Redesigning Governance- Shann Turnbull on Reality Proves Possibility

What if the way our organizations are designed is the root cause of our biggest social and environmental crises? 

Shann Turnbull challenges conventional governance ideas, revealing how shifting from top-down control to decentralized, self-governing structures can unlock resilience, equity, and sustainability at scale.

If you're questioning the status quo of corporate power or seeking practical paths to reimagine management, this episode will expand your understanding of governance as a living, adaptive system—one that aligns business with human dignity and nature’s rhythms.

Discover how Eleanor Ostrom’s groundbreaking research on self-governance applies beyond communities, pointing toward a future where companies are nested networks of autonomous units, each rooted in local ecosystems. We break down the social science behind polycentric governance and how it can be embedded into corporate law through simple but revolutionary reforms—like giving corporations a limited lifespan and rewarding stakeholder ownership.

Shann shares real-world experiments where shifting legal structures enabled organizations to flourish by redistributing power and fostering bottom-up decision making.You’ll explore: the paradox of hierarchical versus self-organizing systems, inspired by biological principles like tensegrity—where tension and compression create resilient, adaptable structures. 

We discuss how organizations can embrace complexity, staying flexible and innovative through distributed decision-making that mirrors nature’s own design. This isn’t just theory—Shann recounts how he transformed Australia’s skiing federations and company boards into self-governing entities, providing a blueprint for global change.The stakes are clear: without embracing self-governance, corporations will remain disconnected from the natural endowments they depend on, reinforcing inequality and environmental degradation. But with this new approach, there’s an unprecedented opportunity for resilience, democracy, and long-term flourishing—if leaders are willing to rethink basic assumptions about governance, ownership, and lifecycle.

Perfect for entrepreneurs, managers, students, and anyone hungry for a smarter, more sustainable future, this episode will challenge how you see organizational design—and reveal that the boundaries of what’s possible are only limited by our imagination.

Transcript

SPEAKER_00 0:00

This is reality proves possibility, an exploration of human ingenuity. Hello, this is Michael Pearson, and this is Reality Proofs Possibility, and I'm excited to be here with Shan Turnbull, a longtime collaborator and an inspiration for many of my theoretical works, but also an ongoing inspiration, I think, for what's possible in reality. So, Shan, thank you so much for joining. You have been a pioneering voice in specifically corporate governance research, and you have spent decades challenging some of the myths surrounding corporate governance, including that shareholder value maximization is important or the only goal, and that a corporate unitary board is necessary for good governance. And yeah, your work asks a deceptively simple question. What if the way we design governance is the root cause of many of the outcomes we accept as inevitable? Short-termism, extractive strategy, runaway inequality, and environmental destruction. And leaders who feel trapped by the market. So instead of treating organizations like machines that must be controlled from the top, you explore how governance could be designed like a living architecture, one that can distribute power, strengthen accountability, align enterprise with human dignity and long-term flourishing. In this conversation, Jan will explore what it would mean to redesign organizations so that they are more self-correcting, more resilient, more capable of serving the common good. Not through slogans, but through structural choices about information, incentives, ownership, and decision rights. And many other thoughts that you have developed in your many years of contribution. So if you've ever felt that good intentions overall aren't enough and that we need better designs for business and society, this is an episode where we'll expand on what we think is possible. So, Shan, thank you so much for joining. Reality Proves Possibility. And I invite you to quickly react to the title of the show, Reality Proves Possibility. We can do better than this.

