What happens if the government pays for nature restoration? A worked example for Sweden

The EU Nature Restoration Regulation changes the conversation in a fundamental way. It is no longer enough to say that nature should be protected in principle; the new question is how restoration will actually be financed, implemented, and distributed across the economy. That is a political question, but it is also an accounting question, because restoration spending does not happen in a vacuum. It moves through firms, households, labour markets, tax systems, and public budgets.

What follows is a simple attempt to make that visible. The point is not that nature can be reduced to a spreadsheet. The point is that if we want to restore ecosystems at scale, we need to understand the financial flows clearly and we need to understand the ecological ones. If we do not, we risk letting a crucial policy debate get trapped in slogans about “cost” while the real economy keeps absorbing the losses from degraded nature.

We risk letting a crucial policy debate get trapped in slogans about “cost” while the real economy keeps absorbing the losses from degraded nature.

From protection to restoration

For many years, environmental policy in Europe was mainly about limiting further damage. That remains important, but it is no longer enough. The Nature Restoration Regulation introduces a more demanding idea: that damaged ecosystems must actively be restored, not merely left in a slow decline.

That is a major shift. It means governments can no longer treat ecological degradation as an externality that sits quietly outside the budget. Restoration now becomes a concrete obligation, with long time horizons, practical trade- offs, and real financial consequences. The debate therefore moves from “should we act?” to “how do we pay for it, and who carries the burden?”

Nature is productive capital

One reason this debate matters is that nature is not just a background condition for the economy. It is part of the economy’s productive base. Healthy soils, pollinators, clean water, stable climate conditions, forests, and biodiversity all support production in ways that are often invisible until they start to fail.

When natural systems deteriorate, the costs do not remain confined to the environment ministry. They show up in agriculture, infrastructure, insurance, public health, and regional development. A weakened ecosystem means weaker economic capacity. In that sense, restoration is not a luxury add- on to growth policy; it is maintenance of the productive foundations that growth depends on.

This is why it helps to think in terms of real capital.

Real capital is that which is used in provision of goods and services but not used up.

Real capital has functions and capacity. If a road is not maintained, it deteriorates. If a forest is not managed sustainably, its capacity changes. The same logic applies to ecosystems. They are not endlessly renewable in practice, and once their functions are damaged, the cost of recovery rises. A simple example would be straightening a river. The function of dealing with flood water is low compared to a meandering river.

The four capitals are presented in the table below:

Capital Maturity

The concept of maturity is that capital is mature when it has the functions and capacity to fulfill human needs and values. In the case of nature restoration and pollinators, nature is mature when it can support the pollinators and the pollinators are sufficient to pollinate crops.

Capital, or an asset, can be considered mature when it has functions and capacity able to be employed to serve values and needs at a sufficient level to all citizens.

This is where maturity helps us connect nature and economics.

The diagram below explains these concepts. As the maturity of the natural resource declines, so does productivity, resulting eventually in a collapse of production. This has a cost. At the same time, a restoration budget is accumulated, rather like accumulated maintenance costs.

A note on “valuation”: This approach deliberately avoids trying to assign a market price to nature’s services. The critical concept here is “gap value.” The question isn’t “What is a pollinator worth?” but rather “What does it cost to restore the pollination function to a sufficient, mature state?” This is a practical, non-ideological way to frame the problem.

Why the finance question is often framed badly

The standard way to discuss restoration is to ask: where will the money come from? That sounds reasonable, but it can hide more than it reveals. In public finance, the question is not whether a government can “find” euros in some household sense. The real questions are whether resources exist, whether labour and materials can be mobilised, and whether spending is directed toward productive outcomes.

That is why the financing debate should not start with accounting panic. A restoration programme does not magically create forests, wetlands, or biodiversity. But it can mobilise workers, landowners, firms, planners, and public authorities around a deliberate investment in ecological repair. The central issue is therefore coordination, not money in the abstract.

