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Chapter 2
What Political Economy Adds
to Transformation Research
The continuous striving for improvements in material welfare is threatening to surpass the
limits of the natural resource base unless there is a radical shift towards more sustainable
patterns of consumption and production and resource use. Persistent inequalities and
struggles over scarce resources are among key determinants of situations of conflict,
hunger, insecurity and violence, which in turn are key factors that hold back human
development and efforts to achieve sustainable development. Business as usual thus cannot
be an option and transformative change is needed. As the challenges are highly interde-
pendent, a new, more holistic approach is needed to address them.
UN System Task Team on the Post-2015 UN Development Agenda, Realizing the Future
we Want for All (2013: 1).
Particular narratives are produced by particular actors and so co-construct particular
pathways of response. Some are dominant; shaped by powerful institutions and substantial
financial backing—these are the ‘motorways’that channel current mainstream environment
and development efforts. But these can often obscure and overrun alternatives; the smaller
by-ways and bush paths that define and respond to different goals, values and forms of
knowledge.
Leach, Scoones, und Stirling, Dynamic Sustainabilities: Technology, Environment, Social
Justice (2010: 5).
So, if the changes envisioned by the 2030 Sustainable Development Agenda are
supposed to be transformational in quality, how do we work toward this quality?
This chapter provides the analytical perspective of a system-thinking, environ-
mentally aware political economist with a sober appreciation of technological
innovation. It defines two concepts and one heuristic that lie at the core of this view:
engaging with the materiality of ideas and radical incremental transformation
strategies enables a repurposing of our current development systems. This ana-
lytical framework emerged from my transdisciplinary quest to find out why humans
collectively create societies that individually they would like to change. This quest
has always been connected with sustainable development: no one I know is not in
favor of peace, of letting nature thrive and enabling every person and animal to live
a life of dignity. So why is this not possible?
My search for answers led me to combine academia and research with political
engagement and activism. For a long time it seemed that this made me something of
©The Author(s) 2016
M. Göpel, The Great Mindshift, The Anthropocene:
Politik—Economics—Society—Science 2, DOI 10.1007/978-3-319-43766-8_2
13
an outsider: too keen on systematic and nuanced argumentation to fit into a
media-driven world of punchy slogans and easy scapegoats, but also too interested
in changing the real world to become an expert who dug deep into one scientific
discipline. Given the rapidly growing popularity of transformation research over the
last five to ten years, in particular in the field of sustainable development, my notion
of being an outsider has fundamentally changed: transdisciplinary approaches have
become the new thing for tackling the persistent problems that sustainable devel-
opment strategies face. This means that scholars not only connect different scientific
disciplines, but also integrate the insights of practitioners on the ground. The goal is
to create robust knowledge that not only refines existing theoretical hypotheses
about how humans and the world work, but also has relevance for the people
enacting change on the ground.
The term ‘transdisciplinary research’was first introduced in 1970 by Erich
Jantsch, a Club of Rome member, to encapsulate the notion that inherited scientific
knowledge needs frequent confrontations with the ‘real world’in order to test,
amend and form new assumptions. Only with such an approach would science
support the ability of a society to continually self-regenerate. This approach has not
been very popular in the Enlightenment-influenced sciences, however. Here, the
dominant ideal is of the positivist paradigm whose goal and premise it is that
universally true ‘laws’governing human behavior and natural evolution can be
identified and fit into quantitative models and experiments with which future
developments can be predicted and managed. This still does, of course, require
researchers to make decisions about what they observe, how they quantify aspects
that cannot simply be tallied, and how they interpret their observations. This is why,
in scientific terms, paradigms are divided into assumptions that are epistemological
(what can we know), ontological (what can be said to exist and how we group those
things), and methodological (what guiding framework is suitable in solving a
problem). Some scientists also add axiological aspects, encompassing the choice of
relevant values. Depending on how these various aspects are defined, a single event
can be interpreted very differently. Likewise, proposed solutions for the problem
will vary significantly.
The transdisciplinary paradigm differs considerably from positivist ones in its
epistemology. For example, it does not involve the ambition of finding universal
laws that could be true forever. In its ontology it is constructivist or reflexive and
thus does not see ‘reality’as something objective that can be observed by
researchers at a distance but instead as something intersubjectively created by
sense-making actors and thus subject to change. Meanwhile the current state of
reality will also impact the way humans—including researchers—make sense of
how the world objectively ‘is.’As a result, no researcher or truth claim can declare
itself separated from reality. Our world, as quantum physics affirms, is constantly
evolving. German has a great word for ‘reality’to capture this information-based
interplay: Wirklichkeit.Wirken means to ‘seem’and ‘appear’but also ‘have an
14 2 What Political Economy Adds to Transformation Research
effect’or ‘operate.’The word ‘reality’on the other hand has its Latin roots in the
term ‘res,’which means ‘thing,’‘matter.’
Areflexive research approach therefore views humans as both the object and the
subject of making history: today’s interactions do not happen in a vacuum but under
the circumstances created by us and the generations before us. As a consequence,
humans experience individual freedom within frameworks for action laden with
beliefs, norms, social roles, typical procedures, rules and distribution patterns that
are not necessarily of their choosing but still shape their sense-making and
behavior. Thus, my personal opinions and behavior are influenced by my sur-
roundings but also influence those of others with whom I am interacting, my
counterparts and observers. And humans are arguably the only species on the planet
that can apply reflexivity in order to discover, assess and creatively work with or
against the frameworks for action that we encounter.
This point was foregrounded in parts of the 2013 World Social Science Report
(WSSR) with the introduction of the concept of ‘futures literacy’:
The complexity of these processes of transformation raises a number of questions, most
notably about people’s capacity to imagine futures that are not based on hidden, unexamined
and sometimes flawed assumptions about present and past systems. ‘Futures literacy’offers
an approach that systematically exposes such blind spots, allowing us to experiment with
novel frames for imagining the unknowable future, and on that basis, enabling us to critically
reassess actions designed in the present (ISSC and UNESCO 2013: 8).
Not everyone within the transformation research community works with a
transdisciplinary approach and reflexive paradigm. The community combines a
wide array of scientific disciplines and is still sorting out where exactly paradig-
matic agreements lie. So within this book I pulled together the work of leading
scholars who do at least reject the positivist epistemology and ontology that one
finds in the mainstream economic paradigm and its methodological individualism.
In this paradigm, humans do not reflect on more than the costs and benefits of the
choice set with which they are confronted. So each person in their economic system
behaves similarly (representative actors), regardless of where they happen to live.
This is very convenient because individual behavior assumptions are aggregated
into extrapolations of how the system will work as a whole and what knock-on
effects it will have—e.g., the prediction that markets will balance themselves.
However, even within allegedly objective, positivist/standard economics, it has
been recognized that such additive approaches risk a fallacy of aggregation, ending
in incorrect predictions. For example, American economist Alfred E. Kahn warned
of The Tyranny of Small Decisions as early as 1966. He stressed that market
equilibrium theory must remain cautious about the reliability of its methodological
individualism: small decisions by rationally calculating actors may well lead to
misallocation effects on the macro scale that produce outcomes which the same
individuals would not choose (Kahn 1966: 23). One prime example of this tyran-
nical effect in natural sciences is the way that climate change results from the
cumulative effect of what seem to be negligibly small entities of additional CO
2
emissions made on the individual scale.
2 What Political Economy Adds to Transformation Research 15
The tyranny of small decisions makes perfect sense to those who conduct the
complex system research used both to examine the Earth’s ecosystems and in social
sciences. Here the main thrust of the research lies in understanding relations
between single elements and the dynamics of the whole in order to understand why
single elements behave the way they do and how this might change. As a result, the
emphasis when searching for sustainable development solutions is less on
improving single technological products or economic incentives, and more on
understanding the dynamics of wider socio-technical or socio-ecological systems
(STS or SES) before thinking about which interventions could improve
sustainability.
Most reflexive transdisciplinary methodologies work with what has been called a
problem-driven approach. The research is designed around a specific problem or
challenge that scholars seek to address or produce answers for. Collecting infor-
mation about its emergence, including talking to people, allows mapping which
actors, but also which institutional, technological, economic, environmental, and
socio-cultural conditions are relevant factors of its persistence. From this infor-
mation one can draw a system that is relevant to dealing with the challenge. Often
this system will cut across official demarcations of organizations, sectors, disci-
plines or even nations.
The 2015 OECD System Innovation report explicitly defines ‘system innovation’
as a way of analyzing and innovating that will transgress the boundaries of
established containers: “The appeal of system innovation today is closely linked to
the pressing issue of meeting the ‘grand’or global challenges of today. These
global challenges require policy actions across technological, economic and social
structures and boundaries, as well as national borders”(OECD 2015: 8).
Returning to the Brundtland Report, we realize that this is not really a new insight: The
integrated and interdependent nature of the new challenges and issues contrasts sharply
with the nature of the institutions that exist today. These institutions tend to be independent,
fragmented, and working to relatively narrow mandates with closed decision processes…
The real world of interlocked economic and ecological systems will not change, the policies
and institutions concerned must (WCED 1987: 17).
It seems that such structural change implications were among those demands
considered too radical at the time and that they thus need persistent reiteration. The
transformation and system innovation discourse brings the need for encompassing
structural change to the forefront and to the titles of flagship reports, while slowly
delegitimizing the narrow emphasis on adaptive market magic, money printing and
technological breakthroughs.
To me, this is part of the window of renewed opportunity for sustainable
development. The rapidly growing transdisciplinary transformation research com-
munity could become instrumental in helping to use this window strategically. It
promises the most telling insights into how the infamous integration of ecological,
social and economic dimensions of development can be achieved in practice.
16 2 What Political Economy Adds to Transformation Research
2.1 Digging into Societal Transformation and System
Innovation Research
I begin with a few definitions from influential sources that illustrate what trans-
formation research leaders say about the challenge of turning development toward
sustainability. The Intergovernmental Panel on Climate Change (IPCC), for
example, foresees “the altering of fundamental attributes of a system (including
value systems; regulatory, legislative, or bureaucratic regimes; financial institutions;
and technological or biological systems”(IPCC 2012: 5).
The primarily European Sustainability Transition Research Network (STRN),
founded in 2005, says in its mission statement that “incremental change in pre-
vailing systems will not suffice. There is a need for transformative change at the
systems level, including major changes in production, consumption that were
conceptualized as ‘sustainability transitions’” (STRN 2010).
The German government’sAdvisory Council on Global Change (WBGU)
published the report A World in Transition: A Social Contract for Sustainability in
2011 and defined its viewpoint as follows: “This major transformation will require
technological advances, new concepts of welfare, diverse social innovations, and an
unprecedented level of international cooperation”(WBGU 2011b, 1).
My contributions to the field focus on concepts that foreground mind-sets
because these will inform the purpose that the technological advances, new con-
cepts and innovations of all kinds will serve. And I argue for a Great Mindshift
because I feel that willingness to reassess old assumptions and convictions for their
validity seldom involves the degree of radicalness required. The definition of
transformation proposed by the Stockholm Resilience Centre comes closest:
“Transformation or transformability in social-ecological systems is defined as the
capacity to create untried beginnings from which to evolve a fundamentally new
way of living when existing ecological, economic, and social conditions make the
current system untenable”(Stockholm Resilience Centre 2012). To create untried
beginnings we need new social imaginaries, sets of ideas including values, insti-
tutions, laws and symbols through which people imagine their social whole and
envisage how alternative systems would differ from the current situation—and the
courage to let go of that to which we have grown accustomed.
