The Ecology of Commerce, A Declaration of Sustainability – by Paul Hawkin

Preface

The question is, can we create profitable, expandable companies that do not destroy, directly or indirectly, the world around them?

Corporations, because they are the dominant institution on the planet, must squarely address the social and environmental problems that afflict humankind.

If every company on the planet were to adopt the best environmental practices of the “leading” companies, the world would still be moving toward sure degradation and collapse.

To create an enduring society, we will need a system of commerce and production where each and every act is inherently sustainable and restorative. Business will need to integrate economic, biologic, and human systems to create a sustainable method of commerce.

Asking people to reduce consumption without increasing employment will create a world as destructive as the one they would replace.

Humans want to flourish and prosper, and they will eventually reject any system of conservation that interferes with these desires.

Government, business, and environmental organization cannot create a sustainable society. It will only come about through the accumulated effects of daily acts of billions of eager participants.

The urge to create beauty is an untapped power, and it exists in commerce as well as in society.

Our human destiny is inextricably linked to the actions of all other living things. Respecting this principle is the fundamental challenge in changing the nature of business.

Chapter 1

The ultimate purpose of business is not, or should not be, simply to make money. Nor is it simply a system of making and selling things. The promise of business is to increase the general well-being of humankind through service, a creative invention, and ethical philosophy.

Making money is, on its own terms, totally meaningless, an insufficient pursuit for the complex and decaying world we live in.

Business people must either dedicate themselves to transforming commerce to a restorative undertaking, or march society to the undertaker.

We have the capacity and ability to create a remarkably different economy, one that can restore ecosystems and protect the environment while bringing forth innovation, prosperity, meaningful work, and true security.

Standing in the way of change are corporations who want to continue worldwide deforestation and build coal-fired power plants, who see the storage or dumping of billions of tons of waste as a plausible strategy for the future, who imagine a world of industrial farms sustained by chemical feed-stocks.

The restorative economy envisioned here unites ecology and commerce into one sustainable act of production and distribution that mimics and enhances natural processes. It proposes a newborn literacy of enterprise that acknowledges that we are all here together, at once, at the service of and at the mercy of nature, each other, and our daily acts.

We have decimated 97% of the ancient forests in North America

Every day farmers and ranchers draw out 20 billion more gallons of water from the ground than are replaced by rainfall

The Ogallala Aquifer, an underwater river beneath the Great Plains larger than any body of fresh water on earth, will dry up within 30 to 40 years at present rates of extraction.

Globally we lose 25 billion tons of fertile topsoil every year.

These critical loses are occurring while the world population is increasing at the rate of 90 million people per year.

The land, water, air and sea have been functionally transformed from life-supporting systems into repositories for waste.

The immune system of every unborn child in the world will soon be adversely and irrevocably affected by the persistent toxins in our food, air and water.

Although the essential nature of commerce has not altered since the very first exchange of coin for corn, the power and impact of corporate capitalism have increased so dramatically as to dwarf all previous forms of international power. No empire – Greek, Roman, Byzantine, British, or any other – has had the reach of the modern global corporation, which glides easily across borders, cultures and governments in search of markets, sales and profits.

One hundred years ago, industrial cities were coated with grime and cut off from the sun by permanent palls of smoke; the citizens were beset by disease; the very conditions under which workers toiled and died were inhumane and exploitative.

The dilemma that confronts business is the contradiction that a commercial system that works well, by its own definitions, violates the greater and more profound ethic of biology.

The act of doing business carries with it ethical import, so given the dominance of business in our time, we must ask the question: How do we want our principal economic organism to conduct its commerce?

Business must judge its goals and behavior, not from inherited definitions of the corporate culture, but from the perspective of the world and society beyond its self-referential borders.

If business is prepared to reexamine its underlying assumptions and listen to ecologists, botanists, toxicologists, zoologists, wildlife management experts, endocrinologists, indigenous cultures, and victims of industrial processes, without the selective filter of its internal rationale and biases, it will not only fulfill its own agenda of contributing to society by providing products, jobs and prosperity, but also initiate a new era of ecological commerce, more promising and ultimately more fulfilling than the industrial age that preceded it.

While business teaches us effective forms of human organization, environmental science reveals that those forms do not necessarily preserve the natural resources that are the basis of our well-being.

The extraordinarily complex manner in which a company recovers profit is reduced to a single numerically neat and precise concept. It makes no distinctions as to how the profit was made. In other words, business does not discern whether the profit is one of quality, or mere quantity.

Business has three basic issues to face: what it takes, what it makes, and what it wastes, and the three are intimately connected. First, business takes too much from the environment and does so in a harmful way; second, the products it makes require excessive amounts of energy, toxins and pollutants; and finally, the method of manufacture and the very products themselves produce extraordinary waste and cause harm to present and future generations of all species, including humans.

The only input into the closed system of the earth is the sun.

Nature depends on diversity, thrives on differences and perishes in the imbalance of uniformity.

The single most damaging aspect of the present economic system is that the expense of destroying the earth is largely absent from the prices set in the marketplace.

Chapter 2

At the present rate of extinction – estimates range from 20,000 to over 100,000 species every year – we may lose 20 percent of all the species on the planet within the next twenty to forty years, most of these in the tropical rainforests.

The loss of evolutionary potential is being called the “death of birth.”

We will face what naturalist Jack Turner calls the “final loss” – that point in the not-too-distant future when environmental degradation on the planet will no longer require our active participation.

