Transition Economics: Principles of Financial Permaculture

Financial permaculture in action

Financial permaculture in action

by Jennifer English Morgan

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Globalization and mainstream neoliberal corporatized agendas pose a terrible threat to the fabric of life on earth. By neoliberalism, I mean liberalism that favors free-market capitalism that has led to mass-globalization and mass-consumption of resources. This operating economic system enables corporations to decimate life in the name of profit and privatization, for political favoritism. In the Soul of Capitalism, William Greider shares, “The consumer has become such a hallowed intuition, it is easy to forget that the feat of mass consumption is rather a recent phenomenon in human history.” Deployed on the wings of Neoliberal capitalism, Greider says, “The darkening shadow cast across the mass consumption economy has many threatening expressions. We are the 6th mass extinction.” We can not depend on Government or the business sector to solve this global crisis. I believe we must redesign financial and market systems from the inside out, to make them regenerative rather than life destroying. Regenerative means renewal or restoration. It’s a process of recycling energy within any system to generate life. As Paul Hawken says, “Preserving Life should be the natural result of commerce, not the exception.”

What is Transition Economics?

Transition economics is a growing counter-cultural trend over the last twenty years toward more localization of food, energy, goods, and services. Transitionists are moving away from a dependency on a global, unsustainable fossil fuel-based economy. The transition culture is responding appropriately to massive resource depletion, global energy crises, rising fuel and food prices, plummeting markets, and the threat of global climate change. Towns, organizations, and entire governments are finding that localization is a win-win for the economy, environment, community development, and quality of life. The Transition Town Movement founded in 2005 in Kinsale, Ireland, was replicated in Totnes England and has since spread throughout Europe and into the Americas. Transition Towns across the world are redesigning their local economies to transition away from centralized petroleum and other unsustainable systems. Permaculture has and will continue to help us design this path forward.

What is Permaculture?

At the core of Permaculture are three ethics: people care, earth care and fair share. The roots of Permaculture began as a means of applying patterns and principles found in nature to design human agriculture and land use systems within these ethical parameters. Practitioners harness principles from their observations of living systems and apply them to a holistic and regenerative approach of designing human systems that care for the needs of both people and the planet.

Permaculture designer Robyn Francis says, “Permaculture refers to land-use systems, including human settlements, which utilize resources in a sustainable way. From a philosophy of cooperation with nature and each other, of caring for the earth and people, it presents an approach to designing environments which have the diversity, stability, and resilience of natural ecosystems, to regenerate damaged land and preserve environments which are still intact.”

Over the last two decades, the field of Social Permaculture has emerged, utilizing that same sound thinking Permaculturalists apply to landscapes, to designing communities, businesses, organizations, and financial systems. Social Permaculture acknowledges and incorporates the intricacies of human relationships and invisible structures such as finance into the scope of Permaculture as a design science. In this article, we’ll explore how we can apply Permaculture design specifically to financial systems to create a genuinely regenerative economy.

What is Financial Permaculture and How is it Applied?

Financial Permaculture may be applied as a model for systems thinking that takes a whole ecosystem approach to economics. Financial Permaculture strives towards holistically optimized economic returns. Financial Permaculture is appropriate information technology. Appropriate refers to applying efficient designs that generate the least amount of waste for the highest yield. It takes into account the actual social and ecological costs within a local economy. The principles of Financial Permaculture are a template for finding solutions specific to the needs and circumstances of the system designed. It is not a top-down, or a one size fits all approach. Each design is customized to be appropriate to the locale.

Financial Permaculture has become an ever more present concept and sub-field within Permaculture. As an example of how Financial Permaculture is applied, in 2008 five colleagues and I founded the Financial Permaculture Institute. From 2008–2014 we combined forces with experts in the fields of Permaculture, Finance, Business, and the worldwide Transition Initiative to host Financial Permaculture Summits in multiple locations in the USA. We developed a participatory style of engagement in which we would consult with the local community before, during and after design events. We targeted the following sectors: local business owners, the creation of quality employment, and community networking opportunities, to achieve an increase in sustainable economic and community development.

We worked with existing infrastructure in a four-tiered approach to local business development and financial literacy enhancement:

1. Improve existing businesses (add layers of resiliency and integration into the greater business ecosystem)

2. Educate, support, and incubate new regenerative enterprises and entrepreneurialism

3. Attract new employers to the area

4. Create a platform to discuss the overarching fields of complementary forms of currency, investment strategies, and general resilience.

To accomplish these goals we partnered with local organizations to offer monthly educational gatherings and skill-shares, quarterly business trade shows and an annual business summit that focused on participatory learning through a business design charrette. Examples of partner programs included linking with Technology Centers, Career Centers, Technical Training Programs, Leadership Organizations, Agricultural Centers, Garden Clubs, Community Supported Businesses (like CSAs), Tourism Working Groups, Historical Societies, Department of Economic Development, the City Council, County Officials and the local Chamber of Commerce.

