We spoke with John Fullerton, author of Regenerative Economics and former top banker, about why the economic system isn't broken and working exactly as designed. And that's the problem.

His core argument: we built the economy like a machine. But life doesn't work like a machine. And no amount of carbon taxes or ESG reporting will fix a design flaw that deep.

What would it look like to build an economy like a living system instead?

That's what this conversation is about.

Background

John spent nearly 20 years at J.P. Morgan before leaving in 2001. The September 11 attacks, which he witnessed firsthand, prompted a deep personal search for meaning. He began reading widely outside finance, including Limits to Growth, and eventually developed the framework of regenerative economics.

The Core Problem: Economy as Machine

The root of today's economic crisis lies in how neoclassical economics was founded: 19th-century mathematicians deliberately modeled it on Newtonian physics, treating the economy as a machine rather than a living organism. Two critical errors followed, ignoring the second law of thermodynamics (entropy) and assuming time is reversible. The Nordhaus Nobel Prize, which deemed a 3.5°C temperature rise acceptable, is a product of this flawed thinking.

Regenerative vs. Other Economic Frameworks

• Environmental economics (Nordhaus) uses externalities, useful as a concept, but inadequate because not all harms can be priced or fixed with money.
• Ecological economics (Herman Daly) was a major leap, re-embedding the economy within the biosphere, but still frames things as a trade-off between growth and sustainability.
• Regenerative economics goes further, treating the economy as a living system governed by emergence, adaptive cycles, and self-organization, not top-down management toward preset goals.

Co-Inherited Wealth and the Commons

Drawing on Peter Barnes' work, John argues that natural resources, the internet, mathematical knowledge, and accumulated technological progress are all co-inherited wealth, shared assets that the private sector currently uses for free. He estimates that privately owned wealth represents only about 13% of total real wealth. A proper institution of the commons, similar to Norway's oil fund or Alaska's oil trust, could govern these shared assets, generate universal revenues, and make the economy self-fueling.

Practical Pathways

Rather than one grand plan, John points to many existing examples:

• The Mondragón cooperative in Spain, managing 80 businesses as a single ecosystem for 80 years
• Bioregional movements and decentralized food systems
• The opportunity presented by the "silver tsunami", as aging baby boomers exit their privately owned businesses, there's a chance to buy and reorganize half the global economy into place-based regenerative ecosystems

On AI and Energy

John believes the current AI boom is likely a financial bubble. That said, the massive energy demand it creates is already spurring engineering innovation in efficiency, the challenge is directing that ingenuity toward systemic health rather than billionaire-making.

The Path Forward

John sees this as fundamentally a re-education and paradigm shift project. Drawing on Ilya Prigogine's mathematics, he argues that when systems are far from equilibrium, small "islands of coherence" can shift the whole. His online community (withlife.net) is one such island. The transformation may happen suddenly and unexpectedly, like the fall of the Berlin Wall or through painful collapse first. Either way, he believes the regenerative economy is already emerging, even if we can't fully see it yet.

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