The Godley-table logic

This is where a sectoral balance perspective becomes useful. A Godley table is simply a way of showing how flows move between sectors of the economy. Government spending becomes income for firms and households. Wages generate tax payments and consumption. Consumption generates VAT. Bonds may be issued to manage reserves or financial flows. The key point is that one sector’s spending is another sector’s income.

The diagram below illustrates main flows.

The government approves the budget, and puts money in the accounts of the aouthortites, who pay firms and private individuals. These individuals purchase goods, and firms and households pay money in tax. Banks lend to the government via bond schemes and loans to firms and households.

These kinds of diagrams may mislead, as economist Wynne Godley pointed out. Financial flows are ALWAYS one account gets debited, the other credited. Let us draw the above out in a Godley table to illustrate. The horizontal row should always add up to zero. ROW means rest of the world, which we have left out for simplicity.

It is important to see this table as a “snapshot” of a complex system. As a static table, it captures the initial and immediate financial circulations. However, it misses the important feedback loops—like how improved natural capital later increases agricultural productivity, which then boosts firm revenues and tax income. To capture those dynamic effects, we would need a more advanced system dynamics model.

How to model material flows and the effects of mature capital

Financial flows always miss out material flows – that would be comparing chalk and cheese. It would work if for every harvest, nature sent an invoice! However, there ARE two important dependencies. The activities of firms use materials and services from nature, and many deplete natural capital. The diagram, adapted from the previous one adds this dimension.

It is possible to put real capital columns next to Godley Tables to gain a better understanding of the impact of resources on the economy. The concept of capital (or you could say asset ) maturity is useful here.

In the diagram above, we have added real capital columns. We use percentages to illustrate the concept. Say for example, a certain real asset X is immature. That will affect production, which may reduce both spending and tax returns. This is especially if the firm lets workers go because it lacks resources or ecosystem services.

In the pollinator example, a 19% maturity will affect production ( that which is purchased from firms). At the same time, there are costs for unemployment which increases the budget.

Considering real capital status should, then, inform budget preparation. Before national budgets are compiled, a full analysis of resources should be undertaken.

That leads to questions like: “Should the budget include unemployment benefits, or should it be spent on job creation? Should nature be restored, or not?”

Failure to restore nature will, in the long run, destroy the productivity of the firms relying on its materials and/or functions and increase losses to the firm.

Unemployment must be budgeted for. If we are talking food production, the whole system would become unable to fulfill basic needs if pressure from firms continues. As time goes on, without restoration or removal of pressures from firms, the cost of restoration will increase.

Applied to restoration, this means public spending on ecological repair is not just a line in a budget. It supports capability to provide the basics. It is a flow that supports employment, contracts for firms, income for households, and tax receipts for the state. Some of the spending leaks back through taxes. Some circulates as wages and purchases. Some creates productive capacity that remains after the initial outlay.

That does not mean restoration is “free.” It means the real economic question is not whether expenditure occurs, but what it produces. If public funds are used to restore ecosystems that support food production, flood protection, and long-term resilience, then the spending should be judged against the losses avoided and the capacity created.

A Swedish example

Let us make this concrete. Suppose Sweden needs to finance a restoration programme linked to pollinator decline, habitat repair, and wider ecosystem recovery. The starting point is not a fantasy of unlimited money. It is the reality that there are unemployed people, underused labour, and ecological damage that already imposes costs on the economy.

A program like this could work through familiar channels. The state commissions restoration work. Firms carry out the work. Workers are employed. Wages are paid. Those wages feed into household consumption. Consumption generates tax revenue and VAT. Landowners and local actors may also be involved, depending on the design. The result is a circular flow where restoration is not simply “spending against nature,” but a way of rebuilding the material base that supports production.

Let us explore the case of pollinator restoration. The budget is 5.4 billion kronor, about a quarter of the total budget. The loss of pollinators would devastate real natural capital depriving it of pollination services for maybe half of the types of crops grown, decimate biodiversity by depriving birds of the insects they eat. Furthermore, without removing the pressures on pollinating insects from chemical use and land use, the situation would only become even worse.

