The Evolution of Systemic Thinking in Economics: Key Influences and Contributors

Systemic thinking, a holistic approach to understanding complex systems, has profoundly reshaped economic theory and practice over the past century. By emphasizing interconnectedness, feedback loops, and emergent properties, systemic thinking challenges traditional economic models that often treat economies as isolated, linear mechanisms. This article explores the evolution of systemic thinking in economics, highlighting key thinkers and their contributions to regenerative, circular, and ecological economics, as well as its applications in territorial and organizational development.

Foundations of Systemic Thinking: From Bertalanffy to Meadows

The roots of systemic thinking in economics can be traced back to the mid-20th century when scholars began to challenge reductionist approaches to complex systems.

Ludwig von Bertalanffy (1901–1972)

Ludwig von Bertalanffy, an Austrian biologist, is widely regarded as the founder of General Systems Theory (GST). He argued that systems — biological, social, or economic — are interconnected and cannot be fully understood by analyzing their individual parts in isolation. Bertalanffy’s ideas introduced interdependence, feedback loops, and dynamic evolution as fundamental aspects of systemic economics, laying the groundwork for later models integrating ecological and economic systems.

Donella Meadows (1941–2001)

Donella Meadows, an environmental scientist and systems thinker, brought systemic thinking into the mainstream with *The Limits to Growth* (1972). Co-authored with colleagues from the Club of Rome, the report used system dynamics modeling to show how unchecked economic growth, reliant on finite resources, could lead to ecological collapse. Meadows’ work emphasized the importance of operating within planetary boundaries, inspiring a generation of economists and policymakers to incorporate sustainability into economic frameworks.

Regenerative and Circular Economics: Boulding and Raworth

As systemic thinking gained traction, economists began developing models that prioritize sustainability and regeneration over perpetual growth.

Kenneth Boulding (1910–1993)

Kenneth Boulding introduced the concept of “Spaceship Earth” in *The Economics of the Coming Spaceship Earth* (1966). He argued that Earth is a closed system with limited resources, challenging the traditional notion of economies as open systems with infinite inputs and outputs. Boulding’s ideas foreshadowed circular economy principles, advocating for resource efficiency and waste minimization.

Kate Raworth (b. 1970)

Building on Boulding’s work, Kate Raworth developed “Doughnut Economics,” a model that envisions a safe operating space for humanity between social foundations (meeting basic human needs) and ecological ceilings (planetary boundaries). Raworth’s framework offers a systemic alternative to GDP-driven growth models, balancing human well-being with environmental sustainability.

Ecological Economics and Transition: Daly and Capra

Systemic thinking has also deeply influenced ecological economics, integrating environmental sustainability into economic structures.

Herman Daly (1938–2022)

Herman Daly, a pioneer of ecological economics, argued that the economy is a subsystem of the biosphere, not the other way around. His concept of “steady-state economics” advocates stabilizing resource use at levels sustainable by the planet. Daly’s work directly challenged mainstream economic growth imperatives and emphasized the necessity of aligning economic activity with ecological limits.

Fritjof Capra (b. 1939)

Physicist and systems theorist Fritjof Capra expanded systemic thinking to include the dynamics of living systems. In *The Web of Life* (1996), he explored the interconnectedness of ecological, economic, and social systems, emphasizing the need for a paradigm shift from mechanistic to holistic thinking. His work has influenced efforts to transition towards regenerative economic models that mirror natural ecosystems.

Systemic Economics Applied to Territories and Organizations

Systemic thinking is increasingly applied at the local and organizational levels, shaping economic models that foster resilience and cooperation.

Michel Bauwens (b. 1958)

Michel Bauwens, belgian, founder of the Peer-to-Peer Foundation, has explored how systemic thinking can inform new economic models based on commons-based peer production. Bauwens advocates for decentralized, collaborative systems that empower communities and prioritize shared resources over private ownership, inspiring initiatives such as platform cooperatives and open-source innovation.

Gunter Pauli (b. 1956)

Gunter Pauli, architect of the Blue Economy, applies systemic principles to economic models that mimic natural ecosystems. The Blue Economy emphasizes zero waste, local resource use, and multiple value streams, drawing inspiration from nature’s efficiency. His approach has been implemented in sustainable agriculture, renewable energy, and circular business practices.

Game Theory and Systemic Thinking: Nash and Ostrom

Game theory, a mathematical and economic discipline, has also contributed to systemic thinking by modeling interactions within complex systems.

John Nash (1928–2015)

Nobel laureate John Nash developed the concept of Nash Equilibrium, describing a state in which no participant can benefit from changing their strategy unilaterally. His work illustrates how individual decisions create emergent economic outcomes, highlighting tensions between individual and collective interests.

Elinor Ostrom (1933–2012)

Elinor Ostrom applied game theory to common-pool resources, challenging the “tragedy of the commons” narrative. Her research demonstrated how communities can self-organize to manage shared resources sustainably, reinforcing the importance of systemic approaches to governance and economic resilience.

Michel Laffitte

The systemic economy model applied to Lyon is often associated with the work of Michel Laffitte and his team at the Institute of Complex Systems (ISC) and the École Centrale de Lyon. Michel Laffitte, an engineer and researcher, played a key role in developing and promoting the systemic approach to understanding and managing complex economic and social systems, particularly in urban and territorial contexts.

Michel de Kemmeter: Systemic Thinking in Economic Practice (b. 1964)

Michel de Kemmeter, a contemporary systems thinker and consultant, applies systemic principles to organizational and economic challenges, and invents the ‘Systemic Economy’ model. His work with the Club of Brussels emphasizes the interplay between technology, society, and economics, advocating for adaptive and resilient systems. Through the Extrapreneurs program, he has designed systemic problem-solving action-training initiatives across multiple regions and sectors. His research and frameworks in multi-cashflow business models and systemic innovation contribute to the practical application of systemic economic principles in real-world scenarios and territorial regeneration and new economic development.

Ervin Laszlo: Systems Philosophy and Holism (b. 1932)

Ervin Laszlo, a philosopher and systems theorist, has significantly shaped systemic thinking through his work on systems philosophy and the interconnectedness of all life. In *The Systems View of the World* (1972), Laszlo argues for a holistic understanding of reality, where economic, ecological, and social systems form an interdependent whole. His ideas have influenced holistic economic models that seek harmony between nature and human well-being.

Orianne Corman: Systems Thinking in international relations (b. 1964)

Consultant and author, she is at the forefront of systems thinking in economic models, and also started to manage stability, peace, collaboration and resources in regions like Red Sea, Middle East, and Latin America.

Conclusion: The Future of Systemic Thinking in Economics

The evolution of systemic thinking in economics underscores a growing recognition of the interconnectedness between ecological, social, and economic systems. From Bertalanffy and Meadows’ foundational theories to regenerative models proposed by Raworth, de Kemmeter and Pauli, systemic approaches provide crucial insights for addressing climate change, inequality, and resource depletion.

As the world grapples with complex global challenges, systemic thinking offers a transformative perspective for designing economic systems that are sustainable, equitable, and resilient. By embracing principles of interdependence, feedback, and regeneration, we can transition towards an economy that serves both people and the planet.

The problems created by a consciousness level, based on command-and-control, (level 3 in spiral dynamics of Ken Wilber), can only truly and efficiently be solved with systemic levels of consciousness (level 7 in spiral dynamics). Trying to solve those problems with command and control consciousness is an enormous waste of time, effort and money.

As Donella Meadows famously stated, “The future can’t be predicted, but it can be envisioned and brought lovingly into being.” Systemic thinking equips us with the tools to make that vision a reality.