The Neoliberal Current: Are We Drowning in Growth?
If you haven’t read our blog post called The Violence of Market Rate Returns, you might want to do that before reading this post. It is a bit of a follow on for that post.
Swimming in The Economic Theory Known as Neoliberalism
I keep hearing that in order to get more people “doing impact investing” we need to meet them where they are. Sounds simple enough. The problem is that we are all swimming in the “water” of our current economic system and we can’t see it for what it is. We live near a lake in Seattle and it is clear and clean. You can see straight down to the bottom and it is refreshing to dive right in. Occasionally, however, we get notices from the city that there is a high level of bacteria in the water and we need to avoid swimming. But looking at the water and swimming in the water, you’d never know.
The “economy” is talked about on the news and in our classrooms like it is a big brick wall. It is clear and obvious and unmovable. It is a law. Supply, demand, shareholder value, profits, free markets. Growth is de facto good! Corporations serve society by focusing solely on shareholder value and growing to dominate. The wealthy are able to grow their wealth with no cost to the broader society. In fact, it is the American Dream! If you are getting less financial return than the market then you are sacrificing from the “standard”. Extraction from natural resources is just the cost of doing business.
While it is true that this economic theory is the prevailing theory that is taught in universities and modeled by consultants and financial experts, did you know that this theory really only became popular in the 1970s or 1980s? This idea that the market needs to grow in order to be healthy is a fairly new idea. It isn’t a given. It isn’t an unobjectionable truth. The idea that it's a natural or unavoidable economic law is simply untrue. In fact, I think you know that. I think you feel it. That unease you feel about things not really going that well for the world? That belief that the planet can’t sustain this growth-at-all-costs mentality? The growing chorus of people discussing degrowth or regeneration or a wellbeing economy or doughnut economics - they are starting to sound more reasonable because we can all feel that something is off. Right now we are all swimming in an economic theory called neoliberalism and we are receiving overwhelming reports that the water isn't clean.
There is a growing anxiety about our economy. It wasn’t surprising that the lower class felt this way when they were unable to make ends meet. But more recently the middle class is reporting economic anxiety. And now there is growing evidence that many in the professional class also feel this doomsday cliff approaching when it comes to the economy. In fact, “Sixty-one percent globally have a moderate or high sense of grievance, which is defined by a belief that government and business make their lives harder and serve narrow interests, and wealthy people benefit unfairly from the system.” This type of economy’s rules are written to benefit a very small group at the top. But it also gives them the power to continue to write the rules. This “free market” taxes labor but not wealth and without taxes on wealth those at the top can use tax havens, capital gains and low interest loans to grow their wealth even more by extracting from everyone else.
When our political parties tell us that the system is broken, they are not being honest with us or themselves. The system is working as designed to benefit a small group at the top at the expense of other people and the planet. What is broken is the economic theory that we are basing everything on. The ‘water’ that is causing us to cling to empty promises of growth as good and overlook systemic harms prioritizing short term gains over long term societal wellbeing. By privatizing public assets and deregulating financial systems, the power that the wealthy corporations and individuals have enables them to extract from everyone else at every turn. As Grace Blakeley says, “Extreme wealth is not just an economic problem - it’s a political one. Billionaires use their power to shape policy, buy media influence, and tilt democracy in their favour.”
Our investment thesis (that we have come to by listening to a number of experts and looking at the data ourselves) is that the economy is not working for people and the planet and we need to invest in a new economic model. An entirely new economy sounds daunting until you realize that this is exactly what a small group of politicians, think tanks, and elites did when they designed and embedded neoliberal economics into our universities, corporations, laws and politics about 50 years ago.
The evidence is clear: the prevailing economic system is demonstrably failing us. It prioritizes profit over people, concentrates wealth, and perpetuates inequality.
The Impact of Neoliberalism in a Social Media World
Unfortunately this theory works well with our dopamine hit, game-ified, social media sound byte world. You can have your cake and eat it too! Win-Win! Buy another dress and you are helping the economy! But take a step back and think about our broken social fabric. Is it possible that the money for that dress might be spent well on doughnuts and coffee for a neighborhood gathering? Is being unable to buy a product from anywhere other than Amazon a free market? Is it freedom to go to our abundant grocery stores really freedom when you learn that “four firms or fewer control more than 40% of market share of the food in our groceries…This matters because the size and influence of these mega-companies enables them to largely dictate what America’s 2 million farmers grow and how much they are paid, as well as what consumers eat and how much our groceries cost.” Meta claims that they do more good than bad but so many of us recognize that time spent on social media makes us feel worse not better. And even worse in order to defend their profits they neglect spending on safety to the detriment of our kids.
The primacy of corporations and the consolidation of wealth and power is hurting us. In some cases, killing us. That anxiety we feel? There’s a reason for it.
Investing in women (or new fund managers or minorities or…) is touted by some as a de facto win without considering how many of those investments don’t address the underlying problems with our economy. It is certainly more equitable but if those investments continue to center profit over well-being it’s a very short term win. Many impact funds tell us they are addressing various societal challenges globally while delivering strong financial returns. But if the economy is the problem and it is extracting from those least able to afford the loss, then achieving a strong financial return leads me to believe you might not be addressing societal challenges.
While profits for corporations go up, we have a continuing housing crisis, people dying of preventable illnesses and environmental degradation. But what do we measure for economic health? Profits. Stock prices. GDP.