Modelling the extra money in the budget

The table below shows how an increase in public spending cascades through the economy. We constructed this scenario using standard percentages, with the budgeted 5.4 billion SEK for pollinator restoration.

The example below assumes that the extra budget means unemployed workers are employed, and the cost of employment is reduced by this. From the top, the budget is decided for the restoration, and the money paid to authorities who create grants for landowners. These landowners employ firms to do the work, and the firms create new jobs, we assume, increasing the income of households which in turn increases their spending (we assume they save 5%). This results in taxes coming back to the Treasury, in this case the government column.

In this example, the government issues bonds which banks acquire from reserves. We calculate a nominal 3% interest on the bonds.

Already from the example above you can see what happens when the budget is applied: money comes back as tax and the government account is positive. Firms have a net gain and so do households. The government has sold bonds which are time-limited and will have to be bought back. However, the money came from the banking sector’s reserves and will not affect firms or households.

One crucial decision is who carries out the restoration. The model above uses private firms. An alternative, which many favor for efficiency, is a direct public employment model—a Job Guarantee. In this approach, the government authority itself becomes the employer, mobilising unemployed workers directly. This can be more cost-effective by cutting out profit margins and administrative overhead. It also directly addresses the social goal of reducing unemployment.

The graph below illustrates the differences in the approaches.

As might be expected, authorities gain in the job guarantee case, and firms in the firm case. There is more for households in the job guarantee version, as less money flows to private capital.

Inflation will not happen.

In either case, the spending is safe from an inflationary perspective. Sweden currently has hundreds of thousands of unemployed and underutilized labour. By using these idle resources, the government can boost economic activity and ecological health without creating the classic “too much money chasing too few goods” scenario that triggers inflation.

In the Swedish case, the important point is that ecological restoration can be aligned with domestic employment and regional development. That is politically important. A program framed only as environmental compensation risks resistance. A program framed as productive investment in resilience, food security, and employment is much harder to dismiss.

What can we learn from this example?

Although this is a stylised example, using rough percentages, it illustrates the workings of an economy prioritizing nature through paying market actors and using idle resources.

Unemployment decreases, in this case there are some 500 000 unemployed, and this could create 25 000 jobs, a decrease of 5%5% .
Production is secured, averting a possible food crisis.
Companies have developed the capacity to continue to restore nature.
Banks get interest for lending from reserves
Nature and biodiversity are restored, giving production as well as resilience.
The government ends with a net positive position (14,404 million SEK in this simplified scenario), showing that a significant portion of the initial outlay recirculates back to the treasury. The net cost to the state is far lower than the headline figure.

Why should the state carry the cost?

This is where the political argument begins. Restoration should not be financed in a way that hides responsibility or shifts all burden onto ordinary households. At the same time, it is unrealistic to pretend that all costs can be pushed onto a single group of actors, whether that is taxpayers, landowners, or specific industries.

The fair approach is usually a mix. Public budgets can fund core restoration work. Sector- specific rules can require those who generate pressure on ecosystems to contribute more. Agricultural policy, land- use regulation, environmental liability, and targeted subsidies can all play a role. The important thing is to avoid pretending that one clean mechanism will solve a problem that is inherently mixed, historical, and structural.

We see from the example above that the state can take the lead and make things happen. They can then introduce new or increase old taxes to cement the changes and avoid inflation from putting too much money into the economy. However, the most powerful argument for state-led action is not about “finding money,” but about coordination. The state is the only institution with the mandate and scale to identify the “gap value” (the cost of restoring ecosystem functions to a mature state), plan a national response, and mobilise the unemployed resources to achieve it.

Timing matters. The longer restoration is delayed, the more expensive it becomes. Once habitats collapse further, the cost of repair rises and some damage becomes harder to reverse. In other words, delay is not neutral. It is a policy choice that creates a larger bill later.

The bigger economic point

The most important thing to understand is that the Nature Restoration Regulation is not just an environmental directive. It is a test of whether governments are willing to treat ecological systems as essential infrastructure. If nature is part of the productive base, then restoration is not a side issue. It is economic policy.

