#47: Slavery and System Change

The last System Change Investing (SCI) post of 2024 draws an important parallel between today and slavery in the southern US 200 years ago. Vested interests could not see that destructive systems inevitably would end. They resisted system change and often lost everything, including their homes, families and lives.

The challenge today is to do a far better job than we did then. We must help vested interests to see that they are much better off voluntarily driving system change, rather than opposing it and experiencing inevitable collapse.

From a business perspective, we must do a far better job of making the financial case for system change than we did 200 years ago. This post discusses how to do that, and the critical role SCI can play in driving voluntary system change.

Ending Versus Protecting Business

In the early to mid 1800s, slave owners often equated ending slavery to ending agriculture. They could not imagine agriculture without it. They thought that those opposing slavery were trying to destroy the economy and society. But in reality, abolitionists were trying to save society and protect the economy. History showed them to be right.

Modern economic and political systems do not hold companies fully responsible for harming the environment and society. This often makes it impossible to stop harm in competitive markets. These reductionistic, unintentionally destructive systems are the root causes of climate change and other Sustainable Development Goal (SDG) problems. Improving them is by far the most important action needed to protect the economy and society.

However, in the same way that slave owners could not imagine agriculture without slavery, vested interests today often cannot imagine an economy without externalities, limited liability, time value of money, and other system flaws that compel harm. They often think system change advocates are trying to destroy the economy, rather than save it. They sometimes believe system change supporters are against business, profits and investment returns. But of course, they are not.

There is nothing wrong with business and profits. They implicitly occur in abundance in nature. Successful (i.e. profitable) business is a central component of sustainable systems and essential for the long-term well-being of humanity.

Instead of being against business in general, system change advocates are against harmful business and profits, in the same way that abolitionists were against agriculture that violated innate, natural human rights. Harmful business (like harmful agriculture) inevitably will end. System change advocates seek to transform business into forms that can prosper over the very long term.

Transitional Time

We are in a unique, transitional time. Changing economic and political systems usually is not the responsibility of business. Instead, businesses largely are controlled by these systems. Under sustainable systems, this will continue. Companies will not seek to change systems, except to provide the input and suggestions that democratic governments need to serve society well.

However, during this transitional time from unsustainable to sustainable systems, successfully achieving voluntary system change requires that business play a much larger role, especially in weak regulatory environments. In the US, for example, the incoming administration is likely to scale back environmental and social protections.

Holding companies less responsible for harming the environment and society will accelerate degradation and inevitable system collapse. It is irrational to think that business can systematically degrade the environmental and social systems that enable business existence without serious consequences. Under weak regulatory environments, it is essential that the corporate and financial sectors play a much stronger role in driving system change.

Sustainability consultants could continue to promote company-focused strategies. These are easier to sell and provide some benefits to shareholders and other stakeholders. Asset managers could continue company-focused responsible investment strategies, possibly waiting for more supportive administrations before pursuing system change-based approaches.

Perhaps we have many years before unintentionally destructive systems collapse. Slave owners could not tell when slavery would end. But reality is giving us many signs that we are very near system transition. Every major environmental life support system is declining. Inequality and many other social problems are growing rapidly.

During the lead up to the American and French revolutions, end of US slavery, and other system collapses, vested interests often ignored environmental degradation and the suffering of average citizens.

Will we suffer the same consequences as other societies that could not change their systems before collapse? We have many advantages that past societies didn't, such as global communications in our interconnected society.

Life has survived and thrived on Earth for 3.8 billion years. We can do the same. We can replace our harmful, myopic systems with sustainable ones. How?

Make System Change Easy

System change is by far the most complex challenge facing business and society. Fortunately, we don't need to know all the answers up front to begin system change. Actually, we probably have all or nearly all the system change answers. There are many experts and proven system change models.

What's lacking is the society-wide collaboration and enthusiasm needed to implement these good ideas and models. Probably only the corporate and financial sectors have the power and resources needed to drive voluntary system change, especially in the US and other weak regulatory environments.

SCI provides an easy and powerful way to engage the corporate and financial sectors in system change. It rates companies on system change performance and shifts investments to system change leaders. Basic system change rating models can be used at first to facilitate implementation of SCI funds.

SCI is intended to facilitate system change by reducing investment risk, increasing returns, and providing many other benefits.

For more information about SCI, visit our website SystemChangeInvesting.com or listen to this recent SCI podcast.