Bottom-Up and Top-Down Transformation — with Bill Baue and Ralph Thurm



Bottom-Up and Top-Down Transformation — with Bill Baue and Ralph Thurm

Bill Baue and Ralph Thurm join us to talk about their work at r3.0 — a not-for-profit platform that promotes Redesign for Resilience and Regeneration. Together we explore the micro-macro dynamics of organizing from their thresholds and allocations perspective, exploring how top-down policies and bottom-up organizing can be combined in face of social and ecological collapses humanity is facing. We further dive into what true sustainability means in a disentangled world, and how multi-scalar organizing and bioregionalism fit into the picture.

Podcast Notes

Today we’re joined by Bill Baue, Senior Director at r3.0, and Ralph Thurm, Co-Founder & Managing Director at r3.0 — a not-for-profit platform which promotes Redesign for Resilience and Regeneration. Founded in 2012, r3.0 connects a global community of “Positive Mavericks” around its “work ecosystem” that focuses on transcending incrementalism to trigger necessary transformations that enact living systems principles. The work of r3.0 explores responses to the ecological and social collapses humanity is experiencing, in order to achieve a thriving, regenerative and distributive economy and society.

Bill Baue is a true expert when it comes to sustainability thresholds, thriveability, and online stakeholder engagement. He has co-founded several enterprises, including Sustainability Context Group, Sea Change Radio, and Currnt.

Ralph Thurm is a leading professional in sustainable innovation and strategy, operational sustainability, sustainability change management, sustainability reporting, transformation and thriveability. He is also the Founder of A|HEAD|ahead and Managing Director at OnCommons, the not-for-profit home of r3.0.

We are super excited to share this interview with you as we dig into how r3.0 applies a fractal, multi-scalar and bioregional lens to understanding transitions towards a regenerative and distributive global economy and society. Tune in as we explore organizational entanglement, creating value at a systems level, and how Bill and Ralph look at global governance.

To find out more about Bill’s and Ralph’s work:

Other references and mentions:

Find out more about the show and the research at Boundaryless at

Thanks for the ad-hoc music to Liosound / Walter Mobilio. Find his portfolio here:

Recorded on 17 March 2021.

Key Insights

1. Thresholds and allocations play out at multiple scales, where top-down approaches do not necessarily trump bottom-up approaches, according to Bill and Ralph. Globally, r3.0 has set up a Global Thresholds and Allocations Council bringing together scientists from around the globe, while at the bioregional level they are experimenting with building bioregional collaboratives (e.g. one located in Connecticut River Valley in the United States) using Elinor Ostrom’s core design principles for governing commons. In their Systems Value blueprint from 2020, r3.0 further refers to different levels part of shaping a regenerative economy and society, from the nano (personal), micro (organizations), meso (conglomerate level, like industries), and macro-level (economy and society), adding “supra” level to denote the systems level.

  •  Listen to Bill explaining the thresholds approach taken by r3.0 around min 14:38 and the different levels of the systems value approach around min 40:25.

2. In a disentangled, super-specialized, globally connected world, the sustainability concept itself has become disentangled. By putting a price on everything, resources become fungible and tradable — like for instance carbon trading as illuded by Simone in one of his questions (min. 26:36). The problem we now need to reckon with is that carrying capacities or thresholds of resource stocks cannot be traded; only flows can. As Bill points out in the episode: “there’s a non-fungible zone that we just need to respect”. This is something r3.0 is working relentlessly to raise awareness around.

  •  Listen to the question by Simone on disentanglement and the responses by Ralph and Bill from min 26:36.

3. In 2019, r3.0 took the stance that they needed to increasingly focus on increased resilience on a bioregional or localized level, and not only through top-down power structures. Since then, they are thus incorporating ideas around bioregionalism (including from Joe Brewer’s point of view), trans-contextuality (from Nora Bateson), multi-level selection and peer-to-peer dynamics (e.g. the P2P Foundation) increasingly in their work. Both Bill and Ralph look cautiously at the role of technology in potentially increasing the carrying capacity or health of our systems, seeing it as a potential risk of creating so-called “phantom carrying capacity”, which lacks the real resilience of a regenerative system.

  •  Listen to the final reflections around the question of progress, modernism, and technology from min 48:18.

Boundaryless Conversations Podcast is about exploring the future of organizing at scale by leveraging on technology, network effects, and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.

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This episode is hosted by Boundaryless Conversation Podcast host Simone Cicero with co-host Stina Heikkila.

The following is a semi-automatically generated transcript that has not been thoroughly revised by the podcast host or by the guest. Please check with us before using any quotations from this transcript. Thank you.

Simone Cicero:
Hello, everyone. So, we are back at the Boundaryless Conversations Podcast once again. I’m Simone here, together with my usual co-host, Stina Heikkila.

Stina Heikkila:
Hello, everyone.

Simone Cicero:
Today, with us, we have Ralph Thurm and Bill Baue from r3.0. Welcome both of you, gentlemen.

Bill Baue:
Great to be here. Thank you.

Ralph Thurm:
Yeah, thank you for having us.

