difficult for a poorer economy to rise out of recessions and depressions even when its wealthier neighbors do.
Ways Businesses and Consumers Can Get Involved
Every business owner is a consumer, so separating the two into different factions is often a superficial division at best. Instead, business owners and other key decision-makers need to embrace this dual role they play in the market.
Corporate Social Responsibility
Prioritizing corporate social responsibility can help to re-inject some of that wealth back into communities that need it. As consumers continue to hold companies accountable, this might improve. The key is to discourage the wealthy from donating to each other’s nonprofits and instead support legitimate grassroots operations. Otherwise, the cycle of the rich feeding the rich continues and there is very little “trickle-down” taking place in the economy.
Human Capital Investment
Companies often treat workers like liabilities instead of as the assets they are and often leave the cost of human development in the hands of their workers. In short, people are expected to pay for their own degrees, seek out their own opportunities for development, occasionally take career and pay hits for the team. By investing in their human capital, companies can create a much better opportunity for workers to grow with them in a rapidly changing economy.
When it comes to teaching a man to fish instead of providing free fish, financial literacy is an excellent skill. People who know how to properly manage money and handle debt are in a better position to reach their financial goals, no matter how much money they make. Consumers should do what they can to take this matter into their own hands so they can take the right steps to climb to the next socio-economic class and beyond.
The Bottom Line
Many people view a regenerative economy as an attack on capitalism; it is not. Instead, what it does is provide a framework for holding the lead players in capitalism more accountable for world economies, how they, and how they affect the day-to-day lives of a literal 99% of the world’s population.
At Financial Rescue, we try to be part of that solution by helping people struggling with personal debt to secure financial freedom and realize their full potential. Contact us today for information on our tax relief and debt relief programs.