Prosperity Within Planetary Boundaries

Why we need an economic upgrade with Stefan Krook

When Stefan Krook stepped down as CEO of digital mail company Kivra, he finally had time to step back from the daily entrepreneurial grind and zoom out. What he saw left him in what he calls “a bad place.”

Despite thousands of purpose-driven companies around the world doing their best, data from the Stockholm Resilience Centre showed humanity crossing one planetary boundary after another. “We had crossed the safe operating space for seven of the nine boundaries. The maths no longer added up; the overall system was still steering us toward overshoot, no matter how many good ventures succeeded at the micro level”

For a lifelong optimist who had built businesses explicitly to contribute to a better society, this was a profound shock. It forced Stefan to look beyond individual companies and ask a different question:

“what if the real problem isn’t the intentions of entrepreneurs, but the economic rules all of us are playing by?”

 

From Adam Smith’s world to ours

Stefan’s starting point is surprisingly simple: economics is about managing scarce resources. When Adam Smith wrote about the virtues of free markets more than 200 years ago, the world had around 800 million people, and nature seemed effectively infinite. Today we are 8 billion, heavily industrialised, and the real scarcity is the planet’s capacity to absorb our impacts.

Yet our tax systems still behave as if the opposite were true. Labour – the work that gives people meaning and is increasingly competing with AI – is heavily taxed, while natural resources and ecosystems are treated as almost free. In practice, this means we are making it harder to employ people and easier to overuse the planet.

A small upgrade with big consequences

In The Laghum Economy, Stefan argues that we don’t need to abandon markets, but we do need to upgrade them for the realities of our time. The core move is a deliberate tax shift:

• Reduce taxes on labour.

• Increase taxes on resource use, applied at the point of consumption.

Modern technologies – AI, blockchain and ubiquitous barcodes – make it possible to link every product to a resource declaration and tax it based on the real material footprint behind it. Suddenly, circular business models, repair, reuse and high-durability design become systematically cheaper, while resource-intensive throwaway models face real costs.

Stefan calls this a small upgrade because the basic architecture stays the same: a mixed economy where markets remain the engine, and the state intervenes only where there is clear market failure. The failure here is that markets cannot price nature on their own. Taxation becomes the tool to correct that – not just to raise revenue for welfare, but to send the right signals into every price tag.

Innovation follows the brief

One of Stefan’s most important insights is about how innovation actually behaves. Entrepreneurs and investors follow the brief the system gives them: maximise profit according to the rules of the game. In today’s model, the implicit brief is:

“Produce as much as possible, at the lowest monetary cost, ignoring nature.”

In a Laghum Economy, the brief becomes:

“Produce as much consumer value as possible, with the lowest resource use.”

That small change redirects the creative power of innovation. Recycling polyester, for example, is technically possible and can deliver material as good as virgin fibre, but today it is usually more expensive than burning the old textile and pumping new oil. Under a resource-taxed system, recycled alternatives would gain a structural advantage rather than fighting uphill.

The same holds for sharing models, product-as-a-service, and design-for-repair. Instead of relying on a shrinking pool of “green premium” customers willing to pay extra, these models become the rational default.

Why CEOs alone can’t fix it

Stefan is clear that leadership still matters. He wants progressive CEOs to keep pushing circularity and purpose-driven strategy, to pilot new models and to show what’s possible. But he is equally clear that we cannot stay within planetary boundaries on goodwill alone.

Even the best-intentioned leaders are constrained by a system where prices send the wrong signals and where going beyond compliance can mean competing with one hand tied behind your back. That is why he sees a crucial role for CEOs not just as operators within the rules, but as witnesses who speak up about the need to change the rules of the game.

When chairs and former CEOs of large companies like H&M and Unilever start openly saying we need a tax shift to stay within planetary boundaries, it gives politicians cover to act. Stefan’s strategy is to build that broad societal demand first, so systemic reform becomes politically possible rather than a technocratic idea parked in a drawer.

Where this could start – and what might change

Stefan’s work at Stockholm School of Economics as its first Practitioner in Residence at the House of Innovation gives him a neutral platform to test and refine these ideas with researchers, students and leaders. He is convinced that the first movers – whether Sweden, Italy, China or another large consumer market – will gain a competitive advantage by aligning their economies with the realities of planetary boundaries.

If Laghum principles were widely adopted, everyday life might feel surprisingly familiar on the surface: people would still buy clothes, use services, repair devices, travel. But behind the scenes, the dominant business models would look very different: more access and sharing, less ownership of seldom-used things; more repair and upgrade, fewer planned breakdowns; more jobs in care, creativity and maintenance, relatively less incentive to extract virgin materials.

For Stefan, that possibility is enough to bring him back to optimism. The economic system we have is not a law of nature; it was designed, and it can be redesigned. The key is to update it in a way that lets markets and human ingenuity work for the planet, not against it.

If the talk resonates with you, we’d recommend you listen to these episodes too:

• Lisen Schultz – “Resilience Thinking and Human Impact on the Planet”

  Shelley Paxton – “Learning to Rewrite Your Script of Success”

  Seth Godin – “Doing Things on Purpose”