It is critical to distinguish between the financial logic and the ecological outcome. The purpose of this exercise is not to show that restoration is “profitable” in a narrow accounting sense. The financial flow is the tool. The real goal is ecological resilience. A restored wetland, for example, provides flood protection and biodiversity. This resilience is a public good that doesn’t show up in a standard financial statement. The financial argument is a necessary but not sufficient condition. It helps us understand how to pay for restoration without breaking the economy, so that we can achieve the non-negotiable goal of a healthy, functioning planet.

That does not mean every project will be easy, or that every budget constraint disappears. It means the debate should be honest about what is being financed and why. The real choice is not between “saving nature” and “protecting the economy.”

The real choice is between investing in the systems that sustain the economy, or allowing those systems to deteriorate until the costs are larger, more unevenly distributed, and harder to repair.

If we want a functioning economy in the long run, then we need functioning ecosystems. That is the financial logic, the ecological logic, and the political logic all at once.

This is just the beginning of a crucial conversation. Integrating real capital into our economic models is a significant step forward. The next step is to explore these dynamic feedbacks using tools like system dynamics models (e.g., Minsky) to better understand how investment in natural capital creates long-term resilience.

The summer of 26: a new direction for economics

Something strange is happening in economics.

Not in the markets—you won’t see it on a stock ticker. Not in central banks—you won’t hear it in a rate decision. But in the intellectual foundations of the economy itself, a quiet revolt is underway.

For decades, we’ve been told a simple story:

Manage the money supply, and you manage the economy.
Let markets self-organise, and society will benefit.
Pursue growth, and prosperity will trickle down.

That story is now being challenged—not by fringe activists, but by the UN, leading economists, and global research institutions. And in the summer of 2026, three major initiatives landed almost simultaneously, all pointing in the same direction: the economy needs rewriting.

1. The UN’s “Beyond Growth” Roadmap: Growth is Not the Solution

In June 2026, the UN Special Rapporteur on extreme poverty released a striking document: The Roadmap for Eradicating Poverty Beyond Growth.

Its core provocation?
Economic growth is no longer a reliable path out of poverty.

The report explicitly rejects the long-held assumption that “growth = progress,” arguing that this belief is now “neither realistic nor sustainable.” [ohchr.org ]

Instead, it lays out around 80 policy measures designed to:

reduce inequality,
strengthen public services,
and decouple poverty reduction from GDP growth. [ohchr.org ]

The roadmap calls for a“human rights economy”—one that puts well-being and planetary limits at the center, rather than production and consumption. [srpoverty.org ]

Even more radical: it argues that our current growth-driven model is actively fueling inequality, weakening democracy, and damaging the planet. [ohchr.org ]

This is not tinkering. It is a direct challenge to the idea that markets, left alone, will deliver broad prosperity.

2. The Global Justice Project: Equality First, Not Markets First

Just days earlier, economists associated with the World Inequality Lab launched the Global Justice Report.

If the UN report is a policy roadmap, this is a full-blown alternative economic vision.

Its starting point: We cannot solve climate change, inequality, or instability within the current economic framework.

The report proposes a radical reordering of priorities:

drastic reductions in global inequality,
shorter working hours,
massive redistribution through global wealth taxes,
and a shift towards what it calls“sufficiency”—less consumption, but higher well-being. [globaljust….wid.world]

Perhaps the most explosive claim:

A fair and sustainable world is possible—but only if inequality is reduced dramatically and systematically. [globaljust….wid.world]

The report also dismisses GDP as the primary measure of success, arguing that prosperity must be measured in terms of well-being within planetary limits. [newsline.com ]

This is a frontal assault on the idea that markets, driven by individual self-interest, will naturally converge on the best outcomes.

Instead, it suggests the opposite:
unchecked markets produce outcomes incompatible with both democracy and planetary survival.

3. Mariana Mazzucato’s “Common Good Economy”: Markets Must Be Shaped

At the same time, one of the world’s most influential economists, Mariana Mazzucato, is publishing The Common Good Economy (rolling out globally through 2026).