SPEAKER_01 2:17

Well, thank you, Michael. And you're an inspiration with humanizing management, and that's where we want to go, and we want to and to really humanize management. We've got to get the size of corporations and organizations down to human scale. And and Eleanor Ostrom studied complex problems for 40 years, and her empirical evidence proved that self-governance was practiced around the world. And it and it's often practiced in the modern world, but it's not taught anywhere. It's an intellectual void in academia, because as the Nobel Prize Committee re reported that in 2009, when they awarded the prize to Eleanor, they said you ne economists unanimously agreed that self-governance was not possible. You had to have markets and hierarchy. And Ellen Austin entitled her Nobel Prize lecture that without markets or state. So if you're wanting to get the votes of both sides of the House of Congress with less government, you do that by self-governance. And self-governance is is the intellectual void that system scientists know. Elon Musk is an expert in self-governing automobiles. But that but he d he's he's no expert in how to make organizations uh self-governing. Yet he's got the knowledge, and all he's got to do is transfer the knowledge of system science to uh social sciences, and Elinor Austin did that. And her she her conclusions of best practice of self-governance was not to have a unitary centralized command and control hierarchy, which is alienating and goes against all the views of humanistic management. She introduced the idea of polycentric governance, which is a political science word for decentralized distributed decision making. And distributed decision making is illustrated and practiced all around the world. And she researched that in the use of common pool properties, life-sustaining resources like water, irrigation, water and hunting rights, running schools and police forces, it's always best done at the local level. You've got to do it at the local level. And we and to get democracy and to get to to humanize corporations, we've got to have corporations owned and controlled and governed by the endowments of nature of the bioregion in which they live. And the main problem we have with society, we're disconnected from the endowments of nature, which govern us. Indigenous Australians have the longest culture of self-governance in the world. They've existed, they've had distributed decision making for 65,000 years when the sea levels were 130 meters lower. And they and they have survived. So what we've got to do is be governed from the bottom up rather than the top down. Now all business schools, schools of managed graduate schools of management, business and government that I've discovered only teach top-down hierarchical, you know, communistic or socialistic management in capitalist organizations. Corporations rule the world. The Oxfam reported that just eight individuals, their asses, as much as the half the world's poorest population. When you've got concentration of power that great, it undermines democracy. And it's undermining the rights of universities to be independent and and do original research. So we've got to correct that. And one way to correct it, one way that both Republicans and Democrats support in the United States is employee share ownership plans, because they help the capitalists and they help the workers. So what I've been proposing is a tax incentive, a counterintuitive one, which goes to the to the shareholders. They get a bigger profit quicker on condition they change corporate constitutions. And there's two ways that change corporate constitutions. And one way most academics will say is impossible. And that is they give up five percent of their ownership each year by book entries to a stakeholder account, from which free shares are issued to the voters of their region. And over 20 years that means big corporations dissolve into families as nested networks of smaller organizations governed by the people in the who who vote for the politician who give the tax incentive. Now corporations, when they get to that s uh smaller size, they have a hundred percent payout of their dividends, which are reinvested in offspring corporations. So I call it ecological governance because corporations take on the attributes of living things. They give birth, die, and give children, and the children take over, and you have succession rebuilt, you get continuity of investment, management, and growth by doing it through your children, not by becoming giant dinosaurs ruling the world on a top-down basis not accountable to the endowments of nature. So Eleanor Ostrom has made uh has identified the design rules for self-governance, and our challenge is to get deans to admit that there's a gap in their education program of how to apply Ostrom's insights into corporate constitution. Now that's a global gap, knowledge gap in business schools, because they don't consider corporate constitutions, and that determines the power structure. And if you want to get polycentric governance, you've got to have a distributed power. And that's the second condition that the tax incentive depends upon, of introducing polycentric governance, and people say, oh, that sounds very complicated and how we do it. You need no changes in law. All you need is is the shareholders to to vote to do it. I've actually done twice in Australia. I've changed the corporate constitutions of two national organizations from centralized top-down command and control communist state-like power structure, which is which which denies humanistic management, into uh bottom-up stakeholder ones. And it's very simple to do. The first one was when I became the uh honorary non-paid chief executive of the national controlling body of skiing in Australia. We only had skiing in four states, but and those four states were all self-governing. And each state self-governing body uh was in turn a federation of self-governing local ski clubs. And as secret as the Secretary General, which is another name for chief executive, honorary chick part-time chief executive, I wanted to hire staff, so I wanted to incorporate. So I federated. I didn't take over control of the constituent parts. I let them do their own thing. I just federated them and into in into and represented them internationally at the International Controlling Body of Skiing, which is part of the Olympic Committee. And so from a glob you what you've got is a hierarchy, a nested network of self-governing organizations from local communities to a global basis without state, necessarily the state or markets, although markets are involved, but you don't need them to have the the Olympic Committee, except they need to have markets that can raise the funds to run the show. So that's the vision I have of the of how we can sustain our future for eternity of being locally governed, bottom up, and then that allows us to follow the indigenous practices of Australians, of organizing our society according to the renewable resources of nature. So we get connected to nature again. So I've done it twice in practice, and the other time I did it was for the the Company Directors Association of Australia. It was a top-down organization, and we changed the constitution to make each state and states and territories elect their own state councils, and those state councils were self-governing, and the national body was serving the servant leaders. So we served the state councils. Now, when it merged with the Institute of Directors and Affiliates from England in 1990, um the that self-govern the state councils were retained, but but the the center took pa power away from them. So it just became a it it it's it's lost its polycentricity. It it has it in the Constitution, but the central took over the powers and run the whole show from the center. But it just proves that it can be done, it's not hard to do. So twice I've introduced, I didn't realize I was this is back in 1974, 1978, and I didn't realize it was polycentric governance till I learned about Lynn Ostrom. So I've actually been there, done that, introduced polycentric governance, and there's marvelous examples around the world, the John Lewis Partnership in England, the Modrigan Cooperatives in Spain, and of course the Visa International. And uh and uh the DH organized visa. It has one corporate entity, but it has hundreds of boards within the one corporate entity, because each bank is a member and each bank wants to have power over its the credit ability of its clients. So each board of visa is is a self-governing unit of the greater good. And so again, that shows you how you can put into practice polycentric governance. And these companies I've just quoted, they've been existing over the last half century through different business cycles and improve their resilience and efficiencies, so you're not losing resilience or efficiencies, and what you're getting is the local control uh of the people in which enriching democracy. So, how are we going? Am I talking too much?

SPEAKER_00 12:15

No, no, no. I think you got a whole story there laid out, which I think is also going to be part of your sort of book uh upcoming, right? Surviving our future. So I want you to speak to all of that. And I believe from what I got, the reality proofs possibility story line goes through it all of your insights about corporate governance and structuring. And I want to push back a little bit though on this sort of glorification I want to put point to of the local governance because I'm sure there is good use for centralized governance at some point, and top-down. It may not be always, it may not be the unified structure for everything, but an internet or global institutions require some center, and maybe it needs to be polycentric, as you're saying, not just local, but there needs to be global and local and whatever meso my micro and macro solutions, like Lynn Ostrom and others have said, like our mutual friend David Sloan Wilson talks about multi-level. So you would say to that, yeah.

