The Invisible Heart of Resilience
How Becoming Personally Resilient Helps Create a Resilient World
For those with even a cursory interest in economics, there is likely a familiar ring to the idea that pursuit of personal interests yields societal benefits. This is, of course, the message of Adam Smith’s “invisible hand of the market.” Unfortunately, it has become all too evident that a civilization based solely on competition and maximizing self-interest does not always create the desired benefits or distribute them equitably. In fact, it can frequently cause great harm to people and nature.
Nonetheless, as we have developed our new resilient investing framework, we’ve come to appreciate the nugget of truth in Smith’s teachings. What he lacked—or at least what is lacking in the way he is interpreted today—is a big enough perspective on what is meant by the pursuit of individual interests. By expanding the definition of what self-interest really means, the essence of Smith’s teachings may take on newfound relevance in a world searching for answers to complex challenges.
Here’s why: In our experience, when investors broaden their goals so that they focus not solely on their financial assets but their personal and tangible ones as well, as we outline in our resilient investing system, they tend to utilize strategies that enhance the health of the community and the environment. Conversely, investments that harm the fabric of society fall out of favor because by their very nature they make us less resilient. A deteriorating global environment and extreme levels of inequality are detrimental to everyone, and many investors understand the folly of profiting financially while furthering such negative trends.
We have coined the term Invisible Heart to reflect this larger view of self-interest. It does not ignore the financial realm but recognizes that a hand left to its own devices can be used for healing or can cause harm. A hand needs a heart to guide it. We are all connected in more ways than we can fathom; as more people recognize this, the ancient and universal wisdom of the Golden Rule—to not harm others—becomes a foundational principle that guides our decisions.
Here is our expression of the Invisible Heart principle:
When investors take a comprehensive approach to enhancing their self-interest, one that is larger than solely personal or financial, the invisible heart of resilience exerts a tendency to enhance societal well-being.
The Resilient Investor shows how becoming more resilient empowers individuals and prepares them for an uncertain future. Yet we are convinced that the effectiveness of these strategies is strengthened by the fact that we are not only investing for our own good, but also to support the community and environmental relationships on which we all depend.
The Invisible Hand implies that there is no need to consciously decide to be of service—the mere fact that one is successful in the market supposedly means that one has done something beneficial for society. Today, there are many entrepreneurs who are being more purposeful about this desire, deliberately combining their profit-making ambitions with their zeal to make a difference in the world. This is not just about such practices being good for business; it’s about creating the societal and environmental conditions necessary for people of all economic classes to thrive. The Invisible Heart builds on these intentions, enabling investors to use all three of our asset types (personal, tangible, and financial) to yield larger benefits. Embracing the triple bottom line of “people, planet, and profit” is what makes true resilience possible.
For decades we and our colleagues have been urging investors to embrace this bigger perspective. Today there are ever more opportunities to strengthen communities and revitalize ecosystems. All three of the resilient investing strategies (close to home, global economy, and evolutionary) were designed to bring about positive outcomes in the larger world that we inhabit. For some time, each of them has been tracking upward on a slow-but-steadily-rising growth curve, and over the past decade they have all seen a surge in both popular interest and institutional adoption.
Let’s imagine that this continues and even accelerates as the Invisible Heart unfolds its beneficence. What would our world look like if all nine baskets get filled to overflowing by enthusiastic, resilient investors?
With all three strategies rooted in ecological principles, we will see a regeneration of our planet’s life-support systems. It is within our reach to alleviate poverty, hunger, and drinking-water shortages and to guarantee healthcare to all of humanity as a basic right. As more people take on an evolutionary, worldcentric identity, it is quite possible that we will shift some power away from the nation-state and toward both local and global entities that are better scaled to manage the tasks at hand. If it all comes together, we will find our way through the ultimate quandary of our times, building a thriving society that leaves vibrant habitats, healthy rivers and oceans, and a stable climate as our legacy to our children.
These musings are of course only a sliver of what is possible in a future where each of the three resilient investment strategies becomes widely adopted. We have barely touched on the synergies between any two, much less all three of them. Indeed it is the powerful combination of all of them that will allow civilization to thrive—a world of strong regional economies, interacting with a more just and sustainable market economy, all moving toward a new system that emphasizes participation and collaboration. This vision of a resilient future is one that each of us can help create through our investment decisions.