I hope you are well. And if you are, it is worth noticing that for a moment. The simple fact that you have the time and space to read something like this already places you, like me, among the more fortunate parts of the global population. That is not a moral statement, just a reminder of perspective. There are many more people for whom things look very different.

Something related to that perspective caught my attention recently. The latest World Happiness Report shows a shift that is easy to overlook but hard to ignore once you see it. In the richest countries, mostly English-speaking and those closely connected to them such as the Netherlands, younger generations report lower levels of life satisfaction than before. That breaks with a long-standing pattern. Life satisfaction usually follows a U-shape, relatively high in youth and later life, dipping in midlife. That curve is now starting to bend in unexpected ways.

This is not happening in isolation. It aligns with worsening housing prospects, more precarious forms of work, and widening wealth gaps that affect younger cohorts more than others. I have written about this elsewhere, so I will not repeat the full argument here. But it is worth pausing on it. If you have children, it may be worth asking how they see it.

Still, that is not what this piece is about.

What I want to explore here is something more specific, and perhaps more uncomfortable. There is a growing group of voices arguing that the sustainability transition is overstated, unnecessary, or already well underway thanks to markets and technology. The more careful among them no longer deny climate change outright. That position has become too costly to defend. Instead, the argument has shifted. It has become more refined, more data-driven, and in some ways more persuasive because of that.

In this piece I want to unpack three recurring tactics in these arguments. They are not about denying facts outright. They are about shaping how those facts are interpreted. The first concerns the focus you choose and the story you tell. The second is about the data you present and how you present it. The third, and most subtle, is about how research itself is framed and tested.

As always, I will start with a short version before moving into more detail.

So, let’s start with focus and story. The ecomodernist move here is to root everything in a particular version of the Enlightenment. Not the historical one, but a simplified one: Reason, Science, Progress. From there the line is almost automatic. Progress leads to growth, and growth solves our problems. Anyone who doubts this is not just wrong. They are irrational, standing against the direction of history.

What makes this powerful is that it is self-sealing. Environmental failure does not challenge the model. It reinforces it. Climate change? More innovation. Resource scarcity? Better technology. The answer is always the same. The model never comes into question.

Add to this the framing move. Present yourself as pro-progress, and critics become anti-progress almost by definition. You don’t have to argue that explicitly. The language does the work.

And lastly the academic layer. A large majority of economists endorses green growth. But the strong est predictor of that endorsement is not expertise in decoupling. It is the prior belief that growth is necessary for well-being. The conclusion drives the reading of the evidence, not the other way around.

Then there is data. The ecomodernist does not invent numbers. They select them. Show per-capita emissions instead of totals. Show a few countries instead of the global panel. Show the last decade instead of the long run. Show production-based emissions instead of consumption-based ones. Each of these choices can be defended. Together they create a very particular picture.

The problem is not that the numbers are wrong. It is that the picture is incomplete in a systematic way.

If you step back and look across two centuries, the story becomes much less comfortable. Genuine green growth, absolute decoupling at a rate consistent with Paris targets while the economy keeps expanding, is rare. Essentially anecdotal. And when it does occur, it does not last. Once growth resumes, the pattern reverses.

And then research. This is the most sophisticated move. Not because it looks less scientific, but because it looks more so. Formalise a theory in a way that strips out what matters most. Choose a proxy that only partially matches the concept. Run the test. Present the outcome as a clean falsification.

A recent attempt to test the doughnut economy does exactly this. It uses a dispersion statistic that cannot capture planetary boundary violations. It replaces actual thresholds with normalized endpoints. And instead of measuring capitalism, it uses a proxy for market liberalism. The result looks precise, but the core of the theory is gone.

When the same framework is measured properly, the picture is very different. Ecological overshoot is large. Extreme in some cases. A relatively small group of countries drives a disproportionate share of it, while experiencing only limited social shortfall. And the gap is not closing. It is widening. The difference is in how the question is constructed.

In what follows, I will go deeper. If you have the time, it is worth reading. It helps to see more clearly, and it gives you something to hold on to when you run into these arguments.

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1. Focus and story: the art of the flattering mirror

Let’s start with the most fundamental tactic: framing. When you are in the business of ecomodernism, or what the political ecologist Giorgos Kallis more precisely calls “post-environmentalism”, there are a few reliable tricks of focus and narrative.

Post-environmentalism, associated above all with the Breakthrough Institute and its co-founders Ted Nordhaus and Michael Shellenberger, rejects the idea of limits and instead advocates urbanization, industrialization, and agricultural intensification as the path to environmental protection. The 2015 Ecomodernist Manifesto is its most polished product. But the intellectual roots go further: to Steven Pinker’s Enlightenment Now, Hans Rosling’s Factfulness, and the broader “New Optimist” literature that has found a large and enthusiastic audience precisely because it tells people what they want to hear. WE DON’T NEED CHANGE! WE DON’T NEED TO GIVE UP ANYTHING. Technology and markets will fix it. Progress is the law of nature.

Relax.

If it was really true, why did we not solve our sustainability problems yet?

The first trick is to root everything in the Enlightenment. Not the historical Enlightenment, complicated, contested, entangled with colonialism and enclosure and the rationalisation of exploitation, but a mythologized one: Reason, Science, Progress, Freedom. Pinker makes this move explicitly and grandly. His argument is essentially that the Enlightenment gave us empiricism and markets, empiricism and markets gave us growth, and growth gave us everything good: longevity, literacy, falling child mortality, democracy, fewer wars. It is a beautiful story. The problem is that it is a story and not history. It is a founding myth dressed in data.

But the philosophical move is more subtle and more dangerous than mere cherry-picking. Pinker is not simply saying that things got better. He is making a Kantian claim: that history has a direction, that Reason drives it, and that this direction is good. This is secular providentialism The idea, running from Turgot and Condorcet through Herbert Spencer and now through Pinker, that social evolution is progressive by nature. Setbacks are temporary deviations. Problems are inputs for solutions. The arc of history bends toward improvement because that is what Reason does. Innovation is not just useful; it is the mechanism of historical destiny.

This matters enormously because it makes the framework self-sealing. Every environmental problem becomes evidence that more growth and more innovation are needed, not evidence against the model. Climate change? We need more technology. Biodiversity loss? Better agricultural intensification. Resource depletion? Innovation will find substitutes. The framework cannot be falsified because every failure is reinterpreted as a call for more of the same. Anyone who suggests that the model itself is the problem is not just wrong: they are irrational, standing against the direction of history, betraying the Enlightenment project. They are "romantics," "primitivists," "doomers." The story is structured so that criticism is pre-emptively delegitimized.

What the story leaves out is everything inconvenient. Don’t mention class struggle. Don’t mention colonialism. Don’t mention that the institutions which generated mass literacy and public health were often built through political battles against precisely the interests that now invoke their legacy. Mention that we “stand on the shoulders of giants” only if we carefully select which giants and romanticise them and ignore the conditions under which those shoulders were built. Don’t mention that the Industrial Revolution that lifted average incomes also produced the ecological debt we are now trying to repay. Critics have shown that the New Optimists’ progress narratives rest on shaky assumptions, cherry-picked data, and a faulty moral compass: they confuse what was, in centuries past, with what could have been.

What this framing ultimately accomplishes is to present the current economic model as the necessary consequence of Reason itself. Doubt the model and you doubt Reason. Doubt growth and you doubt progress. You are not just wrong: you are unenlightened.

The second trick follows directly. Post-environmentalists frame positive messages, such as ecomodernism, eco-pragmatism, environmental progress, and then critics must argue against these good things, unwittingly reinforcing the framing in the process. Call yourself "pro-progress" and your critic is implicitly "anti-progress." Call your agenda "pragmatic" and alternatives look utopian. The political scientist George Lakoff called this dynamic explicitly, and the Breakthrough Institute has applied it with considerable skill. As Kallis and co-authors show in their detailed discourse analysis, this explains much of post-environmentalism's staying power: its politics align with powerful interests who benefit from arguing that accelerating capitalist modernisation will save the environment. The story is appealing because it is convenient. It tells incumbent industries and their political allies that nothing structural needs to change; just more innovation, more growth, more of the same.

The third trick is the most important for the sustainability debate specifically: the paradigm-conformity effect. Among academics, anyone who questions the green growth premise faces a significant headwind. A large survey of over three thousand researchers in 101 countries found that 59% endorsed the feasibility of green growth globally and among economists the figure rose to 74%. The single strongest predictor of green growth endorsement was not expertise in decoupling science. It was the prior belief that economic growth is essential for human well-being. In other words: the conclusion drives the evidence-reading, not the other way around. Those who question whether innovation will rescue us are swimming against the dominant framework and the dominant framework is not purely empirical. It is also ideological. If you deviate too far, you risk being labelled unserious, your models unfunded, your policy proposals ignored. The Enlightenment story creates the atmosphere in which the data is read.

The fourth trick is the conflation of improvement with sufficiency, and it operates through careful choices about what to measure, where, and over what time period. Show per-capita emissions rather than absolute totals. Show national figures rather than global ones. Show the last decade rather than the last century. Show production-based emissions rather than consumption-based ones, which conveniently move the carbon footprint of wealthy countries’ imports offshore. Each of these choices, individually defensible, collectively constructs a picture of progress that the underlying reality does not support.

And here the new research is devastating. A comprehensive historical study examining 200 years of data found that the large majority of cumulative fossil-fuel CO₂ reduction occurred not during green growth but during recessions — wars, financial crises, pandemics. Just five global crises account for roughly 40% of all fossil-fuel CO₂ reduction since 1820. What we call “genuine green growth” , absolute decoupling at a rate consistent with Paris climate targets and robust economic expansion, is, in the historical record, essentially anecdotal. A major new study of material footprint across 105 countries gives this a precise name: temporal cherry-picking, spatial cherry-picking, and overshoot-level cherry-picking. You choose the time window, the country, and the sustainability threshold that makes the story look best. The methodology produces the conclusion before the data is examined. More on the data in the next section.

What the ecomodernist story never tells you is that the Enlightenment progress narrative was built under very different planetary conditions. We are no longer operating with the same slack in the system. Seven of nine planetary boundaries have been exceeded. The atmosphere does not average across countries. It does not care whether we count per-capita or per-unit-of-GDP. Celebrating the current trajectory as proof that the system is working is like praising someone for slowing down from 140 to 120 km/h as they approach a red light.

The mirror is flattering. But it is also facing the wrong direction.

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2. Data: Selection over selection

The second tactic is data. The ecomodernist does not invent numbers. They select them. They choose the indicator, the time period, the geographic scope, and the unit of measurement that makes the story look best. Each choice is individually defensible. Collectively, they construct a picture that the underlying reality does not support. Let me show you how this works in practice, using a simple taxonomy and three moves. And I will do only the ‘core’ discussion: decoupling between economic growth and carbon emissions.

The taxonomy you need

Before anything else, you need to understand that “decoupling” is not one thing. It is at least three things, and conflating them is the oldest trick in the book. Relative decoupling means GDP grows faster than emissions or resource use. Emissions still rise, just more slowly than the economy. This is the most common pattern globally and completely compatible with continued ecological destruction. Absolute decoupling means total emissions fall while GDP grows, genuinely different and much rarer. And then there is what we might call sufficient decoupling: absolute decoupling fast enough to respect our fair share of the remaining carbon budget. This is the standard that actually matters for planetary boundaries. According to the data, it requires roughly ten times the current rate of decoupling achieved by even the best-performing countries.

Almost every optimistic claim you will encounter in the ecomodernist literature conflates the first with the second, or the second with the third. When someone shows you a graph of “successful decoupling,” the first question to ask is always: which kind?

Move one: show per capita, hide the total

This is the most common trick and the easiest to execute. Take a wealthy European country. Show its CO₂ emissions per capita over the last two decades (see figure below). The line goes down. It looks like progress. It feels like progress.

This suggests that this is a global phenomenon: Even Nigeria! Even Azerbijan! And these data are correct, so why so negative?

Well, the problem is that what determines whether we stay within planetary boundaries is not emissions per person but total emissions the sum of everything humanity puts into the atmosphere.

But even using not per capita data, but total emissions, we have a trick: geographic selection. Show Germany, Denmark, the UK. Do not show the global panel. A study covering 164 countries found that while 49 countries have achieved some form of decoupling, 115 have not, and globally the association between GDP per capita and CO₂ emissions per capita remains positive. The optimistic story is built on roughly 30% of countries and presented as if it describes the world.

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Move two: choose your time window

The second move is temporal. You show the period that looks best and stop there. Perfect framing. But the effect is systematic and the new research is unambiguous about it.

Take the United Kingdom, frequently cited as a model of green growth. If you look at 1990–2021, you see an inverted U-shape: material footprint rising then falling as GDP grows (see also figure above for carbon). It looks like the Environmental Kuznets Curve in action, the theoretical idea that economies automatically clean up after themselves once they reach sufficient wealth (see blog #43). Now extend the same analysis back to 1875. The inverted U disappears. What you see instead is a predominantly linear relationship across 147 years: more income, more material consumption. The apparent turning point in the recent period is not a structural transformation. It is a temporary fluctuation, partly driven by the 2008 financial crisis and the housing bust, sitting on top of a persistent long-run trend of coupled growth.

The researchers name three specific forms of cherry-picking at work. Spatial cherry-picking: spotlighting individual countries while ignoring the global panel. Temporal cherry-picking: using short time windows where dips are mistaken for structural change. And overshoot-level cherry-picking: claiming decoupling success at consumption levels far above any plausible sustainability threshold. The UK’s material footprint, despite its recent decline, remains well above the 6–8 tonnes per capita corridor that sustainability science suggests is compatible with a safe operating space. Decoupling from an unsustainable level, at an insufficient rate, in a short window, is not green growth. It is a flattering camera angle.

When you look at all 105 countries together rather than selected cases, the Environmental Kuznets Curve simply does not appear. The panel regression shows a positive and statistically significant relationship between GDP and material footprint throughout the entire 1970–2023 period. Individual success stories are not making the collective difference required.

The atmosphere does not average. It accumulates. Globally, there is only evidence for relative decoupling. Total CO₂ emissions hit an all-time high of 37.8 gigatonnes in 2024. While selected European countries were showing their beautiful per-capita downward trends, the global total kept rising.

Move three: count only what you can see

The third move is definitional. Most decoupling statistics count production-based emissions, what is physically emitted within a country’s borders. This is the number that goes into national climate commitments and gets reported in the headlines. But wealthy countries have extensively offshored their carbon-intensive production. When you instead count consumption-based emissions, including the carbon embedded in everything a country imports, the decoupling picture deteriorates sharply. One analysis found that switching from production-based to consumption-based accounting reduces the number of country-year instances of absolute decoupling by 49%.

The same logic applies within sectors. When you account for the full supply chain of electricity generation. not just the direct emissions from power plants but the upstream emissions from fuel extraction, refining, infrastructure, and the materials used to build renewable energy systems. total emissions are consistently around 20% higher than the figures that appear in official statistics. Solar panels and wind turbines have zero direct operational emissions. They do not have zero life-cycle emissions. Counting only what you can see at the smokestack is not neutral methodology. It is a choice.

What the data actually shows

Put these three moves together and the picture that emerges is very different from the one in the ecomodernist presentation.

A comprehensive historical study examining two centuries of data across all world regions found that roughly 60% of cumulative fossil-fuel CO₂ reduction occurred not during green growth but during economic recessions. Just five global crises — the two World Wars, the 1929 crash, the 1970s oil crises, and COVID-19 — account for around 40% of all fossil-fuel CO₂ reduction since 1820. The episodes of “genuine green growth” — absolute decoupling at a rate consistent with Paris targets and robust economic expansion — are, across 200 years of industrial history, essentially anecdotal. And the episodes that did occur were reversible: the UK’s celebrated seven-year run of absolute decoupling ended when growth resumed. France achieved the same for seven years in 1979–1986. Japan, Germany, Belgium — the same pattern each time.

On the energy sector specifically, scenario modelling to 2050 across multiple world regions found that achieving net-zero energy emissions under continued economic growth would require annual improvements in technology intensity consistently above 10%. The highest single-year improvement ever recorded was 3.3%, in 2015–2016, a year often celebrated as proof that decoupling was finally happening at scale. Achieving the required rate every year for 25 consecutive years, across all regions, while continuing to grow the global economy, has no historical precedent. The only scenarios in which emission reductions are large enough are those in which economic growth is also significantly lower, or negative.

The structural reasons are not mysterious. Rebound effects offset efficiency gains, studies find that efficiency improvements are offset by 78–101% through induced demand, Jevons’ paradox playing out in real time. Offshoring moves carbon-intensive production across borders without removing it from the atmosphere. Services are not immaterial: data centres, logistics, finance, all sectors carry comparable climate and water footprints to manufacturing when measured on a full life-cycle basis. And the IPCC’s favoured mitigation scenarios still rely heavily on negative emissions technologies, such as carbon capture, bioenergy with carbon capture and storage, that do not yet exist at the scale assumed, and may never do so.

The data, read honestly and in full, does not tell the ecomodernist story. It tells a more difficult one: that the decoupling we have achieved is real but insufficient, concentrated in wealthy countries, often temporary, dependent on accounting choices that make rich nations’ footprints look smaller than they are, and nowhere near the rate required to stay within planetary boundaries while continuing to grow. The graphs look good if you choose the right country, the right time window, the right unit of measurement, and the right emissions boundary. Change any one of those choices and the picture changes with it.

That is not science. That is curation.

3. Research: how to win before the data speaks

The third tactic operates at the level of knowledge production itself. It is the most sophisticated and the hardest to spot, because it mimics the form of science while quietly pre-loading the conclusions. Three moves: manufacturing the question, selecting the method, and choosing the proxy.

Move one: formalize selectively

Good science requires that ideas be made testable. The ecomodernist research programme is skilled at demanding this of its critics while exempting itself. When degrowth economists claim that growth is structurally incompatible with planetary boundaries, the response is swift: show me the model, show me the falsifiable hypothesis.

Watch what happens when the formalization is actually attempted. A recent paper set out to formally test Kate Raworth’s doughnut economy model. The authors translated the doughnut into a measurable index, ran the regressions, and concluded that the predicted relationship does not hold. A clean falsification. Case closed.

Except look at what happened in the translation. The doughnut framework is built around two fundamentally different kinds of limits: a social foundation, below which people experience critical deprivation, and an ecological ceiling, beyond which Earth-system processes become dangerously destabilized. These are not symmetric. Crossing a planetary boundary can trigger non-linear system change. Falling short of a social standard is terrible but does not restructure the atmosphere.

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The paper measures none of this. Instead it uses the coefficient of variation (CV) across normalized indicators as its measure of imbalance. The CV captures whether different indicators are dispersed from each other. It does not capture ecological overshoot. And the normalization does not use planetary boundaries as goalposts. It uses arbitrarily chosen endpoints. A country at exactly the planetary boundary for CO₂ scores wherever it happens to fall on the authors’ normalized scale. The threshold disappears from the analysis.

We now know exactly what proper doughnut measurement looks like, because Fanning and Raworth published it in Nature last year. Their framework measures ecological indicators against actual planetary boundary thresholds, with the pre-industrial Holocene baseline as zero. The results are specific: chemical pollution is currently 3,174% beyond its planetary boundary. Species extinction 900% beyond. CO₂ concentration 94% beyond its safe limit. These are not dispersion statistics. They are threshold violations. Meanwhile the richest 20% of countries, with 15% of world population, contribute more than 40% of annual ecological overshoot while experiencing only around 2% of global social shortfall. The poorest 40% hold 63% of global social shortfall while contributing 4% of ecological overshoot. This distributional structure is the analytical heart of the doughnut argument. The CV cannot see any of it.

There is a further problem. The method assumes that low CV is the desirable state. But a country could achieve low CV by being uniformly bad on everything. Equal misery scores as balanced. The paper’s own authors acknowledge this. The formalization does not just simplify the theory. It reverses it.

The demand for testability is routinely weaponized against structural critique. If you want to be taken seriously, you must formalize. When you formalize, you must simplify. When you simplify, you lose what makes the theory interesting: the asymmetry between social and ecological limits, the role of planetary boundaries as hard thresholds, and the distributional structure that shows who overshoots and who goes without. Strip those out and you can falsify the skeleton while leaving the substance untouched.

Move two: choose your proxy

The same paper uses the Economic Freedom of the World index, produced by the Fraser Institute, as its measure of capitalism. The index combines property rights, sound money, trade openness, and regulatory scope into a single score. A country can score highly because it has strong institutions and reliable rule of law, while also having a large welfare state and extensive environmental regulation. The index bundles together features that theorists of capitalism would treat very differently. What was measured was not capitalism. It was a particular composite of market institutions that correlates imperfectly with what the degrowth literature means when it identifies capitalism as the driver of ecological overshoot. The proxy does not match the concept. The test does not test the hypothesis. And yet the conclusion circulates as a falsification of degrowth.

This pattern is pervasive. Carbon intensity per unit of GDP stands in for ecological impact, erasing absolute scale. GDP per capita stands in for well-being, erasing distribution. Each substitution is individually small. Accumulated across a research programme, they systematically tilt findings toward the incumbent paradigm.

Move three: manufacture uncertainty where there is consensus

Where the scientific evidence is inconvenient, the ecomodernist research programme emphasizes uncertainty and the need for more research. Where the evidence for the preferred view is thin, optimistic projections are presented as established findings.

The Fanning and Raworth data make the gap visible. While global GDP more than doubled between 2000 and 2022, the median level of ecological overshoot increased from 75% above the planetary boundary to 96% above it. Social shortfall improved modestly. But to eliminate it by 2030 would require rates of improvement nearly five times faster than current trends. To stop ecological overshoot by 2050 would require immediately reversing direction and accelerating nearly twice as fast the other way. These are not gaps that innovation is closing. They are gaps the current growth trajectory is widening.

The survey of over three thousand researchers we discussed earlier is revealing here too. Green growth endorsement is strongest among economists and weakest among Earth and Planetary Scientists. The single strongest predictor of endorsement was not familiarity with the decoupling literature. It was the prior belief that growth is necessary for human well-being. The research programme has a systematic tilt, reinforced by funding structures, journal hierarchies, and the paradigm-conformity effects already described. The incentive structure does the work that explicit bias does not need to do.

What honest research would look like

Honest research would measure ecological performance against actual planetary boundaries, not arbitrary normalized endpoints. It would separate social shortfall from ecological overshoot rather than collapsing them into a dispersion statistic. It would use consumption-based rather than production-based accounting. It would ask not just whether the global average is improving but who is overshooting and who is going without. And it would acknowledge that the historical record of genuine green growth is, as Infante-Amate and colleagues have shown across 200 years of data, essentially anecdotal.

The rules of the research game, like the rules of the economy, were written by humans. The question is always: which humans, and in whose interest.

There is much more to say. But the pattern should be clear by now. Be critical of what is presented as progress. Ask which country, which time window, which indicator, which threshold. The question behind every graph is always the same: who chose this picture, and why?

In an age of overshoot, the fight is not only over policy. It is over what counts as evidence, what counts as progress, and who gets to define reality.

Take care,

Hans

I have the feeling that all that is happening in the world is shifting so dramatically, that I am sometimes already happy just reading a novel, riding a bike or going for a swim. Just to be distracted from reality. Wars enough to talk about. Erosion of democracy, also an interesting topic. As well as ecosystem collapse. But let’s leave that for some other time. Now: AI.

AI, like all capital-intensive innovation before it, will speed up the rising capital share across all countries. That reduces tax bases, because most taxes are on labour income, thereby undermining government revenues and further threatening welfare states. This is extremely worrying, and an acceleration of what we have seen for decades: more pressure on people, more stress, less security.

In my previous newsletter, I argued that we now broadly accept resilience as a legitimate economic objective, but only when it comes to defence. And my plea was to broaden in for society at large. The argument that we cannot simply optimise for efficiency when the system is fragile has finally broken through in the security debate, with European governments committing to defence spending at levels not seen since the Cold War. And yet the same logic, that resilience requires investing in buffers, redundancy and collective capacity even when it is inefficient in the short run, is nowhere to be found when it comes to the welfare state, to public health systems, to the social infrastructure that keeps societies together under pressure. We accept resilience for tanks. We refuse it for nurses. But we probably need more welfare state, not less, in times of crisis.

The AI question makes this contradiction sharper and more urgent. Because what AI is doing, structurally, is accelerating the erosion of exactly the economic foundation on which the welfare state rests. Not through some sudden shock, but through a slow and largely invisible redistribution: more output, but less of it flowing through wages, and therefore less of it reaching the tax base that funds public services. The people who need those services most are precisely the people whose labour income is being squeezed. And the people who benefit most from AI are precisely those who already hold capital.

I wrote an opinion piece on this problem (here, in Dutch). The response was strong, and several readers made sharp remarks about the role of private ownership that pushed the analysis further. This piece is the expanded version. The conclusion remains: AI might lead to growth, but only for a few. And it will almost certainly undermine the way we have structured redistribution in welfare states. Time to reconsider.

There is also something that makes this moment particularly uncomfortable. We are, in Europe, about to spend an enormous amount of money on defence, money that will have to come from somewhere. The political argument is that resilience justifies it. Fine. But if resilience justifies spending on military capacity, it must also justify spending on the social capacity that prevents societies from fracturing under economic pressure. A welfare state is not a luxury. It is a resilience investment. Dismantling it while AI hollows out the labour income that funds it is not fiscal prudence. It is the opposite.

The argument below runs in four steps. First, the labour share of income has been declining for forty years across most of the world, AI accelerates a structural trend, it does not invent one. Second, this matters fiscally in a way that is barely discussed: when labour income declines, so does the tax base that funds everything from healthcare to education, and raising tax rates on a shrinking base is not a solution. Third, the deeper problem is not employment but ownership, who holds the capital generating the productivity gains determines who captures the wealth, and that ownership is extraordinarily concentrated. Fourth, there are concrete responses that go beyond redistribution: consumption-based taxes on AI services and data centre infrastructure; capital levies on AI market power and positional rents; mandatory equity sharing so workers hold stakes in the firms whose AI systems replace their tasks; and, most fundamentally, a structural broadening of capital ownership itself — through sovereign wealth funds, universal capital stakes, or the kind of credit-financed ownership mechanisms that Louis Kelso proposed in 1958 and that are far more relevant today than when he wrote them. The question is not whether we can afford these measures. It is whether we can afford not to act on them.

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AI Ghost GDP

Two weeks ago, an American investment research firm called Citrini Research published a scenario analysis that briefly rattled financial markets. The scenario was straightforward: what if AI raises output significantly, but the revenues barely reach households or governments? They called it ‘Ghost GDP’: economic growth that does not circulate through wages or tax receipts. Science fiction, said the critics. But the scenario touches something that has been happening for decades, and that barely registers in most political debates.

The figure in their piece (below) captures the mechanism in three interlocking drivers (negative feedback loops). First, AI capabilities improve, so companies need fewer workers and white-collar layoffs rise. Second, displaced workers spend less, which reduces consumer demand and puts margin pressure on firms, which respond by investing more in AI. Third, the productivity gains and cost savings flow entirely to the owners of compute, not to labour, so the gains never circulate back through the economy as purchasing power. Each loop reinforces the others. Citrini called the result Ghost GDP: output that appears in the national accounts but never reaches households or tax receipts.

Of course, this is all true, but also not new. Capital accumulation does this. Profit maximisation does that. And we have ‘ghost GDP’ already for some time. The difference: the scale of (possible) substitution.

Raghuram Rajan, writing in Project Syndicate last week, took the Citrini scenario seriously while questioning its pace. His concern is the oligopoly scenario: a few dominant AI platforms reach a level of generalized capability that allows them to steadily charge high prices to user firms, generating enormous profits concentrated among a handful of shareholders and well-paid employees, while those firms shed white-collar workers who then compete for whatever is left. Rajan is right that frictions and inertia will slow adoption — the last human telephone operator in the US was not replaced until the 1980s, decades after automated exchanges were technically possible. But he is also right that the Citrini scenario is not pessimistic enough in one critical dimension: it focuses on employment, while the deeper problem is ownership.

The most likely AI scenario is not mass unemployment. It is silent erosion. Less inflow of young workers into AI-exposed occupations, more output per employee, and a labour share of national income that continues to decline. Possibly gradual. But structural.

That is the problem before AI has even hit its stride (because for now, we leave out the speculation how fast AI penetration will go).

A forty-year trend, not a new disruption

To understand why AI matters fiscally, you have to start earlier, much earlier than the current hype cycle.

In the early 1980s, over 80 percent of national income in the Netherlands went to labour. Today it is below 70 percent. This is not a Dutch anomaly. The IMF documented in its 2017 World Economic Outlook that labour income shares in advanced economies began trending down in the 1980s, reaching their lowest level in half a century just before the 2008 financial crisis, and have not materially recovered since.

The most recent data makes this concrete. The ILO's May 2025 World Employment and Social Outlook reports that the global labour income share fell from 53.0 percent in 2014 to 52.4 percent in 2024. That sounds modest. It is not. Had the labour income share remained at its 2014 level, global labour income would have been $1 trillion higher in 2024 — roughly $290 more per worker per year, in every country, every year. Across advanced economies, labour income shares are now almost 4 percentage points lower than they were in 1970.

Based on ILO data I calculated some trends. Across 213 countries, labour’s share of income declined in roughly two-thirds of countries since 1980 and 1990, with the average fall around 5–6 percentage points. A creeping decline in most rich countries, visible in the figures below.

The IMF analysis attributes roughly half of this long-run decline to technology, and roughly half to globalisation, with the two forces interacting and reinforcing each other. Technology replaced routine tasks. Global value chains offshored labour-intensive production. Together, they shifted bargaining power from workers to capital owners. What AI does is not invent this pattern. It accelerates it, and extends it into sectors that until now appeared relatively protected.

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The tax base problem nobody is naming

Here is the fiscal logic that follows, and that is almost entirely absent from public debate.

In most European countries, more than half of all tax revenues come directly or indirectly from labour: income taxes, payroll taxes, social contributions, and the VAT that people spend from their wages. In the Netherlands, this share is above 55 percent of total government revenues. When that share structurally contracts, you do not have a tax rate problem. You have a tax base problem. Raising rates on what remains solves nothing — it accelerates distortions while the base keeps eroding.

Three dynamics are making this worse simultaneously.

The first is job quality. Research by Brynjolfsson, Chandar and Chen at Stanford’s Digital Economy Lab shows a 15–16 percent relative employment decline already visible among early-career workers in the most AI-exposed occupations. Simultaneously, a large-scale Danish study by Humlum and Vestergaard, covering 11 occupational groups and 25,000 workers two years after broad AI adoption, finds near-zero effects on wages and hours worked. The productivity gains from AI appear primarily as cost savings for firms, not as wage increases for workers. As Acemoglu and Johnson documented in Power and Progress, firms structurally use AI as a cost-reducing substitute for labour rather than as a productivity-enhancing complement. The new jobs that emerge either require rare human-AI collaboration skills at the high end, or are the jobs AI simply cannot do: care, education, childcare, physical work. These tend to be the lowest-productivity, lowest-wage jobs in the economy. On average, the jobs that emerge pay less than the jobs that disappear.

The second dynamic is what the British economist William Baumol described in 1967. Sectors with low productivity growth, such as care, education, childcare, must nonetheless keep wages competitive with the rest of the economy, or no one chooses those careers. As AI raises productivity in the tradable and automatable sectors, the relative cost of the labour-intensive public sector rises. A nurse or a teacher must be paid more as the economy around them becomes more productive, even if their own productivity barely changes. This creates a structural squeeze: the tax base shrinks while the expenditures on the welfare state grow. Two erosion processes accelerating simultaneously.

The third dynamic is geographic concentration of AI profits. OpenAI alone carries a valuation of around $500 billion. The value generated by AI concentrates at a handful of American firms. OECD BEPS estimates already put global government revenue losses from profit shifting by multinationals at $100–240 billion annually, and that was before the current AI wave. The EU minimum corporate tax of 15 percent is a step, but it leaves royalty constructions largely intact, and the United States, home to the dominant AI players, is not fully participating. European citizens and firms use these systems daily. The value they generate accrues elsewhere.

Rajan identifies a further complication: even if governments can raise revenues from oligopolistic AI providers, targeting relief to those actually harmed is fiendishly difficult. How do you distinguish a technologically displaced worker from one laid off for other reasons? How do you avoid overly generous unemployment benefits that push up wages and reduce job creation elsewhere? These are genuine problems. They point to the inadequacy of purely redistributive responses — which is precisely why the ownership question matters so much.

The ownership problem

Here is where most discussions stop too soon.

The debate about AI and labour has focused almost entirely on employment: who loses jobs, which sectors are exposed, how fast automation spreads. Rajan’s Goldilocks scenario, AI rollout not too fast, industry not too oligopolistic, is sensible as a description of what we should hope for. But it does not address the structural issue: even in the best case, the productivity gains from AI will accrue overwhelmingly to the owners of AI capital. And the ownership of that capital is extraordinarily concentrated.

This is not a new observation. In 1958, the American lawyer Louis Kelso and philosopher Mortimer Adler published The Capitalist Manifesto, a book that deserves far more attention than it receives today. Their central argument: what appears to be the increasing productiveness of labour is not the increasing productiveness of labour. It is the increasing productiveness of capital. And when capital is owned by only a fraction of households, the wealth that capital produces cannot circulate broadly enough to sustain mass purchasing power or democratic welfare states.

Kelso and Adler were writing about industrial machinery. Their diagnosis applies with even greater force to AI. The core problem they identified was not that capital exists. It is that capital ownership is concentrated. Their proposed remedy was not redistribution through taxation, and not state ownership, but a structural broadening of capital ownership itself: financing mechanisms that allow households without capital to acquire it, so that they participate in production not only as workers but as owners.

The numbers make the urgency plain. Karabarbounis at the University of Minnesota, cited by the ILO, found that in 2022 labour’s share of income in the US was at its lowest level since the Great Depression. The five largest AI companies by market capitalisation are owned predominantly by a narrow slice of the global population. Mostly American, mostly wealthy, mostly already holding substantial capital stakes and mostly with access to Trump to bend the rules in their favour. The gains from the AI productivity revolution are, structurally, flowing to those who already have capital.

This is Kelso’s ambush, restated for 2026: we are marching, as he put it, “joyously into ambush by the very forces we implacably oppose but do not recognise.” The economy is becoming more productive. The people who own that productivity are becoming richer. And the institutions built on the assumption that labour income would remain the primary source of purchasing power and tax revenue are being quietly hollowed out.

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Rate increases solve the wrong problem

The standard political reflex when public finances come under pressure is to raise tax rates. This will not work when the base itself is contracting. Higher marginal rates on an eroding base produce diminishing returns and mounting distortions.

Three different approaches to the problem deserve serious consideration.

🔶 Consumption-based taxation. As long as people consume, there is something to tax, even if they work less. Economists Korinek and Lockwood at Brookings argue that VAT on AI services, combined with levies on the energy and water consumption of data centres, would create a more robust tax base than labour taxation alone. This would also price in externalities, the carbon emissions of electricity demand and water use of large-scale AI inference is substantial and largely unpriced, and shift some of the burden onto the activity that is actually replacing the labour income being lost.

🔶 Capital taxation on market power. Targeted levies on the profits generated by ownership of scarce AI infrastructure (compute, proprietary data, platform dominance) are economically defensible on the grounds that these profits reflect positional rents rather than social value creation. The distinction matters: Thorstein Veblen called it the difference between industry and business: between making things and extracting from the making of things. Who holds the chokepoints of AI infrastructure holds the chokepoints of future income. There is no principled argument against taxing that concentration. Rajan makes a similar point: if platforms achieve oligopolistic rents while causing widespread job losses, the political impetus for intervention will be strong regardless of lobbying. Better to design that intervention deliberately than reactively.

🔶 Broadening capital ownership. This is where Kelso’s insight becomes most relevant. If the problem is that the productive gains from AI flow to a narrow ownership class, the solution is not only to tax those gains but to broaden who owns the capital generating them. This could take several forms. Mandatory equity-sharing schemes that give workers stakes in the firms whose AI systems replace their tasks. Not as charity, but as a property right proportional to their contribution. Public sovereign wealth funds that accumulate stakes in AI infrastructure on behalf of citizens, Norway’s oil fund is the precedent, but the principle extends. Or a universal capital stake, a claim every citizen holds in publicly financed AI infrastructure, funded through the kind of credit mechanisms Kelso described: not borrowing to consume, but borrowing to own.

None of this is nationalisation. It is the recognition that AI systems are built on publicly funded research, publicly maintained digital infrastructure, and the data of billions of citizens. The gains from those systems circulating back to those citizens is not radical. It is consistent with the basic logic of property rights that Kelso outlined: those who contribute to the production of wealth have a just claim to share in its distribution.

The deepest problem with the current trajectory is not that some people are getting very rich from AI. It is that the ownership structure of the AI economy, left unchanged, will produce a society in which a small number of capital owners extract an ever-larger share of the economic output, while the institutions designed to distribute that output broadly — welfare states, public services, progressive taxation — are undermined by the very productivity gains that are supposed to make everyone better off.

The scenario is already partially here

The Citrini Research scenario was labelled science fiction. But consider what is already observable. Corporate profits as a share of national income have risen. Labour’s share has fallen. AI adoption is accelerating precisely in the tasks that once anchored middle-income employment. Early indicators from the most exposed sectors show the pattern: not mass layoffs, but reduced hiring, higher output per head, and lower wages for those entering.

The ILO’s September 2024 World Employment and Social Outlook documents a 1.0 percentage point decline in the labour share for Europe and Central Asia between 2019 and 2024. This is the pre-AI-at-scale baseline. The direction of travel was already set.

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Rajan’s best hope is a Goldilocks scenario where adoption is not too fast and the industry is not too oligopolistic. That is worth working towards. But it is not sufficient. Even a competitive AI market — low prices, productivity benefits flowing through — still concentrates the ownership of the productivity-generating capital. The gains flow to users through cheaper products, but the wealth accumulates to owners. That is the ownership problem, and it does not disappear in the competitive scenario.

The political conversation is still focused on rates. The real question is about the base — and beyond the base, about who owns the machines that are replacing the labour income that used to fund democratic governance. That is a different conversation. It requires moving beyond the assumption that labour income is the permanent anchor of public finance, and beyond the assumption that redistributive taxation alone can compensate for a structural shift in who owns the productive capacity of the economy.

Those who do not face this now will pay twice: first through lower wages, then through higher taxes on whatever is left.

We live in a time of abundant war. Gaza. Ukraine. Sudan. And now Iran. As always, it is civilians who pay the price for leaders who choose conflict.

Two things follow from this. First, war is always expensive and the case that military spending pays for itself through innovation is much weaker than its proponents claim. Second, the deeper problem is structural: the efficiency logic that drives our economy is fundamentally incompatible with the resilience we now say we need. That tension has no easy resolution and most proposed solutions cut against the growth-first narrative that still dominates policy. Both points deserve more than a headline.

War is expensive

That reality is devastatingly expensive. A recent study covering 150 years of war across sixty countries tallies the bill: an average war costs the affected country nearly ten percent of GDP, drives inflation up by twenty percent, and wipes out a quarter of stock market value. Recovery takes twelve years on average (see also figure below). A child born today will be in secondary school by the time the economies caught up in today’s conflicts return to where they were before the war. And the damage does not stop at the border: countries economically intertwined with a war zone see their own GDP fall too. War turns out to be everyone's problem. We all pay.

It goes beyond the direct costs of the fighting itself. Because while the bombs fall, astronomically large sums of money are also being spent on preventing the next war, or so we tell ourselves. Countries worldwide spent more than 2.6 trillion dollars on defence in 2025, the highest level since the Cold War. The reasoning is familiar: whoever is strong enough deters the enemy. Si vis pacem, para bellum. If you want peace, prepare for war.

Defence is necessary in a world of autocrats, but necessity is not a blank cheque for escalation. The problem is that deterrence rarely stays stable. Every step in an arms spiral — more weapons, more alliances, more threatening rhetoric — empirically increases the risk of escalation. Peace researchers call this the ‘steps to war’ dynamic: the more states invest in military power in response to a conflict, the greater the chance that conflict ends in war. Weapons are built to be used.

Peace is cheaper than rearmament

History offers surprisingly dull answers to the question of how to get to peace: economic interdependence, verification, exchange, and diplomacy.

Schuman and Monnet conceived the European Coal and Steel Community in 1951 as an explicit peace strategy: if France and Germany share each other’s raw materials, they can no longer wage war without ruining themselves. It worked. Eighty years of peace between countries that had until then regularly gone to war with each other, the last two conflicts claiming tens of millions of lives. Economic interdependence as risk management.

The SALT and START negotiations between the US and the Soviet Union in the 1970s and 1990s showed that disarmament does not require trust, only verification: mutual inspection makes trust unnecessary. Honouring agreements because they are verifiable, not because you believe in the other side. The IAEA has precisely this mandate, and receives a fraction of what major powers spend annually on a single weapons system.

And the Franco-German Youth Office, founded in 1963, has sent eight million young people back and forth across the border. Eight million people who learned that the former enemy is a human being, with the same fears and the same ambitions. The backbone of the Franco-German axis. For less than what Rheinmetall earns in profit in a single quarter.

That last point may be the most underrated instrument of peace: knowing each other. Tolerance is a security strategy. Understanding is not cultivated with weapons but with exchange, education, trade, language. One reason the French and Germans no longer go to war is that they came to know each other through institutions, exchange, trade, and shared political projects.

And the simplest institutional intervention remains: more diplomats. As Robert Gates once pointed out, the United States employs almost as many musicians in military bands than diplomats in its entire foreign service. Which is insane. The UN estimates that one dollar invested in conflict prevention saves two to seven dollars in crisis management afterwards. Yet money flows structurally towards the latter.

Why? Because violence delivers immediate political returns, and prevention does not. Because a fighter jet belongs on the front page and a youth exchange does not. Because it costs less politically to bomb the enemy than to explain why you need to talk to him.

War demands no courage. War demands compliance and budget. Peace demands courage: the courage to negotiate when the mood calls for war, to seek connection where enemy-thinking is expected, to invest in something that only shows up in the statistics ten years from now and not on tomorrow’s front page. As long as leaders lack that courage, citizens pay the bill.

The Innovation Argument

Whenever defence budgets come under scrutiny, a familiar counter-argument appears: but what about the internet? GPS? The microchip? These were all military inventions. Defence spending, the argument goes, drives innovation and growth.

The argument is not entirely wrong. But it is much weaker than it sounds. A recent study by Moretti et al (2025), covering 26 industries across OECD countries over 23 years, finds that a 10 percent increase in government-funded R&D leads to roughly a 5 to 6 percent increase in privately funded R&D. That is real, but modest. And it matters where that money goes. Defence R&D is concentrated heavily in development rather than in basic research, where the wider spillovers usually originate.

Fieldhouse and Mertens (2024) find no statistically significant productivity gains from defence R&D over 15-year horizons. The social return on defence R&D is estimated at 20–29%, compared to 140–171% for non-defence public R&D in health, energy, and fundamental science.

The celebrated military innovations emerged from Cold War defence spending embedded in a broader culture of open, patient, fundamental research. Today's rearmament happens under active geopolitical pressure, with more secrecy and shrinking civilian spillovers. The opportunity cost is not abstract: the evidence points clearly toward public investment in fundamental civilian research as the higher-return alternative. Weapons are optimised for destruction. Discovery requires something else.