Simone Cicero:
It’s great to have this conversation. We all started, let’s say from our longer-term, let’s say, interest for the work that you’re doing that as you, as the loyal readers, let’s say, can recall, ended up featuring the work that r3.0 is doing in our recent white paper that we released on November 20th. And also, besides this very interesting, I would say, work that you have been doing and the latest papers that you’ve been publishing and your blueprints, also a conversation we had on Twitter a few weeks ago, that started from, I would say, concern — or maybe curiosity — that we have about understanding the role of advanced reporting and accounting practices, sometimes based on trade flows, and evaluating or measuring the impacts that our organizations have on the environment or society more in general, as a sort of transition towards a new economic model, the new development model that everybody’s talking about. We don’t know really how it works, how it will emerge, and so on.

So, the questions we started from was really about the role of top-down policies versus bottom up transformations, constraints, the role of risk in the restructuring the mission, and the execution of our organizing. So, before diving into this conversation, I would like to ask you both to give us a bit of an address of what r3.0 is doing and a little bit of a story. Normally, we don’t do much of introductions in the podcast, but I think it’s important for our listeners to know more of what you are doing with this initiative that is so precious, and also so long-standing as I understand. So, I leave it to you for this brief maybe intro, and then diving deep into the question.

Ralph Thurm:
Yeah, right, and it’s Ralph here. I’m just going to pick up on that one. And actually some of the questions that you’ve been now just addressing were some of the reasons why we actually started with r3.0. r3.0 stands for the redesign for resilience and regeneration, and was really triggered by the Rio plus 20 conference in 2012, when our government leaders decided that we wanted a regenerative and distributive economy. And some of us including myself, and Bill, we looked at each other and said, “Okay. So, what’s going to happen now?” Because there was a report that came out, that was called The Future We Want. And we were looking at each other and we thought, “Well, that’s not going to get us there. It is really the future we design.” So, how are we going to design that future from the here to the now, and ending up at a regenerative and distributed economy? That was really the trigger in 2012 when we started to sort of first do some soul searching, and then structuring, what sort of work are we going to do to get us there? Because existing standards, existing benchmarks, existing business model canvas models, we looked at all of them and we concluded they’re not going to take us there. So, how are we going to do this? That’s how we started.

And in the meanwhile, and now we’re eight years later, actually, we have a fully-fledged what we call “work ecosystem”, where we are designing blueprints or so-called blueprints where we look from the ideal of a regenerative and distributive economy. That’s something that we did right at the start of the work r3.0. And then back casting from there, what areas need to simultaneously leapfrog in order to get us to that idea or that ideal of a regenerative and distributive economy and that is how it all started. And we’ve now designed seven of in total nine of those blueprints, working on reporting and how it would look if it truly served the idea of regenerative and distributed economy. How would accounting need to change? What sort of data architectures would we need? How would we design new business models based on the other three blueprints? How would we transform an organization? How would sustainable finance need to be established? Because we don’t have it yet. How do we design value and system value and design fractal economy? And last but not least — and that’s what we’re working on right now — is educational transformation. And then governance and funding, those are the two blueprints that we’re still working on. And what all of that really leads to is a full work ecosystem that creates that necessary leapfrog.

As an organization, we are really seeing ourselves as pre-competitive and market making. We’re not standing in the way of anybody who’s out there and who exists. They’re all invited to come on board to work with us. So, with blueprints, we also write white papers and opinion papers, we have a yearly conference. But what all of that really bonds together is the idea of when you actually perform sustainably. And that is where some of the vocabulary that we’re going to talk about, I think in this podcast, sort of surfaces. And that is namely thresholds and allocations. And I would leave it there and let Bill also say a couple of words. And then I think we’re having the right intro right into the questions.

Bill Baue:
Great. Thanks, Ralph. And I’ll just add a little bit on to what you’re saying in the sense that the thresholds and allocations question is really where I intersected with r3.0. So, going back almost to the beginning, of course, we were already in connection from the beginning. But Ralph reached out to me to ask me to speak at several of the early r3.0 conferences, in my role as co-founder of the sustainability context group. Which was a loose global network of experts, practitioners, thought leaders who all agreed with this idea that our economies and our cultures really need to align with the external, the real-world thresholds, whether those are sort of physical thresholds in the natural living systems, or whether those are social thresholds in the social systems or the newest sphere, as you call it at Boundaryless. So, that’s really our connection point.

I think that’s where we’re going to delve into deeper. But I guess the last thing I’d say is that a real point of intersection that I see between our work at r3.0 and the work of Boundaryless and your network of audience for this podcast and the folks that you work with, is this notion of taking a networked approach. So, one other element of r3.0 that I think is key is that we have a very small core group working for r3.0 itself. But we have a very large network of partners that amplify our work and that we also consume knowledge from. And so we create a sort of a co-creative ecosystem that is a kind of platform itself. So, r3.0 could be considered a platform that is leveraging a large global network. So, I’ll leave it at that in terms of intro to r3.0.

Simone Cicero:
Right. Thank you very much that was really important, I think. You hand me this first reflection that is a little bit of the starting reflection we had also on this Twitter exchange that we had a few days ago. Our impression sometimes is that you have these two directions to address this idea of a transition towards something new. Somebody call it today Game B, somebody calls it the new development model, and somebody also see only the perspective of collapsing when thinking about a transitional state. So, there are definitely these two places where we are having this conversation. And one is the conversation around policies and the conversation around what authorities — to some extent, collaborative ones — are essentially entitled to establish some kind of policies in terms of thresholds or taxing carbon or making policies that ensure, to some extent, that the economic players, the traditional economic players move within the right to space. They don’t cross space, they don’t generate too much, or uncontrollable externalities, and so on.

