Thursday, October 04, 2007

Solutions: "Natural Capitalism"?

At the outset of this blog, I wrote that we not only need to name the problems in our society and world, but we need to offer visionary solutions that are proactive and concrete. One of the massive problems we face today is a global economic system that produces vast inequalities and destroys the environment. My good friend Justin Kemerling is a big fan of "natural capitalism," a set of ideas put forth by Paul Hawken, Amory Lovins, and L. Hunter Lovins. At their website, they write:

Most businesses still operate according to a world view that hasn't changed since the start of the Industrial Revolution. Then, natural resources were abundant and labor was the limiting factor of production. But now, there's a surplus of labor, while natural capital - natural resources and the ecological systems that provide the vital life-support services - is in decline and relatively expensive. The next Industrial Revolution, like the first one, will be a repsonse to changing patterns of scarcity. it will create upheaval, but more importantly, it will create opportunities. Business must adjust to these new realities. Innovative companies are already doing just that. They're profiting and gaining decisive competitive advantage - and their leaders and employees are feeling better about what they do, too. They're the vanguard of a new business model: "natural capitalism"

Here is their website:
Natural Capitalism

Here is an article from Mother Jones:
Mother Jones article

A more comprehensive report on "natural capitalism" from the Harvard Business Review can be found in pdf format at the Wikipedia site on the subject:
Harvard Business Review article

Natural capitalism has its critics, particularly among progressives and environmentalists. For example, a reviewer in FEASTA Review, a journal of economic sustainability, writes,

Perhaps the most widely discussed recent book on the transition from a wasteful, unsustainable economic system to a more sustainable one is Natural Capitalism.. Unfortunately, the book is deeply flawed because, like most US books of its type, it pretends that the transition will be so highly profitable that the market alone will bring it about and that government regulation and legislation are unnecessary. Surprisingly, it maintains this position despite an excellent chapter on the ways in which markets can fail.

Here is the whole review:
FEASTA Review review

Here is another review by William Greider, a brilliant progressive economic journalist:
Greider review

Can, as the authors of Natural Capitalism claim, "business strategies built around the radically more productive use of natural resources... solve many environmental problems at a profit"? Or, is this wishful thinking, having our cake and eating it, too?

What do you think? Is this the best viable alternative to the current version of global capitalism? Or, is it a utopian pipe dream as some critics suggest?


  1. Hey Justin,

    If you're readin', maybe you could post a brief comment explaining why natural capitalism appeals to you...


  2. Well yes Patrick, I am reading, and I would love to provide a comment.

    I do like the ideas behind natural capitalism. And with Naomi Klein's The Shock Doctrine being recently released, I guess I'm thinking more of our next system of markets & how government's interact with them. Because yes, the Industrial Revolution brought us many advancements, but it's a one time model. It cannot be duplicated or continue as is without completely destroying the planet.

    So, there needs to be something new. And for me, it is quite apparent it isn't either market or government. Not purely socialist, not purely capitalist. It is the mix.

    You see this with major corporations like GE and Dupont who are pushing green technologies and asking for federal regulation. Asking for help from the government to get where they see business needing to go.

    Markets are flawed. Governments are flawed. And what we have in America is the best the world has seen—so far. We aren't done. And Hawkin's books talk about the push toward the next. The sustainable, which current capitalism doesn't grasp.

    I went to the Bruce Mau Massive Change lecture last evening, where he talked about the welfare of the human race as a practical objective. And if we're talking the welfare of the human race, capitalism cannot accomplish that. If it could, the U.S. health care system wouldn't cause the harm that it does as profit runs rampant across the lives of everybody in this country.

    We need to redefine. Rename. Make our sustainable world now, using the best of the ideas we have seen to this point, fusing them together into a wonderful new project that will create a wonderful new world.

    And yes, we will. We don't really have another choice.

    Great interview from WorldChanging Paul Hawken, Bill McKibben on Blessed Unrest and Deep Economics

    The 2 new books from each:

    Blessed Unrest explores the diversity of the movement, its brilliant ideas, innovative strategies, and hidden history, which date back many centuries.

    Deep Economy The Wealth of Communities and the Durable Future.