SPEAKER_01 13:25

I agree entirely. And this is what uh management scholars don't see. They don't see that every living thing on this planet is self-regulating and self-governing. And the system science word for with Herbert Simon talked about individual component parts, and the and the word is used as a holon or holarchy. You get a network of holons or self-governing parts, you get a holarchy. And a def and a defining feature of a holarchy is its paradoxical quantum-like characteristics of doing both at the same time, top-down and bottom-up. And this is uh a fellow called Donald Ingber, a biologist, Harvard biologist. He he said that this paradoxical relationship called what Bucky Fuller called tensegrity, you're combining opposite behavior patterns together. In physical world, tensecratory is when you combine struts and compression like your bones and muscles in tension like your muscle. And so you've got compression and tension working together, and it has memory of where it wants to be. So the word tensecretary is called by Bucky Fuller and Donald Ing called it the architecture of life. It's the architecture of both the physical structures, because geodetic domes and so on is the way to cover the greatest materi space with the least material, and psychological structures of behavior and the DNA of every living thing, like you and I, we are we are hardwired to have contrary behavior. It's fight or flight. It can be selfish or generous, it can be cooperative and it can be competitive. So you need to have both together, and and as soon as you get a hierarchy, variety is denied and expelled and demoted or exp and and so management scholars don't see it. It's a it's a characteristics. Michael Jensen has all the behaviors of behavior, but you can't have one or the other because tensecretary means behavior is continually changing all the time according to context. And that's how evolution evolves, and w and we have the variety of designs of living things according to the context of where they live. And we've got to be part of nature. We want humanity to survive for eternity. We've got to integrate with nature and adopt tensegrity, which you can only get when you've got distributed powers of polycentric governance. So and and the need for the center is of course the Olympic Committee. It gives the example. Eleanor Ostrom never got, didn't think it would work either at a global level. She believed it wouldn't be self-financing. So her design rules are purely at confined to the community. And two years ago I went to one of Ostrom's workshops where I met a lot of Lynn's students and colleagues and did a presentation there of how we could extend her scholarship from local to global level, like I've just described for social organizations with have national representation. So there's but what I'd like to see is people teaching how to design corporate constitutions to turn corporations upside down, and the tax incentive provides a way to do that. Now, I should add that I've had ex the the thing which is most difficult for academics to accept is that investors will invest in limited life projects. Everything in the world except the the earth and uh corporations have perpetual life, and that was because corporations were developed by the English to privatize empire building. But when America fought for independence, the states took control and they didn't they limit the life of all corporations to 20 years. It is under state law. And we now how do we get back to limited life corporations that grow through their children and grandchildren? And and the way you do that is is through the tax incentive and p and the academics will say, Oh no, inve it wouldn't be competitive. Investors wouldn't invest, you'd lose their innovation, da-da-da-da. And I've twice raised millions of dollars from hundreds of investors on 15-year leases. The first company that uh I did this with was uh a vineyard company in Australia. It had 600 acres and it had a new technology. Normally vineyards have don't have irrigation, and normally dry dry vineyards get about one and a half tons per acre of grapes. If you get drip irrigation on each plant, you get the productivity going up to four and a half tons per acre, and that's what we did. And we sold leases, 15-year leases. But for every thousand dollars you invest in a tax-deductible lease, you got one you got the right to convert it into common shares when it was ready to be listed on the stock exchange. And that's what happened. The the investors got a tax deduction going into the deal and a tax-free capital gain coming out of the deal.

SPEAKER_00 18:29

And that sounds pretty sweet. That sounds pretty sweet. And I want to piggyback on that in a moment. I do think we want to take a little break now. And so, Shan, when we come back, I want to have more of the conversation about like the basic insights that you're proposing for the rest of us to consider. And I I do think there's a couple of themes here. It's like some of it is from the from the biology, some of it is from system science, cybernetics, and complex adaptive systems, and you bring in concepts that Bucky Fuller popularized to some degree in many ways that are coming maybe from architecture, engineering, or just the science of life. And so I I'd like you to to structure that with me a little bit bit by bit because there is a lot there. Okay.

SPEAKER_01 19:14

Thank you.

SPEAKER_00 19:14

More when we come back.

SPEAKER_01 19:16

Okay, good on you.

SPEAKER_00 19:17

Well, indeed. There's a lot to unpack. And Shan, thank you so much for making the time. Australia is far away. It's difficult to arrange time zones. And maybe this is also a reason why some of your thinking from Australia hasn't yet been so powerfully received as I think it should be over here. So maybe we'll just get back into some of the baseline conversations that I can actually still follow, which is the corporate governance thinking that you have explained so well, and where multi-level, multi-board, multi-stakeholder engagement processes like at Mondragon, at John Lewis Partnership, at Visa at some point, were actually very effective to govern organizations in a federated way, um, and with both control and strategic advisory and adaptivity options being powerfully exercised, at least for a time. So now maybe just get back to us. What are some of the key things in the corporate governance debate that you think we and other younger scholars should look into? Because it's still dominated by agency theory, maybe a little bit of stakeholder theory, and then uh the idea that the unitary board is somehow the only way that you can organize effective governance. So if you can start there, and then we want to move into some of the broader thinking that you have worked on for society, maybe ecological money, and all the kind of other ideas that you have presented. So let's stick with corporate governance, maybe just your your final thinking and thoughts.

