Nexus Class Relational Summary Lecture:
Dismantling the Illusion of Profit — Nexus Thinking and the Economy for the Common Good
Good morning, everyone. Today I want to begin with a provocative statement: I will try to convince you we have never truly made a profit. Well, almost nobody, and almost never. Small businesses in areas or times without violence backed corporate monopolies, maybe. In modern times, perhaps never. Perhaps. If true, that would throw a monkey wrench in things, wouldn’t it?
Now, I know that might sound strange, maybe even absurd. After all, isn’t profit the very lifeblood of business, the ultimate sign of success? In classical terms, profit is simple: what’s left when we subtract expenses from revenue. But what if this definition is incomplete? What if it has been criminally distorted? What if our understanding of profit ignores vast categories of costs—environmental degradation and habitat loss to the point of irreversible extinction – creating a kind of poverty that is irrecoverable, social inequality, the exploitation of labor, even intergenerational debts? These “negative externalities,” as economists call them, are invisible on the balance sheets of corporations but painfully visible in the real world.
This illusion of profit is at the very heart of our economic system. And to unpack it, we need to travel through three sets of ideas: the persistence of social Darwinism with its biased description of some kind of “natural selection” that cajoles people into thinking “winner take all” is somehow a good thing in our economic imagination, the countervailing biological principle of natural inclusion offered by British biologist Dr. Alan Rayner, and the emergence of purpose-driven and common good economies championed by leaders like Victoria Hurth and Christian Felber. Along the way, I will also draw on the classical perspective of Adam Smith—the so-called father of modern economics— , with a little Ricardian Comparative Advantage thrown in, and show, with Felber’s help, how Smith’s work has been deeply misinterpreted because schools only teach half his story.
Finally, because this lecture is for a Nexus Thinking class, we will make explicit connections to the WEFe nexus—water, energy, food, and ecosystems. Nexus thinking is about understanding interconnections, feedback loops, and the consequences of focusing on one sector while ignoring the rest. Focusing on just one book or literature is similarly fraught with danger. As we will see, these economic and biological perspectives are not just theoretical—they are essential for anyone who wants to design resilient, sustainable solutions for the real world.
The Illusion of Profit and the Hidden Costs of Capitalism
Let’s start by looking closer at the problem of “profit.” Imagine a company selling cheap fast fashion. On the ledger, they may show millions in profit. But where do those profits come from? Often, from sweatshop labor in Bangladesh, cotton grown with pesticides that poison rivers, carbon emissions that destabilize climate, and garments designed to end up in landfills within a season. None of these costs are subtracted before the company declares its “profit.”
Take another case: BP’s Deepwater Horizon disaster in 2010. Before the oil spill, BP reported strong profits, celebrated in financial media. But when the disaster struck—killing 11 workers, spilling millions of barrels of oil into the Gulf of Mexico, destroying livelihoods, and damaging ecosystems for decades—those so-called profits were revealed as fragile, even fraudulent. What appeared profitable was simply deferred liability.
This is not an anomaly. The International Monetary Fund (2015) estimated that fossil fuel companies receive $5.3 trillion in implicit subsidies annually when unpriced damages to health and climate are factored in. If those costs were internalized, the “profits” of oil, coal, and gas corporations would largely evaporate.
Now let’s connect this to the WEFe nexus. A bottled water company may declare profits, but its extraction leaves aquifers depleted and communities water-insecure. A fossil-fuel power plant may boast revenues, but its emissions destabilize food systems through droughts and floods. Industrial agriculture may look profitable, but its nitrogen runoff creates dead zones in oceans, collapsing ecosystems that support fisheries. Nexus thinking reveals that what looks profitable in one column is often catastrophic when seen across the water–energy–food–ecosystem nexus.
This is why profit, as traditionally defined, is an illusion. Nexus logic demands that we measure not just direct revenues and expenses but the cross-sectoral consequences—whether a project creates resilience or undermines it.
Social Darwinism: The Roots of an Economic Worldview
The illusion of profit is reinforced by an ideology: social Darwinism.
Coined in the 19th century, social Darwinism was not actually Darwin’s idea but Herbert Spencer’s extension of “survival of the fittest” to human societies. It suggested that competition, domination, and exclusion are natural laws, and that inequality is justified because the strong deserve to rise while the weak must fall. This worldview shaped colonialism, industrial capitalism, and even eugenics.
Think of Cecil Rhodes and the British Empire, extracting resources in Africa under the guise of civilizing “less fit” peoples. Or consider Gilded Age industrialists in the United States, who justified child labor and brutal working conditions as the price of progress.
