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Natural Capitalism
Introduction to the book Natural Capitalism is as important to the environmental movement as Eric Raymond's The Cathedral and the Bazaar is to the Open Source Software. Natural Capitalism describes a new philosophy of doing business that runs counter to the very-well-established capitalist establishment. The book that summarizes and integrates complex concepts into an easy to read, coherent, and convincing whole, with the ultimate effect of raising consciousness and discussion to an entirely new level. Those are strong words, but the book really is that good. As a bonus, there are many similarities between the state of natural capitalism today and the state of Linux and OSS two years ago. Natural capitalism is fighting for acceptance in the marketplace, much like Linux did, and environmentalists and would-be natural capitalists would do very well to study how the OSS movement "won" its marketplace victory.
Natural capitalism is an alternative to so-called "conventional capitalism." They both share many aspects, and natural capitalism is nothing at all like Socialism or Communism. Natural capitalism is designed to fix some of the most significant problems with conventional capitalism. These problems are created because conventional capitalism takes a short-sighted approach to the environment and the value of the health and happiness of people that live within it. In other words, CC favors short-term profits at the expense of the environment and people's lives, while NC makes the contrary claim that short and long term profits can be equal if not greater when a higher value is placed on the environment and happy workers. Does anyone lose in the latter scenario?
The book itself describes various aspects of natural capitalism that must all work together to simultaneously protect the planet Earth and ensure that the global economy will not collapse. Capitalism and environmentalism are not mutually exclusive ideals, and the sooner everyone realizes this, the sooner we can all get to work on actively stopping global warming, ecosystem collapse, air and water pollution, and other environmental problems. Discussing the nature, magnitude, and urgency of these problems is the realm of many other books, scientific articles, non-profit action alerts, government and agencies -- Natural Capitalism (the book) discusses these problems only enough to talk about the revolutionary solutions that natural capitalism (the theory) provides. If you want to learn more about the problems, then you should check out my Web site Your Planet Earth, which is a slash-based site devoted to discussing environmental issues with a scientific perspective.
Part of the real attraction of natural capitalism is that some companies have implemented its principles with great success, so it is proven to work (much like OSS and Linux in the early stages). But the other half of the attraction is that it provides an essential piece of the solution to the world's environmental problems: market-based incentives to protect the environment. Our current economy will be crippled, if not destroyed, if we continue to ignore our present environmental destruction. This is because our current economic and social systems are based on obtaining resources from the natural world (e.g. food, air. water), and they cannot exist independently it.
Here are the four underlying principles of natural capitalism that can be developed into an environmentally friendly and profitable economic system.
The four tenets of natural capitalism
- Radical Resource Productivity
Just as the Industrial Revolution allowed one man to do the work of twenty with the help of modern machinery, so can we continue to improve processes and machinery that produce more work from less energy and resulting in less waste. This is not new concept, but the book describes a way to do this in an environmentally friendly way. What is more, it talks about how to achieve revolutionary gains in productivity vs. merely evolutionary gains using the so-called "whole-systems" approach to solving problems. An example of this is a building where the building was designed around the plumbing as opposed to the conventional practice of designing the plumbing around the building. This resulted in much smaller pumps and 90% lower energy use. This order of magnitude increase in efficiency constitutes a revolutionary gain in resource productivity. The book describes examples of how this was achieved in many ways, illustrating the contention that in natural capitalism, one gain always begets another.
Another cool concept of natural capitalism is that radical achieving resource productivity results in the counter-intuitive result of creating more highly paying skilled jobs. Jobs are not lost because manufacturing processes become more efficient. Rather jobs are created by trying to figure out ways to make these radical resource gains. Instead of raising the bottom line a little bit by slashing jobs, the principles of natural capitalism raise the bottom line dramatically by hiring people to make whole systems more efficient.
- Biomimicry
We still have a lot to learn from how nature produces advanced materials and solves problems with waste. For example, not even our most advanced chemistry or engineering processes, which typically use extremely high temperatures (1000+ C) and produce much toxic waste, can even come close to creating materials as strong and light as spider silk, or as tough as abalone shells. Spiders produce their silk at roughly room temperature, out of materials that are no more toxic than the juice of crickets and bugs; while abalones make their shells in 50F sea water. We would do well to set our industrial goals to mimic the spider and other natural processes.
Another important aspect of biomimicry is termed "closing the loop". This means creating circular recycling streams of materials in our society, because in nature, nothing is wasted, and everything is recycled. In nature, there are no toxic by-products that require superfund cleanup and no overflowing landfills that leach carcinogenic pollutants into our drinking water. Natural processes exist in a circular fashion such that the waste from one processes is the input to another process. Companies that develop these and other biomimicry techniques will produce better products from cheaper and more readily available materials, with fewer or no toxic by-products that would otherwise cost money to clean up. The book is filled with practical examples of how this works.
- Service and Flow economy
In the service and flow economy, the ownership of goods and services is reversed such that the company that produces a good owns that good throughout its entire lifetime. For example, when you buy carpeting for an office, you wouldn't own the physical carpet fibers, but you would own a contract that requires the carpet company to provide the service of carpeting in your office. After all, all you care about is having carpet to walk on and look at, and you would really rather not be responsible for repairing, replacing, or recycling it. The beauty of this service relationship is that the company that provides you with the carpet service has incentive to give you a longer lasting, higher quality product, because it costs them money every time they have to bring in a bunch of workers to replace it. The carpet company has incentive to innovate in its product design to follow the previous two principles of natural capitalism, because the problem of disposing of used carpet is its own problem. This principle can be extended in many ways, including recently designed "industrial ecology" business parks, designed to form a closed-loop mini-ecology: one business' waste output is another business' raw material input, just like in nature.
- Invest in Natural Capital
From the book:
"Natural capital can be viewed as the sum total of the ecological systems that support life, different from human-made capital in that natural capital cannot be produced by human activity. It is easy to overlook because natural capital is the pond in which we swim, and, like fish, we are not aware we're in the water. Natural capital comes about not by singular miracles, but as the product of yeoman work carried out by thousands upon thousands of species in complex interactions. These interactions between plants and animals, in conjunction with the natural rhythms of weather, water, and tides, provide the basis for the cycle of life, a cycle that is ancient, complex, and highly interconnected. When one of its components - say, the carbon cycle - is disrupted, it in turn affects the oceans, soils, rainfall, heat, wind, disease, and tundras to name but some of the other components. Today, every part of the earth is influenced by human activity, and the consequences are unknowable. As biologist E. O. Wilson has commented, the multitudinous diversity of obscure species don't need us. Can we say with certainty the same about them?"
The above is a number of excerpts from chapter 6, pasted together seamlessly, because their words define natural capitalism better than anything I might describe. Implicit in their description is that humans are systematically destroying the many ecosystems of the earth, either to make a quick few bucks, and/or because we foolishly do not realize the destructive nature of our actions. Yet we are 100% dependent on the natural services that the earth provides, such as fresh oxygen from plant respiration, clean water produced from healthy watersheds, and food from the earth. These things are not trivial -- try to imagine life without them.
Yet in our messed up economy, the natural world remains valueless until it is chopped down, dug up, mined, drilled, dammed, paved, developed, and/or otherwise destroyed.
The services that natural capital provides are priceless, yet scientists have indeed tried to quantify their value. In a landmark paper, they calculated the value of biological services flowing directly into society from the stock of natural capital as $36 trillion in 1999 dollars (Costanza et. Al. "The Value of the World's Ecosystem Services and Natural Capital", 1997, Nature 387:253-260). Compare this with the gross world product of $39 trillion, and you get an idea of just how much of our economy exists because of the services nature provides.
Other neat ideas from the book The book has some very interesting ideas on how our society can place a much higher value on natural capital that will eliminate waste and destruction of our ecosystems. One of these ideas is totally eliminating personal income tax, and instead taxing the use or waste of natural resource; the book does a great job of justifying that decidedly radical concept. The basic idea is that things have changed drastically since the early stages of the industrial revolution when labor was scarce and natural capital was abundant. Way back then, it made sense to tax what was scarce. Now however, labor is incredibly abundant (6 billion and counting), and natural capital is the resource that is becoming increasingly scarce. Considering that natural capital is ultimately priceless, we should tax those people and corporations that destroy it. This provides strong incentive to conserve and protect natural capital, which is what we all ultimately want and need. Currently, the U.S. gives away its natural capital for a song and dance (e.g. Mining Act of 1872, US Forest Service, etc ...) to corporations which then rape and pillage the environment to make a fortune for their shareholders.
Conclusion This is a landmark book that summarizes and integrates many different theories about how to practically achieve an environmentally friendly economy. It describes the theory and practice of natural capitalism, including what it is, why we need it, and why and how it works. There are countless interesting ideas put forth in this book, with many chapters devoted to the " what, why, and how" questions in specific areas of our economy. These areas include automobiles, efficient building design, the pulp and paper industry, the farm industry, fresh water supply, and climate change. Best of all, it never loses focus on how to implement the changes proposed. People are not very receptive to "doom and gloom" predictions of impending catastrophe unless there are tangible solutions to prevent it. Natural Capitalism has so many real-world examples of its principles in action that it's hard to disbelieve the primary message: protecting the environment is damn good for business. As you read the book, you may end up shaking your head, as I did, wondering why this concept has taken so long to develop. You may also realize that these principles present an incredible business opportunity for those who are smart enough to become the early adopters.
You can learn more about who these people are on the book's homepage, www.naturalcapitalism.org.
this book appears to have been ghostwritten by Ralph Nader. From what i'm reading the whole thing seems to be a sheep in wolve's clothing (i.e. - just the same old fruit cake, just rewrapped and sent back to the same people).
The ideas we're seeing here aren't really new (when taken as a whole). Love your environment and all will be well. The problem is that this has nothing to do with capitalism. The governement should be regulating pollution causing industries with an ever increasingly strong grip, however, that has nothing to do with basic economics. This book seems to be trying to develop a symmetry between apples and oranges(pardon the cliche). Oh well. If this is how the "green party" and its cohorts are trying to break into the main stream, they'll have to find something a little more clever next time.
I'm not trying to say that i hate the environment. Not by any means, i'm actually more of a radical in that sense...but i equate this book to a situation where you're drinking a coffee on the street and some guys yells "We can drink coffee *AND* be in perfect harmony with mother earth!" - you'd be thinking the same thing i'm thinking about this review ("what the fuck?!?!")
FluX
After 16 years, MTV has finally completed its deevolution into the shiny things network
"It is seldom that liberty of any kind is lost all at once." -David Hume
"Imagine for a moment a world where cities have become peaceful and serene because cars and buses are whisper quiet, vehicles exhaust only water vapor, and parks and greenways have replaced unneeded urban freeways."
Imagine getting that past congress. Or the multi-national oil conglomerates.
Maybe if he didn't have to spend all his time trying to keep the signal-to-noise ratio up he wouldn't need such drastic measures? Try posting something useful, and maybe taco won't need to "bitchslap" people summarily.
The problem is that even intelligent and concerned consumers cannot really understand the full implications of the products they buy...
IMNSHO, this makes the "free market" a foolish and destructive goal, since constrained markets can be adjusted to take into account social and environmental factors more practically.
Also note that once you start advocating eco-taxation, you're not really advocating a free market any more...
Fixing copyright
Capitalism, at its core, requires growth. It requires that resources be consumed, that new markets be formed and that new products be introduced - atleast "real" laise fair(sp??) capitalism. This is fundamentally at odds with the environmental movement.
Not at all. In fact, pure capitalism is both a very radical and enivornmental friendly concept. Don't forget that the free in "free market" is the same free as in "free software."
Several problems generally occur in the implementation, though, that work counter to the free market.
First, market participants learn that in a truly free market their profits are severely limited by competition. As a result, bad apples often try to subvert the system and establish monopolies or cartels.
Second, the free market rests on the supposition that market participants are rational agents. In reality, of course, rationality is only an approximation of human (and corporate) behaviour. One result is that short term gains are often over-emphasized, while long term gains are over-discounted.