SPEAKER_01 20:54

Thank you, Michael. But you've got it in one. It's the unitary borders the problem because that has absolute power to identify and manage its own conflicts of interests or be ethically blind and simply not see them. And I'm inspired by the research of Ellen Lynn Ostrom, who got her Nobel Prize for identifying how people can solve complex economic problems without markets or state, and it's been going on for thousands of years. Our indigenous society in Australia demonstrates that, and so do very large m multiboard self-governing organizations like the John Lewis Partnership in England and the Modrighan Cooperatives in Spain and the Visa Corporation in the United States, which, as we discussed earlier, has hundreds of boards because each bank has its own board within the one corporate entity. And that is the model that I think that is consistent with uh Lynn Austron's polycentric governance as she calls it. And unless you get the separation of powers, you cannot get contestation and challenging the community. Communication and you don't get simplification. By having many centers of decision making, you simplify complexity. And that's what the Visa Corporation and John Lewis and Modrig and Cooperatives demonstrate. There's no commercial reason why people that manage a business should also have the power to manage the corporate entity. So obviously there's no commercial reason why conflict them and overload them with complexity? Why not remove all those powers of committee meetings of nomination, of orders and remuneration and have them in a separate board? And that separate board can shock horror be democratic, one vote per person. So if you've got a a a founder or strong leader, you can have control. The strong leader has ultimate control because he can call an EGM and vote on one vote per share, but then it becomes a public issue in the public marketplace. And he lives with the consequences of uh of mismanagement, malfeasance and and uh uh and just pause here because I think there's a key thought that most people seem to miss.

SPEAKER_00 23:17

It's like the simplification of the structure, the unitary board, is seen as structure with division of power and division of labor. But that's what you're basically arguing for, right? That we we use that the we use the structures that nature has provided us to deal with complexity by creating that requisite variety of structures that actually then absorb structurally the complexity, doesn't overload individuals where we have limited brain capacity and we're very bad in our decision making anyway, for very limited things. It is basically an overload and a problem for anybody, no matter how smart, intelligent, and capable, to deal with the complexity of governing and controlling a big organization like a corporation. Is that correct?

SPEAKER_01 24:08

Yes, you say it beautifully, and that's and that's a humanistic way. You follow the uh processes of nature, mimic nature and reality. Um that's no living thing is centrally controlled. We're all self-regulating, self-governing living things. And and because of that, our DNA hardwires us to have contrary views. So all the models that um you have of behavior go out the window because w our DNA hardwires us to be contrary. It's a quantum-like paradoxical behavior, like we can be selfish and generous at the same time. We can be competitive and we can be cooperative. And this is not in the management literature. You've all got to be a good team, you've got to be a good leader. Well, if you're a leader, somebody's got to be followers. And like any good marriage, um you've got to there's different rules, different horses for different causes. You need different people with different skill sets and interests and values to be considered as well. And you can't do that by being a uh a centralized socialist leader with which who pretends to know best for all his uh stakeholders. So, yes, I totally agree with your analysis. Thank you.

SPEAKER_00 25:24

Okay, so that's one part of the I think very compelling argument that we have been underutilizing structural arrangements for better governance and especially the division of labor and the division of power. And we've done that with democracy as a way to deal with the problem of unitary rulers, kings, etc. We're going back to that, it seems, as a standard way of organizing. So it does take some human evolution, some learning to be able to work with the structural approach that you are mentioning. What do you think are some of the key things that are missing in our business education or in general education that would allow us, let's say, those that are concerned with the common good, those that are common concerned with it addressing some of the bigger issues, what what is needed to be able to be more effective in structuring the governance of current corporations? Because that conversation is not happening, or it's happening in very limited way and has almost zero, zero public impact.

SPEAKER_01 26:26

Well, I agree. Do you know of any business school or management or government school that teaches separation of powers? Do you know of anybody? Another question. Do you know of any graduate school that looks at corporate constitutions? Yeah, I think that's a good question.

SPEAKER_00 26:43

I don't, and I think that you've been trying to make that case, but there's a reason why that's not happening. So what do you think is missing?

SPEAKER_01 26:49

Uh I think it's because deans of uh schools don't want to admit there's a gap in their education curriculum. They want to be competitive if they don't want to admit there's a missing huge intellectual gap of corporate constitution where the power lies. And it's a paradox for humanistic management because the word management itself.

SPEAKER_00 27:17

Basically not even business schools, no schools.

SPEAKER_01 27:20

See, a lot of people see it's law. That's uh it's a a disciplinary uh channel in silos. You have a silo, oh, that's law business. It's not part of management. Of course it's part of management because it defines management powers, it defines state shareholder powers, it defines to the extent that stakeholders get involved. Now it's just amazing that you cannot have any successful business without uh multi-stakeholders, unless you have employees, workers, suppliers, host communities, agents, distributors. No business can exist without those. But they don't get a voice, let alone any influence. And it's divided that you don't want it. What you want is a challenge to the centralized directors can live in a cocoon of ignorance, because by the time communication messages come up to two or three layers of a management hierarchy, it all gets filtered and synthesized to not expose a mismanagement malfeasance.

SPEAKER_00 28:16

So I I get that that's sort of part of the argument, but I think there's something deeper missing. And I'm wondering if you if you have a a thought, why is it that we're so blind to this really critical issue? And there hasn't been much published, and it's continuously being ignored, uh, whatever has been published. And so what what's what's there? What what do you sense is at the source of that ignorance or unawareness?

