SEVEN
THE ISLAND
From Growth to Sufficiency

I hold the e-mailed printout of directions in one hand as I steer with the other. Left after Kingdom Hall, three-tenths of a mile on a dirt road, left at the Red Arrow Road sign on the tree. Turning onto the dirt road, I find myself driving through a forest that feels odd, but it takes me a moment to realize why. This stand of oak trees is clearly not young, but the trees have not grown tall. They retain the height of perpetual youth, yet bear the gnarled, wizened countenance of age—their adaptation, my host will later tell me, to the winds on this island of Martha’s Vineyard and to the sandy soil in which they grow.

“Our house is the last one on the left next to the pond,” the note says. I pull into a gravel parking lot, beyond which stands a cluster of two-story, cedar-shingled houses, weathered to that comfortable New England gray. Sixteen of them are nestled together in the forest, with porches facing inward, toward a central courtyard. But “courtyard” is too fancy a name for this long common area, covered with greenery that is natural rather than manicured. Meandering down the middle of it is a dirt walking path. The place has a palpable air of ease and serenity.

Out of the house by the pond—one of the larger houses in the grouping—steps my host, John Abrams, with salt-and-pepper beard and wire-rims. John is an old friend from my days at Business Ethics and a longtime participant in Corporation 20/20, but this is the first time I’ve been to his home. He strolls with me down the dirt path and shows me around. Neighbors call out greetings as we pass, and kids ride by on bikes.

“Even three-year-olds can be left to play here on their own,” John says, “because there are no vehicles in the inner space and so many eyes looking out.” This is Island Cohousing, the community where John lives, and which his firm, South Mountain Company, built.

Some homes have an ownership framework ensuring that they remain affordable for low-income residents, while others have traditional ownership designs, but I can’t tell the difference. Each house is constructed substantially from salvaged and certified sustainable wood. Some have solar panels. And the homes are tightly insulated, he explains, which means they’re cool in the summer and warm in the winter.

“They all have composting toilets,” he continues. “It was one of the riskiest decisions we made in building the place—would people buy houses with no-flush toilets? Would authorities approve them? Would banks finance them? In all cases, the answer turned out to be yes. People went for it.” The houses are sized for comfort rather than ostentation. They range from two-bedroom to four-bedroom, the largest about 1,700 square feet.

John takes me through the common house, with an expansive screened-in porch and generously sized rooms on the first floor, bedrooms upstairs. This shared space, he says, “allows us to have smaller homes.” Here, community members throw parties and put up out-of-town guests. It’s where weekly potluck dinners are hosted and yoga classes taught.

Over dinner, John and his wife, Chris, talk about how they came by accident to live on this small island off the coast of Massachusetts—only 100 square miles in total—which serves as a resort community of second homes for the wealthy. The two were “bicoastal hippies,” John said, and came out to help his parents build a house, then just stayed. And kept on designing and building, working with others to create South Mountain Company.

A tour of that company is the ostensible purpose of my visit. It’s one of the rare companies I’ve found that consciously practices slow growth. I’ve made this journey because I want to experience the living answer to a simple question:

What does a company look like that has moved beyond growth?

What allows some companies to disregard the growth imperative, while others seem trapped in it as in a vise grip? I want to see the answer up close in this one place. Island Cohousing seems a sideshow. It is only later that I realize it is in fact far more.

ENOUGH

The next morning, I take the same route to the housing community and continue a short distance beyond, for South Mountain Company occupies part of the same 36-acre plot as Island Cohousing. Soon the headquarters of this $8 million, 33-person business comes into view—a two-story cedar-shingled structure that looks less like an office than a lodge. Its interior has an air of relaxed comfort, with rugs over wood floors and high ceilings with exposed beams of blond wood. The table in the conference room, I notice, has legs in their original shape of branches, stripped of bark and sanded but not otherwise industrialized. Outside John’s office sits an overstuffed leather chair that invites me to sit.

