The words “sustainability,” “responsibility,” and “social reform” have been thrown around carelessly since the issue was brought to wider attention — for most scholars, the specific moment in time was the report from the Brundtland Commission, entitled “Our Common Future” in 1987 which finally created urgency on climate issues, provided a generally accepted definition of Sustainable Development, and set the agenda for the next decades. What many understood to be a starting point for change and action was not a truly proactive mission but simply the culmination of a myriad of crises and events which made political actors finally react. Prior to this, the Vietnam War, apartheid in South Africa, rallies to allow black people and women to vote, and environmental disasters like the Three Mile nuclear powerplant disaster in the United States in 1971 and the Chernobyl catastrophe in 1986 — were already causing social unrest and movements to rise all over the world against governments who had put such issues on the back burner.

And yet here we are today, nearly 24 years later into executing that agenda, knee-deep in a health crisis whose solution lies in laboratories of only the wealthiest of nations, with increasing poverty levels in areas which had previously progressed in eliminating hunger, in an isolated and digitized world benefiting a handful of technology companies while micro and small enterprises are forced to shut down. In these trying times, the hyped-up agenda of a shift to cleaner energy losses urgency as we search for short-term solutions merely to survive a human catastrophe, the moral and ethical forms of governance in corporations becomes a mere nice-to-have, and fiscal plans to address climate issues have gotten derailed as developing countries focus on a consumption-driven recovery.

While every decision-maker is clamoring for short-term solutions, I urge the public to maintain a long-term and holistic view of our role in this economic society. The reader of this column is by self-selection, interested in the Business World (pun intended) which encompasses by necessity the world of investments, simplified here as Finance, but more importantly, reads this to understand how she or he may figure in the future economy; an economy which is market-driven, global, dynamic, but, most importantly, socially constructed. The latter meaning, we are economic actors; we have the agency to create (academic term “perform”) the markets, we and not just the governments who regulate, we and not just the corporations and funds handling the trillions of wealth. We change society by nuancing the changes which occur in the economic systems whose logics control it, and we change those logics by an intellectual exercise of perusing alternative perspectives. I call this exercise: Rethinking Finance.

I begin my weekly Thursday column with a couple of simple questions. First, why was the economy created? The economy — this exchange of goods and services — was created to promote some level of fairness, to provide opportunities so that people with different skills can add value in different ways. In a functioning economy, the sum of the parts is greater than the whole; if we harness our potential as cooperative human beings, we are able in theory to create a lifestyle which benefits and elevates us all. Thus, the economy was created to serve society to improve human life conditions. But has the economy fulfilled that role? The short answer is “No.” There are too many sources to cite the not-so anecdotal truth that more than 70% of the world’s population own less than P500,000 in assets whereas close to 90% of the wealth is concentrated in less than 10% of the global population. While this is a bleak reality, the bleaker issue lies in the fact that this has been a worsening trend, with millionaires set to grow five times more than the rate in which the poor are expected to shrink. The COVID-19 pandemic has exacerbated this situation further with a “new” set of poor who were not previously poor, about to fall into this prison. Imagine… from nouveau riche to nouveau pauvre! We have more resources than ever, yet we are consuming resources at an alarming pace to the point where we literally may have no earth in which to exist. We are working more than ever, with high levels of stress. The economy is not serving us. Rather, we are slaves of the economy.

And why was Finance created? These days we associate Finance with Wall Street, but Italians like to credit themselves with having established the disciplines of both Finance and Accounting. The first formal bank was established in 1397 by the Medicis in Florence. A little later on in the 1400s, Luca Pacioli, a Franciscan friar and collaborator of Leonardo da Vinci, was said to have invented double-entry bookkeeping. The idea back then was to create systems and institutions that would make transactions efficient but safe and transparent, with the ultimate objective of allowing a person to save for future purchases. Debit in Latin means “he owes” and Credit means “he trusts.” A far cry from us making our daily credit card purchases feeling that banks use our scoring to decide on what interest rate would be most beneficial for their profit margins. Calculation was created to make things less complex, to simplify economic assets into numbers and ratios that allow us to communicate with transparency and focus our attention on preventing future deviations and errors. And yet, has Finance fulfilled its role? The short answer is again, a resounding “No.” From bankruptcy cases like Parmalat whose books had faked assets over a 15-year period, to Madoff-esque Ponzi schemes, to the use of derivatives to package bad loans leading to a loss of 9 million jobs in the United States during the mortgage crisis of 2008-2009, to speculative bubbles that have benefitted techpreneurs.

Close to a decade ago in my Doctoral dissertation of the same title, I had argued that it is mainly during situations of a colossal system breakdown that we are prompted to question extant models, which have failed, and then scrutinize received wisdom. The institutional theory literatures have said over and over that markets in crisis are susceptible to transformation, actors begin to pursue interests they value highly, resulting in field-level change. Why the non-transformation, then? Why are the shared beliefs not enough to create and trigger systemic change?

I do not have the answers, but I don’t believe that all is lost. I am a social constructivist. It means that I believe that there is no fixed reality; but instead, people construct reality. And in our everyday interactions, we construct the kind of finance we want. How can finance and society intersect (again)? As a pragmatist, I focus this discussion on two pillars: Responsible Investment which deals with the formal financial sector, and Financial Inclusion, which addresses the informal economy. In responsible investment, we question where exactly our money goes to, understanding the externalities that come with putting every peso into a bank account. Understanding that each centavo put into the market economy, whether as a passive or active investor by necessity, already puts us in a position of agency and influence, no matter how minute. In Financial inclusion, we nitpick the barriers faced by the people with no agency and influence. Interestingly, the non-transformation of society seems to be correlated with the lack of democratization of finance — and therein lies my ultimate hunch: first, we democratize finance, then we socially re-construct it, then we use it for a wider social agenda.

Daniela “Danie” Laurel is a business journalist and anchor-producer of BusinessWorld Live on One News, formerly Bloomberg TV Philippines. Prior to this, she was a permanent professor of Finance at IESEG School of Management in Paris and maintains teaching affiliations at IESEG and the Ateneo School of Government. She has also worked as an investment banker in The Netherlands. Ms. Laurel holds a Ph.D. in Management Engineering with concentrations in Finance and Accounting from the Politecnico di Milano in Italy and an MBA from the Universidad Carlos III de Madrid.