SPEAKER_01 28:43

It must be just group think. It's cultural conditioning, it's the uh the uh commitment to leadership. You know, you must have a strong leader, command and control. Keep it simple, sweetheart, which is not what you want. It's not found in nature. Nature doesn't work that way. Where we become disconnected with nature, and this is how why any concern about the environment and uh overcoming climate change is not going to happen until we get polycentric governance being universally adopted so that we're guided and regulated and governed by the endowments of nature on which our bodies depend upon for their existence.

SPEAKER_00 29:21

So, I mean there is a bigger bigger challenge here, you call it cultural groupthink, this love of the grand leader, this affection uh yeah affection for quick fixes, the the yeah, the old style white man you call it, or other people call it, but the the great man theory of of organizing. And we're politically seeing that resurgence and even people willingly discard democracy as a functioning system of governance. So I guess we may need to wait for this all to implode for other alternative structures and responses to have a little bit more currency. Currency gets me to ask you about your ideas about ecological currency and ecological money. Do you want to speak to that at some point in your answer? Maybe you have something else you want to share before?

SPEAKER_01 30:14

No, I think uh it's something you can do immediately. The reason we're having climate change, for those who recognize it, is because we have market failure. Markets provide incentives to burn carbon rather than to get solar cells. Climate change is created by market failure, according to Lord Stern. We did a report to the uh United Kingdom government in about 2009. But rather than uh correct what one way to solve climate change is change the nature of money. It's a signalling system, it's a message stick of uh driving behavior. So why don't we adopt a message stick which is designed for eternal sustainability? And so we need money to signify things which are sustainable on an internal basis. And money's too complicated. It's a monopoly official money system, and there's an alternative in the Great Depression when the uh Federal Reserve failed and uh banks failed throughout Europe and North America, the local communities created their own simplified money, and it was simplified money because it followed the laws of nature. You used it or losed it, and it was called stamp script because it are certificates issued by local towns, and these certificates of say uh a hundred dollars were good c good for money, but every week you had to buy a two cent stamp from the town council and put it on the back. If the two cent stamp wasn't on the back, it wasn't valid money. But after a year, that's fifty-two weeks, the town council had collected fifty-two stamps of two cents. So it got a for every dollar it issued, it got a hundred and four cents back. So it made a profit of four percent by giving away money. And and if you do that on a uh the cost of that is a negative interest rate, and the negative interest rate is is less than the commission on some credit cards. So it's viable and it's now being still uh again issued in uh in Germany, but not at such a high uh redemption rate that they did in the Great Depression. This is the way local councils, local communities can issue their own currency. It it started off as store currency, and the stores it's like uh uh bonus points when you buy in stores. You get a they accumulated. But the but you the to make to help people give them incentive to buy, you'd have this negative cost. You used or l or lose it.

SPEAKER_00 32:48

And so it's a way of Let me let me just try to catch up with you because uh you've been involved in this thinking for a long, long time. But just give us a sense why you would call this ecological money and what is the benefit because that's these alternative currencies are in place, they have been in place, they oftentimes come in in crisis scenarios like we might have soon, and crypto and all of these other kind of ideas are are based on the same kind of challenge in many ways. What what do you see? What's ecological about the way that you describe money and basically the the time value of money?

SPEAKER_01 33:22

Yeah. Well, if you have time value of money, you've got a positive interest rate. That's ridiculous. Money is a social construct. You cannot there's no definition of economic value. If you can't, it's not connected to anything real. Value is uh is uh is defined by markets, marketplaces, but it's not pegged to reality. And what's different it's ecological because it'll be pegged to the sustainability of the activities of the region in which it's issued. And one peg, a simple peg, is a ratio of renewable energy used to total energy used. If everything's 100% renewable energy and you peg it to the value of that renewable energy, you get 100% money. But other regions might only be 50% renewal. So their exchange rate.

SPEAKER_00 34:17

But once that is achieved, then what what is ecological about it? It's basically just using energy as the quote unquote gold standard. Energy No, no, no.

SPEAKER_01 34:26

It's not energy itself. It's the relative, it's the amount of renewable energy to total energy. It's a ratio, it is not energy.

SPEAKER_00 34:36

Let's assume there are regions in the world that have a hundred percent regenerative energy. Norway, Norway and Tasmania.

SPEAKER_01 34:43

It's almost a hundred percent hydro.

SPEAKER_00 34:45

Right, right, right. So now then what? What's what's the the the money is maybe a tool for transformation, and then what?

SPEAKER_01 34:52

What transformation is it's ecological because it has limited life. Right. It's ecological because it has a dynamic feature, you use it or lose it. And that's we all have that problem in our own bodies. If we don't use things, we lose it. And and it's tethered. It is pegged, its definition is tethered to reality of how sustainable that region is. Different regions of the world.

SPEAKER_00 35:20

Besides what sustainable is, right? I can get it with like the ratio that you're proposing about the percentage of renewable energy sources. But then at some point, let's assume that has worked. What what else is there to peg it to?

SPEAKER_01 35:33

Uh well, it'd be an index you can include other things beside energy. It'd be the well-being, so the the number of well-being statistics published by the OECD uh to replace GDP. And these it's called the quality of life. Now, the quality of life is much more critical and important than GDP figures, which are based on economic undefinable economic value. And a lot of the values are negative values like building uh defense equipment and and spending it on gambling, tobacco.

SPEAKER_00 36:07

So let's okay, I I I get some of that. I get some of that. And let's assume this. You have money circulation in a local fashion in a place and a hurricane hits. Is your money valueless because it has repercussions for uh maybe the energy usage or maybe the well-being of the people that are in that zone?

