Ernesto, one of the clearest articulations of where regenerative finance is heading that I’ve read. The distinction between systemic and living capital is real, and BFFs sit exactly where you place them, at the threshold, pointing the right direction.
But there’s a tension in the living capital concept worth naming.
You’re asking money to take on traits it structurally resists; relational, place-specific, reciprocal. Money’s power comes precisely from its indifference. It’s universal, indifferent and transactional. To make it behave like a mycelial network, you have to fight the instrument’s nature, combatting it with governance structures and covenants.
What if the move isn’t to make capital more forest-like, but to convert it into forest?
A regenerated soil, a trust network, a community with real commons governance, these don’t need to proxy the traits you want money to develop. They already carry them intrinsically.
Where money is gone when spend. Personal capital accumulates when spend, I learn when I do, skill grows when exerted. Social capital deepens through use rather than depleting. Ecological capital generates conditions rather than returns. They resist extraction by what they are, not by legal architecture.
This reframes the role of financial capital in the transition: not to become more alive, but to be consciously spent into aliveness. Its highest use might be its own dissolution, conversion into the capitals that can do the work money was never built to do.
BFFs then are a crucial transitional form. The bridge, as you say. But the country on the other side isn’t better money. It’s something that no longer needs to be money at all.
This piece found me exactly when I needed it. My community is in the midst of fighting a proposed and now approved hyper-scale data center to be situated in a fragile ecosystem called the Hansel Valley. What you outline here contains all the arguments many of us are trying to form and communicate. The BFF's tear through the intractable limits of modernity's mindset, but don't quite make it all the way to alignment. Awareness is not alignment....Thank you for pushing further and expanding our imaginations as we all try to birth a new way of being in the wake of our dying system!
This is a very profound essay for permaculture people. It's economics using our vocabulary, our concept library, which permaculture is itself often is accused appropriating from indigenous cultures.
There was a joke about a woman writing in social media protesting hunters killing animals. She asked, “Why can’t they just go to the grocery store and buy their meat like everybody else?”
There are “consumers” in this system who are so far removed from rivers and forests as to be on a different planet. We participate without awareness.
Regarding grammar, in addition to “its,” we say, “the Earth” or “the river” which objectifies them. Strangely, we do not say, “The Venus” or “The Jupiter.”
I always look forward to your thinking, Ernesto. Wonderful!
Your reflection captures something essential: a forest doesn't have an exit strategy. The idea of money behaving like a mycelial network (moving surplus sugars to the nodes in the shade) completely flips the script on what 'return on investment' means. If wealth is measured by a system's capacity to give life rather than what can be extracted, then our current financial system is deeply bankrupt.
Thank you for reminding us that the bridge of systemic capital is necessary, but that we must be brave enough to cross over into the wilder country of living capital.
I think the moment we extract something living from nature's cycle and monetize it as a product, we remove it from the cycle of aliveness. The only economy that truly makes sense to me is a gift economy, because it emphasizes trust over control, relationship over value and that is exactly what nature is: a gift economy. It always gives more than it takes.
And when we look at the origin of the word economy, we see that it shares the same root as ecology, namely *Oikos* (home). One is the wisdom of home (*logos*), and the other is the meaningful partnership of home (*nomos*). A gift economy is nothing less than finding our way back to our own home through meaningful action.
Thank you Ernesto, I believe this is the way of the future, a future where we humans recognise we are nature and nature is us. I think your question about "how would nature design ...." can be applied not only to finance, but to all areas of human endeavor... and if we don't do this I fear humanity is doomed, hung by our own petard... a belief we are separate from nature and somehow invincible. Thank you for sharing your midnight ramblings - they made sense in the light of day! ❤️🌳
This is a beautiful piece. Embedded in your work is the depth of Aldo Leopold's Land Ethic, "A thing is right when it tends to strengthen the integrity, stability and beauty of the land. It is wrong when it tends otherwise." As I read I thought of my neighbors pigs. They live on the land near their home. They eat mostly what grows there, including acorns and hickory nuts. Their manure fertilizes their garden, from which these pigs eat the things people don't. My neighbors compost their own waste, which feeds the forest that feeds the pigs, who feeds them. Nutrients circulate. Is it a perfect system? Perhaps not, but their homestead tends that way, changing through time as the land dictates. My neighbors are practitioners embedded in a living system, yet isolated because there are no true boundaries and the surrounding land is managed via the prevailing "normal" economic mindset. The question remains, how do we change that mindset, including our own, to reach what we do not yet fully understand.