As I wait for John, an employee comes into the building and stops to chat with the front desk person, saying he’s been in the parking lot listening to the end of an interview with Lawrence Ferlinghetti. He proceeds to describe that interview at some length. It is 9:15 a.m. and no one seems concerned that this person is “late” to work.

John and I sit in his office and talk a long time that day, the forest visible outside his window and the sun streaming in. He points out the wind turbine that the company put up, which—along with solar panels—supplies 90 percent of the firm’s electricity. At lunch we drive around to see places the company built. We visit a house designed to approach zero net energy, which can feed excess energy from solar panels into the grid and is heated only with a pellet stove. He takes me by “Jenny Way,” a cluster of ten homes that includes the first LEED-certified platinum single-family affordable homes in the nation (LEED stands for Leadership in Energy and Environmental Design).¹ One source of wood for homes like these is logs salvaged from the bottom of rivers—“sinker cypress,” John calls it.

In this resort community where real estate is extraordinarily expensive (I saw an ad for a “two-bedroom walk to the water” priced at $5 million), the company uses some profits from building high-end homes to create affordable houses. It offers employee housing assistance and led the development of the nonprofit Island Affordable Housing Fund. South Mountain maintains long-term relationships with its clients, offering “post-occupancy care.” If a cabinet door fails to work after ten years, it gets fixed. I meet separately with a number of employees, including designer Derrill Bazzy, who started there as a carpenter. He talks about how many clients became close friends.

“My son’s godparents are clients, and we’re godparents to their kids,” he says. “When there’s a certain comfort level within a company, it’s easy to extend that out to customers.”

Most compelling to me are the company’s unorthodox policies on growth. These originated in 1994, after the firm took on projects that doubled its revenue and meant adding employees. As John describes it in his writing, “The company was shot through with anxieties, dissatisfactions, and stresses. There seemed to be a general sense we had grown too much, too fast.” To gauge it better, he called a staff meeting. He hung a chart on the wall and drew a vertical line down the middle labeled, “Maintain present size.” On the left it said, “Decrease size,” and on the right, “Continue slow growth.” Employees were asked to each place a sticky dot somewhere to indicate their preference.

When everyone stepped back, most dots clustered near the center, a significant number were scattered to the left, and several were smack in the middle. The consensus, John wrote in his book, Companies We Keep, was, “We should back off on the accelerator a little, adjust ourselves to our recent growth, err toward caution, and slow down a bit.” Since then, the company has held similar growth meetings every few years. At one point it kept revenue flat for nearly a decade. And it often turns away work that doesn’t fit its values or plans.²

South Mountain is free to take this approach because of its ownership structure. This is an employee-owned and employee-governed firm. The people who feel the effects of growth can control it. Employees make up the board of directors, and they feel no need for outside board members. Because the company finances itself with its own profits, it has no outside investors. Employee-owners choose to focus not on more but on enough—in John’s words, “enough profits to retain and share, enough compensation for all, enough health and well-being, enough time to give the work the attention it deserves, enough to manage, enough headaches, enough screw-ups.”

Another word for enough is sufficiency, wrote Thomas Princen in The Logic of Sufficiency. It’s different from the industrial ideal of efficiency, which is the notion that more, faster, cheaper, is always better. Sufficiency, Princen said, is “the sense that, as one does more and more of an activity, there can be enough and there can be too much.”³ Sufficiency is natural in living systems. It arises as an operating principle in this company because membership is rooted in the living hands of employees, and because Mission-Controlled Governance gives voice to those employees.

THE STICKINESS OF GROWTH

South Mountain’s comfort with slow growth is far outside the mainstream of business. In extractive ownership design, the operating principle is that the continuous growth of financial income is the ultimate good. If all of corporate America squeezed into John’s room and placed their sticky dots, they would cluster massively to the right—in territory labeled “continue rapid growth forever.” Over the years, I’d seen that imperative lead to the ethics crises at Enron, WorldCom, Adelphia, and other companies. Rather than admitting that growth in profits had become difficult, they cooked the books to keep the fantasy alive longer. The same mentality led investment banks to push expansion into subprime mortgages, for they were loath to admit that all the appropriate lending was finished.