SPEAKER_01 36:31

How is that impacting the how the the hurricane, the OECD world being metrics are based on eleven real-life contexts where you need food, clean water, um bit of democracy. They've got 11 different measures.

SPEAKER_00 36:48

Everything of those uh dimensions is impacted by people losing energy, losing home, having hurricanes sweep through their county, etc. That means the well-being index will go down. What is the money?

SPEAKER_01 37:02

Well, no, no. If you have damage, they can still have well-being after the hurricane.

SPEAKER_00 37:08

Yeah, yeah, maybe, but not immediately after, right? In the But you're talking about an index which is averaged over Let's lose another example. Ukraine. Ukraine doesn't have the Krivna, but Ukraine has whatever ecological money. Gets attacked by Russia, has nothing to do with that, but yes, the quality of life is definitely impacted by it. Is the quality of the is the quality of money impacted by that?

SPEAKER_01 37:33

Yes, it would be. How? Because the if you're using the OEC indexes, their world being of food, clothing, safety, and shelter, water, and so on, the quality would go down, and so would the the relative value of their money compared with other areas. It's all relative to each other areas at the moment.

SPEAKER_00 37:53

Basically, I could use, if I'm strategically evil, I could use my attacks to a specific area as a way to bring a double whammy to people, basically saying, I'm gonna make your life worse, but I'm also gonna decrease the value of your money.

SPEAKER_01 38:10

That could happen. That could happen.

SPEAKER_00 38:13

Okay.

SPEAKER_01 38:14

And that is important because it's connected to reality. The present money is not connected to reality. It's disconnected.

SPEAKER_00 38:22

Part of the uh the benefit of that is that it's actually not impact as much, and that I can still have, even if I'm attacked, I can still have some way of maybe getting more safety, getting more weapons, getting some kind of thing other than like being even worse off in in my own.

SPEAKER_01 38:41

I agree. I agree. It depends what you want to do. Do you want to sustain humanity on this planet, or do you do we want to cook the planet?

SPEAKER_00 38:49

Well, but I mean you can remove the incentive. I wanna survive and I wanna have people survive in that space, but with this arrangement of ecological money, the way that I understand it, you will actually create more death, more trouble, less well-being. Isn't that so?

SPEAKER_01 39:10

You're quite right. There's no question about that.

SPEAKER_00 39:14

So isn't that then itself-defeating as a as a way of using money? That's why so many people think crypto is a good thing because it is independent of everything else. And it actually is based on on people trusting algorithms rather than the wisdom of leaders like Putin or Trump.

SPEAKER_01 39:36

You're quite right again. But what what we're trying to do is stop money providing an incentive to burn carbon. You've got to keep focused on the fact that we're burning carbon because money you make more profit burning carbon than converting to renewable energy. And we want to stop climate change and stop cooking the planet, and you and you have problems like you raised, which are very valid, and you've got to live with, you've got to get your priorities straight. And the fact that crypto isn't connected to anything is the point. It's the same as official money. It's not connected to anything. And it's a social construct. It's a social socially created construct of value, which is not stopping climate change. We've got to get our priorities straight. Do we want humanity to survive on this planet? Now, people say, oh, you've got to go to Mars and re-engineer the Mars climate. But it's not as simple as that, because the human bodies needs uh uh a biome of uh millions of different sorts of living things. Our bodies are constructed of independent DNA in our bodies uh that help us our bodily functions to work. So I think it's a bit of a daydream to think you can start uh uh save humanity by migrating to Mars. I think it's much better to keep the environment which evolved our bodies. It's got the bacteria and living things, the the components of our bodies are dependent upon millions of different living things with different DNA. And I think we're much safer and much simpler to stop burning carbon and going on renewables. It just makes common sense.

SPEAKER_00 41:13

I think there's almost nobody that would dispute that, right, at this point. Okay. And and so the question, I think then here it's like the use of ecological money, the way that you describe it, I understand, is a very limited function for the transition of specifically the energy sources. Is that correct?

SPEAKER_01 41:32

Not only energy, but all resources. The index would include other things besides energy. You'd you need the you'd need some rare earth. Now you'd need you still need an international market because you can't have not a region of the world. Every region of the world needs to be governed in a different way because it has different fauna, different flora, different temperatures, different climates. So if you want to preserve the nature, you've got to have a different uh system in each bioregion where you have a congruence of uh interests. And so you've got to design you design your society to be governed by those internally renewable endowments. Now, this is what our indigenous Australians have done. As the as the water rose, they've been l been self-governing since the last ice age, 65,000 years ago. And and as the water rose up 120 meters, it made Australia 20% uh less in area. So they had to reduce their population to the endowment renewable endowments in nature which could sustain them. So nature governed humanity, and it always will. Now you can have lots of robots running around doing everything, but they'll they'll be cooked too if you don't stop cooking the planet.

SPEAKER_00 42:51

So yeah, so I I I hear some of that and understand some of that. I'm curious what other sort of grand theories and thoughts you you have, because I think they're very inspiring to think bigger, even though I admit that sometimes I have trouble to experiencing and understanding it in its fullness. So we have the governance question, the complex adaptive system perspective, the requisite variety, the the need for uh cybernetics and and nature based solutions for the study of better management and outcomes in society. What what other grand ideas do you have? Let's say money is one. What what are some other things that you think there's only two.