Resilience is bigger than defence

What matters here is not only that war is costly, or that peace is cheaper. It is that the language now used to justify defence spending, resilience, strategic autonomy, preparedness, points to a much broader truth. If we accept inefficiency in defence because it builds resilience, why do we reject the same logic everywhere else?

We should start working on resilience, a far broader concept than defence spending. Defence spending is soaring, and we have accepted that military overcapacity is justified: inefficiency in service of resilience. But we never apply that logic anywhere else. Meanwhile, forty-five years of optimisation have stripped redundancy from every other domain: healthcare, energy, food, digital infrastructure, supply chains. Three major crises (the Global Financial Crisis, Covid, Ukraine) exposed the same structural vulnerability each time, and each time we responded with sectoral fixes rather than structural change.

Resilience and efficiency are fundamentally in tension. A system optimised for today’s environment is fragile in tomorrow’s. That insight applies on three fronts: economically (debt bias, supply chain concentration, monoculture ownership), socially (precarious workers without buffers, thin safety nets), and ecologically (degraded ecosystems that once functioned as free insurance). The policy agenda is the same in logic across all three: accept higher short-term costs in exchange for buffers, diversity, and redundancy.

What is missing is not the knowledge. It is the willingness to put resilience at the top of the policy hierarchy and apply that consistently, not just to the Ministry of Defence.

In what follows, I have written down a longer version of the arguments for resilience. As always, I hope you enjoy it.

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If resilience matters more than efficiency, why only in defence?

We now accept in defence what we reject almost everywhere else in economic policy: buffers, slack, redundancy, and overcapacity. With that, we also accept that defence is inherently inefficient. An F-35 that is never used is an insurance policy. Stockpiles of ammunition that rust are a buffer. Overcapacity is the objective, not the exception.

But that raises a question that is rarely asked: why does this logic apply exclusively to defence? And is it actually possible to build a resilient economy while simultaneously optimising everything else?

What resilience actually means

Resilience is the capacity of a system (be it an individual, a forest, a city, or an economy) to deal with change and continue to develop (Holling, 1973). More precisely, it is measured by the magnitude of disturbance that can be absorbed before the system changes its structure by changing the variables and processes that control behaviour (Gunderson & Holling, 2002). In concrete terms: buffers you can draw on when things go wrong, diversity that prevents a single failure from bringing down the whole, and redundancy that ensures an alternative is always available.

As the figure below illustrates based on a publication I wrote more than three years ago, resilience operates across six reinforcing principles: redundancy, diversity, dispersity, autarky, adaptability, and transformability, each with distinct implications for both the economic and financial system.

Redundancy is spare capacity built into the system so that fluctuations can be absorbed, the opposite of just-in-time. A hospital with reserve beds. A grid with backup capacity.

Diversity is the variety of components (sectors, technologies, ownership forms, business models) that ensures a shock to one does not bring down the whole.

Dispersity is the spread of critical functions across geographies and scales, so that a single disruption cannot take everything out at once; Europe's dependence on a single Russian gas pipeline was the textbook failure of dispersity.

Autarky is the capacity of parts of the system to function independently when cut off (local food and energy systems, for instance) not self-sufficiency as an end in itself, but as a fallback when connections fail.

Adaptability is the capacity to reconfigure in response to disruption without losing core function: scenario planning, flexible contracts, investment horizons that allow for adjustment.

And transformability is the deepest form of resilience, the capacity to use a crisis as an opportunity to rebuild with new characteristics when existing conditions become untenable. Not bouncing back to what was, but bouncing forward to something better.

A resilient economy is by definition less efficient than an optimised one, in the same way that fire insurance ties up capital that is useless as long as there is no fire. That apparent waste is the essence of the insurance. The point is that we now understand this for defence, but systematically refuse to accept it for the rest of the economy. And if we do that, we may end up with a military but not a resilient society.

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Forty-five years of optimisation

The same economy now willing to pump billions into strategic military overcapacity has, over the past forty-five years, systematically cut, outsourced and optimised every other form of redundancy. Healthcare was trimmed to exactly enough beds and exactly enough staff, and the extra capacity created after the pandemic was quickly scaled back down. Europe’s energy supply was made dependent on a single pipeline from Russia, because that was the cheapest option. Rare earth metals are mined almost exclusively in China, because extraction in Europe was considered too costly and too dirty. The food processing industry concentrated to the point where a single factory supplies all of Europe with baby food. Digital infrastructure became entirely dependent on American tech platforms. In this way, an economy was built on the principle that every unit of overcapacity is a cost and every dependency an efficiency advantage.

That principle has its own logic. In a stable world with reliable trading partners, functioning global markets, and no acute geopolitical tensions, optimisation is a rational strategy. The costs of redundancy then outweigh the benefits. The problem is that this stable world was treated as a permanent condition, when in reality it was a historical exception.

Three shocks, three missed lessons

We are, in a meaningful sense, living through a polycrisis. As I wrote before, it can be defined as multiple co-occurring, causally entangled crises with synergistic and cascading effects on numerous systems, degrading humanity’s prospects. Each crisis complicates the solution of the others. And the vulnerability behind all of them is the same: insufficient buffers, excessive concentration, monocultures and systems so tightly calibrated to their existing environment that they fail immediately upon disruption.

The 2008 financial crisis showed what happens when banks carry too little capital, are too tightly interconnected, and all bear the same risks (Battiston et al., 2012). The response was correct but narrow: capital requirements for banks went up, and the rest of the financial sector was left exactly as it was. Then came Covid. Hospitals turned out to be running at absolute minimum capacity. No reserve capacity, no stockpiles of protective equipment, no alternative suppliers, because outsourcing to China was simply cheaper. Then the war in Ukraine revealed that Europe had reduced its energy supply to a single artery, partly outsourced its food security to Ukraine’s black-earth regions, and optimised its trade relations for a world of peace and stability that no longer existed. And now, only four years later, we experience the same tension on energy, since we (as Europe) diverted from Russia, but are still (too) dependent on the Gulf region and the US.

Each crisis produced a sector-specific response that left the structural cause untouched. Now, as geopolitical tensions escalate and the climate destabilises further, we are having the same conversation again, but only about defence.

Efficiency and resilience are opposites

To understand why this pattern keeps repeating, it is necessary to be clear about the fundamental tension between efficiency and resilience. Hynes, Kirman and Latini (2022) show that the two concepts are structurally in conflict. Efficiency is optimal adaptation to an existing environment. Resilience is the capacity to survive when that environment changes disruptively. A system perfectly optimised for yesterday’s world is fragile in tomorrow’s.

The ecologist C.S. Holling demonstrated this as early as 1973 for biological systems: the most efficient ecosystems are also the most vulnerable. A monoculture produces more per hectare than a mixed landscape, but a single disease or pest can destroy it entirely. A mixed system is less productive but survives. The same mechanism operates in economic systems. Just-in-time logistics eliminates unnecessary inventory and accelerates capital turnover, but a single supply chain disruption halts production. Debt financing maximises return on equity, but makes companies vulnerable to interest rate shocks. Global specialisation raises total welfare in a stable world, but creates strategic dependencies that in unstable times are wielded as weapons.

This is not an argument against efficiency per se. It is an argument that efficiency and resilience are two separate objectives that do not automatically coincide and that maximising one undermines the other. For decades we suppressed that insight. Profitability became the benchmark. Shareholder value became the compass. Debt was made fiscally attractive, because interest was deductible and rates were low.

How Tinbergen stands in the way

There is an institutional reason why this insight fails to penetrate policy, and it lies in the way we have organised responsibility. Since Tinbergen, policy debate has often been interpreted as if each policy objective requires its own instrument and each institution should confine itself to a single task. That is not quite what Tinbergen argued, but it is how much policy practice came to understand him (Tinbergen, 1952, chapter 3).

The central bank guards inflation. The competition authority protects consumers. The ministry of finance guards the budget balance. Resilience fitted none of those mandates, because resilience is by definition a system property that cuts across sectoral boundaries. So nobody was responsible for it.

The problem is that this is a simplification of what Tinbergen actually argued in his book. His technical condition (that achieving multiple independent policy objectives requires at least as many independent instruments) is a mathematical requirement for the solvability of a system of equations, not an institutional prohibition on secondary objectives. Tinbergen himself already distinguished between unconditional and conditional objectives, which is already a hierarchy of goals, not a strict one-to-one mapping.

What survived in the public debate was a far more normative version: one objective, one instrument, otherwise policy becomes ungovernable. That simplification has a direct downside for resilience. When every instrument is bound to a single objective and efficiency is treated as primary, resilience becomes an exception that must justify itself every time.

A concrete example: when the American company Kyndryl acquired Solvinity (which manages the infrastructure on which DigiD runs, the digital identity of Dutch people) the Netherlands Authority for Consumers and Markets could do nothing but grant approval. The ACM itself acknowledged the importance of digital autonomy, but stated that its legal framework is limited to competition risks. The question of whether critical digital government infrastructure ends up in foreign hands falls outside the mandate. Redundancy has to defend itself and it rarely does well in the logic of quarterly figures or the budget cycle.

The way out is not to reject Tinbergen, but to take seriously what he actually meant: an explicit ranking of objectives. Once resilience is established as primary, at the top of the policy hierarchy, the institutional logic changes entirely. Multiple instruments for one overarching objective is then not diffuse policy but consistent policy.

Three fronts of vulnerability

The structural vulnerability of the current economy is the direct result of decades of policy that treated efficiency as primary and resilience as an exception. That vulnerability manifests on three distinct fronts.

The economic front. For decades, companies have been fiscally incentivised to finance themselves with debt: interest is deductible, dividends are not. The result is thin equity buffers, high leverage, and maximum vulnerability to interest rate rises and downturns. During Covid, many companies that looked healthy on paper immediately needed state support at the first serious shock. They had done exactly what the tax system asked of them: maximise return on equity, not build shock resistance. The same optimisation runs through supply chains. As economist Frédéric Jenny showed in 2020, the vulnerability of global value chains is largely the result of inadequate market governance and excessive market concentration. An economy with a varied landscape of cooperatives, family businesses, SMEs, and public enterprises alongside listed multinationals is more resilient than one dominated by shareholder-value-driven corporations. Diversity makes systems stable. Monocultures are productive but brittle.

The social front. An economy is only as resilient as the people who carry it. The welfare state is not a luxury add-on to the open economy. It is, as Rodrik showed already in 1998, the political and economic condition that made openness sustainable in the first place. Countries more exposed to external shocks historically built stronger social protection precisely because it functions as collective insurance against volatility. The empirical case is clear: Dolls, Fuest and Peichl (2012) find that automatic stabilisers in Europe absorb up to 47% of an unemployment shock, nearly 40% more than in the US, directly reflecting the stronger social protection systems in place. Safety nets that scale with the size of a crisis dampen falling demand during downturns and accelerate recovery. Social cohesion is itself an independent resilience factor: communities with high mutual trust demonstrably recover faster from economic and ecological shocks.

The ecological front. Ecosystems are the oldest and most tested resilience machines we know. Mangroves protect coastlines. Wetlands absorb flooding. Biodiversity stabilises crop production through pollination and soil health. We have degraded these systems for decades in the name of more efficient production. But every degradation of an ecosystem is the cancellation of an insurance policy, economists call this the destruction of ecosystem services, functions that nature performs for free and that only acquire a price once they are gone. Circular economy, diversified agriculture, climate adaptation infrastructure, and regenerative approaches to soil and nature are resilience investments of the same order as military capacity. They are simply rarely framed as such.

A policy agenda

What would a serious agenda look like in concrete terms? On each front, the same underlying logic applies: accept higher costs in the short term in exchange for buffers, diversity, and redundancy that prove their worth at the next shock.

On the economic front, the most direct intervention is reform of the fiscal debt bias. Many tax systems makes it structurally cheaper to finance companies with debt than with equity. Fiscal neutrality between equity and debt, combined with active stimulation of solvency building, increases shock resistance without requiring new institutions. Belgium and Italy have already introduced variants of this. Competition policy with concentration ceilings in critical sectors, mandatory diversification of supply chains for strategic goods, and active promotion of diverse ownership forms all belong on the agenda.

On the social front, economic security is the core. Housing, pension, income continuity: these are the resilience infrastructure for households, in the same way that capital buffers are resilience infrastructure for banks. Robust safety nets that automatically scale with the size of a crisis, inequality reduction as an explicit policy objective, and permanent training as a public investment all follow from the same logic.

On the ecological front, the most underestimated measure is the protection of biodiversity as insurance policy. A collapsing bee population, a soil that loses its water-buffering capacity, a coastline without mangroves: the damage does not appear on the balance sheet as long as the insurance is intact, but becomes acute the moment it is cancelled. Nature-based solutions, diversified agriculture, and a circular economy that reduces dependence on raw material imports all belong in the same category.

As a summary, here the figure trying to capture the practical implications. First resilience in systems, then efficiency. However, all these measures share one feature: they are more expensive in the short term and cheaper in the long term. They sacrifice efficiency for resilience. They choose redundancy deliberately. That is precisely what we have accepted for defence for years as self-evident, without anyone calling it economically irrational.

Conclusion

The willingness to break with efficiency logic in the case of defence is justified. But it is also telling. The vulnerability of our economy, our society, and our ecosystems is not a natural phenomenon. It is a political choice, built up layer by layer over decades of belief in the feasibility of optimal markets and the assumption that global stability was permanent. Three major crises in twenty years have each time exposed the same pattern: insufficient buffers, excessive concentration, a system so tightly optimised for its existing environment that it fails immediately upon disruption. And each time the response produced sectoral repairs, not structural reorientation.

What is missing is not knowledge of what resilience requires. What is missing is the willingness to place resilience at the top of the policy hierarchy and then be consistent. That means the resilience logic does not remain confined to the Ministry of Defence but penetrates the Ministry of Finance, the competition authority, labour market policy, and agricultural policy. As long as that does not happen, the defence impulse is not a strategic choice but symptom management: we arm the military and leave the economy, the society, and the nature that must sustain it fragile.

Weapons are optimised for destruction. Peace is cheaper. And resilience requires something else entirely.

It has been a while. I have been finishing the manuscript for a book that hopefully will be published somewhere this year (in Dutch), doing a lot of swimming, and a lot of work. I don’t publish my Dutch columns and opinion pieces here — although I sometimes reuse fragments — but I find myself increasingly preoccupied with the state of the world. And, more specifically, with Europe’s delicate position in it.

One of the questions that keeps returning is how democracies adapt in times of democratic erosion. Not in the abstract, but under very concrete economic and geopolitical pressures.

What strikes me most in current European debates is not hesitation, and not even the shock of Trumpism, autocracy or outright fascism — although by now none of that should come as a surprise. What strikes me is that Europe still reacts almost exclusively from a set of misplaced certainties.

Certainty that growth will return.
Certainty that geopolitical tensions will remain manageable.
Certainty that democracy, prosperity and sustainability ultimately reinforce one another, as they always supposedly have.

In that sense, Europe’s problem is not the absence of knowledge, but the persistence of assumptions that no longer have to justify themselves. Certainty has become habitual rather than earned.

The conclusion then follows almost automatically: that more competition, more markets and more growth are the appropriate responses to geopolitical tension and strategic vulnerability.

Added to this is an even deeper certainty: that we do not really have to give up anything, and that there is therefore no need for a genuine, uncomfortable debate about trade-offs.

These certainties are rarely defended explicitly. They function as background assumptions, silently shaping what is considered realistic, feasible or politically acceptable. And because they remain implicit, they are almost never tested.

This blog is an attempt to make those assumptions visible, and to question whether they still hold.

Europe after guarantees

Europe’s current predicament is often described as a crisis. In reality, it is better understood as a delayed adjustment. The world Europe was optimised for, one of stable alliances, cheap energy, expanding trade and predictable growth, is no longer the world it operates in. What has changed is not just the geopolitical environment, but the assumptions that once made Europe’s position feel natural and secure.

For decades, Europe’s political economy rested on a relatively simple division of labour. Security was largely outsourced. Energy and resources were imported. Industrial production was increasingly externalised. In return, Europe specialised in regulation, norms, market access and coordination. This arrangement worked remarkably well as long as three conditions held: abundant global growth, stable geopolitical guarantees, and a broadly cooperative international order.

None of these conditions can be taken for granted anymore.

The erosion of implicit guarantees is not only visible in security arrangements, but also in trade, energy and technology. Access is becoming conditional. Dependence is increasingly weaponised. Power is exercised less through rules than through control over critical inputs. Europe, lacking fossil reserves, critical minerals and dominant technology platforms, finds itself structurally exposed in this new landscape.

The default response has been to treat this exposure as a competitiveness problem. If Europe can grow faster, innovate harder, liberalise further and reduce regulatory “burdens”, it can supposedly regain its footing. Growth, once again, is expected to do the stabilising work: economically, geopolitically and politically.

If you spend time in Brussels, or speak with people working there, you can see how this logic translates into practice. Across multiple policy domains, legislation is now being reassessed through so-called omnibus proposals: large legislative packages that bundle together numerous, often unrelated, measures and push them through in one procedural move. There are already ten such packages under preparation, and it is telling that the first one focused on sustainability.

At the same time, the European Commission has announced its intention to loosen its own internal rulemaking procedures, arguing that it needs to respond more quickly to an “ever-changing and volatile geopolitical environment.” Speed, competitiveness and simplification have become the dominant watchwords. Dozens of civil society organisations, as well as parts of industry, have warned that this approach risks undermining democratic scrutiny by compressing deliberation and reducing transparency.

What is striking is not the existence of these pressures, but how they are justified. The underlying assumption is that regulatory density is a drag on growth, and that restoring growth will, in turn, restore strategic room for manoeuvre. Simplification is presented as pragmatism, deregulation as necessity, and democratic friction as an unfortunate but temporary cost.

This is precisely how growth functions as a substitute for politics. Rather than debating which objectives should take precedence under constraint, complexity is framed as inefficiency and conflict as delay. The promise is that, once growth returns, the deeper questions can be revisited. But postponement, once again, is mistaken for resolution.

As long as growth is expected to return through ‘simplification’ (in fact deregulation), difficult choices can be postponed. Distributional conflicts can be softened. Strategic dependencies can be tolerated. Environmental limits can be framed as temporary constraints rather than structural boundaries.

Yet the empirical case for growth as a democratic stabiliser has weakened.

Growth allowed conflicts to be postponed rather than resolved, a pattern that worked remarkably well in a world of abundance, extraction, commodification and unequal trade, and far less so in a world of constraint.

Across advanced democracies, growth has become more volatile, less inclusive and more weakly connected to political legitimacy. At the same time, democratic institutions themselves are showing signs of strain (figure below), not through sudden collapse, but through gradual erosion of trust, accountability and institutional restraint. This erosion is uneven and contested, but it increasingly overlaps with high inequality, concentrated power and declining expectations of shared progress.

Large cross-country analyses increasingly suggest that democratic erosion is not random. It follows identifiable patterns, and one of the most consistent correlates is high income inequality, including in wealthy, long-established democracies. Recent work shows that inequality is among the strongest predictors of democratic backsliding, and that this relationship is unlikely to be explained by reverse causality alone. Growth, in other words, does not reliably neutralise the political risks associated with unequal distributions of income and power. This pattern persists across different model specifications and country samples.

This matters because Europe has long relied on growth to postpone political choices. As long as aggregate expansion continues, distributional conflicts can be softened, institutional tensions managed, and ecological constraints pushed outward. When growth slows (or when its environmental costs become impossible to externalise) these tensions surface simultaneously.

The growth–democracy relationship itself turns out to be more fragile than often assumed. The historical coincidence of industrial growth and the expansion of liberal democracy appears to have been exceptional rather than structural. Modern democracies emerged under conditions of abundant energy, rapid productivity gains, and expanding material frontiers, conditions that are unlikely to persist throughout the twenty-first century. Slower growth does not automatically undermine democracy, but it does remove an important buffer that once absorbed social and political stress.

Europe is not immune to this pattern. What makes its situation distinct is that democratic erosion, geopolitical vulnerability and ecological constraint are converging rather than occurring separately. Each amplifies the others. Strategic dependence limits political room for manoeuvre. Ecological limits constrain growth-based compensation. Institutional fragility reduces the capacity to manage distributional conflict.

This convergence exposes a blind spot at the heart of the European project: it was never designed for a world of persistent scarcity and strategic rivalry. It was designed for a world in which integration, markets and growth gradually dissolved political tensions instead of sharpening them.

Scarcity changes that logic. Scarcity forces prioritisation. It makes trade-offs explicit. It reveals which commitments are real and which are rhetorical. In such a context, sufficiency, reducing material demand rather than merely greening supply, stops being a moral preference and becomes a strategic consideration. Less dependence means less exposure. Less throughput means fewer points of vulnerability. Scarcity, in this sense, is not merely an economic condition. It is a test of political adulthood. It forces societies to distinguish between what they want and what they are willing to defend.

However, what recent research reveals is that most economists see sufficiency (or demand-side reduction policies) not as a viable policy option, unlike other researchers.

None of this implies that democracy, prosperity and sustainability are fundamentally incompatible. But it does mean that their relationship is no longer automatic. Democracies that assume perpetual growth to maintain legitimacy become fragile when growth slows. Systems that refuse to articulate limits invite political backlash when limits assert themselves anyway.

This is ultimately a question of maturity: deciding what can no longer be postponed. Europe’s difficulty is not a lack of values or resources. It is a reluctance to accept that the age of implicit guarantees is over, and that autonomy now requires choice, restraint and direction.

Political maturity is not the ability to promise continuity, but the capacity to govern discontinuity. Europe’s difficulty is not that guarantees are disappearing, but that its political imagination is still organised around their return.

The uncomfortable possibility is that Europe cannot regain stability by restoring the old model. It can only adapt by redefining what stability means in a world where growth, consensus and security can no longer be assumed.

For the rest of this blog, I will go more into depth on what follows from this. If you want the short version, you can stop here.

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The end of implicit guarantees

Europe’s current discomfort is often framed as a sequence of shocks: a war here, a trade conflict there, an election cycle elsewhere. But what has really changed is not the number of shocks; it is the disappearance of guarantees that once absorbed them.

For much of the post-war period, Europe operated in a world where key conditions were implicit rather than negotiated. Security guarantees were assumed to hold. Access to energy and raw materials was treated as a market outcome rather than a strategic vulnerability. Trade openness was seen as mutually reinforcing, not conditional. These assumptions rarely needed to be defended precisely because they worked well enough in practice.

Philosophically speaking, the stability of the system allowed assumptions to harden into background truths, not because they were universally valid, but because they were rarely challenged by reality.

That world is fading.

What we are seeing now is not simply “geopolitical tension”, but a shift from rule-based assurance to leverage-based conditionality. Security commitments are increasingly transactional. Trade relationships are reinterpreted through the lens of strategic dependence. Energy, technology and critical materials have become instruments of power rather than neutral inputs. This reflects a return of politics to what it has always rested on: control over material conditions.

From a political-philosophical perspective, this matters because liberal democracies have long relied on externalised stability. When guarantees are implicit, politics can focus on optimisation rather than choice, on management rather than direction. Markets can be treated as neutral coordinators. Growth can function as a solvent for conflict.

The concept of “weaponised interdependence” captures this shift empirically: global economic networks that once promised efficiency and mutual gain can be turned into tools of coercion when control over key nodes is concentrated. Europe is deeply embedded in these networks, but rarely controls them. That asymmetry was manageable in a world of guarantees; it is politically salient in a world of conditional access.

This exposure is not accidental. Europe deliberately specialised in regulation, coordination and market access, while outsourcing much of its material base: energy extraction, mineral supply, manufacturing capacity, and increasingly technological platforms. As long as access was reliable and growth softened distributional tensions, this was a rational strategy. But it rested on an implicit assumption: that politics could be deferred, because material conditions were stable.

What is striking is how often European responses still assume the return of that world. Policy debates quickly revert to restoring competitiveness, accelerating growth, or deepening markets (take Draghi) as if these measures alone can recreate a context in which dependence remains politically neutral. Growth is expected to compensate for vulnerability, rather than vulnerability being addressed as such.

Here the philosophical problem becomes explicit. Growth has functioned not merely as an economic objective, but as a substitute for political judgment. It allowed societies to avoid explicit prioritisation, to postpone conflicts rather than resolve them. That logic only works in a world without binding limits.

Recent synthesis work on geoeconomic fragmentation makes clear that resilience is no longer a problem of optimisation, but of governing trade-offs under persistent constraint, a shift that brings political choice back into domains long treated as market outcomes.

This is where the question of political maturity enters. Mature political systems are not those that promise continuity under all circumstances, but those that can govern discontinuity without denial. The end of implicit guarantees does not mean collapse. It means that choices can no longer be outsourced, neither to markets, nor to growth, nor to inherited assumptions.

This is the external condition under which the rest of the argument unfolds. Democratic strain, scarcity and the need for explicit trade-offs do not arise independently. They arise because a world organised around certainty has given way to one that demands responsibility for limits.

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Democracy under strain, but not collapsing

If the end of implicit guarantees is the external condition Europe now faces, democratic strain is the internal one. Not because democracy is about to disappear, but because it is increasingly asked to operate under assumptions that no longer hold.

Much of the current debate treats democratic erosion as either an exceptional pathology, the result of populism, misinformation, or bad actors, or as an external threat imported from elsewhere. But a growing body of work suggests something more uncomfortable: that democratic strain is often endogenous to how advanced democracies have been organised economically and politically over recent decades.

What we observe across many democracies is not sudden collapse, but gradual erosion. Constraints on executive power weaken. Media independence becomes contested. Trust in institutions declines unevenly. These changes are often incremental, legally ambiguous, and politically justified as temporary or corrective. Democracy erodes not by being overthrown, but by being thinned out.

The Varieties of Democracy project has been particularly clear on this point: democracy is not a binary condition, but a set of institutional dimensions that can deteriorate independently and unevenly. This helps explain why democratic erosion can coexist with elections, courts and formal checks, at least for a time.

Europe is not immune to this pattern. As a recent Financial Times analysis notes, democratic backsliding in Europe rarely takes the form of open rupture; it more often reflects declining institutional restraint, growing concentration of power, and the normalisation of exceptional measures. What makes this moment distinctive is not the presence of erosion, but its convergence with economic and geopolitical stress.

Here the role of growth becomes critical. For much of the post-war period, economic expansion acted as a political buffer. It softened distributional conflict, raised expectations of future improvement, and allowed democracies to postpone hard choices.

That stabilising function is weakening.

Recent empirical work suggests that high and persistent inequality is one of the most robust predictors of democratic erosion, including in wealthy democracies, even when accounting for reverse causality. The implication is not that inequality mechanically produces authoritarianism, but that it erodes the conditions under which democratic compromise remains credible. When large parts of society no longer expect progress, procedural legitimacy alone becomes fragile.

Philosophically, this marks the end of a quiet but powerful assumption: that democracy, prosperity and growth naturally reinforce one another. That assumption allowed democracies to rely on expansion rather than articulation, or on outcomes rather than orientation. As long as material improvement could be expected, politics could focus on management instead of direction.

Under conditions of slower growth, ecological constraint and geopolitical exposure, this logic breaks down. Democracy is forced to do what growth once did implicitly: make trade-offs visible, distribute burdens explicitly, and justify limits politically. That is a far more demanding task than administering abundance.

Importantly, none of this implies that democratic erosion is inevitable, or that constraint is incompatible with democracy. But it does imply that democracies built around expectations of perpetual expansion face a structural test when those expectations fade. The challenge is not simply to defend democratic institutions, but to adapt democratic practice to a world in which guarantees, economic as well as geopolitical, can no longer be assumed.

This is where the question of political maturity reappears. Mature democracies are not those that promise insulation from limits, but those that can govern within them without denial or scapegoating. Democratic erosion, in this sense, is not only a threat. It is also a warning: that the old alignment between growth, legitimacy and stability can no longer be taken for granted.

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Scarcity, limits, and the end of postponement

If the erosion of implicit guarantees defines Europe’s external condition, scarcity defines its internal constraint as a gradual tightening of the room in which political and economic choices are made.

For a long time, scarcity could be treated as episodic. Energy shortages, resource constraints or environmental pressures were assumed to be temporary or local. Growth, innovation and trade would ultimately restore balance. This assumption allowed politics to frame limits as technical problems rather than as enduring conditions.

That framing is becoming harder to sustain.

Across a range of domains, the evidence points to structural constraint rather than cyclical fluctuation. Research on planetary boundaries shows that several (seven of the nine) biophysical limits have already been crossed, not as abstract thresholds but as interacting pressures that narrow future options. The relevance here is not ecological alarmism, but the political implication: systems designed for expansion struggle when stabilisation becomes the dominant task.

The role of efficiency illustrates this shift particularly clearly. For decades, efficiency gains were expected to reconcile growth with environmental and resource limits. But work on economy-wide rebound effects shows that, at the level of whole economies, improvements in efficiency do not reliably translate into lower overall resource use. Instead, gains are often absorbed by increased demand elsewhere in the system.

Europe’s own energy trajectory demonstrates this pattern. Between 2015 and 2024, the EU improved its energy intensity (energy use per unit of GDP) by about 22%. Yet total final energy consumption declined by a mere 5%, in the same period. Efficiency gains were largely absorbed by expanded economic activity. The decoupling that policy assumed would happen automatically required crisis-driven contraction to materialise even partially.

The same logic applies to critical materials. Europe imports 97% of its rare earth elements, largely from China. Policy responses emphasise diversification, recycling and technological substitution; all forms of efficiency. But if demand for digital devices, electric vehicles and renewable energy infrastructure continues to grow at projected rates, efficiency measures reallocate scarcity rather than resolve it. The bottleneck shifts from rare earths to lithium, from lithium to cobalt, from materials to processing capacity. Scarcity is displaced, not eliminated.

What follows is not inevitable decline, but the end of postponement. For decades, growth allowed societies to defer decisions about distribution, consumption and exposure. Environmental limits could be offset by efficiency gains. Social tensions could be softened by rising aggregate incomes. Strategic dependencies could be tolerated because access seemed assured.

Under conditions of persistent constraint, that logic breaks down. Efficiency improvements increasingly rebound into higher demand rather than absolute reduction. Resource use is displaced geographically rather than reduced structurally. Environmental pressure is redistributed rather than resolved. Scarcity, in this sense, is not a failure of policy. It is a feature of a world in which expansion is no longer the default state.

This is where the philosophical dimension becomes unavoidable. Scarcity forces a distinction between what can be optimised and what must be chosen. Markets are effective at allocating abundance. They are far less equipped to adjudicate limits. When resources, energy or ecological space become binding, distribution and prioritisation return as explicitly political questions.

For Europe, this matters because its political economy has long relied on avoiding that moment. Growth postponed conflict. Openness diluted responsibility. Regulation substituted for direction. Scarcity interrupts all three.

The uncomfortable implication for many is that sufficiency is no longer primarily an ethical preference; it becomes a strategic condition. Lower material throughput reduces exposure to volatile supply chains. Reduced demand eases pressure on energy systems and ecosystems alike. More importantly, it forces politics to articulate priorities rather than rely on expansion to reconcile them implicitly.

This does not imply uniform restraint or collective austerity. It implies acknowledging that not all demands can be met simultaneously, and that pretending otherwise erodes credibility. Scarcity exposes whether political systems are capable of governing limits, or whether they remain organised around promises that no longer match material reality.

In that sense, scarcity is not only a constraint. It is a test. It reveals whether democratic politics can move from managing growth to governing within bounds.

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Acting without consensus

If guarantees have expired and scarcity has become structural, the final assumption to fall is that meaningful action still requires broad global consensus. Much of Europe’s political reflex remains organised around that expectation. Problems are framed as global, solutions as multilateral, and legitimacy as something that emerges only once agreement has been reached.

That reflex made sense in a world of expansion and shared direction. It is increasingly paralysing in a world of divergence.

Global consensus is not absent because actors have become irrational or irresponsible. It is absent because interests, constraints and timelines no longer align. Climate, energy, trade and technology are now embedded in national security, domestic distribution and regime stability. Under those conditions, waiting for universal agreement often becomes a way of deferring responsibility rather than building legitimacy.

This does not imply abandoning cooperation or retreating into unilateralism. It does imply recognising that coordination is no longer the default mode of action. Under conditions of geoeconomic fragmentation, states increasingly act under conditions of partial alignment, where cooperation is selective, temporary and shaped by power rather than principle. In such settings, insisting on full consensus before acting often privileges the status quo.

The philosophical shift here is subtle but important. Consensus has long been treated as a precondition for legitimacy. But legitimacy can also emerge from coherence, credibility and example. Acting first, and being judged on outcomes rather than intentions, becomes a form of political communication in itself.

This is where demonstration effects matter more than declarations. China’s rise in solar manufacturing did not follow from global agreement, but from sustained domestic commitment. The resulting cost reductions reshaped global markets more effectively than decades of negotiations. The lesson is not to emulate the political system, but to recognise that action can precede consensus and still transform collective possibilities.

For Europe, this implies a different posture. Rather than waiting for global alignment on sustainability, trade or industrial policy, Europe’s leverage lies in showing that a high-income, democratic region can function under constraint. That sufficiency can coexist with prosperity. That reduced dependence can increase resilience. That democratic legitimacy does not require permanent expansion.

This is not moral leadership in the traditional sense. It is strategic signalling. Demonstrating that certain pathways are viable makes them negotiable later. Acting without consensus is not the rejection of multilateralism, but its reconfiguration. Agreement follows from credibility more often than the other way around.

There is also a democratic dimension to this shift. Acting without consensus forces political systems to justify choices explicitly, rather than hiding behind procedural delay. It exposes trade-offs to scrutiny. It invites contestation. That is uncomfortable, but it is also how democratic legitimacy is rebuilt under conditions of constraint.

The risk, of course, is fragmentation without direction. Acting alone without coherence leads to incoherence. But the opposite risk is now more acute. Waiting for consensus that never arrives risks turning restraint into inertia and ambition into rhetoric.

In a world where guarantees have faded and limits are binding, the question is no longer whether Europe can afford to act without consensus. It is whether it can afford not to.

Conclusion

What emerges from all this is not a call for pessimism, nor for retreat, but for a different kind of realism. Europe’s predicament is not that guarantees have disappeared, but that its politics is still organised around their return. Growth is expected to reconcile tensions it no longer reliably resolves. Consensus is still treated as a prerequisite for action rather than as something that can follow from it. And limits are still framed as temporary obstacles rather than as conditions of governance.

The task ahead is therefore not to restore an earlier equilibrium, but to accept that political maturity now means choosing under constraint.

That choice cannot be postponed much longer. Europe cannot simultaneously maintain current levels of material throughput, deepen strategic autonomy, preserve social cohesion, and meet its climate commitments. Something has to give. The question is whether that giving happens through deliberate political choice or through crisis-driven adjustment.

The honest answer is that Europe will need to reduce aggregate material demand. Not as a distant aspiration, but as a near-term strategic necessity. This means explicit policies for sufficiency: caps on resource-intensive consumption, progressive redistribution to maintain legitimacy under constraint, and industrial policy that prioritises resilience over scale. It means accepting that not all existing economic structures can be preserved, and that some sectors will need to contract while others expand.

That is the conversation Europe is not yet having. But it is the only conversation that takes its stated commitments seriously. In a world without guarantees, autonomy does not come from reassurance. It comes from the willingness to govern limits openly, to act with coherence even when certainty is no longer available, and to name what can no longer be defended.

Take care,

Hans

End of year, but no typical end-of-year story from me. Not the 'it was a terrible year, hope next year will be better' story. I've read too many of those. And yes, it was a terrible year. But repeating that over and over again doesn't help.

I want to discuss transformative strategies and... shoe habits. I'm in the middle of writing my book and working on a key passage that I want to test here: can we, instead of describing a future 'state' or discussing what's wrong with our current societies, actually develop a strategy for what to do? Can we bring the different discourses about a structural new system under some kind of common denominator and chart a path for getting there?

Because sometimes (and here's where my shoes come in), I have the feeling we're too comfortable in the time before collapse, like wearing comfortable shoes while only sitting at a desk.

Shoes and strategies

First, the shoes. My question to you: What shoes do you wear? Is it different for work than private? Has it changed over the years?

I keep returning to these questions because shoe-wearing habits are deceptively mundane. They sit below the radar of most sustainability debates, yet they reveal a great deal about how we think about comfort, productivity, status, and transition. Shoes are infrastructure for daily life. When they change, something deeper is shifting as well.

Looking at footwear habits in the Netherlands, a few things struck me. The most visible is the steady move away from leather shoes toward sneakers. What used to be informal footwear has become socially acceptable almost everywhere: offices, universities, cafés, even formal meetings. After COVID-19, decorum weakened (especially among men) and comfort became the dominant justification. Sneakers fit that story perfectly. They signal ease, flexibility, informality, and perhaps even a quiet resistance to rigid norms.

But this isn't a Dutch phenomenon. Globally, sneakers have become the default shoe. Market analysts consistently show that the athletic and “casual” footwear segment is the fastest-growing part of the global shoe market, outpacing traditional leather footwear. Sneakers are no longer niche sports equipment; they’re mass everyday products. Looking at my own kids, the transition is complete: they don't own anything else. No "good leather shoes," no formal pair, just a rotation of sneakers.

At first glance, this looks like a harmless cultural shift. But I think it is a good example of what I would call a misguided transformation. Yes, there has been a rapid norm shift. But it is a deeply unsustainable one.

As someone who has been a runner all my life, I still carry an old-fashioned belief: sneakers are designed for running. They’re technical products, engineered for impact absorption, grip, and short performance lifespans. They're not designed for sitting at a desk, cycling through the rain, or walking city streets day after day. Turning them into universal, everyday footwear comes with consequences we rarely reflect on.

From an environmental perspective, sneakers differ fundamentally from traditional leather shoes. Life-cycle assessment (LCA) studies show that roughly 70–90 % of a shoe’s total environmental impact occurs during material production and manufacturing, not during use or disposal. Modern sneakers are complex composites of fossil-based materials, such as EVA foams, polyurethane, synthetic rubber and multiple adhesives, which are energy-intensive to produce and almost impossible to separate or recycle at end-of-life. So much different than the old-fashioned leather shoes. As a result, the carbon footprint of a single pair of sneakers typically ranges between 20 and 35 kg CO₂-equivalents, with materials and assembly dominating the total impact. By contrast, traditional leather shoes, despite their own environmental drawbacks, are often repairable and resoleable, extending their lifespan and reducing the annualised environmental burden per year of use.(Though this increases the costs: resoling a leather shoe is getting more and more expensive, and the craftspeople who can do it are getting scarcer every day. In my town, there's only one good shoemaker left in the city center — making resoling increasingly prohibitive for most people).

Add to this the issue of volume. The global footwear market produces tens of billions of pairs of shoes every year, and sneakers account for a growing share of that total. Think about that: with a world population of (a little more than) 8 billion and a production of 23.9 billion (in 2024) it means 3 new pairs every year (which is, of course, not evenly distributed). Many of these shoes are worn for relatively short periods before being discarded. Unlike leather shoes, they are rarely repaired. They end up incinerated, landfilled, or exported as waste, slowly fragmenting into microplastics. All in all, the footwear industry accounts for 1.4% of global carbon emissions.

This is where the transition becomes troubling. We often associate “casualisation” with dematerialisation or simplicity. But in this case, the opposite is true. The move from leather shoes to sneakers represents a shift from relatively durable, mono-material products to short-lived, petrochemical-heavy composites. It feels lighter and more relaxed, but materially it is heavier, more polluting, and more waste-intensive.

There is also a deeper cultural layer. Sneakers are embedded in a growth-driven fashion logic: constant novelty, limited editions, influencer marketing, and status signalling through consumption. Even when people buy “one pair for everyday use,” they are drawn into a system that thrives on turnover. Comfort becomes a narrative that masks disposability.

And there is an even deeper symbolic layer: shoes that are made to make speed are used for comfort, while the more durable leather shoes are worn mostly by people that represent vested interests: those (few) people still in suits. So, everything goes wrong here!

What we see is not just a change in taste. It’s a small but telling example of how transitions can go wrong. Norms can shift quickly—overnight, even—but without any alignment with ecological boundaries. Informality replaces formality, but repairability doesn’t replace disposability. Comfort replaces stiffness, but longevity is quietly sacrificed.

Change can indeed happen overnight. Or it can take a long time. The question that keeps nagging me is not whether change happens, but what kind of change we’re normalizing and whether, in the process, we’re confusing social progress with material regression.

This is not an isolated failure. It’s the pattern. The sneaker transformation succeeded precisely because it followed the path of least resistance. It changed culture without threatening power, it felt like progress without requiring sacrifice, it accelerated consumption while wearing the mask of liberation. And that’s exactly why it went wrong.

However, any transformation strategy worth the name must be designed to resist this pattern. It must distinguish between changes that feel good and changes that work. It must anticipate co-optation. It must recognize that rapid cultural shifts are not the same as structural transformation, and in fact, can actively prevent it by creating the illusion that transformation is already happening.

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A system change strategy

So, think about this when you put on your shoes in the morning.

But here’s why I keep returning to this seemingly trivial example: the sneaker transformation reveals something essential about how change happens, and how it goes wrong.

We got rapid change. We got a complete norm shift in less than a decade and we got something that felt like progress: more comfort, less formality, more individual expression. And yet, materially, we moved backwards. We replaced durable, repairable products with petrochemical composites designed for obsolescence. We mistook casualization for dematerialization. We confused social informality with ecological improvement.

This is not about shoes. This is about transformation strategy.

Because if we can get something as simple as footwear this wrong then what else are we getting wrong? What other “transitions” feel like progress but are materially regressive? And more importantly: what does it take to steer change in a direction that actually works?

The sneaker story teaches us three uncomfortable things about transformation:

First: change can happen fast, overnight even, but speed doesn’t guarantee direction. Norms can shift completely while remaining entirely misaligned with ecological boundaries.

Second: what looks like grassroots cultural change often conceals structural drivers. The sneaker revolution wasn’t just about comfort preferences, it was about an industry that makes more profit from disposable composites than from durable leather. Informality served accumulation.

Third: we are very good at confusing symbolic progress with material improvement. A more casual dress code is not the same as a more sustainable economy. But in the moment, it feels like liberation.

These three lessons, speed without direction, cultural change masking economic imperatives, symbolic progress obscuring material regression, apply far beyond footwear. They show up in how we talk about green growth, circular economy, sustainable finance, wellbeing indicators. Everywhere, we see rapid adoption of new language, new metrics, new pilot projects, while the underlying system remains fundamentally unchanged.

The sneaker story isn't an anomaly. It's the pattern. And understanding why it happened tells us what any successful transformation strategy must address. So the question becomes: if incremental cultural shifts keep taking us in the wrong direction, what kind of transformation strategy would actually work?

That’s what the rest of this piece is about. Not another critique of what’s wrong. Not another vision of a better future. But a structural map of how fragments of a wellbeing economy could actually cohere into something durable, and what stands in the way.

This fragmentation problem extends beyond footwear. In a recent essay, and diagnose the same dynamic playing out in economic transformation discourse itself.