On the other hand, it looks like there is another, also something happening in the other direction that is the direction of the wholes: the small pieces, the small elements that, to some extent, need to change their posture towards participating in the economy. So, let me be more clear. On the other side of the spectrum versus the global policymaking, for example, or the national policymaking, we have organizations that focus more increasingly on their boundless contexts, like the new trends we are seeing in localism, for example. But in general, the question that we raised in this tweet and conversation was really about: how do you develop an approach to direct in this transition, that is really complexity friendly, is based on accepting these competitive dynamics that we see happening now in the world? There is this concept that we mutuated from Jack Murphy when he speaks about strategic disconnection. And also, the point here is, how much of this transition and the work you are doing deals with today, this global top-down level, and how much instead deals with changing, driving values, and changing posture of the organization towards things such as disruptions, risk, and participating in a more interconnected, but at the same time, more competitive economy and system?

Bill Baue:
Yeah, I think that the question that you ask is fundamental, and it actually sort of hits the target, in the bull’s eye in terms of how we at r3.0 think of ourselves and the questions that we grapple with. So, I think in order to answer your question in a way that people can really wrap their head around, I think they’re sort of two components of your question. One is sort of what are these thresholds and sort of what’s the conceptual thinking behind them? And then the real core of your question is who is it, or what process is it that we determine what these thresholds are? And then how do we implement respect for those thresholds in the real world in organizations? And is that something that isn’t imposed from above? Or is it something that emerges from below? So, that’s sort of the structure of how I’ll answer your question.

From the thresholds and allocations perspective, the idea of sustainability thresholds is actually sort of a long-standing notion that goes all the way back to 1713. The first sort of instance of the notion of sustainability in the literature was from von Carlowitz, was a German mining minister. And essentially, he noted that the mining sector was relying on cutting down huge swaths of forests in order to coke the materials that were mined. So, you had to fire what was mined in order to make it usable iron and such. And they were noticing that there’s going to be no forests left. And so it’s really at the point at which we, as a culture, realized that we were using resources unsustainably, that the whole notion of sustainability entered our consciousness. So, sustainability is only a concept that’s relevant when we start to enter an unsustainable sphere. So, the notion of thresholds has long been in our consciousness, but it’s not been particularly broadly accepted.

I’d say the next important sort of milestone there is the 1972 Limits to Growth report that came out from the Club of Rome and Dana Meadows, was a lead author of that with her husband, Dennis Meadows, coming out of the work of MIT and the complexity science and systems dynamics that Jay Forrester had established there. And what they noted is they modeled how the world functions and they recognize that our economic models, our economic system would soon use up all of the resources that humans rely on, and that we can access in any kind of economic way. And that would lead to a kind of collapse, if you will. They call it overshoot and collapse. And they noted that resources have what they called carrying capacity. So, there’s a capacity at which the resources can handle a human population that relies on them, or even other species of populations that rely on them. And if those species overuse those resources, then that system collapses. So, that ties into your notion, Simone, of collapse.

If we fast forward, I think that the next key sort of milestone was a couple of years later in 1974, when Barbara Ward, with the UN talked about the notion of inner and outer boundaries. So, outer boundaries would be ecological thresholds, or the amount of natural resources that humans rely on it. But there’s also an inner limit. There’s essentially a boundary of social resources that we need to continually generate. We humans need to create human or anthropogenic resources on an ongoing basis. We have to continually regenerate these resources in order to support our well-being. So, folks may recognize that notion of inner and outer limits, in the sort of visualization of that that came about in 2012 with Kate Raworth talking about the doughnut, her work built on the earlier work of the Stockholm Resilience Centre and its planetary boundaries that focus specifically on the ecological ceilings.

Both of those threads of work, were prefigured by the work of one of our colleagues, Mark McElroy, who basically said, “Well, if these thresholds exist in the real world, how do you apply them at an organizational level, at a company level, or at a municipal level, if you will.” And that’s where the question of allocations comes in. That’s a concept that was really established earlier on by Mathis Wackernagel and Bill Reese from the ecological footprint. They basically worked with the concept of carrying capacity and said how would you apply that to the land that’s needed to support a population. So, what Mark McElroy did is he just applied that concept across the board that they’re carrying capacities to all the capitals, so to speak, or the vital resources that we rely on. So, not just ecological resources, but also social resources. So, this is the conceptual grounding of our work at r3.0 is that these thresholds exist in the real world. And so, we humans, if we’re going to survive and thrive, we need to work within or respecting those thresholds.

So, that’s sort of the conceptual foundation, if you will, in terms of the question of who is it that sets those thresholds? The first thing to say there is that there are thresholds in the real world whereby a system will hit a tipping point, and it will collapse. That’s fairly well-established. Anybody who drinks wine and appreciates the alcoholic content of wine, they’re relying on a population collapse of the bacteria eating the yeast that creates the fermentation for alcohol. So, collapse is not a bad thing altogether, at least for people who enjoy fermented beverages. So, I think that collapses or thresholds that mark tipping points exist in the real world, but how do we humans understand that? Basically, we have to look at the evidence and say well, where do we think that threshold exists? And so for example, I mentioned earlier the Stockholm Resilience Centre and their notion of planetary boundaries. What they did is they looked at that evidence from the physical sciences, from climate change science, from biodiversity science. And they basically said well, we can have a pretty clear understanding of where that tipping point threshold is. And let’s set the planetary boundary short of that. Let’s basically say the threshold is out here at the ecological ceiling, in terms of Kate Raworth’s language, let’s set our planetary boundary to give ourselves some leeway or some buffer, if you will.