During this pre-consulting period, we aimed to harvest ideas for businesses enhancement and bring diverse stakeholders to the table to identify development strategies. During the actual summit, we would bring in a team of expert facilitators, Permaculture designers, financial advisors and leaders within various fields of business. These professionals in teams of four, each led a group of local participants and entrepreneurs from around the world. At the end of a four-day design charrette, the teams would pitch their business ideas to potential local and regional investors and Government officials. One group was always a business incubator that had the role of supporting the development of the other businesses while also helping them weave together as a web of business ecology, which included an assessment of the local financial ecosystem that the start-up companies would exist within.

Integrating Permaculture Principles With Finance

During this design process I shared above we filtered all of our design thinking through the following principles of Financial Permaculture. I’ve put together a comparative chart of financial investment principles taken from Catherine Austin Fitts of Solari Inc. and Permaculture principles. Permaculture is a multi-principle approach to whole systems design. Using only one principle can cause inefficiency in the design and imbalance in the system, therefore for each finance reference, I incorporated various Permaculture principles.

Comparison of Investment and Permaculture Principles

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* Investment principles (on the left) taken from Solari Inc. with permission from Catherine Austin Fitts. For access to Solari, finance principles view

Principles Expanded

Total Economic Return

– “Pay it forward.”

When I worked with Catherine on Financial Permaculture, she would teach about net positive total returns. A net economic return means that we are using the least input (time, money, and energy) while obtaining the most productive output that benefits the entire system. She says, “The concept of total economic return is a tool for aligning our investments with what creates value for the wider communities and constituencies impacted by them.”

In conventional investment rhetoric, “total return” refers to exceeding the prevailing rate of interest while preserving capital. However, we need to consider the wealth of our community, not just our personal wealth. Catherine says, “it’s challenging for people to build wealth if everybody is making money in ways that destroy the greater economy.” Investing in or working for companies that are socially and environmentally degenerative may fulfill a personal net positive return, but do not satisfy a total economic return for the entire system.

Not seeing this, our out of control accumulation of personal wealth and consumerism has led to a freakish collective psychosis of narcissism, materialism, misdirected needs, addiction to instant gratification, isolation, and codependency running on a broken operating system. We have lost common sense with how we value objects, social connections, and our environment, wasting them all to a frightening extent. Permaculture can reverse this vicious and destructive cycle back towards total economic gain.

It mainly comes down to energy consumed versus energy created. Right now we expend far more energy than we are harnessing. According to Global Footprint Network, humans require at least 1.7 planets to offset our use of natural resources each year. Permaculture can reverse this vicious and destructive spiral back towards total economic gain.

Permaculture Principle: Obtain a Yield

A designer seeks to get more energy out of a system than is put into the system. Right now the way the market is set up, economic and business decisions turn a blind eye to how designs impact communities and the environment. Designing for a total economic return, all of the users of a design are stakeholders, even those on the margins. Natural resources themselves hold a value as stakeholder entities. If the design is taking a toll on or degrading the overall thrivability of the natural system itself to sustain life, it is considered a loss. We must assess the quality of life of all stakeholders before and after the design is implemented to measure system-wide yields accurately. New technologies, such as smartphone apps are making this type of data collection easier every year.

Permaculture Principle: Produce No Waste

The cost of products in today’s market does not include the actual costs of producing them or the impact on human health, society or the environment. The costs of cleaning up the social and environmental wastes generated in the production, packaging, distribution, usage, and disposal of a product externalize to marginalized communities and future generations. For example, exploiting workers creates an externalized waste because they are not able to provide for their family and contribute to their community. The company employing them is stealing energy from the surrounding community and exporting it in their product. In turn, the exploited worker may have diminished health or even resort to crime. Using total economic return, we can recycle energy and materials back into the system at every level, creating more benefits for all stakeholders, and optimize wellness at all levels: self, social and environmental.

Permaculture Principle: The Problem is the Solution

Financial Permaculture looks to cycle waste streams or design challenges, whether caused by physical byproducts or human potential, back into the system. When we find a waste that needs recycling, rather than seeing it as a problem to solve, we can see it as a valuable opportunity. Wasted human potential can transfer into a regenerative enterprise that educates workers and gives them shares for their sweat equity. Because they are willing to work for less than their labor is worth, they can slowly build equity and eventually own the company themselves. If you see an exploited worker as a potential investor, the problem becomes the solution. This cycle, when conducted within a local economy empowers both consumers and producers as they continuously adapt to local supply and demands, filling new niches as they arise.