  3. Justin,

    I hear you on the broad strokes, but I guess I am still skeptical of this plan on the particulars. These folks seem to name the problem very well, but I am still not fully sold on their solution; again, it seems they want to have their cake and eat it too. They seem to want to say to sapitalists, you can still be capitalists and greedy and hyper-selfish AND we you can be Green AND PROFITABLE. I agree that the solution involves a mixed economy, but these guys are very light on the regulatory side of things. They seem to suggest, through what appears to me to be overly rosy glasses, that a kind of enlightened businessperson/practive will emerge. But, as the FEASTA essay suggests:

    "The allure of this argument [Natural Capitalism] is indeed compelling for it banishes the doom and gloom merchants to their dismal cellars; but it is misleading, for there is one thing they have over-looked: human greed. The evidence is that when you get more from less, you just take advantage of the slack. Economists call this the 'rebound effect', and it is well documented. Is it significant that neither 'rebound effect' nor 'thermodynamics' appear in the index of a book that is astonishingly rich in allusions to energy?"

    I guess I simply believe that capitalism has its own internal amoral logic that promotes greed (the profit motive) over ALL ELSE. As such, the only way to change it is through a kind of force. Businesses must be compelled to treat workers well, treat the environment well, etc. History is clear on this point, I think. Businesses ALWAYS seek the bottom line and a competitive advantage, meaning MORE PROFITS. So, I guess I still believe you need a much more vigorous regulatory apparatus, that is democratically overseen (small 'd' democratic, not big "D" Democratic).

    One of the things that immediately raises my skepticism is that when you dig into these authors, you find that they are darlings on the mega-corporate lecture/seminar circuit, making thousands and thousands of dollars per speech telling corporate execs what they want to hear: that you can make this transition and not have to really have any painful change in your base habits. That power won't need to really be altered in a fundamental way...

    I'd be interested to hear your response to the crtiques offered in the two articles I posted, or to the issues I've raised here.

  4. Where does the alternative come from then? Do we just scrap everything and start over?

    I'm sorry, but I see Greider's "profound" end-all be-all argument of, well what about "human greed" as laughable. (If it isn't followed with dom-dom-dom-dom, well it probably isn't greedy enough.)

    I think we both understand what capitalism does. It makes profits. That's all it is around to do. By law. That's it. Everything else is secondary. However grotesque that may seem to both of us, it is what we are living in.

    How do we take the approaching calamity of environmental disaster paired with a weakened U.S. labor force due to the exporting of jobs and make it work for what we are sure to be faced with in the next 10 years?

    My understanding of these authors and of other reading on the subject, is that our environmental outlook does require a shift, and damn it, it is a large shift.

    But I also have no time for the doom and gloom. What about human ingenuity? What about human intelligence? What about human empathy? What about human solidarity? What about all we have accomplished under the huge problems that we faced? We didn't need the go ahead from governments or corporations for the advancements we've made in this country.

    What about the human capacity to change? Perhaps we'll come to the realization in the next 10 years that corporations as they exist today are not only unjust, but are extremely limiting and prone to self-destruction. And as institutions, they will be reworked.

    That is what Natural Capitalism does. It adds on to the movement to fix what we have and be ready to move head on to seize the opportunities we are presented with and to solve the problems that face us.

    Finally, how do we make government work again? Because under Bush, you really don't want it touching anything, for fear it might explode into thousands of tiny little pop-rocks scorching blisters into your tongue.

    If we are faced with nobody trusts government, nobody trusts corporations, well then what?

  5. Again, Justin, I share your optimism that humans CAN make change (that is what I study, teach and write about), but corporations WILL NOT DO IT ON THEIR OWN WITHOUT BEING FORCED. That is a clear lesson from history. How did we get safer work environments? minimum wage laws? civil rights acts? etc.? Massive social movements compelled government institutions to REGULATE THE ECONOMY and FORCE corporations to do things they DID NOT WANT TO DO!!!!!! The history of the last 30 or so years has been large corporate interests and wealthy individuals fighting back and destroying what was gained by those movements. So, consciousness shift, yes. Massive social movement, yes. But, corporations will not change without being compelled. I think it is really silly to think a bunch of corporate barons will suddenly wake up to these issues and go against the grain of the entire system they set up.