So, actually, the planetary boundaries aren’t thresholds themselves, the planetary boundaries are a human, sort of an intelligence agreement that we actually set our boundary well before the actual tipping point threshold. So, this is all by way of saying that these thresholds are human understanding of what the boundaries of a wise system or a safe and just operating space, to use the language of Stockholm Resilience Centre and Kate Raworth. So, this gets at your question, Simone, is sort of “who’s responsible for making those determinations?” And we at r3.0 have set up what we call a Global Thresholds and Allocations Council that would pull together scientists from around the world to give their input on that, that mirrors some work that’s happening with the Global Commons Alliance that’s following a fairly similar path. But really, that knowledge base can be established globally. But the implementation of it really happens at an organizational level or even at a bioregional level.

So, to sort of give an example of how we are actually pursuing this, from the bottom-up perspective, r3.0 is a convener of a bioregional collaborative here in the Connecticut River Valley in the United States, where I live. We’ve launched this collaborative in a specific bioregion. And a bioregion is an area that’s defined by its ecological boundaries, like watersheds, and also its cultural, heritage, and cultural expression that aligns with those physical and ecological attributes. So, we’ve actually launched a project where we would identify these carrying capacity thresholds on a bioregional basis, and then engage using some of the work of Elinor Ostrom and her work on governing a commons, and in particular, her eight core design principles, using those principles to engage with the inhabitants of this buyer region to decide what are your priorities. So, the punchline here, Simone and Stina, would be that we believe that those threshold determinations can be made at multiple different scales, and really, at the scale of significance or the scale of relevance for where they’re being implemented. So, I guess we believe that there could be top-down, but we certainly wouldn’t say that top-down, would trump, if you will, more bottom-up grassroots approaches.

Simone Cicero:
Right. Because we were frantically sharing ideas with Stina in the background, and maybe here, I’m coming up with another reflection, where also Ralph can chime in as well. So, the point that this conversation raised, in my point of view, is a bit related also with a leading topic of our research, that is the idea of organizational entanglement. And also the idea that our current model of organizing sees the organization as completely disconnected from the community and the landscape. This idea of a specialized society where basically, organizations are all about intangibles. And in the meantime, the tangible side of the economy, it’s pretty much left as a consequence of our consumption patterns and so on. And on the other hand, if we think about entangling organization in the landscaping, the community, it makes more sense probably, to some extent, to really connect an organization to the impact it’s having on its reference, again, context, communities and landscapes. But my question will be more into what happens when we try to embrace this idea of sustainability, but we try to bring with us also the idea of the specialized, globalized society, where basically everything is traded, everything is tradable.

And then we end up with things such as trading carbon, for example. That is a good example of how you try to connect these two levels: you establish the threshold, and then suddenly trading becomes the way for organizations to bypass those thresholds. So, they point here, it seems like there is a bit of a friction between this idea of we put threshold, and then we financialized everything, so that is subject to trade, and we can continue with our idea of a specialized society, globalized where organizations are not really connected with their context. And so the question maybe, for you is also in terms of finance: what is the role of finance? What is the role of trade, which is an expression of global interconnectivity? Versus this clear expression that I feel when you were talking, Bill, of the need to re-entangle our organizing in our bioregion, for example, or, the need to see that our approach to organizing as something more, I would say, local. So, how does this dynamic work?

Ralph Thurm:
Let me pick up that first part of your question. And then you’re also more specifically asking about things like net-zero, or the role of finance in this, which Bill can actually pick up later on. What I first want to do is just to let us together realize that the sort of disentanglement that you were describing, is actually what also happened in the sustainability field. When sustainability started with the Brundtland report in 1987, and of course, it started earlier, but that was the first real document around sustainable development. There was this very great quote that we are responsible in our doing, in taking into account also that future generations have the same chances that we have in our generation. And technically speaking, that is really about intergenerational equity, which is one of the major preconditions of sustainability.

And what happened, since the Brundtland report came out is exactly that, what you were describing as a sort of disconnectedness of the sustainability field with the real world. Because what happened, we abused a paradigm that was around people, planet, and prosperity. And by that mainly around humans, into people, planet, and profit, to make it fit better to corporations. We totally neglected the idea of intergenerational equity. Ask any organization today, what are you doing on intergenerational equity? You’re looking into questioning faces: “I have no idea what you’re even talking about”. And still, they have a sustainability strategy, and they have a sustainability report and so on and so on. And why is that? It is because we actually schmoozed ourselves into a — what I often call a comic version of sustainability, which is called ESG, Environmental Social Governance. That’s what it stands for. And the order also says, okay. Environment discussions came first, then discussions about social and then finally discussions about corporate governance.