In order to develop my foundational analytical concepts of how to achieve the
large system change to which the 2030 Sustainable Development Agenda aspires, I
will first present a selection of popular transition research concepts from three thick,
multi-scholar reports that are also seeking answers to this question. They are all part
of the rapidly growing community adopting systemic and transdisciplinary
approaches. At the same time, they differ with regard to certain basic ideas and
departures for research design and can be systematized as examples of ‘the three
camps’within transformation research, distinguished by the disciplinary homes
from which the new agenda is approached: innovation management,natural sci-
ences, and political economy.
2.1 Digging into Societal Transformation and System Innovation Research 17
The three camps are certainly not the only possible systematization of the field;
they are simply one way of approaching issues discussed within the community
itself. Transition scholars should not be upset to come across categories that they
reject but are instead invited to read what follows in the spirit of cultivating
awareness about framing effects that emerge when we (including myself) choose
the lenses and terms with which we decipher the world.
The first camp of transition research tends to contain social scientists with an
evolutionary economics or innovation management background. They are primarily
interested in understanding how technological advances change the way commu-
nities and societies organize themselves and which potentials for sustainable
development emerge from that. Their main unit of observation is the STS. The
second camp is deeply rooted in natural and earth systems sciences and argues that
new knowledge of Planetary Boundaries and ecosystem services needs to be the
reference frame for the identification of solutions to sustainable development. Their
main unit of observation is the SES. Political economists who engage with the
systems frameworks highlight the need to understand unsustainable structural dri-
vers embedded in current economic processes and the effects of increasing mar-
ketization and commodification on systemic governance proposals. They would
apply these to both the socio-technical and socio-ecological relations and thus I
grouped them into socio-ecological-technical systems (SETS).
In line with these different views, the descriptions of transition processes also
vary. Scholars with an evolutionary economics, innovation and management
background tend to speak of repeated learning cycles in which the results of pilot
projects and niche innovations are monitored for their effect and the most con-
vincing ones, i.e., the most resource-efficient, become part of a transformed system.
More recently, aspects of interest and power have been taken into consideration, but
agency remains a less important variable, as the following characterization of “main
features of system innovations”shows: “(1) disrupting or complementary types of
knowledge and technical capabilities; (2) fundamental changes in consumer prac-
tices and markets; and (3) novel types of infrastructures, institutional rules and skill
sets”(OECD 2015: 6).
Scholars with a natural science background will tend to search for dynamics,
feedback loops and tipping points in the reproduction circuits of ecosystems and
develop extraction or pollution targets and principles to help societies stay within
safe operating spaces. Often less attention is paid to the question of how the gov-
erning frameworks and economic processes needed to stay within the boundaries can
be implemented. One important contribution toward this has been the concept of
‘pathways’to show that there are multiple possible solutions to governing a safe
operating space and that each one implies different distribution and participation
patterns. Here the power relations and interests behind the emergence or mainte-
nance of one pathway in particular receive explicit attention (Leach et al. 2010).
Finally, political economy approaches are making their way into the transfor-
mation research community. Traditionally they do not have a strong track record in
ecological literacy or the relational innovations that technology breakthroughs
might engender. The sub-camps that engage with transition research mostly consist
18 2 What Political Economy Adds to Transformation Research
of ecological economists and behavioral economists. They place their chief
emphasis on understanding the emergence and perpetuation of capitalist economic
path dependencies that keep on pushing SETSs out of sustainable development
paths (Göpel 2016). Political economists tend to reject win–win narratives and
argue that both transformational changes and the status quo involve winners and
losers, and that these should be exposed.
Thus, while all researchers foresee that transition or transformation will involve
discontinuities in the current systemic setups and dynamics, their notions of where
transformational changes originate differ. The typical terms for explanations thus also
differ: ‘diffusing technologies’or ‘disruptive innovations’tend to be socio-technical
terms, ‘feedback loops’or ‘tipping points’stem from a socio-ecological view, and
political economists speak about ‘struggles’and ‘structural crises.’
Some scholars explicitly prefer the term ‘transformation’to the evolutionary
term ‘transition’because it makes the conflicting aspects of change more clear. But
when it comes to defining what constitutes a transition versus what constitutes a
transformation, the quotes above demonstrate that there is not much difference.
Here, I use the terms interchangeably and wish to map the commonalities rather
than the differences between the camps. Each of the three larger studies reviewed
here can be roughly grouped into one of the camps. My own bias in what I select
will be that of an environmentally aware political economist who appreciates the
potential of technological breakthroughs.
Given its conceptual leadership in the field, I start by reviewing the 2010 book
Transitions to Sustainable Development: New Directions in the Study of Long Term
Transformative Change edited by John Grin, Jan Rotmans and Johan Schot. It was
the first conceptual milestone of the STRN network mentioned above. This network
and its annual International Sustainability Transitions conferences have been the
epistemic community development locus for the STS camp.
Its work has influenced my second example: the SES-driven WBGU and its 2011
flagship report to the German chancellor, the transition viewpoint of which is cited
above. Here the starting point is less an understanding of transitions as such and more
the avoidance of disastrous climate change (one important Planetary Boundary),
which is deemed only possible with a great transition. To this end the report has a set
of recommendations for policy and science at its core. The Stockholm Resilience
Centre cited above is a strong convening player of this camp; the biannual
Transformations and Resilience conferences are key exchange platforms.
The third study I will examine was published in 2002 as the outcome of longer
discussions of the Global Scenario Group convened by the Stockholm Environment
Institute and the Tellus Institute in the 1990s. The report, Great Transition: The
Promise and Lure of the Times Ahead defines transitions as “complex junctures, in
which the entire cultural matrix and the relationship of humanity to nature are
transformed”(Raskin et.al. 2002: 3). It states that the world is in transition to a
planetary phase and sketches six possible development pathways for the future that
combine narratives with quantitative data. The scenarios differ according to the
degree of change in human values, paradigmatic thinking and therefore policies
2.1 Digging into Societal Transformation and System Innovation Research 19
adopted; economic thinking plays a central role. Discussions of The Great
Transition continue online at http://www.greattransition.org.
Please bear in mind that naturally I can only present selective reviews that are
mere snapshots of hundreds of pages. They will not do justice to the entire work but
instead provide an insight into the core concepts and basic assumptions underlying
these hallmark publications and their respective camps, at best triggering an
appetite for more.
2.1.1 Socio-technical Systems and Their Innovations
The goals of STS thinking as developed in the STRN community could be sum-
marized as follows: how can we understand innovations systemically—and apply
this knowledge for sustainability purposes. It fits firmly into what I call the reflexive
ontology. The status quo of our world is viewed as a constant reproductive process
in which “internal dynamics, external influences and the resulting feedback loops
keep on rearranging the ordering”(Grin et al. 2010: 6). Technologies are therefore
not viewed in isolation but in conjunction with the social practices, norms, and
institutions that enable or hamper their use and influence choices between the
options on offer. Meanwhile, adopting certain technological solutions rather than
others will also influence which institution, infrastructures or business models seem
promising and sensible to make good use of.
The diversity of energy systems highlights these co-evolutionary properties. The
availability of resources on a particular territory and in geopolitical relations with
potential delivery partners will make some fuels and raw materials for harvesting
technologies more desirable then others. The availability of investments depends on
the desirability of proposed solutions, while existing market and ownership structures
will play an additional role in these judgments. Meanwhile, knowledge about the
negative pollution effects and risks of some fuels compared to others will impact
citizen opinions, while consumer acceptance of technological solutions depends on
consumer budgets and habits. Policymakers navigate this set of information and
preferences in order to shape governing solutions that find support from lobbyists and
voters—which will in turn impact geopolitical relations and investment expectations.
Breaking out of a particular system of energy supply therefore depends on changes in
all of these dimensions rather than only in the availability of alternative technologies.
The highly political battles over the ongoing renewable energy transition in
Germany and the fierce opposition of powerful incumbents of the fossil energy
system are good examples of this. Transitions are therefore always “intrinsically
social, full of uncertainties, ups and downs, twists and turns”and should best be
viewed as a dynamic, multidimensional, multi-actor and multilevel challenge that
cannot be planned and predicted in a linear manner (Grin et al. 2010: 6). In order to
get a grip on how to meet this challenge, the 2010 book provides some key
conceptual frameworks of the STRN community and I picked out the two most
popular ones to make my case. They seek to explain and improve understanding of
20 2 What Political Economy Adds to Transformation Research
processes of transformation and thus can be applied for many outcome goals of
transformations, like moving toward a safe operating space or institutionalizing a
Second Enlightenment with a new economic paradigm.
The STS transition research community was born in the Netherlands when
professors Jan Rotman, Johan Schot and John Grin combined their respective
research backgrounds for a programmatic approach toward understanding larger
system changes. These scholars primarily study medium-sized systems, often on a
sectoral basis like energy. The duration of transformational changes in these sys-
tems is estimated to take about 40–50 years (Grin et al. 2010: 3–7). One of the key
iconographic outcomes of this endeavor is the Multilevel Perspective
(MLP) presented in Fig. 2.1. It was developed by Jan Rotman and his student Frank
Geels and highlights the interplay between different societal subsystems across
space and time. It differentiates qualitative levels of resistance to intentional and
spontaneous change in order to identify multiple upward and downward causalities
of influence behind large system change processes. It is important to note that these
are functional scale levels and do not represent spatial or geographical hierarchies.
Fig. 2.1 The multilevel perspective on system transformation. Source Geels and Schot (2010: 25)
2.1 Digging into Societal Transformation and System Innovation Research 21
Figure 2.1 shows that the most innovation-friendly level is the niche or micro-
level where small units or ‘situated groups’experiment easily with alternative
solutions, as long as the degree of interdependencies with overarching or neigh-
boring systems is not too strong. Examples here range from single technology
innovations like mobile phones to empowering local food production (e.g.,
Community Supported Agriculture or CSA). Their initial development often takes
place under conditions shielded from the overarching regime logic. These can be
laboratories for research and development in science, experimental pilots intro-
duced by businesses, direct or indirect government subsidies for desired solutions,
or the emancipatory initiatives of citizens.
Higher levels of structuration characterize the regime or meso-level because it
hosts structures in the form of well-established institutional setups in governments
and markets, scientific standards and technologies or infrastructure. They change
much more slowly and define a framework for action that tends to stabilize the
status quo because it limits the scaling and multiplying of alternative solutions.
Yet, the MLP is not intended to present a hierarchical ordering but rather
embedded systems. It could and often is read as a bottom-up theory of change, in
particular because the arrows that represent change-inducing pioneering activity in
the graph emerge from the niche level. But it is important to point out that change
can emerge on all levels. Pioneering initiatives can be little hubs of deviation and
innovation within entities that fall into the regime grouping—for example, research
and development units in big corporations or inter-ministerial units in government.
An activity is pioneering if the solutions it promotes differ radically from the status
quo. And typically, niche actors depend on support from pioneering actors within
the regime institutions in order for their solutions to become part of an adapted or
transformed system configuration.
