“Never doubt that a small group of thoughtful, committed citizens can change the world; 
indeed, it’s the only thing that ever has.”

— Margaret Mead, Anthropologist

The old economic system is known, but the new system is still in its infancy. Movement towards a wellbeing economy involves both hospicing 'the old' and nurturing 'the new'. The Two Loops model of change, developed by Margaret Wheatley and Deborah Frieze at the Berkana Institute, describes this process of simultaneously nurturing initiatives that positively impact social and ecological wellbeing, as well as proactively reducing activities that impact it negatively.

The Berkana Two Loops Model

The Two Loops model shows a dominant system that is no longer sustainable (a ‘legacy system’) and an emergent system, inspired by a new vision of desired outcomes, which is gaining influence. At the heart of the two loops model is the relationship between the ‘legacy system’ and the ‘emerging system’: the transition. 

As the legacy system loses its fitness and ability to sustain itself, it goes into decline. This is a painful process: people will try to hold on and use their power to attempt to sustain what is being lost. Without good hospicing of a dying system, resistance can reduce opportunities to use the resources of the legacy system to support the new system that is emerging. These resources are referred to as ‘compost’ in the Two Loops model.

How government can help shape the transformation

Government plays an important role in shaping the transformation. Markets on their own are unlikely to self-manage the large structural transformation that is required, as resources must move out of old sectors into new ones [1]. Policies can act as an enabler, set new directions, and help avoid system failures [2]. Government policy can also make sure there is something new to replace the old when the old is retired, as this is not something that necessarily happens by itself, or can take longer than is desirable. 

Government has many levers that can guide and support transformative change. But government is also part of an incumbent system. Strengthening the transformative potential of governments asks for policymakers and politicians to always be on the lookout for potential institutional, cognitive and political biases that limit its transformative potential [3].


References

[1] Stern, N. & Stiglitz, J. (2023). Climate change and growth. Industrial and corporate change, 32: 277-303. 

[2] Kanger, L., Sovacool, B. & Noorkõiv, M. (2020). Six policy intervention points for sustainability transitions: A conceptual framework and a systematic literature review. Research Policy, 49.

[3] Diercks, G. (2019). Lost in translation: How legacy limits the OECD in promoting new policy mixes for sustainability transitions. Research Policy, Elsevier, vol. 48(10). 

Image sources

The Berkana Two Loop Model: The Moment, www.themoment.is/how-change-happens/