Her argument is as sharp as it is simple: Markets are not natural systems to be managed—they are tools to be designed.

For decades, governments have treated “the good” (public services, environmental protection) as a correction to markets.
Mazzucato calls this a trap.

Instead, she proposes:

designing markets around collective goals from the outset,
aligning business, finance, and public policy around shared missions,
and ensuring value is created and shared collectively. [marianamazzucato.com ]

She rejects the passive role of government in traditional economics:

The state should not just fix market failures—it should actively shape markets. [hachettebo…kgroup.com ]

Her “common good compass” reframes the economy as a purpose-driven system, not a spontaneous outcome of private incentives.

What’s Really Being Challenged

Taken together, these three initiatives form a pattern.

They all reject the same three pillars of old economic thinking:

1. The “invisible hand” is enough

The idea that markets self-organise into efficient and beneficial outcomes—dating back to Adam Smith—is now under heavy criticism.
Even modern research suggests markets can be fragile, unstable, and prone to cascading crises. [arxiv.org ]

2. Growth fixes everything

The “growth-first” model is being reframed as part of the problem:

it can increase inequality,
degrade ecosystems,
and fail to improve real living conditions for many. [ohchr.org ]

3. Managing money equals managing society

Macroeconomic policy—interest rates, inflation, fiscal deficits—has long been seen as the main lever of control.
But these new frameworks argue that structure matters more than flows:

Who owns what
Who decides what gets produced
And who benefits from it

A New Economic Imagination Is Emerging

What makes this moment remarkable is not just the ideas themselves, but their convergence.

A UN roadmap
A global inequality research coalition
And a mainstream bestselling economist

…are all saying versions of the same thing:

The economy is not a neutral system. It is a political and social construction—and it must be rebuilt.

The Provocation

Here’s the uncomfortable thought:

What if the traditional economic “common sense” we’ve relied on for 40 years was never neutral science—but a set of assumptions that fit a particular era?

And what if that era—of globalisation, cheap resources, and faith in markets—is ending?

Because if these summer 2026 interventions are right, then the real question is no longer:

“How do we grow the economy?”

But:

“What is the economy actually for?”

And that is a far more dangerous question.

Using RCF to assess UK resources

The Real Capital Framework, RCF, fits very naturally with the logic of Modern Monetary Theory (MMT).
MMT says the binding constraint on public spending is real resources, not money.

RCF does something MMT has often lacked operationally:

It provides a systematic way to measure the condition and availability of real resources before the budget is written.

We are proposing is essentially a Real Capital Pre-Budget Assessment (RCPA).

The foundations of Doughnut economics provide a useful starting point.They require us to identify the social floor of provision of care, (corresponds to the capacity of social capital) as well as the environmental ceiling, of the pressure the economy can bring on natural capital. (Corresponds to the negative performance of built capital owned by social capital)

Below is a structured methodology for testing the approach for the UK, but the principles apply to any country.

The way to test the approach is to go through the method step by step, and pause at each step to see what is learned and if the information from the step informs the purpose of the exerise.

A Real Capital Pre-Budget Assessment Method

For Application in an MMT Policy Framework

1. Purpose of the Exercise

Working Hypothesis:Before a national budget is constructed, the government should understand the state of real capital assets that enable the economy to deliver essential services while staying within ecological limits.

In an MMT framework:

$\text{Fiscal space} = \text{Available real resources}$

The Real Capital Framework says that it is not resources (which are flows) that are at the heart of the capabilities of an economy, but the real capital(stock), which is

That which is used in the production of goods and services, but not used up

Therefore , the central policy question becomes:

What real capital assets are available, what is their status in terms of capability to fulfil needs, and what is under pressure. Which capital assets are putting negative pressure on other assets?

The assessment aims to identify:

shortages in social provisioning capacity
excessive pressure on natural capital
underdeveloped infrastructure assets
strategic vulnerabilities in key systems

The output is a set of priority investigation areas for the national budget.

2. Conceptual Framework: Real Capital

The analysis treats the economy as a system of interacting capital stocks.

