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A Theory of Change

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In the world of NGOs—the nongovernmental organizations that work to make the world a better place—a phrase has caught on in recent years. It's the observation that one must have a “theory of change.” The point in the social sphere is that it is often easy to get broad agreement on a desired end-state—for example, to reduce homelessness or eradicate malaria—but the hard part is outlining for donors and others how you think the movement will happen from point A to point B. Often the most effective route is not the one that seems most obvious and direct.

In writing this book, we didn't start from a point B; we had no consensus target for capitalism to move toward. We do, however, have a very definite theory of change: that capitalism is made up of rules practiced by capitalists; that in different environments capitalists will adapt, generating new rules; that the new rules will be taken up wherever they work well; and that some of the existing rules will not be favored in new (and increasingly influential) environments. In the jargon, capitalism is an adaptive system.

Not to get too Discovery Channel, if you were watching the evolution of homo sapiens and got to the part where the monkeys came down from the trees, you might notice that they were using their limbs differently on the ground and imagine that someday they might look like tailless, upright apes. That would happen because the monkeys with capabilities best fitting their no-longer-arboreal environments got to pass their genes on to successors more frequently than those that didn't. In the same way, capitalism will end up optimized for a new world not because of policy or revolution but because of adaptation.

To state it all but redundantly, adaptive systems come to reflect the features of their environments. In chapter 1, we explored how capitalism's environment has changed broadly, deeply, and rapidly. Knowing that, one could adopt one of two points of view: either this shift has no feedback on capitalism itself, or it does. If the economy is like a machine, a change of environment will mean nothing to it. It will go through all the same motions it did in the old environment, even if they prove less productive. But if it's more like a natural, organic system, made up of individuals who can figure out new ways to make a living, the system will discard things that are not working out well in this new world, and adapt.

Standing on the Sun

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