Pursuit of growth is why Dominion spent an unfathomable $6 billion buying back its own stock—a paper maneuver designed to remove shares from circulation so as to drive up the price of remaining shares. It produced nothing in the real world: no wind turbines, no natural gas plants, no solar energy installations. What it produced was a bump in stock price. At Dominion, that bump meant the CEO walked off that year with $15 million, largely due to stock options. Yet Dominion’s stock price soon deflated. In less than two years, the stock traded lower than before the buy-back. This energy company spent $6 billion on thin air. It did so at a time when the future of the planet depends on our energy choices. It was Nero fiddling on a planetary scale.

In the short run, Casino Finance and Governance by Markets can work wonders, for a few. In the long run, they can make a mess for everyone. Dominion and Enron behaved as they did because of their ownership design. It’s the way extractive, industrial-age ownership links earnings to capital markets, and the way those markets spin molecules of earnings into larger bodies of wealth—transforming a dollar of earnings, through an inflated P/E ratio, into $20 or $30. This magic holds an irresistible lure, because it “creates” financial wealth beyond anyone’s wildest dreams. CEOs are the ones who keep it going. But if every CEO at every major firm were abducted by aliens tomorrow, others would simply step in. Nothing would change. The problem isn’t so much individuals as it is the ownership design that encourages, amplifies, and rewards their behavior.

Could a CEO of a publicly traded company wake up one morning and decide, well, enough revenue and profit; let’s slow down and stay at a nice plateau of prosperity? Could such a firm, in other words, become a steady-state economy writ small? Not without all hell breaking loose.

The multiplier effect holds together only when investors expect future earnings to grow. If earnings flatten or decline, the process goes into reverse. Stock prices collapse. CEOs are handed their head on a platter. Others are brought in to get the growth machine roaring.

Keeping stock price inflated isn’t the only reason why companies like growth; they want to capture market share, achieve economies of scale, and so on. But the financial markets create an addiction to growth, transforming a preference into a white-knuckle need.

Growth is an imperative of finance, not of business itself.

“The real key is keeping business private,” John says to me. “As soon as you become a public corporation, your social mission is done. You cannot resist the pressure of Wall Street.”

THE MACHINE STUCK ON HIGH

Most public discourse about growth focuses on issues like climate change, consumerism, and policymakers’ fixation on GDP. But those bigger issues are inseparable from what happens inside of companies. Take consumerism. Whenever a consumer buys something, some other party is selling that thing. Those transactions aren’t happening at garage sales. The selling is done by companies. The sales revenue of major corporations represents most of global GDP.

The fit between consumption, company focus on growth, and the swelling of GDP is a tight one. It’s all one process. Pressure for growth arises at all three points—at the individual, company, and national levels. Yet the pressure may be most intense in companies and financial markets.

Corporations and capital markets are the internal combustion engine of the capitalist economy. They’re where it hits the ground and goes. And where it spins out of control. When companies aim to limitlessly grow profits, they sometimes kick themselves into high gear and run beyond normal tolerances. Gaskets blow out. Engines overheat. Pedestrians get run over. Inside the company, the pressure leads to overwork, anxiety, layoffs, outsourcing, wage cuts, reductions in health benefits, and accounting misstatements. Outside the company, the pressure ripples through the economy like an electric charge down a wire—pushing customers to buy more than they need, families to take on more debt than is manageable, ecosystems to absorb more waste than is possible.