And that was really done because the financial world wanted something simpler. I can still remember from my GRI time that when we were talking about, I think it was the second generation of GRI guidelines that had round about 70 to 80 indicators. And we were talking to people from the financial sector, they were saying, “Okay. So, I’m dealing with two different industries. Each industry has about 100 organizations that I have on my watch list. So, you want me to look at 200 companies times 70 indicators? Are you crazy? Give me one indicator. No, give me one sustainability indicator, or give me two, but no way I’m ever going to capture 70 or 80 indicators times 200 companies every year.” And that is how ESG got born and at the same time, sustainability started to get killed because what I described, the intergenerational equity bit of it, the prosperity bit of it totally got skipped from the agenda. And that’s what we have right now and also in measurement. We don’t have sustainability reports, we have ESG progress reports. We don’t have sustainability benchmarks, we have benchmarks of those who say, who are best in class of those who just became a little bit less bad in what they did.

So, when we talk about sustainability today, we need to just capture that we’re talking about a very reduced idea of sustainability, called ESG. And that that doesn’t really connect to sustainability at all. And that’s also a huge part of our work at r3.0 actually captured through the idea of thresholds and allocations, and therefore, it is such an important part of our work. But I think what I wanted to say is that I showed that there is a parallel, that the sort of disentangled world also is a disentangled sustainability world, and that we’re actually not dealing with sustainability. We’re dealing with less degeneration in many parts of the world. And not about the dividing line of sustainability where you cross from less than degeneration to actually regeneration. And we’re doing very little in that part. And the majority, I would say, 95%, of everybody, calling himself a sustainability expert, is an ESG progress expert, and sometimes not even that. So, that is sort of a starting point. And, Bill, I think you can say a little bit more about the idea around net-zero, about the role of finance, and sustainable finance.

Bill Baue:
Thanks, Ralph. And I think I’ll also sort of tie in this notion of organizational entanglement, building on the sort of entanglement or disentanglement, that you’ve been talking about. But I think, Simone, when you ask about sort of carbon trading, I think there’s two layers to look at there. One layer is the carbon itself and how one accounts for that. And the next layer is this assumption that if you put a price on something that, that will help manage it, I think both of those are complex and problematic in the way that they’re being dealt with. So, I’ll deal with them sort of one at a time.

The net-zero idea or the idea that what we want to come to is net-zero carbon emissions, so that we’re essentially creating the kind of dynamic balance that the natural world has achieved throughout the Holocene. Which is the sort of Goldilocks era that human civilization developed during was this period of global temperature stability, where we kind of magically achieved this zone of comfort where human societies and other species could thrive. So, we’re way out of whack with that. And we’re getting more and more out of whack with that, obviously, primarily from the emissions of greenhouse gases from fossil fuels. So, we need to get back into that dynamic balance that the natural world says. And so doing that we need to get to our carbon emissions and our carbon sequestration balancing each other out. So, that’s the concept of net-zero. And the problem with net-zero is that, twofold, it assumes that you can sort of count and account for all of that carbon in a disentangled way that sort of sorts out the inherent entanglement between companies. That’s a complex endeavor in itself. It’s possible to do that, but it’s very difficult to do, particularly with the conflicted interests that we have.

And I can just point very quickly to Shell’s recent net-zero announcement that everybody was trumping about when it first came out a month or so ago. And then as soon as people started peeking under the hood, they recognized that, that Shell wasn’t actually calling for reducing its carbon emissions. It was just calling for waving a magical wand and creating carbon sinks sometime in the future by using several Earth’s worth of land to plant trees to suck up that carbon. So, that’s just an example of that side.

On the financial side of things, I’d say that the Achilles heel there is the assumption that the resources that are being monetized by putting a price on something, all of a sudden that resource becomes fungible, or tradable, or transferable, if you will. And the core problem with that is that resources, you may be able to trade resources, but you can’t trade, the carrying capacities of those resources, or the thresholds of the resource stocks themselves. We can trade when we’re dealing with the flows of resources, but we can’t trade in terms of the stocks. There’s a non-fungible zone that we just need to respect. And anybody who balances a checkbook knows that you need to live off of your income, that you can’t dig into your principal if you want to keep a balanced checkbook. So, in other words, you can’t go below your zero balance. Those are a couple of the problems that I see in the realm of carbon trading.

Stina Heikkila:
Thanks. Let me see if I can come back from the disentanglement thesis and maybe go more into the direction of — we’re talking a lot on this system level, and the system thresholds, and allocations, and so on. So, I’m curious about the small pieces in the system. And of course, you’re really careful when you’re talking about context or sustainability. And I know that we also mentioned in the beginning of the conversation, the fractal economy. So, I’d love to hear how this ties together. So, if we imagine that we have many small pieces making the whole, may be of different sizes, but in a way, if one force becomes too disproportionate, the whole system can be put into disequilibrium. So, how should we think about these smaller parts of the system and the different dynamics that are taking place? And, I guess, coming back to those, in multiple contexts, also, that you mentioned between organizations, no one is operating in a void. So, there are many relationships taking place, both with the landscape and with different organizations. So, I don’t know if there is a clear-cut question, but maybe if you can expand more on what you mean, when you, for instance, talk about a fractal economy, and how that can help us understand where regeneration starts. And how your framework is conducive to that.

Ralph Thurm:
Yeah. And yeah, Ralph here. I’m just going to, again, take a first stab at that, and Bill can chime in. I think one of the things that has really been essential in our thinking right from the start, is that notion of multiple levels, in which economies function. And we established that in various pieces of our work, where we are calling these different areas, nano. So, the personal level where things happen, the micro-level, which is normally an organizational level, and or meso level, which, depending on where you come from, can have different sorts of boundaries — there’s an industry, on an industry-specific level, there is a habitat from a geo level, and there is maybe from a financial sector perspective, the idea of a portfolio. All of these are conglomerates of different micro-level organizations led by nano level personnel, of course. And then there’s the macro level, which is really the economic, ecological, and social systems level.