For this to happen, an important role is given to the landscape or meta-level.It
harbors all those aspects that intentional action will likely not be able to change in
the short- or medium-term. These are natural developments like climate change but
also deeply anchored human-made institutions like the market system or hegemonic
paradigms, social values and cultural beliefs. This level forms the backdrop, or
deeper structuration, of lower-level developments. Sudden expressions of ongoing
changes here, like natural disasters, a massive financial crisis or an outbreak of
right-wing violence against refugees, have the quality of shocks for the subsystems
and their self-stabilizing processes. These shocks tend to be windows of opportu-
nity for change, a point I will return to below.
Depending on the author, one finds slightly diverging descriptions of the level at
which single aspects like market patterns or policy orientation rest, i.e., regime or
landscape level. This choice often depends on the actual case researched and the
individual view of the researcher as to what should and can be changed inten-
tionally. The joint message is that the higher the level, the slower the change
processes and the more difficult for individual actors to imbue transformational
missions. But it also means the higher the level the higher the transformational
22 2 What Political Economy Adds to Transformation Research
impact: changes in overarching systems always reshape the framework of action for
smaller units, whereas only a critical number of changes on lower levels are likely
to impact higher levels.
The other joint message is that despite the good intentions of many actors
involved, unsustainable trends persist, a phenomenon that can best be understood
through a systemic view that recognizes not only economic and technological
dimensions of innovation but also institutional and sociocultural aspects. The latter
affect not only which solutions take off but also whether their adoption will
transform or perpetuate system dynamics. One great demonstration of the added
value of such a holistic systemic approach is the search for answers for the widely
observed ‘rebound effect,’namely, while resource efficiency goals and standards
reduce the relative resource use per product or service, overall resource use is not
coming down.
This observation was originally made by William Stanley Jevons in 1865
regarding coal extraction. The steam engine alleviated the need for coal in one
sector but the fall in prices then made it economically viable to use coal in many
other contexts, which increased overall extraction again. This example is now
known as the Jevons Paradox and he generalized it into the statement that a more
economic use of a resource must not be confused with its sparing use (Jevons
1866). More recent examples include the technological advances in transport
technologies for cars and planes, which have made each kilometer of distance
traveled more efficient and therefore economically cheaper. The consequence was a
spurt in kilometers traveled and rising emissions from the transport sector.
Thus, without checking holistically for the driving factors behind resource
extraction, we cannot change the overexploiting trajectory. If we begin with the
most obvious drivers, we must consider the number of people: population levels
(landscape) are still growing and at the same time a significant percentage of people
live with fewer material goods than they need for a decent life. But this can hardly
explain the persistence of rising resource consumption in countries with saturated
material needs and stable population levels. Here, when we examine the regime
level, we find, for example, business models based on constantly increasing outputs
embedded in market patterns geared at constant competitive growth of national
output. As a consequence, billions are spent on marketing measures to ensure that a
consumer culture (landscape level) guarantees demand for, or at least acceptance of,
what could count as oversupply. This culture then runs counter to solutions that
involve raising prices for resources that would in turn make products expensive:
people have become used to rapidly changing fashion or technology trends and the
short product-lives in throw-away use patterns and business models (regime). As a
consequence, absolute resource use increases despite impressive technological
efficiency advances in pioneering products or firms (niches).
Transition research therefore starts with one particular persistent problem or
undesirable trend and seeks to find and understand the key reasons, drivers and
stabilizers of the system to which it is host. The overarching term used for multi-
farious different stabilizers of certain system dynamics or development in
2.1 Digging into Societal Transformation and System Innovation Research 23
institutionalism theory is ‘path dependencies.’All transformation researchers use it,
albeit giving different degrees of attention to the technological, economic, institu-
tional, sociocultural and ecological dimensions that path dependencies combine. So
depending on the camp and also the individual researcher, such path dependencies
include more directly visible political laws and regulations, infrastructural or
technological limitations, market patterns and scientific knowledge, but also con-
sumer behavior, power plays, firm strategies and economic transaction cost con-
siderations (WBGU 2011a: 418–419). Moreover, socio-psychological aspects like
norms, role expectations, lifestyles and self-images or shared beliefs play important
yet less tangible roles (Welzer 2011). Complex system theory would say that path
dependencies harbor important ‘feedback loops’in that particular system. All of
these usages of path dependencies capture processes within a system that hamper a
change of course. So at least some of them need to be ‘unlocked’if the problem or
undesirable trend should discontinue.
Path dependencies also form the link between the MLP and the second concept
for explaining transformational change, the s-curve or multiphase concept: path
dependencies behind one particular problem do not necessarily adhere to one of the
levels but might cut across them. The set of path dependencies behind the rebound
effect was one example of this. And each context shows a different, historically
grown setup of path dependencies, which means that one niche proposal or ini-
tiative may work in one region but not in another. And here we depart from any
notions of and demands for blueprinting. Even if a solution is doing magic in one
place, this does not mean that replicating it in another will lead to success.
Hence, the starting point of strategic transformative research designs is always
one particular wicked problem in one defined context. After the challenge has been
defined, the system that is relevant for understanding its existence and persistence is
mapped, including aspects or elements from any MLP level if suitable. The results
portray unique system boundaries: constellations with different scope, dynamics,
impulses, agents, and room for maneuver. The next step then lies in developing
ideas on how to intervene in these system constellations so that desired outcomes—
like avoiding the rebound effect—become likely. This is where the multiphase
concept as another key iconography of the transition community comes in. It is
basically a very coarse model of a theory of change for complex systems and shows
at which stages which intentional change initiatives seem promising.
The multiphase concept illustrated in Fig. 2.2 shows that transformational
changes in complex systems do not unfold in an obvious and linear manner where
the dosage of change-input equals that of change-output. Unless they are triggered
by some drastic shocks from neighboring or overarching systems, system trans-
formations require a build-up in which not much is visibly happening before tipping
points are reached, after which a lot of change happens in a short period of time.
After this chaotic and contested phase either a restabilization of the system or its
collapse can follow. When this change pattern is captured in an illustration it
resembles an ‘s’, which is why the multiphase concept is also called the ‘s-curve.’
Sequencing is typically divided into four stages:
24 2 What Political Economy Adds to Transformation Research
1. Pre-development, in which a system is in a dynamic state of equilibrium and
changes slowly but unobtrusively.
2. Take-off or point of ignition during which more coordinated niche activity and
regime reactions gain momentum. These may lead to the tipping points followed
by an…
3. Acceleration or navigation phase in which structural changes become possible
and visible but hard to control. Eventually, at the stage of…
4. Stabilization, a new dynamic system setting emerges. This can be a transformed
system in which the overall development trajectory is different, because it is
informed by many niche elements and ideas. However, this can also be an
adapted version of the old dynamic in which most of the challenges have been
absorbed or subjugated by the old regime structures, so that some aspects are
amended but the general development trajectory stays the same. In a third
alternative, the system can collapse when it falls out of the order imposed by the
former dynamic, should restabilizing feedbacks and activities be insufficient
(Grin et al. 2010: 3–7).
The phase pattern was originally observed in natural systems but proves very
insightful for social changes as well. It is part of all the reports reviewed in this
chapter. Figure 2.2 provides an example illustration drawn up for a climate change
financing project by myself and my colleagues at the Wuppertal Institute
Fig. 2.2 The four-phase pattern of transformation processes. Source Based on Mersmann et al.
(2014: 34)
2.1 Digging into Societal Transformation and System Innovation Research 25
(Mersmann et al. 2014). It has been labeled with ideas about which type of activities
seem promising in each phase if a donor would like to support intentional trans-
formational changes. In our particular case these have been climate mitigation and
adaptation strategies with transformational impacts.
The basic message behind this phase concept is that stable systems, i.e., those
whose path dependencies work in smooth dynamic alignment, will be immune to
any attempts at transformational change. Their form is well supported by ongoing,
often slightly adaptive activities that maintain stability. Only through increasing
irritations do the alignments become brittle enough to provide space for more
radical changes: those that challenge this form.
Such irritations can be new challenging knowledge (e.g., on climatic change),
growing niche activities (e.g., around new renewable energy technologies), or
emerging landscape changes (e.g., increasing droughts and floods). If these prevail
despite adaptive calibrations, the alignments eventually stop running smoothly—
hence the term tipping points. These tipping points are highly political because they
mean that the feasibility, support and legitimacy of the old form has ceased, so
struggles about what should replace it are intense. This replacement outcome could
be a transformed one that embeds a new system goal or purpose—but could also be
re-formed to accommodate some of the irritations but stay on a similar development
trajectory. The multi-phase graph encapsulates this view: only with significant
changes of path dependencies on the regime level will there be lasting transfor-
mations of the system’s dynamics.
The thick purple line should not give the impression that the phases are
unfolding in a linear fashion. Transformations are a rocky and highly contested ride.
This graph is a gross simplified model of what would, in reality, zigzag consid-
erably if viewed in more detail. The energy transition in Germany is a good
example of how this simplified sequencing can help understand and inform the
intentional transformation of large systems. The following provides a rough tour
through important developments over the last few decades and groups them
according to the phases. It also shows that all dimensions of path dependencies
from cultural to technological are playing a role.
The important landmarks indicating the rising awareness in Germany that energy
systems would need to be transformed were the 1970s oil crises and the reports
about limits to the exploitation of natural resources. These first regime crises were
reined in but the sociocultural anchoring of the awareness that a fossil energy
development path was contested and risky prevailed. This fed into an already
ongoing anti-nuclear movement that led to the creation of The Greens as a political
party. The Greens got enough votes to enter the German parliament, the Bundestag,
in 1983 and the 1986 Chernobyl nuclear power plant disaster worked like an
accelerating shock from the landscape level for its political agenda. Environmental
concerns became much more mainstream.
Meanwhile, from the early 1980s onward, technological developments slowly
but surely made the idea of significant renewable energy production seem feasible.
Niche players acted in a pre-development phase under favorable civil society and
public discourse conditions. Some regime pioneers in the political and investment
26 2 What Political Economy Adds to Transformation Research
community understood the potential and started to support these developments
through targeted research initiatives into technological opportunities and transition
pathways. In the political discourse these became solutions to what was established
as a societal challenge and the first small feed-in tariff regulation in 1991 encour-
aged credit for technology pioneers.
Following Germany’s 1998 elections, a new coalition government incorporating
the Green Party started to develop renewable energy support schemes and the
anti-nuclear agenda became a fully-fledged Renewable Energy Act. By 2000 this
included not only an agreement on phasing out nuclear power plants over the
following 25 years, but also differentiated support schemes for different renewable
energy technologies. These were available to all end users of electricity who wanted
to become producers by installing small-scale solar, wind or biomass power plants.
The ‘feed-in tariff’scheme provided guaranteed prices per kilowatt-hour of
renewable energy fed into the national energy grid over 20 years. It obliged elec-
tricity utilities to purchase this energy but allowed for them to push the cost onto the
final consumer bills.
This mechanism effectively created a return on investment security that attracted
conventional banks and risk-averse investors into lending small enterprises, farmers
and citizens money to install renewable energy technology. For the first time there
was a technology market in a sector previously dominated by a few big companies
whose long-subsidized centralized coal and nuclear energy infrastructure seemed
more like oligopolies. Since these older business models had rendered the trans-
action costs of switching to renewable energy solutions prohibitively pricey in the
past, no pioneering movement had been possible. The Renewable Energy Law
hedged the risks of a plethora of new, decentralized energy producers and unlea-
shed the competitive activity of many small- and medium-sized enterprises (SMEs)
active in technology development.