Uninformed market participants are often not properly able gauge the value of long term assets such as the enivornment. There is nothing incompatible between the free market and environemntalism. Your demand for clean air is just like any other good, in a truly free capitalist system the market will work to meet the demand for a clean enivornment
I'll skip the new millenium version of the green paries "my struggle" and dismiss the same old dribble dressed up in new buzzwords.
___
There is nothing incompatible between the free market and environemntalism.
My sentiments exactly. I think the problem is that most people still do not see that the connection as to why capitalism (in its current form) destroys the environment is that the very nature of money demands this.
Think about it. Corporations strive to make money. Their resources are natural and finite. Money is created by government agencies and is of unlimited supply. As long as the objective is to make money and the potential supply of money is infinite, there can be no equilibrium with the environment.
Placing taxes on wasting natural resources is a good step in this direction, IMHO, but in the long run, the very nature of money as we know it (fiat money) has to change in order to prosper while protecting the environment.
This has been debated ad-naueseam in intro policsci classes around the world. Yes, theoretically feasible balanced models are possible and yes, they have been implemented on a small scale by a handful of privately held companies. But when you face a conference room full of angry investors who've seen their wealth diminished by your inability to beat Wall Street's profit expectations this quarter, ideas such as long term, social responsibility and eco-capitalism suddenly seem to lose much of their luster.
Corporations do not destroy the environment, oppress workers or curtail civil liberties because they are inherently evil or because the world's top management is devoted to the suffering of others. They do it because it's the most profitable, expedient way of conducting business in the existing market and it has been so for ages. In other words, noone is going to change a time-proven formula for generating profits unless forced to by government coercion. And we all know how far-fetched the idea of structural government intervention into business matters has become since the early 1980s.
Forget about eco-capitalism. Pick up a book on programming and learn how to make money and put yourself in a position where you can make some choices in your lifestyle instead.
The whole point of the book is that there we need to place a higher value on healthy intact ecosystems. This is fundamental to human survival... at least for humans who like to eat, drink, and breathe.
Once this is established, then the challenge for the capitalistic market is to remain profitable while increasing eco-friendliness via the radical resource productivity, biomimicry, and the like. There are companies, like Interface that are already doing exactly this with beautifully innovative solutions to the problem of office carpeting. As a consumer and an environmentalist, you have to power to reward those companies. And to make them even more profitable and desirable.
Capitalism and environmentalism can have healthy happy marriage if capitalism places a higher value on the natural environment being healthy and free of pollutants. We can do this through a combination of market forces, consumer demand, and government incentives. First though, we need to believe that the systems works (i.e. not spout FUD). In 1998, how much of the free market believed that Linux would never be able to compete with MS?
Kevin Whilden www.solarhifi.com
Capital, as used in economics, is money intended to be used and multiplied by investment. This money is owned by someone; ownership is the fundamental principle of capitalism. But the phrase "natural capital," as used by the author, apparently has nothing to do with the traditional meaning of "capital," nor do it have any relation to the processes of capitalism.
So what we have here boils down to word hash. There are a great number of readers to whom, for a variety of mostly either nonsensical or self-serving reasons, the word "capitalism" is beautiful and alluring. No doubt the author may want to imbue his pro-environment ideas, which seem to be wholesome or at least innocuous, with that allure. But to label these ideas as some form of "capitalism" is just obfuscatory nonsense.
This review has got me curious, and I'd like to read this book anyway. I suspect, however, that it misses the main point, and I'm cynical enough to believe this is no accident. For the central issue in political analysis for the last two centuries is the class war, and it will be for the foreseeable future. Any discussion of politics or economics which does not focus on the central importance of class war - and here I'm specifically referring to virtually the entire range of libertarian political theory - is at best logically defective, at worse deliberate, outright fraud.
That's the same class war that has been ruthlessly waged for at least two centuries now between the investing class and the rest of us. The contemporary news and entertainment media, wholly controlled, of course, by the investing class, go to enormous lengths to try to convince us down here in the lower class that no such thing is taking place. The investing class talk about it, privately amongst themselves, quite freely; if you'd like to spy on your betters, read the economic analyses in section C of any day's Wall Street Journal, and learn for yourself precisely what that malicious old Randite Alan Greenspan means by "inflation." But meanwhile the rest of us are supposed to believe that the class war simply does not exist.
"Natural capitalism"? I don't buy it. Go try to sell your word hash to some other sucker.
Yours WDK - WKiernan@concentric.net
As always, capitalism enables technologies. Surely, we can conclude that a strong commitment to "Natural Capitalsim" indicates that the protocols engender ecology and a sustainable environment. A key driver in this process is service and flow economy. It will follow through on the issue of NC as a major player that continues to realize the benefits of Biomimicry.
Now that the merger is complete, a feature-rich transition phase conveniently negotiates methods of empowerment. In order to obtain full natural capitalism, we must take a close look at radical resource productivity to understand what they mean, and thus allowing widely-distributed solutions. We absolutely have to develop a metaphorical fishing pond to demonstrate this. Natural Capitalism takes the issue off-line, so the ecologists must productize that which is digital, and it follows that the partnerships with other capitalists will fall into place.
Except that there is no such thing as "lassie faire" capitalism except in the minds of the robber barrons of the late 19th century. "Lassie faire" capitalism makes the presumption that resources, markets and goods are effectively infinite--that is, it's the misuse of microeconomic theory to the macroeconomic market. That's why if left to it's own devices, lassie faire capitalism will consume every square inch of the planet--because the people who created the theory thought the planet was infinite, and so the issue of consuming every square inch just never came up in the rush to greed.
OTOH, capitalism is not incompatable with environmentalism--even the American Indians had forms of monetary exchange which was used to regulate intertribal exchange of goods and allowed specialization of services performed. It's just a matter of properly integrating the cost of the environment into the capitalist framework rather than treating the environment as a "free and infinite" resource.
It is quite a fascinating thing to think about the perfect recycling of everything, including chemicals, though. Unfortunately, perfect cycling would require other a command economy or lots of evolution time in the marketplace... A EULA for carpeting though! Corporations being responsible for their product at all times (except if we break it...this would probably be an attorney's worst night), interesting.
No, an economy, a capitalist one at that, and money are two divergent entities. An economy is the mastrabatory cycle of exchanging goods and services we go through our whole lives. Capitalism's prime tenet is that someone invests their time/energy/money (which is a condensed form of the other two) to realize something.
Money, on the other hand, is in principle, an infinite resource, and is independent of the person using it. Think of Ted Turner... he has captured the residue of tens of thousands of actors, executives, accountants, technicians, etc etc's time and talents. All of that energy is condensed into his hands, which leverages power.
If all we want is to eat, screw and grow old, though, there is absolutely no reason that an economy must be destructive. We could recycle forever if the processes were designed right. Of course, we all want to screw, which often is aided by some measure of power, which would be money. But fixing that game is a whole other question...
The problem is that most environmental resources (clean air, uncharted mines, clean water...) don't belong to anybody in particular. So, a corporation has no incentive to not to waste these resources: indeed, if they don't waste them, their competitors will, and will have a slightly more efficient process. Why waste your own resources (money) when you can waste your neighbour's, or the community's for free? An individuum would still have his sense of morality to prevent him from behaving like a pig, but for a corporation, morality is spelled fiduciary responsibility to the shareholder.
The only solution to the problem is to bill the corporations for the wasted common resources, i.e. tax environment-unfriendly outfits. That way, impact on the environment becomes part of the cost-benefit calculations, and may sway those soul-less corps into the right direction.
Unfortunately, these taxes might be considered as a backdoor to socialism too :(
Say no to software patents.
They'll be long dead, so why should they care?
;-)), these non-democratic organizations will always consider the short-term benefit to their wallet, over being good human beings.
In any rate, humans are hardly rational. If capitalists considered the long term effects of their actions, we wouldn't even be in this situation.
example:
If you exploit your laborers, their health, both mentally and physically, will decay, and they'll die. Thus exploiting labor produces a long-term loss of labor, but a short-term benefit of wealth.
So? Look at the Industrial Revolution for England and the U.S.
For that matter, look at the movement of business from states with organized labor, to states without it.
Then look at the movement of business from the U.S. to Mexico and China.
When given the choice of capital or labor, corporations again and again choose capital. Instead of providing a quality working environment for labor, with decent pay, they relocate wherever they can find cheap, easily exploited labor.
When given a pseudo-free, very much a free market (thank goodness we don't have a real free market
With any new totally different idea, there is a lot of inertial resistance to the new concepts. You this already in the majority of the comments to the review. But right now people are happy and comfortable in a booming economy, so why worry about something radically new that requires thought?
Well, most of those same people adamantly opposed fouling their nest with excrement, and it will take some kind of global catastrophe to makes them realize that they are doing exactly that to the nest that is their planet earth.
My personaly favorite catastrophe is the cessation of the thermo-haline circulation of the Atlantic Ocean. Another name for the this is the Gulfstream, and this is what keeps Northern Europe warm despite having the latitude of Alaska. It is proven that the gulfstream has stopped in the past, and if it did so again, then Europe would plunge into an ice age literally overnight. The best estimates are that temps would drop 6 degrees Celsius - a huge number!
Global warming will stop the Gulfstream folks, because it is driven by a haline density pump at the north end between Iceland and Greenland. As the Greenland ice sheet melts and as the Arctic Ice Cap breaks up (40% of mass gone already), a large amount of freshwater can stop the sinking of water that is an essential part of the thermo-haline circulation.
The relief effort required to save Europe from an ice age *might* be enough for people to realize the error of our fossil fuel burning ways. That we would be collectively responsible for the problem would be impossible to refute. And it might be enough to start what some people are calling a new kind of Apollo program. A mission to use our incredible technical innovation to make our society and economy revolutionarily more eco-friendly. Then we might all be a lot more receptive to the principles of Natural Capitalism.
Kevin Whilden www.solarhifi.com
What do you mean not possible? You looked at the world of software/books/music, etc? Except for the media upon which they are printed, there is no net consumption, yet these are HUGE industries.
Errr - I'm affraid not. Take the latest "Britney Spears" album (yeah I know...). Making the disc is already quite polluting in itself - plastic, chemicals, paper, ink, aluminium, etc...
OK so one might say we can distribute it online as MP3... but then someone has to build the cable for your net access, the computer to store and listen it, etc... those are very polluting stuff to make.
Even if the medium is considered as totally ressource-free, we still have to air-condition the record company offices, provide them with paper, ink, computers, etc... we need gallons of gas for the limos offered to artists, etc... so in the end it is still very polluting.
While I may admire the aim the book, the real issue in reconciling capitalism with limited natural resources is how to take the long term perspective? Wall Street "looks forward" only to the next few months or maybe a year or so on the outside. Also, the rapid growth of the internet has, IMHO, only aggravated the tendency of us all to look at the short term (e.g. last weeks news is old news...).
I think that what is going to force us to break out of this short term view is the simple fact the people (at least in developed countries) are living longer and longer. Someone born today can expect to live well into their nineties or more. I think that is something most of us can't simply comprehend. Think about it, you're thirty or so now; perhaps medical advances soon forthcoming (genome project, etc.) will let you expect to live until you are 85.You're not even half-way there yet! You're kids will grow up and live in good health and have fifty or sixty year careers!! Meanwhile, you'll be *retiring* when they are about 40 or so.
Now tell me that last months news is "old news." Now tell me that Compaq's stock taking a tumble recently upsets you. The only you'll care about is if the company is around long even that you can quintuple your money and have something to say for your investment.
When we start taking the long term perspective, lots of things change quite a bit. Global warming becomes a concern to all. Running out of fossil fuels becomes an issue ("Well, I remember kids when cars used to run on distilled dinosaurs, way back in the 20th century!" "OOOh, aaah" they say). You also start to give a damn about how the federal governement operates.
Just my rant, but people here need to realize that they are going to live three or four times their current age.
I like the idea of 'pollution credits' that have been considered for use here (in Canada).