And just recently in our work, we actually added a Supra level where all of these things come together, actually to define well-being through the creation of system value. So, we think through these different levels in all parts of our work, and then in our value cycles blueprint that you’re also citing in your white paper, we actually referred or you referred to our work in the value cycles blueprint, where we wanted to bring together those two components of questions. One was, what is of value really, in a regenerative and distributed economy? And what sort of economic system design would actually be needed? And that was more of an answer towards that sort of newly created buzz around the idea of a circular economy as sort of the end goal, which we doubted just simply from our earlier sustainability perspectives. And knowing that on these different levels, that these multiple levels, an economic system design is not just always circular.

So, we know that certain parts are always linear, we know that some parts are circular, some plots bringing the timeline into that perspective are cyclical. And we also know that there are spiral aspects to that. So, an economic system design that is only focusing on the design of a circular economy is dead on arrival, from our perspective, it needs to capture all the different levels of development as well. And that is why we came up with the idea of fractal economy that combines all of those aspects in the best possible way as actually nature does. So, from that perspective, our work is actually really looking to combine those different levels also, in the design of an economy.

And then, of course, the idea around thresholds, and then especially also allocations, is actually a crucial one in making the right allocation decisions. So, we have this idea of, there’s always a micro-macro link in the design of an economic system that needs to be taken care of. And that is also actually what since the 2000s, when stainability context was actually designed at GRI and was first implemented in the second version of the GRI guidelines, and is carried through until today, really got its hold that it needs to acknowledge the limits and demands are now called thresholds and allocations, and actually managing such a fractal economic system design, and the economic system then as well.

Bill Baue:
Two quick things on top of that, Ralph. So, just building on the idea that you establish that the Global Reporting Initiative sustainability context principle, established the idea of the micro-macro link between organization-level impacts, and systems-level outcomes, that’s sort of what defines sustainability. And also your notion that that’s what brings about the need to allocate responsibility for meeting those thresholds. The notion of allocation, what I always like to say is that, we are always allocating resources. Every time that we buy something, every time that a company purchases land to mine on, for example, it’s allocating resources. So, allocation is always happening. It’s whether it’s being done consciously, and in a way that takes justice, fairness, and proportionality into account.

What it does, though, is that allows us to scale down to the level of micro-enterprises, for example. So, with an allocation system, Stina, you could allocate resources to a very small organization or even to an individual level. We could certainly allocate and there are apps that do this, what’s an individual’s allocation of the carbon budget, if you will. The question really becomes how do you do that in a fair way where I’m not over-allocated resources such that somebody else gets under-allocated those resources. I think that also happens between different scales and also different parts of an economy, different resources, if you will. So, I guess two things that I’ll end by saying is one: the notion of system value is predicated on the idea that we’re creating financial value right now. So, we capitalize financial value in our economic system by decapitalizing the natural and social capitals that we rely on.

So, in other words, we are draining value from the system in order to concentrate value in finance. And that’s just insane. We really need to be focusing on creating value at a systems level and distributed throughout that system in a fair and just way. And I think I’ll actually end there. I was gonna say one more thing about multi-level selection. But I think that maybe goes too far down the rabbit hole, or I’ll see if we can address that in a future question.

Stina Heikkila:
I think we’ll get there. We’ll get there. But thank you very much, because I was going to ask about the individual level. But you came ahead of the question. So, I’m going to pass over to Simone for his follow up.

Simone Cicero:
In this conversation, we are having, there’s a lot that resonates with some topics that we have been also touching upon with some of the guests on this podcast on. And I was thinking mainly two topics. But one conversation we had with Joe Norman, for example, that was around this idea of subsidiarity, that is making a point around that recently. So, the idea that we should be dealing with needs, and pros, and key processes at the smallest level, let’s say, the smallest context possible. And also you can think about, for example, what is the layer where you deal with our food production, our energy, our education, our welfare, for example, these are economies of essentials that we often talk about. And if we look at fractals, essentially, we started to think in terms of, for example, outer key and strategic disconnection and self-produce your own key elements of the economy. And maybe if I can share a reflection, we’re talking about organizations. And when it comes to organizations, these will project a whole lot of new challenges into the organizational sphere that deals with local.

So, normally, at the moment, at the local level, we don’t really do much organizing, maybe we do some administrative organizing, but just keeping the roads clean and the aqueduct functioning, maybe. But it seems like we should be looking into a whole lot more of the economy at that scale. And so that’s the organizational challenge, but there is also quite a political topic because — and this is maybe a good start for the closing part of this conversation. But what do I mean with the political aspects? I mean, that seems that we are looking a lot into some kind of pre-modern, or even modern, maybe, ways of managing and organizing things that has been completely transformed and or destroyed by these post-modern economic systems that we have, this is completely disentangled. So, my concern is probably that there needs to be some political disconnection from the situation we’re living in now, and I think really a sustainable economy and organizing. And it seems that it inks a lot towards traditional ways more than globalized, postmodern ways that is expressed, for example, things such as the SDGs.