But this ideology misreads both Darwin and human society. Darwin emphasized not only competition but also symbiosis and cooperation. In The Descent of Man (1871), he argued that human survival depended on sympathy, cooperation, and moral instincts. Unfortunately, the selective interpretation of “survival of the fittest” has dominated economic thinking.
From a nexus perspective, social Darwinism fosters siloed logic—maximizing returns in one area while degrading the others. It is Logic 1 in Hurth’s terms: shareholder primacy at all costs. And Logic 1 is unsustainable in a nexus world, because water, energy, food, and ecosystems are too tightly interdependent to allow exploitation in one without consequences in the others.
Natural Inclusion: Alan Rayner’s Biological Alternative
Enter Alan Rayner, a contemporary biologist, who proposes natural inclusion as an antidote. Rayner argues that life is not fundamentally about exclusion and competition, but about interconnectedness, diversity, and mutual inclusion.
Nature is full of examples:
Coral reefs thrive not because one species dominates, but because thousands of organisms contribute to a resilient ecosystem.
Mycorrhizal fungal networks link trees underground, sharing nutrients and warning signals. This “wood-wide web” ensures that when one tree is stressed, others provide support.
Slime molds switch between individual and collective forms to solve complex problems, reminding us that adaptability often requires oscillating between autonomy and cooperation.
These biological metaphors challenge us to rethink economics. Instead of markets as gladiatorial arenas where only the strongest survive, we can envision economies as ecosystems where cooperation, diversity, and reciprocity foster resilience.
This is where biomimicry becomes central to nexus thinking. When we study coral reefs or fungal networks, we are not only seeing how biology organizes itself; we are learning how to redesign our economic and governance systems. Here, we can apply what Victoria Hurth and colleagues call Logic 1, Logic 2, and Logic 3.
Logic 1 is the traditional shareholder-primacy logic: maximize financial profit, minimize all else.
Logic 2 shifts to stakeholder logic: balance financial profit with broader responsibilities.
Logic 3 is purpose logic: design systems where the raison d’être is to serve the common good, with profit only as a byproduct.
Rayner’s concept of natural inclusion aligns directly with Logic 3. Just as ecosystems thrive when every species plays a role in maintaining resilience, nexus thinking asks us to design water, energy, and food systems that operate within ecological boundaries, serving community well-being as their primary aim.
Interestingly, Indigenous traditions around the world echo Rayner’s view. The Haudenosaunee Confederacy in North America emphasized the “seventh generation principle”: decisions must consider their impact seven generations ahead. This is natural inclusion applied to governance—recognizing that no decision stands apart from the web of time and relationship.
Purpose-Driven Economy: Victoria Hurth and Beyond
Building on this ecological lens, thinkers like Victoria Hurth advocate for a purpose-driven economy. Hurth’s argument is simple yet transformative: instead of measuring success by shareholder returns, we must measure it by collective well-being.
Consider Patagonia, which famously ran the ad “Don’t Buy This Jacket” to discourage overconsumption. Their brand thrives not by maximizing short-term sales but by aligning with values of sustainability and responsibility. Another example is Interface, the carpet company led by Ray Anderson. In the 1990s, Anderson shifted the company toward “climbing Mount Sustainability,” reducing waste, adopting circular production, and turning a polluting business into a global model of ecological innovation in the framework of an industrial ecology where the output of one process becomes the input of another, cradle to cradle, eliminating waste.
For our class, this means that when we analyze case studies—say, a solar irrigation project in Morocco or a biogas digester in Tanzania—we should not stop at whether they are profitable. We must ask: do they reduce water stress, generate renewable energy, and provide food security simultaneously? If yes, if they actually IMPROVE the landscape and seascape and socialscape rather than degrading or harming it, then they embody Logic 3 and demonstrate nexus thinking in action. Patagonia’s refusal to overproduce clothing is not just an environmental gesture; it conserves water, reduces energy use, and avoids food–ecosystem trade-offs. In short, purpose-driven businesses succeed when they optimize across the nexus, not just along a single profit line.
Christian Felber and the Economy for the Common Good
Now let’s bring in Christian Felber. Felber, an Austrian economist and activist, created the Gemeinwohlökonomie (Economy for the Common Good). His model explicitly shifts economic success metrics from profit to contribution to human dignity, ecological sustainability, social justice, solidarity, and democratic participation.
Central to Felber’s model is the Common Good Balance Sheet. Instead of only reporting financial performance, companies report how their practices align with these values. Do they treat workers fairly? Do they reduce ecological impact? Do they foster transparency? This matrix is being used in Austria, Germany, and Spain, not only by businesses but by municipalities requiring suppliers to present a Common Good Score in procurement.