Depending on the companies size, they would be giving a certain amount of credits with each credit allowing them to create x amount of pollution. These credits can be bought and sold between companies, so that firms that pollute less and that have spare credits can sell to firms who pollute more.
Ideally you would give out enough credits to cover the amount of pollution that is currently being produced, and then would gradually reduce x (the amount of pollution per credit) as to lower the overall pollution.
If a company fails to aquire enough credits to cover their pollution output, then massive fines are charged.
This type of system would have the effect of making it profitable to not pollute, as their leftover credits could be sold at a market determined level (which could be very profitable as the pollution credit "supply" diminishes)
The only problem that I see with this system is how it could be applied to imports. It would not be good if the forgien competition can undercut the domestic industry becauise they can pollute more. Tariffs are harder to impose now because of all the various free trade agreements going around...
I am stunned by your lucid statement of truth.
Let's fuck. Bend over.
The market would not attempt to work towards a clean environment, unless it could make money specifically at that. This is its failing, since it relies on the requirement of fixing or preventing damage to be more profitable. This demand will only come when it's far too late.
The desire for a healthy environment, fair wages, a good work environment, equal and quality education and health care for all, and any number of other 'just' things for U.S. citizens will never be met by a free market. Its motives are solely to maximize personal profit, not provide a social good.
If we had a real 'free market,' we'd all be working our sixteen hour shifts, waiting to be replaced by automated gas pumps, food dispatch machines, or whatever device that would move us on to the next sweat shop. All this, while we're pumping PCBs into the streams, all the live long day.
Go free market!
Adbusters' article on "Ecological Economics".
Stay up hacking each weekend. Sleep is for the week.
Actualy, it's the spotted owl that's tasty. ;)
I really shouldn't take the time to respond to this but, I've already (as most liberals think conservatives do) cleaned my gun, prayed to my shrine of Charlton Heston, and taken the trigger locks off the pistols so the kids can play. ;)
I've heard this kind of response again and again regarding the environment and our roll in it. Taking a shot at anyone who stands against baseless restrictions on their liberties as someone being "anti-dolphin", "anti-white seal", or "anti-clean air" is just wrong. There may be a fundemental differance in our viewpoints to a solution, but our goals are the same.
___
Capitalism at its core requires growth, huh?
This approach may be good for the environment, huh?
Let me rebutt the article and Signal_11's post at the same time:
Let's open-source the chainsaw!
Good world-wide economic growth, bad environmental impact!
-AP
A small lumber or mining town. The government declares conservation on much of the land. The town becomes poor because it relied on one or two industries. The people get angry because they can't use this land. There is dichotomy in government; They are responsible for the qualms of the people in their states. They are also responsible for the environment and sustained resources (well, at least if they need any votes from environmentalists to win their next election).
First, let me tell you how boring my economics classes are, all we do is building graphs - budget lines, optimal Indifference Curves, MRS, Price changes, Demand/Supply, Utility functions etc.etc.etc. ...
What amuses me most is the notion of Utility Function. Basically the idea is the following: every living organism (humans in our case) must try and assume the happiest position in their lives. In order to be happy, the organims (human) must consume as much products that make him/her happy as possible. Utility function measures your happines in units called 'utils'. Utility function states that one can not buy more happiness (products) than his/her budget allows. In order to become happy, one must consume optimal bundles of product, so that ones personal exchange rate for each product corresponds to the market exchange rate and one must spend EVERY single penny buying products (happiness) in order to get to the highest 'Inidifference Curve' - level of happiness.
When I first heard about it, I could not believe my ears, WTF was my prof. saying? Was he saying that happiness is measured in the amount of stuff one has? Well, Yes. The prof. said that this model is simplified and that there is something in capitalist economics called the "Bliss Point". At this point ones utility can not be boosted any more. Basically, imagine a person who has only a bed and food. His happiness (measured in utils of products consumed) is at maximum. Now take away his bed, the utility of this person goes down, he/she is unhappy. Take his/her food away and he/she will die - utility is less than zero.
Our prof. calls this economics of modern capitalism, I call it consumerism. I think that consumerism is the beast that forces economic growth through consuming every single resource. Consuming resources allows multiplication of organisms and this in its turn brings more consumption. Basically this is Utility Function of the entire Economics: consume everything you have at the appropriate exchange rate (corresponding to the market) and you will have maximum utility (happiness, money).
You know, it is going to be VERY hard to move from this notion of Consumerism to the notion Natural Capitalism, this requires a revolution!
You can't handle the truth.
First, market participants learn that in a truly free market their profits are severely limited by competition. As a result, bad apples often try to subvert the system and establish monopolies or cartels.
I might add these bad apples usually use the government (aka the System) to legally subvert their competitors using stuff such as lobbyists, lawsuits and antitrust, at our expense.
it's "lassiesz faire"... and stop using stupid hackerspeak words like "atleast" and "alittle" -- it isn't hard to hit the space bar.
You may be a shoes-on-your-feet Mr. Smarty-Pants, but the truth of the matter is you have no idea what you're talking about. I have been to Georgia several times, and from my experience, I saw that nearly everyone with an eraser in their pocket was concerned about the environment enough make sure their practices didn't harm the environment of their wild cattle and precious salad plants. To make it happen, they were willing to spend a little money for pollution cleaning/prevention technology and even switch from smoking Marlboros to Camels.
Being environmentally clean does not mean slowing down. I believe that the open source software model is living proof of that. GNU and Linux have a very minimal impact on the environment, and corporations with money can make investments to improve their records as well. It may make things a bit more expensive, but in the long run everyone benefits from the expansion of the environmental consultancy and hardware industries. There is only so much money in the world, and with more industries it is more widely distributed, which benefits everyone.
--
Naturalism
Reduce, Reuse, Recycle
Where is Reinvest?
Capitalism is a pretty damn loaded word. Typically by using it you are hoping for the prestige of Adam Smith and the potency of Ayn Rand. What you most often sound like though is the irrational of Rush Limbaugh and the lunatic idealism of "libertarianism". Any political position that places its goal as both sustainability and "better" production (meaning more efficient) is contradictary. Whether or not our politics/economics should be based on assumptions of scarcity is one thing. But to take the larger view (the Earth) we are most assuredly limited by the scarcity of the planet. Which comes around to this. To base an economic-political system on the rhetoric of a thirty year old toothless movement (the environmental) and an even older insane movement (capitalism) is to mire yourself in the irrelevancy (historically speaking) of both. Production is not a goal. It is how big machines talk to little people. You are either for it (by working for it) or you are ground to bits. Aragorn!
The description of "service and flow" sounds remarkable like the model of software licensing that currently is sold by proprietary IT companies. Rather than owning the software/carpet itself, you are sold the experience of using the software/carpet.
This model is appealing to companies in the tech industry simply due to the low cost of replicating their product. I fail to see the incentive in a material goods economy such as carpet sales. Why would a company want to shackle itself to the quality of your much-abused rugs? How could they possibly benefit?
Additionally, slashdotters are well aware that the licensing model has its own costs to the consumer in terms of freedom. The book's theory sounds a bit like armchair philosophy to me.
-konstant
Yes! We are all individuals! I'm not!
-konstant
Yes! We are all individuals! I'm not!
Economic growth is not the same as physical growth. You can make money from using less resources. Look at the bottling industry. Bottles (milk, soda) use 50% less plastic than fifteen years ago, and the bottles are cheaper to produce. That's economic growth through physical shrinkage.
It must be tiring to work so hard at being so wrong.
-russ
Don't piss off The Angry Economist
According to the Oxford dictionary of economics it is "laissez-faire"
even intelligent and concerned consumers cannot really understand the full implications of the products they buy...
Yes they can. They look at the price of one thing, and compare it to the price of another. AS LONG as everyone's property rights are recognized, and air and water pollution is paid for by those producing it, then all the social and environmental factors can be considered just by comparing prices.
You should read Leonard Read's "I, Pencil".
-russ
Don't piss off The Angry Economist
It's amazing the outpouring of ignorance that appears whenever economics and free markets are discussed.
The problem with the capitalism we had 50 years ago was that it didn't create property rights in environmental resources. Companies were allowed to pollute the air and water, to use government land for clear-cutting and over-grazing, and generally had no incentive to protect environmental resources.
The solution is simple. First, publicly held lands not required for the operations of government should be sold to private owners. Second, property rights in lakes and rivers need to be established. One way to do this would be to grant separate fishing rights and recreational rights to rivers and lakes, while leaving people free to travel on those waterways. Thirdly, laws granting the government immunity for its environmental misdeeds need to be repealed. Much of the environmental problems in this country were created by government. For example, many military bases have been polluted extensively.
As for air pollution, I propose the following: the government should auction off vouchers giving the bearer the right to pollute a fixed amount of a given pollutant each year. These vouchers would be transferable. The amount of these vouchers could be set initially at the amount of pollution occuring currently.
Anyone who didn't have a voucher would be required to either get one or stop polluting altogether. The result would be a vibrant market polluting credits, and the cost of these credits would drop over time as companies found ways of producing without pollution. As the price dropped, these vouchers could be bought back by the government or private conservation groups. The result would be less pollution than we have now at far lower cost to the economy. The EPA could be eliminated entirely.
Capitalism is all about efficient allocation of resources. So is environmentalism. The problem is not a fundamental conflict between the two, but a poor implementation of property rights in environmental resources, thereby leading to those resources being poorly allocated. A truly free market in environmental resources will lead to these being used more efficiently and at far lower cost, benefiting both the environment and the economy.
Ecologically friendly capitalism doesn't mean developing "biomimicing" technologies or reducing our waste products 100%. If such things are profitable, boring, normal capitalism will do them without caring what the positive environmental repercussions are.
One of the nice things about that boring, normal capitalism is that the non-externalized costs of production get minimized much more effectively by the efforts of competing producers than by the plans of your average "revolutionary" thinker. Water vapor car exhaust sounds nice, until you actually try and design the fuel cells and hydrogen storage systems to make it work.
And I just wanted to slap someone after watching Ralph Nader whine on television this morning about how "the poor American farmer is working from sunup to sundown to survive against the evil agricultural conglomerates who sell food too cheaply." What the hell is he smoking? The green party is supposed to be an advocate of the poor, common man, and their presidential candidate wants to see higher food prices? What next, is housing too cheap also?
What we need for eco-friendly capitalism isn't book authors telling corporations to panic about how much fossil fuel or landfill space they're using. We have enough of each to last us a hundred years, by which time we'll have more exotic options available.
What we need is a way of bringing currently externalized environmental costs back to the corporations and individuals who create them, to give them incentive to reduce those environmental costs where it is practical to do so.
I saw another post entitled "Tragedy of the Commons", so some people here already know what I'm talking about. If an unfiltered factory smokestack dumps crap into the air, it may cause hundreds of dollars of health problems, environmental damage, and quality of life reduction for each of a million people. However, only a hundred of those million people may actually work for the factory. $100 million of total environmental cost, $10 thousand of which is actually felt by the polluters. If a smokestack filter costs $1 million to install, then for society as a whole you certainly want to install filters, but the factory has no financial incentive to.
Currently, our system doesn't give corporations financial incentives to reduce pollution, we give them legal incentives, in the form of "You will install that filter before you start operating this factory" type instructions. That's a fine, workable solution, but it's not a capitalistic solution, it's a command economy solution. We control the exhaust of our vehicles, the effluents of our manufacturing, and the natural resources that we mine and log in the same way: through permits and regulations. The idea, of course, is to put environmentally important decisions in the hands of lawmakers who should be concerned for the environment and economy of society as a whole rather than for the costs and revenues of one particular corporation.
And it works, mostly, as well as you can expect an inexpert government to decide where the country should draw the line between economic prosperity and environmental health. There are excesses here and there on both sides of that line, and there are bitter political arguments between people who disagree on where that line should be placed, but there's not going to be any revolutionary improvement within the governmental decision-making framework.
