RCT vs
Circular Economy
Circular economy revolutionized how we think about physical resources. Regenerative Capital Theory asks: what if we applied the same logic to capital itself?
What Circular Economy Got Right
The circular economy, championed by the Ellen MacArthur Foundation and others, recognized that the linear "take-make-dispose" model is fundamentally unsustainable. By designing products for reuse, repair, and recycling, we can keep materials in circulation and dramatically reduce waste.
Material Flows
Circular economy has developed sophisticated models for tracking and optimizing physical resource flows through supply chains.
Business Model Innovation
Product-as-service, sharing platforms, and take-back schemes create new economic models around resource efficiency.
Environmental Impact
Direct reduction in extraction, waste, and emissions through closed-loop systems.
The Gap Circular Economy Doesn't Address
Funding Dependency
Circular economy initiatives are typically funded by conventional extractive capital—investors expect returns, creating pressure that can compromise circular principles.
Scope Limitation
Focused primarily on physical resources and environmental outcomes. Doesn't address how institutions themselves should be structured for longevity.
Growth Tension
Often embedded in growth-oriented business models. 'Circular growth' may still exceed planetary boundaries.
The insight: Circular economy applies regenerative thinking to physical resources but relies on linear (extractive) capital to fund it. This creates a structural contradiction.
How RCT Completes the Picture
PSC Funds Circular
Perpetual Social Capital provides patient, non-extractive funding perfectly suited for circular economy infrastructure that needs decades to mature.
RCA Governs Circular
Regenerative Cycle Architecture provides governance patterns that prevent circular economy institutions from mission drift over time.
Shared Philosophy
Both reject the linear 'take-make-dispose' model. Circular economy applies this to materials; RCT applies it to capital.
Complete System
Together they create a complete regenerative system: circular physical resources funded by circular capital, governed by regenerative institutions.
Side-by-Side Comparison
| Dimension | Circular Economy | RCT / PSC |
|---|---|---|
| What Cycles | Physical resources (materials, products) | Financial capital |
| Primary Domain | Environmental sustainability | Institutional sustainability |
| Unit of Analysis | Products and materials | Capital and institutions |
| Goal | Eliminate waste, close loops | Eliminate extraction, perpetuate capability |
| Time Horizon | Product lifecycle (years to decades) | Institutional lifecycle (generations) |
| Value Capture | Material value retained in system | Social value compounds in system |
| Funding Model | Typically funded by conventional capital | Capital itself is regenerative |
| Scalability | Limited by physical constraints | Capital cycles are infinitely scalable |
Complementary, Not Competing
Circular economy asks: "How do we keep materials cycling?"
RCT asks: "How do we keep capital cycling?"
The most powerful regenerative systems will apply circular thinking to both domains: physical resources cycling through product loops, funded by capital cycling through beneficiary networks, governed by institutions designed for perpetual purpose.