Core categories with examples:

Natural Capital	Infrastructure / Produced Capital	Social Provision Capital	Human Capital
ecosystems soils water systems minerals climate stability	energy systems transport housing industrial capacity water and waste systems	Organisations health systems food systems education care systems housing provision	People Skills Capacity Health

Industries draw on natural capital and infrastructure to deliver social services. The heart of the process is to map industries against human capital and natural capital in a matrix of four main parts.

The diagram above shows the four parts of the matrix. The left column (A) represents the social capital. Here, you can choose the industries – from the SIC classification – under scrutiny.

Column B represents the social performance of these industries. In the example below we use contribution to GDP and contribution to employment.

Column C represents the two types of natural capital, biological and lithosphere. Biological capital includes the main planetary cycles of the planetary boundaries – the water, carbon and nutrient cycles. The lithosphere is a source of real capital, metals and minerals.

The last column represents the providing for essential human needs, we suggest using the ones from Doughnut Economics.

3. Step 1 – Identify Core Social Provision Systems

Begin by defining a small number of essential provisioning needs. This is for section D

Examples for the UK:

Food system
Housing
Energy
Mobility
Health and care
Water and sanitation

These correspond to the social foundation of the Doughnut.

4. Step 2 – Industry Mapping

For each system, identify the industries that enable it, using national industry classifications (i.e., UK SIC). This is section A

Example – Food system:

Agriculture
Fertiliser production
Food manufacturing
Transport and logistics
Retail distribution
Water and waste treatment

This produces a provision map.

5. Step 3 – Social Provision Matrix

Construct the matrix along the lines of the example above. You can use excel or google sheets or construct a MIRO diagram for collaboration.

Industries × Social Needs

Use a scoring system blank – 3 where 3 means that the industry is the primary provider for the need. Blank means it has no provision.

Diagram shows where add industry importance (D) and industry use of natural capital (C).

For each social need, mark the cells in section D as above.

Then assess each of the industry’s ability to provide. For the numbered cells, colour code them according to capital maturity. Maturity is the extent to which the industry has the capability and capacity to provide for needs. (This is opposed to its current performance, which might be below its capacity.)

Colour coding:

Green – mature capacity
Orange – constrained capacity
Red – inadequate or fragile capacity

Example indicators might include:

domestic production capacity
workforce availability
infrastructure constraints
affordability or accessibility

This identifies gaps in service provision capability.

6. Step 4 – Natural Capital Pressure Matrix

We now move to section C

Industries × Natural Capital

Natural biological capital may include:

biodiversity / ecosystems
water systems
soils

Lithosphere capital may include:

minerals and materials
fossil fuels

First, identify the extent to which the industry uses the natural capital.

Blank = not at all, 3= to a large extent, the industry is totally reliant on the natural capital. 2 = is moderately reliant and 1 is somewhat. A score of 1 suggests other alternatives exist.

Next, score the industry according to the pressure it puts on the natural capital by colour coding the cell.

Colour coding:

Green – within sustainable limits
Orange – approaching limits
Red – exceeding sustainable thresholds

This identifies ecological stress points.

7. Step 5 – Identify Capital Immaturity Zones

Overlay the two matrices.

Four cases emerge:

Social Provision	Natural Capital	Interpretation
Green	Green	Mature system
Green	Red	Production with ecological damage
Red	Green	Underdeveloped capacity
Red	Red	Structural crisis

The final category becomes priority sectors for investigation.

The industry performance – contribution to GDP or employment might also inform the nature of the crisis. For example, if an industry has a high impact on biodiversity, but a low GDP contribution is could signal there is little money to make large changes.

8. Step 6 – Deep Dive for Red Areas

For sectors identified as critical, conduct a deeper assessment.

This includes:

identifying the real capital assets involved
analysing constraints on capacity
assessing ecological impacts
identifying missing infrastructure
evaluating workforce and skill availability

Example:

Food system deep dive might examine:

farmland condition
fertiliser supply
nutrient recycling infrastructure
regional food processing capacity
logistics networks

9. Step 7 – Build an Asset Register

For each critical sector, create an asset register aligned with ISO-style asset management principles.