In a utopian capitalist world, of course, the government wouldn't decide how environmentally friendly a manufacturing process had to be, any more than it decides how much that process should produce or how much the product should sell for. How would the free market economy make decisions about natural resources and environmental harm without falling into the "tragedy of the commons" trap (I prefer the "prisoner's dilemma" analogy myself) that makes life worse for everyone? By applying externalized costs to their producers. Instead of putting a limit on the amount of air pollution a factory can generate, you charge them some fee per unit mass of each pollutant component. If they've got filter after high-tech filter trapping every gram of sulfur dioxide, you still charge them by the kilo for the escaping CO2.
The point is that you then put into managers' hands the decisions about what environmentally unfriendly processes are worthwhile, and what processes aren't valuable enough to be worth the environmental costs inherent in their use. Would mass transit in places like Houston and LA be in it's current lousy state, and would so many overcompensating city dwellers be buying gas-guzzling SUVs to drive to work, if gasoline there was taxed according to how much damage it does?
I'm not really suggesting this as a way for America (or other countries) to go, however. First of all, if it ain't broke, don't fix it, and our current mass of environmental regulation is only sprained at worst. Secondly, moving environmental regulation from a command to a capitalist decision-making model wouldn't be as nearly as productive as, say, capitalist price regulation is. You'd still need government to decide what the costs of pollution were, and you'd still need audits to measure the environmental costs generated by a company. Unlike labor, equipment costs, and revenue, it's a little tough for your corporate accountants to put a fair dollar figure to environmental costs without a government inspector standing over their shoulders.
Perhaps most importantly, since there is no perfect way to let the "invisible hand of the market" handle the environment as well, you'd still see the same furious debates between the people who think that the atmosphere is a limitless sinkhole and those who think that CO2 is poisoning Mother Earth, and you'd still see lengthy pointless rants from people like me with a slight vested interest in the outcome.
(Score: -1, Longwinded)
Rather humorous quote, that. As RMS put it, it's "free as in freedom, not free as in beer". I find it hard to imagine my GPL-licensed programs could exploit me, but I think you'd be laughed at to your face if you claimed nobody exploits anyone under capitalism.
Polish proverb - under capitalism, man exploits man, under communism, the opposite is true. ;) Not terribly relevant to the issue at hand, but a cute quote nonetheless.. if only because it's true.
He has very good points, and it'd be a shame for no one to see it, just because he's an AC.
Capitalists will never give a damn for the environment. Why? It's too long-term.
I will pay you $1 per year for the next hundred years, or I will pay you $5 right now.
-russ
Don't piss off The Angry Economist
Pure capitalism as an economic system is just what the authors stipulate, inherently harmful to everything but profit. In our society, rules are made to sandbag the rising river's edge, but they do not interrupt the flow. We are built on capitalism, and our prosperity for the last two hundred years largely rests on this fact.
Enter the last hundred years where real damage has been perpetrated on the environment, particularly the last thirty years. Capitalism has so much inertia that we as a society do not quite know how to stem it. Add to that the science of the environment which is often unsure enough of it's postulates to be able to gain ground on capitalism. We can measure profit on a balance sheet, but it seems scientists cannot convince us about things like ozone depletion and deforestation through studies.
On the whole, we do a pretty lousy job of jibing capitalism with environmentalism, and judging by at least the American popular ideology, it will take severe environmental crises to change that reality. From day one, we have been a nation of minutemen who need to be struck in the face before we realize we are in a fight.
-L
because the corporations (the capital) is not interested in change (at least not those corporations which are successfull in the current system.). now the fundamental problem ist that in some political systems the capital has already too much influence. e.g. with lobying and most important: the $$$ companys controls mass media used to indoctrinate people. furthermore in the usa to have a chance to get elected one already needs big money for the campain.. (payed by the capital).
so it might be the case that we are already on a one way road and can not change the course of our society anymore. still we should not give up and at least fight the capitalism as much as possible. (where the goal is not to destroy capitalism but to limit it and transform it to something more socialy just, to something easier democraticaly controlabe and something more ecological).
measurements to do so would be:
- extremly progressiv tax for the super rich and big corporations to limit their influence. while on the other hand helping small startup companies.
- helping small and independent media.
- make political party financialy independent from corporate money (pay them from taxes)
- help independent science (pay from taxes instead corporate money)
- free and uncensored internet.
- helping critical NGO/NPO organisations.
- etc...
in short: just avoid anything that a right wing party wants. so we see in odrder to have a chance to leave the dangeros one way road we have to fight against capitalism a lot. of course you will not hear that in your mass media. thus it is necessary to spread this knowledge via grass root paths like the internet...greetings from vienna, austria.
mond
If the gulfstream stopped in the past, it was obviously not caused by man burning hydrocarbons.
Of course. But it shows that fairly small changes can switch on or off the gulfstream. That means, the amount of pollutants that we produce can lead to major changes in the climate.
Canada is not overrun by glaciers. Why assume that Europe would be too?
I don't.
Yes, some estimates give 6 degree drops. Others give 6 degree rises.
No, like the original poster said, most models give 6 degree rises in some (most) parts of the world and 6 degree drops in others, this is not a contradiction.
I used to build very large computer models for a living so I know how incomplete current modeling technology is.
That is true. But the frightening thing about dramatic climate changes in the past like the ice-ages is that sometimes they happen very fast, sometimes 10 years or less. Obviously there are a sort of chain reactions in effect, so that if the climate starts to change, at least sometimes it will then tip over. It is very questionable whether the world would be able to stop for example greenhouse gas production on such short notice when we could prove that such a climate shift has begun. Anyway, I think there are enough other reasons as well to use less and less oil and coal:
- The political reason: The world is quite dependant on the few largest producers of oil.
- Air pollution degrades health, especially of children.
- I think we should leave some natural resources to our children and grand-children. There are many things that can be created from crude oil (including some medicines). The humans will doubtlessly invent good replacements for some, but probably not for all.
- If the wealthy states say this route is too expensive, the others wont go it, not even in an emergency.
- I wouldn't be surprised if at some point renewable energies get less expensive than others.
- Often we throw away resources without getting anything for it. For example, there was a lady I know going into a travel agents who wanted to get a plane trip to a destination several 100 miles from here. They had a cheaper trip to a destination a few 1000 miles from here. She didn't mind and bought the cheaper trip. If natural resources are as cheap as they are now, things like that will happen.
- Sometimes, participating in the changes that will come sooner or later is a economic opportunity. For example, the Belgians were the first to invest heavily into wind power. For quite some time they had an advantage on competitors and made good profits.
I think we should be happy and try to see dangers in the future and try to minimize risks.
Most believe that capitalism is an important part of democracy. I would suggest that in fact, capitalism is the *opposite* of democracy.
Where capitalism is the concentration of the wealth and power in the hands of a few elite, democracy is about giving everyone an equal say. For that reason, pure democracy and pure capitalism are incompatible.
But the only alternative to capitalism is communism, you shout. I would argue that view of the world is too limited. There are more then two different ways to arrange an economy, maybe we should be more open-minded about different economic systems.
What is evil about communism is not the principle of everyone being equal, in fact that idea is very compatible with democracy. The problem with communism is, and always has been, that in attempting to achieve equality, it creates a society that ends up being just the opposite, namely a totalitarian regime.
Think of it not as a left to right spectrum, not even as an 'X', as libertarians would have you believe. There are in fact *3* axes on the spectrum: Totalitarianism vs. Anarchy, Market Force Capitalism vs. Forced Equality Communism, and on the 3rd axis, Utopia vs. Conflict.
Democracy is halfway between Totalitarianism and Anarchy, and Socialism halfway between Communism and Capitalism.
The two main political parties would have you believe its a very simple 'us vs. them', left and right. As Steve Jobs would say: Think Different about politics. and vote different... please... *anyone* other than the same Republicrats over and over again.
Reality has a liberal bias
Free-market approaches to environmentalism have been around for decades. Debunking mercantilist theories goes back a hundred years, with the best known analyst in recent years being Julian Simon This stuff has been on the web for a while, as well. While the book might prove interesting, the point behind it is old hat.
"Utility function!?!"
This stuff is so outdated. He might as well be teaching Keynes.
Suggest that he read Menger and Bohm-Bawerk.
Taken from the summary:
One of these ideas is totally eliminating personal income tax, and instead taxing the use or waste of natural resource;
This sounds like something true Libertarians would run away from screaming. The personal income tax was not devised to manipulate and control the market. So here we have these supposed advocates of 'freedom' advocating further, and far more pervasive government intervention in the marketplace. Claiming that it is 'natural' and based on some sort of natural law of how things work is so contrived I can't imagine it's an error on the author's part. It's outright deceitful.
I'm sorry. The kind of people I remember back in college being really into Amory Lovins philosophical outlook seemed on the surface to be all free and natural. They were actually some of the biggest advocates of state intervention in the economy. You know the type. The Ralf Naderish *PIRG people.
When my brother-in-law was in Engineering school the geeky engineering type students took over the local PIRG organization one year and completely shut it down. Don't let the type of people with ideas like 'Natural Capitalism' convince you they're cool and geeky tech freaks. They're the OPPOSITE of hackers. Hackers develop cool ideas and make them happen in reality. These people write a book, and sell it to liberals as something to use to get more government programs running.
Look at the Industrial Revolution for England and the U.S
That's right, the coming of the steam engine meant that children didn't have to crawl through coal mines, they were replaced with machines. Horrors!
They took those people hapily laboring under the sun in paltry fields to barely feed themselves, and put them in factories where they could afford to feed themselves and perhaps send their kids to school. Horrors! Damn that industrial revolution! I think I'm going to move to Tanzania right now and get back in the pre-industrial world.
I WANT TO STARVE!
Do you have any money? I presume you do, to pay for internet access.
Do you keep all of it yourself, and none of it in the bank?
Have you ever bought any product or service? (Hint: yes)
Then you are part of the capitalist economy. The money you have in the bank is an investment.
You can't pretend that there is a single hard black line between the Upper Class and the Lower class, and that everyone falls on one side of that line or the other. Now that WOULD be "logically defective".
What do you think the goals of class war are? Extermination? Slavery? Theft? What? Don't you think that "they" could do it much more easily with power than economics?
Er, you mean, send their kids to work in in the factories and mills. Nice try though, but perhaps you should read some history books. ;-)
It wasn't industry that moved us beyond the horrors of the Industrial Revolution, it was social reform and laws.
Translation: "The free market is a fantasy. There can be no such thing as a free market in a real world with real people. Free markets only exist in the minds of economists."
You didn't even have to think before responding to what he said there, did you??
Free Software = Software with Freedom.
Free Market = A Marketplace with Freedom.
I can't even figure out, and I suspect nobody else will be able to, either, what the hell your response had to do with what he said.
Social mobility makes the whole idea of class war fallacious.
Joe Blow at the 50th percentile of income most likely is not going remain there his entire life. Indeed, he aspires to become part of the investing class.
At the top, commonly the spoiled children of the rich mismanage their fortune and lose it.
As the players are constantly changing sides, the idea of a war between them is absurd.
"To excuse such an atrocity by blaming U.S. government policies is to deny the basic idea of all morality: that individu
Perhaps you should read some Marx, since I doubt you have....f esto.html
http://www.anu.edu.au/polsci/marx/classics/mani
Certainly the goals were valid, but there's a lot of anger in it.
To compare Stalinist Russia to democratically run and worker-owned corporations is fairly amusing. But then it's not that unusual, given the ignorance propogated by McCarthy.
You're free to choose to be free; I certainly can't force you to be.
[350 million people were not murdered in the making of this post. After I killed the accountant, no one offered to take his place.]
Imagine all the different states the world can be in. This includes not only your personal situation but also everything else that is going on in the universe. Obviously this is a really big set, too big to do anything reasonable with.
Assuming you can order all of these states from your favorite down to the worst, we could define a utility function over that.
But of course, that is silly. It is too big a problem. So what economists do is assume that you care only about yourself, and see where that leads.
Simplifying some more, we can be in a world with beer on the X axis and pizzas on the Y axis. In this simple world, free trade kicks ass. I try to avoid this whole utility business in my class and demonstrate free trade using a trading game where I provide incentives with some real money. Students like this, and it gives them a way to see how market prices can find these nice supply/demand equilibria on their own. But it is the same basic message.