What keeps the pressure on high is extractive ownership design. Since ownership shares of big firms mostly trade on public markets, these companies are driven by the same algorithm of growth at any cost. The output they create adds up to an economy too large for the carrying capacity of the biosphere. As Fritjof Capra put it, “It’s an alarming thought that organizational systems are now the main driving force of ecological systems.”⁴

Most people don’t recognize that ownership design plays a large part in driving the whole thing. People see the urge toward wealth accumulation as akin to gravity. And greed does arise naturally in the human heart. But so does compassion. Extractive ownership design singles out one natural impulse and institutionalizes it, normalizes it, magnifies it.

In the short run, profit-maximizing companies can help a rapid transition to an ecologically cleaner economy. But in the somewhat longer run, that transition might represent a brief moment in time. If human civilization and planetary ecosystems are still functioning well 50 years from now (not a small if), what about the next 50 years? And the next 100 or 200 or 1,000 years beyond that? What kind of economy will be suited for ongoing life inside the living earth? Will it be an economy dominated by massive corporations intent solely on growing earnings? That doesn’t seem likely. When you take the long view, the question turns itself about:

Can we sustain a low-growth or no-growth economy indefinitely without changing dominant ownership designs?

That seems extremely unlikely. Probably impossible.

METEORS HITTING THE EARTH

The biggest challenge of getting outside the growth paradigm is recognizing how much we’re in it. Since the end of World War II, we’ve been living in an inconceivably massive explosion of economic growth.

“People living in an explosion are different, just as people living in a war zone are different,” my Tellus colleague John Stutz says to me. “The normal reaction to an explosion is to take cover and wait for it to be over.” By contrast, we assume that our explosion will go on forever.

John, who has a PhD in mathematics, studies numbers the way others study cookbooks. He’s a student of growth. A researcher he often turns to is Angus Maddison, who put together estimates of global GDP back to the year one. (Some people sit around and do this stuff.) Maddison’s figures offer a geological-scale perspective on growth. And they’re eye-opening. One afternoon in my office, John explains how, compared with earlier eras, growth since 1950 has been off the scale.

“We’ve been through 50 years of growth so massive, it’s distorted the whole experience of the species,” he says. “Suppose your salary went up every year by $100,000. Then one year you got a raise of $50,000. You’d be really angry. That’s the kind of distortion that has set in, where the smallest falloff in growth rates seems a catastrophe.”

On a global scale, GDP changed very little in the first 1,800 years of the common era. Then with the start of the Industrial Revolution in 1820, growth began to pick up. Global GDP swelled to eight times as large by 1950. But in 1950, growth lifted off like a rocket, from slightly over $5 trillion to a jaw-dropping $51 trillion in 2008. The output of 1950 was about 10 percent of this new level. The remaining 90 percent of global GDP appeared in just under 60 years.⁵

As John put it, “It’s as though a town that spent 100 years building a few houses suddenly woke up one morning and built New York City in a day.”⁶

To make this kind of exponential economic growth visible, different people have created thought experiments. Here’s one I dreamed up. Imagine we’re in a movie theater, watching a two-hour film graphically depicting the growth of global GDP. On the screen is a simple frame with 100 squares, representing 100 percent of economic activity in 2008. Two thousand years will pass in two hours. When the lights go down and the film begins at year one, we watch as a single square slowly fills in. This takes an hour and three-quarters. We are at the year 1750—just before the American and French revolutions. Economic activity equals 1 percent of the activity in our era.

We watch as an additional four squares fill in. This takes about ten minutes and represents a century and a half. We’re at 1913—just before the start of World War I. The pace picks up. Another two minutes and we’re at 1950. We’ve gone from the time of Jesus to the time of Dwight D. Eisenhower, and 10 squares are now filled.

In the final three minutes of the film—from 1950 to 2008—90 squares rapidly fill in. Economic activity is now nearly ten times what it was in 1950. This is roughly the span of one human life: my own.