Your distinction between systemic capital and living capital is the sharpest framing I have encountered for what separates a regenerative economy from a well-intentioned extractive one. I have been writing about the economic architecture of exactly this — tracing the line from an Iron Age furnace on a koppie in Johannesburg to what a society built on restored natural capital rather than extraction might actually look like. The value chain from soil outward. The guild as the template for a culture rooted in place. The Loess Plateau as proof it has been measured. Your question — how would nature design finance — and mine — what would an economy look like that compounds rather than depletes — are the same question arriving from different directions. I wrote about it here https://substack.com/home/post/p-202919174 hope its interesting
We are looking at the same problem from different perspectives. I have been working on civilization design and immediately ran into the problem of the current capital models supporting infrastructure being inadequate for long term stewardship goals.
I suggest looking at the work of Mike O’Kane is his principles of ‘beginning with the end in mind’ for resource development projects, and then Rob Karpati on the topic of blended finance models.. I myself, as I said, and working on civilization design for the next, building full scale circular communities focused on infrastructure first. Would love to riff on where our work intersects if you would like to DM me. :)
Presumably money would not be used to simply extract value and to concentrate wealth and power. Money would not be issued on the basis of interest-bearing debt, and credit would not be misallocated for unproductive purposes.
Instead, perhaps interest-free credit would be allocated to generate value, to facilitate the production and reciprocal exchange of value.
Whats missing are people designing mechanisms that allow value to circulate through the network (or forest) itself.
Once we can measure and route value through a network, we can begin creating systems that coordinate, adapt, and regenerate more like living ecosystems.
One question this raises for me is where the mechanism of circulation actually lives.
A forest does not regenerate simply because nutrients exist. It regenerates because there are pathways through which nutrients continuously flow.
Perhaps the equivalent challenge in regenerative finance is not only designing new forms of capital, but designing the circulation mechanisms that allow value created by supply chains to continuously return to soils, water systems, landscapes, farmers, and local institutions.
Landscapes often degrade when value extraction exceeds ecosystem reinvestment.
They regenerate when reinvestment becomes structural rather than voluntary.
In that sense, the bridge from systemic capital to living capital may ultimately be built through reinvestment architecture.
“The only true voyage of discovery, the only fountain of eternal youth, is not to visit strange lands but to possess new eyes; to behold the universe through the eyes of another, of a hundred others; to behold the hundred universes that each of them beholds, that each of them is.”
Ernesto, one of the clearest articulations of where regenerative finance is heading that I’ve read. The distinction between systemic and living capital is real, and BFFs sit exactly where you place them, at the threshold, pointing the right direction.
But there’s a tension in the living capital concept worth naming.
You’re asking money to take on traits it structurally resists; relational, place-specific, reciprocal. Money’s power comes precisely from its indifference. It’s universal, indifferent and transactional. To make it behave like a mycelial network, you have to fight the instrument’s nature, combatting it with governance structures and covenants.
What if the move isn’t to make capital more forest-like, but to convert it into forest?
A regenerated soil, a trust network, a community with real commons governance, these don’t need to proxy the traits you want money to develop. They already carry them intrinsically.
Where money is gone when spend. Personal capital accumulates when spend, I learn when I do, skill grows when exerted. Social capital deepens through use rather than depleting. Ecological capital generates conditions rather than returns. They resist extraction by what they are, not by legal architecture.
This reframes the role of financial capital in the transition: not to become more alive, but to be consciously spent into aliveness. Its highest use might be its own dissolution, conversion into the capitals that can do the work money was never built to do.
BFFs then are a crucial transitional form. The bridge, as you say. But the country on the other side isn’t better money. It’s something that no longer needs to be money at all.
This piece found me exactly when I needed it. My community is in the midst of fighting a proposed and now approved hyper-scale data center to be situated in a fragile ecosystem called the Hansel Valley. What you outline here contains all the arguments many of us are trying to form and communicate. The BFF's tear through the intractable limits of modernity's mindset, but don't quite make it all the way to alignment. Awareness is not alignment....Thank you for pushing further and expanding our imaginations as we all try to birth a new way of being in the wake of our dying system!
This is a very profound essay for permaculture people. It's economics using our vocabulary, our concept library, which permaculture is itself often is accused appropriating from indigenous cultures.
There was a joke about a woman writing in social media protesting hunters killing animals. She asked, “Why can’t they just go to the grocery store and buy their meat like everybody else?”
There are “consumers” in this system who are so far removed from rivers and forests as to be on a different planet. We participate without awareness.
Regarding grammar, in addition to “its,” we say, “the Earth” or “the river” which objectifies them. Strangely, we do not say, “The Venus” or “The Jupiter.”
I always look forward to your thinking, Ernesto. Wonderful!
Your reflection captures something essential: a forest doesn't have an exit strategy. The idea of money behaving like a mycelial network (moving surplus sugars to the nodes in the shade) completely flips the script on what 'return on investment' means. If wealth is measured by a system's capacity to give life rather than what can be extracted, then our current financial system is deeply bankrupt.
Thank you for reminding us that the bridge of systemic capital is necessary, but that we must be brave enough to cross over into the wilder country of living capital.