    Yes, the task is daunting, massive, and overwhelming. But, "massive change" is what is called for, I think.

    By the way, the "doom and gloom" is already here. We live in it. It is happening. Grieder has a career of being pretty good on these issues... He is doom and gloom about THIS SYETM and its implications, not an alternative democratic future. He writes very eloquently about that stuff, in fact.

    As I posted last night in the new entry, government is not inherently good or bad. It all depends on who controls it and to what end it is put. So, corporations and welathy individuals now control it, so it works for their ends. In my mind, the reform that must take place before all other reforms is public financing of campaigns. Get the influence of private welath out of our public elections and we will see dramatic new possibiloities for change. Invigorate democracy and other changes suddenly become possible. So, I suggest focusing there first...

  6. I feel I need to clarify. I am extremely distrustful of corporations & the "wonders of the market." Left in the hands of the private sector, our nation would be sucked dry. No jobs, no space, no choice, (see No Logo) and no health care, no environmental protections, no human rights, and on and on.

    However, in our moving forward, they can play a helpful role. They can change things on a large scale. Can help back up the charge. So if the people can make a compelling argument for practical reasons that corporations can move their business practices to be in line with true-cost, well that is a good thing and could offer assistance to social movements to make our democracy actually be representative. Even help pressure a disillusioned government that thinks socialized & regulated anything is like eating breakfast with the devil.

    Doom and gloom is definitely already here, it's all around us, because it is the weapon of the enemy. Fear and worry, doom and dread, be scared, hunker down and don't come out of your cave. That is what is put out on the populace from the media propaganda machine.

    In order to keep our mental state focused on the goal, a more just and hopeful society living in harmony with the world around us, we need to keep from getting cynical. It just slows us down.

    I do like your focus. "Invigorate democracy and other changes suddenly become possible." Yes, I like that.

  7. I hear you, Justin.

    Here is another proactive solution: change corporate charters. Corporations are legal entities, chartered by government. We COULD change their charters to mandate such things as community representation or worker representation on their boards, make it harder for capital to bail on cities after they have been used all up, etc. Most folks don't realize this dynamic of corporate America and of democratic oversight.

    Also, everyone should see "The Corporation."

  8. Yes, an excellent documentary. One I just finished that I think you would like is "The Power of Nightmares" by Adam Curtis done for the BBC.

    Simply put, astonishing.

  9. Thanks for all the fodder, guys.

    Patrick, I challenge your closing question. I don't think that Slesser (FEASTA author) and Greider are suggesting that the Natural Capitalism guys are smokin' the utopian pipe. Both of those reviews are extremely complimentary to the book, even if they are also trying to "take the edge off of the optimism," as Greider puts it. Greider and Slesser both want this book to be read and debated.

    I'd rather engage in the question "what will get more people to talk about things that are in this book (and its critiques)." We need to rebuild a civic culture that actually believes that the discussion is at least somewhat as important as the Spectacle of the week.

    (PS I can tell that I share a lot of the Natural Capitalism aesthetic -- I'm kind of a Stewart Brand/Whole Earth groupie and I know all these guys are in league. I know I tend to wear the rose colored glasses myself.)

    (PPS Not that Patrick is a member of the media spectacle-makers... but if you didn't see it, last night's Colbert Report interview with George Saunders is very germane to the underlying problem. And of course, Colbert plays it perfectly!)

  10. Joe,

    That was my language. I hear you, but I do think several reviews criticize NC for what they see as a naive faith that businesses will "see the light" and change their ways without a stern regulatory apparatus. I think I agree with them on this point. It is not that these companies are "evil," it is that the internal logic of the system of capitalism leads to a narrow focus on profits over all else. even when one or two companies doers something enlightened, as soon as a competitor undercuts them to gain advantage, they abandon the reform to pursue profits. My dad, who is an organizational behavior consultant has seen this happen a million times...

    I share the positive faith that solutions are available to us, IF we muster the external political will to put creative new ideas/policies into practice...

  11. I recently came across this blog post from January which ascribes to Obama's campaign a lot of faith in markets. Patrick, this seems kind of at odds with your support of Obama.

    Have you read that commentary? I'm not trying to catch you in a contradiction or anything; I'd just be curious to hear what you think.