By the mid-2000s the tipping point into the acceleration or navigation phase had
been reached, and pioneering activities had become mainstream considerations.
Fossil energy suppliers now felt threatened and tried to fight the regulation at all
levels, e.g., attempting to make the EU declare feed-in tariffs incompatible with
energy market integrations. But the renewable energy sector grew very quickly,
created many jobs in rural areas with high unemployment and turned Germany into
an international technology leader that inspired other countries. Thus, an environ-
mental issue had found technology solutions and became solidly economic when it
served the export interests of the German economy and found wide, bottom-up
citizen support.
The share of renewable energy in the electricity mix increased steadily,
debunking the strongly spun narrative that renewable energy systems were tech-
nologically unfeasible—although concerns about black-outs remain. However, a
new narrative was established in which a transformation of the energy sector was
both possible and in progress, drawing in many new participants.
However, unexpected side effects—like rapidly dropping prices for solar tech-
nologies; changes in international production relations (solar panels imported from
China were much cheaper and their German purchasers were also entitled to the
2.1 Digging into Societal Transformation and System Innovation Research 27
feed-in-tariff support scheme); problems with the functioning of the electricity
market (renewable energy has no fuel costs and therefore does not fit a spot market
sales scheme); and some resistance to the alternative electricity grid infrastructure
from civil society—led to a new and critical phase that required legislative changes.
Actors with vested interests in the fossil energy system inevitably used this
strategically. When the government changed to a conservative party coalition with a
very industry-friendly liberal party in 2009, a window of opportunity to open the
Renewable Energy Act and terminate the agreements to phase out nuclear power
plants emerged. This in turn boosted the revenues and stock values of the incum-
bent energy players. These had entered the renewables production and lobbied for
electricity market regulation that would favor big suppliers over small ones and
compensate conventional energy plant owners for being fall-back providers in
periods when renewables could not deliver.
Although the flipflop on the long-standing nuclear exit encountered much public
and political resistance in 2010, it was the Japanese nuclear catastrophe in
Fukushima in March 2011 (a shock from the landscape level) that caused the
conservative Chancellor Merkel not just to return to the nuclear-exit strategy but
also to go even further by fostering a cross-party consensus on an energy transition
roadmap. This consensus foresees tackling issues in electricity markets, compen-
sation injustices and electricity provision infrastructure that are all in line with the
goal of a renewable energy system. Yet, at the same time, the former plan for rapid
transformation was also watered down when the priority to get as much renewable
energy as possible was replaced by a target of 45 % by 2020.
Its proponents argue that this is due to safety of supply and better cost man-
agement, but it is clearly also less disruptive to the incumbent business models,
whose champions get public money to dismantle the previously lucrative nuclear
power stations. Nevertheless, these providers have been hard-hit by a plunge in
stock market value and revenues. So the German example clearly shows that each
transformation involves changes in who is winning and who is losing—and that
incumbents will not easily give up on status quo solutions.
So it is no surprise that Germany is still grappling with putting the energy
transition commitment into practice and will be for decades to come. It seems that
the radical vision of a renewable energy system will not be reversed: its purpose has
been changed from ‘as much energy as possible at lowest costs’to ‘climate-friendly
and long-term secure energy.’The cost effects are often used and misused in
arguments against the transition but its sociocultural anchoring is still firm and
broadly based. But the regime restabilization actually required to achieve this goal
is far from complete: intense struggles are taking place in the social, economic,
cultural, technological and political dimensions of the energy system. Who is
paying how much for which type of electricity? Which business models receive
which type of financial support? Where can wind turbines and solar panels be
located so that they fit the landscape? Which storage capacities will be available to
smoothly provide irregularly harvested renewable energy? Which party coalition is
supporting which business sector and how do Germany’s European neighbors react
to a transition that also impacts their energy grids?
28 2 What Political Economy Adds to Transformation Research
Large-scale system transitions take time and are full of political battles and small
steps. The actors that steer or influence a transition are, at the same time, part of it.
Their freedom is a structured one, framed by the existing path dependencies. Here
we find the basis for the concept ‘radical incremental transformations’: no deep and
wide changes will happen without pre-development and build-up leading to fric-
tions and crises that provide the space for them.
2.1.2 Socio-ecological Systems and Their Safe Operating
Spaces
From an ecosystem perspective, the main question for the SES camp could be
summarized thus: how can we best understand sustainable human societies and
apply system innovations to achieve them? Important institutional research in this
field is carried out at the Stockholm Resilience Centre in Stockholm, Sweden, and
also the STEPS Centre in Brighton, United Kingdom.
One report that made significant waves in Germany was the WBGU’s 2011
World in Transition: A Social Contract for Sustainability. The WBGU was founded
just before the 1992 UN World Summit on Sustainable Development with the
mandate of providing independent scientific advice. A key idea promoted by the
WBGU in an earlier report was that of “planetary guard rails”similar to the
“Planetary Boundaries”introduced by Rockström et al. (2009). While acknowl-
edging other environmental domains and their overuse, the main emphasis of both
the WBGU guard rails and the 2011 transition or transformation report (the German
title uses ‘Transformation’but the English translation is ‘transition’) lies on climate
change (WBGU 2011a).
Overall, the single most important issue and overarching goal of the different
measures and strategies discussed, is the avoidance of catastrophic climate change
with all its implications for “the world’s ecosystems and their ability to sustain
human life.”Given the wide-reaching consequences of the carbon cycle for life on
earth, a transformation toward “climate compliance”is declared an “ethical
imperative”similar to that of the abolition of slavery and child labor (WBGU
2011c: 1).
Climate change is introduced as the most important environmental global
challenge and the report discusses other global megatrends in order to understand
interlinkages: economic development; democratization; global energy supply and
demand; urbanization; and patterns of increasing competition for land use between
food, bio-energy and forests. It also seeks to identify how these and ecological earth
system trends interrelate. As a result, the three areas with the highest transformative
impact are identified. These are the sustainable design of future energy systems,
urbanization trends, and land use patterns. The programmatic gist of these required
transformations is to turn current carbon-based economies into ones based on
renewable, or at least recyclable resources. The magnitude of this remodeling is
2.1 Digging into Societal Transformation and System Innovation Research 29
equated with “the two great revolutions which have crucially shaped world history:
the Neolithic Revolution (the diffusion of arable farming and animal husbandry)
and the Industrial Revolution (the transition from an agrarian to an industrial
society)”(WBGU 2011b).
In line with the focus on the fossil fuel foundations of our current development
model, one part of the World in Transition report provides detailed information
about how these megatrends impact energy use. It also discusses the technological
and economic feasibility of decarbonizing our economies and concludes that
decarbonization is possible if a supportive “social contract”between state, civil
society, business, science, and research is agreed. In essence this contract involves
the agreement that new rules are necessary for the economic system, and also
conclusions on how development could subsequently proceed.
While many of the contract’s rules will impact on very structural technological,
economic, political and ecological path dependencies, the prime root for its con-
clusion lies in the sociocultural domain: the ethical basis that can bind such diverse
interests could lie in our responsibility toward future generations, combined with
ecological responsibility and a culture of democratic participation. If the contract
were based on such a visionary agreement (read: a better purpose for development),
it would provide the legitimizing backdrop from which a ‘proactive state’engaged
to change the rules and incentives so that sustainability transformations could
proceed. As a potent manifestation of the contract the country could embed sus-
tainable development or climate protection into the constitution.
Wide discussion of such a new social contract is intended to generate the
political will and public support necessary to break some of the current barriers to
policy change, namely powerful interests vested in the fossil-fuel-based infras-
tructures and consumption patterns of our economies today. The antidote to pow-
erful lobbyists is public opinion, which the authors claim has undergone a
significant shift in the direction of environmental awareness and post-materialist
value sets. The Gallup Institute’sWorld Values Survey is cited as one important
base of evidence for this, as are the ongoing initiatives on new measures of pro-
gress, wealth and well-being. Thus, the new social contract would find its
expression not primarily on paper but rather in people’s consciousness: it changes
what they judge to be appropriate and desirable policy and product options (WBGU
2011c: 2).
Adopting the STRN concepts, the report foresees that extended participation of
enlightened citizens would not only legitimize but also improve policy imple-
mentation, which creates new room for pioneering sustainable business and citizen
practices that test prototype practices for a sustainable society. These may turn into
niche solutions, like an eco-village, a car-sharing business or a renewable energy
cooperative but also possibly set a new trend. Such pioneers of sustainability
practices operate in all parts of society, business, non-governmental organizations,
culture and even in political decision-making.
These emerging solutions put visions into practice and provide proof to poli-
cymakers that alternatives to fossil-based energy dependence are not only thinkable
30 2 What Political Economy Adds to Transformation Research
but actually possible. Through strategic niche management the state could therefore
create more spaces in which social and technological experiments are protected
from immediate market exposure. Meanwhile, the niche players can also increas-
ingly press for policy changes in the regulatory regime so that their solutions are
able to expand instead of being held back by the current path dependencies on the
regime level, like vested interests and structures of production and consumption.
Following citizen pressure, supportive regime-level changes are also proposed.
Institutionalized foresight and long-term orientation expresses the spirit of the
contract because it counters the dominance of short-term orientations in democra-
cies with frequent voting cycles: the immediate costs to one’s core voters are very
unpopular, even if they help prevent much higher costs in the future. In addition,
improved democratic participation in the formulation of policy changes is supposed
to up their acceptance and legitimacy. Some possible accountability mechanisms to
these ends include a future chamber of parliament that frequently reports on the
long-term effects of policies and programs, and also ombudspersons whom citizens
can address in cases of perceived maladministration or with whom civil society
organizations can work before bringing cases of environmental damage to the
courts.
Thus, transformation occurs when regime structures are changed to a meaningful
degree, accelerating the spread of existing pioneer solutions and incentivizing even
more radical ones. Taken together, the “requisite transformation encompasses
profound changes to infrastructures, production processes, regulation systems and
lifestyles, and extends to a new kind of interaction between politics, society, science
and the economy”(WBGU 2011c: 1).
In summary, the emergence of the Great Transition is described as a rather
evolutionary learning process, in which more knowledge and sustainability values
will make things better and bring down powerful vested interests. Key interlinked
processes mentioned here can be summarized as:
•Learning about technical performance, market demand, infrastructure require-
ments, policy instruments and symbolic meaning.
•The articulation and adjustment of expectations or visions that guide innovation
activities and help attract attention and funding from additional actors.
•The building of social networks that expand resources and capabilities (WBGU
2011c: 1).
In this way the authors of the 2011 WBGU report put strong emphasis on the
overarching role of joint ideas and visions in encompassing change processes, and
add these sociocultural aspects to the STRN perspective. They also discuss at length
what the role of science itself should be in these processes. As the WBGU is firmly
in the SES camp, this includes understanding the carrying capacities of our
ecosystems. The WBGU also draws attention, however, to the role that transfor-
mative science plays in this context, and promotes a notion that science should
become part of bringing sustainability solutions to life. The theory of change is
summarized as follows:
2.1 Digging into Societal Transformation and System Innovation Research 31
In co-operation with policymakers, business and society at large, the scientific community
is tasked with developing visions for a low-carbon society, exploring various development
pathways, and supporting sustainable technological and social innovations. Education
should help to create problem awareness and promote systemic thinking, thus empowering
people to participate in and shape the transformation process (WBGU 2012: 1).