Bill Baue:
Yeah. Well, I think I’ll take first stab at this one. And this points to a conscious decision that we made at r3.0 in 2019. And that’s when we had several of the people that you’ve mentioned at the beginning at our conference. So, Nora Bateson as you mentioned, I think actually that might have been in our pre-conversation, or maybe you mentioned at the outset that you’ve had a recent conversation with Nora about trans-contextuality. But in particular, a session with Kate Raworth and Joe Brewer, in particular, where Joe laid out the work that he was doing at the time around bioregionalism. And essentially recognizing that this ties into our earlier conversation that sort of the top-down approach of solving issues was proving to be unsuccessful, and even maybe part of the problem, you might say.

And a lot of that is I think, due to the political power dynamics that we have come to believe in, in the modern world, or the post-modern world. Essentially, the belief that we can achieve progress through our faith in modernism. And that may or may not be. The evidence is suggesting that our pursuit of progress is actually what’s killing us, if you will, if you sort of believe the empirical evidence. And I’ve been introduced to the work of Bruno Latour recently, who questions whether modernism actually exists or whether it’s a myth. But I won’t go down that particular rabbit hole, but rather just focus on this question of bioregionalism that Joe Brewer, really — he reasserted after we had been introduced to that idea by John Fullerton and in 2015. So, we’d been stewing on it for four years.

And we made a commitment after our 2019 conference, to extend the work that we had been doing, which was largely from a top-down perspective of trying to change things at the system’s level. And we consciously moved into working at the bioregional level and organizing to fill that political vacuum that you’re talking about, Simone, that essentially, there are a lot of political decisions that get made in say, a government context. But there’s less organizing peer-to-peer in a more movement-based approach, recognizing that we can’t simply rely on the power structures that exist in a top-down way that are actively creating the circumstances of collapse, we have to work in an antifragile way that increases resilience on a bioregional or localized level. And so it’s really tapping into that idea that you mentioned, that Joe Norman talks about of subsidiarity of really recognizing where in the system is an impact felt, and engage in that level of the system to try and make the system healthy, make the system regenerative, if you will. So, I think that we’re still engaging with the power structures in a top-down way. But we really diversified our portfolio, if you will, of engagement to the more localized level, recognizing that it’s how we work at an organizational or a habitat level that ultimately aggregates up to the big picture.

Simone Cicero:
Right. I mean, I was reflecting to something that Cameron Tonkinwise said a few months ago now on a podcast when he said we are facing the paradox of wanting to “manage our way out of managerialism”. So, to some extent, I believe, it’s a paradox that we cannot solve. But from what you said, and the parallels you’re doing with the concept of subsidiarity, we’ve been talking about, it looks like we need to some extent, a political movement around organizing at the bioregional level, and to some extent, I would say, cut to the energy, let’s say that flows from our communities into the global — post the global trade systems that super-specialized trade systems that we seem to be living comfortably within.

So, I see the political challenge and I think we need to start to see that and also start to embed these into our way of organizing. So, probably, and then I will leave the floor to Stina for some further considerations. But my learning here, the point that I bring home is that the work you’re doing, it’s also great to let go people realize that their compass of organizing should point much more into their local essential needs as a way to steer effectively a paradoxical system, that we now seem to be living within, taking responsibility to some extent. But I will leave to Stina to maybe elaborate on this.

Stina Heikkila:
I’m a bit afraid that I might open Pandora’s box. But when I was listening and I’m thinking about the thresholds and like you were mentioning, our intelligence points at this moment. But then we also know that it’s evolving, science is evolving, and our understanding is evolving. So, how would you deal with someone who is very optimistic, maybe of the role of technology in influencing the thresholds that are currently from our best understanding in place, and are of course, dynamic as well? If you have any quick reflections, and I don’t know if it’s possible in such a big question, but would be interesting to hear.

Bill Baue:
Yeah, I’ll take a quick stab at that one, Stina. I recently was in a Twitter exchange with Gregory Landua, who certainly, I would imagine some of your podcast audience would be familiar with his work. Right now he’s the chief regeneration officer at Regen Network, which is a blockchain solution that’s advancing regenerative agriculture. And we were basically talking about carrying capacity and can you increase carrying capacity. And one way to increase carrying capacity would be through a human technology intervention. So, at the field level scale, essentially, Gregory was arguing that we can actually increase the carrying capacity of, say, a field by enhancing its soil carbon content. So, sequestering more carbon in soil, not only helps solve the climate crisis, but it also makes for healthier soil. And I actually think that, that Twitter exchange sort of introduced maybe more perception of division than then actually exists.

At least upon reflection, I see that I was arguing more at the macro level, or the system’s level, where I think that our attempts to increase our carrying capacity, or sort of increase the threshold, if you will, often introduces what William Catton, author of Overshoot calls, phantom carrying capacity. So, it’s the illusion of carrying capacity, but you’ve actually just expanded the ability of a system to function by over-taxing it. So, I guess the real question is does technology serve to actually enhance the resilience and the health of a system? Or is a technological intervention, simply kicking the can down the road with what you might call the illusion of progress, to quote one of our steering board members who’s recently passed away, Brendan LeBlanc said there’s nothing more dangerous than then no progress. Or the only thing more dangerous than no progress is the illusion of progress. So, I think that’s a quick response. And, Ralph, I don’t know if you’ve got anything to add on to that.