I think the moment we extract something living from nature's cycle and monetize it as a product, we remove it from the cycle of aliveness. The only economy that truly makes sense to me is a gift economy, because it emphasizes trust over control, relationship over value and that is exactly what nature is: a gift economy. It always gives more than it takes.
And when we look at the origin of the word economy, we see that it shares the same root as ecology, namely *Oikos* (home). One is the wisdom of home (*logos*), and the other is the meaningful partnership of home (*nomos*). A gift economy is nothing less than finding our way back to our own home through meaningful action.
Bravo, Ernesto! Hope the LARIS presentation went well and that you shifted some paradigms! 💚
What I think you're dancing around is a bioregionally-issued currency, with BFF forming the overall governance mechanism.
When we get this right, it will be the instantiation of what David Ronfeldt refers to as +N - the next form of human coordination. Exciting times!
https://davidronfeldt.substack.com/p/rethinking-what-tribes-and-networks
John Seed
Deep ecology workshops Australia.
Thinking Like a Mountain.
"what if seeing the forest is not the same as belonging to it?" - great point.
Thank you Ernesto, I believe this is the way of the future, a future where we humans recognise we are nature and nature is us. I think your question about "how would nature design ...." can be applied not only to finance, but to all areas of human endeavor... and if we don't do this I fear humanity is doomed, hung by our own petard... a belief we are separate from nature and somehow invincible. Thank you for sharing your midnight ramblings - they made sense in the light of day! ❤️🌳
I should say we Western humans - indigenous peoples have never forgotten this.
This is a beautiful piece. Embedded in your work is the depth of Aldo Leopold's Land Ethic, "A thing is right when it tends to strengthen the integrity, stability and beauty of the land. It is wrong when it tends otherwise." As I read I thought of my neighbors pigs. They live on the land near their home. They eat mostly what grows there, including acorns and hickory nuts. Their manure fertilizes their garden, from which these pigs eat the things people don't. My neighbors compost their own waste, which feeds the forest that feeds the pigs, who feeds them. Nutrients circulate. Is it a perfect system? Perhaps not, but their homestead tends that way, changing through time as the land dictates. My neighbors are practitioners embedded in a living system, yet isolated because there are no true boundaries and the surrounding land is managed via the prevailing "normal" economic mindset. The question remains, how do we change that mindset, including our own, to reach what we do not yet fully understand.
Your distinction between systemic capital and living capital is the sharpest framing I have encountered for what separates a regenerative economy from a well-intentioned extractive one. I have been writing about the economic architecture of exactly this — tracing the line from an Iron Age furnace on a koppie in Johannesburg to what a society built on restored natural capital rather than extraction might actually look like. The value chain from soil outward. The guild as the template for a culture rooted in place. The Loess Plateau as proof it has been measured. Your question — how would nature design finance — and mine — what would an economy look like that compounds rather than depletes — are the same question arriving from different directions. I wrote about it here https://substack.com/home/post/p-202919174 hope its interesting
We are looking at the same problem from different perspectives. I have been working on civilization design and immediately ran into the problem of the current capital models supporting infrastructure being inadequate for long term stewardship goals.
I suggest looking at the work of Mike O’Kane is his principles of ‘beginning with the end in mind’ for resource development projects, and then Rob Karpati on the topic of blended finance models.. I myself, as I said, and working on civilization design for the next, building full scale circular communities focused on infrastructure first. Would love to riff on where our work intersects if you would like to DM me. :)
“how would nature design finance?”
Presumably money would not be used to simply extract value and to concentrate wealth and power. Money would not be issued on the basis of interest-bearing debt, and credit would not be misallocated for unproductive purposes.
Instead, perhaps interest-free credit would be allocated to generate value, to facilitate the production and reciprocal exchange of value.
Whats missing are people designing mechanisms that allow value to circulate through the network (or forest) itself.
Once we can measure and route value through a network, we can begin creating systems that coordinate, adapt, and regenerate more like living ecosystems.
One question this raises for me is where the mechanism of circulation actually lives.
A forest does not regenerate simply because nutrients exist. It regenerates because there are pathways through which nutrients continuously flow.
Perhaps the equivalent challenge in regenerative finance is not only designing new forms of capital, but designing the circulation mechanisms that allow value created by supply chains to continuously return to soils, water systems, landscapes, farmers, and local institutions.
Landscapes often degrade when value extraction exceeds ecosystem reinvestment.
They regenerate when reinvestment becomes structural rather than voluntary.
In that sense, the bridge from systemic capital to living capital may ultimately be built through reinvestment architecture.
“The only true voyage of discovery, the only fountain of eternal youth, is not to visit strange lands but to possess new eyes; to behold the universe through the eyes of another, of a hundred others; to behold the hundred universes that each of them beholds, that each of them is.”
—Marcel Proust