Permaculture Principle: Stacking Functions

When one element of a design creates more than one benefit, we say we’re stacking functions. For example, teaching employees how to read your business’s financial statements and giving them access to that information raises their attentiveness to waste and gaps in productivity. The clarity enhances their ability to make critical decisions in their job. This one act of providing transparency also increases their loyalty and engagement at work and helps them manage their finances, so they are happier, healthier, and more productive in general.

To achieve Total Economic Return one must have an intimate understanding of his/her own needs along with the requirements and needs of other people and the ecosystem where they live. Thinking this way helps one become a problem solver: creative, adaptable, efficient, and abundant.

Financial Intimacy

– “Build networks of trust.”

Catherine says, “where my money goes and what it does in my name, there am I.” Intimacy means that the relationship between consumers and producers creates accountability. The more this intimacy is visible, it will cause an overall increase in standard of living for the entire community. In a local context, consumers can see production practices first-hand. This connection builds trust. Globally it is much more difficult. Depending on resources from out of our jurisdiction means that it is harder for us to regulate the quality and quantity of that supply. We should invest locally in simple, small, and slow solutions that are self-regulated and empower consumers. If we do purchase from or invest in far-away entities, we must demand transparency and support companies with complementary value systems.

Intimacy connects us to our personal purchasing power — we can spend money on the things we value, and buy from the companies with complementary value systems. Up to this point, most of us have given our power away to the wrong groups — we need to organize to take it back. Intimacy also highlights our connection to all of life. This connection leads to cradle to cradle thinking — where we design products without a limited lifetime.

Catherine also says, “ With financial intimacy, our values, goals, and lives integrate with the values and goals that we expect of those whom we entrust with our money. We do this in part for moral reasons.” We should strive to create systems that provide trust and accountability. An example of morally driven consumer advocacy is not-in-my backyard campaigns which eliminate product based pollution through intimacy.

Permaculture Principle: Apply Self-Regulation and Accept Feedback

If we are intimate with our purchases, we see the consequences of business practices and can help regulate and give feedback to our companies. We can use our purchasing power and voice to create more intimate accountability in our systems. Businesses should welcome such regulation and input from their customers and investors because it increases support and loyalty.

Permaculture Principle: Designing From Pattern to Detail

We should invest our energy in designs that support the entire system, not its isolated and fragmented parts. We look first at the patterns that are already present and work with them, not against them. We then look at how the elements can cooperate to stack more functions, create more symbiotic relationships, produce a higher yield, remain open to change, benefit from mimicking nature, and not waste time and resources. Once we establish our designs, we need to stay balanced between macro and micro, often returning to look at the whole picture and continue designing to support the entire system.

Fragmentation leads us away from self-reliance and towards dependency on specialization and segregation, which results in a silo effect, where information as details get stuck in compartments and disintegrates across platforms. This disconnection almost always leads to a net energy loss for the system.

Permaculture Principle: Site Analysis — Zones

Through site analysis we observe patterns, and we interact with and receive feedback from our experiments through data collection. We look for what resources are already present in the system through each zone of possible interaction.

Zones categorize the parts of a design by the distance from the center of activity. The more we can utilize resources from the zones closest to the center, the more the system will be efficient, integrated, and resilient. When we are financially intimate with parts of the system, they become closer to our center of activity. If we can focus our time and energy on the closer zones, the businesses and relationships that we are most intimate with, our economic system will become healthier.

Quadrants: Builds on Total Economic Return

– Liquid vs. Non-liquid and

– Local vs. Global

In our current economy, liquid assets are available and readily converted to cash. Stocks and bonds are usable and liquid because they are easy to sell, but property is a non-liquid asset because there is no guarantee it will sell fast. Non-liquid means an asset or possession cannot convert quickly. Investing locally versus globally builds on what was discussed above related to financial intimacy.

As a financial advisor, Catherine divides her client’s portfolios into four quadrants. She says, “First, we categorize investments according to what is liquid and what is not liquid. Liquid means that an investment is easy to transact. It’s easy to find a price. It’s easy to buy and sell without sacrificing value or paying high transaction costs. In a bubble economy, we tend to invest in liquid securities and liquid investments. As we shift to investing in the real economy, we will gradually see more opportunities in the non-liquid area, particularly for those of us who are interested in going local or building more self-sufficiency in our own lives or our communities.” Though we will want a diversity of investments, including both local and global, it is easier to effect and measure total economic return in a local context. Therefore, our investments would tend to gravitate to our local zones. The Permaculture principles support these trends with whole systems design thinking.

Permaculture Principle: Catch and Store Energy

When we catch and store energy, we create more non-liquid assets as it is about long-term storage of energy to build soil, biodiversity, and human capital that may not have an immediate return. Long-term assets building for the benefit of future generations has been a focus of ethical behavior down the ages. In a time of rapid change and short-term thinking we need to rebuild the aspect of our culture that emphasizes caring for the future, as well as deciding what is worth investing in.