Assets may include:

Infrastructure assets
Natural capital assets
Production facilities
Critical supply systems

For each asset record:

condition
performance
ecological impact
strategic importance
lifecycle status

Note that governments may not own or even operate assets. However, if they are responsible for the running of the economy, and these assets are used, then good management (ISO 55001) demands that they know the factors above.

10. Step 8 – Gap Analysis

Compare the current asset base with the required asset base needed to deliver mature provisioning within ecological limits.

Examples of gaps might include the investment needs as outlined below.

The gaps can be presented in capacity terms, or in functions or in monetary terms, the investment needed to close the gap.

Natural Biological capital	Natural mineral capital	Built Capital	Social capital	Human capital
soil fertility	Aluminum recycling	renewable energy capacity	Technical training colleges	Skilled construction workers
		housing construction capacity

11. Step 9 – Lifecycle and Transformation Planning

Using asset management principles, identify:

investments required to restore or expand assets
upgrades needed to reduce ecological pressure
timelines for transformation

This allows estimation of:

investment scale
labour requirements
material requirements

12. Step 10 Capital Gap assessment against budget proposal

Budget	Natural	Built	Social	Human
-Expenditure			+ Firms	+ Benefits +Wages
+ Revenue			-taxes	-taxes
Effects of spending	On environment Metals, fossil reserves, mineral reserves	On built infrastructure like roads, water infrastructure, power generation	On solidity Profits Bankruptcy	on health prosperity economic stress

The table above shows the monetary flows to the types of capital that are in the economic system, namely from Government to ministries to firms, and then to private individuals. These financial entities pay taxes to match the initial expenditure. This economic activity, added to the activity of the private sector has physical effects on the combined real capital of society. This is represented in the bottom line of the table.

The diagram above shows the planned expenditures for the various categories of the UK budget.

Given the estimates of the investment needed for each critical area, it should be possible to estimate the impact of the planned spending on the capital categories involved in the critical areas identified.

ISSUE: XXXXX

Budget item	Natural capital	Mineral capital	Built capital	Social capital	human capital
1	-2	+1	-3	+1	+2
2	1	0	-1	0	-1
3	-3	+1	+3	0	0
….. 26
Sum	-4	+2	-1	+1	-1

According to table above, the budget will have an overall negative effect on the issue.

Step 11 – Input to Budget Formulation

The results feed directly into fiscal policy.

For each priority sector identify:

Real resource requirements
Labour and skills needs
Infrastructure investment
Research and innovation needs

Under MMT principles:

If these real resources exist or can be mobilised,
the government has fiscal space to fund the transition.

Budget allocations can therefore be guided by:

closing capital maturity gaps
reducing ecological pressure
strengthening national resilience

13. Outputs of the Process

The pre-budget assessment produces:

A national capital maturity dashboard
A list of priority sectors
A portfolio of critical assets
A quantified investment programme
A roadmap for structural transition

14. Why This Approach Is Useful for MMT

MMT economists often emphasise that:

Money is not the constraint – resources are.

This methodology makes that principle operational by:

mapping real resources directly
identifying where capacity exists
identifying where resources are scarce
highlighting ecological constraints

In other words:

It translates MMT theory into planning practice.

15. Benefits of the Approach

The method:

connects fiscal policy to real economic capacity
integrates ecological limits into planning
reveals hidden structural vulnerabilities
guides investment toward system transformation
supports strategic long-term planning

It also shifts the pre-budget debate from:

“How much money should we spend?”

to:

“What real capital must we build or restore?”

16. How the Exercise Could Be Conducted

For the UK group workshop:

Select two systems (e.g., food and housing)
Construct the two matrices
Identify red areas
Map the relevant assets
Conduct a quick gap analysis
Discuss fiscal implications

Within a few hours the group would see how real capital analysis informs budgeting.