But the filmmaker has a bonus. She steps onto the stage to explain: “Let us assume that growth in the next two decades, up to the year 2030, is about 2 percent a year in the rich world and somewhat higher in the developing world. Let’s watch how the next minute and a half of earth time would unfold.” She invites us to look around, and we watch as a second entire screen fills up, and activity spills onto a third screen, in the blink of an eye.⁷

By 2030—roughly when my kindergartener niece will be a few years out of college—global economic activity could be more than double what it is today. That activity (if it proves possible) would occur on our one planet, which is already in ecological overshoot. If it’s reasonable to compare the impact of current human economic activity to that of a meteor hitting the earth, as some have, then in the coming two decades, we could see the impact of a second massive meteor. What about the next 20, or 100, or 1,000 years beyond that?

“Islands are laboratories,” John Abrams wrote. “Islands are semi-closed systems. When you get off the boat or the plane and set foot on the Vineyard, you know immediately that you are in a place with limitations.” The fixed boundaries create the conditions for innovation. “Challenging the false gospel of unchecked growth,” as John calls it, is part of South Mountain’s experiment in living well within limitations.

And there’s a second part: learning to live well when the growth stops. This was the new reality that hit South Mountain Company in the wake of the 2008 crash and the housing bust that followed. “The year 2009 was our year of reckoning,” John wrote in a company review. This employee-owned company had to contend with the unthinkable: not enough work for all. In a rigorous effort to avoid layoffs, the firm turned to furloughs, wage cuts, major marketing efforts, and employee skill building. But by January 2011, five long-term employees (two of them former owners) were no longer with the firm.

The large volume of work the company had enjoyed for so long was shrinking. South Mountain had begun shifting to smaller jobs, more renovations, and more energy work. As the company reinvented itself, John wrote, “we came to realize that we wanted to get smaller even if we didn’t absolutely have to.” Heresy upon heresy. Here was a firm that not only challenged the gospel of growth, it willingly (if somewhat painfully) opted to shrink—and to do so in the most humane way possible.

Learning to live well within limitations. This is what I saw in action in my visit to Martha’s Vineyard: what it might mean to begin adapting to the emerging possibility of no growth, slow growth, or “degrowth,” as some are calling it. But South Mountain Company, it turned out, wasn’t the most interesting of John’s post-growth experiments. It was at Island Cohousing that I most vividly saw something truly different—not simply the absence of growth, but the presence of something else. Call it sufficiency. Call it well being. It’s about allowing ourselves to slow down and just live. John’s willingness to live simply at Island Cohousing was all of a piece with his willingness to share ownership with employees and to accept that his company needed to shrink. It’s all the same value system. Sufficiency goes hand in hand with fairness and community, because when we’re no longer hellbent on squeezing out every possible dime of increased earnings for ourselves, we can begin to notice other people’s needs. When we’re moving more slowly, satisfied with what we have, it’s easier to treat other people well. It begins to seem foolish to financialize every molecule of property in order to infinitely grow our financial assets.

This sufficiency approach is institutionalized, normalized at Island Cohousing. Families own their individual houses and land, but the forest and common areas are held jointly. The people living there agree that these common areas are not intended to be for sale (though they could be, if three-quarters of the owners vote for it). In addition, the homeowners voluntarily agree to covenants about how to live together: agreeing to honor ecological design and to make some homes available to low-income residents. Individual freedom is honored. Yet the interests of the community are taken care of by design. Not the design of legislation. The design of common property.⁸

REINVENTING THE COMMONS

The idea of holding land in common for the community is an old idea. It’s still seen in the British tradition of the town common in New England. Mexico once had the ejido system, involving village control over communal lands. Traditions of common land ownership were known in ancient China and Africa. In Israel, there is the Jewish National Fund, a public but nongovernmental institution established over a century ago to hold land that would, in the words of its founder, be “the property of the Jewish people as a whole.” Today the fund still holds title to substantial land in Israel, overseen by trustees who lease portions to kibbutzim and others who use it in the public interest.⁹

Native American tradition embraced the most expansive notion of common holding, based on something closer to kinship than ownership. Because they saw the earth as a mother, the sacred ground of all beings, Indians found it inconceivable that one person could claim exclusive possession of land. The story is told of warrior chief Tecumseh and his incredulous reaction when white settlers suggested that natives sell land.