The vocabulary of transformation, such as degrowth, wellbeing economy, doughnut economics, post-growth, has become a hindrance rather than help. While we argue over terminology, the system continues untouched. These frameworks are not competing visions, they serve different strategic functions. Degrowth names the problem and applies pressure, shifting the Overton window by refusing to pretend efficiency alone can solve systemic crisis. The wellbeing economy and doughnut economics provide the destination, helping institutions imagine post-growth life. But without clear red lines about what counts as transformation, visionary frameworks get absorbed into green growth narratives, just like sustainable development before them.

The real risk is not fragmentation but false synthesis, a single, softened vision that integrates all models while quietly erasing antagonism and politics. This is how movements lose force. The neoliberals won because they were coordinated, repeatable, and ready when crisis created openings. We need the same discipline: alignment without erasure, confrontation without purity tests, vision tethered to structural change.

The wellbeing economy and doughnut economics must stop acting as if nudging power is enough. Degrowth must stop acting as if being analytically correct is sufficient. Together, without being merged into one harmless story, they form a coherent theory of change.

Drawing on ecological economics, post-growth scholarship, and transition governance research, the table below maps the structural contrast between two stability logics: a growth-dependent economy versus a wellbeing economy.

This table inevitably simplifies. Different schools within post-growth economics emphasize different dimensions, some prioritize ownership structures, others focus on monetary reform, still others on democratic governance. But simplification serves a purpose here: the goal is not to specify every detail of the destination, but to identify the strategic levers that determine whether fragments cohere or remain marginal.

A wellbeing economy cannot be layered on top of a growth-dependent one. This is the core insight that runs through post-growth research, from Tim Jackson to Jason Hickel to recent work on structural change in post-growth transitions. You cannot steer a ship with new instruments if the hull is cracked.

So, based on this table, what follows is not a policy menu. It’s a navigation map how to transform the system, and not get stuck into a methodological/schools of thought fight about definitions, intentions and worldviews.

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Three logics that explain why fragments stay fragments

Across the literature on wellbeing economies, post-growth, and degrowth, a shared strategic pattern emerges. Not a blueprint, but three interlocking logics that explain why alternatives remain marginal, and what it would take for them to cohere into something durable.

First: Making limits real. Ecological ceilings and social floors have been articulated for decades, but as aspirations they dissolve under pressure. Limits only reshape behavior when they become binding constraints, carbon budgets with phase-out schedules, material caps on high-impact sectors, social floors embedded in fiscal rules as non-negotiable design requirements. This flips the default from “growth unless proven harmful” to “activity must justify itself within limits.” Without this, the other two logics cannot gain traction.

Second: Protect and build alternatives. Good ideas don’t scale because they’re superior, they remain marginal because they operate inside a system whose rules reward extraction and accumulation. Vienna’s public housing, energy cooperatives, mission-oriented public investment, these work not because of grassroots enthusiasm alone, but because institutions chose to protect, finance, and normalize them. This is where wellbeing economy stops being rhetoric and becomes infrastructure. Alternatives must be structurally supported to survive, let alone spread.

Third: Shift legitimacy. Legitimacy doesn’t flow from better storytelling or new indicators. It flows from experience. People defend what makes their lives secure. When non-speculative housing stabilizes neighborhoods, when energy cooperatives deliver lower bills, when productivity gains become time instead of output, growth loses its status as the default measure of success. Not through persuasion, but through lived reliability. This is the slowest logic, but it determines whether the first two survive political pressure.

These three don’t compete, they operate at different moments of the same transformation. Remove any one, and transformation stalls. This is why wellbeing economies cannot be ‘rolled out.’ They must be prepared, through changes that alter what is possible, viable, and normal, until fragments begin to cohere into a new stability logic.

The sneaker transformation succeeded because it changed norms without changing systems. The transformation we need must do the opposite: change systems until new norms become inevitable.

What follows unpacks the table and each logic in detail - how it operates, what levers it requires, and why removing any one makes transformation impossible.

From fragments to system

How a wellbeing economy moves from exception to norm

For a long time, I believed the central problem of our economy was how we grow.

Too dirty, too unequal, too extractive, too short-term. If we could decarbonise fast enough, price externalities correctly, redistribute more fairly, and innovate more intelligently, perhaps growth itself need not be the problem. That assumption sits quietly beneath much of contemporary sustainability policy. And, for a long time, beneath my own work as well.

But over the past decade, through my PhD, through policy advisory work, and through the lived experience of overlapping crises, that position has become increasingly untenable.

What has become clear is that economic growth is no longer a goal we choose; it is a condition the system requires. Employment, public budgets, debt repayment, pension systems, and even political legitimacy are organised such that not growing produces instability. Recession is not experienced as pause or recalibration, but as failure. Stagnation is not neutral; it is crisis.

This is not a moral critique of growth. It is a structural diagnosis. And the difference is subtle, but important: it is not about envying people that have more, or saying that sufficiency is easy. It is simply the diagnosis that our system does not help to deliver prosperity for all within planetary boundaries and that one of the core problems is institutionalised growth dependence.

And it leads to a deeply uncomfortable conclusion:
an economy that requires growth in order to remain stable cannot operate within binding ecological and social limits — not indefinitely, and not even with extraordinary technological progress.

This insight is no longer fringe. It runs through ecological macroeconomics and post-growth research, from Tim Jackson’s Prosperity without Growth, to Jason Hickel’s Less is more, and recent analyses of structural change in post-growth transitions.

Growth is not accidentally pushing us beyond planetary boundaries.
It is doing exactly what the system was designed to do.

The corridor is narrowing — and the engine will not slow

In my PhD, I argued that the economy should not be understood as an autonomous optimisation machine, but as a subsystem embedded in social and ecological systems. When higher-level systems destabilise, efficiency gains at the economic level cannot compensate. You cannot “outgrow” a weakening foundation.

This perspective matters because it changes how we interpret the now-familiar image of the “safe and just corridor”. Kate Raworth’s doughnut made the idea intuitive and politically legible. But recent science has sharpened it considerably. Work on safe and just planetary boundaries shows that once justice is taken seriously, once we account for human exposure to harm, not only Earth-system thresholds, the corridor becomes narrower than previously assumed.

The space in which economies can operate without causing systemic damage is shrinking from both sides. Ecological ceilings are being breached. Social foundations are eroding, even in high-income countries. Burn-out, housing insecurity, precarious work and declining trust are not side-effects; they are signals.

And yet our economic engine behaves like a bicycle that only stays upright as long as we keep pedalling faster. Straight toward a wall.

If the alternatives work, why do they not spread?

By now, we are not short on alternatives.

Public banks that lend without maximising shareholder returns. Social housing systems that stabilise rents instead of inflating assets. Worker cooperatives that prioritise employment over profit growth. Energy cooperatives that produce affordable, renewable energy. Commons that govern resources without extraction.

These are not thought experiments. They exist, often for decades, and often outperform mainstream institutions on stability, resilience and social outcomes.

And yet they remain exceptions. This is the paradox that increasingly preoccupies me: if these alternatives work, why do they not become the norm?

The usual answer is scale. Too small. Too local. Too niche. If only we could replicate them, roll them out, “scale them up”.

But that diagnosis is misleading. Alternatives do not remain marginal because they are inefficient. They remain marginal because they operate inside a system whose rules are written for growth, accumulation and financial return. Within such a system, success elsewhere becomes a threat here.

A public bank undermines private banking profits. Affordable housing undermines real-estate appreciation. Cooperatives undermine shareholder primacy. Renewable energy projects undermine fossil fuel profits.

This is why empirical research finds that wellbeing ideas lose their transformative edge as soon as they enter government. Mason and Büchs show how governments associated with the Wellbeing Economy Alliance adopt wellbeing indicators and narratives, while quietly retaining economic growth as the overriding objective. The same argument I have made in chapter 5 of my Phd.

We change the dashboard, but keep the same engine.

From scaling up to unlocking

This is where much of the transition debate goes astray.

We keep asking how to add more good things to the system: more pilots, more metrics, more innovation, more best practices. What we avoid asking is what must be disabled, constrained or fundamentally redesigned for those alternatives to stop being marginal.

A wellbeing economy cannot be layered on top of a growth-dependent one. This is increasingly explicit in the literature. Kallis and colleagues argue that post-growth is not a policy menu but a structural condition: the economy must be able to reproduce wellbeing without relying on expansion.

From a strategic perspective, Savini makes a similar point. Degrowth, he argues, is not primarily about instruments, but about trajectory, agency and depth, about how societies move from sufficiency as an idea to sufficiency as an organising principle.

Seen this way, the core challenge is not how to scale the new, but how to unlock the old.

Why “transformation” keeps stopping short

A crucial reason why wellbeing and transformation narratives remain politically attractive, yet materially weak, is that they often avoid the political economy of ownership and control.

A recent paper by Chaabouni and Barnthaler, analysing transformative climate adaptation, makes this avoidance explicit. They show that many initiatives aim for “transformation”, but systematically sidestep three structural dimensions: property relations, capital accumulation, and democratic control over economic decisions.
The parallel with wellbeing economy discourse is striking.

Just as adaptation policy often focuses on learning, participation and resilience while leaving ownership structures untouched, wellbeing economy strategies frequently emphasise indicators and narratives while avoiding questions of who owns what, who controls investment, and who decides what counts as legitimate economic activity.

This helps explain why transformation so often stops at the level of language.

A structural map: from growth logic to wellbeing logic

At this point, it helps to slow down and look at the structure as a whole. The table below is not a checklist or blueprint. It is a navigation map, showing why fragments remain fragments, and where strategy must intervene if a wellbeing economy is to become the norm.

The table synthesises insights from ecological economics, post-growth and degrowth scholarship, transition governance, and political economy. Rather than proposing a normative blueprint, it contrasts two systemic stability logics: a growth-dependent economy, whose reproduction depends on continuous accumulation, and a wellbeing economy, whose reproduction depends on sufficiency, resilience, and provisioning within limits.

Dimensions were identified inductively through cross-reading of recent synthesis papers (e.g. Kallis et al., 2025; Kenter et al., 2025), sectoral and institutional analyses (Hardt et al., 2021; Savini, 2025), and political-economic critiques of growth dependence (Richters & Siemoneit, 2019; Chaabouni & Barnthaler, 2026), social tipping points (Milkoreit, 2023 and others), transition management (Loorbach et al, 2017) and then triangulated with my Phd (Stegeman, 2025). Definitely not exhaustive, but I think very helpful.

The table therefore does not describe isolated policy instruments but articulates structural contrasts across purpose, stability conditions, ownership, capital dynamics, governance, and transition pathways. Its function is analytical and strategic: to clarify where incremental reform reproduces growth dependence and where phase change becomes possible.

This table explains why wellbeing initiatives struggle inside growth systems: they violate the system’s stability condition. It also explains why measuring wellbeing without changing ownership, capital flows and planning mechanisms remains insufficient.

You cannot steer a ship with new instruments if the hull is cracked.

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How fragments begin to cohere: three logics

When you step back from the growing body of work on wellbeing economies, post-growth and degrowth, something interesting happens. The field no longer looks like a collection of disconnected proposals, better indicators here, circular practices there, a few brave experiments at the margins. Instead, a shared strategic logic begins to surface.

Not a blueprint. Not a ten-point plan. But a pattern of change: a way in which fragments that once behaved like isolated islands start to align, reinforce one another, and (under the right conditions) tip into something resembling a regime shift.

What is striking is that this logic is neither purely visionary nor purely oppositional. It does not rely on imagining a better future alone, nor on resisting the present from the outside. Instead, it works through a combination of constraint, construction, and legitimation. Each intervenes at a different point in the system’s stability logic. Each mobilises different actors. And none of them works in isolation.

In what follows, I unpack these three logics. I look at what kind of “thing” each is — critique, institutional lever, grassroots practice, or political strategy — and how it operates in practice. Not as frictionless transition narratives, but as real interventions in systems that are designed to resist change.

1. Making limits real: From moral appeal to binding constraint

The first logic is the least glamorous, but arguably the most decisive. It has little to do with inspiring visions of a new economy and everything to do with changing the operating conditions of the existing one.

For decades, ecological limits and social floors have been articulated as aspirations. Important ones, certainly, but aspirations nonetheless. And aspirations, however well-intentioned, have a habit of dissolving under pressure. When growth slows, when budgets tighten, when crises hit, they are renegotiated, postponed, or quietly overridden.

Limits begin to matter only when they become binding.

The post-growth literature is increasingly explicit about this. Hardt et al. (2021), for instance, move beyond abstract calls for “less growth” by operationalising structural change at the sectoral level. Their framework distinguishes between sectors that must expand, stabilise, or contract in a post-growth transition. But this logic only becomes meaningful if it is anchored in constraints that cannot be sidestepped. Without binding limits, “contraction” remains a suggestion rather than a requirement. Moreover, you can also argue that with binding limits (on resource use or pollution like carbon emissions), it becomes less relevant to talk about degrowth. Of course, that can be a consequence of the limits, but not a requirement.

A similar shift is visible in climate policy debates around carbon budgets. The budget framing matters not because it is technically sophisticated, but because it changes the nature of the problem. When mitigation is framed as a cumulative emissions issue, as synthesised by Matthews et al.(2018), climate policy is no longer about marginal improvements or efficiency gains. It becomes a question of allocation under scarcity (so, standard economics). Emissions spent in one place must be saved elsewhere. “Somewhere later” stops being a viable strategy; it becomes an accounting impossibility.

This is precisely why price-based instruments on their own have proven insufficient. Ecological economics has long warned that in growth-dependent economies, efficiency gains tend to rebound. Lower costs stimulate additional consumption, eroding absolute reductions in throughput. Market instruments can improve relative efficiency while leaving total scale untouched — or even expanded. Spash’s (2010) critique of carbon trading is emblematic here: limits are translated into tradable assets, and in the process, the growth imperative remains firmly in place.

Making limits real, then, is not about adding another policy instrument. It is about changing the default logic of the system — from “growth unless proven harmful” to “activity must justify itself within limits”.

What does this look like when it moves from theory to practice?

It shows up in carbon budgets paired with sectoral phase-out schedules, rather than relying solely on price signals. Once budgets are binding, difficult questions can no longer be deferred indefinitely. It appears in material and energy caps for high-impact domains (aviation, cement, steel) coupled with just transition strategies that acknowledge distributional consequences rather than denying them. And it takes shape when social floors are embedded directly into fiscal and legal frameworks: minimum service guarantees, non-negotiable housing affordability targets, baseline access to care and mobility that is treated as a design requirement rather than a residual outcome.

This logic is often misunderstood as purely technocratic, but that misses the point. While grassroots mobilisation is crucial for pushing limits onto the agenda, the moment at which limits start to restructure behaviour is almost always institutional. It is law, regulation, budgeting rules, and planning standards that turn moral claims into operational realities.

The levers, accordingly, are not subtle. They include enforceable caps and budgets, explicit phase-out dates, and sectoral standards that remove certain trajectories from the realm of political negotiation. They include fiscal choices that align public budgets with ecological limits and withdraw subsidies and guarantees from high-throughput activities. And they include spatial and infrastructural planning decisions that lock in low-energy provisioning (compact cities, robust public transport, shared systems of heat and care) long before individual choices enter the picture.

Perhaps most importantly, they include political work: building coalitions that make limits legitimate, not just necessary. This is where the first logic begins to intersect with the third. Limits that are experienced as arbitrary provoke backlash. Limits that are experienced as protective — of livelihoods, of access, of future options — can become politically durable.

Making limits real is therefore not the end of the story. But without it, the story never really begins.

2) Protect and build alternatives: From niches to infrastructure

If the first logic is about tightening the frame (setting real boundaries), the second is about filling it with something that can actually hold.

This is where the idea of a wellbeing economy either becomes tangible, or evaporates into rhetoric if not done well. Because once limits start to bite, the question immediately shifts. If certain forms of activity must contract, what expands instead? And under what conditions can those alternatives survive in an economy that is still largely organised around growth, competition, and accumulation?

A persistent mistake in transition thinking is to assume that good alternatives will scale simply because they are ethically attractive or technically superior. Decades of transition research suggest otherwise. New practices rarely outcompete incumbent ones on a level playing field, because the field is anything but level. Markets select for profitability, speed, and scalability, not for care, resilience, or long-term sufficiency.

This is why the early work on strategic niche management remains so relevant. Kemp, Schot & Hoogma (1998) showed that novel practices tend to survive only when they develop in protected spaces, niches that are temporarily shielded from dominant market pressures, allowing them to mature, learn, and stabilise. Without such protection, alternatives are either marginalised or absorbed, stripped of the very features that made them transformative in the first place.

More recent political economy work sharpens this insight further. The direction of innovation, as Acemoglu and others have argued, is shaped less by what is cheapest and more by what is profitable under existing institutional conditions. Left unchanged, those conditions continue to reward extractive, high-throughput trajectories. Expecting alternatives to flourish without altering that reward structure is, at best, optimistic.

Degrowth scholarship makes this point uncomfortably explicit. Alternatives are not neutral innovations waiting to be discovered; they often conflict directly with growth imperatives, profit expectations, and accumulation dynamics. Savini’s recent paper is particularly useful here because it treats degrowth not as a moral stance but as a strategic problem: one of trajectory, agency, and depth. The question is not only what kinds of alternatives exist, but how they move from prefigurative experiments to forms of provisioning that have institutional weight.

Seen through this lens, “protect and build” is not a call for more pilots. It is a recognition that if we want alternatives to endure, they must be structurally supported.

This becomes visible as soon as we look at concrete domains.

Take housing. Cities like Vienna and Helsinki are often cited not because they are perfect, but because they show how the structure of provision matters. Large non-profit and public housing sectors, insulated from speculative pressures, do not merely house people differently; they stabilise entire urban systems. Affordability is no longer a residual outcome of market dynamics but a design feature of the system itself. Over time, this changes political expectations about what housing is for.

Or consider energy. Energy cooperatives have proliferated where regulatory frameworks and grid access rules allow citizens to participate as co-owners rather than marginal prosumers. Where such enabling conditions are absent, cooperatives remain small, precarious, or symbolic. The difference is not cultural enthusiasm but institutional design.

The same logic applies to finance and innovation. Mission-oriented public investment, when it is taken seriously, shifts the question from “how do we de-risk private investment?” to “how do we steer innovation toward public goals?” Public banks, guarantees, and procurement can either reinforce existing accumulation dynamics or create space for forms of provisioning that would otherwise never attract capital.

In all these cases, what matters is not whether alternatives exist, but whether they are allowed to outlast the dominant system. Survival, not scaling, is the first threshold. Only once alternatives are stable can questions of diffusion and replication meaningfully arise.

Is this vision or critique? In a sense, it is both. But unlike abstract visions of a better future, this is vision in material form: provisioning systems you can point to, walk through, and rely on. They are not arguments; they are arrangements.

And is this logic grassroots? Often, yes, at the beginning. Cooperatives, commons, municipal initiatives and care networks frequently emerge from below, driven by necessity as much as ideology. But they become transformative only when institutions decide to protect, finance, and normalise them. Without that institutional embrace, grassroots alternatives remain heroic but fragile.

The levers here are therefore unmistakably structural. Ownership matters: public, collective, and commons-based forms in foundational domains like housing, energy, care, and mobility change the logic of provision itself. Finance matters: patient capital, public guarantees, and regional investment vehicles determine which activities can persist through downturns. Procurement matters: buying rules can reward social and ecological value rather than lowest upfront cost. Regulation, matters too: legal forms, grid rules, and market access can either open space for alternatives or quietly close it again.

This is the point where the wellbeing economy stops being a narrative and starts becoming infrastructure. Not yet dominant. Not free of tension. But solid enough to carry weight when the old system begins to falter.

3) Shift legitimacy: From growth as success to provision as normal

If the first logic tightens the frame and the second builds alternatives within it, the third determines whether any of this survives contact with politics.

Legitimacy is slow. It accumulates quietly, often invisibly, and then suddenly becomes decisive. It is the reason some institutions endure even when they are criticised, while others collapse at the first sign of stress. And it is the reason why the first two logics, limits and alternatives, either consolidate or unravel.

A common misunderstanding is to treat legitimacy as a matter of storytelling. Change the narrative, introduce better indicators, publish a new dashboard, and assume the system will follow. This is why wellbeing metrics have been so attractive to governments: they promise transformation without confrontation.

But legitimacy does not primarily flow from stories. It flows from experience.

People come to defend what makes their lives more secure, predictable, and intelligible. They resist what threatens that security, even when it is morally compelling. This is why dashboard reforms, on their own, tend to remain systemically weak. They may signal new priorities, but they leave the old stability condition intact. Growth remains the quiet guarantor in the background.

Fioramonti et al. (2022) are explicit about this tension. The wellbeing economy, they argue, represents an attempt to mainstream post-growth ideas, but one that often stalls at the level of framing. Indicators change faster than institutions, and institutions change faster than lived experience. The gap between rhetoric and reality is precisely where legitimacy is won or lost.

Political economy research helps explain why this gap is so persistent. Legitimacy is deeply path-dependent. Once institutions reliably deliver security, they generate their own political resilience. Even when contested, they become hard to dismantle because people organise their lives around them. Pierson (2000) work on increasing returns and institutional feedback remains foundational here: policies do not just allocate resources; they reshape expectations, identities, and coalitions.

This insight matters because it reframes the task. Shifting legitimacy is not about convincing people to abandon growth as an abstract ideal. It is about building systems of provision that make non-growth stability feel normal.

Crises, often invoked as moments of opportunity, complicate this picture rather than simplify it. Transition research repeatedly shows that crises do not automatically produce better outcomes. They are not creative forces in themselves. Instead, they act as selection mechanisms. They amplify some narratives and institutions while sweeping others aside.

What gets selected, however, is not what is normatively superior, but what is already available and credible under pressure.

This is where the recent synthesis by Kenter et al. (2025) becomes particularly useful. By identifying cross-cutting principles for economic transformation, including justice, participation, and political economy, it underscores a crucial point: transformation cannot be reduced to new metrics or aspirations. It depends on whether alternative arrangements are sufficiently embedded to withstand disruption.

Legitimacy shifts, then, are cumulative. They take shape where new forms of provision stop feeling experimental and start feeling reliable.

This is easiest to see in concrete domains.

In housing, for instance, legitimacy changes once a substantial share of residents benefits from stable, non-speculative provision. At that point, rent extraction no longer appears as the natural order of things but as a political choice, one that can be questioned. Security reshapes perception.

In energy systems, legitimacy shifts when citizens experience co-ownership and local reinvestment not as exceptional projects but as everyday arrangements. When lower bills, collective control, and reinvestment in local infrastructure become tangible, the idea of energy as a pure commodity begins to lose its grip.

Something similar happens with work and time. When productivity gains are consistently translated into shorter working hours, better care, or more predictable schedules, rather than into output expansion, the familiar claim that growth is needed “for jobs” starts to weaken. Not because people have embraced degrowth as an ideology, but because their lived experience no longer confirms the argument.

These are not symbolic victories, but institutional footholds.

Is this vision or critique? It is both. But crucially, it is grounded in practice. Legitimacy sits at the intersection of moral claims and material arrangements. Without the former, change lacks direction. Without the latter, it lacks endurance.

And is this logic grassroots? Grassroots movements matter enormously here. They contest meanings, challenge taken-for-granted assumptions, and keep alternative futures imaginable. But legitimacy consolidates only when institutions embed new norms into budgets, rules, and entitlements. Protest can open space; provisioning systems decide what fills it.

The levers, therefore, are not primarily communicative. They are fiscal, legal, and institutional. Budgeting frameworks that make wellbeing objectives binding rather than decorative. Rights-based entitlements, to housing, care, mobility, that make access non-negotiable. And narrative work that reframes “the economy” as a system of provisioning rather than competition, always tethered to real institutional change rather than floating above it.

When legitimacy shifts, growth does not disappear as an idea. It simply loses its status as the default measure of success.

At that point, the first two logics no longer look radical. They start to look like common sense.

How the three logics come together

And why transition looks less like a roadmap than a phase change

It is tempting, at this point, to line the three logics up as alternatives. Limits versus innovation. State intervention versus grassroots experimentation. Critique versus vision. Much of the debate around wellbeing economies and degrowth is structured this way, as if the task were to choose the right lever.

But this framing misses what the literature, and experience, increasingly suggests. These logics are not competing strategies. They operate at different moments of the same transformation, intervening in different aspects of the system’s stability logic.

Making limits real works by destabilising the existing order. Binding ceilings and floors shrink the room for manoeuvre. They surface trade-offs that were previously deferred or externalised. They force choices that growth once allowed us to avoid.

Protecting and building alternatives works in parallel, but on a different register. It is not primarily about destabilisation, but about replacement capacity. Without viable systems of provision, in housing, energy, care, mobility, the imposition of limits risks being experienced as mere austerity. Alternatives absorb pressure. They make contraction survivable, and in some domains, actively desirable. It is the ‘just’ part of the transition.

Shifting legitimacy operates more slowly, but it ultimately decides which of these arrangements endure. Legitimacy determines what people defend when conflicts arise, which systems are perceived as normal, and which are treated as expendable. It is here that lived experience feeds back into political stability.

Seen together, the three logics form a strategic sequence — not in the sense of a linear plan, but as a set of mutually reinforcing dynamics.

Remove any one of them, and the transformation falters. Limits without alternatives provoke backlash. Alternatives without limits remain marginal or are reabsorbed. Legitimacy without material change collapses the moment pressure mounts.

This is why a wellbeing economy or a degrowth society cannot be “rolled out” as a policy package. It cannot be implemented by decree, nor scaled by pilot alone. It has to be prepared, through changes that alter what is possible, what is viable, and what is considered normal, until fragments that once appeared disconnected begin to cohere into a new stability logic.

This is also where the table introduced earlier comes back into view. The contrast it sketches, between a growth-dependent economy and a wellbeing economy, is not a checklist of reforms, but a map of structural reorientation. Each row in the table corresponds to pressure points where the three logics interact: limits reshape objectives and stability conditions; alternatives reconfigure ownership, capital dynamics and productivity; legitimacy consolidates new forms of governance, participation and provision.

Taken together, they describe a movement away from an economy organised as a growth machine, one that must expand to remain stable, toward an economy organised as a maintenance system, designed to keep essential forms of provisioning working within limits.

This shift does not happen smoothly.

One of the most persistent myths about economic transformation is that it follows a neat, linear path: first we agree on goals, then we design policies, then we implement them. In reality, transitions behave more like phase changes. Long periods of apparent continuity are punctuated by moments of rapid reconfiguration. Practices that once seemed marginal become normal. Assumptions that felt immovable lose their grip.

Different traditions have described this dynamic in different vocabularies. Savini speaks of prefiguration, popularisation and institutional pressure. Erik Olin Wright distinguished between interstitial, symbiotic and ruptural transformations. Transition scholars emphasise tipping points and feedbacks. The language varies, but the insight is shared: change accumulates before it becomes visible.

Which has one crucial implication.

The work that matters most happens before the crisis, not during it. Crises do not create new options from scratch. They select among those that are already present, already tested, already legitimate enough to be scaled under pressure. Whether a society responds to crisis by doubling down on growth, or by consolidating a maintenance logic, depends on which fragments have been allowed to cohere in advance.

From this perspective, the question is no longer whether a wellbeing economy is desirable. It is whether the conditions for its emergence are being actively prepared.

That is the strategic horizon within which the three logics belong — and the lens through which the table, and the shift from growth machine to maintenance system, should ultimately be read.

From growth machine to maintenance system

Where to begin when the goal is no longer expansion?

Once we stop treating growth as a neutral good and start seeing it as a stability requirement, a different question comes into view. Not how do we grow differently? but what kind of system are we actually running?

The answer, uncomfortably, is that we have built an economy that behaves like a machine that must keep accelerating in order not to break down. Productivity must become output. Output must become income. Income must become demand. Any interruption is treated as failure. In such a system, stability is not designed; it is borrowed from the future.

A wellbeing economy, taken seriously, implies a different organising principle. Not acceleration, but maintenance.

Maintenance is not a softer word for stagnation. It is a different way of relating to complexity. It asks not how to maximise throughput, but how to keep systems functioning over time, under constraint, with as little damage as possible. Engineers understand this instinctively. So do caregivers. So do ecologists. Economies, however, have been trained to forget it.

The difficulty is that “maintenance” sounds modest, even conservative, while growth sounds dynamic and forward-looking. But in a world of tightening limits, that intuition reverses. It is the growth machine that becomes brittle, while maintenance begins to look quietly radical.

So the real question is not whether we agree with the idea of a maintenance economy. It is where such a shift could plausibly begin.

What becomes visible very quickly is that maintenance does not enter the system where growth still appears to work. It enters where growth already fails, where expansion no longer produces stability, but erodes it.

Think of housing markets that grow in value while becoming uninhabitable for large parts of the population. Care systems that become “more efficient” while burning out their workforce. Infrastructure that is constantly expanded while quietly decaying underneath. Ecosystems that are optimised for yield until they collapse.

These are not marginal problems. They are signals that the growth machine has moved from extraction into self-undermining. It is here, in these pressure points, that maintenance stops sounding nostalgic and starts sounding pragmatic.

A maintenance logic begins, almost always, as a response to failure.

One of the first places where this becomes tangible is the way we treat productivity. In a growth-oriented system, productivity is an unquestioned virtue. More output per hour is assumed to be progress. But in many of the sectors that matter most for wellbeing — care, education, housing management, ecosystem stewardship — higher productivity often means thinner margins, faster work, and lower quality and less attention.

Here, productivity becomes corrosive.

A maintenance-oriented economy does not reject productivity, but it refuses its automatic translation into output growth. Gains in efficiency are redirected into time, quality, and resilience rather than expansion. Fewer patients per nurse. More durable buildings instead of cheaper ones. Reduced working hours rather than intensified labour.

This is not a utopian inversion. It is a quiet redefinition of what “improvement” means. And it matters because once productivity is no longer chained to growth, one of the core engines of the growth machine begins to disengage.

Investment is another place where the difference between growth and maintenance becomes visible.

Growth-oriented investment looks for returns through expansion: new assets, new markets, new consumption. Maintenance-oriented investment looks for returns through risk reduction: preventing breakdown, extending lifetimes, stabilising provisioning. The problem is that our financial institutions are almost entirely built around the first logic.

As a result, maintenance is systematically undervalued. Repair is postponed. Care is understaffed. Ecosystem restoration is framed as a cost rather than as infrastructure. When investment does flow, it is often channelled toward making existing systems more extractive rather than more durable.

A shift toward maintenance therefore does not begin with “better behaviour” by investors. It begins with changing the criteria by which investment is judged, especially in the public sphere. When public budgets start treating housing renovation, care capacity, ecological restoration and energy retrofitting as stability investments rather than market opportunities, the gravitational pull of growth weakens.

This is one of the least glamorous, and most decisive, parts of the transition.

Sufficiency, in this context, stops being a moral appeal and becomes an institutional outcome.

People do not consume less because they are told to. They consume less when systems make stability cheap and insecurity expensive. When housing is stable, people move less. When care is reliable, households compensate less through private consumption. When mobility systems work, car dependence declines without anyone having to preach restraint.

This is why appeals to individual behaviour change fail so consistently. They ask people to compensate for systems that are structurally misaligned.

A maintenance economy works the other way around. It embeds sufficiency into the background conditions of everyday life, until “enough” stops feeling like sacrifice and starts feeling normal.

Crises, finally, look very different from a maintenance perspective.

Growth systems treat crises as interruptions to be overcome as quickly as possible, usually by restoring expansion. Maintenance systems treat crises as stress tests. The question shifts from “how fast can we get back to growth?” to “which systems must keep functioning under strain?”

This reframing has consequences. It determines which sectors receive unconditional support, which are allowed to contract, and which infrastructures are protected regardless of profitability. It also reshapes political legitimacy. Systems that maintain housing, care and energy access during crises become politically durable. Those that fail lose authority rapidly.

Crises do not automatically produce better systems. But they do reveal which logics can survive pressure.

The most important thing to recognise, perhaps, is that a maintenance system does not arrive fully formed.

It begins unevenly, sector by sector, often under pressure rather than through design. Expecting coherence too early leads either to disappointment or to technocratic overreach. The task is not to blueprint the wellbeing economy, but to shift the stability logic in enough critical domains that growth loses its aura of inevitability.

Maintenance spreads when it proves more reliable than expansion.

That is the deeper wager of a wellbeing economy: not that it is morally superior, but that in a world of limits, it simply works better.

And that, quietly, is where the transition really begins.

We’re done. Never forget that it matters what shoes you put on in the morning. And also never forget that transformation is not easy, but necessary. And it comes always in three: limits, alternatives and legitimacy.

Take care,

Hans

We have had Black Friday. Or Black November. Living in the city centre, I always get the feeling that no one actually likes shopping, judging by all those grumpy faces.

However, I am constantly accused of being too pessimistic then. Especially when talking about sufficiency, or even worse, degrowth. “What a grim, negative, austere, semi-communist, and frankly conservative approach! You must be truly desperate to buy into the idea that everything has to be less. Can’t we be a bit more optimistic?”

I’ve lost count of how often I’ve heard this. People want progress. Of course they do. For decades, we have been told that prosperity means growth, more consumption, more mobility, more energy, more technological throughput. In a world built on “more”, any scenario with “less” feels like giving up on hope itself.

Perhaps that’s not the correct analysis.

Recently, an article in De Groene Amsterdammer illustrated this dynamic perfectly. The author, Jaap Tielbeke, sketched two imagined futures. One was a gloomy degrowth world filled with rationing, wool socks and collective shivering, all packaged as a form of humble cosiness. The other was a buoyant techno-optimistic future where breakthroughs solve everything, and we continue our lives unchanged. He concluded that this is essentially a clash of worldviews: techno-optimism versus degrowth pessimism.

He made (unconsciously) a big mistake: you cannot compare different scenarios where your assumptions are implicitly completely misaligned.

But Tielbeke is not alone. This pattern appears everywhere. In Wired, Andrew McAfee calls degrowth “the worst idea on the planet,” arguing that rich countries have already decoupled growth from environmental impact. In Jacobin, Leigh Phillips claims degrowth “fundamentally misdiagnoses” ecological breakdown. Noah Smith calls it “abject fantasy.” In Bloomberg Green, Gernot Wagner calls it “misguided.” The Atlantic treats it as economically dubious. The Daily Friend imagines totalitarian rationing “at gunpoint.”

These articles differ in style and ideology, but they follow the same script: the techno-optimistic scenario makes extremely optimistic assumptions about technology and policy. Degrowth scenarios are depicted through their harshest stereotypes. One future benefit from every breakthrough. The other is denied even basic forms of innovation or institutional imagination.

In addition, they almost all suffer from carbon tunnel vision: the idea that the only relationship between economic activity and nature is carbon emissions. But as we all know, it is much more—the use of land and resources, the pressure on ecosystems, the waste that accumulates.

This looks like a clash of values. In reality, it is a clash of assumptions. One scenario is judged at its brightest, the other at its bleakest. That is not analysis. It is narrative convenience.

Think of it like building two bridges.

One bridge—the techno-optimist one—is drawn with perfect engineering conditions. Unlimited budget, no supply shortages, ideal weather, no political interference, no ecological constraints. It spans the river effortlessly.

The other bridge—degrowth—is drawn under storm clouds, with rusted tools, a tired crew and missing materials.

Of course, the first looks more elegant. But that tells us nothing about which bridge will stand in real water, under real pressure.

If we want meaningful conversations about our future, we need to place both scenarios under the same sky, with the same gravity. Give both futures the same weather forecast. Only then can we actually compare them.

So let’s do that.

Let’s start with energy—the heart of the matter.

The green growth story goes like this: we rapidly scale renewable energy while GDP continues growing. We electrify everything—cars, heating, industry—and power it all with solar and wind. Technology improves, costs fall, and we decouple economic activity from emissions. Problem solved.

But give that scenario realistic assumptions, and the picture changes dramatically.

A comprehensive review published this January in The Lancet Planetary Health by Giorgos Kallis, Jason Hickel, and colleagues synthesises decades of research on what green growth scenarios actually require. The review finds that above a certain income level, economic growth does not improve human wellbeing, and that there is no empirical evidence that absolute decoupling from resource use can be achieved on a global scale against a background of continued economic growth.

The assumptions behind green growth are staggering:

• Unprecedented decoupling rates: Breaking the link between GDP and energy use at speeds far beyond anything achieved historically—with no empirical evidence, this is possible on a global scale

• Massive resource extraction: The materials needed for “green” infrastructure—rare earths, lithium, cobalt—require mining operations that would devastate ecosystems, often in the Global South.

• Land competition at the continental scale: Bioenergy with carbon capture (BECCS), relied upon in most green growth scenarios, would require agricultural land up to three times the size of India, with devastating effects on biodiversity, forests, water tables, and food systems.

And crucially, if carbon capture technology fails to work at scale, we would be locked into a high-temperature trajectory from which it would be impossible to escape.

Even Hickel and Kallis’s earlier 2020 analysis showed that the maximum decoupling rate models suggest is around 3-4% per year under extremely optimistic conditions—far short of what’s needed if the global economy continues growing at expected rates while meeting climate targets.

In other words, we can keep growth going, but only if we assume away resource constraints, political resistance, time limits, and the material reality of what “green” infrastructure actually requires.

Now compare that to the degrowth stereotype: everyone shivering in poorly insulated homes, using candles instead of electricity, and returning to preindustrial poverty.

But that’s not what the research actually proposes.

The Lancet review emphasises that high levels of well-being can be achieved with lower resource use, and that focusing on public services, income equality, and democratic quality can meet human needs with much lower energy use. Arnulf Grubler and colleagues’ “Low Energy Demand” scenario, published in Nature Energy, demonstrates exactly how: with existing technology—no miracles required—we could provide high living standards globally while using 40% less energy than today. How?

• Shorter working hours (more time, less commuting, less energy-intensive consumption)

• Shifted mobility patterns (walkable cities, excellent public transport, far fewer cars)

• Efficient buildings (deep retrofits, shared spaces, district heating)

• Reduced material throughput (longer-lasting products, repair culture, less waste)

This isn’t rationing. It’s a redesign. And crucially, it doesn’t depend on technologies that don’t yet exist, political miracles, or strip-mining the Global South.

When you align the assumptions—give both scenarios the same real-world constraints—the ostensibly “pessimistic” sufficiency pathway starts to look far more plausible than the ostensibly “optimistic” green growth one.

Second: work and time.

The green growth story here is seductive: automation and AI will eventually free us from drudgery, creating abundance and leisure for all. Technology handles the boring stuff, productivity soars, and we all benefit from the gains.

But again, look at what actually happens under realistic assumptions.

Research from MIT economists Daron Acemoglu and Pascual Restrepo shows that between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by automation displacing workers from routine tasks. Since 1980, automation has reduced wages for men without a high school degree by 8.8 per cent and for women without a high school degree by 2.3 per cent, adjusted for inflation.

Crucially, Acemoglu calls many of these innovations “so-so technology” or “so-so automation”—tools like self-checkout kiosks that are good for corporate profits, bad for service workers, and not hugely important for overall productivity gains. The productivity gains from technology don’t automatically translate into shorter working hours or higher wages for most workers. They translate into profits for those who own the technology.

Now compare that to the degrowth stereotype: mass unemployment, poverty, economic stagnation, people unable to find work or support themselves.

But that’s not what sufficiency-oriented research proposes.

Recent trials of the four-day workweek show a very different picture. A 2025 study published in Nature Human Behaviour, led by Boston College researchers Wen Fan and Juliet Schor, tracked nearly 3,000 employees across 141 organisations in six countries over six months. They found that moving to a four-day work week with no pay reduction led to significant improvements: burnout decreased, job satisfaction increased by 0.52 on a 0-10 scale, and both mental and physical health improved. The researchers found that workers reported feeling happier, healthier, and higher-performing, and 89 per cent of participating companies were still using the four-day workweek a year later, with over half making the change permanent.

This isn’t about working harder in compressed time—it’s about recovery and better work organisation leading to better outcomes for everyone.

Meanwhile, degrowth scholars like Bernard Unti and Blake Alcott have shown how a job guarantee could decouple employment from economic growth entirely. The most important feature of the job guarantee is that it eliminates the profit constraint on employment. With a job guarantee in place, the working class will not be hostage to profit-driven economic growth to secure an income. Work could be channelled toward socially and ecologically beneficial activities—care work, ecosystem restoration, community services—that the private sector won’t provide because they’re not profitable enough.

Combine shorter working hours with a job guarantee and public investment in care infrastructure, and you get something very different from the austerity stereotype: more time, less stress, meaningful work, stronger communities.

When assumptions align, which future actually improves daily life?

A pattern emerges

These two examples reveal something broader. The assumptions behind each pathway aren’t just technical; they’re institutional. They reflect the incentive structures of the system that produces them.

In a market-driven system optimised for profit, you get plenty of innovation—but innovation designed to maximise returns, not wellbeing or ecological stability. You get efficiency gains that translate into cost savings for firms, not reduced resource use overall, because those savings enable more production (rebound effects). You get automation that displaces workers rather than reducing their hours, because profits depend on lowering labour costs, not improving working conditions.

In a sufficiency-oriented system with stronger democratic control and public provisioning, the trade-offs differ. You likely get less rapid technological change, because innovation isn’t driven by competitive pressure and profit incentives. You face the political challenge of coordinating reduced consumption and working time across society. You need robust public institutions that can actually deliver quality services—a significant governance challenge.

Neither pathway is friction-free. But when we map out the realistic versions of both, a clear pattern emerges:

The table makes visible what narrative alone obscures: the futures we find emotionally appealing rest on the weakest empirical foundations. The futures we instinctively resist rest on demonstrated possibilities—and yes, on significant political and institutional challenges too.

So where does that leave us?

When you align the assumptions—give both futures the same constraints, the same real-world friction—something unexpected happens. The scenarios we’ve been taught to fear (sufficiency, reduced throughput, shorter hours) rest on demonstrated possibilities: existing technology, proven policies, and institutional designs we can study. Yes, they require political will we haven’t yet mustered. Yes, they demand confronting inequality and vested interests. But the building blocks exist.

The scenarios we find emotionally comforting (endless green growth, friction-free automation, rapid decoupling) rest on breakthroughs that haven’t happened, resource extraction at scales that would devastate ecosystems, and political cooperation that has never materialised. They require not just optimism but faith—faith that limits will bend, that technology will arrive in time, that the same market logic that created overconsumption will somehow constrain it.

This doesn’t mean green technology is useless or that innovation doesn’t matter. It means technology alone cannot carry the entire weight of the future we need. And it means that the real optimism—the kind anchored in what’s actually possible—looks very different from what we’ve been sold.

I understand the resistance. For decades, prosperity has meant growth. More has meant progress. Questioning that feels like questioning hope itself. But what if the real retreat from hope is clinging to a story that no longer describes the world we inhabit?

What if real optimism requires something more complex: the courage to redesign prosperity within a finite world? To build economies that provide genuine wellbeing—health, security, time, community, meaning—without requiring endless material throughput? To imagine abundance not as infinite accumulation, but as enough, fairly shared, within a living planet’s limits?

That future is still open. But only if we stop comparing it to fantasies. Only if we test our pathways with the same honesty, place them under the same sky, and judge them by what will actually work rather than what makes us most comfortable.

Otherwise, we’re not choosing between worldviews. We’re choosing between coherent thinking and wishful thinking.

And those grumpy faces on Black Friday? Maybe they already know which world we’re building.

