Hazel Henderson, a self-taught economist, futurist, and sustainability advocate, spent decades challenging conventional economic wisdom and proposing innovative alternatives. Her work, which spans from the 1960s until her passing, one year ago today on May 22, 2022, embodies the principles of design economics. Let’s explore how Henderson’s ideas and initiatives align with the three tenets of design economics.
Tenet 1: Acknowledging the Evolution of Human Cultural Systems
Henderson’s entire career was dedicated to pushing economics to evolve in response to changing social, environmental, and technological realities. She recognized early on that traditional economic models were inadequate for addressing the complex challenges of the modern world.
In her 1981 book “The Politics of the Solar Age,” Henderson argued that the industrial era’s fossil fuel-based economy was becoming obsolete. She envisioned a transition to a solar-powered, information-rich economy, demonstrating her understanding that economic paradigms must shift in response to technological innovations and environmental constraints.
Henderson’s critique of Gross Domestic Product (GDP) as a measure of progress is another example of her recognition of evolving systems. She argued that GDP was an outdated tool, developed for an industrial age, and unsuitable for measuring progress in a knowledge-based, environmentally conscious society. Instead, she proposed alternative indicators that accounted for environmental and social factors, such as the Calvert-Henderson Quality of Life Indicators.
Her work on “ethical markets” and socially responsible investing (SRI) further exemplifies her acknowledgment of evolving cultural systems. Henderson recognized the growing public concern about the social and environmental impacts of business, and she worked tirelessly to create economic frameworks that responded to these changing values.
Tenet 2: Embracing Inclusive, Interdisciplinary Approaches
Henderson’s approach to economics was inherently interdisciplinary. She drew insights from ecology, physics, biology, and social sciences to inform her economic theories, embodying the second tenet of design economics.
Her concept of the “love economy” is a prime example of this interdisciplinary approach. Henderson argued that traditional economics ignored vast swathes of human activity – particularly unpaid work often performed by women – that were crucial to societal well-being. By incorporating insights from feminism, sociology, and anthropology, she presented a more holistic view of economic activity.
Henderson’s work on the “information economy” also demonstrates her inclusive, interdisciplinary approach. She recognized early on that information and knowledge were becoming key drivers of economic value, and she incorporated insights from information theory and computer science into her economic analysis.
Furthermore, Henderson’s development of the “Country Futures Indicators” (CFI) showcases her commitment to inclusive approaches. The CFI included measures of income distribution, environmental quality, and social welfare alongside traditional economic indicators, providing a more comprehensive view of a country’s progress.
Her emphasis on systems thinking in economics also aligns with this tenet. Henderson often spoke about the need to understand the economy as part of larger social and ecological systems, advocating for approaches that could account for complex, dynamic interactions between these systems.
Tenet 3: Promoting Economic Literacy
Henderson was a tireless advocate for improving public understanding of economics. She believed that economic literacy was crucial for informed citizenship and for driving positive social and political change.
Her efforts to demystify economics and make it accessible to the general public are evident in her numerous books, articles, and media appearances. Henderson had a gift for explaining complex economic concepts in clear, engaging language, often using visual aids and metaphors to make her points more understandable.
The Ethical Markets Media company, which Henderson founded, was explicitly dedicated to improving economic and financial literacy. Through its various initiatives, including a TV series and online resources, Ethical Markets aimed to educate the public about alternative economic models and sustainable business practices.
Henderson’s development of alternative economic indicators was also a form of economic literacy promotion. By critiquing GDP and proposing more comprehensive measures of progress, she encouraged people to think critically about how we define and measure economic success.
Her work on “green economics” and sustainable development further contributed to public understanding of the links between economic activity and environmental health. Henderson helped popularize the idea that environmental protection and economic prosperity could go hand in hand, challenging the prevailing notion that there was an inevitable trade-off between the two.
Building Momentum for a New Economic Paradigm
Henderson’s ideas, once considered radical, have gained significant traction over the years. Her early advocacy for renewable energy, sustainable development, and socially responsible investing has been vindicated as these concepts have moved into the mainstream.
The growing adoption of Environmental, Social, and Governance (ESG) criteria in investment decisions can be seen as a direct outgrowth of Henderson’s work on ethical markets. Similarly, the increasing use of alternative progress indicators by governments and international organizations reflects her long-standing critique of GDP.
Henderson’s emphasis on the “solar age” and renewable energy has proven prescient as the world grapples with climate change and seeks to transition away from fossil fuels. Her vision of an information-rich, knowledge-based economy has largely come to pass with the rise of the digital age.
In conclusion, Hazel Henderson’s work exemplifies the principles of design economics. Her recognition of evolving economic realities, her interdisciplinary approach, and her commitment to promoting economic literacy have left an indelible mark on economic thought. As we face the complex challenges of the 21st century, Henderson’s ideas continue to offer valuable insights for creating more sustainable, equitable, and adaptive economic systems.
Henderson’s legacy serves as a powerful reminder of the potential for innovative economic thinking to shape a better future. As we continue to evolve our economic models and practices, her work remains a rich source of inspiration and guidance, fully aligned with the tenets of design economics.
Prompt: Vinny Tafuro | Composed: Claude 3.5 Sonnet | Edited: Vinny Tafuro