Later, I'm sure your prof will go back and say, "what if we all care about some public resource, like parks or clean air, what if we have that in our utility function?" More math will be involved, and all of a sudden the market equilibrium that worked in the selfish beer and pizza consumption world won't work here with public goods.
Not impressed? Obvious, you say?
Well, almost every "solution" I hear sounds like "Well, if I were Lord and Emperor, this is what the world would be like.... consumers would become enlightened, companies would be responsible, governments would care about the rights of their citizens."
Yeah, right. Give me a break. Maybe if I tap my shoes together just one more time, I can save on air fare to Kansas.
The hard part of economics is finding solutions to problems that respect the nature of a free society where people and companies can do what they want with the resources they control. Emissions trading, for example, is a step in this direction. But realizing this comes from learning the tools of the trade, and thinking about problems in a mathematical way. Not from reading Al Gore or listening to Rush Limbaugh.
"Someone's prof"
Perhaps we should start over with the basics. Given that...
Conclusion: People who are uninformed and/or stupid will be exploited by people who understand the system and are motivated to maximize profits. What does this mean? For the uninformed public, it means they have the "freedom to be exploited".
American farmers have faced the same problem for almost 2 centuries now, that being increased productivity. Overproduction of crops drives the price down on the commodities markets. The revenue per acre planted is therefore reduced and it becomes a struggle for a small farmer to reduce his costs to be less than his income. A large farm with many acres can more easily be profitable.
If all the agri-businesses were destroyed tomorrow, they would be reinvented in time because of the nature of the economics of farming.
Price fixing occurs whenever you decide what price you will sell at. Mysteriously, sometimes it is illegal to raise prices, but never to drop prices. Hmm, I wonder if this could have any relation at all to the chronic problems of farmers, who are forbidden to organize and coordinate their production?
As to the computer analogy, you pay a premium for the IBM name and service, which the shop down the street doesn't have. Don't forget, if it weren't for IBM there would be no computer shop down the street.
"To excuse such an atrocity by blaming U.S. government policies is to deny the basic idea of all morality: that individu
My point is: I expect that most of what is written in this book is nonsense and the only reason the story got posted is because it made a reference to open source software.
Before you flame me, let me qualify what I have said a little. There are some problems with capitalism (by which I mean the way markets are organised at the present), and this book clearly refers to some of them. Economic theory tells us that free markets will maximise welfare based on certain promises. I won't go into the detail here, but if you're interested, look up welfare theorems in an economics text book.
There a three ways in which markets fail to maximise welfare in the way the theory tells us that they should.
1 Externalities, this is when the price of an action to an individual is not equal to the price of that action for society. For example, my factory releases C02, which alters the climate, and causes a farmer in Uganda's crops to fail, but I do not compensate him for the adverse effect of my action on his welfare.
2 Imperfect information, this can be when I sell you something which I claim does something useful for you but in fact, after you have bought it, you find it does not. Another example is you might find no one is willing to sell you reasonably priced health insurance when you reach old age because the insurance company can't tell whether you are asking for the insurance because you know you have some disease (but don't tell them) whose treatment is expensive.
3 Imperfect competition, this is when a company can charge a price for something which is higher than the cost of production. This could because the company in question operates in such a way as to purposefully and unfairly harm its competitors. It's easy to think of examples.
The answer to these questions is government regulation. I hear the libertarians howl with outrage. And for effective government regulation, it is true that the lobbying power of corporations would need be reduced. But his is hardly a revolutionary new form of capitalism.
I am sure that this book refers to some of these things, but I get the impression that it is doing so to rationalise some environmentalist position - I've read many similar books before.
I may be wrong, but read carefully!
Somehow I don't think /. could handle that.
Thanks at least for recognizing the references. I suppose "utility function" per se is not what I object to so much as "bliss point" which comes across as a poor attempt at a singular Pareto optimality. But utility function itself implies a degree of calculation that flies in the face of time, uncertainty and disequilibrium.
Some really deep ecologists would object to my maximizing the value of certain grasses -- say by domesticating them and initiating the neolithic period -- or perhaps an enemy of mine would so object.
Some animal rights activists would object to my "playing god" by hybridizing and then intensively inbreeding various wild animal species to generate domestic breeds which are useful to humans -- or perhaps an enemy of mine would so object.
Quite a few human rights activists would object to my "playing god" by breeding humans, training them in valuable skills and selling them to the highest bidder (perhaps under contract to not use them for their own breeding programs so I can retain my genetic property) -- or perhaps an enemy of mine would so object.
I can maximize economic value in all of these things but the question remains, have I maximized moral value?
And, BTW, whose business is it to tell me what is moral and what is immoral?
Some theocrat or politician who can manipulate words and people's actions into meaninglessness? Someone who can kick the shit out of me? Someone who can talk others into kicking the shit out of me? Someone who exudes the right pheromones to trigger child-like imprint vulnerability in my limbic system as they talk to me? Someone who gets an intense injection of lutinizing hormone when a centralized technology for communication comes up for grabs, like, say, movies, radio and television?
These are questions even the Dalai Lama has trouble with -- and don't forget the first Dalai Lama was an heir of Genghis Khan -- sort of like the Popes are, in a sense, heirs of Ceasar.
Morality has its limits and those limits relate directly to genetic self interest. I don't want some bozo with a conflict of genetic self interest telling me what is right from wrong. I don't care if it is about loving my neighbor as myself, being a worker hero, avoiding racism, sexism and homophobia or turning Dolly in to mutton. Take your universalist religions and preach them to your next of kin. Dressing them up as "capitalism" is ineffective except to the extent that it becomes all the more noxious when you do so.
Of course, if you can make a convincing case to me that "we are the world" -- I might start listening -- but to be convincing, you'll need to make that "whole earth" perspective real. That means putting me and everyone else you want to influence out into space where the global perspective becomes our natural perspective. Then all this talk of "universal brotherhood" starts to make sense.
So, until you start pulling your weight in getting us all there, zip it.
Seastead this.
Don't you think the lumber and paper companies are smart enough to realize if they cut down all the trees they will be out of business? The oil companies know eventually the oil will run out, but right now its the best source of fuel for transportation. I'm sure in the next 100 years when the oil wells dry up we will have a much better energy source. Solar power doesn't work everywhere. Where I live about 2/3 of the year is overcast. If you lived in the desert solar power makes sense.
Only the State obtains its revenue by coercion. - Murray Rothbard
The environment is a property-rights issue. In a capitalist system, each owner/lessor/etc of property has a right to not have that asset devalued by others against their will. If someone ran into your house and released a could of poinsonous gas, you could shorgun them right then and there, and rightly claim self-defense. How is it different when, a mile down the road, a poisonous gas gets released and then floats into your living room? Would it be different if, from a mile away, someone sent a mortar shell into your living room that then released a poisonous gas?
Capitalist countries have MUCH cleaner environments than non-free countries. ANd it's because, under the capitalist system, people have rights and the means with which to defend themselves, and/or collect recompense after the event. People often lament the 'litiguousness' of the U.S. Believe it or not, that is in the main a good thing. Sure, there's crackpot get-rich-quick lawsuits, but most are for real reasons.
Here, we can protest. We can not buy products. We can ruin the stock price of companies that harm us, assuiming we have the will. In forced-industrialized countries like China and Russia, industry can do whatever it wants because it is also the government. And it often does. There is a 10-mile radius of fibrous waste around one industrial site in Russia (starts with a 'K'... forget the name right now). It takes a LONG TIME to cause that much damage! And it went unchecked. In a capitalist system, the government is reponsible for protecting the rights of all parties in contracts and enforcing basic human rights. Capitalism doesn't work without a government.
To put it simply, in a capitalist system, the government is in charge of keeping a watch on business. In Socialist (corparatist/communist/fascist/choose your own synonym for 'collecitvist') countries, government IS business. Which do you think will work out better?
A lot of people complain that the U.S. is becoming or has become a corporate state, and then lay the blame for that at the feet of capitalism, when it doesn't belong there. There is no socialist party in the U.S. any longer because its entire platform was enacted into law. Socialism blurs the line between government and business.
Take, for instance, the currently fashionable idea of 'investing' social security taxes in the stock market. If the people advocating that came right out and said they wanted to nationalise U.S. businesses -- bring them under direct government control -- the citizens would balk. But by "investing the funds for our retirement" for us, it's okay. THe end result is the same though: government ownsership of business. If they just nationalize, it's simply a faster way of doing it than by taxing the citizens and businesses, and then using the money to buy the stock of those businesses. Either way, the government will eventually end up with a controlling share of U.S. businesses.
With the government then concerned about profitability, in order to fill its tax coffers to be able to pay for its programs, how much oversight do you think they will be providing?
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
Thinking further about this, I think there's yet another serious flaw.
Game Theory, widely used in economics modeling, talks about "optimum strategies" or "Nash equilibria" for multi-player "games". There are a number of results about optimum strategies-- theorems about the existence of optimum strategies and such. Saying an actor is rational amounts to saying that she will pick the optimum strategy in any given game.
The problem is that, given some particular game, even if by the results of game theory we know that there is some optimal strategy, could actually computing such a stategy be an undecidable problem?
As to whether such a situation is possible, I suspect it is-- you can define truth for first-order logic in terms of games, and first-order truth is undecidable.
Still, even if a particular problem were decidable, it may yet have an untractable computational profile-- it might be exponential time, for instance.
Essentially, the point is that the assumption that actors in an economy are rational may make some untenable computational assumptions. Even if there is a rational action in some particular economic setting, finding that action may be computationally too expensive, or even undecidable.
This is completely untrue. Capitalisim has nothing to do with using up things, just in using things. Things get used up when you do not know how to make it last, or you do not own it. If you own the forest, you don't chop it all down; if you own the fishery, you don't fish it out; if you own the land, you don't leech out all the minerals. Destruction in capitalism stems from destruction of things people don't (or can't) own, in an attempt to get the most out of it before the next guy gets it. this is evidnced in the economies of ocean fisheries and in the atmosphere itself, where a little pollution affects everyone a little but affects you very little, allowing you to pollute much more than if you owned the atmosphere itself and had a larger stake in keeping it healthy. Now I am not advocating that everything should be owned by everyone - just pointing out what makes capitalism destructive
I object wholeheartedly. This close-minded view precludes any and all _real_ technical innovation, such as, (dare I mention it) nanotechnology. When generalized consumer goods can be fabricated using a Stallman Free Matter Compiler, from dirt in one's back yard or from the remnants of disused products, chopping down every tree left in British Columbia or setting fire to what remains of the Amazon Basin will not be economically feasible, let alone morally feasible. Earth will eventually recover, if populations are kept at bay.
And frankly, for all its good intentions, Marxism has left some real environmental scars on this world - have you seen the Aral Sea lately, or visited the sites of any of the former USSR's fusion-warhead-excavated hydroelectric dam basins?
Read my post about the environment being better protected under capitalism than socialism.
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
Capitalism, if left to its own devices, will consume every tree, every drop of water, every gallon of petrol, until this world is a desolate wasteland
You are a complete fucking moron. You don't begin to understand economics. Keep your fucking mouth shut unless you know what you are talking about.
As it stands now, we are nowhere near running out of "petrol", and if oil supplies start to dwindle, prices will shoot up until other energy sources become more cost effective.
Logging by corporations is largely confined to trees they planted themselves; the destruction of your beloved rain forest is due to the slash-and-burn efforts of third world subsistence farmers.
And how the hell are we going to run out of water?
A few more points:
First, about the idea of American Indians as environmental icons. This is idiotic. They were living with fucking stone age technology. They couldn't damage the environment if they wanted to. Every other group on earth at one time or another lived at a similar level of primitiveness, "in harmony" with the environment. Do you want to return to a time when we don't harm the environment but die by the age of 35?