When considering the redesign of energy systems, urbanization trends and land
use patterns, a study of the wider setting of correlations and side effects will enable
people to not only think about more efficient cars but also to explore how mobility
can be delivered in the most sustainable way (WBGU 2011a: 342–343).
Here of course we find a strong link with the emphasis on mind-sets in this book,
and my call to integrate political economy stems from what I find to be a slightly
naïve conception of the origin and roles that ideas and paradigms play in political
processes and their relation with power. While hardly anyone would explicitly
argue against values like the protection of future generations or our environment,
the devil lies instead in the detail—in this case the worldviews held. The same value
set might lead to very different proposed solutions, given differing worldviews and
their focuses. Mainstream economic mind-sets tend not to support the regulation of
markets precisely because this would hamper individual freedom, happiness, cre-
ativity and meritocracy—values to which most people would subscribe.
In one paragraph, the report mentions that Karl Polanyi’s interpretation of the
industrial revolution, The Great Transformation (1944), describes how “attitudes
and considerations inspired by personal benefit maximisation have established
themselves”and that with mass production, “the ‘good life’has increasingly
become synonymous with material wealth”(WBGU 2011a: 67). The proposals for
change in the report, however, leave this deep cultural wiring and its mental path
dependencies unchallenged. Hence, it does not say how the observed value shifts
can be implemented if there is no discussion of the paradigm behind the evidence
and narratives used to argue which policies are suitable to embed the shift.
2.1.3 Socio-ecological-Technical Systems and Their
Repurposing
The discussion of paradigms and mind-sets is an important aspect of the 2002 report
Great Transition: The Promise and Lure of the Times Ahead, which primarily
explores the question: how do we best understand human choices and apply this
understanding in times of transformation? It is the result of seven years of col-
laborative efforts between the Stockholm Environment Institute and the Tellus
Institute in the United States. The goal was to describe and model scenarios for
potential future development paths, including one that would be a Great Transition
toward sustainable development.
Making reference to two former “sweeping macro-transformations”from the
Stone Age to early civilization about ten thousand years ago and from there to the
modern era in the last one thousand years, such transitions, says the report, were
32 2 What Political Economy Adds to Transformation Research
marked by a change in the “entire cultural matrix and the relationship of humanity
to nature”(Raskin et al. 2002: 3). With this definition the report combines an
ecologically embedded socio-technical view (SETS) with an economic lens on
relationships. The authors describe social organization, the character of the eco-
nomic system, and capacity for communication as the three core dimensions that
have been transformed.
The modern era is seen as beginning with the advent of nation states as the social
and political forms of organization that interacted with the establishment of
capitalist-industrialist forms of production and consumption. In parallel, commu-
nication also expanded its geographical scope and became more widely accessible
through printing. The ongoing twenty-first century transformation toward what the
report calls the “planetary phase”is marked by the globalization of all three
dimensions: governance beyond nation states, multinational economic relationships
and information technology communication connecting almost all parts of the
world. Another pattern observed is increasing social complexity, an accelerating
pace of change and spatial connectedness, so that few places are immune to what
takes place elsewhere. From this the authors conclude that the next transition should
not last ten thousand or a thousand years, but around a hundred.
The 2002 report locates the origins of the modern era transition in the charac-
teristics of the modern capitalist industrialist system that overthrew the authority of
a society based on birthright, economic traditionalism and rigid class divisions.
Instead, law-governed institutions, market economies and a society based on sci-
entific ingenuity and mass production emerged. The authors also observe that these
institutions were designed to primarily harness some aspects of human potential,
those for accumulation, acquisition and innovation: “A permanent revolution in
technology, culture and desire spawned an explosion of population, production and
economic complexity. Ever hungry for new markets, resources and investment
opportunities, the self-expanding and colonizing industrial system began its long
march toward a world system”(Raskin et al. 2002: 7).
The planetary phase was a necessary outcome of this explosion because the fate
and relationships of peoples in different parts of the world are now too connected
for anyone to think that developments in one part of the world can happen without
impacting others. In addition, the fate of and relationships between people and
nature are too intertwined for anyone to believe that the destruction of ecosystems
can leave humanity unscathed.
So the report focuses not on whether there will be a transformation but instead
on the fact that one is already underway. It is up to purposefully acting people to
influence which path this transformation will take. In terms of what drives con-
scious human action, the authors distinguish several different mind-sets. Each of
them embodies beliefs about the potentials and qualities of technological, human
and natural changes. They amount to paradigmatic differences regarding the
assumptions of what we can know about the world, what we say the world is like
and how we presume it ought to be. This broad categorization distinguishes three
typical lenses through which to anticipate the future:
2.1 Digging into Societal Transformation and System Innovation Research 33
•Evolutionists foresee conventional worlds because they are convinced that the
dominant patterns of the modern era can be adjusted to deliver prosperity,
stability and ecological health.
•Catastrophists foresee a future of barbarization because they predict that
environmental, social and economic crises will lead to a perfect storm.
•Transformationists share these concerns but still believe that a Great Transition
toward sustainable solutions is possible.
The authors describe two development scenarios for each of the three world-
views in the event that each type of thinking—evolutionist, catastrophist, trans-
formationist—guides people’s actions and decisions in consumption, production
and policymaking. Examples include whether or not societies will elaborate policies
aiming to decouple resource use from economic growth or if they might, at the
same time, aim to reduce overall resource use. Other paradigmatic crossroads look
at what might happen if we continue to pursue more GDP per capita as a means for
better living or, by contrast, if the consumption-based welfare idea is challenged.
Still others examine whether the financial markets are perceived as efficient drivers
of economic development or not, and so on.
In a massive modeling endeavor, the study substantiates the narratives with
quantified estimates on resource use and availability, economic output numbers and
some social criteria in each scenario. This is done by estimating how selected
indicator developments—e.g., emission or resource extraction patterns—would be
impacted by the combined consumption, production and policy choices described
as likely for each of the different worldviews. The table in Fig. 2.3 summarizes the
scenarios and the predicted quantitative trends.
Fig. 2.3 Great transition scenario structure with illustrative patterns of development. Source
Based on Raskin et al. (2002: 16)
34 2 What Political Economy Adds to Transformation Research
In a 2010 paper, some of the report’s leading authors updated the framework by
reducing the number of scenarios to four—market forces, policy reform, fortress
world and a Great Transition—and fitting them with data from 2005 (Raskin et al.
2010). They also developed a Quality of Development Index (QDI) with updated
data from 2005. This combines sub-indices on human well-being, community
cohesion, and environmental protection to “consider the quality of development—
the degree of well-being in human lives, the strength of communities, and the
resilience of the biosphere—rather than gross domestic product, the misleading
conventional measure of ‘development’” (Raskin et al. 2010: 2631). The website
greattransition.org also has an animated short film highlighting the key messages.
In both report and paper, only the Great Transition or new paradigm scenario
leads to long-term prosperity within Planetary Boundaries. This scenario involves
“profound historical transformations in the fundamental values and organizing
principles of society. New values and development paradigms ascend that
emphasize the quality of life and material sufficiency, human solidarity and global
equity, and affinity with nature and environmental sustainability”(Raskin et al.
2002: 15). Here we find a strong overlap with the WBGU report, including the urge
for a conscious repurposing of what development is about (like the social contract
on climate compliance). Yet, this report does not start the reflexive change process
with the spread of knowledge about planetary guardrails, but by asking what
purpose economies should have in the first place. This question precedes the
assessment of how this can be done sustainably and in this scope comes close to a
Second Enlightenment discourse.
In order to highlight the influence of basic paradigmatic questions concerning
‘being in the world’on the more specific mind-sets that guide policy choices, the
Global Scenario Group combined each development scenario with one ‘archetyp-
ical worldview’by referring to one well-known philosopher and his core ideas
about the world. Many of these ‘patrons’are economists. The list of the key
attributes in their thinking of course emphasizes the fundamental differences, so the
nuances of each view get lost:
•Adam Smith and John Maynard Keynes are the main protagonists for the
evolutionist worldview but differ hugely on the question of how best to run
economies smoothly: The invisible hand of the market is the best allocation tool
for Smith (scenario market forces) whereas Keynes emphasizes the role of
government interventions to secure demand when capitalist relations lead to
crises (scenario policy reform).
•Among the catastrophists we find Thomas Robert Malthus and Thomas Hobbes,
neither of whom were very optimistic about the human capacity to become more
civilized. Malthus is connected with a breakdown scenario because of his claim
that limited resources will necessarily mean that people die if the population
becomes too big. Hobbes stands for an armed defense or fortress world scenario
because he depicted the natural state of the world as one of warfare between
humans resembling beasts.
2.1 Digging into Societal Transformation and System Innovation Research 35
•For the transformationists, the authors refer to William Morris, E. F. Schumacher
and Mahatma Gandhi as well as John Stuart Mill. All of these thinkers question
whether humans really need to be selfish, endlessly accumulating competitors.
The first three formulate ideas about a decentralized variety of small and beautiful
communities in self-determination (the eco-communalism scenario), while Mill
sticks with larger units but envisions a post-industrialist and post-scarcity
development model (a Great Transition or paradigm shift scenario). All three
aim for human development rather than material acquisition once subsistence
needs are met (Raskin et al. 2002: 17).
The main message of the Great Transition report thus lies in assessing the
combination of worldviews and values in order to understand differences in ideas,
imaginaries and convictions about the best way forward. The Global Scenario
Group labeled these ‘soft’aspects of values and needs, knowledge and under-
standing, power structures and culture as the “ultimate drivers”of transitions. The
more readily observable trends in politics, economics, technology and governance
are by contrast mere “proximate drivers”(Raskin et al. 2002: 50).
Most of the time, as the concept of futures literacy cited in the introduction
indicates, humans operate without much awareness of their ultimate drivers. It is at
the moment of conscious reflexivity that unstated ideas and assumptions about the
world—possibly flawed—are revealed and contested. Here we find another reason
why transformation researchers herald the moments of crisis or increasing irritation
as moments of potential. They are not dismissive of the terrible consequences that
potential runaway effects might have when feedback loops turn trends into
uncontrollable developments, but, as the Global Scenario Group points out and the
s-curve in Fig. 2.2 illustrates, they are instead ‘branch points’where conscious
human action can have very meaningful influences on the future of the planetary
system.
While many transformation researchers discuss the role of crises in structural
changes, few make such an explicit link to the ideas to which humans will revert
when searching for strategies to deal with them. One rather unexpected ally is
Nobel laureate Milton Friedman, one of the leading thinkers of the mainstream
economic paradigm. His theory of monetarism was instrumental in transforming the
governance structures of many countries and he is clear about the role it played as a
political tool: “Only a crisis—actual or perceived—produces real change. When
that crisis occurs, the actions that are taken depend on the ideas that are lying
around. That, I believe, is our basic function: to develop alternatives to existing
policies, to keep them alive and available until the politically impossible becomes
the politically inevitable”(Friedman 2002: xiv).