Permaculture Principle: Use and Value Renewable Resources and Services

Dependency on non-renewables creates fragility in the system and imbalances of wealth through the control and supply by those who have the advantage of access. Fossil fuels and patented or seedless food sources are extreme examples of non-renewables. Local and uncontrolled renewable resources promote self or community reliance, increasing the resilience of the system.

Scenario Planning

– “Plan for the worst and hope for the best.”

Catherine uses scenario planning as a technique for managing a portfolio of assets. She says, “We can’t predict future outcomes. We can, however, anticipate some of the risks and challenges that may present themselves in the future… We attempt to allocate time and money in a manner that helps us stay on solid ground in all reasonably anticipated future scenarios. In that way, we can focus our time and attention on creating the best possible future for our world and for ourselves.” Permaculture supports scenario planning in the up-front design process, as well as responding to those scenarios as they unfold.

Permaculture Principle: Observe and Interact

To observe and interact is to watch, sense, collect information, look for patterns and trends, predict behavior, accept feedback from your experiments, and make preparations for possible scenarios. Good design depends on a free and harmonious relationship to nature and people in which careful observation and thoughtful interaction provide the design inspiration. If we do our financial scenario planning as part of this process, we will be more able to create sound strategies that conserve energy in the system.

Permaculture Principle: Creatively Use and Respond to Change

Change can bring strength and build capacity. Problems become solutions. Evolution is inevitable, so we must learn to innovate. To increase agility, we can limit our use of unsustainable techniques and beliefs, invest in things that have been proven to be resilient, and remain open to change if a new form of productivity presents itself. With this attitude we become invested in learning, observing, and interacting with dynamic systems. We become more active, alert, and conscious and detached from previous unproductive habits.


– “Don’t put all your eggs in one basket.”

Catherine says, “The diversification principle says don’t put all your eggs in one basket. I have different kinds of investments that deal with different kind of uncertainties and different kinds of risks. I have different kinds of assets in different kinds of places. I have different kinds of custodians and servicers. Use diversification to significantly increase your staying power come what may.” As an advisor, when Catherine looks at assets for a client’s balance sheet, she looks at the diversification of investments such as liquid vs. non-liquid, and local vs. global. Permaculture emphasizes biodiversity, but the same principles can be applied to financial diversity as well.

Permaculture Principle: Use and Value Diversity

Increased diversity means that we’ll be more resilient. We will improve our opportunity to adapt during times of change. Diversity protects us from one problem taking down the whole system. When investing, we look for investments that are negatively correlated, meaning that when one goes up, the other goes down. With the diversity of elements in a system, each component requires different inputs. Thus there is less competition for energy and resources. We should try to get our energy from multiple sources and invest our energy in various places. Diversity increases our overall resiliency to change.

Permaculture Principle: Use Edges and Value the Marginal

In Permaculture, edges or margins refer to those places where two different systems intersect, such as the edge of a pond. Marginal elements are a minority easily overlooked. On the edge, there are more diverse resources and opportunities. There is more opportunity to transfer information, cooperate, trade, and stack functions. We look for investments in portfolios and projects that use the edges of our society, where cultures intersect, and where disenfranchised people and resources reside. We can specifically skill up to be a liaison between two edge cultures, by helping to bring together the various voices in the community. Working with minority groups and using unconventional resources are potent ways to increase diversity and resilience.

Permaculture Principle: Integrate Rather than Separate

As we are focusing on diversification, it’s imperative that we also include integration of those diverse parts so that they work together, rather than in Silos. When we ask what makes things similar and how they can work together, we are seeking a holistic approach, and we will have more value for the entire system. This integration will increase cooperation, and the system will have a shared symbiotic net gain. When we only focus on what makes us different, we fall into the trap of judgment, segregation, fragmentation, unhealthy competition, and greed. When we know that we are not separate from the environment or one another, we start creating whole systems designs. This realization does not mean that we devalue individuality or difference. Instead, it implies that we first look at how we are the same, what needs we share, and then ask what can meet the most needs of the most people. Using this principle, we invest in things that unite us, while respecting our diversity.


It is possible to create financial systems that care for people, the earth and a fair distribution of resources by applying the above patterns and principles to design a life-affirming economy that is holistic and regenerative. An economy that celebrates a total economic return based on actual costs to society and the environment organizes a shift from being profit driven to designing systems that equally value its people, the planet, and profits, and in sustainably utilizing resources. We can cooperate with nature and each other, and design systems that are intimate, diverse, and resilient while preserving environments and resources. The above principles are a template for finding forward-thinking solutions as we transition towards a new economy.

* Previously published in the Green Living Journal and The Solari Report, 2008 and updated in 2012 for the Financial Permaculture Institute.

by Jennifer English Morgan (gaia_certn) is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 Unported license. Permissions beyond the scope of this license may be available from Jennifer English Morgan (gaia_certn).
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