And about the premises behind environmentalism. Many environmentalists give the impression that they feel the earth would be a better place without humans. Some even come right out and say it. "Think of how clean the air would be and how happy all the cute little animals would be." But what is the point? All these little animals go on living and dying for a few billion more years until the sun expands and puts an end to their happy little lives. Meanwhile, there would be no art, science, or anything worthwhile.
I just finished reading all the replies (whew!), and it seems to me that the one thing that everyone has neglected to notice is that, at least in the U.S., the government is owned by big business. The whole theoretical "pure capitalism" vs. "government intervention" is just that - a theoretical construct. In reality, government does just what their corporate masters tell them to.
Who the hell moderated Signal 11's post as "insightful"?
Hmm, I didn't know age had anything to do with one's knowledge of a subject. Maybe there's some hidden law I don't know about that makes it so I can't be trained until I'm older. Oh, by the way - here's the definition of an engineer. Strangely enough, I have this driver's license.. and of all things, my car has an engine in it too.. which seems to fit definition 2 quite well. Even stranger - my driver's license says I'm 20 years old. The government must have made a mistake - I can't be an engineer and "only" be 20... I think I'll have to return my license...
Hey! I've got Emma Goldman's autobiography (a 1930's first edition copy), and I've read it.
I've also got her book 'My Disillusionment in Russia' which tells of the mess she found when she was exiled into Soviet Russia for being an Anarchist.
Hell, I've even got a Dead Kennedys album or two.
And, of course, the all-important copy of Grimm's Fairy Tales. Gotta bulk up the 'fantasy' section of the library somehow.
That's all fun stuff to dream about.
An old time lefty who I've finally been able to shake off, someone from the 60's who I admired in my idealistic youth, a guy who used to live and breathe 'Anarchist' hype, has found his way halfway into reality. He still sputters and fumes and spews out class-war rhetoric. But he also plays around a lot with online-trading. When he isn't letching over a female lab assistant 30 years younger than he is.
Anarchy is a fun hobby, like building model railroads.
Who's theory?
1 Externalities...
Which are created by the absence of liability and property in a given context.
For clarity's sake, we should recognize that there are positive externalities as well as negative ones. It's really the negative ones that concern us the most. Negative externalities are created by the structure of common law not permitting a liability on expenses.
2 Imperfect information...
Imperfect information is a constant condition, regardless of the system. The only question is: which system provides the best incentives to spread information? Markets have been logically and empirically demonstrated to be the most effective conduits of information exchange
3 Imperfect competition...
While I disagree with the terminology behind "imperfect competition," the alternatives leave us with no way to determine the relative values of heterogenous goods. That is, only the market provides a mechanism to even postulate the possibility of perfect or imperfect competition. All centrally controlled systems function in a realm of fiat pricing, which might better be called *unperfect* competition.
The answer to these questions is government regulation.
How on earth do you reach that conclusion? Governments are not infalliable (to solve externalities), omniscient (to solve imperfect information), or selfless (to solve "imperfect competition.) So how does government participation ever resolve any of these issues?
In fact, as von Mises explained in the 20's and as was so aptly demonstrated in the former Soviet Union, centrally planning cannot *ever* work simply because it provides no calculative mechanism for determining relative value. In the absence of pricing, how do you know whether the cost/benefit of eating chicken is better than the cost/benefit of eating brocolli?
No proposed solution for the environment could possibly be *worse* than regulation -- where rationality is utterly abandoned in light of the total immeasurability of the consequences of laws!
Well, the word "zealots" indicates you don't consider this a complimentary description, but that aside this is a pretty good description of my thoughts.
In fact, it's one of the best compact descriptions of the libertarian point of view that I've seen.
Fend off invasion, enforce contracts (and by implication, preserve rights). Bingo.
Dump the FCC, the Department of Education, the BATF, the Department of Agriculture, the NEA, the NIH and the NEH, among others.
Let society experiment!
timothy
jrnl: http://tinyurl.com/c2l8yr / foes: http://tinyurl.com/ckjno5
It wasn't industry that moved us beyond the horrors of the Industrial Revolution, it was social reform and laws.
Yeah, but, where were those laws when kids were put to work from sunup till sundown on the farms? And this was doing backbreaking work, not running machines or sweeping up.
Ludwig Von Mises said it best: "It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchens and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation"
The mass exodus from the less-industrialized Continent to industrial Britain during the first half of the 19th Century shows that plenty of people wanted to get factory jobs. It sucked, but it was better than what they had before industrialization.
Child labor only ended when economies grew to the point where only parents were required to work to support the family. This is a recent and post-industrial phenomenon. It could not have happened without the Industrial Revolution. In non-industrialized counties, children still do back breaking work. Actually, this also happens on family farms in the US as well...
Child labor sucks, but let's not imagine that the Industrial Revolution created it. It ended it.
I say I have a right to burn my tires, you say the acrid smoke from the fire is going to give you cancer.
Yes, and if I can demonstrate that your burning is harming me in some way, then you aquire a liability, and we have a negotiating opportunity. Perhaps you *love* to burn tires, but my risk of cancer is only minor. So I tell you that I'll charge you $500/day to compensate my increased risk of cancer. If you accept it, it demonstrates that your value of the burning is greater than my cost. If you decline, then clearly it *isn't.*
Or can I buy a big piece of land and set off a nuclear bomb on it? What if there's some wind and the fallout blows over to your land?
Again, exactly the point. If your actions create a harm to me, then there is liability and you can compensate the liability rationally -- allowing us an opportunity to negotiate a charge.
Or with an ocean: can I dump toxic waste in my part of the ocean, even if it's going to drift into yours? Only if I give you permission to do it. Else you are aquiring a liability by damaging my property.
Or how about fish? What if I put a lot of fish food in my part, so all the fish from everywhere else in the ocean swim off your part?
Same situation.
You may be wondering why this would offer any benefit over regulation, and the answer is: measurement. If you choose to compensate me for the harm of burning tires, then we've compared values and your choice makes sense. If we cannot come to agreement, then you cannot create that negative externality, and the social cost is not borne by those absent in the transaction.
Regulation provides *no method* to measure cost/benefit of particular resource consumption methods. Only the market can place relative value on heterogenous choices.
This reminded me of a cartoon from years ago showing an air vending machine. The idea was quite funny at the time and seemed very unlikely.
Now, I note that there are 'oxygen bars' in Ca. that seem to be catching on. It seems that there really is a small but noticable depletion of oxygen in LA. How far must it go before pollution is reduced?
Funny you should mention that. I just got back from the gas station - prices are up to $1.70 over here, from $1.19 this past fall. But, not being one to trust only my experiences, decided to consult my macroeconomics book (ISBN 0-07-046814-1, Economics: Principles, Problems, and Policies). The consumer price index (CPI) in 1929 was 17, and in 1970 was at 38.8. About those falling prices...
You are a supreme idiot. Gas prices undergo large price fluctuations in the short term. That doesn't neceassarily mean the price is going up on a longer time scale. The world's oil supply is largely controlled by OPEC; recently, when prices were driven so low by the abundance of oil that oil company profits began to suffer, OPEC decided to limit oil production, leading to higher prices.
Please explain to me how privitization does *not* resolve the tragedy of the commons. Given several property in a resource, each participant is incented to maximize the knowable social value of the use of that resource. This is *precisely* the problem of the commons.
And they can feel free to pass on the expense - just about everything you buy is artificially cheap because of externalities.
This is entirely true. But *by how much?* You don't know. Indeed, you *can't* know without a method of valuation, which taxation cannot provide. cf: Ludwig von Mises' Human Action
I've said it before and I'll continue to say it. Signal 11 is an idiot who needs to shut the fuck up before he exposes his ignorance any further.
You have nothing worthwhile to say. Quit talking, bastard.
"Just shut the hell up, Signal 11"
Hardly. Children dying from white lung fever, or being mamed or killed by machinery is hardly an improvement over working a family farm.
People starve when someone has the misconception that he is entitled to everything there is to have. Kings, Tsars, Aristocrats, and business owners have all filled this position.
The Industrial Revolution only ended the exploitation of children in the U.S. and England, by being so horrible that the working class faught back, after years of exploitation. They faught for that eight hour work day, they faught for child labor laws, they faught and still fight today.
Child labor exists in other countries for the same reason it existed in this one; a corrupt or oblivous Government sat back and watched it happen.
The book sounds like an interesting compilation of eco-capitalism arguments and IMHO is probably worth a read. However, the title is a disaster: "Natural Capitalism" immediately suggests "laissez-faire" or "(completely) free-market" or "unrestrained" capitalism, backed up by the usual spurious psuedo-Darwinian sociobiological arguments about "natural selection" and "survival of the fittest". In fact, the book does not appear to be about this at all - indeed it commendably appears to advocate government intervention to assist capitalists to take a rather longer-term view of life. It should have been titled "Ecological Capitalism" but that is hardly new or catchy. I suspect the title is intentionally misleading in order to try to hook the attention of people who would never look at something titled "Eco-capitalism". Like most of the people posting replies here...
AS LONG as everyone's property rights are recognized, and air and water pollution is paid for by those producing it
Of course, the problem is that it is not the case that everyone's property rights are recognized, or that our definitions of property rights doesn't really cover the environment as a whole. This is like saying that as long as everyone's property rights are recognized, all the bad blood and wasted consumer and 3rd party resources are paid for by those producing spam.
Besides, it's this fixation with money that causes people to place hard quantified values on the worth of human life, health, and happiness. When a consumer buys a Twinkie, they aren't truly understanding the full implications of the manufacturing process that went into that little snack nor are they understanding the full implications of the wrapper, left behind for next few centuries. (That is, assuming that it is left open to the air to decompose rather than buried in a landfill for eternity.) The assertion that people left to their own devices will create a utopia ignores the effects of greed, cutthroat competition, and other baser human emotions.
Perhaps Leonard Read should write a sequel about what thousands of untold hands working without restrictions can do. He should title it "I, Ethnic Cleansing."
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
Like I keep saying, Signal 11 needs to shut the fuck up. He is really detracting from my slashdot browsing experience.
Right now, trolls need to focus on destroying Signal 11.
A great book by Michael Rothschild. Rothschild notes that the roots of Darwin's natural selection theory came from his study of economics...and it makes intuitive sense that economics would have much more to do with biology than math and statistics. Capitalism is not just another economic system... it is a natural emergent quality of nature itself.
Pork is not a verb
U.S. or Canadian?
That Jesus Christ guy is getting some terrible lag... it took him 3 days to respawn! -NJ CoolBreeze
(Score:-1, Sheer_idiocy)
I will pay you $1 per year for the next hundred years, or I will pay you $5 right now.
And guess what? Any real-world company will take the $5 and run. Why? Because they are concerned about the next quarters' profit. Capitalism is a broken system. Just because Soviet Communism was even more broken doesn't change this fact.
Why do I read this drivel on Slashdot? Whatever happened to 'News for nerds - stuff that matters'? Next we'll be hearing ESR waffling on about libertarianism in a tech story. Oh, wait a minute.... You can moderate this to -10: poster doesn't give a flying fuck.
one good form of natural capitalisim would be the acceptance and use of breeder reactor technology. they produce no smog, a minimal amount of waste, and cost a fraction of what other power sources do in terms of dollars and environment (cutting trees, strip mining, oil transport, etc...), and I know people don't want to hear this - but the amount of lives lost per/kw hour is less than with any other power technology - bar none. yes - including radiation posining. (also if you use breeder - nuclear waste is only a fraction of what it is for regular nuclear reactors). - Even better, common use of breeder reactors would bring down the cost of water electrolisys - making the possibility of hydrogen (that do not pollute the air) based fuels commonplace.
Here's what he means:
Free market means that you're free to enter the market and try your skill or luck.
Free Software means something similar. You are free to get involved with large software projects without the intervention of a big company dictating its demands.
There a three ways in which markets fail to maximise welfare in the way the theory tells us that they should.
Who's theory?
I was referring to the theory argued for informally by Adam Smith and that has now been formalised into the First and Second Fundamental Theorems of Welfare Economics. The theory says that under certain conditions, free markets will lead to the maximisation of social welfare, even when the agents who are trading only care about their own welfare.