Ralph Thurm:
I just simply don’t believe that technology is the lifesaver. I think I’ll just leave it with that one sentence because it offers so many different directions, and it needs the humans to understand and to manage this. And so from that perspective, technology might be helpful in certain ways. And in other ways, it might not be. So, I don’t believe in technology to be sort of the focus point of saving humanity.

Simone Cicero:
Right. I mean, I tend to really agree on that. And we have been grappling with this technological question forever. But we refer sometimes to the work of Yuk Hui, who speaks about these local cosmo-techniques. So, the idea that we can develop a local way to, I would say, subjugate technology to our cosmology, to our ways, of looking at our role into the universe. So, I think this is a brilliant way of framing it. And I really suggest everybody on this podcast to dive deeper in Yuk Hui’s work, this philosopher from Hong Kong. But coming back to you for the closure, I think I want to highlight a few points that I bring home from this conversation that technology maybe won’t save us like Ralph said, but maybe organizing can. And it’s really about looking at organizing through the lenses that you have been bringing up. So, this idea of fractals and multiscale application, and also mastering maybe finance in a way that you speak about multi-capitalism, the idea to project a multiplicity of identities and possibilities and contexts into our otherwise very monolithic technique that humans have been creating, this idea of capitalism and finance.

So, I think it’s really a call to — I bring home really a call to be attentive to thresholds and these global conversations. But also on the other side, treat this equation, let’s say, with enough energy and enough attention and responsibility towards organizing at every level, not just at the global one, but also at the local one, the bioregional one. So, to step in, in terms of almost as a political choice to become organizers at this level. And I think this is a very good point to end our conversation. So, as a closing point, maybe if you want to add anything that it’s important on your site these days, so news or particular initiatives that you want to refer our listeners to, and of course, where people can connect with your ideas and your work more specifically.

Bill Baue:
Sure, I’ll take a first crack at that on maybe the idea side of things, and leave it to Ralph to maybe announce some of the ways that the folks can touch base with us. On the idea side of things, Simone, I think that the idea of cosmo-localism that we came across through Michel Bauwens and the Peer2Peer Foundation is something that we embrace. And it also ties into the notion I mentioned earlier of multi-level selection, which is from the field of evolutionary biology, and it basically says that natural selection doesn’t just happen at the species or individual level, that actually selection can happen at the group level. And so groupings of individuals can tap into behaviors that are predisposed towards being selected by evolution to be successful. So, we certainly embrace that approach. And that’s work that we’re increasingly integrating into our writings. But maybe that’s a good bridge over to Ralph to share some of the ways that folks can connect with us here at r3.0. So, I’ll just give my thanks to the two of you, Simone and Stina, for hosting us.

Ralph Thurm:
Yeah, great. Thank you, Bill. I think I introduced our organization, r3.0, which is actually a not-for-profit organization, producing global public goods that are available for everybody. You can download them from our website, you don’t even have to leave behind an email address. So, we’re not harvesting any data from those that download our work. And r3.0 is a rather small organization on purpose because we’re sort of creating those rings of supporters around us. We have an advocation partner network of about 100 organizations already that are absorbing the know-how of r3.0, and introducing that into, or implementing that into their own value propositions to their networks and their clients. And by that, we wanting to create a snowball effect from inside to outside to the rest of the world. But also a feedback process with our advocation partners to continuously work on improving that work ecosystem that we have. So, that’s an open invitation. We also have an academic alliance and we’re also thinking about adding two more rings around our planet, one around the investment or financial sector or investor sector. And then at a later stage when our know-how is even better known also a government network. So, that’s going to happen in the future.

Right now, one of the most important things that your listeners may also wonder, how are we going to implement those thresholds and allocations. And we talked about that, already a little bit around the Global Thresholds and Allocations Council and Network Idea. But we’re also doing a very practical project right now with the United Nations Research Institute for Social Development Project that we call Thresholds of Transformation, where we are actually piloting with around about two dozen organizations, from the for-profit sector, but also from the social and solidarity economy sector, a set of indicators that are thresholds and allocation based, just simply to also breakthrough that idea that the non-activity doesn’t have to do with the fact that this cannot be done, or it’s too complex or too complicated. So, we’re really wanting to prove that it is possible. And there will be final results of that project coming out by the end of the year, actually, through UNRISD.

And then last but not least, like every year, we’re having a yearly conference, the 2021 conference will happen September — 7th and 8th of September. The website was just opened, and we announced it in our newsletter. So, that is also sort of a yearly check-in point into the news developments around signs and behavior, finance and growth or anti-growth or degrowth or re-growth, whatever you want to call it. The discussion around values and around fractal economic design around education and around governance. So, that is a very, for us, it is sort of a culmination point on a yearly basis of all the work that we’re doing, and a good chance for everybody who wants to catch up to take part in that conference. So, thanks, Simone and Stina, for having us. Over to you for final words.

Simone Cicero:
Thank you. Thank you both. I think this sounds like the start of a conversation more than a closure. And I’m sure — I’m happy that our listeners are now more aware of the work you’re doing and maybe they can really contribute to these important conversations. So, thanks very much about this. Stina, do you want to add something more?

Stina Heikkila:
No thank you. It’s been a great conversation and looking forward to sharing it with the listeners.

Simone Cicero:
So, thanks, everybody. And to our listeners, we’ll catch up soon.