Karl Polanyi was another thinker who was very clear about this interplay. Since I
believe that Friedman’s ideas are more of a problem for sustainable development
than a solution, this last subchapter is a quick excursion into the thinking of
Polanyi, who could also be called the father of the idea of a Great Transformation:
his 1944 book carried this title and he is often referred to in contemporary transition
36 2 What Political Economy Adds to Transformation Research
and transformation writings. But reference is seldom made to the fact that his work
already contains much of today’s critique of the way in which mainstream eco-
nomics deals with issues of sustainability. It does, however, provide a very good
understanding of why systems built on these principles have severe blind spots
when it comes to delivering on human needs and respecting the quality and dignity
of nature.
2.1.4 The Economic Paradigm Shift Behind Today’s World:
Karl Polanyi’s Heritage
In The Great Transformation. The Political and Economic Origins of our Times,
Polanyi described what he saw as the complete overhaul of the core operating
principles of societies, which took place when feudal agriculture was replaced by
the capitalist industrialist market model. He used the term “Great Transformation”
because it demarcated the change from one civilization to another through a process
of continuous change of values, knowledge, norms, rules and regulations, starting
in the late eighteenth century (Polanyi 1957: 3).
His analysis focuses on Great Britain as the origin of industrialization. While
applying a historical point of view, his work does not reconstruct a sequence of
events in a perfectly chronological manner, but seeks to identify trends in the
emergence of institutions and social technologies and to track which philosophical
and economic ideas or reasoning lay behind them. To shed some light on these ties,
Polanyi describes real world developments as well as core theoretical concepts and
the explanations of influential thinkers of the time. This account therefore paints a
picture of how creative and reflective actors provide ideas and explanations for real
world developments and in so doing influence sociopolitical responses, sometimes
very explicitly.
His analysis shows how the basic ideas of what I will describe as the mainstream
paradigm started emerging in the eighteenth century, and have since underpinned a
massive reorganization of the social technologies and institutions guiding human
development. To Polanyi, the most powerful of those ideas was the substitution of
the economic motive of subsistence with that of gain. Polanyi discusses how the
philosophers and scholars of that time were instrumental in presenting this per-
spective as a more accurate description of reality, one that was even natural or at
least desirable. He singles out Adam Smith as particularly influential with his
argument that it is a deeply natural human inclination to barter, trade and exchange
in order to maximize gain. Smith also made self-interest the fundamental human
drive behind the pursuit of those activities (Polanyi 1957: 68–70). Polanyi adds
frequent references to other influential thinkers like Thomas Malthus, Jeremy
Bentham, David Ricardo and Joseph Townsend, who nurtured the view that this
inclination would need to be unleashed fully if man were to escape the fetters of
poverty and starvation. Over time the new concept of ‘interests’replaced what the
2.1 Digging into Societal Transformation and System Innovation Research 37
church had condemned as greed. The invisible hand of the market was the proper
solution for facilitating this natural rewiring efficiently and for punishing those who
were not contributing valuable assets or skills.
By spanning the differences and similarities in the work of thinkers of the period,
Polanyi found that the common new imaginary for progress had become what he
called the “stark utopia of a market system”or the “matrix of the self-regulating
market”(Polanyi 1957: 57). He offers many quotes from key philosophers and
politicians of the time when describing how, inspired by this new vision for pro-
gress, both economic theory and policymakers occupied themselves with seeking
out and resolving the barriers standing in the way of the efficient and profitable
running of market societies. Some of the leading thinkers even established factories
or other institutions to that end. Another important theme involved outwitting the
limitation that nature had put on production by applying increasing amounts of
energy, machinery and capital.
Polanyi does not describe these changes as a smooth rolling out of a blueprint,
but as a conflict-ridden process which involved multiple changes in technology,
social groupings and regulation, all influencing each other in a paradoxical pairing
of unprecedented material production capacity with unprecedented poverty. He
describes intricate correlations between technological developments, new sources
of energy and the introduction of big machinery and factories, land enclosures for
mass wool production and a new financier class providing capital for those
investments while brokering increasing international trade, which in turn incen-
tivized even more mass production.
Instrumental in all this were state and local government regulations that either
accelerated or slowed down certain trends and developments. These concerned, for
example, land enclosures, definition and protection of private property, poor pro-
tection laws or their abolition, or allowing capitalist merchants access to local
markets. Important also was the invention of the gold standard behind the emerging
monetary system, which in turn fuelled the trend of internationalization.
Polanyi’s historical observations describe how societal relationships became
increasingly focused on profit in the form of money as the general expression of
value. Increasingly, processes of collaboration were governed by newly created
monetary tokens, social relationships, payments and newly calibrated ownership
structures. Eventually most income was derived from the sale of something or
other. This, combined with the structural developments of mass production,
impelled a highly differentiated division of labor that would be more efficient in
terms of the generated output.
So in line with the big philosophers of the period, constant economic gain
became the new image for successful societal organization, supplanting culture,
custom and religion. The effect was indeed transformational: ‘Ultimately,’Polanyi
sums up, “that is why the control of the economic system by the market is of
overwhelming consequence to the whole organization of society: it means no less
than the running of society as an adjunct to the market. Instead of economy being
embedded in social relations, social relations are embedded in the economic sys-
tem”(Polanyi 1957: 57).
38 2 What Political Economy Adds to Transformation Research
It is important to note that Polanyi’s critical view of the market system does not
lead him to neglect the existence and importance of markets in history. Indeed, he
analyzes at length how these were organized by different principles at different
times and in different places. The Great Transformation lay precisely in turning
away from these long-approved principles of collaboration like reciprocity, redis-
tribution or property ownership. In his view, “nineteenth century civilization alone
was economic in a different and distinctive sense, for it chose to base itself on a
motive only rarely acknowledged as valid in the history of human societies, and
certainly never before raised to the level of a justification of action and behavior in
everyday life, namely gain”(Polanyi 1957: 30).
This interplay between theory, power and policy is the underlying theme in
Polanyi’s opus. Following the overarching imaginary of the market system, the key
mindshift that he put center stage was the view of humans, nature and capital as that
market system’s input factors: successful development strategies needed to ensure
that labor, natural resources and investments were available for the continuous and
smooth expansion of production and consumption. In effect this meant conceiving
of humans, land and money as what he calls “fictitious commodities.”The frame
with which their governance is approached becomes one of economic production.
Polanyi is clear that from his point of view this transformation inevitably leads to
unsustainable developments. Human life, the environment and money are con-
ceptualized and organized as if they have no other existence or purpose than to be
sold for profit. To him this alone renders the market society idea ‘utopian’and
inherently destructive for subjects robbed of their real qualities. ‘Labor,’he wrote,
is only another name for a human activity which goes with life itself, which in its turn is not
produced for sale but for entirely different reasons, nor can that activity be detached from
the rest of life, be stored or mobilized; land is only another name for nature, which is not
produced by man; actual money, finally is merely a token of purchasing power which, as a
rule, is not produced at all, but comes into being through the mechanism of banking or state
finance. None of them is produced for sale (Polanyi 1957: 72).
To Polanyi, the logical consequences of this were poverty for most workers
needing to sell their skills and an overexploitation of nature. Political interventions
were frequently necessary to prevent this inbuilt tendency of market systems from
destroying its real basis.
Social history in the nineteenth century was thus the result of a double move-
ment: the extension of the market organization in respect to genuine commodities
was accompanied by its restriction in respect to fictitious ones…Society protected
itself against the perils inherent in a self-regulating market system—this was the
one comprehensive feature in the history of the age (Polanyi 1957: 76).
The influential nineteenth-century philosophers or economists whom he cites,
however, see the origin of the misery precisely in these regulatory efforts. They
believed that without public interference and by shedding former organizational
patterns, market dynamics and their tendency toward equilibrium would lead to the
most efficient allocation of resources—from which everyone would prosper even-
tually. Some structural adjustment costs for some groups or ecosystems might
2.1 Digging into Societal Transformation and System Innovation Research 39
emerge in the short- and medium-term but the less policy interfered, the faster the
adjustments would be (Polanyi 1957: 135–150). Seeking an explanation for this
interpretation he describes a “blind faith in spontaneous progress”that would be
brought about by the freeing of the market system from the constraints of treating
everything as a commodity (Polanyi 1957: 76).
Most of today’s discourse around progress, successful development and
individual-cultural aspirations still holds ‘gain’as the overarching goal, and ficti-
tious commodification is still expanding, even though voices are increasingly raised
over its negative impacts. The imaginary of fictitious commodities is also very
much alive and kicking when political decisions around environmental protection
or social welfare are judged by how much ‘the (financial) markets’will accept and
when a society’s or businesses ‘productivity’or ‘competitiveness’is hampered.
Under current political and economic structures—i.e., the manifestation of the
market system utopia—this is of course a rational way of looking at what is likely
to happen. This is why former chief economist of the UK Sustainable Development
Commission Tim Jackson and other scholars speak of the “Growth Dilemma,”in
which the current type and rate of economic growth threatens ecosystems and social
well-being alike, although the current system dynamics also mean that discontin-
uing it will lead to unemployment, drying up of investments and broken social
protection systems (Jackson 2009: 46).
2.2 Summary: Paradigm Shifts and Large System
Change: Humanity’s Structured Freedom
To summarize the findings of this chapter, I will introduce a few concepts I find key
to understanding how to work toward system innovation without risking system
collapse or intensified rejection of change attempts. These concepts place humans
as sense-making actors at the locus of intentional change. After all it is people who
argue, evaluate and struggle over which purpose any SETS should fulfill, how this
could best be done and whether any updates are necessary or desirable.
At its outset, the sustainable development agenda called for a repurposing of the
overarching development goal, away from economic gain as an end in itself. Yet,
the agenda primarily ended up positioning it as the crucial means to the higher ends
of poverty alleviation and the ability to afford environmental protection. In effect,
this meant that most of the sustainable development strategies actually kept it as an
end in itself and tried to provide it more efficiently or in a ‘dematerialized’manner.
The prime agenda became that of decoupling economic growth from environmental
destruction, or doing more with less. Doing less was and is simply not in the cards,
anywhere or for anybody. Implementation thus sought to improve an otherwise
mainly uncontested way of thinking, planning and conceptualizing development.
The mental model continued to be blind to any possible solutions that would imply
‘sufficiency’or ‘enough’as possible goals. Poverty remained defined solely by
40 2 What Political Economy Adds to Transformation Research
material possessions and monetary income. This fell short of causing the upset to
the human self-image that the Brundtland Report had predicted would result from
seeing Earth from space.
This upset to the human self-image is what system-thinking scholars like
Donella Meadows call paradigm shifts. She also calls them “high leverage points”
for transforming systems. To me, paradigm or mind shifts are the bridge between
the radical and incremental aspects of transformation strategies: radically different
imaginaries of potential future developments influence the formulation of new goals
for the system that can then be implemented step by step, changing the rules,
procedures, roles and norms accordingly.
This strategy is in line with Meadow’s approach to working on system inno-
vations. In a seminal article about Places to Intervene in a System, Meadows
proposed a hierarchical list of possible leverage points for system change. As
illustrated in Box 2.1, it is ordered by increasing effectiveness for transformative
change, coupled with the possibility of actually influencing it. The more embedded
the identified points are within the deeper or resilient structurations of a system, the
more difficult they will be to change. The resulting change however, will also be
more lasting.