Externalities... there are positive externalities as well as negative ones. It's really the negative ones that concern us the most.
I don't see why this is true. Surely anything that affects welfare that is not governed by the price mechanism should concern us equally whether it increases or decreases welfare.
Imperfect information is a constant condition, regardless of the system.
Maybe this is true, but it is not important. What is important is how imperfect information affects welfare, and this is different under different systems.
The only question is: which system provides the best incentives to spread information? Markets have been logically and empirically demonstrated to be the most effective conduits of information exchange
In most cases, I agree, markets are the best solution. However, in some cases imperfect information can cause markets to unravel. Think of the case of buying health insurance for the old people. In this case the insurance companies are likely to know less about peoples health than their potential customers. Less healthy people will buy more health insurance than the more healthy ones, so the insurance company will increase the price of insurance. This will mean if you are healthy, there will be no reasonably priced health insurance. In case like this, markets do not work, so there is a good case (i.e. it would improve welfare) for universal health insurance for provided by the government and paid for through taxes.
The answer to these questions is government regulation.
How on earth do you reach that conclusion?
Like this: there are two types of solution. (1)Those involving unregulated free markets and (2) those that involve some government intervention. In cases where solutions of type (1) fail, try solutions of type (2) if there is a good reason to think that doing so would increase welfare. There is such a good reason, namely: correcting market distortions would move us closer to the welfare maximising situation that would obtain were markets perfect.
This is the bit of your post I agree with. I was not suggesting the complete abolition of pricing. Only intervention where prices do not reflect the approximate true value/cost in term of welfare of an action. Sorry if I didn't make myself clear!
No proposed solution for the environment could possibly be *worse* than regulation
Try this one. Suppose we abolish all property rights. In this case there would not even be an incentive to look after those parts of the environment that we had previously owned.
Yeah, the crisis is, "How do we spend it all?" And I never said I hadn't heard the term. I said it was an oxymoron. And you have the gall to question my "learnedness," when you don't even read my posts carefully before replying. You've "qouted" all kinds of things I've not actually said.
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
I.e. People screwing each other over for more money. Will 3rd world countries still exist?
Will It give bigger pay and more power to the workers? Or will it just be like current capialism, except a big coperation spins silk from spiders, instead of making a mess with toxic stuff.
Are the same people who only have money as there goal in life really going to care about the environment?
IMHO, if he thinks society is really intelligent enough to give something else a go. Why not anarchism? It would certinly be a better alternative.
But then again. I don't think society is ready to change. The only way at the moment of really changing, weather it's natural capitalism, communism, or anarchism, is to start up a community of your own with other people of similar belifs and lead by example.
Go on, folks, the whole book is posted at this site for FREE. Read it, and get some clue about what these guys are talking about before you start shooting your mouth off about how this is all radical greenie crap and they're just trying to take away our freedom.
The primary theme of the book is that it is more profitable to approach design in a manner that saves resources than it is to be wasteful. The only reason this needs to have a book written about it instead of being plain common sense is that for a long time, engineers have assumed that the law of diminishing returns can't be overcome; you spend money on efficiency, but eventually the energy and resources saved are no longer enough to pay you back for the money you spent.
But Hawkins and the Lovinses are trying to make the point that if you begin the design process with the goal of efficiency, you can end up saving money in areas you hadn't thought about before. E.g: Design a conventional house, and there's only a certain amount of insulation that it will be cost-effective to buy. But if you design a house with the intention to insulate it heavily, it turns out that you don't need to pay for as large a central heating or air conditioning system, and may not need to buy such a system at all--which saves you so much in capital outlay that your highly efficient house costs you far less than a modestly-insulated conventional house would have.
This is a very significant observation, extremely counterintuitive to most design professionals--as radical in its way as (dare I say it) the notion of commonly-maintained free software being less buggy, more reliable and more secure than software produced by major corporations.
This ain't a crypto-socialist naive Naderite threat to Our Way Of Life, folks. This book is clear-sighted, and very much worth reading.
Boy, if I'd put all my money in coyotes back in the 60's, I'd be a rich man today!
"Reactionaries must be deprived of the right to voice their opinions; only the people have that right." - Mao
First, about the idea of American Indians as environmental icons. This is idiotic. They were living with fucking stone age technology. They couldn't damage the environment if they wanted to.
Actually, the fossil record in North America shows that before the Indians came over from Asia, there were horse-like animals here on the North American continent. The Indians wiped the species out without bothering to train them for transport. They were probably good eating.
an important parallel is that both the environmental movement and the open source movement have had to fight entrenched economic beliefs by showing how the current system doesn't use the right metrics. almost all /.ers know the benefits of open source, but we all know it's been quite a battle to get the rest of the world to see those.
tech support and massive viruses are par for the course. dumping my toxic waste is the way it goes. this is normal, my bottom line looks good. both the environmental movement and the open source movement point out that this thinking is wrong, the metrics are missing important measures, and that the bottom line can be improved.
if we all use windows, we won't know any better and the computing world will suffer. if we all pollute the air with our SUV's, we probably won't think about it much and the air we breathe and ourselves will suffer. it's the same thing. open source'ers and enviromentalists are fighting different versions of the same battle.
First off, you can remove the government granted immunity from personal responsibility called incorporation away, most of the problems vanish as the major conglomerate shareholders face almost perpetual lawsuits on the losing side.
Then you can watch new problems crop up tenfold to take their place, as the rate of small business creation goes down the tubes. Running any business involves the risk that someday, your creditors (or your victorious plaintiffs) are going to take away everything you've invested and worked at. If running a business also required risking your home, your retirement savings, and your kids' college money, entrenched large businesses would be a lot more secure from those pesky startups.
Not at all. In fact, pure capitalism is both a very radical and enivornmental friendly concept. Don't forget that the free in "free market" is the same free as in "free software."
The rhetoric of freedom is just rationalization of capitalism. There's no difference, freedom-wise, between a free enterprise in pursuit of profits within the capitalist system, and between a free enterprise in pursuit of the general good in a socialist system. Actually, the socialist system is better poised to encourage innovation and development rather than what you called "short-term gains".
Several problems generally occur in the implementation, though, that work counter to the free market.
First, market participants learn that in a truly free market their profits are severely limited by competition. As a result, bad apples often try to subvert the system and establish monopolies or cartels.
Bad apples? Those are the GOOD apples. They just follow their best interests. Check out the arguments of various ultra-conservative organizations on behalf of Micro$oft, they make a lot of sense.
If we wouldn't have monopolization, we'd have the whole system collapse. Otherwise, how would this huge structure that stiffles innovation exist? Competition would drive profits into the ground.
Thanks for the candor -- I hope mine didn't come off as dogmatic either;)
... but corporations can and do fail when they don't work; governments tend to declare holidays, or declare their own exemption from the rules they would have others follow, etc. Remember, for all their PR and dishonest actions, businesses do not have guns.
When you write "But, ultimately, I believe it is neccessary for government to keep a tight rein on private affairs. There needs to be clearly defined limits of what it can do, don't get me wrong, I'm not arguing for a police state mentality, but some form of governmental control is vital," though I can't help asking, What is a police state if not government with "a right rein on public affairs"? That's exactly what I'm opposed to.
And I agree with you (to an extent, and Yes, there's a catch that I'll get to in a second) when you say "government should, and can be far more representative of the masses at large than any private capitalistic concern could ever hope to be."
True as far as it goes, but that's not far (IMO), because corporations need to sell stuff and satisfy people much more than governments do. They can cause dissatisfaction only so many times, or so much in aggregate, before they give up the fight to their competition. In fact, if you take that sentence and add the word "single" in between "any" and "private," I would agree without particular reservation I can think of right now
My ideal is a society that is (intellectually, socially, financially, etc) flexible. Who would have thought 15 years ago that Wang, Microsoft, or Red Hat would be in their various positions today? A trick question, since Red Hat is both beneficiary and promulgator of an entire free software world (that is, Linux specifically, not all Unices or free software) which didn't even exist 15 years ago. Government actions surrounding markets tend to do too much assuming that what is, will continue to exist pretty much as it has been.
That's why my favorite book recommendation on the subject is "The Future and Its Enemies" by Virginia Postrel.
Thanks for your points, hope you like reading mine.
timothy
jrnl: http://tinyurl.com/c2l8yr / foes: http://tinyurl.com/ckjno5
To flesh out Russ' example (hey Russ, fellow Potsdamite here, I'm a ugrad at CU):
Russ issues his offer to me. I now judge several things.
True free markets are nowhere near as near-sighted as you would suggest. The problem lies in the fact that there does not exist (nor has there ever existed) a true free market.
Some good reading for those interested would be "Human Action", by Ludwig von Mises and "The Ethics of Liberty", by Murray Rothbard. Both can be found at www.mises.org
Capitalism. Don't knock it before you try it. And you haven't tried it. :-)
And externalities have been repeatedly demonstrated to be the one exception to this rule. Putting aside externalities, the only definition of "social welfare" is the cumulative welfare of the individuals within a given society.
I don't see why this is true. Surely anything that affects welfare that is not governed by the price mechanism should concern us equally whether it increases or decreases welfare.
What is the problem with positive externalities? If I like beautiful rose gardens, so I maintain one in my front yard, and you sit across the street and enjoy it, this is a positive externality. If it is not internalized -- that is, if I do not erect a fence and charge you admission to my rose garden -- the result is only underproduction of rose gardens. This is only a social opportunity cost, rather than a real cost. A benefit which could have been incurred is not, but there is no involuntarily forfeited value -- I would still choose to maintain my rose garden.
But that's a damn good question! [grin]
Maybe this is true, but it is not important. What is important is how imperfect information affects welfare, and this is different under different systems.
It's imporant if you propose regulation as the solution! That's a mechanism notorious for working with information as far from perfect as one is likely to achieve!
In most cases, I agree, markets are the best solution. However, in some cases imperfect information can cause markets to unravel. Think of the case of buying health insurance for the old people. In this case the insurance companies are likely to know less about peoples health than their potential customers. Less healthy people will buy more health insurance than the more healthy ones, so the insurance company will increase the price of insurance. This will mean if you are healthy, there will be no reasonably priced health insurance. In case like this, markets do not work, so there is a good case (i.e. it would improve welfare) for universal health insurance for provided by the government and paid for through taxes.
I disagree strongly, for one simple reason: the aquisition of knowledge itself has a cost. By requiring extensive differentiation between rates for policy holders, an insurance firm is not permitted to lower its *marginal* rate by cutting costs on information gathering.
Everything an insurance company does is based on aquisition and processing of information, in the form of actuarial metrics to determine the statistical relationships between health conditions and risk of health problems. But the gathering of that information is subject to the law of returns, and eventually the information gathered about the policy holder is more expensive than the resulting savings in the risk-weighted return. How, then, can you justify spending the money? It's as wasteful as clear-cutting forests.
Like this: there are two types of solution. (1)Those involving unregulated free markets and (2) those that involve some government intervention. In cases where solutions of type (1) fail, try solutions of type (2) if there is a good reason to think that doing so would increase welfare.
I have a hangover. There are two solutions: (1) take aspirin and rehydrate myself and (2) drink more alcohol. In cases where solutions of type (1) fail, should I try solutions of type (2), even though I know that's exactly what caused the problem in the first place?
There is such a good reason, namely: correcting market distortions would move us closer to the welfare maximising situation that would obtain were markets perfect.
But how do you identify a "market distortion?" You must have information to compare to. And you run into a calculation problem there. Its Godel's Incompleteness Theorem: the calculation to predict reality is more complex than the reality itself. You can't outguess the market -- you can only let individuals voluntarily exchange value for value and observe the results.
This is the bit of your post I agree with. I was not suggesting the complete abolition of pricing. Only intervention where prices do not reflect the approximate true value/cost in term of welfare of an action. Sorry if I didn't make myself clear!