In what follows, I want to step back one level: away from specific sectors and into the question behind them all — how we imagine the future in the first place.

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Beyond the Bright Story: Why Assumptions Shape Our Futures

Before we talk about models, futures or ideologies, it’s worth pausing on something more fundamental: the state of the Earth system itself.

Earlier this year, Johan Rockström and colleagues published a paper that, in my view, should have ended several debates we still insist on having.

It is a sobering assessment — but not in the “doom scroll” sense. It’s sobering because it is so precise about the physics, and so understated about the politics.

The message is simple: We missed the decade in which the transformation would have been easiest. We are now deep into overshoot. And the planet is beginning to behave accordingly.

On my LinkedIn page, I wrote something that still captures the feeling this report left me with (Oops, self-quotation):

The tragedy isn’t that we didn’t know.
The tragedy is that we knew all along — and acted as if the laws of physics were optional.

We treated 2015–2025 as a decade of debate.
It was, in truth, the decade of decision.
(LinkedIn post)

If you look at the figure from the article (below), it’s hard not to feel the weight of it. It shows three zones:

• a safe and just operating space — the Holocene-like stability we are drifting away from

• a zone of increasing risks, the orange band where we now find ourselves

• and above that, a high-risk zone, where social destabilization and Earth system instability feed each other

Rockström calls 2025 a “critical juncture” — the year when we leave the manageable overshoot trajectory and enter pathways dominated by tipping points, runaway risks, and nonlinear change.

The curves bend sharply upward into the “unmanageable overshoot” zone — futures in which ecosystems degrade faster than we can restore them, where climate feedbacks accelerate, and where social systems fray under ecological stress. The graphic looks like a set of diverging fates. Because that is what it is.

This is the ground beneath our feet.
And it is the ground on which all scenario thinking must now stand.

Not 1997. Not 2005. Not the comforting illusion of “still enough time.”

Once you grasp the contours of that slope — the tilt, the thresholds, the feedbacks — one insight becomes unavoidable:

You cannot compare scenarios unless the assumptions beneath them are symmetrical.

And today, they rarely are.

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The quiet force that narrows our future imagination

This is where another study, by Tom Hawxwell and colleagues, becomes unexpectedly clarifying (see also my blog #27). Their research focuses on mobility, but the insight applies far beyond transport: the future is not only predicted, but it is also curated. In their paper, they use a futures cone (see figure) to show the vast landscape of what is technically, socially and ecologically possible. In theory, the canvas is vast.
In practice, only a small corner of it gets painted.

Why?
Because the range of “credible” futures is quietly narrowed by incumbents, institutions, and the worldviews that built our existing systems. Hawxwell calls this scope incumbency: an invisible force that trims the edges of imagination long before actual feasibility has even been assessed.

And so, even futures research — which should be the place we stretch our thinking — repeatedly reproduces the very systems it seeks to transform. Electric cars instead of fewer cars. Smarter consumption instead of less consumption. “Greener” growth instead of different prosperity.

Not because more profound change is impossible, but because it falls outside the comfortable zone of established narratives.

What Hawxwell found in mobility, we see everywhere: in energy, food, and urban models. The “realistic” future is often the one most biased toward the status quo.

Meanwhile, futures labelled “utopian” or “idealistic” are often the only ones aligned with planetary boundaries.

This is precisely why the degrowth vs. tech-optimism debate becomes so surreal. One future is allowed to roam across the full futures cone — breakthroughs, miracles, cooperative politics. The other is confined to the dimmest corner — rationing, regression, the wool-sock caricature.

If we want to compare futures honestly, we have to reopen the cone.
We have to broaden our intellectual horizons.
We have to see who has been quietly shrinking it.

This is where the assumptions table matters.

Above, we laid out a table of core assumptions — decoupling, negative emissions, technology, power, distribution, and risk. That table was not a decoration. It was the core.

Because when you grant both futures the same sky — the same physics, the same political constraints, the same material bottlenecks — something shifts:

• The “optimistic” green-growth pathway begins to look vastly more demanding.

• The “pessimistic” sufficiency pathway begins to look far more feasible.

• And the distinction between optimism and realism starts to blur.

Once assumptions are aligned, a pattern emerges: The futures we emotionally prefer rest on the weakest empirical foundations.
The futures we instinctively resist rest on the strongest ones.

This is not ideology. It is coherence.

Worldviews — the deepest layer of all

Technology is not neutral. Politics is not neutral. And neither is imagination.

A key insight from my PhD — and one that resonates through the literature — is that system change requires a shift in worldview long before it requires a shift in technology. Technologies can be swapped quickly; meanings cannot.

Green growth assumes the continuation of the same prosperity logic:
more throughput → more growth → more wellbeing.

Sufficiency assumes a different logic:
enough resources → shared prosperity → more wellbeing.

Many people call the latter “unrealistic.” But usually they mean culturally unrealistic, not physically unrealistic. But that explains more about underlying worldviews than ‘realism’. If you take cultural realism as given and physical realism not, then you’re right. But of course, that is not the case in objective reality.

Culture changes slowly — until it suddenly doesn’t.
Smoking. Meat. Gender roles. Working hours.
Entire ethics have flipped within a generation.

If culture can change on these basics of daily life, why not on prosperity?

Precaution is not pessimism — it is responsibility

And this brings us back, again, to Rockström.

When seven of nine planetary boundaries are breached,
The burden of proof moves.
The responsible future is the one with fewer miracles built in — not more.

A future that depends on speculative negative emissions, perfect coordination and “breakthrough technologies arriving on time” is not optimistic. It is reckless.

A future that reduces energy and material pressure, strengthens public services, and broadens wellbeing is not pessimistic. It is precautionary.

Precaution is not the opposite of hope.
It is hope with a spine.

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So, Where Does This Leave Us?

With a different kind of question.

Not “Is degrowth too pessimistic?”
Not “Is techno-optimism visionary enough?”
Not “Which ideology do I prefer?”

But simply:

Given the world as it actually is — which futures remain physically, socially and politically coherent?
And what would it take to build them?

Once we align assumptions, the fog lifts. We clearly see our own cone and the distortions we have, which let us see only a limited number of our preferred futures.

Sufficiency no longer looks like sacrifice.
Green growth no longer looks like the safest path.
Tech optimism no longer looks like progress without consequences.
And pessimism is no longer the word used to describe responsibility.

A new kind of optimism emerges — quieter, but more grounded: the optimism of redesign, of restraint, of shared prosperity within limits.

And perhaps those grumpy Black Friday faces are a clue.
Maybe people aren’t actually enjoying the story of “more.”
Perhaps the instinct for a different story is already there —
a tale of enough, of stability, of coherence.

A story that finally makes sense in the world we now inhabit.

Be kind,
Hans

And yes, it happened again a few weeks ago. I found myself in yet another debate about something concerning our economic system: growth, basic income, money creation, corporate ownership, or the most dangerous one, capitalism... I don’t even remember exactly. What I do remember is arguing that maybe, just maybe, it’s time to rethink how we’ve structured things thoughtfully. But the pushback is always the same: reactive, shallow, void of reflection.

That’s not possible.

Come on.

Utopian nonsense.

Eco-Marxism.

Hardly worth listening to, let alone engaging in an honest discussion.

And yet it remains curious. Because isn’t it bizarre to believe that a system failing on every front will somehow deliver a livable future if we only tweak it here and sprinkle some tech over there? The signs are in plain sight.

The latest science report from Ripple et al. (2025) could not be clearer: a planet on the brink. We have the evidence. We know the numbers. They worsen every year. I won’t list the “achievements” again (see article with all climate problems) the graphs below say enough. Economic activity continues to drive ecological destruction. Global sustainability remains an illusion because every efficiency gain is swallowed by more growth. Meanwhile, the system channels wealth upward with remarkable precision, concentrating power among a small, insulated elite while democratic institutions quietly erode.

And more evidence arrived this week with the new World Energy Outlook from the International Energy Agency. At first glance, the expansion of solar and wind looks like progress. But look closer. Fossil fuel consumption is not falling fast enough. In some scenarios, it is still rising. And the fastest-growing drivers of energy demand are artificial intelligence, air conditioning and electric vehicles. These are not marginal uses. They are structural. This is the paradox of “solutions” inside a growth-addicted system: even promising technologies end up increasing total energy use rather than reducing it. We keep solving the wrong problem and end up generating new ones.

And this week, another example appeared, this time in the Journal of Industrial Ecology. Lowe et al. revisited what they call the “circular economy rebound”: the paradox in which recycling, reuse, and efficiency improvements end up driving more production rather than less. The evidence is uncomfortable. Across sectors — from aluminium and copper to smartphones, textiles, household waste and sharing platforms — a large share of the expected savings evaporates once these strategies enter a growth-driven system. Sometimes 30 per cent, sometimes 90 per cent. As the authors show, rebound is not a bug in the circular economy. It is a structural feature of trying to fix an extractive economy with efficiency. In a system built on expansion, every loop of reuse becomes another loop of production. In other words, even our “solutions” behave as symptoms. We are trying to repair a rusted machine with fresh paint, while the living world around it keeps reminding us that economies are not engines but ecosystems.

This fits the same pattern as the IEA data above. The more efficiently we solve, the more we consume. It is the logic of a system that cannot imagine limits, only throughput.

And this dilution happens everywhere. Every new term emerging from the sustainability world eventually gets absorbed by the system it seeks to challenge. ‘Regenerative’ is the latest casualty (see also here). Once a call to restore ecosystems and communities, it now risks becoming a vague label for business-as-usual with a green paint job. In theory, a regenerative economy would put nature and society before profit. In practice, it often becomes branding. Schleifer’s critical review shows how regeneration becomes a discursive upgrade that keeps corporations at the centre, maintains existing power structures and hides behind the fog of “net positivity.”

Democracy. Inequality. Ecology. All under siege from a machine that operates like a busted washing machine: noisy, but nothing gets clean.

Still, I understand the reflex. Real change is frightening. Especially when it contradicts everything we’ve been taught is normal: permanent growth, ownership as sacred, work as moral duty. I’m shaking the very paradigm we were trained in. The definitions of success, the careers built on it, and the assumptions we treat as self-evident. Suggest that things might need to change at the root, and people panic. Not because it is too radical, but because it is uncomfortably close to the truth.

Hence the strawmen.
Say that profit should not be the only measure of success, and suddenly you get a lecture about Soviet planning.
Propose new ownership structures, and someone invokes Cuba.
Question growth, and people imagine a future without WiFi or oat-milk lattes. We are stuck inside the operating manual of a system long past its warranty, blind to the living world it was meant to serve.

So I made a short animation. A simple flow diagram of our collective reasoning. It exposes the hidden architecture of our worldview: the assumptions, feedback loops and moral hierarchies that quietly define what counts as “rational.” Each arrow represents a belief we rarely question. Growth as a necessity. Progress as expansion. Innovation is the universal answer. The chart looks neat and self-evident until you see how every route loops back to the same conclusion: keep the system running. That is precisely the point. It is not meant to explain the world but to expose how our sense of possibility has been carefully shaped to protect what is impossible. And yes, it is homemade. But it works.

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We have been here before. In the 1930s, when global markets collapsed, alternatives were on the table. Keynes argued for active state intervention. Polanyi reminded us that markets are social constructs, not natural laws. And Gramsci, writing from a fascist prison, pointed out that power is maintained not only through laws or violence but through the values and assumptions we take for granted. Call it cultural hegemony. And when you see how quickly systemic critiques are dismissed today as unrealistic or extreme, you could swear Gramsci was posting his prison notes on LinkedIn.

We need a system that doesn’t collapse the moment it stops growing. An economy that serves society, not the other way around. That means new rules: limits on ownership, alternative forms of distribution, more commons and fewer commodities: less corporate dominance, more collective resilience.

This is the discussion we need — between thoughtful adults, not reflexive loyalists who summon Marx at the first sign of dissent or whisper “Havana” with trembling lips.

To make these contrasts more tangible, I created a table, inspired by the recent work of Beinhocker et al., the broader literature and my own PhD. The table is a little like the sketch of a landscape emerging beneath an old mechanical drawing. You begin to see how two worldviews overlap, compete and define what we believe is possible. It shows how different starting assumptions lead to other ideas of what an economy is and what it is for.

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Below is the full version, with references and further explanation. The idea is straightforward but far-reaching: our assumptions at different ontological levels shape not only how we see the economy, but also what we believe the right solutions are.

And yet... we don’t have that nuanced discussion. Perhaps because, for some, the system still works. For those who define what’s “realistic.” For vested interests. All that is fossil, those who are rich, all production that — if you would subtract the damage done — is net negative for society. But also, do not forget, the privileged middle. People like me and you, if I’m honest. I live comfortably. I offset my flights, invest responsibly, and write columns about changing the system—without it ever really hurting me. Not yet.

For us, this isn’t a crisis. It’s comfort.

So once more, with feeling: come on. Leave the strawmen in the closet. Let’s finally talk about building a system that does work.

Because the real utopia is believing we can keep going like this.

It’s time to grow up. We have the ideas. We have the examples. Let’s not get distracted by greenwashing terms meant to change the system. Hack the system!

What follows is the more extended version of the argument. If time is short, feel free to stop here. But if you want to go deeper, I invite you to read on and leave behind reductionist thinking.

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On our way to new economic thinking.

Recent work in a Nature Sustainability paper on Systemic Transformations captures what many scholars have been arguing for years. It shows that technological innovation and policy reform will not be enough to bring our societies back within ecological limits. What is needed is a more profound transformation, one that questions the assumptions on which our economies are built. The same message runs through Beinhocker and Bednar’s Complexity and Paradigm Change in Economics and Coscieme et al.’s Critique on mainstream myths (and of course much more). These studies give sharper language to something Donella Meadows and Fritjof Capra already understood decades ago: the problem is not a lack of intelligence or tools but the architecture of our thinking. We are not disagreeing about instruments. We disagree about ontologies.

On one side stands the mechanistic worldview that has defined mainstream economics for half a century, built on equilibrium, efficiency and competition as natural laws (see also this blog about those ‘natural’ laws). Of course, it has evolved and become more nuanced (behavioural economics, for instance, has added psychological realism), yet the core of the paradigm remains intact. On the other hand, a relational understanding of the economy emerges as a complex, adaptive system embedded in ecology and shaped by feedback and cooperation. The insight itself is not new, but these papers make the ontological contrast explicit. The real divide lies deeper than politics or theory. It lies in the story we tell about what the economy is.

In my own PhD research, I explored this very foundation of economic thought: how worldviews, assumptions and moral imaginaries shape what we consider rational or realistic. My work showed that dominant economic paradigms are not neutral descriptions of reality but performative systems that create the world they claim to analyse. What we treat as technical truths about growth, ownership, or efficiency are, in fact, moral and ontological choices. From this perspective, complexity economics does not simply offer better models. It exposes why incremental reforms often reproduce the very dynamics they aim to solve.

In Chapter 2 of my PhD, I developed Table 2.1 to map the economy, society and planet as three distinct but connected domains of value creation. Each has its own logic, success criteria and form of value. The economy focuses on output and efficiency, society on inclusion and agency, and the planet on regeneration. It was my first attempt to show that sustainability failures are not simply policy failures but failures of coherence between domains.

Yet this still did not explain why some sustainability ideas go nowhere while others resonate. For that, Table 5.4 in Chapter 5 became crucial (sorry for all those tables, just trying to explain the logic of complexity). In that table, I compared a broad set of sustainability proposals using Meadows’s leverage points, as well as the deeper ethical and institutional attributes behind them: worldview, value orientation, value expression, interaction mechanisms, actors in charge, objectives, criteria, and future visions of change. A clear pattern appeared. Most mainstream proposals — carbon pricing, circular business models, competition policy — are embedded in an individualist and utilitarian worldview. They express value in monetary terms. They rely on markets as the primary mechanism of change and treat efficiency as the key criterion. Their vision for the future is one of system preservation. They operate at shallow leverage points because their ontology keeps them there.

The more transformative proposals (sufficiency, sharing, degrowth, post-growth and limitarian ideas) draw from a different worldview. They assume egalitarian or community-based ethics. They express value in broader ecological and social terms. They depend on collective and community decision-making. Their goal is not efficiency but preservation, solidarity and enoughness. Their envisioned futures involve nonlinear change and shifts in the system's rules. Their transformative potential comes from their deeper ontology. They emerge from a relational view of the economy, much closer to what Donella Meadows, Fritjof Capra and many ecological thinkers have described for decades.

This pattern aligns with the recent work in complexity economics. Eric Beinhocker and Jana Bednar show that the mechanistic paradigm is not only analytically limited but structurally incapable of addressing systemic problems because it misreads the nature of complex systems. Coscieme et al. make a similar point in showing that many core assumptions of mainstream economics persist even when they conflict with biophysical limits. Giorgos Kallis and colleagues have argued for years that incremental reforms are absorbed by the dominant logic and end up reproducing the very system they try to transform.

This is also the central insight in the work of David Sloan Wilson and Dennis Snower. Their papers Rethinking the Theoretical Foundations of Economics
and A New Economic Paradigm for the 21st Century (2025)
show that cooperation, not competition, is the primary evolutionary force in social systems. Economies are moral systems. Markets are not neutral mechanisms but arenas of moral coordination shaped by norms and narratives.

The new table I created brings together the logic of Table 2.1 and the insight from Table 5.4, and is based on the work by Beinhocker et al., who introduce ontological layers (stacks) in a paradigm. Instead of mapping domains or policy proposals, it maps the ontological layers that shape both domains and policy proposals. It shows how paradigms organise assumptions about morality, behaviour, systems logic, normative analysis, metrics, political economy, policies and narratives. It explains why some sustainability proposals remain shallow, while others reach deep leverage points. It shows what is normative and positive, and it highlights the underlying social structures that should deliver wellbeing. This is also precisely what another recent Nature Sustainability paper argues: that only a shift in worldview can align society with planetary boundaries. A similar conclusion that Kallis et al have drawn. What counts as realistic depends on the worldview from which we look.

Read horizontally, the table shows how meaning shifts across layers: morality, behaviour, systems theory, criteria, policies and narratives. Read vertically, it reveals the coherence of each paradigm. Paradigms do not change one layer at a time. They shift as whole worldviews. That is why incremental reforms almost always revert to the old logic. The architecture of thinking pulls them back.

The table can be read as a living map of economic thought. It shows how assumptions about human nature, morality and systems logic cascade through our institutions and eventually shape the world we inhabit. It does not compare policy preferences or ideological labels. It shows how worldviews organise entire systems of meaning.

The first column (neoliberal consensus) presents the inherited ontology of neoliberalism, the worldview that still underpins much of mainstream economics and public policy. It rests on ideas of individualism, utility maximisation, and market equilibrium. It assumes a world that is stable, competitive and self-correcting, where efficiency is the dominant criterion. From these assumptions flow the familiar policy recipes: tax cuts, deregulation, privatisation and the primacy of shareholder value. Narratives of freedom through markets and trickle-down prosperity complete the picture.

The second column (emerging paradigm) shows how an alternative worldview is emerging, drawing on complexity science, ecology, anthropology, and moral psychology. It sees people as socially embedded and motivated by more than self-interest. It understands economies as complex adaptive systems shaped by feedback, power, history and relationships. It recognises that social and ecological systems co-evolve and that change is often non-linear. This worldview already informs new approaches to governance, ownership, value creation, and policy-making.

But the innovation in the table lies in the additional column that describes the transition dynamics. This column does not define the worldview itself nor the consequences that might follow from it. It describes the process by which societies move from one paradigm to another. Every paradigm needs a transition story, and this column makes that explicit. It answers the question: if the emerging worldview is to take root, what forms of learning, governance and institutional change are needed?

These transition dynamics rest on several ideas. First, moral imagination needs to expand. Education, art and participatory deliberation create space to question inherited assumptions and to develop new ethical foundations. Second, institutions need to learn collectively. Instead of assuming perfect foresight and optimal design, the transition logic embraces experimentation, feedback and adaptive governance. Policy-making becomes iterative rather than prescriptive. Third, cooperation must be strengthened. That requires environments that reward trust and shared responsibility rather than competition and narrow self-interest. Fourth, systems modelling and scenario learning help reveal feedback that would otherwise be invisible. Fifth, policy processes need transparency and co-creation so that different forms of knowledge and lived experience can shape the direction of change. These ideas echo transition theory, institutional economics, and the broader complexity literature, as well as the insights of Meadows, Capra, and Ostrom: systems change through reflexive learning, not top-down control.

The transition process column shows that a new ontology does not simply replace an old one. It emerges slowly, through learning, experimentation and the redesign of institutional habits. At the level of moral foundations, it means broadening moral imagination through education, public reflection and cultural work. It means nurturing a sense of planetary responsibility and long-term thinking. At the level of behaviour, it means building environments where cooperation is rewarded rather than penalised. Incentives and norms need to shift together. At the level of systems theory, it calls for the use of system modelling, scenario learning, and complexity-informed policymaking, which help institutions anticipate nonlinear change rather than being blindsided by it.

The final column sketches the consequences that could follow once this new logic becomes embedded in culture and governance. These outcomes are not policy proposals but the natural systemic expression of a relational worldview: an ethics of sufficiency and intergenerational responsibility; economies organised around collaboration and planetary stewardship; regenerative and circular systems within ecological boundaries; fiscal frameworks aligned with social and environmental balance; and a cultural narrative that values belonging and enoughness. They echo insights from post-growth research, regenerative economics and the state principles on systemic transformations as discussed by Kenter et al..

Read horizontally, each row reveals how meaning changes across layers of economic thought. Read vertically, the table shows that transformation is never only technical, moral, or political. It requires shifts in all three. Moral foundations shape behavioural theories. Behavioural theories shape systems logic. Systems logic shapes metrics. Metrics shape political economy and policies. And these shape narratives. Every reform sits inside this deeper architecture. Every public debate reflects a worldview about what an economy is for.

By making the transition process explicit, the table clarifies why incremental reforms so often fall short. They change tools but leave the worldview intact. They adjust incentives within the old feedback loops. The deeper layers resist the shift because the cultural and institutional infrastructure for a new paradigm has not yet been built. The transition column shows that paradigm change requires more than new ideas. It requires environments in which those ideas can be tested, contested, shared and institutionalised.

In that sense, complexity economics does not create something new. The moment we stop treating the economy as a machine to optimise, we can finally see it as part of the wider ecosystem that keeps us alive. It gives structure and coherence to a transformation that has been unfolding for decades. It aligns scientific understanding with what ecological thinkers have long recognised: the economy is not a machine to be managed but a living network of relationships within the biosphere. Our task is not to optimise it, but to redefine what it is for.

And that brings me back to the little animation above. It is not a model of the economy, but a map of our assumptions. It visualises the loops of reasoning that keep the current paradigm intact, the beliefs we no longer recognise as beliefs. Each arrow represents a story we tell ourselves about how the world works: that growth equals progress, that innovation will save us, that competition drives improvement. The logic looks neat and self-evident, until you realise that every path leads back to the same conclusion: keep the system running.

Seeing these loops laid out makes one thing clear: before we can build a different economy, we have to unlearn the stories that hold the current one together — and begin to imagine what it means to regenerate meaning as much as matter.

Sorry for another long read. I think this unpacking of worldviews and underlying assumptions matters. It makes it easier to see why we talk past each other. The real job now is helping people realise that the disagreement is not about reality. It is about the pair of glasses they use to look at it. And no, switching glasses does not mean you go blind. It just means you might finally see the edges of your own frame.

Take care,

Hans

Busy times, and so much to analyse, talk about, and discuss. Especially in times of distress, we should take the time to reflect on our actions. What we definitely know is that clinging to our own positions and beliefs will not move the needle, especially if we don’t understand the other's perspective.

Many people are understandably preoccupied with other worries. As I read in a Dutch newspaper today, a journalist noted that, understandably, voters aren’t overly concerned about climate change; they’re more worried about whether they can still afford a house.

That might be true, but such reasoning will never help us avoid collapse.

Last week, I wrote about the dikes that are cracking. And they do. Because this week, we’ve seen new cracks appear in the political dikes that were supposed to hold back ecological collapse. On one side of the Atlantic, the Trump administration pushed to grant sweeping exemptions from sustainability regulations, effectively rolling back years of environmental protection. On the other side, in Brussels, the political right is gaining ground and seeking to weaken EU environmental rules.

I don’t get it. In the very same week when new scientific warnings about ecosystem breakdown emerged, we see policies that seem completely detached from reality.

However, perhaps that’s not the correct analysis. Maybe what we’re seeing is not ignorance, but the end of a particular kind of truth.

Perhaps what we are witnessing is not merely political blindness, but the collapse of a particular way of knowing. For decades, both policymakers and economists have operated within what philosopher Martin Savransky calls a “regime of futurity” — a shared belief that progress and growth could always extend the horizon of control. In this view, the future was open, rational, and manageable.

But as Savransky argues in his recent Futures article, that regime is breaking down.

The trouble with our times, to echo Paul Valéry’s (1988): 192) words from a century ago, “is that the future is not what it used to be.”

Source: Savransky, 2025

The Anthropocene — an age of irreversible planetary instability — no longer allows us to think of “the future” as a destination waiting to be engineered. It has become precarious, uncertain, and morally charged. The once-reassuring story of progress has lost its anchor.

This collapse of futurity is not only philosophical; it is also political and economic in nature. Our policy frameworks still act as if the world can be optimised through better models — more efficient markets, greener growth, more innovative technologies. But this technocratic certainty is itself the problem. It reduces reality to numbers while ignoring the relational, moral, and ecological dimensions of truth.

As I argued in my earlier Collapsology blog, collapse is not simply an event, but a mirror that shows us the limits of systems built on the illusion of endless control.

So, what might replace this collapsing regime of truth and progress?

A possible answer lies in the growing field of post-normal science, which accepts that “facts are uncertain, values in dispute, stakes high, and decisions urgent.” It demands humility and inclusion. Inclusion of an extended peer community where scientists, citizens, and policymakers co-create knowledge rather than pretending to possess it.

This resonates with the recent Lancet Public Health paper on the Wellbeing Economy, which argues that our economic design (obsessed with growth) lies at the heart of today’s “polycrisis’ (an argument, of course, not unfamiliar to me). The Wellbeing Economy reframes success in terms of dignity, fairness, nature, and participation, rather than GDP. It’s not another growth model; it’s a new moral economy, one that values the future, nature, and care.

In other words, we need to rediscover truthfulness. Not the truth as mathematical inevitability, but as moral courage. The courage to act amid uncertainty, to listen to others, to doubt one’s own models, and to imagine a future that is shared, not owned.

If the dikes are cracking, it’s because the waters of reality no longer obey our projections. Truth in the age of collapse will not emerge from better equations, but from a rediscovery of humility, solidarity, and moral imagination — the capacity to stay with uncertainty and still care for the world.

For those who want to dive deeper into the ideas, the literature, and the philosophical undercurrents, please continue reading below.

Otherwise, the truest thing you can do right now is to close this page. Go to your social media if you must, but better yet, reach out to your family, friends, and neighbours. Or step outside for a while. Look around, breathe, feel, and think. That, too, is part of the work.

A Truthful Truth: When Economics Loses the Future

If politics become clearly detached from empirical facts, forecasts, and the needs of humanity, you can call it short-sightedness, stupidity, populism, or whatever you like. But perhaps what we’re witnessing is not a lack of realism, but the collapse of a particular kind of realism — the technocratic one. The kind that believes truth can be reduced to numbers, and politics to equations. The success of the Enlightenment led us to believe in objective science for answers. For decades, we’ve lived in a regime where “the truth” was something experts could calculate: GDP growth, employment ratios, carbon budgets, net-zero pathways.

That regime worked — until it didn’t.

To be clear: I am not saying that science is merely “an opinion.” For most natural sciences, some laws universally hold and we must adhere to them. But for the social sciences — and economics in particular — outcomes depend on the assumptions we make. As Joseph Schumpeter noted in his History of Economic Analysis (1954), every theory begins with a “pre-analytic vision” — an ideological act of seeing the world a certain way before analysis even begins. Those visions, not equations, ultimately shape the stories our economies tell.

“In other words, analytic effort is of necessity preceded by a preanalytic cognitive act that supplies the raw material for the analytic effort. In this book, this preanalytic cognitive act will be called Vision. It is interesting to note that vision of this kind not only must precede historically the emergence of analytic effort in any field but also may re-enter the history of every established science each time somebody teaches us to see things in a light of which the source is not to be found in the facts, methods, and results of the preexisting state of the science.”

Schumpeter, Joseph A. (1954).

These pre-analytical visions, as Schumpeter once called them, reflect our worldviews and values before a single equation is written.

Now, the cracks are everywhere. Not only in our climate and ecosystems, but in our epistemic foundations: the very ways we decide what counts as knowledge, progress, and evidence. We’ve mistaken models for maps, and narratives for nature. And when those models start to fail (as they inevitably do in complex systems) our political reflex is not to rethink them, but to defend them even harder.

As Hannah Arendt observed in her essay Truth and Politics, “no one has ever doubted that truth and politics are on rather bad terms with each other.” Arendt warned that when political narratives consistently replace factual truth, we lose not just facts but “the sense by which we take our bearings in the real world.” Yet perhaps, as Nietzsche suggested, there were never pure facts to begin with — only interpretations that masquerade as such.

Truth in modern politics (and maybe also economics) became precisely that: a position, not a practice. It became performative — the more confidently one stated it, the more “true” it appeared. That is why oxymorons like “green growth” and “competitive sustainability” can coexist with rising emissions and deepening inequality: because the narrative of progress still carries more political power than the evidence of decay.

Regimes of Futurity: When the Future Stops Working

In Regimes of Futurity: Progress, Catastrophe, and Historicity in the Anthropocene, Savransky describes how the modern imagination of the future — as open, limitless, and improvable — has fractured. For two centuries, progress functioned as a collective time machine. The future was the domain of hope, innovation, and growth.

The Anthropocene breaks that spell. It renders the future not open, but unstable — not a landscape to plan, but a storm we are already inside. The “energy transition,” the “green deal,” the “AI revolution” — all these are attempts to patch up the old narrative of progress. They pretend the future is still ours to control, even as control itself becomes an illusion.

In that sense, the so-called “transition” narrative is the last illusion of the growth era: the belief that we can keep everything (our lifestyles, our economies, our privileges) intact — only greener, more innovative, more efficient. But as Savransky notes, this is merely a nostalgic extension of the same modern regime of time: the idea that the curve of history always bends upward.

It doesn’t.
It cracks — like the dike.

There is no substitute for system change. No amount of efficiency or digital ingenuity will suffice if the foundations remain the same. The truth is that it is scientifically impossible to extrapolate our global economy indefinitely along its current structures — extractive, unequal, and growth-dependent. We can, of course, continue to hope that technology or markets will save us. But hope, unanchored in structural change, is not a strategy. It is a form of denial dressed up as optimism — the final illusion of an era that refuses to acknowledge its own demise.

Post-Normal Science and the Courage of Uncertainty

This is where post-normal science — as recently also articulated by Greaves et al. in their Futures article “Post-Normal Science: The Enclosure of Uncertainty” — offers an essential lens. The authors describe how our institutions have built elaborate enclosures to protect themselves from uncertainty: methodological rules, peer-review boundaries, and risk models that treat doubt as error rather than as the beginning of understanding.

In a world of cascading crises, this “enclosure of uncertainty” has become a political act. By hiding uncertainty, we also hide power, deciding who gets to define the facts, and whose experience counts as knowledge. Greaves and colleagues argue for a radical opening: embracing extended peer communities that include citizens, artists, and practitioners in shaping what counts as credible evidence.

This epistemic humility aligns closely with the lessons of the Anthropocene. When the dikes are cracking, the last thing we need is another concrete wall of certainty. What we need are flexible, participatory systems that can absorb doubt, reinterpret evidence, and adapt morally as well as materially.

Post-normal science, then, is not anti-science. It is science returned to democracy — science aware of its limits, open to other ways of knowing, and grounded in moral responsibility.

The Wellbeing Economy: A Different Truth

A similar opening is visible in the Wellbeing Economy framework proposed by McCartney et al. in The Lancet Public Health. Their Figure 1 captures, in a single visual, the profound structural shift that a wellbeing-centred economy implies.

At the top of the figure, the current dominant economic design is shown as a tangle of feedback loops: historical inequalities shape political and economic institutions; these institutions reproduce class hierarchies and discrimination; those in turn drive unequal access to education, work, housing, and health; and the entire system operates within a degrading ecological environment. Health outcomes — physical, social, and emotional — are downstream consequences of this architecture. In this design, inequality is not a side effect; it is a feature.

Below, the diagram turns the system inside out. The transition to a Wellbeing Economy begins by redesigning the economy itself to live within planetary boundaries and to democratise both power and purpose. Governance, social policy, and public investment are re-anchored in equality rather than extraction. As economic democracy grows, inequality-generating class and discrimination processes shrink. Reduced discrimination leads to reduced social stratification, which in turn improves the “positive determinants” of health: fair income and work, education, decent housing, access to services, and the ability to participate meaningfully in society.

Notice how the feedback loops reverse direction. In the Wellbeing Economy, healthier and more equal populations reinforce flourishing cultures and strengthen ecological protection — not the other way around. The economy becomes a circulatory system rather than an engine, nourishing rather than consuming the social and natural foundations on which it depends.

In practical terms, Figure 1 maps out a blueprint for transformation:

• Governance and policy shift from competition to cooperation, focusing on public investment, inclusive decision-making, and community ownership.

• Economic structures foster equality of wealth and income through progressive taxation, living wages, and caps on ecological throughput.

• Culture and norms evolve toward care and solidarity, where success is measured not by accumulation but by contribution to collective flourishing.

• The ecological environment is no longer an externality, but an active boundary condition—a constant reminder that prosperity must fit within the biosphere.

This re-orientation turns abstract theory into institutional design. It suggests how ministries of finance, health, and environment could work in concert; how budgets could be framed around wellbeing outcomes; how local economies could regenerate ecosystems while generating jobs.

Countries such as New Zealand, Scotland, and Iceland, as well as the Wellbeing Economy Governments (WEGo), are already experimenting with versions of this. New Zealand’s Wellbeing Budget channels investment toward child welfare, mental health, and biodiversity rather than GDP expansion. Scotland’s National Performance Framework aligns spending with social and environmental indicators. None of these is perfect, but they are early proofs that a different macroeconomic compass is possible.

McCartney and colleagues refer to the harms of our current model as ecogenic — damage that originates within the economy itself. The Wellbeing Economy aims to reverse this causality. It treats economic activity as a means to sustain life rather than an end in itself. Seen through the lens of post-normal science, this is not a final model but an open experiment: a process of collective learning in which citizens, scientists, and policymakers co-create what “wellbeing” means for their communities.

Concretely, it requires three structural transitions:

1. From efficiency to resilience — designing redundancy, diversity, and adaptability into economic systems.

2. From competition to cooperation — valuing reciprocity, care, and shared purpose over market dominance.

3. From extraction to regeneration — replacing linear throughput with circular and restorative flows of energy, materials, and social value.

(For the alert reader: all here is not new. These are general transitions that we, for instance, at Triodos Bank also incorporated in our Impact Vision).

When read alongside Figure 1, these shifts form a coherent narrative: an economy that is less a circuit of accumulation than an ecology of reciprocity. Growth, if it happens, is a consequence of well-being, not its condition.

In that sense, the Wellbeing Economy offers not just another framework. However, a truthful economics, one that dares to see the world as finite and interdependent, and yet still believes it can be just and abundant enough for all.

From Collapsology to Courage

In Collapsology, I wrote that collapse is not a prophecy but a pedagogy: a way to learn from the limits of our systems before they teach us the hard way. Savransky’s “regimes of futurity” deepen that insight. Perhaps collapse is not only physical, but temporal. We are losing the future as a category — and that loss is precisely what opens the space for truthfulness.

The Wellbeing Economy is one emerging regime of futurity. It rejects the fantasy of total control and reorients toward care, sufficiency, and participation. To build such an economy is to accept what post-normal science already knows: there is no single model of the future, only shared experiments in the present.

Yes, that’s uncomfortable. It lacks the elegance of a growth curve or the comfort of a forecast. But as Nietzsche warned, “convictions are prisons.” To act truthfully in a collapsing world may mean letting go of the illusion that someone, somewhere, has the answer.

The Politics of a Truthful Truth

And so we return to where we began: to the Dutch voters worried about housing, to politicians loosening environmental rules, to European policymakers treating the economy as a spreadsheet. This is not ignorance; it is a form of futurity fatigue. The old promise that “growth will solve everything” has lost credibility, but nothing coherent has taken its place.

Our task, then, is not just to design better policies, but to tell better stories. Stories that reconnect the economy with ecology, truth with care. A politics of humility, not hubris.

If we are to prevent collapse (or at least navigate it with dignity) we need institutions capable of admitting what they don’t know, and leaders who understand that uncertainty is not weakness but truth in motion.

Truth in this sense is not a position; it’s a practice. It’s the courage to listen, to doubt, to act without guarantees.

As I wrote before, claiming the truth is like locking yourself in your own church. Truthfulness is daring to hear the psalms of others, until a new harmony emerges.

The politics of tomorrow will depend not on who shouts their truth loudest, but on who dares to seek a truthful truth. A truth that recognises uncertainty, invites participation, and builds an economy fit for a finite planet.

Take care,

Hans

We Dutch know what it means to live with water. It’s not just a geographical fact — it’s a mentality. A shared awareness that, without vigilance, the water always returns. Those dikes, once built, must be maintained so that you don’t wait until the breach to act.

Lately, I’ve been thinking more and more about those dikes. Not the physical ones, but the institutional ones. The systems and values we’ve constructed to hold back more than water: power without limits, market forces without ethics, ecological degradation without restraint.

And to be honest, I am nowadays more worried about the stability of those institutional dikes than about the physical ones. And that, in times of climate warming resulting in more extreme weather and rising sea levels, is a huge sign.

Over the past week, in panel discussions, a column and some speeches I gave, I’ve returned to this metaphor. Because it captures something essential about the time we’re living in—a time not just of mounting crisis, but of systemic unravelling — and deliberate sabotage.

We often talk about institutional erosion. As if what’s happening is slow and accidental, like rain slowly wearing down a rock. But it’s not. It’s more accurate to call it what it is: organised breakdown. A deliberate weakening of the very institutions that were built to protect us — from inequality, from authoritarianism, fascism, from ecological collapse. What generations constructed as a dam against the flood of arbitrary power and exploitation is now being cracked open from within.

And the water, as it always does, is rushing in.

Crises that once seemed isolated are now crashing into each other. Climate, inequality, institutional trust, financial precarity — they’re not separate problems, but symptoms of a system in overshoot, like I also argued in my previous blog—a river running out of its banks. And yet, in too many places, the response has been to cheer on the demolition, to ridicule the very idea of restraint, to dismiss institutions as barriers rather than safeguards.

But institutions are not the enemy. They are our dikes. Imperfect, yes — but essential. Because without them, there is only water. And once the breach is wide enough, none of us stays dry.

In this blog, I explore how the weakening of our institutional “dikes” intersects with the mounting pressure of ecological and social crises. New data from Nature (Fanning & Raworth et al., 2025) confirms what many of us sense: no country currently manages to meet basic social needs without overshooting planetary boundaries. Meanwhile, the European Environment Agency’s State of the Environment 2025 report shows Europe is off track on most environmental goals — with degraded habitats, polluted waters, and declining soil health. The water is rising, but the structures meant to protect us are being deliberately eroded.

This is not a moment for minor repairs. In the blog, I outline seven principles for reinforcing the dike:

1. Rebuilding public trust in institutions;

2. Embedding ecological limits in governance;

3. Shifting from reaction to resilience;

4. Ensuring a socially just transition;

5. Reclaiming the state for the common good;

6. Valuing care and sufficiency over growth for its own sake;

7. Phasing out harmful sectors to make space for what sustains life.

To be clear: these are not end-point characteristics of the system. No, these are principles that are needed to change the system. And to accomplish that requires both care and courage: a hospice for the old economy and a midwife for the new. Repairing the dike is not just technical work — it’s moral, political, and urgently human.

What is breaking through — institutional cracks and systemic forces

The breaches we see are not theoretical. We see the cracks forming all around us. Trust in politics and the rule of law is evaporating. Public services, once designed to provide stability and solidarity, are being hollowed out. Media are dismissed as biased or irrelevant. Judges are cast as enemies of the people. This is not natural wear and tear — it’s a concerted effort to undermine the very structures that once held us together.

Take the recent Dutch housing crisis. After decades of market-driven policy, social housing stock has dwindled while property speculation has flourished. For many young people, the idea of owning a home — or even finding stable, affordable rent — is becoming a fantasy. The market was supposed to bring efficiency. Instead, it brought precarity. The dike of public provision was lowered, and the flood of speculation rushed in.

Or look at the nitrogen crisis. Years of under-regulation and political avoidance allowed intensive agriculture and construction to push environmental limits well beyond what ecosystems can bear. When the legal dam finally broke — via a court ruling enforcing EU nitrogen norms — political backlash was immediate. Farmers blocked highways. The political system buckled. And instead of using the moment to reinforce environmental safeguards and support fair transition, the response has primarily been to water down protections, delay enforcement, and scapegoat the institutions — judges, ecological agencies, civil servants — who dared to hold the line.

Another example: the rollback of nature protection laws at the EU level. In the face of mounting ecological warnings — including from the European Environment Agency — political leaders have begun to strip back hard-won environmental directives under pressure from short-term economic interests. This is not a lack of knowledge. It’s a lack of political courage—a deliberate choice to weaken the dike to maintain specific economic flows.

And all the while, the erosion continues where it hurts most: in daily life. A teacher in a public school who no longer has time for individualised attention to students. A nurse racing through a 12-hour shift in an understaffed hospital. A municipal official is trying to implement climate policy with slashed budgets and mounting hostility. These are not anecdotal. They are systemic. The effects of decades of extraction — not just from nature, but from public institutions, from social cohesion, from civic imagination.

This is the context in which populist narratives thrive: when people feel unprotected, unseen, and unheard. And it’s precisely when we need strong institutions most — to mediate conflict, to deliver fairness, to provide stability — that they are least trusted and least able to act.

As I’ve said over the last week, institutions are not the enemy. They are our dikes. Imperfect, yes — but essential. Because without them, there is only water. And once the breach is wide enough, none of us stays dry.

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The river is rising — planetary overshoot and social shortfall

While the institutional cracks widen, the pressure behind the dam continues to build. And it’s not just speculation or polarisation — it’s ecological overshoot, accelerating inequality, and unmet basic needs.

But okay, let’s stop ranting—time for some new evidence.

A new study published in Nature (Fanning, Raworth et al., 2025) offers the most detailed global analysis to date of what the Doughnut framework calls the “safe and just space for humanity.” (And yes, I know that some economists are still offended by the tone of Kate Raworth in her book (such as here) the study is useful to see how sustainable the world is).

Examining 35 indicators across 159 countries, the study reveals that not a single country achieves high social performance without exceeding planetary boundaries. Worse, most countries are failing on both fronts: breaching ecological limits while leaving people behind.

For instance, the researchers show that:

• One hundred four countries are consuming more than their fair share of Earth’s ecological capacity.

• At the same time, many fall short on key indicators such as access to clean energy, education, and food security.

• Global GDP has more than doubled since 1990 — but that growth has not delivered either planetary safety or social justice.

