The Futures Foundation

According to Dr Henderson, these major failures are the fragmenting of human knowledge, and the persistence of violent conflicts, wars and poverty. 
"The UN Millennium Development Goals (www.un.org) provide an initial agenda," she writes.  "Fulfilling these goals and shifting from fossil fuels to renewable resources and their sustainability can employ every willing man and woman on earth and expand global prosperity. 
"Reintegrating human knowledge, systems thinking and multi-disciplinary approaches to public and private decisions are widely recognised as necessary to address the human condition in this new century."

Dr Henderson moves on to a closer examination of some of the causes of our current condition - one that is seen as perilous by most of the world's top futurists.   And, taking a more positive stance, she addresses the strategies for improvement that she believes are most likely to succeed.
"Reappraisals of the work of Charles Darwin together with new evidence from historians, archeologists and anthropologists now clearly point to the evolution of human emotional capacity for bonding, cooperation.  
"Competition, territoriality and tribalism, rooted in the fears of our past, served humans well in our early trials and vulnerability.  But so did cooperation and the ability to trust and bond with each other."
Current research by scientists from many fields has invalidated the core assumptions underlying the narrow economic models that dominate public and private decision-making, she says.  
"Yet today, as privatization and technological evolution accelerate change and globalization, economists and their general equilibrium models still drive these processes.
"What they fail to recognize is that while competition remains a key driver in evolution and all human affairs, cooperation and co-evolutionary processes are equally important."
Dr Henderson points out that while the social sciences study the full range of human behavior, the profession of economics simply assumes that competition and self-interest are rooted in human nature. 
The benefits of competition in societies are widely-recognized - in spurring innovation, efficiency and driving industrialism and economic growth.  The role of cooperation in families and communities, however, has been unpaid, unrewarded and invisible in economic models.  Yet it was just such cooperation that allowed for collective action, taxes and vital infrastructure for commerce.
In her article in foresight magazine (Vol. 8, No. 1), Dr Henderson tracks the history of economics from the "political economy studies" that rose to academic prominence after Adam Smith's great work, An Inquiry into the Nature and Causes of the Wealth of Nations (1776).  She notes the influence on Smith and others of Sir Isaac Newton's great discovery of the physical laws of motion - laws that are still in use, but that are now seen to apply only at certain levels.   And she quotes the influence of Charles Darwin's work on economists of the early industrial revolution.  
"They seized on Darwin's research on the survival of the fittest and the role of competition among species as additional foundations for their classical economics of ‘laissez faire' - the idea that human societies could advance wealth and progress by simply allowing Smith's ‘invisible hand' of the market to work its magic."
But Charles Darwin also saw the human capacity for bonding, cooperation and altruism as an essential factor in our successful evolution, she says.  
"In retrospect, how else could we have gone from the experience of over 95 per cent of our history lived in roving bands of 25 people or less - to today's mega cities: Sao Paulo, Shanghai, Mexico City or Jakarta?
"These improbable metropolises, along with global corporations and governance institutions such as the United Nations and the European Union - could never have emerged without humanity's capacities for bonding, cooperation and altruism.
"So as we have evolved into our complex societies, organizations and technologies of today, we need to re-examine our belief systems and the extent to which they still may be trapped in earlier primitive stages of our development.
"Why, for example, do we underestimate our genius for bonding, cooperation and altruism -stuck in our earlier fears and games of competition and territoriality? 
"Why do we over-reward that behavior and still assume in our economic textbooks and business schools that maximizing one's individual self-interest in competition with all others is behavior fundamental to human nature? 
"Why do the neoconservatives that drive most US policies today believe, as Margaret Thatcher proclaimed, that the individual has primacy over community? 
"Scientific research is now revealing excessive individualism as dogma, while systems views, including those of Ken Wilber, Richard Slaughter, Fritjof Capra, Elisabet Sahtouris, Riane Eisler, Jane Jacobs, myself and many others seek a balance in acknowledging society, culture and the planet's ecosystems."
Hazel Henderson also wonders why leading business schools are still teaching attitudes and habits that have been outdated by science for many years.   And she asks:  "Why is our equal genius for bonding and cooperative behavior - even altruism - not taught in business schools as the true foundation of all human organizations and our greatest scientific and technological achievements?
"In reality, as every business executive knows, competition and territoriality are channeled within structures of cooperation and networks of agreements, contracts, laws and international regulatory regimes that allow airlines, shipping, communications, and other infrastructure to undergird global commerce and finance."