Felber draws on an important but neglected insight from Adam Smith. Business schools worldwide teach The Wealth of Nations (1776), where Smith outlines division of labor, free markets, and the “invisible hand.” But they ignore his earlier book, The Theory of Moral Sentiments (1759).
Smith argued that markets could only function if undergirded by moral sympathy—our capacity to care about others’ well-being. The invisible hand, in Smith’s view, was not a blind mechanism of self-interest but a delicate process that required moral and civic responsibility. Without moral sentiments, markets distort into systems of greed and exploitation.
Felber insists that teaching Wealth of Nations without Moral Sentiments is like teaching medicine without ethics. It creates technocrats who can calculate efficiency but not justice. This partial education explains why neoliberal capitalism so often produces crises: 2008’s financial collapse, widening inequality, climate breakdown. The moral compass was amputated from economics.
For nexus thinking, this omission is disastrous. If markets ignore moral sentiments, they optimize for one sector while destroying others—growing GDP while depleting water, generating energy while collapsing ecosystems, producing food while eroding soils. Reintegrating moral sentiments is the intellectual equivalent of reintegrating the WEFe nexus.
Historical Debts and Regenerative Futures
Another way to see the illusion of profit is through what economic anthropologist Jason Hickel, the degrowth theorist affiliated with the London School of Economics calls “plundered wealth.” Much of modern prosperity rests on historical exploitation: colonized lands, enslaved labor, extraction of fossil fuels. These costs were never paid. They are historical debts that accumulate as inequality and environmental crises.
By embracing principles of natural inclusion and the common good economy, we can begin to repay these debts. For instance:
Renewable energy projects in Africa that prioritize local ownership can reverse the legacy of extractive colonial industries.
Fair-trade supply chains in coffee and chocolate help restore dignity and fair wages to communities historically exploited.
Regenerative agriculture sequesters carbon while reviving degraded soils, paying down the “climate debt” of industrial farming.
This is where Felber’s framework shines: it reframes economic success as reducing hidden costs and generating genuine, shared value. And for us in nexus studies, it means designing projects that are not just technically sound but historically reparative—healing the water, energy, food, and ecosystem injustices of the past.
Rethinking Capital Accumulation
Some of you may wonder: in such a system, can anyone still become a billionaire? The answer is yes—but under a new logic. In ecosystems, energy accumulates as biomass or water behind dams, enabling large-scale transformations. Similarly, capital can accumulate to fund transformative projects: building sustainable cities, transitioning to green energy, even space exploration.
The difference is that this wealth would not be hoarded in private yachts or speculative bubbles. It would be accumulated transparently and deployed for the common good. Imagine an infrastructure fund where billionaires, communities, and governments co-invest to reforest deserts, build carbon-neutral housing, or eradicate malaria. The returns would be shared prosperity, resilience, and innovation.
This reframes wealth not as private indulgence but as collective capacity. Capital, like water, must be stored and directed carefully. Otherwise, it stagnates or floods destructively. Nexus thinking helps us recognize these flows of energy, material, and capital as interconnected reservoirs.
Fulfillment, Responsibility, and Joy
Felber also critiques how our warped and disconnected natural capital depleting ideas about capitalism distort our psychology. By making money the highest goal, it encourages competition, anxiety, and endless consumption. But when we shift focus to purpose, responsibility, and community, we rediscover joy.
Here he aligns with philosopher Clinton Callahan’s idea of radical adult responsibility. True maturity, Callahan argues, comes not from escaping responsibility but from embracing it: caring for families, stewarding communities, protecting ecosystems. Responsibility becomes not a burden but a path to fulfillment.
This insight echoes Indigenous wisdom traditions and spiritual teachings across cultures: real wealth lies in relationships, not in possessions. In the nexus, conceived as a whole and not a single point of connection, the network holds the real value, not the nodes. And when responsibility is celebrated rather than avoided, we build economies that nourish life all along all the conduits and peripheries as well as in the cities and other market and population centers, instead of depleting it.
For students of the nexus, this means cultivating joy not only in solving technical problems but in carrying moral responsibility for interconnected systems. To care for one node in the nexus—say, water—is also to care for energy, food, and ecosystems. This is not a burden; it is the essence of purpose.