We need a new discipline

1. Purpose

Human Provisioning Systems (HPS) is a proposed scientific and professional discipline dedicated to understanding, designing, and governing how human societies meet fundamental human needs within biophysical and social limits.

From Anger to Advocacy manual. Putting Science in context.

Turn Anger into Action with Science.

Struggling to make policymakers listen? This free manual gives activists and scientists a powerful 11-step toolkit—the Real Capital Framework—to transform frustration into credible, compelling advocacy.

Developed from real-world campaigns in Sweden, this guide shows you how to:

Translate scientific data into clear, targeted demands.
Identify and measure threatened natural, built, social, and human capital.
Hold authorities accountable using their own policies and commitments.
Create one-page briefs and pamphlets that speak the language of decision-makers.

Whether you’re protecting old-growth forests, fighting pollution, or advocating for community health—this framework helps you build a watertight, science-backed case that can’t be ignored.

Download now and start advocating with impact.

Concept Note: From Analysis to Action

Bridging the Gap: The Real Capital Framework as a Tool for Academic Advocacy and Activism

Beyond Growth and Degrowth: The Compelling Vision of Capital Maturity

For decades, our economic discourse has been trapped in a false choice between two unsatisfying futures. On one side stands the familiar model of endless economic growth. This path that relentlessly consumes natural resources and risks environmental devastation. On the other is the alternative of degrowth, a concept often perceived as a narrative of reduction, scarcity, and diminished quality of life. This document introduces a third, more inspiring path forward: the pursuit of Real Capital Maturity. This vision reframes our ultimate economic goal not as perpetual expansion, but as the achievement of a stable, high-quality, and regenerative state where the fundamental needs of everyone are met with sufficiency and efficiency.

Economists dominate policy making for now, but there might be a way around them

One thing that gets my goat is the way economic thinking – with its stupid ideas about the way people work (maximizers) and the way companies work (increasing marginal costs) and the way nations work (banks lend other people’s money) – pervades policy making. Most politicians seem to have swallowed economics 101. I made it my personal crusade to find ways to get around this disingenuous bunch. I might have found something. Read on.

I understand the appeal. It all comes down to money anyway, why not just manage a nation based on money – as long as it looks like all is under control why worry? But as I point out in my Real Capital Blog, things you want to keep functioning – health, forests, railways, water cycles, metal access – get downgraded to a point where they might collapse.

The alternative is complicated. Say you are a scientist that sees that a city has got 3 years left of groundwater. Your report will probably end up nowhere. The machinery, to get from warning through the engineering, through the companies pumping, through the city administration, through the planning, through the political leadership is so complicated and you would need specialist knowledge in every layer to be taken seriously. Just finding out who is actually responsible for what is months of work. And as a scientist you won’t have a workable alternative.

Or, it USED to be that way. You can now get AI to do all the heavy lifting. I tried it with the Real Capital Framework. Get this: there is nothing new with Real Capital, in all its components, the ideas have been around a while (read accessible to AI). The only trick to getting AI to do the work is to point it in the right direction.

This is where AI prompts come in. If you just get the prompts right, in the right order AI will sail through the spaghetti of causes, responsibilities, effects, etc to produce clear, policy decision basis reporting synthesising dozens of professional domains.

This is what economics should be, and AI can prise the role from the sweaty grasp of economists.

Soon, AI will do system dynamics Ravel simulations for you so you can show your work.

I am testing AI prompts just now, and the results are encouraging.

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The Challenge

This is a letting my heart out moment and I can’t promise it is going to be coherent. But I see some very important things that have happened recently as stakes in the new ground of economic thinking and in politics. There is a challenge laid down to find something new, built out of the old

How to use the Real Capital framework on national budgets

Most national budgets tell us how much money governments plan to spend and collect. But they rarely say anything about whether the nation’s forests are thriving, its infrastructure is decaying, or whether citizens are healthy and capable of sustaining the next generation’s wellbeing.

In other words, the budget tracks the money — but not the real foundations of value that the money is meant to mobilize.

That missing link is what the Real Capital Framework was created to address.