Although this cooperative reality has been recognized as "co-opetition," (Brandenburger and Nalebuff 1996) it has not supplanted the competition model in economic theory.    
The result of this is that while the formula for humanity's success has always rested on cooperation while embracing competition and creativity, new managers are not being taught how to manage organizations in this way.   Instead, shocking new evidence (The Economist 17/02/05) shows that the methods still taught in most business schools encourage managers in the kind of behavior that produced the wave of corporate scandals and crimes at Enron, Worldcom, Parmalat, Tyco and Arthur Andersen.
And while this is serious enough, the fundamental fault lines in our economic thinking are not limited to business transactions, says Hazel Henderson.
"What do deep, primitive beliefs about the primacy of competition and territoriality have to do with poverty, conflicts and wars?  All are rooted in ancient human fears - of scarcity, of attacks by wild animals or other fearful bands of humans.  Rooting out these fears - deeply coded in our us-versus-them political and economic textbooks - is the essential task of our generation. 
"We must move beyond this economics of our early reptilian brains - to include the economics of our hearts and forebrains.  These old fears underlie today's continuing cycles of oppression, poverty, violence, revenge and terrorism.  Indeed, if we humans do not root out these now-dysfunctional old fears, we will destroy each other."
Turning to the opportunity side of this challenge, Hazel Henderson looks at the "fantastic potential that humans have created for further successes through pursuing the UN Millennium Development Goals and building prosperous, equitable, sustainable human societies."
Like other futurists, she reminds us that we create the future through the choices we make in the present.    And, she says, the new "superpower" of global public opinion is already rejecting the old, dysfunctional dogmas.
"Over ten million people demonstrated peacefully worldwide against the preemptive war on Iraq," she wrote in the foresight article.   "Yet as Thomas Kuhn described in his Structure of Scientific Revolutions (1962), old dysfunctional beliefs often persist long after they have been disproved.
"So it is with today's political and economic textbooks and the entire paradigm underlying the ‘Washington Consensus' model of development.   We have evidence of its bankruptcy all around us - widening poverty gaps, the digital divide, unbalanced, unsustainable economies mired in debt - breeding despair and terrorism, diverting resources from enhancing human life to military weapons."
To Hazel Henderson, all this reveals not so much a flaw in human nature as a flaw in the way we understand our past - a failure to recognize that humanity's true genius lies in those cooperative, bonding and altruistic skills that have really underpinned our progress to date, rather than destructive competition.
She is especially concerned about the role of central banks who, she says, have "won independence from political control and wield enormous power over societies.   Monetary policy and money-creation are now widely understood as political, not scientific."
This achievement on the part of the banks allows unaccountable, obscure theories to continue to underpin today's economic and technological globalization and the rules of the World Trade Organization, the international Monetary Fund, the World Bank, stock markets and currency exchanges as well as the central banks.
"Since the 1980s and the waves of global deregulation and privatization unleashed by Britain's Margaret Thatcher and US President Ronald Reagan, central banks lobbied for freedom from political control - even by democratically elected governments.   Even Britain's Labor government under Tony Blair conceded this autonomy to the Bank of England....
"This quiet coup by central bankers and their advocates among the economics profession is illustrative of the methods of neoconservatives, such as those currently dominant in the USA.  Yet the failures of these economic models in achieving their targets of non-inflationary economic growth and fuller employment is evident in the recent history of financial crises, booms, busts, bubbles, unrepayable debt and unemployment."
According to Dr Henderson, the globalization of finance and technology, the spread of privatization and deregulated markets have produced a range of unanticipated consequences.
"For example, today's global Information Age has already become The Age of Truth - where careless corporate actions can destroy a global brand in real time.  Business leaders worldwide have responded by embracing the idea of good corporate citizenship, both at home and globally. 
"Two thousand companies (including some 600 in Brazil) have signed on to the ten principles of Global Corporate Citizenship of the Global Compact, launched by the United Nations in 2000, covering human rights, workplace safety, justice and ILO standards, as well as the environment and anti-corruption.  Civic groups worldwide now monitor all the companies who have engaged with the Global Compact, to see if they are walking their talk.  Backsliders are publicly shown on hundreds of websites. 
"The World Social Forum has successfully linked hundreds of thousands of civic activists and organizations and made the beautiful city of Porto Alegre a mecca of innovative thought. My TV series "Ethical Markets" on US public broadcasting stations benchmarks higher standards, corporate ethical performance and socially-responsible investing worldwide (www.ethicalmarkets.com) .