Figure 3 (see below) of the study is a world map — not of geography, but of justice and overshoot. Each dot represents a country, plotted along two axes: how well it meets its population’s basic social needs (such as health, education, and housing), and how far it overshoots key planetary boundaries (including nitrogen use, carbon emissions, and material footprint). The result is a scatterplot that tells a painful truth.

Only 5 countries manage to meet nearly all social thresholds while remaining within safe ecological limits — and even those are borderline. The rest fall into two bleak camps:

• A majority of low-income countries stay within planetary limits, but fail to meet even basic social needs. This is deprivation without destruction.

• Meanwhile, most high-income countries — including those in Europe — achieve higher social standards, but only by vastly overshooting ecological boundaries. This is prosperity built on planetary debt.

In the metaphor of the dike: the river is not only high — it’s rising unevenly. Some countries are already struggling with social deficits. Others have built levees with concrete poured from fossil fuels, mined minerals, and cheap labour elsewhere. And the global system keeps the water rising, as economic logic pushes for more — more throughput, more extraction, more growth.

If the Nature article reveals a global flood of unsustainability, the European Environment Agency (EEA) serves as the regional alarm bell. The European Environment Agency’s State of the Environment 2025 report warns that despite progress in reducing greenhouse gas emissions (down 37% since 1990), the continent is approaching ecological tipping points:

• Over 80% of protected habitats are in poor or bad condition.

• Only 37% of surface waters meet “good” ecological standards.

• Soils are degrading, threatening both food systems and carbon storage.

• Biodiversity is collapsing, with species abundance in steep decline.

The figure below from the report summarises expected progress toward Europe’s key environmental goals: reducing emissions, restoring nature, improving water and soil quality, and transitioning to circular resource use. The colour coding is simple — green for “on track,” yellow for “mixed progress,” and red for “off track.” And the screen is flooded with red.

It’s the visual equivalent of cracks appearing all along the dike — not one breach, but many. And each one weakens the structure further.

The EEA doesn’t mince words. The report states that Europe is “approaching irreversible tipping points” — where environmental degradation will no longer be linear or containable. It warns that ecological failure is not just an environmental issue, but a threat to economic stability, public health, and geopolitical resilience.

This isn’t just about wetlands and insects. It’s about water security, food production, the livability of cities, and the health of children. It’s about whether the foundation beneath our societies will hold — or give way.

What makes this more dangerous is that the institutional capacity to respond is also eroding. Environmental protections are being diluted in the name of competitiveness. Long-term investment in ecological restoration remains dwarfed by fossil fuel subsidies. And enforcement is lagging, even as laws formally remain in place.

So we return to the metaphor: Europe’s environmental dike is riddled with weak points. The engineers know it. The alarms are sounding. But the political will to reinforce the structure — or to slow the rising tide — is not yet there.

The lesson? We do not face a dilemma of choosing between people and planet. We face a design failure. Our economies are structured in ways that make it nearly impossible to meet human needs without breaching Earth’s limits — and vice versa. Growth, in its current form, is misaligned with both justice and stability.

It doesn’t have to be this way. But as long as the river flows in the same direction — toward extraction, accumulation, and inequality — every patch on the dike will eventually fail.

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When the cracks reinforce the current

This is where the metaphor of the dike begins to shift. Because what we’re facing isn’t just a flood pressing from outside. Erosion is occurring from both sides. While the ecological pressure mounts, the very institutions we need to respond are losing legitimacy, capacity, and public trust.

Consider Southern Europe. As heatwaves intensify and wildfires spread — from Sicily to Thessaloniki — public institutions are stretched to their limits. Emergency response systems were never designed for this frequency or scale of disaster. Infrastructure budgets, slashed by years of austerity, can’t keep up. And trust erodes with every delayed evacuation, every bureaucratic failure, every promise unkept.

Or take Eastern Europe’s forest sector. In countries like Romania, vast swaths of protected forest have been illegally logged over the past decade, often with the complicity — or paralysis — of local authorities. NGOs and journalists face threats when they expose it. Laws exist, but enforcement is patchy and politicised. Ecological damage becomes institutional decay — and vice versa.

Even in Germany, floods in the Ahr Valley exposed not only the violence of a changing climate but also the fragility of coordination between federal, state, and local agencies. Rescue efforts were delayed. Risk models were outdated. And in the aftermath, victims were left waiting months — sometimes years — for adequate compensation. What should have been a demonstration of resilience became a crisis of legitimacy.

And more recently, Russian drones entering EU airspace — reportedly reaching as far as Romanian and Polish territory during attacks on Ukraine- have triggered a new kind of institutional stress. These aren’t just military threats; they expose Europe’s geopolitical vulnerability, particularly in border regions where energy infrastructure, agricultural land, and critical ecosystems are closely intertwined. What happens when a stray drone crashes near a Romanian Danube port used for Ukrainian grain exports? Or when airspace violations test NATO resolve while local institutions struggle to maintain basic services?

It’s a reminder that ecological, economic, and security systems are no longer separable. Food chains, energy supplies, refugee flows — all are exposed. And unless institutions can act with coherence and legitimacy, each new breach accelerates the erosion of trust.

In all these cases, the dike metaphor takes on a bitter twist. The water is not only overtopping the barriers but also seeping into the foundations, causing them to crumble. And once public confidence is lost, so is the social license to collaborate. People retreat into individual survival strategies. Political opportunists fill the vacuum. And the system becomes less able — and less willing—to manage long-term risks.

This is the real danger of organised demolition. It doesn’t just remove regulations. It eliminates the belief that shared solutions are possible.

So what do we do when the structures that are supposed to protect us are themselves in crisis? How do we avoid the trap of either technocratic overreach or populist destruction?

That’s the question we must answer — not only to hold the line, but to reroute the current itself.

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Reinforcing the dike — principles for repair and resilience

If we want to prevent the next flood — or at least reduce its impact — we need more than sandbags. We need a fundamental rethink of what institutions are for, what economies should serve, and how society defines progress. Reinforcing the dike isn’t just about patching cracks. It’s about re-engineering the entire structure — and, just as crucially, rerouting the current that feeds the pressure.

What does that mean in practice? A few core principles to strengthen dikes (not all new, see also, for instance, in this paper I contributed to about Re-imagining a new economy that was published last week, or my PhD).

1. Restore public trust by making institutions visible and tangible
Trust doesn’t return because we ask for it. It returns when people feel protected, heard, and empowered. That means a judiciary that delivers justice not just for the powerful, but for the small business owner, the tenant, the climate activist. A public service system that doesn’t just digitise itself, but humanises itself. Schools, clinics, courts — these must be experienced as shields, not walls.

2. Embed ecological boundaries into the heart of governance
We need to stop treating environmental standards as “nice to have” or “externalities.” They are the conditions for any long-term prosperity. That means using frameworks like the doughnut — not as slogans, but as structural inputs in policy, planning, and finance. Every significant investment should pass a dual test: does it improve social wellbeing, and does it stay within planetary limits?

3. Shift from risk management to resilience building
Whether it’s in flood-prone cities, agricultural policy, or digital infrastructure, we need to move from reactive to anticipatory governance. That requires robust public data, early warning systems, and adaptive capacity — not just in ministries, but in municipalities and neighbourhoods. When the next heatwave or supply shock hits, the question will not be “Who saw this coming?” but “Who was ready?”

4. Make the transition socially — or don’t expect it to happen
If climate policy is perceived as top-down punishment for ordinary people, it will fail. Transition must come with redistribution, participation, and repair. Think of the recent farmer protests across Europe. While reactionary forces co-opted some, the root frustration was real: uncertainty, pressure, and the absence of a fair future. Policy must include those currently locked into unsustainable systems — not as afterthoughts, but as co-creators.

5. Re-politicise the role of the state — and reclaim it for the common good
We need to move beyond the idea that the market delivers and the state merely regulates. The state is a builder, a steward, a co-author of the economy. But it can only play that role if it is protected from capture by populists on one side and corporate interests on the other. A democracy that fears its own institutions will never manage long-term transformation.

6. Honour care, maintenance, and sufficiency
This may be the hardest shift of all: cultural, not just structural. We have built economies that value speed, novelty, and scale. But real resilience comes from attention to what holds — the quiet, daily work of teachers, nurses, municipal planners, ecologists, civil servants. A sustainable society celebrates care, repairs what is broken, and accepts that enough is not a failure — it’s a choice.

7. Transition means phasing out — not just building up
A sustainable economy isn’t just about green innovation or circular business models. It’s about making space — socially, economically, ecologically. That means actively phasing out harmful sectors and practices. Fossil fuel subsidies must go. Over-intensive agriculture must shrink. Linear, exploitative business models need to be retired. Not with blame, but with dignity — a hospice for the old, and a verloskunde for the new. People working in these sectors must be supported into future-proof roles, such as those in care, education, restoration, and clean energy. This is not a loss. It’s liberation from systems that no longer serve us

None of these principles is utopian. All are being tested already — in local experiments, civic initiatives, and bold policy pockets across Europe. The task is not to invent everything from scratch, but to scale and connect what works, while protecting it from the tides of cynicism and sabotage.

Because make no mistake: reinforcing the dike isn’t just technical work. It’s political. It’s moral. And it’s urgent.

Between flood and future — what we choose to protect

So here we are: not just watching the water rise, but watching our collective ability to respond wear thin. The institutional dike, once a symbol of public protection and shared direction, has been weakened — not just by time, but by design. And the river has changed too: it is now faster, hotter, less predictable, and charged by climate change, inequality, and geopolitical volatility.

But we are not powerless. And we are not alone.

All across Europe — and beyond — people are already at work: building community-owned energy systems, practising regenerative farming, defending the rule of law, designing circular economies. They are not waiting for permission. They are patching cracks and drawing new maps. They are rerouting the river.

The question is whether we will see them. Whether we will support them. Whether we will make space — politically, institutionally, culturally — for their efforts to become the new mainstream.

Because in the end, we do not inherit institutions. We maintain them. Or we lose them.

And this is our moment to choose: patchwork denial and continued erosion — or the hard, hopeful work of repair.

The water is coming either way. What matters now is who holds the line, and what we build behind it.

Thanks for reading.

Take Care,

Hans

Yes, it's getting even more irregular than before, my newsletter. Not for lack of ideas—quite the opposite—but due to a mix of writing a weekly column for Vrij Nederland, regular pieces for Het Financieele Dagblad, managing a team, raising a family, and trying (occasionally) to stay fit. Let’s say, life. But now, on my way back from the Ethical Finance Conference in Edinburgh, it's finally a pause. A moment to reflect, and write.

And where better to reflect than Edinburgh? A city steeped in the legacy of moral philosophy, where giants like David Hume and Adam Smith once walked and wrote. In fact, as I stepped out of the train station and made my way to the hotel, the first statue I passed was Smith’s, watching over the Royal Mile like a quiet reminder that economics was once, and perhaps still should be, a moral science.

The whole conference felt “Smithsonian”—but not in the economic sense we typically invoke. Instead, it echoed his moral inquiries. Before Smith ever wrote about the butcher, the baker, or the invisible hand in The Wealth of Nations, he penned The Theory of Moral Sentiments (1759). This book reminds us that market behaviour is not, and never was, separate from culture, values, or ethics.

“The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another… It is this deception which rouses and keeps in continual motion the industry of mankind.”

This is the less-quoted Smith, the one who warns us not just about market inefficiencies, but about moral illusions. And it is here that he introduces a crucial concept: fellow-feeling: our innate capacity to imagine ourselves in the place of another, and to moderate our judgments and actions accordingly.

“To approve of another man's opinions is to adopt those opinions... and to adopt them is to approve of them. If the same arguments which convince you convince me likewise, I necessarily approve of your conviction.”

Smith’s fellow-feeling is not sentimentality; it’s a moral muscle. One that requires effort, imagination, and restraint. It’s what makes ethical finance even possible: not algorithms or compliance checklists, but the ability to listen deeply, to recognise shared vulnerability, and to act accordingly.

The Ethical Finance conference took this moral legacy seriously. It asked hard questions about values in a time of polycrisis and polarisation. It also felt sometimes confrontational: while ‘we’ in Europe feel threatened and see the current deglobalisation, fragmentation and retreat on sustainability policies as a defeat, visions from Indonesia, Malaysia or Saudi Arabia are pretty different. And as someone said, if it cracks, light might come in.

To understand different perspectives, we must learn to listen again. Not to rebut, but to enter into the other’s world with curiosity. Why does someone draw such different conclusions? What fears, hopes, or losses quietly guide their moral eyes?

Because in our times, “truth” is no longer a shared horizon but a fractured mirror. Many still reach for the truth as though it were a rigid landmark. Or even worse, they still think that they hold the truth. Yet what we call truth often reflects background, privilege, and values we cannot see. The “truths” of populists, technocrats, agency heads—these are positions, frequently unexamined. They simplify reality to make it bearable.

But truthfulness requires more. It asks us to doubt our certainties, to feel our own blind spots. It asks us to carry a moral compass that is not rigid, but alive, one that bends in ethical tension, adjusts with awareness.

Research shows that our moral “compasses” are not fixed but evolving, shaped by context, identity, and conflict. Sustainability studies point out that people’s commitments differ not for lack of data but because their values pull in different directions. Institutions facing such value conflicts cannot eliminate them, but can create spaces where disagreement is acknowledged and managed (see, for example, here). And even global science-policy platforms struggle with whose voices count, as specific knowledge systems are privileged while others remain marginal (see here).

Values are often unspoken burdens; we carry them like invisible weights and expect them to translate cleanly into policy or argument. Rarely do they. That mismatch causes frustration, conflict, and misrecognition. Reflecting that, moral pluralism is not a problem to be solved but a condition to be managed. It requires structural spaces for dissent, ritualised ways of speaking value conflicts, and the humility to admit our values are provisional.

Listening well, then, is both demanding and straightforward. It’s hearing not just what is said, but what lies beneath: the metaphors people use (“threat,” “home,” “inheritance”), the emotional tone (fear, longing, shame), the unspoken history. It means asking, What assumptions underlie this person’s truths? What losses have they borne? Often, what appears to be obstinacy is merely a scar. What looks like ignorance is exclusion, and what looks like rejection is hurt. Personal truths are based on belief systems. And who is to judge that believing in ancient wisdom is worse than believing in a science-based truth?

Philosophers like Adam Smith called this sympathy or fellow-feeling, not sentimentalism, but the capacity to put ourselves in the condition of another, to see moral life as embedded in relationships, not as transactions. Without that fellow-feeling, systems change becomes hollow; policies become symbols; finance becomes abstraction.

So truth is not a fortress. It’s a flickering searchlight passed hand to hand. Only together can we begin to map the contours of a just and sustainable world, one where finance, policy, and ethics are not abstractions but fields of moral encounter.

And yes, I still struggle in this respect with the term "ethical finance". If this is ethical, what is the rest? Unethical? Non-ethical? This is the same kind of normative idea. All finance is moral, since every financial decision has an impact somewhere. Yet what was clear throughout the discussions at the conference was that we need deeper listening, greater empathy, and perhaps more courage to imagine alternatives.

My modest contribution was a plea for more radical thinking. After all, Trump and his administration have already shown us that system change is possible, just not necessarily the kind we want. If change is possible, shouldn’t we aim higher?

The rest of this blog is an expanded version of the keynote I gave. A reflection on system thinking, financial ethics, radical imagination, and tipping points. Or, if I’m honest, a remix of earlier blog posts, with some new twists. My conclusions:

1. Think upside down: start with sustainability as a foundation

2. Reconnect finance with the real economy

3. Use tipping points as levers for change

4. Have the courage to withstand backlash

Enjoy the read.

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Upside-down ethical finance

We live in turbulent times. Ecological crises are no longer distant warnings in scientific reports; they arrive in our daily lives as flooded basements, scorched harvests, and rising insurance costs. What begins as an ecological disaster quickly cascades into economic disruption.

At the same time, the geopolitical order resembles a fragile net, fraying at the edges. Wars, trade conflicts, and resource dependencies pull at its threads; tug one string too hard, and the whole weave begins to unravel. Within finance itself, the backlash against sustainability is mounting. ESG, which only a few years ago appeared unstoppable, is now questioned and rolled back.

Taken together, these developments reveal more than a collection of challenges. They show that our system is straining at its limits. We have to think about the collapse of society. We are caught in what scholars call a polycrisis: interlocking ecological, social, and economic breakdowns that feed on one another. A crisis in the natural world becomes a financial crisis; economic insecurity feeds social unrest; social instability undermines political cooperation. The result is not the sum of separate shocks but a tangled web of mutually reinforcing risks.

[As an in between: There is a lot of new research on polycrisis. Triggered by the opinion article of Adam Tooze in the Financial Times, I delved into the literature on the topic. What I found is an emerging but fragmented field: scholars from sustainability science, political theory, economics, and anthropology are all trying to grapple with the same intuition—that crises today do not come one by one, but overlap, reinforce, and sometimes even create each other.

Studies show that crises don’t occur in isolation: shocks increasingly co-occurred between 1970 and 2000, then shifted into regionally distinct dynamics, as Delannoy et al. show. They spread across domains like epidemics or through reinforcing “Anthropocene traps” such as climate change and antibiotic resistance (See, for instance, Brosig and Søgaard et al.). Conceptual framings highlight recurring patterns of resource constraints, inequalities, and crisis deferral (Collste et al.). In contrast, others stress that polycrisis is as much about politics and contested values as it is about science (Charbonneau & Giguère, and Seyd 2025). Some even ask what comes after, suggesting pathways such as degrowth or plural futures anthropology (Assadourian and Pink 2025).

Scanning recent literature (however, not all papers cited above), Rakowski et al. see a common understanding of the polycrisis as multiple co-occurring, causally entangled crises with synergistic and cascading effects on numerous systems, degrading humanity’s prospects.

Across all these contributions, one theme stands out: polycrisis research mirrors the very phenomenon it describes. It is interdisciplinary, networked, and full of overlaps and tensions. As a recent LinkedIn post suggested, dealing with polycrisis requires not only head (analysis) but also heart (values), hands (practical action), and narrative (stories that connect communities).

So while we see a polycrisis rooted in complexity in real life, the literature itself is also complex, chaotic, and far from unified. Perhaps that is fitting: in a world of interwoven crises, the search for clarity may always be partial, contested, and in motion. I will probably come back to this in another blog.]

If we are serious about creating a future in which economies and societies can endure, then system change requires more than what we are currently doing. A few ideas, from economics and finance, to make it very practical.

Thinking upside down: sustainability as foundation

For too long, economics and finance, as its close ally, have been taught as a story of growth first, sustainability later. We pursue expansion, and only afterwards check whether the foundations still hold. But this logic is upside down.

Sustainability is not the paint on the walls; it is the ground the house stands on. Without it, the whole structure collapses. Our economy is embedded in nature and sits within society, and depends on the health of ecosystems. Finance must serve these foundations, not undermine them, as they currently do. As examples, The IMF note “Embedded in Nature” shows that many bank loans are exposed to sectors that degrade ecosystems, yet industries are ill-prepared to manage those risks. Likewise, the ECB warns biodiversity loss is not just environmental; it’s financial instability: the loss of ecosystem services reduces economic resilience and makes shocks more frequent. This is not new nor unique.

But although this seems so obvious, the reality is still different. All regulations, especially in the financial sector, are still based on economics (returns) first, and then maybe some sustainability considerations.

So, that requires transformation, not mere optimisation. Imagine this challenge as trying to renovate a city while its citizens are still living there. You cannot simply add a few green parks at the edge and expect the city to become sustainable. You must redesign the infrastructure itself. Less space for cars, more for public transport. Less space for roads and parking places, more room for green areas. It means also scaling up what works for people –renewables, regenerative agriculture, cooperative business models; transitioning those sectors that can still be adapted –resources, mobility, housing; and phasing out activities that, like asbestos in old buildings, are dangerous no matter how carefully we handle them – fossil fuels, polluting industries.

This is what transitions and transformation are about.

To move forward, we need to ask better questions and cultivate a more curious mindset. Too often, sustainability debates get stuck in technical fixes or incremental adjustments. At the same time, the deeper inquiry is neglected: what kind of futures do we actually want, and what transformations are required to reach them? This article highlights that transitions are not only about deploying solutions but about shifting the very questions we pose—away from “how do we grow greener?” towards “how do we live well within limits, and what must we let go of to do so?”

For finance, that means moving beyond the narrow question of how to make existing markets a little greener. The better questions are more unsettling but also more productive: what kind of economy should finance actually serve? What activities must no longer be financed at all, no matter how profitable? What provisioning systems—food, energy, housing, care—deserve priority for capital allocation? These are the questions that cut through surface adjustments and open the door to actual system change. Asking better questions is not a luxury; it is the compass that prevents us from mistaking minor detours for transformation.

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Reconnecting finance with the real economy

Nowhere is the mismatch more apparent than in finance (see also this blog about the illusion of sustainable finance). We speak of ethical investment, but in practice, there is often no apparent connection between the flows of money and the needs of the real economy.

Our regulations have mainly focused on transparency and disclosure. Useful, yes – but disclosure without steering is like giving a car passenger a more detailed dashboard while the driver keeps heading toward the cliff. We don’t just need better information; we need mechanisms for control (see also this blog).

Ethical finance requires embedding sustainability at three interconnected levels. At the level of the financial infrastructure, we need rules on leverage, credit creation, and capital allocation that keep money creation within planetary boundaries. This is about banking rules, the role of central banks and the division between public and private functions of banks—big topics.

At the level of financial institutions, governance, ownership, and incentives must align with long-term resilience rather than short-term gain. The higher the required returns of a financial institution, the higher the margin it has to make on loans and investments, and the bigger the incentive to achieve that by short-term, high-yielding loans.

Finally, at the level of the real economy, we need to ensure financing supports the provisioning systems that actually sustain human life: energy, food, housing, and care. We have to rethink what financial activities do for ordinary people: do they make lives better, or only more expensive?

Only when these three levels connect will finance become more than branding. Only then will it function as a system capable of supporting the transition.

Tipping points and transitions: danger and opportunity

Systems rarely change in slow, linear ways. They build up pressure until suddenly they shift. Climate science warns us of negative tipping points: once ice sheets thin, they melt faster; once forests are degraded, they risk collapsing into savannah; once oceans lose resilience, their ability to absorb CO₂ rapidly declines.

However, socio-economic transitions can also have positive tipping points, and they are just as powerful, driven by technology and behaviour (see also my previous blogs on this; for instance, this one). For decades, renewable energy was a niche technology, dependent on subsidies and policy support. Then costs fell, adoption spread, and a self-reinforcing cycle began: more investment, cheaper technology, more adoption. Within a few years, renewables had become the most affordable source of new power. The system tipped.

Think of it like pushing a heavy boulder uphill. For a long time, progress feels painfully slow. But once the crest is reached, momentum takes over, and the boulder races forward with little additional effort. Positive tipping points are moments when momentum works with us rather than against us. Social positive tipping points, the moment that norms in society shift, don’t require a majority of society. A significant minority – 20 to 25% – can be enough to shift societies to a new norm.

Finance has the power to determine which side of the hill we end up on. If capital remains tied to fossil fuels and extractive models, we accelerate collapse. If it is directed toward regenerative farming, the circular economy, and new ownership models, we can speed up the transitions that society desperately needs. Tipping points are not only risks to avoid; they are levers to pull.

The ESG backlash: a transition pause

How, then, should we understand the backlash against ESG? Perhaps not as a defeat, but as the predictable friction of a system in transition. When tectonic plates shift, the Earth trembles.

We may be living through a transition pause: costs are visible, incumbents resist, and momentum slows. But the costs of inaction do not disappear – they accumulate. The longer we wait, the steeper the eventual climb and the more costly it is.

Ultimately, the future of finance cannot resemble the present. It must integrate sustainability risks across all dimensions – climate, biodiversity, inequality, and social cohesion. It must phase out harmful activities that undermine our collective future. And it must scale up sustainable alternatives, not as charity, but as the most brilliant long-term investment strategy available.

If we can hold the course through this pause, the next tipping point will arrive. And when it does, change will accelerate in ways that seemed impossible only a few years earlier.

The unfinished agenda

System change requires more than what we are doing now. It requires thinking differently, starting with sustainability as our foundation. It requires reconnecting finance with the real economy. It requires embracing tipping points not only as dangers but as opportunities. And it requires courage to withstand backlash.

This is also the unfinished agenda of the Sustainable Development Goals: to link ecological boundaries with social foundations, to build an economy that thrives within limits while securing wellbeing for all.

Ethical finance is not a niche. It is not a luxury. It is, ultimately, the only finance that allows economies – or better societies – to endure.

Take care,

Hans

An unexpected extra blog. I can’t claim to have a steady rhythm, but hey — it’s my holidays. And this one? Born from the strangest spark: smells. And because here in Croatia, it is oppressively hot. Not just summer hot, but record-breaking hot. Like much of Europe, we’re in the grip of yet another extreme heatwave, part of the worsening pattern of climate extremes scientists have been warning us about for decades. The World Meteorological Organization confirms that heatwaves are arriving earlier, lasting longer, and becoming more intense, fueled by the relentless accumulation of greenhouse gases.

These temperatures slow everything down. Except, perhaps, the urgency of the crisis. The extra stillness has given me more time with my family to read, write, and reflect.

When I swim in the mornings, I notice something else: fewer fish. It’s a personal observation, yes an anecdote, but one that fits within a much larger, well-documented reality. Global marine biodiversity is declining at an alarming rate, with the Living Planet Index showing severe drops in populations of marine species, and there is also specific evidence for the Mediterranean Sea. Warmer oceans, acidification, and overexploitation are reshaping ecosystems before our eyes.

Here, the sea feels less like a living habitat and more like a human playground: inflatable islands drifting in the shallows, speedboats and water scooters carving noisy scars into the silence. Of course, leisure is not the enemy, we all need joy, but there’s a difference between being in nature and simply using it as a backdrop. Increasingly, our relationship with the natural world resembles a tourist economy: we consume it, we package it, and we move on.

But that is not today’s main topic.

Today I want to talk about something that might seem unrelated at first: Flavours, sweat, and perfumes. Inspired by my children (who consider sweating dirty and see wearing expensive perfume every day as entirely normal), I started thinking about the privatisation of the air we breathe.

And yes, that sounds dramatic, but it’s real. Air, once the ultimate commons, is slowly being transformed into a branded, monetized, and selectively accessible commodity. In a way, the same systems driving the climate crisis. The same forces that turn forests into timber, oceans into shipping lanes, and coastlines into real estate are also transforming our sensory environment. We are living in a heatwave in the commons: the atmosphere itself, already thick with carbon, is now being perfumed, packaged, and sold back to us.

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Sweat Out, Scent In

There was a time when the smell of hard work was a badge of honour. “In the sweat of thy face shalt thou eat bread” wasn’t just biblical, it was a social creed: sweat signified honest labour, a proof of one’s place in the world. Today, it’s more likely to earn you judgment, or at least an Uber ride home. Even in the gym, sweat is erased as swiftly as possible. It’s become a cultural faux pas, akin to smoking.

Sweat is out. Entirely. I know this firsthand, living in southern Europe with two teenagers who think sweating is “gross” yet see applying expensive perfume every day as completely normal. Scent, on the other hand, is in. But not the scent our bodies naturally produce. Instead, it’s a meticulously designed blend of synthetic molecules, bottled by a handful of corporations that control the global fragrance market.

We’re talking about an oligopoly of scent: Givaudan, Symrise, IFF, DSM-Firmenich. These giants remain invisible to most consumers, yet together they generate billions in revenue each year.

The driving force? Young people, especially Gen Z. The perfumed generation. They buy perfume more frequently and at higher prices. Boys, once satisfied with a splash of aftershave, now “layer” fragrances, a trend TikTok calls smellmaxxing. One scent is no longer enough; the average teen can easily spend hundreds of euros a year on fragrance.

And science gives them some justification. Studies show that scent shapes our behavior unconsciously. Pleasant or context-appropriate scents accelerated decision-making, while unpleasant ones slowed it down, according to a study. Retail research has found that shoppers in pleasantly scented environments consistently bid more for products. Fragrance also enhances perceptions of attractiveness, not just in the eyes of others, but in one’s own self-image. The scent of attraction and the smell of success confirms that perfume functions both as social lubricant and as confidence in a bottle.

Yet here lies the tension: scent was once free. A shared, non-marketable part of daily life, as much a part of the commons as the color of the sky or the sound of rain. Where sweat once signified authenticity, it is now treated as an economic defect. Our bodies, too, must be “market-ready”: no unwanted emanations, only curated aromas.

The Enclosure of the Commons

This shift mirrors broader trends in the privatisation of the commons, the process by which resources once freely accessible to all are claimed, enclosed, and converted into market commodities. The commons can be tangible, like forests, rivers, fisheries, and grazing lands, or intangible, like clean air, silence, or even genetic information. For most of human history, these shared resources were managed collectively. But over the past few centuries (and accelerating in the last few decades) capitalist economies have systematically transformed them into privately controlled assets.

The classic historical example is the Enclosure Movement in England from the 16th to 19th centuries, when common grazing lands were fenced off for private farming. Today’s equivalents are subtler but no less significant:

• Water that once flowed freely is bottled and sold under global brands (and is getting increasingly scarce)

• Seeds, once shared among farmers, are now patented by agrochemical giants, with legal restrictions on saving and replanting them (see also here)

• Beaches are gated for resort guests only, excluding local communities.

• Silence in cities is now something you might have to pay for — in luxury retreats or noise-cancelling tech —because constant background noise has become the default.

• Even digital space, once seen as a vast public commons, is increasingly enclosed within corporate platforms and paywalls.

Sweat has quietly joined this list. Once a mark of authenticity, it has been reframed as a flaw, outsourced to deodorant and perfume companies that “filter” our natural emissions into socially acceptable, branded aromas. The human body becomes a site of commodification, our natural states deemed inadequate until upgraded by purchase.

Why This Matters—and Why It’s Built Into Capitalism

Privatising commons fractures social equity. Shared resources allow collective life; once enclosed, access is gated by what one can afford. This breeds inequality, undermines public life, and fosters overexploitation. It is profit-driven rather than sustainable use-driven.

And this is no accident, it is a core feature of capitalism. Capitalism’s growth has always relied on expropriating the commons, turning what was shared into private property, and property into profit. Once the obvious goods are commodified, the system searches for new markets, which increasingly means enclosing what was previously free: air, water, seeds, biodiversity, genetic code, even the microbiome, and now, scent.

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The Sensory Economy

This is part of what economists and sociologists call the sensory economy — the monetisation of human senses. Our noses are being privatised. What was once an ambient experience is now branded, patented, and priced. Brands don’t just sell products anymore; they sell atmosphere, aura, and ambience. In sensory marketing, companies craft emotional environments (smell, sound, visuals) that shape behaviour and deepen consumer loyalty.

The fragrance sector has embraced this fully. Global perfume sales have surged over the last decade, outpacing many other luxury categories. What was once an occasional gift is now marketed as a lifestyle essential, pushed through celebrity endorsements, TikTok micro-trends, and seasonal “must-have” drops. Even mid-market products now mimic luxury scarcity. Limited editions, numbered bottles, and drop culture — all designed to turn a whiff into a purchase.

And it’s working spectacularly. The global fragrance market is booming. In 2024, it reached an estimated US $56.6 billion, and it's projected to climb to $74.8 billion by 2030, growing annually at nearly 5%. Other reports are even more striking: values nearing $68.9 billion in 2024, with rapid growth in gourmet, mood-enhancing scents.

The industry’s expansion spans luxury, niche, and mass segments. A Financial Times analysis calls perfume the “lipstick effect” of the post-pandemic beauty market—luxury fragrance sales grew double digits globally, reaching $64.4 billion, while prestige segments outperformed mass-market variants.

Uniformity in the Name of Individuality

Ironically, the pursuit of distinctive scent often leads to sameness. Fragrance identity collapses into brand-based uniformity, with price as the only marker of difference. Luxury scent becomes group uniform, and individuality is determined by which bottle you can afford.

This model demands participation through purchase. Those who can’t buy are left as outsiders, marked by the “basic” version of themselves. The biblical “sweat of thy face” has been replaced by the spray of thy wrist. Scent no longer signals work but buying power. Success no longer smells of effort — it smells of invoices. And the meter keeps running as long as we breathe.

The Invisible Enclosure

The most unsettling part? This transformation is largely invisible. We may notice when green spaces are fenced off or when bottled water replaces public fountains, but the enclosure of our olfactory commons happens molecule by molecule, marketing campaign by marketing campaign.

In economic terms, scent has been converted from a public good into a club good—exclusive, branded, and accessible only to those who pay. The very air becomes stratified.

The privatization of the nose is a parable for a wider neoliberal shift: from a society built on shared resources to one organized around perpetual monetisation. We no longer simply are — we must subscribe to our own existence. And while perfume may seem trivial compared to water rights or carbon emissions, it reveals how deeply commodification can penetrate: even into the molecules that surround our skin.

We might dismiss this as harmless vanity. But as with all forms of enclosure, it changes the social fabric. When personal worth is measured not by what we contribute but by the aura we can afford to project, inequality seeps into the most intimate spaces — our breath, our scent, our self.

And in the background, the spray nozzle clicks.

Stay safe, and don’t outsource your sweat,
Hans

Holiday season. My holiday starts late tomorrow. But already last week to read, recover and rethink (and reread, rehearse (for swimming) - all the re-’s you can think of).

Many things have kept me busy. Currently (finally!), I have found some time to work on my book for a more extended period (partly based on my PhD), which gives me enormous pleasure. However, reading and writing also lead to many new questions.

I am still pondering the moral and philosophical implications of economics. Things like ‘value’, for instance. It is pretty challenging for an economist to remain detached from the utilitarian perspective on the world. But also, what is the difference between political economics and mainstream economics? You can not judge the current economic environment without understanding the power play. How have economists ignored power for such a long time? They now refer to it as geoeconomics (see, for instance, this paper). Still, it is nothing more (for most economists) than a reality check: the economy does not behave according to the model specifications. It is about people, human relationships, power and affection.

However, I leave that for another time. This time: about economic rules. Or the lack thereof.

Economics is often seen as the science of constraints. We celebrate it for its hard-nosed realism, its grounding in scarcity, and its promise to arbitrate difficult trade-offs. It presents itself as the guardian of discipline in a world of excess—a field that tempers politics with numbers and warns against utopian fantasies. But look closely, and this discipline that claims to be empirical often slides into something much less grounded: ritualised certainty, cloaked in decimals.

Few other domains lean so heavily on numbers that are, at best, stylised tendencies and, at worst, politically chosen anchors. Policymakers and institutions cling to these figures, not necessarily because they are correct, but because they offer the illusion of control. They give technocratic cover to fundamentally political decisions. Why 2% inflation? Why a 3% budget deficit? Why does debt sustainability begin to unravel at precisely 60% of GDP? These are not economic truths. They are conventions, elevated to the status of commandments.

Alongside these numeric targets are economic “laws” dressed up in historical regularities: Kuznets curves, which claim inequality or pollution rise and then fall with growth; Piketty’s r > g inequality dynamics; or the once iron-clad belief that raising minimum wages reduces employment. These began as stylised facts—observed tendencies in specific data at certain times. But through repetition, they became something more: assumptions hard-coded into models, and then into policy. Their original contingency was forgotten. Their context was flattened.

Yet many of these “laws” have crumbled under scrutiny. Kuznets' environmental optimism has not held in the age of climate change; r > g only tells part of the story, contingent on institutional settings and policy structures; the minimum wage-employment trade-off, once sacrosanct, has been revised by newer evidence. These aren't universal truths—they are patterns, observable only under specific configurations.

These numbers persist because credibility in economic discourse is tied not to truth but to consistency. Tweaking the decimal, even for good reason, can be branded irrational—or worse, politically untrustworthy.

Thomas Carlyle anticipated this dynamic in his 19th‑century critique of economics. He accused economists of reducing the moral and social world to machinery—of turning complex societies into predictable engines of inputs and outputs.1 This mechanicalism wasn’t just a method; it became a worldview. s Patrick Welch explores in Thomas Carlyle on the Use of Numbers in Economics, Carlyle was troubled not simply by economics’ dismal outlook, but by its fixation on reducing moral and civic complexity into quantifiable inputs and outputs. In this light, today’s decimal obsessions—2%, 3%, 60%—are extensions of that legacy. They are gears in a model of society that presumes knowable equilibria, fixed relationships, and rule-like behaviour.

Mechanical thinking sustains because it simplifies chaos. It offers a script: follow the rule, maintain credibility. However, every number was invented—for example, New Zealand’s early-1990s experiment with a 2% inflation midpoint, which the European Central Bank and others later adopted. No cosmic truth said inflation must be 2%; policymakers designed it rationally to anchor expectations. Yet now it feels like destiny.

But the world doesn’t operate like a steam engine. Economies evolve, institutions shift, people adapt, and feedback loops multiply. The comfort of mechanical rules becomes a liability in the face of systemic uncertainty.

So what should replace these false certainties?

This blog traces how specific numbers and “laws” became policy totems, how they survived long past their empirical expiration dates, and why they continue to guide governance despite their fragility. We will revisit the 'dismal science' label—not to discard economics, but to ask whether the discipline might be transformed. From a mechanical model of constraint into a narrative science of tendencies, values, and systemic interdependence. Apologies, it is kind of lengthy.

Short message for the time‑poor reader:

There are no universal laws in economics; instead, there are tendencies that emerge in specific institutional configurations. In market-dominated economies, growth dependence and policy predictability matter, but they do not mandate fixed decimals, such as 2% inflation. The endurance of these numbers is a matter of politics, not science.

The core takeaway of this blog is (this is also at the very end):

• There are no universal economic laws. Only tendencies that appear in specific configurations (e.g., inequality under unregulated market systems).

• Overreliance on fixed decimals—2%, 3%, 60%, r > g—imposes stability at the cost of adaptability.

• Many of these rules outlived their evidence—the Kuznets Curve, EKC, Reinhart & Rogoff’s 90% debt cliff—and yet persist in policy.

• Economics need not abandon its models, but it must reframe them within principles of justice, ecological sustainability, transparency, and resilience.

• Narrative economics means telling systems stories: "Capitalism tends toward inequality—but democracy, framing institutions, and progressive taxes can bend the arc."

• In that world, numbers are meaningful again—as tools that serve, not truths that bind.

We need an economics that is narrative-informed, principle-grounded, institutionally alert, and comfortable with uncertainty. One that treats targets as provisional aids, not metaphysical mandates. Because real economies are not steam engines. They are living systems shaped by ideas, power, and ecological limits. And that is the most powerful idea to end with: we live in our narrative, so we can recreate it in the way we want it to be.

It’s time to move from decimal dogma to deliberative direction.

And now it starts…

1. Where Numbers Come From

Many of the most cherished economic thresholds began not in nature, but in negotiation. I have only traced back the 2% inflation target and 60% and 90% public debt level thresholds.

Inflation targeting

The 2% inflation target—enshrined in central banks around the world—originated in New Zealand in the early 1990s, intended as a midpoint, not a divine revelation. It was designed to avoid deflation while anchoring expectations. But once adopted, it spread. The European Central Bank took it on. So did the Bank of England. The number gained an aura of inevitability.

To understand the basis of the 2% target, we look to the academic work that underpins it. Svensson (2010) explains that inflation targeting, including the 2% benchmark, was a response to the inflation volatility of the 1970s and 1980s, providing a clear anchor for expectations and enhancing policy credibility. The target aimed not to eliminate inflation but to strike a balance, ensuring price stability without veering into deflationary risks.

This pragmatic approach influenced the adoption of the 2% target; however, its widespread implementation has raised important questions about its effectiveness and broader economic implications. According to Mishkin, while the target has been successful in maintaining a stable inflation, it may have inadvertently neglected other critical dimensions of economic well-being, such as employment or wage growth.

Moreover, the potential limitations of the 2% target have been highlighted in the context of financial stability. Woodford argues that while inflation targeting helps maintain price stability, it does not necessarily prevent financial bubbles or safeguard broader economic stability, especially in the face of economic shocks.

The global adoption of this inflation target, including by the European Central Bank and the Bank of England, underscores its influence. The Bank for International Settlements examines how inflation targeting in Canada provided a model that was later emulated by other central banks, emphasising the importance of anchoring expectations in a way that avoids both runaway inflation and deflationary spirals.

In conclusion, while the 2% inflation target was not born from immutable natural law, its spread across central banks worldwide suggests its effectiveness in stabilising inflation expectations. Yet, as critics point out, its success in achieving price stability does not guarantee the same success in fostering broader economic health, suggesting that the target’s impact should be continually reassessed in light of evolving economic challenges.

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Fiscal rules

Fiscal rules are no different. The Maastricht Treaty’s 3% deficit and 60% debt-to-GDP rules were less about scientific precision than political symmetry. These targets were designed to establish a framework for fiscal stability and prevent excessive deficits across the European Union (EU), with the underlying assumption that stable budgetary policy was essential for economic harmony. The idea was simple: if a country's economy grows at 5% nominal GDP (3% real growth and 2% inflation) and its deficit remains at 3%, debt levels would remain sustainable and converge to 60% of GDP. Simple, elegant, and easy to communicate. But in reality, macroeconomies don’t behave like spreadsheet simulations.

The 3% deficit rule, while designed to promote fiscal discipline, has been critiqued for its rigidity, particularly during economic downturns. Research by Alesina et al. (2015) underscores that the deficit limit, when enforced during recessions, often exacerbates economic instability. Austerity measures, which are usually implemented to meet this target, can deepen recessions, as they reduce government spending and investment in critical sectors. This, in turn, can lead to a cycle of low growth, lower tax revenues, and increased fiscal pressure. Alesina's work highlights the pro-cyclical nature of the 3% rule, which can force governments into a "race to the bottom" when trying to reduce deficits during periods of economic hardship.

Similarly, the 60% debt-to-GDP ratio, which has long been considered a safeguard against unsustainable debt accumulation, has its own set of criticisms. This threshold was initially intended to help maintain fiscal discipline and prevent the untenable accumulation of debt. However, it has been increasingly recognised as a somewhat arbitrary figure. The renowned economists Carmen Reinhart and Kenneth Rogoff provided a foundation for debt sustainability arguments with their assertion that economic growth sharply slows when a country’s debt-to-GDP ratio exceeds 90%. Their findings in This Time Is Different (2009) lent weight to the notion that countries should avoid high levels of public debt at all costs. That finding quickly became ammunition for austerity policies worldwide. I remember that moment well—we handed every intern at the Rabobank economics team a copy of the book, believing it captured the urgency of the moment.

Until 2013, a young graduate student, Thomas Herndon, along with Michael Ash and Robert Pollin, attempted to replicate Reinhart and Rogoff’s findings and discovered spreadsheet errors, selective exclusions, and unusual weighting choices. Once corrected, the dramatic 90% “cliff” more or less disappeared in their analysis.

In other words, the whole 90% story, and the fiscal rules built around it, are resting on sand.

Yet the number persisted. Because policy needs anchors, and anchors don’t die easily.

But has the debt-growth relationship held up in broader empirical analysis? Not really. The most comprehensive answer so far comes from Philipp Heimberger’s 2022 meta-analysis, which includes 816 estimates from 47 studies. His conclusions are striking: after correcting for publication bias, the tendency of researchers and journals to highlight “negative” findings, there is no robust evidence that higher debt-to-GDP ratios systematically reduce growth. Moreover, there is no standard threshold, such as 90%, beyond which growth falls off significantly. Any such tipping points are susceptible to model choices, country samples, and econometric assumptions.