“Sell the country?” Tecumseh said to them. “Why not sell the air, the clouds, the great sea?” To American Indians, owning the land was incompatible with being a member of its living community. But in the design of Island Cohousing, the seemingly contradictory notions of individual ownership and relationship to the whole are reconciled.¹⁰

Island Cohousing and other similar experiments help reawaken an ancient wisdom about living together in community, which was lost in the spread of capitalism. Historian Karl Polanyi, in his 1944 work, The Great Transformation, traced the crises of capitalism to the fact that it “disimbedded” economic activity from community. He said that throughout human history, economic activity had been embedded in society, part of a larger social order that included religion, government, families, and the natural environment. The Industrial Revolution upended this. It turned labor and land into market commodities—inputs into the great machine of industry. They were to be “bought and sold, used and destroyed, as if they were simply merchandise,” Polanyi wrote. But these were fictitious commodities. For they were none other than human beings and the earth.¹¹

The economic aspect of land—its price in the market—is only one of its many facets. Land is the foundation of life. It’s the planet, the seasons, the source of sustenance. To turn it into a commodity, governed only by market forces, is to threaten the web of life that depends upon it.

A place like Island Cohousing runs this process in reverse. It decommodifies the land, putting it again under the control of community—through a design that is sensitive to market forces but not subject to them. It re-embeds economic activity in cultural and ecological context. It re-embeds ownership in community.

With a silent intelligence, such designs show how the deep blueprints of cultural understanding can be rewritten. It’s part of the “metaphysical reconstruction” that E. F. Schumacher said would be needed to transform our economy. When property is designed in a generative way, it’s no longer about sole and despotic dominion. It isn’t about standing apart from the objects we own and squeezing every penny from them. It’s about being interwoven with the life around us.

FROM OBJECTS TO RELATIONSHIPS

The “shift from the parts to the whole is the central aspect of the conceptual revolution we now need,” Fritjof Capra said. In classical Newtonian mechanics, the behavior of individual parts determines the behavior of the whole. But in systems thinking, the whole determines the behavior of parts.

In the new reality that physicists conceived at the turn of the last century, they recognized that subatomic “particles” are not things but interconnections among things. As Henry Stapp put it, an elementary particle is “in essence, a set of relationships that reach outward to other things.” What we call a part is simply a pattern in a web of relationships. “The shift from the parts to the whole can also be seen as a shift from objects to relationships,” Capra said.¹² A shift from dominion to community.

The choice between growth and no growth isn’t the place to begin redesigning economic activity. The place to begin is with relationships: to each other and to the living earth.

On the night I’d first arrived and had dinner with John and Chris, I was struck not only by the welcoming sense of community at Island Cohousing but also by the simplicity of the home where this company president lived. When John drove me around that next day, he took me past the house where he and Chris had lived before, which was larger and more valuable than their current home. Their cohousing home was simple. Four bedrooms. And on the first floor, one combined kitchen, dining, and living space. The staircase post was a bare branch from one of the wizened oaks on the property, stripped and sanded but not otherwise industrialized. There was a single rug on a bare wood floor, some simple furniture. That was it. John and Chris don’t have a glitzy lifestyle—not because they can’t afford it but because they don’t want it. In relationship and in community, they seem to have found what they sought.

This is sufficiency at work—a genuine sense of having enough, feeling satisfied. Another term for sufficiency is happiness.

Still, as compelling as Island Cohousing and South Mountain and the other commons designs are, I feel that I’m seeing mostly an atomized, individualized version of the generative economy. What holds it together? How can it begin to cohere into an actual economic system? This is my next quest. I want to see, in one place, a whole social ecosystem of generative design.