Conclusion: From Illusion to Regeneration
So, have we ever truly made a profit? If profit means ignoring ecological collapse, labor exploitation, and social inequality, then no. Not for a long time, and relative to city states and the agricultural revolution and colonialism and the industrial revolution, not yet. But if profit means generating genuine surplus—financial, social, ecological, cultural—then yes, it was once and still is possible.
To get there, we need to abandon social Darwinism’s narrow view of competition, embrace natural inclusion’s vision of interconnectedness, adopt Hurth’s purpose-driven models, and implement Felber’s economy for the common good. We must also restore Adam Smith’s full vision by reuniting markets with moral sentiments.
Oh, and one note about David Ricardo’s famous theory of “Comparative Advantage.” Ricardo argued in the early 19th century that nations should specialize in producing what they could make relatively more efficiently and trade for everything else. On paper, this looks like a win-win logic for maximizing global welfare. But in practice, comparative advantage has too often meant ecological and social monoculture. Portugal was encouraged to cover its hillsides with vineyards to supply England with wine, while England filled its pastures with sheep to produce wool. The result? Deforestation, soil erosion, the loss of biodiversity, and in England’s case, overgrazed commons littered with unutilized waste.
Ricardo’s abstraction ignored ecosystem services—the benefits of diverse landscapes that regulate water, pollinate crops, sequester carbon, and sustain cultural heritage. By reducing nations to “wine producers” or “wool producers,” comparative advantage reinforced a tragic narrowing of land use, undermining resilience and fueling what Garrett Hardin later called the “tragedy of the commons.”
From a nexus perspective, this theory is dangerously myopic. Specializing in a single commodity may increase short-term trade revenues, but it disrupts the water–energy–food–ecosystem nexus, hollowing out long-term security. Vineyards that demand heavy irrigation strain aquifers. Sheep herds raised for wool compact soils and release methane. Monocultures collapse under pests and climate stress. What Ricardo saw as efficiency, we now see as fragility.
A better alternative is GLOCAL trade—a balance between local self-reliance and global exchange. In this model, communities produce a diverse foundation of water, energy, and food security locally, ensuring resilience, while engaging in fair and regenerative global trade for true surpluses and innovations. This glocal logic mirrors natural ecosystems: every organism meets its local needs through diversity while exchanging selectively with the wider environment.
In other words, Ricardo’s comparative advantage locked us into Logic 1 economics—narrow specialization in the name of profit. Nexus thinking asks us to move beyond, toward Logic 3 economics—trade that strengthens, rather than undermines, the integrity of water, energy, food, and ecosystems.
In this course, Nexus Thinking is not just an academic exercise; it is a way of restoring Adam Smith’s lost moral sentiments and aligning economics with ecology. To study the nexus is to study the flows and feedback loops that make life possible. Every time we evaluate a policy, a project, or a technology, we will ask: how does it affect water, energy, food, and ecosystems together? Does it reinforce the illusion of profit, or does it move us toward genuine common good?
By applying natural inclusion, purpose-driven logic, and the economy for the common good to the WEFe nexus, we shift from fragmented thinking to systems thinking—from Logic 1 and 2 to Logic 3. This is the intellectual and moral work of our generation, and it is why learning nexus thinking demands engaging with philosophy, biology, and economics side by side.
The future of economics lies not in maximizing narrow profits but in maximizing life. Out of many, one. E pluribus unum. Just as coral reefs, forests, and mycorrhizal webs thrive through cooperation, so too can our societies and economies.
If we teach economics as Adam Smith intended—anchored in moral sentiments—and as Felber proposes—measured by the common good—and as Hurth champions, with a restorative value adding Logic 3, we can finally move beyond the illusion of profit and build a regenerative, inclusive, and joyful future.
References (APA style)
Anderson, R. (2009). Confessions of a radical industrialist: Profits, people, purpose—Doing business by respecting the earth. St. Martin’s Press.
Darwin, C. (1871). The descent of man, and selection in relation to sex. John Murray.
Felber, C. (2015). Change everything: Creating an economy for the common good. Zed Books.
Hickel, J. (2020). Less is more: How degrowth will save the world. Penguin.
Hurth, V., Courtice, P., & Balagopal, B. (2015). Purpose: A practical guide to finding your why and leading with authenticity. University of Cambridge Institute for Sustainability Leadership.
International Monetary Fund. (2015). How large are global energy subsidies? IMF Working Paper.
Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. Cambridge University Press.
Rayner, A. (2017). Natural inclusion: Life beyond separation. Green Books.
Smith, A. (1759). The theory of moral sentiments. A. Millar.
Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. W. Strahan and T. Cadell.
Strogatz, S. (2003). Sync: The emerging science of spontaneous order. Hyperion.
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