In other words, the whole 90% story, and the fiscal rules built around it, are resting on sand.

Heimberger also points out a troubling dynamic: estimates reporting more negative debt effects get more citations, regardless of their methodological strength. Papers published in higher-impact journals are less likely to reveal strong adverse effects. That says something about what we choose to see and celebrate in economics.

So, where does that leave us? Not necessarily in a world where debt doesn’t matter, but in one where context issues far more than the raw number. Countries with low interest rates and monetary sovereignty can sustain higher debt levels without triggering crises. And forcing governments to slash deficits in a downturn (to stay below an arbitrary 3%) can do more harm than good, deepening recessions and delaying recovery.

The European Commission seems to have taken note: recent reform proposals stress “net expenditure paths” and medium-term fiscal planning rather than rigid thresholds. But the ghost of the Maastricht rules still lingers in public debate, budget speeches, and the mind of every finance minister afraid to break them, even when doing so might be the economically rational choice.

Rules can help. But when the rule becomes the goal, economics turns into ritual. And we forget what public finance is actually for.

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2. The Myth of Economic Laws

If numeric thresholds emerge from convention, economic “laws” often evolve from correlation. The most famous of these is Simon Kuznets’ hypothesis that inequality first rises, then falls, as economies develop. This “inverted U-curve” helped justify inequality in the name of growth. The second one to discuss is the r > g of Thomas Piketty.

Kuznets curves

Simon Kuznets was unusually candid for an economist. In his 1955 paper proposing the now-famous inverted-U relationship between income inequality and economic development, he ended with a disclaimer that feels almost quaint in today's world of data-driven certainties:

“In concluding this paper, I am acutely conscious of the meagerness of reliable information presented. The paper is perhaps 5 per cent empirical information and 95 per cent speculation, some of it possibly tained with wishful thinking”.

(Kuznets 1955, p 26.)

That admission, so modest, so transparent, should have been a warning. Despite that disclaimer, the inverted-U shape of the so-called Kuznets Curve took hold in economic discourse like gospel. For decades, it offered an elegant storyline: inequality is a temporary affliction on the path to prosperity, a passing discomfort we must tolerate while climbing the development ladder. Yet over time, as datasets expanded and methodologies improved, the curve’s simplicity gave way to deeper complexity and contradiction.

And indeed, as decades of research have shown, there is little empirical foundation to support the sweeping conclusions that later economists, policymakers, and pundits drew from his initial hypothesis. While the Kuznets Curve offered a tidy story—inequality first rises and then falls with economic growth—subsequent studies have painted a far more complex and inconsistent picture.

Larger-scale research using the Deininger & Squire dataset (covering 96 countries) found only limited support for a universal curve. In many cases, the pattern disappeared when region-specific factors were taken into account, notably dummy variables for Latin America and Africa. A global panel study by John Thornton confirmed an inverted‑U only under restrictive assumptions; once broader heterogeneity is controlled, the pattern weakens dramatically. Other comprehensive reviews argue that modern economic theory does not predict a single outcome; growth and inequality interact in various ways, depending on political institutions, social structures, and historical contingencies.

Indeed, studies tracking inequality over extended periods in advanced economies, such as the U.S., U.K., Germany, and France, find N-shaped trajectories—inequality rises, falls, then rises again—rather than a clean inverted U. Economic historians caution that mid-century declines in inequality were profoundly shaped by war, depression, and policy reforms—not inherent to rising income alone.

The Environmental Kuznets Curve (EKC) is rooted in a provocative analogy: just as Simon Kuznets hypothesised in 1955 that inequality first rises and then falls with economic development, environmental degradation, too, might follow an inverted-U trajectory. This idea, while speculative in its economic origins, found traction in environmental economics in the early 1990s when researchers such as Grossman and Krueger (1991) first empirically suggested that pollutants like sulfur dioxide peaked and then declined as incomes rose. Panayotou later coined the term "Environmental Kuznets Curve" to describe this pattern.

The EKC gained policy appeal. It suggested that pollution, much like inequality, could be a temporary side effect of growth—a phase that wealthy nations would naturally outgrow. By the time the World Bank's 1992 World Development Report popularised the idea, it had become an optimistic counterpoint to the environmental pessimism of The Limits to Growth (1972).

However, this optimism has not aged well. As a recent systematic review reveals, the EKC is far from universally observed, and its empirical foundation remains tenuous. Their meta-study, covering over 100 EKC-focused papers from 1991 to 2023, concludes that EKC findings are highly inconsistent, dependent on the pollutant studied, the model specification, the period, and the geographic scope. While some local pollutants (e.g., SO₂) exhibit an inverted-U pattern in high-income countries, global pollutants such as CO₂ do not reliably follow the curve.

Moreover, the EKC is often misunderstood as a law rather than what it is: a statistical artefact sensitive to variable selection and model structure. Many studies that appear to support the EKC use GDP squared as a regressor, often with questionable assumptions regarding causality. When more complex dynamics and control variables—such as energy mix, urbanisation, and trade openness—are introduced, the curve often flattens or transforms into (again!) N-shaped or monotonic relationships.

Their findings also underscore that sectoral-level studies (as opposed to national-level studies) sometimes validate EKC dynamics more reliably, suggesting that any such curve is contingent and fragmented, rather than general or automatic. Critically, they emphasise that early optimism around the EKC underestimated the time it might take for countries to reach the so-called "turning point"—and whether environmental systems can withstand the damage incurred before that point is ever reached.

Thus, the EKC has shifted from a hopeful hypothesis to a contested terrain. Rather than assume pollution will decline with growth, Guo and Shahbaz urge more caution, more critical modelling, and a rethinking of environmental policy assumptions that rest on passive economic trajectories.

Taken together, the failure of both the Kuznets Curve (inequality version) and the trickle‑down hypothesis underscores a clear lesson: equity is not an emergent property of growth. Rather, equality depends on intentional policy—progressive taxation, redistributive transfers, public investment in healthcare and education, labour rights, and environmental protections.

If there’s one thing to salvage from Kuznets’ caution—that his theory was largely speculative—it’s that we’d be wise to heed it. Growth, left to its own devices, does not guarantee justice—nor does concentration of wealth trickle down to everyone else. Those outcomes must be purposefully designed.

Piketty’s r>G

Thomas Piketty’s simple yet powerful insight (r > g, the notion that the return on capital typically exceeds economic growth) has been hailed as a modern law of capitalist inequality. In Capital in the Twenty‑First Century, he marshals historical data showing that long-run averages for the rate of return on capital (including profits, dividends, interest, and rents) sit around 4–5 percent per year, while GDP growth seldom exceeds 1.5–2 percent. From this emerges a worrisome dynamic: capital accumulates faster than overall output, and crucially, in an economy where capital ownership is highly concentrated, this process deepens inequality.

Piketty’s assertion echoes, of course, Marx’s critique of capitalism, where capital accumulation is an engine of class stratification. While Marx focused on surplus value, Piketty’s r > g repackages the idea for the age of compound returns, arguing that wealth inherited or invested compounds faster than economies can grow. In doing so, Piketty revives a classical-materialist framework in contemporary terms.

Yet, this apparent law is deeply contingent on the frameworks within which economies operate. As Daron Acemoglu and James Robinson argue in The Rise and Decline of General Laws of Capitalism, overarching generalisations like r > g risk overlooking the institutional architecture and social norms that radically mediate outcomes. Drawing on contrasting histories, such as those of Sweden and South Africa, they contend that the dynamics of inequality cannot be understood apart from political regimes, tax systems, property rights, and power relations. In other words, no economic law holds in all contexts—unless it embeds the force of institutions.

Into this institutional critique comes Emiliano Brancaccio and Fabiana De Cristofaro’s rejoinder. They acknowledge Acemoglu’s caution but maintain that certain tendencies, such as wealth concentration and systemic instability, are "gravitational pulls" in capitalist economies. These are not iron-clad predictions but persistent tendencies: the laws don’t force outcomes, but they nudge systems unless institutions intervene. Therefore, while r > g is not fate, it becomes structurally robust in the absence of progressive taxation, inheritance limits, or redistributive policy.

Robert Boyer’s regulation theory offers a helpful middle path. He portrays capitalism as evolving through successive regimes—Fordism, neoliberalism, financialization—each anchored in a specific regime of accumulation and a corresponding mode of regulation. These regimes shape how capital is deployed and returns are realised, and they shift when crises expose contradictions. The tendency of capital to accumulate and the potential for r > g dynamics emerge most clearly in regimes where redistributive feedback loops are weak, a pattern not immutable, but historically contingent.

So, where does that leave us? Piketty’s r > g remains one of the most compelling explanations for long-run inequality. But it is not a universal law. It is a structural tendency, deeply conditioned by institutions, norms, and policy frameworks. As Acemoglu reminds us, historical paths differ because institutions differ. As Brancaccio emphasises, tendencies persist unless countered. And Boyer situates these patterns within cyclical regimes, constrained and reshaped over time.

Ultimately, the truth of r > g isn’t sealed in mathematics. It’s a political-economic question. If societies are to avoid runaway capital growth at the expense of broad shared prosperity, they must consciously design institutional guardrails: progressive taxation, inheritance limits, public investment, and effective regulation. Absent those, the simple arithmetic of growth and returns becomes a self‑fulfilling logic of inequality.

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Narratives and Principles: Rethinking Economics Beyond the Decimal Dogma

In place of rigid, decimal-driven policy, we must champion an economics rooted in narratives and guiding principles. This shift is not about abandoning rigour; it’s about reordering our belief that numbers are truths and instead viewing them as instruments embedded in values and institutional context.

A recent paper in Nature Sustainability by Brand et al. (2025) makes a clear case that sustainability success depends less on mechanical rules than on principles embedded in governance (see below the ten principles). They identify moral and institutional principles, principles of fairness, transparency, precaution, and resilience, that should guide economic policy, especially in ecological and social domains. Their analysis and conclusions are close to those that I found in my PhD thesis. Just as scientific models rely on underlying philosophical assumptions, so too must economic models be paired with normative principles. Otherwise, they risk ossifying into a ritual devoid of meaning.

Building on this, we can reimagine policy not as calibrations to fixed targets, but as expressions of core principles. Imagine inflation policy aligned not just with a 2% figure, but with the principle of expectational credibility and distributive neutrality: it’s not the number itself, but its stability, public trust, and policy transparency that matter. Similarly, rather than defaulting to a strict 3% deficit cap, consider the principle of countercyclical solidarity and fiscal resilience: deficits are permissible during crises when they support social welfare and recovery, provided transparency and democratic accountability are robust.

Narratives provide the lens: “Growth is necessary, but it must align with ecological limits.” Principles provide the guardrails: “Redistribution should address inequality, not undermine productivity.” This aligns with the view that economics should be a storycraft discipline, one that blends material tendencies—like capital accumulation—with ethical clarity, political agency, and ecological awareness.

As Brancaccio and De Cristofaro remind us, macro tendencies—inequality, accumulation, and volatility are not inevitable laws. They are patterns that emerge unless societies intentionally counteract them. So the narrative becomes: “We recognise the tendency of r > g to exacerbate inequality—but we choose principles and institutions that subvert it: inheritance tax regimes, public investment, regulation.” That is far richer than declaring “r > g law always holds.”

Adolfo Figueroa’s Unified Theory of Capitalism presents a structural narrative, comprising eight empirical regularities that describe the relationships among capital, inequality, growth, and the environment. Yet Figueroa himself insists these regularities are contextual tendencies, not iron laws. They coexist alongside institutional design and are shaped by political power. His warning aligns with Brand et al.: models must be anchored in principles, not converted into dogma.

Ultimately, narratives and principles ground economics not in decimal ritual but in purposeful coordination. They help us ask: What kind of society and economy do we want to have? Under what moral and ecological constraints? Then we derive numeric targets—whether inflation, debt levels, or wages—not as commandments but as consistent tools, defensible to public scrutiny, revisable in crisis, and transparent in both process and implication.

From Decimal Dogma to Deliberative Direction

If economics has too often disguised convention as clarity, the alternative is not to discard models or dismiss numbers. Instead, it is to re-secure them in narrative and ethics.

The core takeaway of this blog is:

• There are no universal economic laws. only tendencies that appear in specific configurations (e.g., inequality under unregulated market systems).

• Overreliance on fixed decimals—2%, 3%, 60%, r > g—imposes stability at the cost of adaptability.

• Many of these rules outlived their evidence—the Kuznets Curve, EKC, Reinhart & Rogoff’s 90% debt cliff—and yet persist in policy.

• Economics need not abandon its models, but it must reframe them within principles of justice, ecological sustainability, transparency, and resilience.

• Narrative economics means telling systems stories: "Capitalism tends toward inequality—but democracy, framing institutions, and progressive taxes can bend the arc."

• In that world, numbers are meaningful again—as tools that serve, not truths that bind.

We need an economics that is narrative-informed, principle-grounded, institutionally alert, and comfortable with uncertainty. One that treats targets as provisional aids, not metaphysical mandates. Because real economies are not steam engines. They are living systems shaped by ideas, power, and ecological limits. And maybe that is the most powerful idea to end with: we live in our own narrative, so we can recreate it in the way we want it to be.

It’s time to move from decimal dogma to deliberative direction.

Stay safe.

Hans

It’s been a little while. After the intensity of my PhD defence, I took some time to rest—just enough to enjoy the start of open water swimming season—and to begin preparing for a new chapter: a part-time move to Rotterdam. Starting in July, we’ll be splitting our time, alternating weeks between Rotterdam and Breda, where I’ll continue to spend time with my kids. A new rhythm of city life with less travel and more family time.

But that’s not what I want to write about today.

I had planned to explore ethics and hope—two themes that feel increasingly urgent. But after diving down every rabbit hole I encountered (as one does), I’ve decided to shift focus and return to a recurring theme in this newsletter: finance. Green finance, brown finance, sustainable finance… and perhaps most importantly, misaligned finance.

Last week’s SDG Progress Report — filled with sobering updates on global progress — opened with a chapter on how finance should support the Sustainable Development Goals. The takeaway? Scrap the current system and start over. That was my conclusion, too, in earlier pieces I wrote for Het Financieele Dagblad and Vrij Nederland (both in Dutch): finance, in its current form, is fundamentally misaligned with sustainability goals.

It's overly optimistic to believe that simply adding transparency will somehow transform finance into a sustainable force. One might question whether the burgeoning field of sustainable finance has delivered any net benefits at all.

That’s not to say I support the recent ESG backlash or the dilution of Europe’s sustainable finance agenda, where 'simplification' and 'deregulation' have become convenient euphemisms. As I’ve argued before, two fundamentally different types of costs are being conflated: the costs of regulatory complexity and the costs of achieving genuine sustainability. While the former deserves thoughtful reform, lumping it together with the latter has created a smokescreen—one that quietly allows corporate accountability for environmental harm to slip away.

Europe’s green agenda is increasingly under siege from a curious coalition of corporate lobbyists, far-right agitators, and the centre-right European People’s Party (EPP). This is not the direction we should be heading.

If we’re serious about confronting the defining challenges of our time, we need to raise our ambitions—and our expectations of what finance should do. The resources are there. The ingenuity is there. What’s missing is direction.

But let’s not kid ourselves: this doesn’t mean clinging to the fantasy that private finance will magically fund the transition out of goodwill or inspiration. Finance doesn’t work like that. As anyone who has ever pitched a solar co-op to a venture fund knows, “they should finance” is not a viable strategy. It’s a misunderstanding of the game. Capital flows where it sees safety, scale, and return, not where it sees justice, equity, or ecological repair.

My three takes:

1. Stop Hoping, Start Rewiring
If we want finance to serve people and planet, we need more than hopeful mantras about market magic. The global financial architecture, currently designed to extract, rather than regenerate, needs a structural overhaul. That means affordable capital for the Global South, tax justice with teeth, and development banks that fund transformation, not delay it.

2. From Nudge to Shove
The Era of Polite Encouragement Is Over. We can’t fix systemic harm with disclosure checklists and ESG labels. It’s time to regulate like we mean it: ban destructive financial flows, enforce sustainability criteria, and cut off capital to activities that burn the future for today’s margins.

3. Speak Capital (Fluently)
Finance won’t fix itself, and it doesn’t respond well to moral outrage alone. Finance is, by nature, conservative; it often views innovative and sustainable ideas as risks. We need more people inside the machine who can translate justice into terms the system understands: risk, return, incentives. Justice must become bankable—not by watering it down, but by reshaping the rules so that doing the right thing also makes financial sense.

On this last point: finance needs you — progressives, realists, anyone who still gives a damn about the future. Especially now. Because regulation isn’t failing — it’s barely even trying.

(If you want, you can stop here. The rest provides further explanation and clarification. But I think it's also still nice to read.

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Completely misdirected finance

The latest SDG Progress Report is sobering: only 17% of targets are on track, while more than a third have stalled or even regressed. Despite a few glimmers of hope—such as reduced child mortality and improved access to clean water—the overarching message is one of systemic failure. Conflict, climate shocks, and an outdated financial system are undermining development at scale. As the report highlights, the current economic model leaves developing countries with limited fiscal space, locked in debt, and unable to invest in the transformations needed. Without a reimagined financial architecture and genuine international solidarity, the Agenda 2030 will remain an unfulfilled promise.

It is evident that rich countries, especially those in Europe, score the best (see ranking).

It is also evident that we face trade-offs and a lack of serious policy. See below some maps for different SDGs (out of the 17, I chose 4, which is quite arbitrary). You have to look very carefully, but then you can see that SDG 1 (No Poverty, upper left panel) is almost the opposite of climate action (lower left panel). Responsible consumption is notably absent in countries with higher GDP (lower right panel), and peace, justice, and strong institutions are also largely lacking (upper right panel).

Finance plays a central role in reversing this trend. The SDG agenda cannot move forward without addressing the broken global financial architecture. Key levers include expanding long-term, affordable financing for the Global South, enhancing the effectiveness and fairness of international tax systems, and reforming multilateral development banks to serve sustainability goals. Without unlocking these financial pathways, the structural barriers to progress—especially for the most vulnerable—will remain firmly in place. In other words, the Chapter 2 recommendations of the SDG report dismiss the current state of finance as ‘a force for good’.

A Promise on the Brink

And that brings me to Sustainable finance. Sustainable finance once held a powerful allure: the idea that financial capital could become an engine for planetary healing and social justice. It suggested a future in which investments flowed not toward extraction and inequality, but toward regeneration and resilience. Capital markets, if properly informed and incentivised, could drive a just transition to a sustainable economy.

But today, that narrative is faltering. Across both the United States and Europe, what was once seen as a bold pathway to sustainability now risks devolving into a marketing façade. The language of “green” and “sustainable” still circulates in financial circles, but the structural commitments that would make it a reality are slipping away. The Net Zero Banking Alliance has essentially imploded and diluted its commitment. We are confronted by the fact that markets alone will not save us. In fact, without intervention, they are more likely to entrench the very problems we seek to solve.

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Finance Is Conservative by Nature

This disillusionment stems from a fundamental misunderstanding of how finance operates. It’s not that the financial system is inherently malicious. It is built on principles that make it deeply conservative. Capital flows toward safety, predictability, and most importantly, return on investment. It is anchored in past performance and historical data, which makes it averse to risk, and change is inherently risky.

Additionally, the financial system is deeply rooted in the concept of private property. Private property defines not only who owns the collateral on which a loan can be based, but also who is legally responsible for bearing the risks and potential losses.

This structure is fundamental to how financial markets operate: ownership provides clarity about who holds rights to returns, who is liable for obligations, and who must absorb losses.

As a result, financing models based on shared ownership — such as cooperatives, commons, or other collective structures — are often more challenging to fund. They don’t easily fit within the current framework of contracts, collateral, and accountability, where lenders and investors typically seek a single identifiable counterparty and control over property as security.

This bias against the new, the collective, and the transformative means that ideas with social or ecological promise often struggle to secure funding. Cooperative housing, community-owned energy, and circular business models are routinely deemed too unconventional, too uncertain, or too unscalable. They don’t fit the model. They don’t promise high returns. And so, they don’t get funded.

Instead, the financial system continues to reward the familiar. Fossil fuel companies, despite their long-term liabilities, still attract investment because they offer short-term gains. Banks, pension funds, and asset managers discuss “net-zero commitments,” but many continue to invest in oil, gas, and industries linked to deforestation. The numbers don’t lie: in many cases, financing for fossil fuels has increased, not decreased.

The Rhetoric-Reality Gap

One of the great ironies of our time is that as sustainable finance has become more visible in public discourse over the last few years, its actual impact risks becoming more diluted. Regulatory initiatives, such as the EU’s taxonomy and the Sustainable Finance Disclosure Regulation (SFDR), were intended to provide clarity and ambition. Yet under political and economic pressure, these frameworks are now being rolled back or softened.

In the United States, ESG (Environmental, Social, and Governance) investing has become a political flashpoint. Right-wing commentators decry it as “woke finance,” undermining even basic climate risk disclosure as ideological overreach. The result is a chilling effect: major banks pull back from net-zero alliances, and financial institutions temper their ambitions.

This retreat exposes a more profound vulnerability. Transparency and voluntary guidelines—so long the preferred tools of policy—are not enough. The assumption that more information would naturally lead to better decisions was always optimistic. In reality, behaviour is not shifting at scale. Most investors, both retail and institutional, are not willing to sacrifice returns for impact. Understanding risk is not the same as addressing it.

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Moral Narratives in a Market Logic

It is tempting to believe that sustainable finance needs better products, smarter labels, or more transparency. But that belief sidesteps the uncomfortable reality: we are still operating within an unchanged paradigm. The logic of return maximisation, capital efficiency, and unpriced externalities continues to dominate. What we call sustainable finance is too often little more than optimisation, doing less harm, within an extractive model.

This is more than a technical failure; it is a moral one. When so-called sustainable funds invest in fossil fuels and weapons, when impact investments perpetuate inequality, and when climate risk disclosure is used to manage portfolios rather than drive change, the gap between words and action becomes dangerous. It corrodes trust. It delays the transition.

Progressives Must Learn the Language of Capital

For those committed to justice and sustainability, this moment calls for a strategic shift in approach. It’s no longer enough to critique finance from a safe distance or hope the market will somehow self-correct. Progressives need to speak the language of capital, not to embrace its worldview, but to intervene in how it works.

That means understanding how capital flows. Why private equity firms can so easily buy up public institutions, publishers, kindergartens, and anything that generates a return. What a yield curve tells us is how credit ratings influence perceptions of risk. And why central banks often hold more power than parliaments.

Don’t let the jargon scare you. Much of the complexity is designed to intimidate rather than inform. The truth is that many of these numbers only make sense to a narrow segment of the finance world, not to the broader public or the real economy.

More importantly, we need to face a hard truth: justice doesn’t finance itself. If we want systemic change, we have to make it financially viable. That doesn’t mean compromising on values. It means converting them into real, fundable proposals through public guarantees, smart subsidies, regulatory shifts, and by deliberately shifting who carries the risk.

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From Nudging to Steering

Public policy has relied far too long on soft instruments: disclosures, voluntary commitments, and labels. These tools suggest a hands-off, technocratic optimism that belies the urgency of the crisis. Real change requires steering. Not just better carrots, but firmer sticks. Not just creating space for sustainable finance, but shrinking the space for unsustainable finance.

This means setting demanding standards and exclusions. It means banning harmful financial products, phasing out fossil fuel subsidies, and regulating systemic enablers of ecological and social harm. Some pension funds and institutional investors—especially in the Netherlands—have begun to set stricter criteria. These are necessary signals. But unless supported by strong public frameworks, they remain isolated examples.

Structural reform is essential. The current system incentivises extraction because extraction is profitable. Until we change the rules of that game, “sustainable finance” will remain an oxymoron—aspirational in language, but complicit in outcome.

Capital as a Tool, Not a Threat

There’s a tendency among some progressives to view finance as the enemy. That impulse is understandable. But it is also limiting. Capital is neither inherently good nor inherently bad. It is a powerful tool. The challenge is not to reject it, but to repurpose it. To build the economy we need, not the one we inherited, we must utilise it effectively.

This will not happen by accident. It requires political will. It requires coalitions of reformers, regulators, investors, and communities to shape the contours of what gets financed and why. It requires us to ask, clearly and collectively: What kind of future are we helping to create?

Sustainable finance is not an end in itself. It is a means—a means to climate stability, to equity, to regeneration. But like any tool, it must be wielded with purpose. And right now, the hand that holds it is still guided by outdated priorities.

The Way Forward

We’re at a familiar crossroads, the kind with plenty of signage but no clear direction. Either sustainable finance will grow into a force for genuine transformation, or it will fade into history as a well-intentioned slogan comfortably absorbed into the system it set out to challenge. The stakes are too high for it to end up as just another buzzword on a glossy investor deck.

What’s needed now is movement on all fronts. Governments need to stop dangling carrots and start steering the cart. Investors must move beyond box-ticking and start backing change that makes a difference. Citizens and movements must do the unglamorous work of holding both accountable. And progressives need to stop waiting for the market to grow a conscience and start rewiring its circuitry.

But let’s be honest: governments are unlikely to lead. Many are too captivated, too cautious, or too confused. Which means progressives can't afford to stay outside the gates, waving policy papers and protest signs. We need people inside the system—fluent in term sheets and fund structures, capable of distinguishing between impact and PR, and willing to bend the financial machinery toward public purpose.

This isn't about selling out. It’s about showing up with clarity, strategy, and a willingness to take control of the levers of capital. Finance won't fix itself, and regulation alone won't be fast enough. If we want capital to serve justice, we have to be in the room where capital decisions are made.

The future will be financed. The real question is: financed for what, and by whom?

Take care (and take care of finance!)

Hans

Yes, it's finally done. Yesterday, I defended my PhD dissertation before a critical, diverse, and deeply engaged committee under the watchful eyes of what I was told was a pretty large audience, in a venue that was, quite literally, sweltering.

What mattered most to me was that we had a genuine academic dialogue about our economic system, examining it from sharply different perspectives. The goal wasn’t to arrive at definitive answers, but to reflect critically, listen, understand, build on ideas, and, naturally, defend my findings and thinking.

If you're curious to see how the defence unfolded—and perhaps form your impression—you can watch it here.

Of course, this was a moment of celebration for me. But to be honest, it feels more like a meaningful milestone in a much longer journey — one that is far from over.

Because the topic of my dissertation was so ambitious, it should come as no surprise that I did not – and could not – find all the answers. The questions I raised reach far beyond a single thesis: they touch on the very foundations of how we think about economics, and how we can transform it to serve ecological and social sustainability. There is still so much more to explore, to debate, to research – and, crucially, to co-create and experiment with others. Not just to make economics more relevant, but to make science itself more helpful in understanding and shaping complex systems, and for supporting systemic change.

In my dissertation, I investigated how economic theory, policy, and practice could be fundamentally reimagined in light of today’s ecological and social challenges. I examined how deep-rooted assumptions, such as the dependence on perpetual economic growth, have become structural features of our economic systems, limiting their ability to adapt or remain within planetary boundaries. I explored the dynamics of tipping points, both ecological and social, and how systemic risks tend to be overlooked by models built for equilibrium rather than disruption.

The dissertation also examines the diversity of institutional arrangements – varieties of capitalism – and how they influence different sustainability outcomes. I show that no system performs well across the board, but that institutional design matters: not just for redistribution or innovation, but for the very resilience and direction of economic development. Finally, I explore the nature of transitions – how systems change, and under what conditions transformation is possible, beyond mere optimisation or reform. I argue that a sustainability transition requires more than better tools or more innovative policies: it demands a rethinking of core goals, values, and epistemologies.

This is not the end of a project – it is part of a much longer journey. One that will require collective reflection, experimentation, and bridge-building across disciplines, institutions, and sectors.

For those who want to read my PhD, you can download it here:

Transforming Economics For Sustainability

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I will share here as a newsletter my ‘layman’s speech’ (a slightly adjusted version), so my dissertation and findings can be explained to non-experts. But this piece is not a summary. It is a reflection on how our economic thinking has evolved – and how it must evolve further, if we are to face the challenges of our time. It is a plea for reconnection: between disciplines, between people, and between our economy and the living systems it depends on.

From Island to Archipelago: Rethinking Economics for a Sustainable Future

Ladies and gentlemen,

Imagine a man washing ashore on a seemingly untouched island.
No markets. No prices. No laws.
Just himself, his ingenuity, and whatever the island has to offer.

This is the familiar image of Robinson Crusoe, not just a literary character, but also, perhaps surprisingly, the starting point for much of modern economic theory because many economic models begin with a kind of Crusoe: a rational individual, isolated from society, doing his best to allocate scarce resources as efficiently as possible.

From that solitary figure, we construct entire systems: markets, profit mechanisms, choices, incentives.
It’s a powerful metaphor. It simplifies. It clarifies. It allows us to model and predict.

However, when we examine the world around us today, we also see the limitations of this way of thinking.

What if the island isn’t endlessly fertile, even though our economic systems behave as if it is?
What if we always need more–more consumption, more growth, more profit – and we’re slowly running out of “more”?
And what if Crusoe is not alone on the island after all, but surrounded by others? Others with whom he must collaborate – or perhaps compete over the last coconut?

Why rethink economics?

Let me start with a reassuring message: economists are not indifferent to sustainability. Far from it.
There is a vast body of research on climate change, biodiversity, inequality –
and on the role of markets, behaviour, and policy in addressing these issues.

But still… something’s missing.

Much of this work is being done within frameworks that were designed for a different era – frameworks built on assumptions of infinite substitutability, perfectly functioning markets, and continuous growth. These assumptions are rarely questioned. They look at individuals, sectors, and even countries – but rarely at the entire system. They are embedded in the architecture of our models, like invisible scaffolding.

And as long as those foundations remain intact, sustainability remains an external factor—an afterthought.
It is treated as a side constraint, an externality, or a footnote to the “real” economic story.

But what if we turned that perspective around?
What if sustainability was not an appendix, but the starting point?
What kind of economics would we need if our primary concern were to ensure that human societies can thrive within ecological limits and social boundaries?

To answer those questions, we must look both forward and back.

A science frozen in time

Modern macroeconomics has a rich and complex history. It began as political economy, a field concerned not just with markets, but with moral philosophy, justice, and the organisation of society.

Over time, the discipline evolved into a more technical and mathematical field. The focus shifted towards rational choice, market equilibria, and efficiency. This brought increased precision – but at a cost.

The broader societal anchoring of economics was gradually lost.
Ecological limits, moral questions, and social dynamics all began to disappear from the heart of the discipline. Not because they were unimportant, but because they became hidden inside the assumptions.

And here lies the deeper issue: economics, like many of our institutions, has in some ways become frozen in time.

Many of the theories we still use were developed in the 19th or early 20th century – a time when natural resources seemed limitless, climate change was not yet on the radar, and inequality was either ignored, suppressed, or violently addressed.

Don’t get me wrong – these weren’t foolish thinkers, far from it. Their insights were often brilliant. However, their ideas were rooted in the challenges of their time: industrial expansion, colonial expansion, and unwavering faith in technological progress.

The danger is not that these ideas were once misguided; rather, it is that they remain so.
It is that we continue to apply them, essentially unchanged, to entirely different problems.

Three islands

So we need a new framework. And to explain it, I return to the image of the island. Not one island, but three.

• First, there is the economic island, concerned with production, efficiency, and market transactions.

• Second, the ecological island, which sustains life through ecosystems, resources, and planetary boundaries.

• Third, the social island is built on trust, institutions, relationships, and cooperation.

  

Each of these domains matters. But sustainability doesn’t emerge from any one of them in isolation.
It arises between them.

If the ecological island collapses, the economy will eventually follow.
If the social fabric is torn, cooperation and long-term planning become impossible.
Economies don’t function in a vacuum. They are embedded in—and dependent on—both society and nature.

So it’s not enough to study the islands separately.
We must build strong, resilient bridges between them.
And maintain those bridges – economically, politically, institutionally – because they are what hold the system together.

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Growth dependency

But there’s more. Sustainability doesn’t just require broader thinking.
It demands that we confront a more uncomfortable truth: the economic system we’ve built has become dependent on growth.

Growth is no longer just a policy objective. It is a systemic requirement.
For profits. For investment returns. For employment. For tax revenues.
Without it, budgets strain, debt levels rise, and political legitimacy weakens.

This creates a vicious cycle:
To maintain stability, we chase more growth, even if it comes at the expense of ecosystems, communities, our own health or future generations.

And that is what makes us so slow to act.
Because systemic growth dependence means that the most obvious sustainability solutions – consume less, slow down, restore – are politically and economically unthinkable.

Why tipping points matter

This is where the idea of tipping points becomes critical (no surprise, given the name of my newsletter).

Sometimes, systems do not respond gradually.
They hold steady and then suddenly shift. Irreversibly.

A glacier collapses. A species disappears. A society loses faith in its institutions.
By the time we see the full consequences, it is often too late to react.

At those moments, price signals, efficiency improvements or digital dashboards are not enough. We need robust public institutions, collective foresight, and the ability to act before the threshold is crossed.

What does the evidence tell us?

Looking around the world, we see that countries with stronger institutions – those that embed trust, redistribute fairly, and plan for the long term – tend to be more resilient and socially sustainable.

But no country gets it entirely right. Some are better on social dimensions, while others excel in ecological ones. Every institutional model has blind spots. There is no perfect blueprint.

One striking pattern: listed companies often perform better in countries with weaker public policy and worse in countries with stronger sustainability governance.

Why? Because where the government fails, companies sometimes step in.
But where policy leads, companies rarely take the initiative.
The lesson: only governments and institutional change can drive real, lasting sustainability. The market won’t do it on its own.

Rethinking change

If we accept that systems must change, we must also ask: how does change happen?

There are three levels:

1. Optimisation – tweaking what exists.

2. Reform – changing rules and institutions.

3. Transformation – rethinking our goals, values, and assumptions.

Most of our current efforts are stuck in the first two.
We tighten environmental regulations. We adjust tax incentives.
But we rarely challenge the underlying logic of extract, grow, and consume.

Yet how we think about change depends on how we see the economy.
Is it a machine to be fine-tuned?
Or a living system shaped by relationships, culture, and values?

The most promising movements today are those that seek not just to improve economics but to reimagine it.

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So what should we do?

From this perspective, a few priorities emerge:

• Put public values at the heart and anchor them legally.
  If we want sustainability to matter, it must be more than a good intention – it needs legal weight to guide decisions, even when short-term interests suggest otherwise.

• Stop measuring success only in terms of GDP.
  As long as we treat GDP as the scoreboard, we’ll keep playing the same game, even if it means winning at the expense of people or the planet.

• Reduce growth dependencies.
  Measurement of well-being is not enough. We also need to reform institutional structures that perpetuate an economy's dependence on growth.

• Respect ecological boundaries.
  Planetary limits are not theoretical constraints. They are hard edges, beyond which recovery becomes uncertain or impossible.

• Curb corporate dominance and support diverse models of cooperation. When a handful of large firms set the rules of the game, other ways of organising, like cooperatives or commons, rarely get a fair chance.

• Reform the financial system to reward long-term value.
  As long as our financial system rewards short-term profits and externalises risks, sustainable investments will remain the exception. We need a system that measures value in decades, not in days.

This is not just about doing more.
It’s about doing differently.
This is systems change.

Returning to Crusoe

And so, we return to Crusoe. At the end of this story, he’s no longer alone.

He lives in a community. He shares the island. He respects the limits of his environment. He builds trust, follows rules, and nurtures collective wellbeing.

He is no longer a simplified abstraction, but a human being among others, seeking meaning, justice, and connection.

And maybe that is the central message of this journey:

We don’t have to throw out the story of economics. But we do need to rewrite it. From individual to interconnected. From optimisation to regeneration. From an island to a system of islands, with bridges connecting them.

Because if we stay stranded on our island, we lose sight of what truly connects us.

That’s it.

Take care.

Hans

There is a quiet form of rebellion we rarely talk about. It doesn’t march in the streets or tweet in all caps. It takes its stand in a sunbeam on a park bench, in a half-read book beside a cooling cup of coffee, in a meandering conversation that forgets its point. This is the rebellion of Lummelen — a Dutch word that translates poorly into English. “Loitering” or “dawdling” captures only a sliver of its essence. To lummel is to drift without purpose, to let the minutes swell with nothingness. It is the opposite of optimisation and, therefore, deeply subversive in a neoliberal economy. Lummelen happens in the quiet in-between moments, what we might call luminal time — the soft, undefined edges of the day where you're not working, not striving, just being. In our productivity-obsessed culture, lummelen can feel radical: it resists the idea that every moment must be optimised.

Modern capitalism does not merely tolerate lummelen; it eradicates it, which is bad for well-being and progress.

When Time Becomes a Scarcity

I have the habit of, at least trying to, enjoy to lummel. My favourite moment: Saturday morning. Coffee. Newspapers and magazines. Just reading half the articles, talking with my family. I even get up earlier to enjoy doing nothing. Because, as part of our neoliberal society, time is also precious to me. Loitering requires two things that neoliberalism renders scarce: time and space. Under the relentless logic of efficiency, time is monetised, monitored, and fragmented, also for me.

Hartmut Rosa, a German sociologist, developed the concept of social acceleration to explain the increasing pace of life in modern societies. In his seminal work, Social Acceleration: A New Theory of Modernity, Rosa identifies three dimensions of acceleration:

1. Technological Acceleration: Advancements in transportation, communication, and production technologies have significantly increased the speed at which activities occur

2. Acceleration of Social Change: Institutions, relationships, and cultural norms are evolving faster, leading to a continuous transformation of societal structures.

3. Acceleration of the Pace of Life: Individuals experience a heightened sense of urgency, feeling compelled to accomplish more in less time, often leading to stress and burnout.

Rosa argues that these accelerations result in a "shrinking of the present," where the time to experience and assimilate changes becomes increasingly limited. This phenomenon contributes to feelings of alienation and a loss of meaningful engagement with the world. In my words: decreasing lummel-time leads to a lower quality of life.

Rosa's theory of social acceleration reminds us that even as technologies promise to save time, they often intensify expectations and compress lived experience. In this landscape, “doing nothing” becomes suspicious and economically irrational.

If I look at my children (or myself), I would add a layer to that. Quite often, the time you usually spend loitering ends up scrolling. And there is a difference between what I mean by loitering and doomscrolling. With loitering, you free your mind, open up new creative spaces, etc. Scrolling has the opposite effect. It does not lead to freeing something. It leads to bubble vision non-ideas.

This transformation of time has profound psychological implications. According to Self-Determination Theory (SDT), well-being hinges on satisfying three basic psychological needs: autonomy, competence, and relatedness (Ryan & Deci, 2017). These needs are thwarted in environments of surveillance and control, precisely the conditions fostered by modern work structures. Meta-analytic evidence confirms that when people feel controlled, their intrinsic motivation declines sharply (Patall et al., 2008; Fong et al., 2019).

As Ryan et al. (2022) note in their review of SDT:

“Support for people’s basic psychological needs for autonomy, competence, and relatedness can enhance learning, identity growth, and sustained behavior change” — yet these supports are systematically eroded by environments that commodify time.”

I don’t want to claim that we need loitering for autonomy. There can be autonomy even if we are swamped. As long as we can plan for ourselves. However, if we are so busy that we don’t have time to strengthen our bonds with friends and family, let alone colleagues (relatedness), we have a problem.

Two reasons for the pressure on loitering as part of SDT are interdependent: the neoliberal idea of freedom and the growth-dominant nature of our system. The first one determines how we define the room we have as individuals (or how we see ourselves as individuals as part of society). The second specifies Hartmut Rosa's acceleration structure (and yes, this is all also dependent on previous work). And when growth, although needed for growth imperatives, becomes more useless over time, the pressure on our limited time becomes even harder. I will explain (and for longer explanations, see below).

First, the neoliberal idea of freedom and loitering time.

As Windegger and Spash argue:

“Freedom, as defined by neoliberalism, is negative, individualistic and market-centred… [it] downplays collective dimensions of freedom such as solidarity and equity”.

This concept of freedom is insufficient. Genuine autonomy — the ability to author one’s own life — requires more than the absence of interference. It demands the presence of enabling conditions: time to think, space to reflect, and the psychological safety to imagine alternatives. These are precisely the conditions for loitering offers.

Yet, loitering is not evenly distributed. It is a class privilege. That was also one of the comments I got when I wrote about it. For many, especially those in precarious employment, loitering is punished with surveillance, job insecurity, or social stigma. The freedom to be unproductive, to step outside the economic grid, has become the preserve of the few.

So, what should happen is to decouple earned labour more radically from income. Basic income, basic wages, part-time work, non-careers—all kinds of proposals already exist, but they are hard to get traction.

And the most important reason is that organised labour is also a hostage of the growth paradigm. Unions fear that stopping or reducing the labour supply (if we start working fewer hours) will reduce economic growth and, hence, the number of jobs and income. And if that happens, the other part of their members (pensioners, people with social security benefits) will also start to mumble and resist: if the economy grows less, the government budget comes under pressure, and as a result, there will be pressure on benefits.

Zac Edwards describes this condition as “growth dependency,” a state in which workers’ well-being is tied to an economy that alienates their labour and commodifies their time:

“The capacity of labour to produce surplus value makes economic growth possible. However, the realisation of this potential is not automatic; rather, it is induced through concrete regimes of labour organisation”.

These regimes do not simply extract labour — they shape identity and constrict freedom. The average worker no longer works to live, but lives to work, caught in a system where rest is conditional, leisure is privatised, and reflection is scheduled.

This is one of the growth imperatives (see, for instance, blog #13). Therefore, we have (again) start to discuss those growth imperatives and how to reduce them (but not now in this blog).

But if we want to create lummel-time, we need to shift this relationship of labour-income-growth. Edwards argues for reforms that decouple well-being from economic growth, including universal basic income, reduced work hours, and public provisioning. These measures not only protect workers but also enhance their autonomy:

“Reforms that increase autonomy from waged work and decouple wellbeing from the growth rate are by their nature also likely to increase the bargaining power of labour”.

Lummel-time! Seems like a revolution. Or common sense. All a matter of perspective.

I want to raise another point related to this obsession with economic growth. Our economic growth is becoming increasingly useless or even destructive. Demolition growth is my word for this—Sloopgroei in Dutch. It refers to the paradoxical expansion of GDP even as societal foundations are undermined: skyrocketing healthcare costs from burnout, militarisation instead of peace, investment in fossil infrastructure rather than resilience. Economic growth, but no progress.

Simon Kuznets, who devised GDP, warned that it doesn’t measure well-being. Yet we still rely on it, even as it counts pollution cleanup and stress-related healthcare as “growth.”

Alternative indicators like the Genuine Progress Indicator (GPI) and Index of Sustainable Economic Welfare (ISEW) show a different story: while GDP rises, real well-being in developed countries has stagnated or declined. We’re spending more to stay afloat (see below for more).

To move forward, we must stop mistaking repair for progress. Adopting holistic metrics like GPI and rethinking our economic priorities—beyond profit and productivity—are essential. Actual progress means creating the conditions for well-being, time, and freedom, not just economic motion.