SPEAKER_01 43:40

Um really it's the c medium of you've simplified money so it's only a medium of exchange, it's not a store of value, and it's not a unit of account. So we've simplified it, only has one function. The other one is the governance one. And the governance one, we've got you cannot get self governance when eight million. Men own as many assets as the poorest half of the population on this planet. Cannot get democracy when power, economic power, is so concentrated. So you've got to find a way of democratizing the power of modern society, which is so centralized that it undermines the there's forty-five companies in America have greater turnover than the uh GDP of America. There's only about nine countries in the world who ha have a um um the GDP um nine countries in the world whose GDP are greater than the uh uh the than turnover of their corporations. So we've got to get have radical redistribution of asset control and ownership. One way to do that is with a tax incentive. Now in America, and the only way you can get a tax incentive is both sides of Congress will vote for it. And there's one example in America that both Republicans and Democrats will vote for, and that is employee share ownership plans, because they provide a new source of equity for owners of businesses. So the Democrats will vote other Republicans will vote for that. It also makes the workers capitalists by becoming owners of the business. And so both Democrats and Republicans happen, right?

SPEAKER_00 45:24

You see the employee ownership kind of movement grow a little bit. Is that is that what you're referring to?

SPEAKER_01 45:30

Or yes, but it's only got five percent of the American voters involved. You've got to get a hundred percent of the voters involved. And to do that, you've got you've got to um find a way to avoid the owners of assets. Piketty's book uh provided evidence that the growth of assets grows ten to twenty times quicker than the growth of incomes. So it's no use taxing incomes, it's not going to solve the problem. You've got to you've got to share the asset ownership. And to do that, you give a tax incentive for the rich shareholders to give away their assets at 5% a year each year, on condition that they make a bigger profit quicker with less risk. And that's what uh the story I told last time about how I arranged to uh fund a couple of companies listed on the stock exchange on 15-year leases. Investors are are greedy and they want to make profits, they'll invest in a short-term profit because they don't care about the long term. So you use that uh behavior pattern to change uh the corporate constitutions. So as the ownership of corporations transfer from the rich shareholders to the stakeholders in the constituencies, political constituencies of the politicians who introduced the tax incentive. The tax incentive is self-funding because corporations would pay out all their profits each year in dividends, which would be reinvested in successive corporations. Corporations would be kept to human scale, and and those dividends would be taxable unless they're reinvested in new offspring companies with polycentric governance. And so the tax incentive is a way of getting both sides of politics to change the ownership of corporations over the next 20 years, and so everybody becomes a capitalist living on income, which they don't need welfare, you don't need taxes for welfare anymore, you need less government. And it's exactly what Elon Musk wants to achieve. You get self-governance at the local level, which is he knows how to design self-governing cars, where you apply that knowledge to social systems. So they become self-governing in in bioregions where they can nature can be uh they can be governed by the endowments of nature for eternal life.

SPEAKER_00 47:56

Okay, so so this sounds like the grand plan, Shan, the man with the plan. And this has not been resonating too much so far, right? So Exactly. What what do you think needs to happen? We will probably be experiencing a lot more crisis, dysfunction, and a ultimately a bankruptcy of the traditional models. What needs to happen so that these other models can actually take root and provide superior outcomes, resilience, well-being?

SPEAKER_01 48:30

You need you need somebody like Senator Russell Long. His father, Huey Long, was assassinated before he stood for president. And Huey Long wanted to tax the rich. That's probably why he got assassinated. Now, Russell Long, when he learnt about when he had dinner with Lou Kelso, the inventor of uh Aesops in America in 1973, he said, We don't have to tax the rich because the tax incentive that they introduced for share plans um doesn't take away money from the rich. It creates new, it shares the formation of capital with more voters. And he said it's it's it's what his father wanted to do without having Robin Hood taking away from the rich to give to the poor.

SPEAKER_00 49:15

Aesops is the is the pathway, right? But that's an American approach. Or for what what about the rest of the world and what is missing? Because those have been around for a long time and not really gotten traction.

SPEAKER_01 49:30

Right.

SPEAKER_00 49:30

Well, the reason they're not adequate. They're only 5% of the population. That's a circular argument. That's a circular argument. They're not adequate because only 5% have it. Yes. But the reason is it doesn't appeal to some degree in America, but maybe in other places it does.

SPEAKER_01 49:45

What needs to have I'm suggesting an alternative to Aesops. Now Jeff Gates wrote working for the Senate Finance Committee was a fellow called Jeff Gates. He wrote the legislation. And when in the 1990s, when the Soviet Union was breaking down, he went to the Soviet Union to advise them how to privatize using Aesops. And he came back and said Aesops are too complicated for a communist state to adopt. And he was also invited to uh to China, and he said, Shan, you better come with me to China, because your plan is much simpler. And it's simpler because it introduces ecological ownership. Instead of having uh corporate property rights which are perpetual, static, and exclusive, you provide a tax incentive, or you just in a in a communist country, you just say that we're going to change the nature of property rights to being um inclusive, dynamic, and and time-limited. So you just redefine the nature of property rights on ecological principles of limited life inclusivity, and you don't need any taxes involved. So it's it's just done by dictate, and it's a way of getting uh providing distributing income to all the poor people in your dictatorship through dividends rather than discretionary command and control allocations.

SPEAKER_00 51:14

Okay, so you've got the plan, you've got the uh everything worked out. What needs to happen that this plan stands a chance? What needs to happen that that that actually people will be talking about this as a serious option? Because that is not happening, right? So I'm asking you more, like you've been banging your hands.