Some people think impact investing needs to get a market rate return to signal that it is investing in a viable business proposition. Other people think that impact investing needs to get concessionary returns in order to maximize social good. We believe that there is a third way to think about investing. We believe all investing has impact so you need to look critically at the consequences of all of your investments. What are the intended consequences and the unintended ones? But more important than even looking at the consequences is to consider what economic model you are investing in. Is it enabling most people (and not just a select few) to thrive? Is it not extracting from the planet in an unsustainable way?
We are working toward a wellbeing economy that stays within planetary boundaries rather than always looking for growth. The market in its current state is extracting from the majority of people and the planet. It's not sustainable. Neither philanthropy nor investing should add to and accelerate this problem.
Beyond the Market's Illusion: Reimagining Our Economy
The economy we have was designed by people. This means that it can also be changed by people. A Wellbeing Economy is an economy designed to serve people and the planet, not the other way around. In a Wellbeing Economy, the rules, norms and incentives are set up to deliver quality of life and flourishing for all people, in harmony with our environment, by default. Rather than treating economic growth as an end in and of itself and pursuing it at all costs, a Wellbeing Economy puts our human and planetary needs at the center of what needs to be achieved.
When we aim for shared wellbeing, we all will feel less anxiety and increased safety. The countries with the highest ratings for happiness and safety (Finland, Denmark, Sweden, Norway, Iceland) are not countries that use neoliberal economic theory. They have capitalist economies with high taxes, universal healthcare and education, strong labor protections & unions and regulated markets that are still open to trade. When the rules and incentives are designed to ensure everyone has enough to live in comfort, safety, and happiness, a good economic system has been achieved. When people feel secure, they can use their energy to support the flourishing of all life on this planet.
In this better economy, individuals aren’t left to fend for themselves. The heavy lifting is done by the economy itself. Some examples of how this plays out in the world would be social enterprises and businesses owned by their workers, community wealth building and living wages.
When the economy’s purpose is to provide wellbeing to people and the planet, it is clear what needs to be implemented and what needs to be measured to determine success. Unlike in a Neoliberal Economy where when GDP goes up it could be from paying for rebuilding after a natural disaster or building an oil refinery, other metrics you could use to determine if an economy is working might be life expectancy, people with healthcare, corruption perception or air quality, for example.
In the new economy, people are given agency over economic decisions and agenda setting through citizen assemblies and participatory budgeting.
This is why we prioritize investments in shared ownership that enables local ownership, fair wages and good benefits over shareholder profit.
Getting Out of the Water: Building a Wellbeing Economy
That feeling of unease—that sense that the water we’re swimming in is pulling us under—is not a sign of your failure, but a recognition of a failing system. The good news is that since this economic ocean was designed by people, it can be redesigned by people. It’s not about finding a new patch of water; it’s about getting out and building a new world on dry land. The question isn't just what isn't healthy, but how do we actively build health into our economic DNA?
While many alternative models exist, a growing global movement is coalescing around a powerful, unifying vision: a Wellbeing Economy. This isn't just another theory; it's a practical framework for an economy designed to serve people and the planet, not the other way around. It’s an economy where we measure success not by the endless accumulation of wealth, but by our collective health, happiness, and fairness on a thriving planet.
So, how do we stop treading water and start building?
- Find Your Fellow Shipbuilders. You are not alone in seeing the flaws in the current system. Organizations like the Wellbeing Economy Alliance (WEAll) are global hubs for people, communities, and businesses who are actively building this new model. The first step out of the water is realizing you don't have to swim alone. Connect with a local hub, join conversations, and learn from those who are already charting these new waters.
- Redesign Your Own Vessel. Question the economic currents within your own life and work. If you run a business or have influence in one, challenge the dogma of profit-at-all-costs. Could you move toward becoming a worker-owned cooperative? Could you champion B-Corp certification? Could you demand radical transparency in your supply chains, ensuring they regenerate rather than extract? This isn't necessarily about conceding returns; it's about redefining what a "return" truly means—a return to community health, to a stable climate, to human dignity.
- Use Your Capital as a Rudder, Not Just an Engine. Think differently about your assets. Where you bank, where you shop (and whether you need to shop), and how you invest are all powerful signals that can either reinforce the old system or help build the new one. Ask your financial advisor uncomfortable questions: "How does this investment contribute to wellbeing and justice? How does it impact the planet?" Move your money to community development financial institutions (CDFIs) and credit unions that invest in your local community. Starve the extractive economy and feed the regenerative one.
- Change the Prevailing Tides. A Wellbeing Economy requires new rules of the game. Engage in your local community and politics. Advocate for policies that prioritize human and ecological wellbeing. Support campaigns for a living wage, demand that your city measures progress with a wellbeing index instead of just GDP, and champion new business models that are rewarded for positive social and environmental impact. We can collectively demand a system that is designed, from the top down and the bottom up, to create shared prosperity.
We have been swimming in the water of neoliberal growth for so long that we’ve forgotten we can choose to get out. The path forward is not a single, easy one. It requires courage, imagination, and collective action. But by taking these steps, we move from being passive swimmers caught in a current of bacteria filled water to active architects of an economy that finally allows us all to thrive.
*There is a growing community offering economic alternatives to neoliberalism. The well-being resonates with us but honestly all of these have some overlapping principles so check them out and see what resonates with you.
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