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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
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.
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
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.
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
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.
Adbusters' article on "Ecological Economics".
Stay up hacking each weekend. Sleep is for the week.
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
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.
Naturalism
Reduce, Reuse, Recycle
Where is Reinvest?
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
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
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.
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
Capitalism's worst flaw is that it externalizes its problems. The environment is an all but too well-known example of this. Why properly dispose of waste products when you can dump them in international waters? Even if you are caught the fines amount to less than the proper disposal would have cost! This is happening even in the US' version of capitalism!
As a consumer and an environmentalist, you have to power to reward those companies.
Oh, so I should be happy with a volvo when my neighbor can use the cost offset of not buying enviro-friendly products to go buy a porsche? Great solution there! You might convince me of that, but not the 300 million other people who live on this slab of earth we call the United States.
Capitalism and environmentalism can have healthy happy marriage if capitalism places a higher value on the natural environment being healthy and free of pollutants.
I think you mean the consumer. And no, because people follow the path of least resistance. The problem is not convincing the individual - with enough education that is possible. It is convincing society at large, people who are more than willing to ignore truths to have material and personal gain. It's a big, anonymous system out there - who's gonna complain if I buy styrofoam cups instead of wax ones? Nobody. Zero social incentive. Plenty of monentary incentive though.
First though, we need to believe that the systems works (i.e. not spout FUD).
I'm sorry, but as an engineer any system that doesn't work on its own merits is not worth consideration. I'm not about to start believing in supernatural beings and praying for my next chip design. I treat ideas the same as I would anything else: by looking at the empirical evidence. Right now, there are very strong indications that the environmentalists are losing the war against capitalism. I rather doubt this book will change the balance much. To use your own dialect: the free market has spoken.
In 1998, how much of the free market believed that Linux would never be able to compete with MS?
The free market doesn't think. The people who are in it do (well, this may be an overstatement, but bear with me). And the vast majority of those people used Microsoft products. The vast majority still do. So if free market = consumers, then their position still hasn't changed. "Linux, what's that? Nah, won't catch me using it."
I reaffirm my position that capitalism and environmentalism are at odds with each other fundamentally. You can't reconcile them and still claim to be a member of both.
This is not an attribute of the market itself, but of the legal structure in which it exists. Many free-market advocates are fans of strict liability which would internalize those externalities. The process is not hard -- just remove the tragedy of the commons incentives through privitization.
Oh, so I should be happy with a volvo when my neighbor can use the cost offset of not buying enviro-friendly products to go buy a porsche? Great solution there! You might convince me of that, but not the 300 million other people who live on this slab of earth we call the United States.
If the externalized costs of resource wasting are internalized within the market, then there *is* no cost offset by buying non-enviro-friendly products. In fact, they would become more expensive relative to the value placed on the potentially wasted resources.
I think you mean the consumer. And no, because people follow the path of least resistance. The problem is not convincing the individual - with enough education that is possible. It is convincing society at large, people who are more than willing to ignore truths to have material and personal gain. It's a big, anonymous system out there - who's gonna complain if I buy styrofoam cups instead of wax ones? Nobody. Zero social incentive. Plenty of monentary incentive though.
You're half-right. It's a *systemic* change that is required. Not because of anonymity, but because of liability and accountability. No other mechanism devised by man has yet provided as effective a means of resource allocation than the market. But it is defined by the legal structure in which it exists. And as long as we have the US Department of the Interior allocating rather than individuals and corporations with vested interest in the property, we'll have more of the same.
Right now, there are very strong indications that the environmentalists are losing the war against capitalism. I rather doubt this book will change the balance much. To use your own dialect: the free market has spoken.
They are fighting the wrong battle. To the extent that the market is the problem, it is also the solution, by allowing the internalizing of those externalities.
I reaffirm my position that capitalism and environmentalism are at odds with each other fundamentally. You can't reconcile them and still claim to be a member of both.
Perhaps, but only because the defenders and detractors of each don't understand the argument.
see http://environmental.networkroom.com/
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."
Actually, while I am no great proponent of the class-war paradigm, I find the above statement completely wrong. Who cares if people change sides? The rich still try to get richer at the expense of the poor, and the poor still try to elevate themselves into a higher income bracket. That's what's referred to as a class war.
What effect does this have on a society? It simply comes down to a Rawlsian ideal of justice. Would you rather come into this world in a society everyone was reasonably well off, or would you rather come into a society in which there are small number of super-rich, and a large number of people living in abject poverty?
Does it make a big difference if there is a little mobility? I think you overestimate the ability of the average person to "change sides," as it were.
--
share and enjoy
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.
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.
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.
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?
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").
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.
What's interesting about this is that even in the limited world of a two-dimensional problem with money on one axis, and something on the other, when experiments were conducted using real students who could win real money in the experiment, plotting the results of the experiment looked like you took the graph with a line drawing of the optimal solution, put it on the firing range at 100 yards, handed some blind guy a shotgun, and have him fire a blast at the graph. That is, the experimental results only loosely clumped around the optimal result.
Granted, this is in part because you're dealing with college kids who frankly don't care that much if they win $20 or $50 for an evening's experiment. But it also largely has to do with the fact that the optimal solution (where you'll maximize your cash, for example) is often difficult to figure out.
And that's on two axis. Try scaling up to the multiple dimensional problem of the real world, and scaling up to players with varying philosophies as to how much beer and how much pizza makes them happy...
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.
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.
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.
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?
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).
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.
The experiments I was refering to were conducted in the mid 80's, while I was there at 'Tech. Most of the experiments tended to be multiple two-player senarios, or on occassion three-player senarios, played out repeatedly. Mostly game theory stuff, not the computer-tallied economic models in the web site you provided.
Actually there are some exciting results coming out of Caltech's economics studies in the last few years on the macroeconomic front. On the microeconomic front, though, that's mostly game theory--and that's what I was refering to, mostly.
One interesting result I recall seeing in a seminar I dropped into a few years ago was a study of the market. And basically they were saying at the time that the stock market boils down to chaos theory--that it's extremely chaotic, owing to the speculative nature of the market.
However, my original comment was in responce to an explanation of utility functions, which are basically the class of optimal solutions to N-player games--the very stuff the Caltech folks realized recently is all fubared.
(Forgive me if I screwed up some of my explanations of this stuff--it's been years since I took an economics class or did anything related to game theory.)