"Contrary to The Economist's editorial skepticism about such corporate social responsibility, 77 per cent of CEOs of major corporations surveyed by KPMG and the World Economic Forum in 2005 said that such higher ethical behavior was ‘vital to profitability.'"
Dr Henderson also referred to the spectacular success of socially responsible investment, a practice she has been actively promoting for many years.
"Sustainability has become a buzzword and even Wall Street's venerable Dow-Jones now has its Sustainability Group Index.  The surprise to economists, mainstream financial players and media is that these new indices: London's FTSE4Good, the US Calvert Social Index and Domini Social 400 Index, as well as Brazil's New BOVESPA, regularly outperform the mainstream Dow-Jones and Standard and Poors 500.  Are we witnessing an evolution of human collective behavior toward moral sentiments and altruism?  Or is cooperation for the common good now a condition of our survival?  I submit that both are involved."
In an article that ranges through many more aspects of international economics, Dr Henderson highlights:
-      changes in corporate performance reporting to include "triple bottom line" and wider reporting, with six hundred global corporations now including these wider measures in their annual reports
-      our entry into the Age of Light... a new awareness of our expanded global  identity, enriched by cultural diversity
-      the fact that "in every country where industrialism took hold, the ‘tortoise' of social innovation lagged behind the ‘hare' of technological innovation, which meant that the social costs of disruptive technological change were borne by employees unless governments and taxpayers cushioned unemployment and provided retraining
-      the growing agreement that economics is not a science, but a profession, and that many of its theories and models are seriously flawed.  She cites specifically the work of neuroscientists, biochemists, psychologists, anthropologists, behavioral scientists and evolutionary biologists whose work is "now dealing death blows to economics' most enduring error:  its model of ‘human nature' as the ‘rational economic man' who competes against all others to maximize his own self-interest"
-      the fact that economic models still based on the Newtonian "clockwork" ideas of general equilibrium are now over a hundred years out of date
-      the dangerous strength of economics in academia "because their departments and business schools receive the lion's share of funds, research contracts, power and prestige.  Economics is politics in disguise.  Cost-benefit analysis or a carefully crafted economic impact statement can squelch any government reform or new social or environmental initiative.  Such analyses emphasize the cost of change to existing interests, while ignoring or downplaying the current costs of the status quo on other actors, the environment or future generations.  Examples include the 2005 energy, transportation and drug subsidy laws in the USA."
-      the blatant mis-use of economics in global affairs, as documented by John B. Perkins, author of Confessions of an Economic Hit Man (2004), and
-      the urgent need for statistical revisions, especially those that will overhaul GNP and GDP national accounts, as pledged by 170 governments at the Rio Earth Summit in 1992.
"Such statisticians have also repeatedly recommended that GNP and GDP record national assets: the value of public infrastructure investments in roads, public health facilities, sewage-treatment, ports, airports, schools and universities that underpin the productivity of modern economies," she says. 
"In too many countries, these asset accounts, which properly balance the public debts undertaken to construct such vital infrastructure - are not recorded.  Such public works, buildings and facilities are immensely valuable and should be amortized over their lifetime of use - often over a hundred years.  Try running a company like this, where your balance sheet could not include the value of your factories and capital assets!  The USA made some of these needed corrections in January 1996 and these ‘stroke of the pen' corrections accounted for one third of the budget surplus of the Clinton administration. 
"Canada followed suit in 1999 and went from a deficit to a $50 billion budget surplus.  
"The investments called for in the Millennium Development Goals, the Monterrey Consensus and other proposals, such as the Global Marshall Plan, must be properly accounted as assets, since they will also produce dividends for societies as they transition to sustainability.
"Today, in our Information Age, we acknowledge the value of investments in Research and Development, management education and employee training programs.  Accountants are learning to account for intangible assets, goodwill, brands and other reputational risks and benefits.  Risk-analysis models now calculate social and environmental risks overhanging a company's balance sheet - which if not recorded, can be overlooked and lead to sudden loss of shareholder value.  Multi-billion dollar US public pension funds now require companies in their portfolios to disclose their plans to mitigate risks of climate change."
Although the World Bank was catching up on some of these innovations under its Australian president, James Wolfensohn, Hazel Henderson is concerned that it may revert to the neoconservative agenda and laissez-faire models of the past under his successor, Paul Wolfowitz. 
"In its 1995 report on the Wealth of Nations, the bank acknowledged that 60 per cent of this wealth is comprised of human capital and 20 per cent ecological capital.   Financial and built capital (factories and monetary assets) represented only 20 per cent.   For 50 years, the Bank focused most of its attention of ‘economic' growth of this 20 per cent of countries' wealth.  Now, the Bank is shifting its focus to that 60 per cent of human capital with more health and education investments - recently citing the education of girls as a country's best investment.