Box 2.1: Places to intervene in a system ranked by increasing order of
effectiveness. Source Meadows (1999: 3).
12. Constants, parameters, numbers (such as subsidies, taxes, standards).
11. The sizes of buffers and other stabilizing stocks, relative to their flows.
10. The structure of material stocks and flows (such as transport networks,
population age structures).
9. The lengths of delays, relative to the rate of system change.
8. The strength of negative feedback loops, relative to the impacts they are
trying to correct against.
7. The gain around driving positive feedback loops.
6. The structure of information flows (who does and does not have access to
what kinds of information).
5. The rules of the system (such as incentives, punishments, constraints).
4. The power to add, change, evolve, or self-organize system structure.
3. The goals of the system.
2. The mind-set or paradigm out of which the system—its goals,
structure/rules, delays, parameters—arises.
1. The power to transcend paradigms.
This list of leverage expressed in their abstract systems-thinking language works
for society-wide change as much as for small systems like, for example, families or
communities. The examples in brackets refer to political systems and I am most
2.2 Summary: Paradigm Shifts and Large System Change …41
interested in the top three points. The reasons are illustrated by the United Nations
Environment Program GEO-5report for the UN Conference on Sustainable
Development in 2012 (Fig. 2.4).
Here we see that the outer layer (or low-ranking adjustments in Meadows’list),
will change little in the overall dynamic of development: Putting different people in
charge of making political or managerial adjustments is not going to bring about a
system innovation as long as the levers they pull are the same as before. They can
only use them with the same information and the same rules as before and thus keep
on pursuing the same old goal. Thus, while the exchange of CEOs or political
leaders is often sold as a radical measure, it may not turn out to be radical in effect
unless the new leaders start repurposing the system by tackling the high leverage
points.
Unfortunately, most of the attention in sustainable development thinking has
focused on adjusting to system feedbacks or tackling the symptoms of environ-
mental degradation and of extreme poverty. Most of the resource efficiency agenda
remained within this remit, as did a poverty alleviation agenda that declares yet
more growth for the richest to be a precondition for redistribution measures. This is
understandable given that these changes are easily visible and can be measured in
quantitative numbers, both of which are important standards in project planning and
evaluation under the current short-term, cost–benefit paradigm. This is also not very
surprising in political and economic systems in which having more than others is
seen as an indicator of merit and superiority and where the avoidance of short-term
costs for voters and stakeholders is what counts most for election purposes or
investment decisions. It is also very understandable in situations in which the bare
necessities for life must be met and path-dependent solutions are the easiest, fastest
or economically cheapest remedy for disaster prevention.
Fig. 2.4 Layers of leverage in system innovations. Source Based on Meadows (1999), illustration
from UNEP (2012: 422)
42 2 What Political Economy Adds to Transformation Research
The problem is that staying on lower leverage point levels rarely translates into
transformational change of the overall system dynamics. One metaphor for this has
been “arranging the deck chairs on the Titanic”(Meadows 1999: 6). Only if
changing these lower parameters results in ramifications higher up the leverage
point list can they lead to successive, wider-reaching changes. If a government
increases the minimum wage by 10 %, for example, is this because people need
social security payments on top of what jobs pay and this risks ruining the state
budget? Or does it advance the goal of limiting the maximum differential in income
between different people working the same hours? Is it simply a measure to keep
the low paid out of poverty statistics, or is it a move to lower inequality as a
benchmark for sustainable societies? The first means no more than dealing with the
symptoms of a remuneration pattern in which people are unable to pay their rent,
even if they work full-time. The latter examples, however, stand for a qualitatively
new goal according to which barriers are removed.
Thus, changing the third highest leverage point in Meadows’list—the system
goal—usually means that many of the lower leverage points will have to be acted
upon to adjust the system’s development paths accordingly. Yet, support for a
deeper paradigm shift (the top two of the leverage point list) is still not readily
visible in the SDG agenda. The prime benchmark for reducing inequalities, for
example, still excludes any limits to the gains of the already very rich, but instead
aims to produce a comparatively faster gain for those with less. Gross Domestic
Product should continue to grow everywhere, including in rich countries with
stagnant population levels.
Yet, the goal of sustainable development was defined as meeting the needs of the
people today and in the future, not as meeting rising per capita GDP. Repurposing a
system accordingly raises the questions of what human needs are, how they are best
understood and served, and not simply extrapolating the old unstated idea that more
economic gain means more need satisfaction. If this paradigm goes unaltered, the
imaginaries, narratives, models and proposals based on it simply do not capture the
idea that much damage is caused only because of the type and speed of growth to
which we aspire.
Meadows herself also makes reference to the growth example when she points
out that this phenomenon is typical. People sense where leverage points are but
often tend to push them into the wrong direction. Everyone sees that growth is
critical, but most people push for more of it instead of thinking about the damage
which would be spared if we had slower, selective, differently defined growth, or
even a steady-state economy (Meadows 1999: 8).
Polanyi included this future-forward effect of a hegemonic paradigm in his
analysis of the effects of the stark utopia of a capitalist market system:
The usual ‘long-run’considerations of economic theory are inadmissible; they would
prejudge the issue by assuming that the event took place in a market economy. However
natural it may appear to us to make that assumption, it is unjustified: market economy is an
institutional structure which, as we all too easily forget, has been present at no time except
our own (Polanyi 1957: 37).
2.2 Summary: Paradigm Shifts and Large System Change …43
A proper repurposing or system innovation process therefore begins with what
the WSSR 2013 called “futures literacy”: identifying and exposing “hidden,
unexamined and sometimes flawed assumptions about present and past systems”
(ISSC and UNESCO 2013: 8). Changing the way we see the world also changes the
way we are in the world—and how we imagine promising development paths and
their governance. In the words of Meadows: “Paradigms are the sources of systems.
From them form shared social agreements about the nature of reality, come system
goals and information flows, feedbacks, stocks, flows and everything else about
systems”(Meadows 1999: 16).
This is what I seek to capture with the concept materiality of ideas as illustrated
in Fig. 2.5. It describes how humans are both subject and object of making history,
how reality today shapes the imaginary of how reality could be in the future.
As a purposefully acting species, humans create relationships and physical
technologies as well as social institutions to engage with each other and with nature
in the creation of goods and services deemed necessary or desirable. Thus, pre-
vailing paradigms and their key ideas are embedded into very tangible structural
outcomes that in turn confront and embed individuals within processes and systems
Fig. 2.5 The materiality of old ideas in today’s systems. Source Own illustration
44 2 What Political Economy Adds to Transformation Research
that shape their mind-sets and limit their scope of action. Karl Marx summarized
this patterned freedom with the critical eye for which he is famous:
Men [sic] make their own history, but they do not make it as they please; they do not make
it under self-selected circumstances, but under circumstances existing already, given and
transmitted from the past. The tradition of all dead generations weighs like a nightmare on
the brains of the living (ibid. 1852: 5).
No one is asked to share Marx’s interpretation of the past as an inevitable
nightmare. But everyone is invited to acknowledge the ideational background of
what we call reality today. Once we do this we see that of course reality cannot be
replaced by simply thinking differently. Humans live in structured freedom. Reality
does influence how humans imagine what is possible, right or just for the future.
But at the same time the way we think, believe and act today will shape future
reality. History becomes an open-ended process—the status quo determined not by
any human or social laws but created by sense-making and purposefully acting
humans.
Civilization did not cease to evolve after the first Enlightenment and modernity.
Sense-making, learning and purposeful acting continues. The quantification and
marketization of our world might be an incredibly strong trend now, but does not
mark ‘the end of history.’Human freedom lies exactly in becoming literate in
deconstructing the emergence and perpetuation processes and patterns behind the
trend toward economic totalitarianism and in starting to change it. Ideas and beliefs
play an instrumental role in these reflection processes. They are the elements of
inspiration, rationalization and argumentation and hence function on the individual
as well as societal level.
The reflexive ontologies applied by most transformation researchers track the
co-evolutionary interplay between actors and the structures that surround them.
Some might explore behavior changes while others go deeper into analyzing
changes in peoples’values and identity. The latter is what, for example, figuration
or process sociology—a term often associated with Norbert Elias (1897–1990)—
stands for. The German sociologist wrote about the connection between social
developments and human psychology. His book, The Civilizing Process (also
published under the title On the Process of Civilization), explores the relationship
over time between power, behavior, emotion and knowledge and became one of the
most influential sociology books of the twentieth century. In Elias’theory, status
quo or circumstances are not portrayed as phenomena that occur and which humans
encounter. He sees them instead as manifestations of changing human relationships.
His term ‘sociogenesis’thus describes the emergence of social practices, norms,
rules, procedures and institutions over time. Elias links it with the process of
‘psychogenesis’to capture the molding effects that prevailing circumstances have
on individual learning and identity formation. The latter, explains Harald Welzer, a
contemporary German sociologist in Elias’tradition, is the prerequisite of identity,
of being in control of one’s own fate. It carries values, habits and aspirations alike
(Welzer 2011: 15).
2.2 Summary: Paradigm Shifts and Large System Change …45
This ontology finds application in other scientific disciplines as well. Political
economist Robin Hahnel, for example, also makes this point when arguing that the
mainstream economic paradigm is not objective or value-free but through its
dominance in decision-making bodies and public discourse shapes future rela-
tionships and people: “When we fulfill needs through particular activities we are
induced to mold our thoughts to justify or rationalize both the logic and merit of
those activities, thereby generating consciousness-personality-structures that can
have a permanence beyond that of the activities that formed them”(Hahnel 2002:
4–5).
Thus, ideas are both inherent in less conscious individual sense-making pro-
cesses but also frequently expressed in the efforts of creating relations with others.
This is what the definition of paradigms stands for in Meadows’analytical
framework presented above: “The shared idea in the minds of society, the great big
unstated assumptions—unstated because unnecessary to state; everyone already
knows them—constitute that society’s paradigm, or deepest set of beliefs about
how the world works”(Meadows 1999: 17). Other researchers use the term
‘worldviews’and define them as “inescapable, overarching systems of meaning and
meaning-making that to a substantial extent inform how humans interpret, enact,
and co-create reality”(Hedlund-de Witt 2012: 18).
Personally, I prefer the term ‘mind’to ‘paradigm’when speaking about social
rather than scientific contexts because it expresses the way that seeing and believing
differently goes beyond an update of information. It also means changes in atten-
tion, consciousness, instinct, imagination, judgment, power, sense, spirit, and
psyche. ‘Mind’emphasizes not so much the facts or ideas in themselves but the
processes of knowing, believing and arguing in which they are embedded. This
encapsulates the many ways in which our manner of thinking influences human
existence.
Moving from the individual-psychological level to the sociopolitical research
designs for explaining transformation we find, as one example, Polanyi-inspired
political economist Nancy Fraser. She highlights how widely spread ideas, like the
mainstream economic paradigm, function as the “discursive face of politics,”
mediating structure and agency by providing “the social imaginaries through which
social conditions are experienced, interpreted and evaluated by social beings”
(Fraser 2013: 125). The analytical term ‘narratives’captures something similar,
sometimes defined in a rather instrumental way: “Narratives reduce complexity,
creative collective perspectives, support reliability of expectations, build a basis for
current and future-oriented action plans, and are a foundation for the cooperation
between actors”(Messner 2015: 263). Here, the emphasis lies more on under-
standing how humans choose communities and get energized for collective action
and less on the effects that this may have on their future identities.