SPEAKER_01 51:32

I need your help. I need your help, comrade.

SPEAKER_00 51:37

You've been banging your head against the wall about this. So what's your best take of what's missing?

SPEAKER_01 51:44

And then we're it's people, it's people like we had here in Australia the other day the guy that heads up the socialist movement in America, and he had no ideas of these sort of ideas.

SPEAKER_00 51:56

He he now is just telling me why why there is more of a problem, right? What is this what needs to happen?

SPEAKER_01 52:03

We need to find a person of influence like um Russell Long was to try try things out, uh have a um a commercial sandpit where you can have uh try different examples of democratizing the assets of the world. We need uh somebody with influence to give it a go or political party.

SPEAKER_00 52:24

Let's assume this world is gonna fall apart, the institutions of the United Nations will not hold up much, which they are not, the the resistance towards some kind of authoritarian regimes that sometimes will arise. What is necessary for this plan to even be discussed? Because right now it's so theoretical, so out there, but in the end it has a very, very simple and appealing core to it. What's what needs to happen? That that is part of the conversation. I get it. Inference might help a nice TikTok video might help.

SPEAKER_01 52:58

But what what what uh it needs a crusader, needs it needs to be taught. We need academics to start teaching alternative solutions. And alternative solutions to what? To management dictatorships, to complexity, to author authoritarianism. We've got to have managers, you've got to educate otherwise if you don't educate people when everything collapses, they'll just rebuild the new world like the old world. It's like when they start.

SPEAKER_00 53:34

But then in the end, you're saying the schools are not teaching this anyway. Most of us don't get it. Right.

SPEAKER_01 53:41

We need trans, you gotta translate my stuff. You gotta adopt it and translate it. It's up to you. You're the next generation, I'm the old one. I'm I'm gonna I'm dying out.

SPEAKER_00 53:52

God, I got oh god. Well, I've been trying and and and uh this is part of it, of course. I I think maybe there's a possibility of inviting lots of other people to explore these issues if that resonates. Do you want to see like how how how would people go about this? Like young PhD students, maybe maybe more established researchers that are interested in that field and are intrigued by some of your ideas. How how should they go about this?

SPEAKER_01 54:15

I'm relying on you. You're my succession planning.

SPEAKER_00 54:21

Okay, okay, okay. So that's that's part of the succession planning program here, I guess. So yeah, thanks so much uh for just exploring some of these ideas with us. I still say they're very challenging in in in some ways, and translation is helpful. But before we go to the final questions, Master Proust's uh questionnaire, etc. Any any final concluding simple thoughts?

SPEAKER_01 54:47

No, because the well I don't have that. That's been why I've been a failure. I need to find people better than me to do my mission, and that's falls upon you as my co-author on many topics.

SPEAKER_00 54:59

Okay, okay, okay. Well, thank you, Shan. Thank you. Uh yes, challenge accepted, I guess. So Thank you. Well done. With you made my life a success. With that, give me a number from one to thirty-five, as we typically end these conversations with a question from Marcel Proust's questionnaire.

SPEAKER_01 55:21

You want me to give a question?

SPEAKER_00 55:23

Yeah. No, no, I want you to give me a number from one to tw 35. What for? 34. 34. Okay. Oh my god. How would you like to die? That's the question that ends this conversation.

SPEAKER_01 55:38

Gracefully, my my PhD supervisor said before he goes to my funeral, he wants to read my book.

SPEAKER_00 55:44

Yes.

SPEAKER_01 55:45

And so I'm busy writing a book on how we can survive our future. And um, I'm hoping that my daughter will rewrite it for our grandchildren so they can implement it.

SPEAKER_00 55:55

Excellent. I uh we want to all hear and read that book. Um so give us a little bit of an overview of the the basic chapters in that book before we close.

SPEAKER_01 56:05

I've sent you the first chapter, which is the summary of the book.

SPEAKER_00 56:12

So what what is the what is the outline?

SPEAKER_01 56:14

Well I'd have to bring it up as my ancient mind thinks very slowly, and and I'd have to read it out.

SPEAKER_00 56:22

I'll leave that for another conversation, but the title it sounds very intriguing.

SPEAKER_01 56:27

And why don't you go read look at that summary and look at the order, and you can go through it and raise questions if like you have accidentally challenge me. And I need that.

SPEAKER_00 56:42

We will continue this. We will continue this conversation, okay?

SPEAKER_01 56:46

Good on you. Good on you. You you have an obligation in my succession planning to keep it alive. Otherwise they'll they'll do what they did after World War II. They wanted to they created the Bank for Reconstruction for Japan and Germany, and and they knew damn well how to reconstruct, and they didn't need the bank, so they had to redefine its missions to um to uh make it to look after all the other countries of the world. And they had to change its business model and to colonizing the rest of the world by top-down consultants and making loans conditional upon following the um the capitalist model rather than uh sustainable model. And we've got to change all those sorts of institutions which are not f functional for well-being of the uh uh human society. So keep your humanistic management going, but uh reform you've got to reform management at the polycentric governance.

SPEAKER_00 57:43

Okay, good, good, good. And that's where I think you meet David Sloan Wilson and maybe John Fullerton and many others that have been on this show. So thank you so much, Shan, uh, for all the work that you're doing for the persistence. That's really inspiring, and uh yeah, to be continued. Thanks so much. Thank you.

SPEAKER_01 58:03

Thank you, thank you.