"Yet the Bank has not, so far, campaigned to add even public asset accounts to GNP/GDP.  Neither the Bank nor the International Monetary Fund (IMF) require the addition of asset accounts, even for infrastructure assets, let alone for education and health - the most vital investments to maintain that 60 per cent of the human capital comprising the wealth of nations.  These accounting corrections will shift statistical focus to longer-term and sustainable investments. Brazil is helping the IMF to correct its GNP/GDP accounting. 
"I and other critics of the IMF's many mistakes over the past decades are now calling for the permanent overhaul of their GNP/GDP and all other macro-economic models. 
"The IMF should not only set up proper accrual accounting of assets for all investments in public infrastructure, but should re-categorize education and public health from ‘consumption' to ‘investment' in human capital.  The World Bank and the UN System of National Accounts (UNSNA) should make similar corrections and add nations' public investments in education and public health to these asset accounts and amortize them over 20 years - the time it takes to raise a child to a healthy, well educated, productive adult.
"As these statistical innovations reflect the technological changes in our information-based societies, and are reported in mass media, citizens in all democratic societies will align with these evolving values.  They will understand and place education and self-development as the best investment individuals, companies and societies can make in a better future for all.  Even neoconservative economics recognizes that education is a ‘public good,' a ‘positive externality' in economic jargon, i.e., activities that individuals and private business are unlikely to fund adequately since they cannot capture the full returns to such private investments. 
"These new GNP/GDP asset accounts will end today's egregious over-stating of public debts and the excuses it offered for excessive interest rates, sovereign bond yields and currency speculation."
Developing countries are already being relieved of un-repayable debt under formulas agreed at the July 2005 G-8 Summit in Scotland   But even before the G-8 Summit, the IMF's new President, Rodrigo Rato accepted the need to change many of its socially disastrous policies and to write off more un-repayable debt - largely due to global civic society and public opinion, says Dr Henderson.  
"In this new century, long-held ideas are changing.  The European Union is a new model of integration of formerly warring countries...negotiation, cooperation and multi-lateral agreements are the way forward. 
"The wars in Afghanistan and Iraq have revealed the many problems that even politicians and military leaders now admit, require diplomatic solutions.  New approaches to terrorism now favor funding education and building schools in countries where poor parents have no choice but to send their children to fundamentalist ‘madrassahs' where they are taught the ways of ‘jihad' and suicidal ‘martyrdom' to kill others in the name of God. 
"Meanwhile, the search for balance between the rights of individuals and society continues."
In our age of weapons of mass destruction, wars are the most dangerous and ineffective options. 
"We see already in our 21^st century that the new weapons of choice are currencies, as well as better diplomacy, intelligence and widely shared information. 
"Investments geared toward the Global Marshall Plan can help guide the re-prioritizing needed to steer societies toward equitable resource-use and reduction of conflicts.
"Insurance policies for peace-keeping forces can reduce military budgets for countries wishing to follow Costa Rica, which abolished its army in 1947. 
"The proposed United Nations Security Insurance Agency, a partnership of the Security Council with insurance companies, would assess country risks and collect premiums that would be pooled to train standing UN peace-keeping and humanitarian forces. Reforming and expanding the Security Council is now on the UN's agenda.
"The UN General Assembly should take up all the alternative financing mechanisms, including those of the 2002 UN Monterrey Consensus, the Global Marshall Plan, so as to implement the Millennium Development Goals.
"The time has come for global taxes on arms sales, currency trading, airline tickets and e-mail to provide global public goods: education, health care, sounder international financial architecture and peace-keeping."
The human skills of cooperation and collaboration lay before us a rich array of potentials for astounding, widespread, shared prosperity, peace, restoring and our planet's ecosystems, Dr Henderson concludes. 
"These new visions and values underlie the United Nations Millennium Development Goals, the UN Global Compact; the Prague Declaration on Humanizing Globalization; the Global Marshall Plan; the ILO's Report of the Commission on the Human Dimensions of Globalization; and the 16 principles of the Earth Charter, now ratified by hundreds of municipalities, companies and thousands of NGOs in over 100 countries. 
"The way forward and transition to peaceful sustainable societies is possible."

Dr Henderson's full article is available at www.hazelhenderson.com and will be in foresight magazine at www.emeraldinsight.com/fs.htm.