Degrowth offers a systemic correction, not a politics of austerity, but a redefinition of value. Instead of measuring progress by throughput and output, it proposes a society where sufficiency replaces excess and time is reclaimed as a public good.

So, we find ourselves in a place where we don’t have time to lummel, because we do, for an increasing part, things that are essential for economic growth, but are increasingly defensive, probably not necessary and not increasing well-being. Seems logical to think about system change, right?

We have to stand up for our freedom to lummel. This is not a distraction from politics; it is its foundation.

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Conclusion: Reclaiming Time as Commons

What would it mean to treat time not as a resource but as a commons? What new solidarities might emerge if we ceased to glorify busyness and began to organise around rest, reflection, and reciprocity?

To loiter, then, is not merely to stop. It is to remember. It is to resist. It is to rehearse a different kind of future — one where value is measured not by the volume of things, but by the quality of attention, care, and connection.

In this way, lummelen intersects with the psychology of flourishing. Both demand that we move beyond survival, beyond growth, toward a society that makes room for life itself.

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Demolition growth

There is growth that builds, and there is growth that sweeps up the debris. The latter—sloopgroei or demolition growth—is becoming a dominant feature of our economies. It is growth without direction, without intention, and increasingly, without benefit.

We have begun to mistake motion for momentum in a society fixated on GDP. More spending means more growth, or so the story goes. But what if most of that spending is not about creating new value but patching old wounds? Imagine a household spending more each year, not to improve their home, but to fix its crumbling foundation, replace broken appliances, and cover health bills caused by stress and mould. To an accountant, this might look like prosperity. But from within the house, it feels like survival.

This is where we are with GDP. It counts the repairs, not the reasons for them.

Simon Kuznets, the architect of GDP, warned us almost a century ago:

“The welfare of a nation can scarcely be inferred from a measure of national income.”
— Simon Kuznets, 1934

Kuznets understood the limitation: GDP is a financial thermometer, not a health assessment. It is (very!) useful to measure production. It might even be a proxy for progress if production is helpful for society: in times of food scarcity, producing more food helps well-being. In times of housing shortage, building houses is, by all means, good. But it also rises when there’s an oil spill (more cleanup), when there’s war (more production), or when mental health crises lead to more pharmaceutical sales. All of it counts as growth—even if what’s growing is distress.

This problem is not theoretical. We spend billions not to progress but to prevent collapse. We allocate vast sums to climate adaptation (caused by economic activity), restoration of nature, combating obesity and increasingly on military budgets. The NATO plan to raise defence spending to 5% of GDP (equal to the entire education budget in the Netherlands) is emblematic. This isn't an investment in the future. It’s barricading against breakdown.

And yet, GDP goes up.

Alternative indicators like the Genuine Progress Indicator (GPI) have emerged to explain this disconnect. GPI corrects GDP by accounting for environmental degradation, social inequality, and resource depletion while adding the value of unpaid care, volunteer work, and leisure (see table below). Unlike GDP, it asks: Are we truly better off?

According to studies by Baysal and Sutton (2024), GPI offers a far more holistic measure of well-being and sustainability.
Their conclusion is stark: While GDP has grown steadily, GPI in many developed nations has stagnated or declined since the 1990s. In other words, we’re spending more, but living less.

They also show the egg of well-being, which has almost the same message as the doughnut or another metaphor. From a global perspective, it is clear that we need to start with favourable ecosystem conditions. However, from an individual or even a country perspective, we can still have a favourable human condition within a bad ecosystem. But, in the end, we all know that you should never eat eggs in bad condition.

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This pattern is confirmed by Gundimeda and Atkinson (2024) in their review of global metrics. They found that economic growth often obscures the destruction of natural capital and fails to improve human well-being. The proliferation of metrics—more than 500 so far—reflects a deep anxiety: GDP is no longer a compass. At best, it’s a speedometer stuck at full throttle, as the wheels fall off. Similarly, the Index of Sustainable Economic Welfare (ISEW) offers a recalibrated view. Tsara et al. (2024) revisit this indicator, initially developed by Daly and Cobb, as a superior proxy for sustainable prosperity. The ISEW subtracts for pollution, adds for unpaid work, and adjusts for inequality. Their review of its applications across countries reveals a consistent trend: real well-being is flatlining or falling, especially when ecosystems degrade or income disparities widen.

One vivid example comes from the realm of climate adaptation. Consider the billions spent on heat plans, sea walls, and water management. These are vital expenditures, but they do not represent forward movement. We’re not building the future; we’re fortifying the past. Or take healthcare: soaring costs driven by burnout, loneliness, and lifestyle diseases are recorded as economic output. Yet they reflect a society fraying at its edges. A stressed-out society can still be productive in GDP's arithmetic because reducing stress means fewer health costs and more measured economic production. However, there are also people sitting on the couch who are not productive.

As Rijpma et al. (2024) explain in their analysis of multidimensional well-being, the Netherlands’ historical GDP series diverges significantly from real indicators of life quality like health, education, and ecological balance.
They show that well-being and growth are decoupling. We may earn more per capita but are not necessarily living better. The growth itself is part of the problem.

This brings us back to sloopgroei—growth as a symptom, not a sign of success. A system that needs to grow to avoid collapse is unhealthy. It's a patient on life support, not an athlete in training.

So what do we do?

First, we must stop calling repair and remediation “growth.” It’s a linguistic trap that disguises decline as progress. Second, we need to mainstream indicators like GPI and ISEW. These metrics must inform reports and real policy decisions—from taxation and infrastructure to education and energy.

Finally, we need a new cultural narrative that values enoughness over excess, regeneration over expansion. We need a future where progress is measured not by how fast we can rebuild what we broke but by how little breaking we do in the first place.

Reducing the growth imperatives is still something else. In addition to better measures for well-being, the centrality of economic production profit and labour dependencies on it determine our limited summer. Therefore, we need to talk about freedom and time.

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Reclaiming Lummel Time: Freedom and Labour

In a world obsessed with efficiency and productivity, the simple act of loitering—of doing nothing in particular, on no one's schedule—is quietly revolutionary. What if freedom meant not just the absence of constraints, but the presence of time? Time to think, to connect, to be. This vision, often dismissed as nostalgic or utopian, gains real traction when we examine the fundamental contradictions in our prevailing economic and political paradigms. There are two points here: how to define freedom and relate to time.

At the heart of our modern predicament is a distorted notion of freedom. Under neoliberalism, freedom is typically framed as individual autonomy in the marketplace: the right to choose between products, to own property, and to sell one’s labour. As Windegger and Spash argue, this negative liberty—a freedom from interference—has become hegemonic, equated almost synonymously with capitalism itself. It justifies structural inequalities under the guise of meritocracy, valorises consumer choice over communal agency, and systematically undermines collective bargaining and democratic participation.

But this model ignores that real freedom—freedom to loiter, to be present, to be part of a community—requires more than an absence of constraint. It requires favourable conditions: material security, reduced work hours, and participatory institutions. It requires what philosopher Cornelius Castoriadis termed autonomy, both individual and collective—a lucid self-governance over the norms and structures that shape our lives. The enormous creative capacity innate to human beings enables them to envision alternatives in constructing their identities, practices, and living lives that exceed the already available forms. This is vital, since it helps form resistance against social powers, which, in Castoriadis’ opinion, are manipulative, insofar as they predetermine what one perceives as conceivable and eligible options.

This is where the degrowth movement offers a profound alternative. As Zac Edwards explores, degrowth is not just about consuming less; it's about restructuring our relationship with labour and time. It confronts the "double bind" of modern workers: exploited through alienated labour (yes, Marxian terms!), yet dependent on economic growth for their livelihoods. The current growth regime demands ever-increasing productivity, not to expand collective well-being, but to sustain a system in which wages and employment are tied to the relentless churn of GDP as discussed above.

For decades, numerous proposals have been made to break this dependency: universal basic income, job guarantees, and, most crucially, work time reduction. These aren't just technocratic fixes—they are pathways to lummel time. As a sidenote, as a student, I did an internship at the Dutch Labour union (FNV), studying working time reduction. It was a revolutionary reduction to 36 hours then, where many people could realise a four-day working week. As part of my research (always have been nerdy), I read many books about the history of the labour movement. From that, I learnt that the essence of the labour struggle— in addition to living wages — is autonomy over working time and working time reduction. And that many workers were pleased with a full day free!

All these proposals allow us to decouple our sense of self-worth and societal value from waged labour. They open the door to solidarity economies, localised production, and the revival of public commons.

But to realise this vision, we must also reckon with the labour movement’s uneasy relationship with growth. Historically aligned with capital during the Fordist era, many unions continue to frame prosperity regarding economic expansion. Yet, as Edwards notes, there are signs of a strategic pivot. Some factions within organised labour now recognise that aligning with degrowth could enhance their bargaining power by reducing capital’s coercive leverage.

Reclaiming freedom in the 21st century thus demands more than political will—it requires a cultural shift. We must learn to value enoughness over excess, connection over consumption, and presence over productivity. Lummel time, far from idle, becomes the foundation for a freer, more just society—one in which we have the time not just to work but to live.

Thanks for reading, take your Lummel-time!

Take care,

Hans

Let’s begin this blog with music. A long time ago (in the eighties), I collected all the records from Eric Clapton (yes, old man). The records I liked most were the old ones (also when I collected them): Derek & the Dominoes, Cream, and Blind Faith. Especially the 1970 Album Layla and Other Assorted Love Songs is one of my favourites (if you don’t know it: here on Spotify). In 1970, Eric Clapton poured his anguish into this concept album steeped in emotional turbulence. The centrepiece, "Layla," tells the story of an unattainable love—Clapton’s obsession with Pattie Boyd, the wife of his friend George Harrison, guitarist from the Beatles. Inspired by the Persian legend of Majnun and Layla, the song captures an arc of longing, rapture, and collapse.

The song begins with a feverish intensity, symbolising the initial thrill of desire. But as it moves into its iconic piano coda, written by drummer Jim Gordon, it shifts into something more mournful, reflective, and broken. It seems that love can promise the world, yet deliver heartbreak.

This same arc—desire, disillusionment, and breakdown—can be used to trace the rise and fall of neoliberalism, the dominant political-economic ideology of the last half-century. Neoliberalism emerged in the late 1970s and gained dominance in the 1980s as a response to the perceived failures of Keynesianism. It promised a renaissance of freedom and prosperity, grounded in the belief that free markets, deregulated industries, and a minimal state would generate wealth, innovation, and efficiency. Politicians like Margaret Thatcher, Ronald Reagan, Bill Clinton and Tony Blair championed these ideas, embedding them in policy and popular imagination. It became an obsession (just like Clapton…). The private sector was lionised; the public sector demonised. "There is no alternative," Thatcher famously declared.1 The market was not just a mechanism for exchange—it became a moral force, a disciplining logic that would supposedly reward merit and punish inefficiency.

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Neoliberalism, defined across Scott (2023) and Firth (2024), emerges less as a coherent economic doctrine and more as a hegemonic and moral order. This doxa subtly permeates institutional and everyday life under the guise of non-ideological "common sense." Drawing on Bourdieu and Lacan, Scott illustrates how economics, as a field, has naturalised neoliberal norms through a technocratic, positivist epistemology that obscures its ideological underpinnings. This invisibility is sustained by the refusal of economists to identify with neoliberalism, its erasure from mainstream economic discourse, and its recasting as objective truth rather than as contested political terrain. Neoliberalism fuses market logic with identity politics and traditional moral values, producing what [Brown] calls a "Frankenstein's monster" of moralised market reason that discredits social justice while fueling anti-democratic populisms.

Hence, the promises of neoliberalism proved seductive rather than sustainable. Free trade was hailed as a pathway to global equality, yet it often deepened economic dependence and extractivism in the Global South while hollowing out industrial bases in the North. In reality, the notion that prosperity would “trickle down” from the rich to the poor was never borne out. Instead, wealth accumulated upward, leading to levels of inequality not seen since the Gilded Age. While productivity and GDP rose, income for the bottom half of the population stagnated or declined. Even in wealthy nations, the social contract began to unravel.

What was marketed as “free competition” often led to monopolisation. In sectors like technology, media, and pharmaceuticals, a handful of dominant players now dictate terms to governments and consumers alike. Public goods were privatised—schools, healthcare, water, energy—often with declining service and rising costs. Gig economies replaced job security with precarity. Meanwhile, climate change worsened, framed as an “externality” beyond the remit of economic models. Environmental degradation became collateral damage in the race for growth.

I am repeating myself.

The dissonance between promise and outcome grew harder to ignore. Financial crises, soaring housing prices, degraded labour protections, and mass disenchantment began to signal a declining system. The 2008 global financial meltdown marked a turning point, revealing that neoliberalism’s internal contradictions were not minor glitches but structural flaws. Rescue packages were doled out to banks and corporations, not to workers or renters. The illusion of meritocracy was shattered.

Today, neoliberalism's ideological scaffolding collapses in real time, completely aligned with Fraser's analysis. The complex fusion of neoliberalism ultimately undermines democracy, corrodes social cohesion, and fails to deliver equitable prosperity—yet persists partly due to a lack of compelling counter-narratives. People have voted massively for change, but voted for a change that is not in their interest, and certainly not in the interest of their children.

Fraser calls for a new progressive-populist bloc that re-integrates redistributive justice with inclusive recognition as neoliberal hegemony unravels. At the same time, Brown urges rethinking values and subjectivity beyond neoliberal moral economism. Both signal that what comes next must attend not just to new policies, but to the reconstitution of meaning, belonging, and the ethical foundations of the social order.

Currently, where we are is not a vacuum where we can think freely about what should come next. We witness a descent into new forms of dystopia. Authoritarian populists like Trump, Orban, Modi, and Wilders have capitalised on the cultural and economic dislocation that neoliberalism engendered. The sense of belonging and security once promised by a social welfare state has been replaced by a politics of resentment, nostalgia, and exclusion. Machismo and nihilism thrive where solidarity has receded. Demagogues, decades of corporate lobbying, and judicial capture erode the rule of law. In Gaza, a genocide unfolds with chilling impunity, and the international order looks away—paralysed, complicit, or indifferent. If you are an autocrat, oligarch or post-neoliberal at least less-democratic government, why should you care?

This is not simply a moment of chaos or mismanagement; it is the end of a paradigm. We live through the death spiral of an economic and moral worldview. The market fundamentalism that once commanded reverence is now met with scepticism, if not outright contempt. From the rollback of environmental protections to the criminalisation of protest, what is being normalised is not a deviation from liberal norms, but the exposure of their limits. The dystopia unfolding is not an accidental byproduct but the logical end of a system that treated growth as sacrosanct and equity as expendable.

Yet in this collapse lies a strange kind of hope. If dystopia is politically possible, then so too is utopia. Ideas once dismissed as utopian fantasy are now entering mainstream debate: universal basic income, decommodified housing, guaranteed healthcare, democratic control of energy and infrastructure, and economies structured around wellbeing rather than GDP. These are not theoretical constructs. They are being trialled in real places, by real communities. What is needed is not more innovation, but commitment to already existing ideas—rooting them in everyday practice and making them politically contagious. One of my radical, hopeful thoughts is that limits and sufficiency can be normalised, just like the idea of never-ending growth and maximising is now the norm. See below for more on these other assorted love songs.

The challenge, then, is narrative. Just as Layla moves from fury to fragility, from electric guitar to echoing piano, our political movements must learn to shift from critique to composition. We must write new social arrangements into being—through organizing, imagination, and repetition. We need stories that people can believe in, not because they are simple, but because they are true to human dignity.

Clapton’s Layla was born from a deep personal crisis. But in that grief was the seed of renewal, of truth-telling. Our global crisis is no less emotional. It is marked by heartbreak, betrayal, and yearning. But like any good music, it also contains the possibility of transformation. We cannot return to the false certainties of the past. But we can write a new score that dares to turn longing into vision and despair into resolve. Therefore, we continue with some other assorted love songs.

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Other assorted love songs

As always, I split my blog into the Newsletter (the part above) and some deeper stuff, mostly based on recent papers. Also, this time, I think these papers give some direction on the other assorted love songs we need or the (radical) alternatives we seek. Or: From TINA to TAPAS (plenty of other options).

So, my love songs are about flourishing. Limits to efficiency, banning advertisement, and Post-growth business. I love it! Self-restrictions, regulatory restrictions, prohibitions, restrictions in company size, income, wealth, and other things that are not aligned with neoclassical economic thinking. As is Trumpian Nepotism.

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#1 Flourishing

If neoliberalism was our Layla, desperately desired, frantically pursued, and finally disillusioning, perhaps "flourishing" is one of the other assorted love songs. Less intense, less blinding, but more sustaining. In the aftermath of neoliberal collapse, we need not just critique; we need a reorientation toward what makes life livable and good, not just survival, not just GDP, but flourishing.

The recent Global Flourishing Study, spanning 22 countries and over 200,000 people, offers a new lens to understand what this might mean. It defines flourishing as the relative attainment of a state in which all aspects of a person’s life are good, including the contexts in which they live (see below for definitions and scoring). This is crucial. Flourishing isn’t a self-help project. It’s not about optimising your life in a vacuum. It’s about whether your society allows you to grow, connect, and contribute meaningfully.

Countries like Indonesia, Mexico, and the Philippines report the highest levels of flourishing, while wealthy nations such as Japan, Turkey, and the UK fall to the bottom. Flourishing, it turns out, increases with age. At the same time, young people today report alarming deficits in meaning and purpose—a sign, perhaps, of how corrosive contemporary life has become for those coming of age in its midst. The study finds that what matters most for adult flourishing isn’t wealth or prestige but the quality of one’s early relationships, health, and spiritual or communal ties. Close parental bonds, weekly participation in religious or community life, and a strong sense of belonging are potent predictors of well-being. Conversely, childhood adversity—abuse, neglect, or social exclusion—casts a long shadow, diminishing a person's chance to thrive decades later. These findings challenge the myth that well-being is a private affair or purely economic. They invite us to rebuild a social and political architecture in which flourishing is a shared horizon, not a solitary climb.

Neoliberalism never made room for this. It defined success as individual, measurable, and monetised. You bought, competed for, or unlocked well-being through entrepreneurial grit. But the study tells a different story. Flourishing is distributed unevenly. It is shaped not just by choices, but by childhood conditions, relationships, social cohesion, and even the frequency of religious or communal engagement. It echoes what many have felt intuitively: that our capacity to thrive is bound up with the quality of our bonds, our health, our sense of purpose—and yes, our material security.

This is a sharp break from the worldview we were sold. Under neoliberalism, flourishing was privatised, and the state's role was to retreat. But what we see now—empirically and ethically—is the urgent need for public commitment to collective well-being. From physical and emotional health to meaningful work, stable relationships, and basic financial security, flourishing is a systemic achievement, not a personal hustle.

Perhaps the real revolution begins when we stop trying to fix the broken melody of Layla and begin to write new songs—more honest, more whole. Love songs, yes, but not for myths of markets or messianic growth. Love songs for thriving communities, for environments that heal, for lives lived with dignity. Neoliberalism ends not in rupture, but in quiet recognition: the dream it sold us was always too narrow. Flourishing reminds us that another dream is possible—and already unfolding.

#2 Rebound: Another Love Song in the Circular Afterlife

This is the love song of circularity: elegant in theory, appealing to the eco-conscious imagination, yet shadowed by complexity and debunked by reality. If flourishing were a tender ballad to well-being, the rebound is the lament that follows our obsession with efficiency. This article is evident and excellent in its comments.

The circular economy promises to close loops, reduce waste, and make consumption cleaner, leaner, and greener. Yet, as the authors argue, this narrative has a dangerous blind spot. Efficiency, it turns out, can be an illusion. What appears to be progress—repair cafes, sharing platforms, rental models—can backfire as I also argued in my previous blog. A repaired phone becomes a secondary device, not a replacement. A shared car saves money, which is then spent on another flight. The rebound effect—where gains in efficiency lead to greater overall consumption—is not an economic fluke or a psychological quirk. It is a systemic feature of how we live.

This article’s brilliance lies in its invitation to rethink rebound not as a misbehaviour of individuals, but as an emergent property of social practices. Circularity isn’t just about what we do—it’s about how doing changes when infrastructures shift, meanings evolve, and practices recraft themselves in unexpected constellations. A faster shower becomes a longer one. A more efficient freezer invites bulk-buying and energy-hungry storage. The article dissects this beautifully: our rhythms of life, spatial routines, provisioning systems—all become agents in a drama of unintended consequence.

The great betrayal of neoliberalism was that it framed consumption as choice and change as innovation. But what this research reveals is deeper: consumption is structured. It is material, temporal, and spatial. It is not just what we buy but how we live. Ouch! We live the neoliberal collapse ourselves, not as spectators, but as actors. If circularity is to be more than greenwash, then it must be rooted in this complexity. It must reckon with rebound not as a footnote but as a central plot.

And yet, this is a love song—because there is something hopeful in the honesty. Just as Layla ends in the aching clarity of its piano coda, this analysis invites us to slow down, listen more carefully, and design not just products but patterns. A world that takes practice seriously stops asking how we can buy our way out of crisis and starts asking how we might live differently, together. It’s not as seductive as growth, perhaps. But in its humility lies the promise of something real.

#3 Keep on Growing: A Love Song for the Degrowth Business

If Layla was our fever dream and Bell Bottom Blues from the same album, our quiet confession, then Keep on Growing is the resilient ballad of transformation, less about heartbreak, more about what we do in its wake. There is something almost prophetic in the song's insistence: “Keep on growing, keep on growing, keep on growing.” Not in the GDP sense. Not in profit margins or quarterly gains. But in something older and deeper: growing in connection, care, and courage to break with a paradigm that no longer works. In this way, it becomes the soundtrack to a post-growth economic reimagination.

The recent article "Degrowth and Business: Towards a Holistic Research Agenda" sketches what this transformation could look like. It combines years of scattered, often marginalised research and organises it through a powerful new lens: the deep transformations theory. Rather than reduce degrowth to “less,” this theory weaves a dialectic of less and more—less exploitation, more empathy; less throughput, more sufficiency; less hierarchy, more cooperation. It treats transformation not as a checklist, but as a whole-system shift, encompassing how we engage with nature, each other, institutions, and our inner lives.

And business? Business is not excused from the stage. It is reimagined entirely. The paper suggests that a degrowth business is not simply about smaller scale or local production (though it includes these). It is about altering the very telos of business—moving from profit maximisation to care, from competition to solidarity. It unfolds across four “planes of being”: in the materials we use and discard; in the way we work together and make decisions; in the social structures that enable or constrain change; and perhaps most radically, in our own interior worldviews. Moral growth, it argues, is part of the model.

What’s striking and gives this love song its hopeful tension is that the authors do not pretend we’re there yet. They insist that we must resist collapsing the present with the future. Today, most businesses operate within the growth economy, constrained by rent, debt, platform dependencies, and legacy systems. Even those striving for transformation are not pure. They are navigating what the authors call “system knowledge” (where we are), “transformation knowledge” (how we might change), and “target knowledge” (where we’re headed). The journey matters. The imperfection matters. Degrowth is not about purity—it’s about direction.

Keep on Growing wasn’t the hit single. It didn’t have the mythic status of Layla. But maybe that’s the point. In the wreckage of one story, another begins—not with fanfare, but with the quiet persistence of those who plant, tend, and trust that something different can take root. Degrowth business may not yet be centre stage. But it is writing new verses. It is rehearsing new harmonies. And it is doing so with a grounded realism that refuses both despair and delusion.

This, too, is a love song. One with calloused hands, collective ownership, and an eye on the long arc. The kind of song we need for a world that’s not just collapsing, but composting.

#4 Nobody Knows You When You’re Down and Out: The Love Song of Sufficiency

There’s a deep irony in how sufficiency has been treated in the modern policy songbook. Like Nobody Knows You When You’re Down and Out on the album, the blues refrain speaks of forgotten friends and discarded values—frugality, modesty, contentment—pushed aside by decades of economic dogma that glorified excess and consumption. Neoliberalism promised that more was always better. But now, in the face of planetary breakdown, we’re beginning to remember what we tried to forget: that there is wisdom, and even beauty, in knowing what is enough.

A recent study on sufficiency in Europe’s climate strategy gives this idea new force. Drawing from multi-regional input-output modelling, it shows how lifestyle changes—eating less meat, reducing flying, sharing goods and space, cycling more, and living in smaller homes—could cut the EU’s greenhouse gas emissions by up to 13% annually, saving nearly 14 gigatons of CO₂ by 2050. These are not fringe ideas. They are powerful, systemic levers that can complement technological solutions and even substitute for them in some domains.

And yet, as the song goes, when sufficiency was “down and out”—dwarfed by techno-optimism and green growth narratives—nobody wanted to know. Mainstream models fixated on electrification and efficiency. The lifestyle component was treated as soft, speculative, or moralistic. This study challenges that omission head-on. It quantifies sufficiency’s impact both environmentally, economically, and socially. Its findings are striking: while some measures like car downsizing have limited impact due to expected decarbonization of vehicles, others—especially dietary shifts and reduced air travel—deliver large, resilient cuts to emissions. Even more strikingly, these changes moderate GDP and employment, suggesting that sufficiency need not come at the expense of social wellbeing.

But sufficiency is more than a dataset. It’s a philosophy of restraint in a culture of speed. And this is where the second voice in this love song comes in: the emerging role of advertising bans. Another study examines whether restricting ads for harmful products can spur innovation in benign alternatives, much like banning beer ads in Norway, which led breweries to experiment with non-alcoholic variants, as this article has evidenced. The results are promising. Restrictions on the cultural promotion of excess consumption not only reduce demand; they may catalyse the emergence of new social norms and markets.

Think of it this way: sufficiency is the quiet melody, and advertising restrictions are the change in key. Together, they destabilise the dominant chord structure of consumer capitalism. They make space for a new refrain where possessions do not index dignity, and progress is not equated with throughput.

“Nobody knows you when you’re down and out.” But maybe that’s changing. Maybe sufficiency is the friend we’re learning to recognise again—not out of nostalgia, but necessity. And maybe we’ll look back and wonder why it took so long to hear its melody.

Another love: A Coda to the Assorted Love Songs

I think these are enough love songs for a week or two.

We've followed the arc—from Layla's burning ache through the tender hope of flourishing, the sobering dissonance of rebound, the defiant rhythm of degrowth, and the quiet rediscovery of sufficiency. Each one, in its way, has told a truth about the systems we’ve built and the futures we might still choose.

These were not just abstract meditations. They were grounded in data, practice, and lived experience, drawn from rigorous studies that challenge the idea that more is always better, that efficiency can substitute for justice, or that technological salvation is just around the corner. These songs were also love letters to alternative ways of organising our economies, our time, and our expectations of life itself.

But maybe the most enduring theme is this: we’ve been in love with the wrong woman. For decades, we idolised a vision—neoliberalism—that promised freedom but delivered precarity, promised choice but gave us algorithmic manipulation, promised prosperity but left us with ecological debt. Politicians across the spectrum, including many who called themselves socialists, fell for her charms. And like Clapton’s story, we chased this love even when it meant betraying what we once held sacred.

And yet, once the love is over, new loves might come.

That is the quiet power of this moment. We are not without direction. The data from the Global Flourishing Study, the sufficiency models for Europe, and the marketing regulations that open up space for truly benign innovation are not utopias. They are grounded blueprints for a life less frantic, less extractive, more anchored in care and reciprocity.

We needn’t idealise them. But we should attend to their rhythm. Because a post-neoliberal world will not emerge from one significant rupture, but from a thousand overlapping refrains: in policy, practice, and everyday decisions. A new love might not start with fireworks. It might begin with a different question:

What does it truly take for people and the planet to thrive?

So we close the record, not with a grand crescendo, but with the quiet confidence of a new note held just long enough to signal: this isn't the end. Just another love.

Take care!

Hans

I just returned from Paris to visit the Changenow conference—a VERY BIG gathering of people who talk and change. I did a few panels and a presentation. Of course, it is nice to be amongst like-minded people. But at the same time, I always doubt how we can make the biggest difference—by talking to each other or by talking to others and showing how change can be made. Some discussions frustrated me. And I am terrible at hiding my mood when sitting in a panel (or somewhere else). The main thing is: even if we are working hard, with all our energy to do things right, it might turn out, on a system level, to be wrong. I know many entrepreneurs and businesses work on changing the world for the better. But the brutal reality is that it is not coming nearer. The truth is that some of our attempts completely failed. And it is okay to make mistakes, but some are very costly. And we ran out of time. I will explain two of these mistakes below.

Another important theme in Paris (and in the last few weeks) is the future of Europe. I already voiced my ideas about the Draghi report in an earlier blog. I wrote an essay (in Dutch) about that last month; in the newsletter, you’ll find the elaborated and slightly updated version (with some wonkish details). Yes, Europe should stand on its own feet. But not by becoming a bad copy of the US.

This time, there are no figures or many academic references. So, people who like that: maybe next time. I also know that some people stop reading after one figure. I hope you make it to the end!

Mistakes

First, about mistakes. I want to spotlight two major, and frankly, frustrating misconceptions (though there are many more). The first is the belief that progress will naturally follow if our businesses pioneer sustainable practices and that micro results add up to macro outcomes. Secondly, sustainability regulations have significantly accelerated our shift toward true sustainability.

Micro business vs macro outcomes

I deeply admire the entrepreneurs and businesses creating sustainable products, building networks like B-corps, and supporting movements such as networks for social enterprises, For Good Leaders, which I also met and engaged with in Paris. These grassroots efforts are vital, and connections between those changemakers are essential. They offer living examples of what the new economy could look like. But let's be clear: inspiring as they are, they are no guarantee of systemic success.

We must remain critical and curious. We need to test, evaluate, and learn from these initiatives—because even when something feels like a step in the right direction, its broader impact can fall short or even backfire when viewed from a systemic level.

Let’s take the example of circularity. More sustainable or circular products often do not replace non-sustainable products. This is known as the circular rebound effect: when circular solutions lower costs or ease guilt, leading to higher overall consumption. Take refurbished electronics, for example. Extending the life of smartphones through repair and resale is a smart, resource-efficient move. However, lower prices and green marketing can encourage more frequent upgrades, increasing the number of devices in circulation. Similarly, fashion brands that use recycled textiles often promote their products as sustainable, which may lead consumers to buy more clothes, not fewer. The environmental gains per product are real in both cases, but the total impact grows. Without policies or business models that tackle overconsumption and promote sufficiency, circularity risks fuelling the problems it aims to solve.

In addition to this, we have the problem of scale. Even if we don’t have the rebound effects, it might also be that the production of these sustainable companies does not fit within planetary boundaries or is unnecessary. This is a problematic message. We don’t know exactly what a ‘fair share’ is in terms of ecological boundaries for a company (see also this blog), so we can not draw any finite conclusions at a company level. However, we can understand the necessity of the products they produce. Maybe a straightforward example, but my house is stuffed with sustainable bottles (doppers and others) that I got as gifts. One or two would be enough. So, if transgressing planetary boundaries through too much production can not be attributed to an individual company, it is an emergent property of the system: it only exists on a macro level. Then, we can come to the paradoxical conclusion that we have too much unnecessary sustainable production, while we, on the other hand, might miss basic needs. Hence, my frustration is that we can never decouple the action of micro actors from macro outcomes. And yes, it is complex. But that is reality.

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Useless regulation

Let’s discuss the regulation of sustainable finance in Europe. Over the past few years, we've made a herculean effort to disclose, classify, and measure sustainability in financial systems. However, despite this work, capital flows have not shifted decently. Why? The underlying theory of change—that transparency alone will drive all actors to make different choices—is simply not delivering. And there are at least three key reasons why.

First, the systems we’ve built for transparency are so complex that the average investor or client can’t make sense of them. That’s a win for industry lobbyists who prefer the status quo. Second, we started on the wrong side. Transparency around unsustainable activities could arguably have a more immediate impact. If more people realised the extent of ecosystem destruction, human rights violations, or animal suffering embedded in the average investment portfolio, behaviour might shift much more quickly.

But the third—and perhaps most fundamental—problem is that we’re pushing on a string. Only niche actors and frontrunners will take a different path as long as the game's core rules remain unchanged—return expectations, capital requirements, and the lack of pricing for externalities in the real economy. It’s a sobering realisation, but one we must face. What now passes for "sustainable finance" often involves managing material sustainability risks. And these risks matter to finance primarily for two reasons: the growing threat of physical climate impacts, and the fear that future regulation might devalue today’s assets, leaving them stranded on balance sheets.

Let’s be clear: I do not favour watering down all the regulations. But there is nothing against simplification. The best way to do that would be to start by regulating harmful finance.

Often, good intentions are not enough. While we think we are doing great, they might deliver even worse outcomes. I hope that many will reflect more on the system impact of their efforts (and don’t get frustrated).

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Europe can stand on its own feet

After the Second World War, Europe entered its American era. Weakened and divided, it accepted America's leading role in exchange for security and economic support. The US transferred $13.3 billion to Western Europe ($133 billion in 2024 dollars).. The Marshall Plan was not just a reconstruction package—it was the foundation of a new world order in which the U.S. became the guardian of the free market, and Europe the loyal partner. NATO, the EU, and the entire post-war project were built on the assumption that the American umbrella would always remain open. Until 1989 to shield us from the Red threat, and afterward from every evil—from Saddam and Osama to Vladimir—emerging from the rest of the world. This security umbrella also served as an economic shield; the European economy could continue to grow comfortably on the rear rack of the United States, free-riding on defence spending from the US.

But now, America seems less interested in safeguarding Europe and its interests. Communism is dead, and autocracies and oligarchies are friends. It is withdrawing, seeking profitable trade partners elsewhere, and flirting with Europe’s competitors. And at a pace Europe did not anticipate, while war once again rages across the continent.

The reflex is anger: didn’t we have agreements? Didn’t we share ideals? But perhaps the better question is: why did we assume for so long that someone else would guard our interests?

Maybe now is the time to reconsider the European economy. Instead of blindly copying the American model of “more market, more power, more militarism,” Europe must rediscover its strength. Building a European narrative—a model that puts our democratic values, qualities, and economic interests at the centre—is crucial and possibly our only hope. Because the global order is shifting, and it is time for Europe to redefine its place. The hope is that Europe realizes that national interests, cultures, and traditions can only be safeguarded through proper cooperation—both within and beyond the continent.

A Major Shock - easily diagnosed

It is crystal clear in the accelerating stream of recent developments: Europe has work to do.

Much of the diagnoses of Mario Draghi’s report on Europe’s competitiveness, and the European Commission’s follow-up plans, such as the Competitiveness Compass and the Clean Industrial Deal, are relatively uncontested. Europe’s material prosperity has long been based on cheap, imported energy and raw materials, and the continent has benefited for decades from an increasingly open and expanding world economy. All of this under the free protection of the United States.

After Russia invaded Ukraine, the problem of energy dependence became all too clear. Energy-intensive industries now face a significant competitive disadvantage because energy prices remain structurally higher following the loss of Russian supplies. Gas prices are still twice as high as before the energy crisis, and significantly higher than in the U.S. These high prices can only be partially offset by energy imports from elsewhere. The shift to renewables is the most obvious, yet also the most arduous path.

In addition to a cheap energy shortage, Europe faces a resource challenge. The energy transition requires rare earth elements. But not only for that: if Europe is serious about advancing AI and innovation, it will need even more raw materials. Think lithium and cobalt for countless applications for batteries, nickel, tin, and copper. Add dozens of rare earths used in microchips, displays, and electronics. These are not readily available within Europe. If nothing is done, we will trade one dependency for another—energy for resources. Russia may become less relevant, but China is all the more relevant.

Meanwhile, the advantage Europe enjoyed for decades from growing global trade—especially beneficial for German exports—is running out, trade war or not. European products are becoming less unique, with China already taking the lead in electric vehicles. Europe’s lag in innovation—particularly in AI—doesn’t help. But even if we were competitive, global trade growth has already lost momentum. And with Trumpian disruptions, things are only likely to get worse.

The final shock might be the most profound: Europe must start protecting itself. The peace dividend, consumed so indulgently since the late 1980s, is spent. Trump views everything transactionally, including alliances. There are no historical bonds, only business, even war.

Pavlov Isn’t Working

Europe’s Pavlovian reaction to all these challenges suggests we want to resemble our old friend the US even more. We must grow more, be more productive, buy more weapons, give more space to the market, and reduce regulation. That’s the message behind almost all reports and recommendations. As European Commission Vice-President Teresa Ribera, responsible for the green transition and competitiveness, said in the Financial Times: ““We need to ensure that there’s a story of growth and prosperity.”

I understand why she says that. It’s the underlying narrative. Now that the U.S. security umbrella is being folded, this is perhaps the most enduring legacy of our Anglo-American century: market logic and growth thinking have seeped into the pores of European policymakers. It’s hard for them to see the world differently.

This goes back to the post-war recovery. Europe was rebuilt with extensive American financial support. But not only that. With the money came a bookkeeping system for the economy: the System of National Accounts. It was very useful—it let you track how much was produced, consumed, and how incomes evolved. The overarching indicator became Gross Domestic Product (GDP). During reconstruction, more GDP—more growth—was undeniably good. More houses, more food, more clothes—who could argue with that in times of scarcity?

But GDP's dominance persists. Draghi begins his report by observing that the main problem is Europe’s lower economic growth compared to the U.S.

Yet by now it’s broadly acknowledged that a happy continent depends on much more than growth. As I stated in my previous blog, while the U.S. economy had grown 47% more over the past 35 years than Europe’s, this was mainly due to population growth from migration. Adjusted per capita, the difference shrinks to 9%. And when we look at income distribution, the average European—and everyone earning less—is actually better off than in the U.S. The bottom 50% of the income distribution saw their incomes rise 19% more in Europe than in the U.S. In other words, the ultra-rich in the U.S. kept all the gains for themselves.

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And it doesn’t stop at income. On other indicators—life expectancy, safety—Europe performs better, all while achieving this level of prosperity with just half the CO₂ emissions and water use.

(US) Scientists summed it all up in this report. Check out the dashboard they created (see below). You’ll see that while economic growth and productivity metrics appear impressive, most other indicators tell a different story—lagging behind peer countries and, in many cases, deteriorating. The United States now has the lowest life expectancy of any wealthy nation, a striking reversal from much of the 20th century. It leads among wealthy countries in murder rates and has the highest rate of fatal drug overdoses in the world. Trust in the federal government remains extremely low, and youth depression and single-parent households are alarmingly common. Moreover, when Americans are asked about life satisfaction, the country ranks lower today than thirty years ago. The U.S. is so deeply unequal that average economic figures often fail to reflect the lived experience of most people—economic gains have disproportionately flowed to the wealthiest 10 per cent. The New York Times summarised the findings starkly: “The U.S. Economy Is Racing Ahead. Almost Everything Else Is Falling Behind.” Europe would do well to consider this when drawing comparisons. And it begs the question: does anyone still genuinely believe that economic growth is inherently tied to human well-being? The United States, one of the richest nations on Earth, is unravelling under the weight of an over-financialised, extractive, and individualistic obsession with endless growth.

Still, despite acknowledging these findings and differences between material growth and wellbeing, the only policy answer remains the American recipe: more growth, more of the same.

This illustrates another example of within-system thinking—specifically, the imperative for social or institutional growth. The narrative remains consistent: to sustain an inclusive, well-functioning society, we need continuous economic growth to fund pensions, healthcare, education, and other essential services. This logic holds within the current institutional framework. However, if growth slows—or if we come to see it as ecologically unsustainable and ultimately detrimental to well-being, especially in light of planetary boundary transgressions and the persistent lack of evidence for absolute decoupling of economic activity from ecological impact (beyond just carbon emissions)—then it becomes necessary to rethink our fiscal architecture. Our tax systems, heavily reliant on income, profit, and value-added taxes, are all predicated on economic expansion. A serious re-evaluation of these foundations could open the door to alternative fiscal models better suited to a post-growth or steady-state economy.

So, Europe’s answer should be much more nuanced. How can we use Europe’s strength and design policies that do justice to a European economy instead of becoming a neoliberal copy? That means focusing not on growth but on well-being.

European Strength

Focusing on well-being starts by making the European economy less fragmented. With 450 million consumers, Europe is a significant economic force. It’s also the most sustainable economy, not in how much energy and resources we consume, but in how efficiently we do it. We also ask more of businesses when it comes to responsible production. Lastly, Europe is innovative—maybe not in AI, but certainly in sectors like food, agriculture, and machinery.

If we leverage the strength of a united Europe, counterbalancing Russia (an economy the size of the Benelux) is well within reach. Spending 1.5% to 2% of GDP on defence should be more than enough.

But unlocking Europe’s power requires sacrifices—and even more, mutual trust. It demands that we organize and finance public goods—defense being the prime example—collectively. That’s a big step for Europe, but one more necessary than ever. Moreover, we could extend this to public transport, payments, and possibly even healthcare at the European level. It would be far more efficient. But it mustn’t become a neoliberal one-size-fits-all. We need to preserve space for cultural differences and diversity. Overreliance on efficiency and markets can also weaken an economy. As Europeans with shared goals, trusting one another is crucial for success.

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A Non-Neoliberal Democracy

We can make other choices that take us further from, rather than closer to, the U.S. model.

First, growth must become less central. Counting on growth is futile if it is unlikely to materialise and if the difference between prosperity and growth remains so large.

Due to demographic shrinkage, Europe’s economy will grow more slowly in the coming decades. Fewer working people means a smaller economy. Innovation—the other growth engine—is hard to steer. Investing in preconditions for a strong economy is better: education, infrastructure, and research. This demographic fact and decades of slowing productivity growth should prompt smart policymakers to stop relying on growth—it only breeds disappointment. It should even lead to institutional reforms: making tax systems less dependent on growth-linked bases like profits, income, and turnover, and shifting toward taxing wealth and pollution and or limiting return expectations and societal debt.

Second, economic policy should not be driven solely from the supply side. The belief is that if sustainable energy, resources, and technology are available, everything else will follow. The energy transition is a clear example. There’s faith that more renewables and better storage will reduce dependence. But that becomes a huge task if we assume energy demand is fixed. We can (voluntarily) reduce demand as well. That’s possible, while remaining globally competitive, by encouraging alternative transport, improving homes (improving comfort), and reducing overconsumption. We should focus more on conscious energy use than trying to meet unlimited demand with green sources. The same applies to materials: recycling gets attention, reuse barely, and reduction hardly. Policies focused on sufficiency—having enough, not as much as possible—could be transformative.

Finally, there’s the myth that competition policy must always include deregulation. The EU has been dismantling sustainability laws—a mistake. The environmental problems won’t vanish. Companies may gain a short-term edge, but in the long run, Europe risks resembling the U.S., along with all its sustainability crises. Looser rules also delay the development of circular and energy-efficient industries. Strict sustainability rules are precisely what drive sustainable business models.

Persisting in a Different Answer

Learning to stand on our own feet as a European economy is possible. But it becomes easier if we unlearn our American reflexes. That means not defaulting to market solutions or repeating the growth mantra. We should collaborate where collaboration is essential—on defense, infrastructure, and basic services—and leave freedom where diversity can flourish.

It’s not easy—politically or economically. But if I had to place a bet, it would be on a serious attempt to make the European economy truly different—more inclusive, more sustainable, more competitive—by choosing a path that diverges from our American era.

It’s time for a European era for Europe.

Thanks all for reading.