The point is that *you can't empirically know* whether the prices reflect the value/cost. You can only make that determination a priori -- which means you must do so from first principles. Economics (good econ, anyway) tells us that economic actors behave purposefully to maximize subjective value given best knowledge, and given that, ensuring the atmosphere of maximization of voluntary exchanges is the method to get that best reflection.
Try this one. Suppose we abolish all property rights. In this case there would not even be an incentive to look after those parts of the environment that we had previously owned.
You just trying to come up with something I'll think worse? Okay, yeah, that's worse. [smirk] Of course, that *is* a regulatory change.
Thanks for pointing that out. And I'm sure there are plenty of other instances of Indians "damaging the environment." My main point, though, was that Indians were not some kind of noble earth stewards who got together and decided to shun technology for the sake of the environment.
..."but the amount of lives lost per/kw hour is less than with any other power technology"...until they explode (OK, Chernobyl was, or rather, is not a fast breeder, but you are asking us to beleive that something which uses a few tonnes of molten sodium as a coolant is safe?).
Sure, it would be impossable to solve every problem. There will always be new problems. But that dosn't mean that we should give up and stick with what we've got. Gezzz... making do with something that is rather crapy when there are better alternatives sounds like something someone would say coming from a pro microsoft site. not pro open-sorce site.
Alfred Nobel did *not* declare a prize for ecomomics. This was added by the chief Swedish Bank (name?) to celebrate its centenary, IIRC, in 1963 (check please).
I can throw myself at the ground, and miss.
One word: Bobo
9 /front.htm
http://www.newsweek.com/nw-srv/talk/cover/00032
It's 10 PM. Do you know if you're un-American?
Female Prison Rape in NY
this book appears to have been ghostwritten by Ralph Nader. From what i'm reading the whole thing seems to be a sheep in wolve's clothing (i.e. - just the same old fruit cake, just rewrapped and sent back to the same people).
The ideas we're seeing here aren't really new (when taken as a whole). Love your environment and all will be well. The problem is that this has nothing to do with capitalism.
The best thing I can say is RTFM! Either grab a copy of this book (or it's predecessor Factor Four) and actually read what it has to say. Not trying to provoke a flame war here, but the post above is FUD pure and simple.
The books are about as far from a rehash of Nader or the cynical love-in described above as one can get. The whole premise of the group at RMI seems to be that for years the government has waved a stick and made empty threats to companies that harm the environment. Now RMI has come along and offered nice juicy carrots in their descriptions of short term benefits that any group of stockholders would have to love. By the way, while you're increasing your profits by 30% this year, you're also saving the planet.
As an example of how hard-headed and practical some of their advice is, here's a paraphrase from one of RMI's consumer oriented books on saving energy in your own home. "First, climb into your attic and plug any hole large enough for a cat to crawl through." A surprising number of the things they point out in Natural Capitalism seem just as obvious once you've read them.
Probably the best thing about the book though is that because it's written in terms of "here are a bunch of things you can do to increase your profits that, as a side effect, save the planet" the right people are reading it. I've personally got extra copies on order now that I'm planning on passing out to our corporate officers. If a few more of you did the same thing at your companies, I bet you'd be surprised at how happy management is to read the book.
If you're going to grab a copy, check out Hamilton Books. The hardcover edition has just been remaindered and they have it available for $7.95 (about half what amazon wants for it).
Frankly, you can expect this book to create a biref stir amoung the stock-holding intellectual set ... then drop out of sight. Because the book presents no new concepts.
Even in the review, all of the arguments presented are Reformist arguments - "Capitalism can be good for the environment with these tweaks." However, like a computer system built on a bad kernel (such as certain OS's), you can only do so much tweaking, and it's a losing battle - the inherent nature of the core system will keep swamping your tweaks (ask anyone who's tried to make "User-friendly" improvements to Windows 2000).
Fundamentally, the system of large corporate capitalism forces, by economic necessity, the valuation of short-term gains at the expense of everything else. You may observe this: even when a corporation itself (such as Pacific Bell) realises that they are wrecking their long-term goals, that corporation is patently unable to reform its internal organization to fix the problem. Thus it's unsurprising that our political system has come to mirror that process - politicians who think to the next election and no further.
Natural Capitlaism is indistinguishable from every "Liberal Solution" that has preceeded it - no different in its wishful thinking, no different in its ignorance of socio-economic history, no different in its oversimplification of political realities ... and, in the end, no different in its ineffectiveness.
-JoshWhy is it that whenever the green-left tries to embrace capitalist principles, they always end up proposing the same kind of heavy-handed top-down regulation that is the anti-thesis of a market economy?
A better book on enviro-capitalism is Peter Huber's criminally overlooked book 'Hard Green'. Or better yet, read Fredrich Hayek's 'Road to Serfdom' for the classic defense of local, market-based knowledge over top-down national regulation...
www.earthinthebalance.org
Yes. You can go off and set up the People's Republic of The South Forty (or however much land you could legitimately obtain) and regulate the industries there to your heart's content.
Of course, they would be free to leave, which I expect is exactly what would happen.
/.
/. If the government wants us to respect the law, it should set a better example.
This morning, on my way into the office, I spotted an inchworm walking on the front fender of my truck. Ya know, inchworms are so cute, the way they arch their backs up as they walk. While my truck only gets 7 miles per gallon and I drive it 40 miles every day where a boring car like a Honda would suffice, I consider myself to be an environmentalist for saving that poor little inchworm.
I placed him onto a leaf on a really annoying tree that I've been meaning to cut down for some time now. He's happy, and I get to give myself a pat on the back, because I'm a good person.
[sigh]
Anyone else see the many problems with the above?
The summary of this book, as I read it, had a lot of good ideas, as well as a lot of dangerous ones. For example, the carpet service (as opposed to carpet ownership) would represent, truly enough, a great way to ensure the quality and recyclability of a product.
But it's also pretty short-sighted. Commerce and human nature being what they are, dictates that the carpet service won't want to clean my frequent coffee spills. They won't want to vacuum up the toner that Ester has now spilled for the fourth time. The cost of upkeep to even the best carpet that money can buy - and that we'll be able to make in the foreseeable future - is just way too prohibitive. Scotchguard is a good first step, but it's not everything.
And you know that, as you come to get used to the carpet service and begin to recognize that the carpet isn't yours, aren't you less likely to take care of it?
Which means that the carpet will age faster and have to be replaced sooner. For the carpet service to continue to be profitable, no matter how wonderfully environmentally friendly the carpet may be, it will have to be replaced more frequently - incurring at least the environmental cost of the energy required to make the raw materials into a carpet, let alone transportation and installation energy.
Nope, this tactic is short-sighed and, in my opinion, somewhat more dangerous than the existing (imperfect) system.
I wish all products were built to last forever. I wish they were all easy to upgrade. I wish that they were all built of things that were easily recyclable. But that's not going to happen. I drive my 7 MPG Dodge Ram because it's a 1976 model, it's in great shape, it's built like a tank and it would take a lot to kill it. Even though it's a gas pig, it consumes a lot less energy than crushing it into a little cube and melting it down to make new Toyotas would cost. And, while the Dodge is almost entirely iron and steel so it would be easy to efficiently recycle, continuing to use it as an elderly Dodge pickup truck is infinitely less wasteful than the by-products you'd create if you went to make a couple of Echos with it. Instead, I'm doing my part by building - using re-used parts - a smaller, more efficient engine that will push my truck into the 25 MPG range. I do this because I like doing it; unfortunately, economics dictate that it would be cheaper and easier for me to purchase a new vehicle. And this is the route most people will take.
Do I think we should legislate changes? Nope. I mean, do you really want the government more involved in your life? Aren't governments - all of them - the reigning kings of waste and inefficiency? They're a necessary evil, but let's not give them more to do.
Do I feel bad about being so benign in driving a vehicle that gets 7 MPG? Nope. The petroleum and other natural resources we have are there and would be used by some natural process or another. Sooner or later all petroleum on earth would be burned somehow or another. Tree-huggers should be grateful that it's being burned in such near stoichiometric mecca as it is in a modern car engine.
Plain-old short-sighted capitalism has pushed gas-mileage ratings of today's vehicles up. And that was the work of OPEC oil shortages and other market forces, not the impact of Corporate Average Fuel Economy (CAFE) laws imposed on automakers.
In other words, the system is imperfect, but it works. Natural Capitalism, while very different from Socialism and Communism, relies on a fundamental miscalculation that has been the undoing of Marxist Utopia. Human nature is lazy. Human nature is greedy. Human nature wants something for nothing, and a quick fix at that.
Which is why I feel compelled to lump Natural Capitalism into the same boat as Communism and Socialism: they're great ideas, but don't have a hope in hell of ever working.
Finally, a quote from John Lennon:
Imagine no possessionsI wonder if you can...
Fire and Meat. Yummy.
Such as the cod fisheries off Newfoundland, where because of high tech factory ships & their accoumpanied fleet of sonar guided trawlers, the cod fisheries were wiped absolutelly clean - now the Canadian govt pays its fisherman for doing nothing. I personally think the Canadian govt should shoot them for treason, as destroying ones own enviroment like that is no different than what RAF Bomber Command did to Dresden. Now with the rest of the worlds fisheries being fished out at 7 times replenishment levels, do you think other fishermen have learned the lesson of the 'Grand Banks'
Okay. Get these or build them yourself, the knowledge of how to do them is public domain:
Small gasoline engine.
Spur gear to fit crankshaft of small gasoline engine.
Handles. Mount as convenient.
Steel sheet, maybe 1/4" thick, cut into outline of chainsaw blade. Mount engine to steel sheet using small machine screws and bolts. (Don't forget lockwashers!)
Chainsaw chain. Basically, bicycle chain with an attitude. Mount it around the outline of the steel sheet; cut and splice the chain so that there is less than a 1/8" slack for every foot of chain in the loop as you pass it around the spur gear on the engine. Double-check to make sure that the chain isn't loose (which could result in nasty bugs, including possible interruption of other system processes (like eating, breathing, beating of heart, etc.)).
Congratulations! Open-source chainsaw. Modify basic design as you will. Feel free to improve on this design.
(This open source chainsaw covered under the terms and provisions of the GNU Public License.)
Fire and Meat. Yummy.
Of course, you can continue to disagree if you like, but if you'd like to see some data and application take a virtual visit back to our alma mater's experimental econ lab or maybe look around at the competition in arizona.
Neat stuff. The Caltech lab eventually got seriously involved in influencing policy about auctioning the airwaves, in electricity trading for California, and in pollution markets with SCAQMD. A lot happened since we were undergrads.
Now, I will grant you that the lab has revealed that individual choice is fubared, as is quite a bit of game theory. But markets work pretty much like the textbooks suggested they did.
Paul J. Brewer
Caltech b.s.89 fizz-sucks/ph.d 95 ec0n
The citizens in the countries are left to decay in the choices of their leaders and the desire of the world rulers.
Perhaps they should change their rulers...
The conditions imposed on these countries usually lead to a deep cut in social spending (education, health, public transportation and other services) and a shift to a mainly export-based economy.
Without an export economy, most developing countries have no economy. Where is all of this money for social spending going to come from?
I'll be the first to admit that the pseudo-government controlled world lending organizations are a crock. If there is a chance a loan might be repaid, private financial markets will be capable of making a loan. But we forget that the World Bank/IMF/IADB/etc. came into being because pseudo-socialist governments of developing countries restricted foreign capital investment in their counties unless it was through these "special" loan organizations, and big suprise, a lot of that loan money ended up in the hands of the psuedo-socialist leaders and friends.
As a result of this, these countries have crushing debt. However, until they kill their dictators or manage to not vote away their democracies, nothing is going to change.
Do you want to see a developing country doing well? Look at El Salvador. After the end of the civil war supported by the US and USSR, inflation has fallen, and exports have grown substantially. It is a working multiparty democracy. GDP has tripled, literacy is up, life expectancy is up. If the US dropped its textile protections, El Salvador would be doing even better.
Your handful of stock shares DO make you part of the investment class. Almost 70% of the stock market is owned through pension funds and mutual funds.. that is, the "worker class". oops.
-Stu