Both the individual-psychological and the sociopolitical are important to the
transformative leverage of a Great Mindshift: an understanding of the imaginaries,
identities and narratives that guide individual and collective actions provides
explanations for the perpetuation of the status quo, an understanding of which
alternative solutions might find support and who might bring them about.
46 2 What Political Economy Adds to Transformation Research
A deconstruction of the overarching ideational frameworks or paradigms behind the
institutions, technologies and economic instruments in place provides an under-
standing of which path dependencies will be particularly difficult to unlock and
which pioneers and change agents are more likely to help—or block—that process.
Connecting this reflexive ontology with the MLP (Fig. 2.1) and multi-phase
concept (Fig. 2.2) of transformation research leads me to conclude this chapter with
the concept of radical incremental transformation. The MLP situates mind-sets on
the landscape level. Following the discussion of the crucial role of ideas on the
individual as much as on the societal level, I would like to differentiate the three
layers a bit more by adding two: the mini-level of individuals that makes up any
institutional setup and the meta-level of mind-sets that cut across and mediate
between the structurations on the niche and regime level and individual actors
(Fig. 2.6).
The purple and blue arrows illustrate how ideas function as the glue that holds
societies together. The purple ones stand for the hegemonic paradigm and common
sense framework that serves as a reference for individual strategies and narratives. It
is embedded in regime structures as well as in niche projects. At the same time,
individual mind-sets (the light blue arrows) might carry alternative paradigms that
influence their pioneering strategies. In addition to trying to showcase new solu-
tions in line with the new paradigm, all individuals can also engage in general
paradigm-busting work that influences the perpetuation or challenging of the
dominant paradigm. In this way, prevailing ideas also influence the way societies
Fig. 2.6 Mind-sets in the multilevel perspective on transformations. Source Own illustration
2.2 Summary: Paradigm Shifts and Large System Change …47
decide to deal with the landscape-developments that they observe but cannot
change through direct action in the short term. Their most important role, however,
lies in providing the new imaginary and binding narratives necessary to ignite
change initiatives and galvanize support for them.
Charlie Leadbeater, a UK-based system innovator connected with the innovation
foundation Nesta, presented a list of ingredients for successful sustainability
transformations that embeds this view nicely. He makes reference to the MLP when
considering five successive features of successful regime transformation.
The following is my summary:
1. Failures and frustrations with the current system multiply as negative conse-
quences become increasingly visible. This is inherent in the sustainability
discourse.
2. The landscape on which the regime operates shifts as new long-term trends
emerge or sudden events drastically impact the general availability or persua-
siveness of particular solutions. This could be peak oil signaling an approaching
end to fossil fuel availability.
3. Niche alternatives start to develop and gain momentum, coalitions start forming
and coalesce around the principles of a new approach. Local Agenda 21, for
example, was a program emerging from the UN Conference on Environment
and Development in 1992, in which many local initiatives for implementation
were linked into a network.
4. New technologies give impetus to alternative solutions, either in the form of
alternative products or communication and connection possibilities. Renewable
energy solutions especially, but also information technologies, form part of
many sustainability projects.
5. For far-reaching regime change rather than small adaptations and cooptation
into the old regime, dissent and therefore fissures inside the regime itself are
key. Possibly called ‘niches’within the regime, by joining coalitions for change
they will help bring the system down (Leadbeater/Mulgan 2013: 31–32).
A core functional ingredient in this sequence is the ‘new approach’mentioned in
point 3, the new principles. In Leadbeater’s example they are the principles agreed
in the 1992 Rio Declaration on Sustainable Development. They provide the radical
vision for a repurposed development system and inspire niche initiatives with the
goal of putting the declaration into practice. As some of the quotes in the intro-
duction showed, the Agenda 21 vision foresaw very radical institutional changes,
and many different groups started experimenting with new ways of bringing them to
life. The discussion of path dependencies in this chapter has provided some good
insights into why these processes were not easy and were subsequently sometimes
discontinued or explicitly opposed.
Writing in 2013, Leadbeater however declares that tipping points have been
reached in some aspects like the energy systems, especially on the local level. Not
many make explicit reference to Agenda 21 anymore, but new narratives like
Transition Towns or 100 % renewable communities, etc., have gained more
48 2 What Political Economy Adds to Transformation Research
momentum. Also, renewable technologies are at a completely different stage of
availability and pricing, climate change impacts have become tangibly noticeable
and increasing conflicts in areas with big fossil fuel reserves have added impetus to
the feeling that turning away from unsustainable forms of energy is a good idea.
So it takes time, a certain degree of irritation, a critical mass of alternatives and
their supporters to bring radical visions to life. The multi-phase concept captures
this process well. Unless the system dynamics show a certain degree of friction or
an existing willingness to change, experiments that propose to change too much in
too short periods of time will cause rejection or resistance.
This pattern matches Thomas Kuhn’s account of the development of scientific
advancements for which he coined the term ‘paradigm shift.’His 1962 book, The
Structure of Scientific Revolutions, describes changes in patterns of thinking and
basic assumptions (epistemology and ontology) behind scientific analysis. To this
end, he demonstrated the parallel existence of different paradigms to be the normal
state of affairs. These determine which questions will be asked when assessing a
certain issue, how they will be asked, what will be required to answer them and how
the results will be interpreted. Kuhn showed that there is usually one paradigm that
comes to predominate and does not evolve steadily by adding insights but is rather
overturned in an intellectual battle whose phases resemble those of the multi-phase
pattern. Dominant ideas and research premises tend not to cede gradually and
smoothly but instead to be amended until critique simply becomes too strong to
justify more exceptions to the rules. After such tipping points, the situation is
fundamentally altered, even if no consistent or coherent alternative explanations
and solutions are yet in place to fill the emerging gap and search processes.
Unsurprisingly, the navigation or transition phase in shifting paradigms as well as
governance solutions is marked by chaos, politicization, unease and power-ridden
struggles. The Global Scenario Group called them ‘branch points’and stressed the
role of science and intellectuals in providing narratives that can galvanize enough
support to become institutionalized. Thus, change agents are well advised to be
mindful that the diverse changes necessary to achieve a radically different scenario
will emerge from multiple sources, and might feel impossible for a long time, before a
window of opportunity opens and much change happens in a short period.
At the same time, one should not assume that radical changes will emerge from
less-than-radical intentionality. Reflecting on Meadow’s list of leverage points and
Kuhn’s account of paradigm shifts, we see that only by checking which key
assumptions inform which change initiatives can we get a better grip on the
transformational potential they carry.
From this perspective, paradigms or mind-sets play two important roles in
transformations that differ with the 4 phases (Fig. 2.2): in the pre-development and
acceleration phase the role of new paradigms and ideas lies in creating or increasing
irritations in the system by deploying the alternative meanings and knowledges
around which pioneers develop experiments. Here the role is to create frictions in
common sense and accepted justifications to create openness to change. It is about
delegitimizing the status quo explanations and solutions, about defining no-go
answers or views when discussing decisions on the way forward.
2.2 Summary: Paradigm Shifts and Large System Change …49
When forging toward tipping points in the navigation phase, however, the
function of a paradigm also changes: it needs to reduce frictions and uncertainties
by enabling single pioneers and followers to see and understand their common will
and to highlight which regime changes align with the paradigm, thus helping the
pioneers scale or multiply to become the new normal.
The mainstream economic paradigm serves as a great example here. As long as it
remains a legitimate reference framework for development, conventional growth
solutions remain difficult to defeat. The science and models it informs, as the next
chapter will discuss, allow only for analyses and predictions that subjugate sus-
tainable outcomes under the old economic growth development path. Or they
justify a continuation of this path in the short term because they predict that
changing course in the future will be less costly and thus a fairer allocation of costs
and benefits. It is only since the big financial crisis in 2008 that the credibility of
this paradigm and its linear extrapolations from historic trends have been severely
challenged, even in the corridors of power. Yet, until now no new paradigm has
found enough support to fill its place.
Kuhn stated that a new paradigm can only establish itself if it overcomes
stubborn adherences to intellectual vested interests. Political economists point out
that one should also be aware of practical vested interests when assessing why a
theoretical framework or the worldview it informs persist. In periods prior to tip-
ping points, those individuals and groups benefiting most from a system’s devel-
opment path have mainstream scientific evidence, canonized knowledge and public
discourse readily available to rationalize and justify the logic and merit of their path
over others.
The next 10–15 years will be very decisive for the outcome of this navigation
phase: stabilization around a new, consolidating paradigm, relapse into the old
dynamics with technological fixes and financialization, or even collapse because
this model has exhausted its adaptive capacities. Human history-making is an
emergent process of co-creation and political struggle, compromise and domination.
Yet, only if the stabilization phase is oriented around a shifted paradigm will the
new development dynamic of the system be radically different—or transformed. Put
differently: transformation means changing the default. Ideas and solutions that
have to justify their appropriateness and argue their legitimacy today will become
the new normal.
This chapter gave an overview of what different strands of transformation sci-
ence offer in response to the question of how to strategically work toward the
transformative quality that the 2030 Sustainable Development Agenda foresees.
This summary started fleshing out the way in which the different starting points of
STS, SES, and political economy research designs can be combined into very
insightful transformative science frameworks: concepts and heuristics for the
design and conduct of transformation processes. My own filter in selecting and
combining insights has been one that places human inspiration and will to act at the
origin of understanding and explaining SETS’s. By embedding humans into sys-
temic models like the MLP and multi-phase concept we can see that even when we
are talking about global transformations, the source of intentional change is human
50 2 What Political Economy Adds to Transformation Research
thinking, feeling, and acting. SETS’s are created, ordered and stabilized through
human decision-making and (often) conscious creation of regime structures.
Searching for more efficient technologies and more effective economic incen-
tives is not enough when looking for sustainability solutions. It is the institutional
setups and sociocultural frameworks that define the purpose for which technologies
and economic instruments are used. Here is where we find the root causes of trends.
Incentives and technologies mostly function as accelerating or balancing feedback,
but not in themselves as game changers. This is why the multi-phase concept as I
posit it here gives the sociocultural anchoring of alternative proposals and
pioneering solutions a crucial role in all phases of transformation.
In the amended MLP it is the purple and blue arrows that make the link. They
indicate how mind-sets mediate between agents and structures and how the dom-
inant paradigm functions as a reference framework for justifications and narratives
of change. The big arrow on the right hand side of the graph also shows, however,
that each individual is constantly involved in shaping the future paradigm. By
providing reason, opinions, arguments and experiences as well as non-verbal
reactions and behavior we can all participate in paradigm shifts and thus in
changing reality.
Polanyi demonstrated this link in his account of the Great Transformation. The
classical economic paradigm played a crucial role in making today’s default
solution the growth-fixated development path. This paradigm survived over two
centuries of criticism by amending itself into a neoclassical version. But today its
basic assumptions are challenged from so many angles and the institutional solu-
tions and processes based on it deliver so many crises that the time is ripe to shift
from diversified irritation to unifying consolidation: which insights on human needs
and natural resource reproduction in today’s scientific debates could become the
foundational ideas of a new development paradigm?
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2.2 Summary: Paradigm Shifts and Large System Change …51