Be nice,

Hans

Hi all,

There was a time when we could still get worked up about bankers crashing the world economy, when headlines about spiralling sovereign debt sent shivers down spines, and when we could still explain financial storms with terms like recklessness, regulatory failure, or plain bad luck. We endured pandemics and energy shocks from war and still believed in the possibility of containment, of policy responses, of repair.

There was also a time when politicians and policymakers acted, or at least pretended to act, as stewards of the economy when crisis management meant trying to fix things, not break them further.

That time has passed.

We now live in an era where the elected leader of what once was a flagship democracy actively sabotages global economic stability — not out of ignorance, but by design. Trump’s return to power is not just a political crisis; it’s a calculated economic assault.

At the same time, ecosystem collapse has faded into the background. What was once front-page urgency has become mere décor in the grand theatre of geopolitics—a stage now dominated by wars, power plays, and farcical outrage over the trivial. Environmental breakdown no longer sets the agenda; it merely decorates it. Policies once aimed at halting this decline are being diluted, delayed, or quietly discarded.

Today’s economic uncertainty runs deeper. It’s no longer about market volatility or cyclical recessions. The foundation is crumbling—the fundamental trust that nations won’t stab each other in the back, that rules matter, and that agreements will be honoured. No monetary policy or stimulus package will save us when that trust erodes.

We don’t need the climate to destroy capitalism — although it might, as was argued by an Allianz employee. We already have Trump, trade wars, and global conflict. This isn’t managed degrowth. This is degrowth by disaster in real life. Or Collapsology - real-world edition.

The economic calculus isn’t complicated. A trade war reignited by Trump could wreak havoc on global supply chains, distort investment flows, and shatter multilateral trust. Its consequences won’t be short-term—they will be systemic and negative for economic prosperity (see below for a little more elaboration on this).

Add war to the mix, and the destruction of economic growth is physical and fiscal. There is a long-standing economic truth: military expenditures are fundamentally unproductive. They inflate GDP on paper but add nothing of lasting value. In addition to that, they crowd out other public expenditure that enhances well-being, such as education or health care spending. If we were to subtract these costs from our economic performance — and account for ecological losses — the story is clear. A higher GDP figure that consists for a larger part on damage spending (=war), or damage restoration (climate adaptation for example) is essentially degrowing well-being.

We are shrinking. We are decaying. We are degrowing by policies of disaster.

So, let’s not kid ourselves. The age of ‘more’ is over. And what replaces it — unless we act differently — might not be less, but worse.

But then we have a problem—a deep-running problem. Our system depends on growth because we need it for capital accumulation, profits, financial returns, and government income.

But the trouble with these facts runs very deep. A new paper shows that many academics still believe in green growth (the idea that we can decouple economic activity from its environmental impact). The strongest factor associated with green growth endorsement is the belief that ongoing economic growth is crucial for human well-being.

Even among the proponents, there is no agreement that decoupling is possible (or realising climate goals). What does this tell me? Most of us are trapped in within-system reasoning: because our economic and social system depends on growth, it must grow. This is, of course, very bad reasoning. If you would turn it around and, for instance, start getting the economic system within planetary boundaries, we would be forced to change it. It might be hard to do that. But if our current policies are already on a degrowth trajectory, why not do it smarter? See below some more on this paper.

So the question: can we change our economic system fundamentally? Not if we keep thinking in the same way about the economy. Dennis Snower and David Sloan Wilson try, also in an new article, to show the principles of how alternative economic thinking can be operationalised.

Their multilevel paradigm builds an alternative to the current (neoclassical) way of analysing an economic system. In blog 19, I also gave a summary of their first article. The core idea is that the economy is understood as embedded in the polity, society, and the natural world. It is based on Generalized Darwinism. That theory refers to all processes that combine the ingredients of variation, selection, and replication – not just genetic evolution – making it relevant to the cultural evolution of economic systems embedded in political, social, and environmental systems. They argue that trust and pro-social behaviour are emergent system properties: individuals must understand that they sometimes have to sacrifice individual gains for the greater good. Let’s tell Donald Trump and his broligarghs how that works. In addition, it allows for the idea that actors in the system (such as governments, firms and individuals (such as families, consumers, voters, and employees) also change their behaviour. Critical, given the discussion before relating to what governments might do (according to economic theory) and what they do. Below more about this article.

The core message is clear: rebuilding our economy to serve the well-being of all is not only necessary—it’s entirely possible. But doing so requires the courage to rethink the system itself. We must be willing to embrace fundamental change and imagine genuine alternatives—not to be confused with "alternative truths."

From there, it’s a matter of cultivating the collective will, fostering political readiness, and empowering a movement capable of pushing for transformation. This isn’t merely a matter of generating new ideas—it’s about recognizing and seizing new opportunities. And some of those opportunities may involve doing less—less production, less consumption—what some call degrowth by design. Not as a narrow policy prescription but as a natural outcome of pursuing equity, ecological balance, and shared prosperity.

Perhaps the most sobering truth of our era is this: entrenched elites—be they broligarchs, autocrats, plutocrats, narcissists, nihilists, or populists—are not interested in an agenda that serves all people, let alone future generations. Their power depends on preserving the status quo.

If we fail to act, degrowth by disaster will be what remains.

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Unwinding trust

Our current prosperity is built on fundamental trust between nations. The United States, once the flag bearer of free trade, has changed its stance. Tariffs are flying back and forth, up and down. Economics textbooks say: don’t retaliate, let the aggressor run its course. But those textbooks were written in a world where mutual benefit was the norm—not geopolitical mistrust.

Yes, we’re seeing short-term economic damage. iPhones are getting more expensive, supply chains are stalling, stock prices are falling, climbing, falling. But the real problem is more insidious. We’re heading into a world where no one trusts each other anymore. Where countries retreat behind their borders, preach strategic autonomy, and aim to ‘secure’ supply chains. It sounds logical. It’s even understandable. But economically, it’s a recipe for collective impoverishment. Doing more ourselves might sound like a healthy challenge, but let’s be honest: it mostly means everything gets more expensive.

Free trade was never just a party of (sometimes excessive) low prices. It led—and still leads—to excesses, from exploitation to pollution. So it's absolutely valid to think critically about it. But above all, it was a system built on mutual trust: you make this, I make that, we exchange and both benefit. That system only works if you believe your partner won’t turn against you tomorrow. Trade, like friendship, is a matter of trust. And like an ex with commitment issues, a country that becomes unreliable can count on fewer lasting relationships.

A world without trust is a world where each country must produce everything itself. That sounds bold—“our industry first!”—but it’s wildly inefficient. It’s like making your own furniture because you don’t trust the carpenter—noble, perhaps, but it gives you back pain, takes more time, and the result is often wobbly. We’ve spent decades building international specialization precisely because it creates efficiency.

The irony is that the U.S., in an attempt to protect its economic power, is undermining that very power—and especially the exceptional leverage it held via the dollar as the global reserve currency. But if trust in America declines, why would anyone still hold dollars? Why keep reserves in a currency when you don’t know which erratic leader will be in charge tomorrow?

If that trust vanishes, so does the world’s willingness to finance America’s deficits. The U.S. has been buying more than it sells for decades—and it could, because the world was willing to finance that. If that willingness dries up, the foundation of the American economy collapses. We saw the first signs of that last week—with potentially massive global repercussions.

And then there’s something even more fundamental: a world without trust is a world without long-term vision. You don’t plant a tree if you fear your neighbor will cut it down tomorrow. You don’t invest in a foreign factory if you're afraid of sudden tariffs. You don’t build a shared future without the belief that others will also keep their promises.

That may be the greatest loss of all: the loss of future trust. And with it comes the real price tag of this geopolitical shift. Maybe not (yet) a direct crash or dramatic crisis. No, a slow, creeping erosion of mutual trust, which eventually leads to less trade, less investment, less innovation—and therefore: less prosperity. Not tomorrow. But ten years from now, we’ll look back and ask: where did it all go wrong?

Maybe that’s the most important lesson we need to learn now. Economies don’t run on factories or algorithms, but on trust. Undermine that trust, and you break the engine of prosperity. And that can’t be fixed with a tariff here or there. The only answer is a new narrative, one where trust forms the foundation again. Not romantic idealism, but a sober acknowledgment that in a world without trust, nobody wins.

Because those who invest in mistrust, get uncertainty in return. And that turns out to be a lot more expensive than an iPhone with a tariff.

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Green growth beliefs

A recent global survey of over 3,000 economists and environmental scientists reveals a significant divide in expert views on green growth—an idea that promises sustainability through continued economic expansion. While 59% of respondents endorse its feasibility, this support is most strongly linked to the belief that economic growth is essential for human well-being. Economists are more strong in their belief than other scientists. This belief, not empirical evidence of sustained decoupling, appears to drive endorsement. Even among proponents, many express doubt that green growth can deliver on its central promises: to maintain GDP growth while reducing carbon emissions and resource use at the scale and speed required. The perceived feasibility of absolute decoupling—both in terms of emissions and material throughput—remains low, particularly when examined against climate targets like the 2°C threshold.

This distinction is crucial. That societies are structured around growth and remain dependent on it for stability is not in dispute. But mistaking this dependency for proof that green growth is achievable risks conflating a systemic constraint with a physical possibility. Rather than offering evidence for green growth, the survey illuminates the ideological and institutional forces that continue to prioritize GDP as a proxy for well-being. It is this growth imperative—internalized by institutions and experts alike—that sustains belief in green growth, even as empirical assessments of decoupling fall short. In this light, the findings point less to the promise of green growth and more to the inertia of a system reluctant to imagine prosperity beyond it.

As the authors say in their discussion:

The fact that green growth endorsement correlates with the belief that economic growth is essential for well-being may point to the fact that such beliefs stem from a common framework (e.g., ideology, free market beliefs).

It is not clear if green growth is possible. But the importance of this topic is undeniable, because many influential policies are based on green growth beliefs. Our survey findings show that many academics endorse the concept of green growth, often linked to the scientifically contested belief that growth is essential for human well-being. Our findings underscore the continued need for a robust empirical assessment of expert opinion on green growth.

(Suter et al. 2025).

So, more work to be done.

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Rethinking the Theoretical Foundation of Economics II

In their latest article, "Rethinking the Theoretical Foundation of Economics II: Core Themes of the Multilevel Paradigm," Dennis J. Snower and David Sloan Wilson build upon their previous work to propose a transformative framework for economic theory. This follow-up shifts attention from critiquing the limitations of neoclassical economics to illustrating a vision of the economy as an evolving, multilayered system. It’s a move from diagnosing the problem to suggesting how a new kind of economic reasoning can better meet the needs of both people and planet.

At the heart of this paradigm is a recognition that individuals do not act in isolation, nor are they merely utility-maximizing agents. Instead, economic behavior emerges from interactions within and between various levels of social organization—ranging from households to institutions to entire societies. Each level has its own structures, roles, and modes of cooperation. What this multilevel view highlights is that economic efficiency and well-being depend not only on individual choices but also on the functional organization and alignment of these collective layers.

A striking element of their approach is the emphasis on trust. Unlike traditional models that treat trust as a residual or optional component, here it is foundational. Trust underpins the cooperation required at all levels of economic organization. It reduces transaction costs, makes informal coordination viable, and supports shared norms—especially important in conditions of radical uncertainty. The authors argue that economies cannot function effectively without trust, especially when market signals and institutional controls are not sufficient to guide complex, interdependent behavior. An economy that works, therefore, is not merely efficient or productive—it is deeply social, anchored in reciprocal trust. Very obvious is, of course, the parallel with what I wrote above: if trust is shattered in trade relationships, it will harm long-term prosperity. Thanks Donald.

Table 1 of the article (see below) provides a useful schematic of this thinking. It categorizes different organizational levels—individuals, groups, and systems—and describes the types of agency and coordination mechanisms prevalent in each. For example, individuals operate with intentional agency, guided by personal goals and bounded rationality, while groups and systems rely more on shared goals, social norms, and formal institutions. What emerges is a dynamic picture of how different layers of economic life interact, suggesting that policy interventions must be sensitive to these layered contexts rather than relying solely on market-based levers.

Returning to their earlier article, Snower and Wilson critiqued the oversimplifications of neoclassical theory and introduced the foundations of a multilevel view. This second piece adds structure to that critique, offering a framework that not only makes theoretical sense but also connects with practical needs—especially in a world facing overlapping ecological, social, and economic crises.

What emerges from their work is a call for economics that is less about control and more about care—less about isolated optimization and more about trust, cooperation, and coherence across the many levels of our shared lives.

Does their work, or their analysis tell something about degrowth or green growth? No, it does not. However, its emphasis on functional organization and trust offers a framework that transcends this dichotomy. By focusing on the alignment of economic systems with social and ecological well-being, the multilevel paradigm provides insights into building resilient, cooperative, and sustainable economies.

As I also have been advocating for, it is about an embedded economy. Embedded into the natural world and social relationships. Once the embeddedness breaks down, the economy collapses. Hopefully there will be an opportunity coming years to transform all these well-articulated ideas into policies. It might take some time.

If we fail to act, degrowth by disaster will be what remains.

Keep the spirit high!
Hans

Dear reader,

Sometimes, life confronts you with stark contrasts. I'm doing well; my family is okay, and the weather is nice (although already too dry). And yet, the world around me feels like it’s unravelling. That contrast weighs on me.

Can I feel joy while also feeling deeply worried? Can I be full of energy and ideas, knowing—if I’m honest—that those ideas and energy likely have a limited impact on the things I worry about the most?

I suppose the answer is yes, and still, we go on—with all the doubts and hesitations—because not going on is not an option.

In the same spirit, my recent post on Collapsology sparked many responses. Many resonated with the core idea: that by understanding the mechanisms of collapse, we can better identify pathways toward a more livable, resilient world. System change remains a relevant concept—even when the system is on the brink of collapse.

This naturally leads us to the idea of tipping points. Once you start seeing them, you can’t unsee them. They’re everywhere.

In Het Financieele Dagblad, I wrote about the difference between positive and negative social tipping points. Two key insights stood out for me. First, while much of the literature focuses on positive tipping points—suggesting that just 20–25% of a population can drive systemic change—the same logic applies to negative shifts. A determined minority of that size can also destabilize institutions, societies, or entire democracies. We’ve seen this in various forms, from the erosion of trust in public institutions to the rise of populist movements. If we want to achieve positive social tipping points, the configuration of networks and strengths of relationships matter (below, I’ve expanded on that idea). Or, in plain language, it matters who we meet, what the relationships are, and how deep our conversations are. The stronger the network, the faster contagion goes.

Some readers reacted to my Collapsology post by saying it was "too negative." While I fully understand this reaction, I also wonder whether it reveals more about the receiver than about the message itself—though, admittedly, that's my own bias speaking.

For me, highlighting the gravity of our situation is not pessimistic; it's realistic, mainly when each passing week brings more evidence of inertia and delay. If you're deeply worried about our collective future, it shows, at the very least, that you care. The real danger lies not in facing brutal truths but in nihilism, in giving up entirely.

I've previously argued that caring about the future inherently involves hope. In his book Hope, Philip Blom suggests that at its most fundamental level, hope is the ability to continue living. However, we can only truly hope for a better future once we find meaning in it. And meaning itself is not rational, so hope, too, defies pure rationality.

Blom offers the example of marriage: statistically speaking, the chance of having a happy marriage might be very low (he cites just 6%). Yet many people choose to marry anyway, driven by the hope of being among the fortunate few. Such hope might not be rational, but we need it nonetheless because hope gives meaning to our lives.

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Some brutal truths

So, I feel compelled to share a few more brutal truths from recent weeks—none more alarming for the global social fabric than what Trump sets in motion. His new trade tariffs—and China’s swift retaliation—aren’t just economic moves; they’re early tremors of a potentially more chaotic world order. Global trade has flaws, especially when built on extraction and imbalance. However, open economies and the free exchange of ideas have long been the backbone of global prosperity. The Trump administration, driven by a zero-sum worldview, seems intent on dismantling that foundation—one blow at a time.

Another brutal truth is the latest IEA report showing that global energy demand has accelerated in the past few weeks. While renewables are picking up, the overall picture is still one of addition, not transition. Fossil energy is not being replaced—it's being supplemented. We are not yet in the shift we keep talking about. And time, as always, is ticking.

This is the key figure (at the back of the report). The increase in renewable supply is insufficient to compensate for the rise in demand. And while the world has become more energy efficient, growth has still been higher. Jevons' paradox kicks in once again in real life.

Also, a new study in Nature shows that human impact on biodiversity loss is everywhere. Drawing on data from over 2,000 studies and nearly 100,000 sites, the researchers found widespread changes in species communities and declining local species diversity across land, freshwater and ocean ecosystems.
The findings highlight how complex and far-reaching human activity affects ecosystems.

The last brutal truth: Climate Change Will Erode Global Prosperity Far More Than We Realized. The assumption that climate change would only moderately affect economic growth (as was the conclusion in the widely used models of Economic Nobel Laureate Nordhaus) is quickly unravelling. Emerging research now reveals a far more severe economic toll than previously estimated—mainly because the models we’ve long relied on overlooked a crucial variable: our deep global interconnectedness. Climate disruptions in one region don’t remain local—they cascade through global supply chains, destabilize trade, trigger food insecurity, and stoke inflationary pressures far beyond their origin.

When researchers updated major climate-economy models to account for these global weather feedbacks, the projected losses in global GDP by 2100 under a high-emissions scenario (SSP5-8.5) spiked from 11% to a staggering 40%. In other words, our economic future is far more vulnerable than conventional models admit. Yet within this sobering outlook lies a clear signal: climate mitigation is not just an environmental responsibility but a prudent economic strategy. By curbing emissions aggressively, we safeguard ecosystems and preserve long-term prosperity, keeping global temperatures closer to 1.7°C rather than 2.7°C, and drastically reducing the financial fallout. The economic case for climate action has never been more straightforward or urgent.

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Happiness and Benevolence

But, despite this unravelling, good news is always and everywhere to be found. In this case, the World Happiness Report is always intriguing (see for more on the content, see below).

In a world that often feels fractured and distrustful, one of the quietest yet most profound findings in the World Happiness Report 2025 is that we consistently underestimate the benevolence of others. This misjudgment doesn’t just distort our worldview—it makes us less happy.

Take the “wallet test,” a fascinating experiment cited in the report. When asked how likely it is that a lost wallet would be returned if found by a stranger, most assume the chances are slim. But real-world experiments tell a different story: wallets are returned far more often than expected in many countries, especially the Nordic region. In some cases, actual return rates are nearly twice as high as what people believe. Our pessimism about others' kindness is misplaced—and measurable.

This gap between expectation and reality matters. The report finds that simply believing others would return a lost wallet is a stronger predictor of happiness than even the absence of harm. Our perceptions of social trust and kindness carry as much emotional weight as tangible safety or wealth. And when those perceptions are overly bleak, our well-being suffers.

Benevolence doesn’t just help the recipient; it boosts the giver’s happiness, too. But perhaps most overlooked is how witnessing or even believing in everyday acts of kindness creates a powerful feedback loop—nurturing trust, reinforcing social bonds, and reducing the emotional burden of isolation or fear.

This insight is more than feel-good fluff. It’s a call to challenge our assumptions, to see the quiet good in others not as an exception, but as part of the social fabric. If we want happier societies, we don’t just need better institutions—we need better expectations of each other.

So, if there’s one clear takeaway, it’s this: benevolence, solidarity, and care aren’t just feel-good values—they’re fuel. They drive happiness, spark transitions, and help us reach social tipping points. They give people hope—as I saw firsthand during last week's presentation when a simple exercise revealed how deeply connection matters. So, let’s not wait. Let’s connect.

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Below, for the very interested reader, the longer stories about social tipping points and benevolence.

How Do We Create Change When We Don’t Listen to Each Other?

Even in dark times, there’s hope for positive change. Major societal shifts often start slowly, almost imperceptibly—until they reach a tipping point and become irreversible. Technological breakthroughs such as renewable energy, artificial intelligence, or vaccines are frequently met with scepticism initially, only to reshape society in fundamental ways eventually. The same is true for social patterns. What begins as a fringe idea can swiftly become mainstream. Consider the Black Pete (Zwarte Piet) debate in the Netherlands: a once marginalised discussion is now largely resolved in the public sphere (we don’t have Black Pete anymore; we have Soot-Smudge Pete, which fits the story of coming down the chimney).

This phenomenon is known as a social tipping point. The concept originally comes from the natural sciences: coral reefs die off from pollution, and penguins migrate as the ice melts. Once a certain threshold is crossed, returning to the previous state is no longer possible. The same logic applies to societies. Think of #MeToo, smoking bans in public places, or the sudden social norm shift around "flight shame" in some circles. Change rarely moves in a straight line—it unfolds like a line of dominoes, where nothing seems to happen for a long time until everything collapses at once.

How Social Tipping Points Work

Social science research shows that change emerges from the interplay between behavioural choices and social norms. Behaviours that were once marginal gain traction as they become more affordable, accessible, or socially accepted. Take electric vehicles: once seen as a niche, hippie luxury, they’ve become a symbol of future mobility thanks to subsidies and rapid technological improvements.

These shifts are contagious. You're more likely to follow suit if you’re in a social group where vegetarianism is common. Social norm change is a kind of herd behaviour—not irrational, but an adaptation to evolving realities. The more cohesive the social group, the faster this behavioural tipping can occur. Surprisingly, most people aren't needed for this kind of shift: studies suggest that when about 25% of a population adopts a new behaviour or belief, a tipping point can be reached. The Pareto principle also seems to apply here: 80% of the effects may stem from 20% of the causes.

The contagion depends on the ties and the structure of the network

Recent research using hypergraph models, which capture complex interactions among groups, reveals that such contagion doesn't occur uniformly. Instead, it can exhibit multistability—situations where groups maintain multiple stable states simultaneously—or intermittency, where groups oscillate between low and high activity states. These phenomena occur particularly within community structures where interactions between groups (bridges) can trigger sudden widespread changes or maintain distinct pockets of resistance. Consequently, new ideas can spread rapidly through networked communities, creating cascading effects or remaining localised, causing competing norms to coexist and potentially prolong societal transitions. Understanding these dynamics provides critical insights for anticipating and managing rapid societal shifts or encouraging the adoption of beneficial norms.

Counterforces and Echo Chambers

This is the academic way of saying that every movement can unlock a countermovement, and successful norm change depends on interactions, strengths of ties, and rivalry in ideas. Entrenched interests fight back, especially when changes like Europe's green legislation become tangible. Polluting industries feel threatened, lobby intensively, and sow doubt. The paradox of transition is that success often provokes backlash: only once change begins to make a real impact does the resistance intensify.

This dynamic also helps explain the rise of negative social tipping points—regressive shifts where norms move backwards instead of forward. The Trump administration, for example, served as a political tipping point in the United States, not only reversing environmental regulations but also normalizing misinformation, polarization, and overt racism in public discourse. What was once fringe became part of the mainstream conversation. Similarly, the rise of far-right parties across Europe and anti-climate movements are symptoms of social contagion—but in a different direction. Norms do not inherently shift toward justice or sustainability; they can just as easily slide toward exclusion and regression when amplified within isolated bubbles.

And herein lies another obstacle: social tipping only works when people encounter each other and engage in conversation. But our society is increasingly fragmented into digital and physical bubbles. Echo chambers reinforce one’s truths while economic segregation grows. According to the Netherlands Institute for Social Research (SCP), the contact between rich and poor steadily declines. Those who never leave their bubble will never be "infected" with new ideas.

Steering Tipping Points in the Right Direction

So, how do we ensure that social tipping points bend toward justice, sustainability, and solidarity? It starts with recognizing that most people want to change but often hesitates to take the first step. Climate change is widely acknowledged, yet habits and the perceived costs of adaptation remain barriers.

That’s why a subtle but powerful strategy is to make the sustainable choice easy. People tend to follow the path of least resistance. When sustainable options become the default—think of less packaging waste in supermarkets or trains being cheaper than flights—behavior shifts naturally. This is not coercion but design. Just as no one is forced to pay with a debit card, yet cash is disappearing from the streets.

Changing norms also requires inspiration. Transitions become tangible when role models and companies embrace the new normal. It helps when celebrities stop flaunting private jets and start celebrating night trains to Berlin instead.

Finally, we must actively seek connection during transitions. A small group can lead the way, but transformation only happens when ideas spread throughout society. So talk to the person next to you at your kid’s sports game, the gym, your neighbour, and especially those you randomly encounter walking the dog or doing groceries. And don’t just talk about the weather. We have to reweave the social fabric if we want to move forward together. That means talking about the hard stuff—the economy, the environment, and the future we want.

A social tipping point is like an avalanche: it seems insignificant initially, but once it starts rolling, it’s unstoppable. The real question is not if change will happen—but whether we’ll manage to steer it in the right direction.

Happiness and benevolence

Although the ranking is pretty stable, this year’s analysis added a lot to the social drivers of happiness.

A few noteworthy stories:

(1) Some rich countries (such as the US, Canada, and Switzerland) saw a significant drop in happiness over the last few years. The US dropped from place 11 to 24, with a .5 decline in overall happiness—quite significant. As former number 1, Switzerland saw its happiness decline even more (0.6), and Canada also saw a 0.6 drop.

(2) The familiar narratives often center on Western countries. But look a bit further down the rankings, and different, equally significant stories emerge. In 2013, Togo was the least happy country in the world. Since then, it has climbed 20 places, with its average life evaluation rising by nearly 1.4 points—one of the most remarkable improvements recorded. This upward shift reflects notable progress in governance and basic living conditions, offering a powerful counterpoint to narratives of stagnation in lower-income nations.

(3) In stark contrast, Afghanistan has seen the most severe decline in happiness over the same period. Its average life evaluation has plummeted by almost 2.7 points to just 1.36—the lowest score ever reported. The crisis is particularly acute for Afghan women, whose average life evaluation has dropped to an astonishingly low 1.16.

These two trajectories exemplify the more profound shifts within the global happiness landscape: a growing convergence in well-being across Europe, particularly with gains in Central and Eastern Europe, alongside steep declines in regions engulfed by conflict—and tentative gains where peace and stability have returned.

Each year, the World Happiness Report mirrors our collective well-being. The 2025 edition, however, feels particularly poignant not merely because it reiterates that the Nordic countries remain atop the happiness ladder but because of its thematic pivot: a deep dive into the social fabric that undergirds well-being—benevolence, solidarity, and connection.

This relates to the point I made above. Only connections can improve society, and benevolence—or the common good—is essential to individual happiness.

Benevolence is not just a moral nicety, the report insists. It is measurable, consequential, and—critically—unevenly distributed. Helping others, sharing meals, supporting family, and expecting kindness from strangers correlate strongly with happiness. But what stood out most was that our expectations of others’ kindness can shape our well-being more than actual harm or misfortune. This isn’t just a psychological quirk. It’s a systemic revelation.

Take the story of lost wallets. In experiments where researchers dropped wallets in the streets of various countries, the actual return rate was significantly higher than people had predicted. In other words, we systematically underestimate the benevolence of others. According to the report, this misjudgment has tangible effects: expecting kindness is nearly twice as predictive of happiness as the actual frequency of kind acts. Our cynicism makes us needlessly unhappy.

In Blog 19, I questioned the supremacy of GDP as a metric of societal success. In Blog 24 the message was that optimising well-being is not maximising the sum of each individual’s welfare, but to have a collective well-being, we also need to sacrifice something for the common good. Something we seemed to have forgotten. The World Happiness Report now affirms what many of us have long sensed: we thrive not alone, not through accumulation, but through mutual care. And yet, our economic models remain stubbornly rooted in individual utility maximization, blind to the dynamics of interdependence.

This is where Wilson and Snower’s multilevel paradigm becomes indispensable. They argue for an economics that integrates multiple levels of human behaviour—biological, psychological, social, and institutional—into its foundations. Instead of treating individuals as isolated agents, this paradigm recognizes us as embedded selves, shaped by our cultures, communities, and collective narratives.

From this lens, the findings of the Happiness Report are not marginal feel-good stories—they are core economic data. If prosocial behaviour reduces deaths of despair (as Chapter 6 shows), and if shared meals can rival income in predicting happiness (Chapter 3), policies that foster community and trust are not luxuries. They are growth strategies—though not of the GDP kind.

Perhaps it’s time to measure policy not by the speed of transactions or the scale of output but by its capacity to increase reciprocal trust, reduce loneliness, and elevate expectations of kindness. Perhaps our future depends not on how fast we grow but on how deeply we connect. Not coincidentally, this is also the best way to steer society towards a better, more inclusive, and sustainable state—to reach positive social tipping points.

Thanks for reading.

Take care and have hope,

Hans

I’ve been unwell for a few weeks—one week genuinely sick, the next simply exhausted—which led to a longer newsletter pause than I intended. But I’m back and I’ll make it up to you with this.

I don’t know if it was me being ill or the news, but this writing turns out to be pretty pessimistic about the mechanisms of the collapse of civilisations. While some of my previous blogs were on the upside of tipping points (like this one), in the same spirit, we can expect negative social tipping points (as I was also explaining here on the dynamics of tipping points). If the countermovement becomes more substantial, you can also expect that a minority can flip the situation into a less favourable state. The Pareto effect of tipping points, the fact that 80% of the results of anything come from 20% of the action, seems to be valid, according to new research.

But let’s not mistake pessimism for the absence of hope. Without hope, there would be no reason to plan, no point in critique or analysis. So bear with me—every attempt to examine collapse, even through a pessimistic lens, is inherently more hopeful than refusing to engage with the human predicament.

And there are (at least!) two reasons to be worried about collapse: Trump’s accelerationism and the current collapse of ecosystems.

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I long believed that Trump’s utterly irrational economic policies were primarily a negotiation tactic—threatening tariffs rather than sabotaging the global trade system. But I have come to a different conclusion. No matter how reckless it seems, he does it.

I also thought that the threat of economic decline would steer him in a different direction. After all, during his first term, he was susceptible to stock prices, corporate profits, and job reports. But that no longer seems to be the case. On the contrary, he is already preparing his base for even worse times. That is also the message sent out more evident by the Trump administration: there will be ‘a period of transition’ is the new mantra. Even if many economists say it might be a stupid idea, the Trump administration continues. And so, only one conclusion remains. What Trump is doing fits perfectly into the strategy of far-right accelerationism—the idea that a rapidly escalating crisis and chaos will ultimately lead to the collapse of the system. This is not just an attack on liberal democracy but also on the economic order. Deregulation, polarization, and institutional disruption are not byproducts of his policies—they are the policies—an agenda of Chaos (see more on this agenda and what to do about it below).

A column from George Monbiot summarises the bridge to the second point (ecosystem collapse):

In thinking about the war being waged against life on Earth by Donald Trump, Elon Musk and their minions, I keep bumping into a horrible suspicion. Could it be that this is not just about delivering the world to oligarchs and corporations – not just about wringing as much profit from living systems as they can? Could it be that they want to see the destruction of the habitable planet?

This is quite an extreme viewpoint. But it's not so unlikely if you think about it. However, you might have heard relatively little in the news about that lately, as all newspapers are by Trumpism, wars and other chaos. But ecosystem destruction accelerates while sustainability policies retreat. It seems to me a toxic combination.

On ecosystem collapse, according to the UN, humanity’s relationship with Nature is at a tipping point (tipping points everywhere!). The WMO reports spiralling weather and climate impacts. Carbon dioxide levels are currently the highest in 800,000 years. The last decade saw each year rank among the warmest on record globally. Ocean heat content has hit new highs for eight consecutive years. The 18 smallest Arctic sea-ice extents all occurred in the past 18 years. Antarctic ice extents reached their lowest in the last three years. Glacier mass loss over the past three years was unprecedented—all reasons to get a little nervous.

However, in the meantime, much legislation has been rolled back in the US, making higher emissions more likely. In addition, the US has stepped out of the Paris Agreements and ended all kinds of international commitments, ending international solidarity.

These tendencies are not confined to the US. Under the misleading notion of 'competitiveness,’ the European Commission has either reversed or intends to reverse numerous sustainability laws. This is called the Omnibus (and don’t let your thoughts drift away when thinking about a school bus. This is about a collection of complex legislation). Complex sustainability regulations (where complexity is created by lobbyists opposing the legislation) and vested interests have relegated sustainability to the lowest priority on the policy agenda if acknowledged.

So, from this, there is only one consequence: collapse is more likely.

My question for now is: What can we learn from the history of civilisation collapse? Luckily, there is much research on that topic. I will give a summary here; you can find the rest below.

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What can we learn from collapse?

Societal collapse is rarely a single catastrophic event but a drawn-out process in which interconnected systems unravel. Historian Peter Turchin and colleagues have identified patterns in cultural macroevolution in which abrupt shifts punctuate long periods of stability—sometimes progress, sometimes decline (Turchin & Gavrilets, 2021). Technological, economic, and social changes often drove the transitions from small chiefdoms to complex states and empires. However, these changes also carried seeds of instability: inequality, resource depletion, and unsustainable expansion.

A paper from Chase-Dunn et al. (2010), with some nice figures (that is why I cite them here) examines the historical patterns of the rise and fall of polities, including states and empires, over the past 12,000 years. It highlights how political entities have oscillated in size and complexity, with occasional "upward sweeps" where a new, significantly larger polity emerges. These sweeps set ceilings of new sizes, limiting further growth until new conditions arise. The study integrates city and empire-size data to analyze long-term trends and theorizes about the future trajectory of political organization, including the potential emergence of a world state.

The figure below provides a stylized depiction of the rise and fall of large polities, illustrating general trends rather than specific historical events. It demonstrates how many smaller polities (bands, tribes, and chiefdoms) have gradually consolidated into fewer but larger political entities, including states and empires. The figure supports the idea of size ceilings, where polities grow and decline cyclically, but occasionally, one expands significantly beyond previous limits, setting a new benchmark for future expansions.

The question remains: Will we learn from history, or are we doomed to repeat its cycles? Other research (see below for more references and explanation) gives more insights. The conclusion is that the chances are that we are in a pre-collapse phase. Rising inequality, elite competition, and governance failures in the West mirror past pre-collapse conditions. Environmental degradation and resource depletion, seen in historical collapses, manifest as climate change and biodiversity loss. Geopolitical tensions, echoing past triggers of significant wars, heighten the risk of systemic breakdown. The difference with past civilisation (and I don’t want to spread more doom and gloom) is that we are currently discussing a global civilisation. George Monbiot might be right…

What to do then? To start, we need to stand up. Try to resist breakdown. Strengthening local social networks and fostering participatory democracy to build community resilience. In addition, citizen-led initiatives, cooperatives, steward-owned businesses, and stronger international collaboration between grassroots movements, companies, and other initiatives can play a crucial role.

If that does not work, we should find the best way to shelter against collapse. Luckily, research shows the safest places: New Zealand tops the list, and Iceland is also a good candidate (see below). 

Hopefully, Trump has not read this paper, otherwise these will be the following annexation targets.

The Agenda of Chaos

The greatest mistake that Europe—or anyone—can make right now is assuming that Trump will behave like a typical politician. As said before, the agenda of right-wing accelerationism, as also can be found in the project2025-agenda and also in the techno-fascist agenda Musk seems to hold, executed by the “broccoli-haired Gen Z brownshirts,” fighting enemy institutions as a sort of Tesla Jugend as coined by Cory Doctorow.

Here, tech billionaires, nationalists, and Christian fundamentalists find themselves in an unholy alliance. The tech autocrats dream of a world without regulations, where they are the undisputed rulers. The nationalists yearn for a retro-economy in which American industry flourishes as it did fifty years ago. The Christian fundamentalists seek a society in which no law contradicts their biblical beliefs.

They share one common goal: to destroy everything built over the past decades. Not to improve or reform it but to tear it down. The greater the chaos, the less resistance remains. And the less resistance there is, the easier it becomes to realize their utopias.

Look at the economic agenda. It is as simple as it is destructive. When a crisis erupts, more businesses collapse, people are pushed into survival mode, and the government becomes even poorer. A poor government has no means to prevent the dismantling of the system. It really can be that simple.

I know—it sounds like a nightmare. But it could very well happen. The U.S. has experience with predatory capitalism. This is the country where, until the early 20th century, the rawest form of capitalism reigned: children died in factories, labour unions were violently suppressed, corporate leaders bought presidents like they were stocks, and the rich became unimaginably wealthy. As far as I know, children are no longer dying in factories. Still, in every other way, we are rapidly heading toward a modern version of this recent past—a country where the market is sacred, and people are merely an afterthought.

Of course, there is a chance that the Trump coalition will implod

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e. Tech billionaires, religious fanatics, and economic nationalists have fundamentally different interests. But don’t count on it. The incentive to continue down this path is far too strong.

America has no time to lose. Waiting for elections is not an option. American democracy does not only exist on election days—it lives and dies by the willingness of citizens to defend it every single day. As seen last weekend in Belgrade, mass mobilization, taking to the streets and not waiting but taking action. Protest, organization, collective struggle—this is the only force capable of countering the agenda of chaos.

And Europe? We must not simply endure Trump; we must counterbalance him. That means no more strategic silence, no more hoping for the best, no more appeasement out of fear. Europe must develop into an economic and political counterweight—a functioning alternative.

This requires three things: first, economic autonomy—less dependence on the U.S. in defence, energy, and technology. Second, strengthening the democratic rule of law both within and beyond the EU—no deals with autocrats who undermine our values. Third, social and economic policies that offer people real prospects so that authoritarian ideologies find no fertile ground in Europe itself.

Destroying an economic system can happen quickly. Rebuilding it takes decades.

Let’s not wait until everything lies in ruins.

The Patterns of Collapse

Societal collapse is rarely a single catastrophic event but a drawn-out process in which interconnected systems unravel. Historian Peter Turchin and colleagues have identified patterns in cultural macroevolution in which abrupt shifts punctuate long periods of stability—sometimes progress, sometimes decline (Turchin & Gavrilets, 2021). Technological, economic, and social changes often drove the transitions from small chiefdoms to complex states and empires. However, these changes also carried seeds of instability: inequality, resource depletion, and unsustainable expansion.

One common factor in collapses is the breakdown of governance and economic structures. The Roman Empire, for example, collapsed due to a combination of overexpansion, financial mismanagement, and external threats. More recently, the Soviet Union’s dissolution followed a similar trajectory—internal stagnation combined with geopolitical overreach and economic decay. The pattern is clear: societies that fail to adapt to internal contradictions and external pressures eventually crumble.

A recent study analyzing thousands of years of historical data in the Seshat: Global History Databank supports this view. It identifies war, economic productivity, and social complexity as key drivers of state formation and potential sources of fragility once states become too large and rigid (Turchin et al., 2022).

War plays a unique role in societal collapse. The role of war in societal collapse is complex. On one hand, war has historically driven the expansion and centralization of states. The concept that “war made the state, and the state made war,” as historian Charles Tilly put it, is supported by extensive historical data (Turchin et al., 2022). Military innovations—such as the spread of cavalry, the development of iron weaponry, and later, gunpowder—reshaped political and economic landscapes, often creating stronger states.

However, war can also hasten collapse when a society’s resources are limited. The Gunboat Revolution of the 15th century, which allowed European powers to project power worldwide, led to imperial overstretch and economic dependencies that ultimately backfired (Turchin & Gavrilets, 2021). Similarly, while initially expanding the largest contiguous empire in history, the Mongol conquests also led to mass destruction, economic disruption, and, eventually, fragmentation.

The impact of war on societal evolution depends on the broader context. External threats often accelerate political centralization and technological progress in the early stages of state formation. However, in later stages, when empires or large states reach their peak, prolonged conflicts tend to weaken rather than strengthen them.

Are We in a Pre-Collapse Phase?

Several warning signs today echo the factors that contributed to past collapses:

• Economic Inequality and Political Dysfunction: Historically, rising inequality and elite overproduction (too many elites competing for limited power) have led to instability and civil conflict (Turchin, 2023). The U.S. and other Western nations are experiencing growing wealth gaps, political polarization, and governance failures, echoing the pre-collapse conditions of past societies.

• Environmental Stress and Resource Depletion: Many past collapses were linked to ecological overshoot, from the deforestation-driven decline of Easter Island to the soil depletion that contributed to the fall of the Maya (Turchin et al., 2022). Climate change, biodiversity loss, and unsustainable consumption patterns pose similar existential threats today.

• Geopolitical Conflicts: The current global tensions—between the U.S. and China, NATO and Russia, and ongoing regional conflicts—mirror the conditions that have historically led to major wars. If history is a guide, prolonged military confrontations and economic and political fragility increase the risk of systemic breakdown.

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Possible Futures

As I said before, we need hope. And, to take it to the max, collapse can be a new beginning:

1. Renewal Through Adaptation: Some societies have avoided collapse by radically reforming their structures. Japan, for example, transitioned from feudalism to an industrial powerhouse through the Meiji Restoration. Can modern states enact necessary reforms in time?

2. Prolonged Decline: Some societies do not collapse abruptly but rather experience a slow decline, as in the Eastern Roman (Byzantine) Empire, which endured for centuries after the fall of the Western Roman Empire. A similar future could unfold in the West: gradual economic stagnation, political fragmentation, and declining global influence.

3. Sudden Collapse: History also warns of rapid collapses when multiple crises converge. The Bronze Age Collapse around 1200 BCE saw multiple civilizations fall within decades, driven by economic crises, climate shifts, and war (Turchin et al., 2021). With its complex interdependencies, the modern world could be equally vulnerable to cascading failures.

While history does not repeat itself exactly, its patterns offer crucial lessons. Societies that adapt to changing conditions, manage inequality, and avoid overextending themselves have the best chance of surviving. War remains a double-edged sword—capable of forging stronger societies and accelerating their demise. As we navigate the turbulent 21st century, understanding these dynamics will be essential for steering toward a sustainable and resilient future.

Where to go and what to do?

But suppose collapse will happen. Where should we go then? Luckily, this is also investigated. In a 2021 paper (with the quite complex title “An Analysis of the Potential for the Formation of ‘Nodes of Persisting Complexity’”), the authors analyse the potential for specific geographical locations to remain habitable and retain complexity (in the idea that human life-supporting systems survive) in the event of a societal collapse, referred to as "nodes of persisting complexity." The authors identify a shortlist of countries—New Zealand, Iceland, the United Kingdom, Australia, and Ireland—based on their ability to sustain their populations independently, their geographic isolation, and their access to resources like food and energy.

According to the analysis, New Zealand is the best location for survival during a global societal collapse. The main reasons are:

• Geographic Isolation: As a remote island nation in the South Pacific, it is less vulnerable to mass migrations and geopolitical conflicts.

• Agricultural Self-Sufficiency: Its population is low relative to its agrarian capacity, meaning it could sustain itself without relying on large-scale food imports.

• Renewable Energy: New Zealand has abundant geothermal and hydroelectric power, ensuring a stable energy supply even if global fossil fuel systems collapse.

• Moderate Climate: The country’s temperate, oceanic climate provides stability and reduces the risks associated with extreme weather events and agricultural failures.

Other strong contenders include Iceland, due to its renewable energy from geothermal and hydropower, and Tasmania (Australia), which is geographically separated from the Australian mainland and has a favourable climate. The United Kingdom and Ireland have good resources but face higher risks due to their larger populations and geopolitical connections.

If global civilisation were to collapse, remote, self-sufficient island nations with substantial renewable energy resources and agricultural independence would be the safest places to go. I have the idea that many billionaires have read this paper.

Take care.

And have hope!

Hans