Environment & the World

Thursday, January 4, 2007

Reading Group: Natural Capitalism, Ch. 1

In this first chapter, “The Next Industrial Revolution,” Hawken and the two Lovinses (H&L) give us a brief history and description of capitalism, point out its shortcomings, and from there sketch out their outline for a new industrial revolution to correct the situation.

Their description of capitalism and the problems that arise from it seem on the mark. In fact, much of it echoes the concerns we’ve already voiced in our threads about environmentalism and economics. Essentially, H&L argue that natural capital (meaning the resources and living systems that make life possible) is on the decline, and that the problem with the current capitalist paradigm is that it fails to value natural and human capital. Moreover, they outline several reasons why simply assigning a monetary value to natural and human capital is neither straightforward nor enough of a corrective measure. H&L hit a high note when they point out that the fallacy in contemporary and past economic theory assumes “that natural and human capital have little value compared to final output.” This assumption worked when labor was scarce and natural capital was abundant. They argue, however, that we now face the opposite scenario in which labor is abundant and natural capital is on the decline–we therefore need a new type of economic theory to effectively address these changing conditions.

H&L’s “natural capitalism” attempts to be just that. They propose a natural capitalism based on four main strategies: resource productivity, biomimicry, service and flow, and investing in natural capital. While these four categories bubble with exciting ideas, many of them come from the stock of ideas that have been floating around in the environmental movement for quite some time (or are they the originators of some?). Their main points are that the current industrial model is quite wasteful: according to H&L only 6% of material flows in the U.S. economy end up in final products (p. 14). Their solution, then? To increase our efficiency, to improve productivity, to waste fewer resources, to remove “vestigial subsidies” that promote inefficient processes, and to correct “deliberate distortions in the marketplace” that favor extracting virgin materials over recycling.

H&L also envision a new business model in which companies retain ownership of their products and instead of selling them, lease them to customers. Because companies would own their products, and therefore be responsible for repairs and disposal, H&L hope that this would inspire a new kind of corporate benevolence. They believe that it would then be in the company’s best interest to reduce the toxicity and improve the recyclability of their products. Furthermore, H&L argue that this would encourage companies to develop more efficient processes which also would create more jobs.

Although the book indeed teems with exciting ideas that make it appear as though the solution to our environmental woes could be right around the corner, at times H&L eschew grappling with underlying sociocultural complexities in favor of focusing on the possibly rosy outcomes of their technocratic and business model fixes. Perhaps this becomes most evident on page 20 where they write, “Societies need to adopt shared goals that enhance social welfare but that are not the prerogatives of specific value or belief systems.” H&L profess to a sort of neutrality when, perhaps, they overlook the fact that the very notion of social welfare itself is ideologically bound by the dictates of a particular value system. In fact, in the U.S.A. the very mention of “social welfare” in certain prominent circles immediately elicits cringes and recalls socialism, which thanks to the Cold War, is still an almost taboo topic in dominant sociopolitical discourse. Others see many social welfare programs as impediments to business growth. A quick glance at the state of social security and healthcare in the U.S.A. also suggests that the social welfare H&L likely would favor is not high on the list of U.S. priorities; and it is this state of affairs that arises precisely from a very specific set of values and ideologies that have taken hold here over time. What I mean to argue, unfortunately, is that enhancing social welfare is not a task that can be undertaken without mobilizing particular value systems. What one defines as a sufficient level of social welfare depends upon, derives and flows from ones political, ideological worldview—it is not necessarily a universal standard.

Finally, one could envision a society that has adopted the dictates of “natural capitalism,” and in which the rich are still getting richer and the poor are still getting poorer. While these ideas may indeed be good for the environment, they do not imply shocking improvements in social welfare. In discussing resource productivity and biomimicry, for example, H&L fail to cite the harm that may arise if corporations proceed to copyright, patent, and privatize highly efficient natural processes, which would then be appropriated for corporate profit rather than for common good. Even the bright idea of service and flow has a potential pitfall, for in our society there is a type of freedom that we associate with outright ownership. Depending on the fees of the companies, if we leased our stoves, washing machines, cars, toilets, air conditioners, TVs, etc. over the course of our lifetime we might potentially go bankrupt on monthly payments.

I don’t mean to start out this first reading group experiment on a highly critical note. On the contrary, I hope that H&L will debunk or assuage the severity of some of these critiques as we read on. While this book may recall some of the tensions that we debated in our threads about environmentalism and economics, it is still worth reading if only to become even more aware of the brilliant and practical ideas that already exist.

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1 Comment »

  1. Good article. Can’t wait to read more articles about this topic.

    Comment by rockwell review — Sunday, May 16, 2010 @ 9:56 pm


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