Beavering Away In Boardrooms

With Trump sparking the fastest Bull-to-Bear slump in modern US presidential history, what role now for market Beavers?

What would happen if the world’s boards adopted the Beaver mindset?

Back in 2020, in my book Green Swans, my attempt at a system change manifesto, I argued that the world was headed into a political and economic “U-Bend”—a period where an old order comes apart at the seams and new ones struggle to find their feet.

That process was well under way even before Donald Trump demonstrated his undying passion for another t-word, tariff. But he now seems hell-bent on underscoring the risks of the U-Bend by making it an overnight global market reality. The system is changing but not in the ways we might have envisaged or wanted.

Not to say that Trump didn’t see all this coming. He did. Last year, he warned his fellow Americans that a vote for Vice President Kamala Harris would be a vote for market meltdown. “You want to see a market crash? If we lost this election,” he huffed, “the market would go down the tubes.” He went on to insist that “the result will be a Kamala economic crash, a 1929-style depression.”

Well, as CNN put it a few days back, he won the election and yet, after all, “may have been right about a crash occurring after the election. Trump and his tariffs have taken a bull stock market and are on the precipice of turning it into a bear faster than any president has overseen in modern history.”

The Bull, the Bear, and the Beaver

Founded to explored promote system change, Volans continues to push that part of the “envelope,” as at this year’s Anthropy. And, as it happens, I have also been playing with the bull and bear market metaphors recently as I worked on my latest book, The Bull, Bear & Beaver. The aim is to explore ways in which we might come to use a trio of market icons, rather than the age-old duo of Bull and Bear—to stretch our horizons, thinking and imaginations.

The book project is a thought experiment, as was the triple bottom line over 30 years ago, a way of exploring ideas and challenges by imagining a possible future scenario and then reasoning it through—in our minds—rather than by conducting physical experiments or collecting real-world data.

It’s a mental game, where we ask, “What might happen if...?”

Want an example? How about, to take another famous creature, Schrödinger’s Cat—from the world of physics? This thought experiment in the weird world of quantum physics was suggested by Austrian physicist Erwin Schrödinger 90 years ago, back in 1935. It was designed to illustrate the strangeness of the rapidly emerging discipline of quantum mechanics—especially the idea that particles can exist in multiple states at the same time, at least until they’re observed.

With my growing interest in ‘Beaver Markets,’ I am addressing the question, What might happen if we built sustainability, circularity and regeneration into the very guts of our economies, markets and business? And Trump’s impact on global markets offers a fascinating opportunity to observe them adapting—or struggling to do so—in real time.

To paraphrase Abraham Lincoln, although I have often been accused of being one, I am not—nor have I ever been—an economist. Instead, I dropped out of my university economics course after one mutually frustrating year back in 1968. I wanted economists to engage with social and environmental issues more energetically than they did.

Still, I have long been fascinated by the ways in which our species evolves and then expresses its collective ambitions, priorities and expectations and behaviors through our economies, markets and businesses. That has been a key focus of this evolving set of Rewilding Markets posts.

Animal spirits

Looking back, much of my interest over the years focused on the great cycles and waves that have driven and shaped our economies throughout recorded history. True, over the decades, much of what I learned way back then washed away as later realities sluiced through my brain but one phrase that snagged immovably in my mind was “animal spirits.”

Thought to have originated with the massively influential British economist John Maynard Keynes, the term was first introduced in his 1936 book, The General Theory of Employment, Interest and Money. He used the phrase to describe “a spontaneous urge to action rather than inaction... not as the outcome of a weighted average of quantitative benefits.” In other words, he was flagging the gut-level emotions that we now know drive much of our economic behavior.

True, some of us persist in seeing markets as universally rational and efficient, regulated by supply and demand dynamics that are continuously informed by near-perfect information, but that is another economic hallucination. Reality turns out to be way more complicated.

Among the emotions that spur us to action are roiling blends of confidence, fear, greed, the herd instinct, hope and, when things go seriously wrong, panic. So, over time, the phrase animal spirits came to serve as shorthand for the emotional and psychological forces that shape markets, often overriding cold rationality and calculus. They shape our life choices, our spending and saving habits, our investment decisions, our appetites for risk and opportunity.

And history warns us that these animal spirits can be highly contagious, as we see in this very moment. When people feel confident, they spend and invest, which in turn drives markets up, which then makes people feel ever more confident. When the resulting booms start to lose steam, as they must, the same thing happens in reverse, driven by emotions like uncertainty, fear, shame and panic.

Economists have tried to get their brains around the human side of markets with an expanding spectrum of new disciplines that didn’t exist when I was a student of the would-be science—among them behavioral economics, market sentiment analysis and narrative economics. Robert Shiller used the latter term when explaining how the stories we tell ourselves and others can drive real-world outcomes. That is a trick I now hope to pull off with the new book.

A three-body problem

By way of background, if the “Bull” represents optimism and rising markets and the “Bear” pessimism and falling markets, the “Beaver” adds something very different to the mix. It represents diligence, long-term-investing and regeneration, in multiple dimensions, across and beyond the triple bottom line. A Beaver Market, in short, is one dedicated to restoring nature, ecosystems and biodiversity. It immerses wider economic landscapes with life and opportunity.

Such markets are conspicuously rare these days, but if we are to have a long-term future on this small planet of ours, they must become the default setting—just as they are for nature itself.

For any physicists among us, the well-established Bull-Bear market dynamo can be seen as involving two distinct “attractors,” one pushing us toward growth, the other pulling us toward degrowth. In adding the Beaver to the energy field, we are evolving a three-attractor system. And as anyone who has read The Three-Body Problem by Chinese sci-fi superstar Liu Cixin already knows, such systems are dogged from the outset by intense complexity and volatility.

In a double-attractor model, as with the basic Bull and Bear, the system can settle into one of two more or less stable states—so here, the Bull and Bear zones. Bring in a “third attractor” and you usher in a very different situation, where the system can end up in three or more very different modes of behavior. In the process, at least in the early stages, its path can become much less predictable.

Regenerating systems

Potential tipping points can become more sensitive or sudden. On the upside, however, the addition of a third—and expanding—zone of attraction could potentially help stabilize, rebalance and regenerate the entire system over time. This is a possibility I intend to explore further.

And a final note here, another fundamental characteristic of real-world beavers is that their activities create a wealth of positive externalities. As a so-called “keystone species,” they create the conditions in which many other forms of life can flourish. As I push deeper into this possibilityscape, I hope to learn from others in this emerging field how our economies, markets and businesses might learn to do the same.

So perhaps our future challenge is less about getting the human equivalents of beavers to sit around boardroom tables than how we design markets in such a way that beaver-like regeneration becomes the natural outcome, the default setting?