If capitalism has one pervasive untruth, it is the delusion that business is an open, linear system: that through resource extraction and technology, growth is always possible, given sufficient capital and will.

Ever-expanding abundance is not a theory based on science, or history, or nature. It is based solely on self-interest.

“Moral outrage should result from the dawning realization that we are destroying the capacity of the Earth to support life and counting it as progress, or at best as the inevitable cost of progress,” writes Herman Daly, economist at the World Bank.

The commercial acts that would lead us away from runaway economic devastation, although sound in the principles of nature, are unsound by the standards of economy.

It is precisely in the discipline imposed by the limitations of nature that we discover and imagine our lives. It is only in the fullest context of the world as it is presented to us, and not as we manipulate it, that we may celebrate our humanity and create true prosperity.

Chapter 3

The biosphere represents our source of wealth. It is the capital which we draw down to support our lives. Whenever we pollute or degrade that system with toxins or waste, we are destroying our natural capital and reducing our ability to sustain our civilization.

Hazardous wastes are the result of a liner system in which the end products of resources and energy inputs are neither cycled nor returned. Nature is by definition cyclical; there is virtually no waste in the natural world that does not provide food for other living systems.

The number of tumor found in St. Lawrence belugas is “unheard of in any marine mammal on the planet.”

This combination of chlorine and hydrocarbons is known as the organochlorine family of compounds.

As long as the environment does not detract from or restrict growth, environmental needs are admissible.

Today, every toxin, every heavy metal, every organochlorine has a champion, a company or an industry that fights fast and furious for its sake.

Farmers who use herbicides have six times greater risk of contracting certain types of cancer, and children in homes that use pesticides have a seven times great chance of contracting some form of leukemia.

Anytime a system creates by-products that harm rather than further life, it is a form of waste, and by definition, it is uneconomical. An enduring and true economy does not create waste.

We will have environmental success as a nation when we have eliminated most, if not all, toxic substances.

What is good for the balance sheet is wasteful of resources and harmful to life.

“The basic structures and functions of our bodies are nearly identical to those of eagles and seals, all the way down to the molecular level.” Dr. Karl-Henrik Robert, creator of the Natural Step process.

Whenever we introduce synthetic toxins into the biological process, regardless of the intent or original application, we are changing a cyclical process to a linear one.

The Natural Step is trying to achieve a level of discourse that arrives at truths that are valid for everyone so that viable policy and action can result, policy and action that can be almost universally supported and embraced.

Chapter 4

To move ahead to a restorative economy, the industrial corporations of the world must change to meet the world’s needs, not the other way around.

3M’s 3P plan (pollution prevention pays) created incentives for the technical staff to modify product manufacturing methods so as to prevent hazardous and toxic waste, and to reduce costs.

Now known as 3P Plus, the plan requires the incorporation of environmental issues on all levels of business planning and is used as a factor in employee performance reviews.

Industrial Ecology, coined by Robert Frosch and Nicholas Gallopoulos in 1989 Scientific American article entitled “Strategies for Manufacturing.”

Imagine what a team of designers could come up with if they were to start from scratch, locating and specifying industries and factories that had potentially synergistic and symbiotic relationships.

A cyclical, restorative economy thinks cradle-to-cradle, so that every product or by-product is imagined in its subsequent forms event before it is made.

Designers must factor in the future utility of a product, and the avoidance of waste, from its inception.

Only when the incentives to continue the manufacture of waste are removed, and only when the risks and costs far outweigh the gains and profits, will designers, engineers, chemists, and investors turn their attention to safer alternatives.

In a restorative economy, the least expensive means of manufacturing a product should also be the most environmentally benign and constructive means. Until this is so, there is an inherent design flaw in business: being “economic” and being sustainable remain in conflict and at odds.

Chapter 5

Markets are superb at setting prices, but incapable of recognizing costs.

Markets arise spontaneously, separate from philosophy or religion or political belief, as the perfect mechanism for fostering trade everywhere in the world.

The primary freedom of the modern, global marketplace is to grow unremittingly, regardless of the consequences to the environment or society.

Markets are the place at which production becomes consumption, but at present they do not recognize the destruction and waste caused by that production.

Because markets are a price-based system, they naturally favor traders who come to market with the lowest price, which often means the highest unrecognized costs.

In order for any type of commercial ecology based on market principles to function, it will require that resources be available on a sustainable basis, that is, using the resources to supply the needs of one generation in a manner that does not compromise the ability of future generations to fulfill those same needs.

Where harm and suffering exist because of market dealings – when the real costs of that market are not factored into the price of goods and services – we require the government as representative of citizenry to step in to prevent those abuses, one way or another.

What we do know is that if we burn most of our remaining coal, oil and gas reserves over the next five hundred years, we will increase carbon dioxide not by a factor of two, but by a factor of ten, and scientists do have a description for this level of global warming: Venus.

Competition in the marketplace should not be between a company wasting the environment versus one that is trying to save it. Competition should be between which company can do the best job in restoring and preserving the environment, thereby reversing historical price and cost incentives of the industrial system that essentially send the wrong signals to consumers.

Chapter 6

The measures we use to determine which companies get our money is completely removed from how those companies affect human and natural life.

International economic advantage goes to the company that is best able to externalize environmental and social costs; companies that internalized those costs and take full responsibility for their environmental impact operate at a disadvantage. (paraphrased)

Big corporations take care of what they know how to take care of, and that is other big things: factories, mass markets, mass production. In this respect, corporations are the opposite of nature.

The most well-meaning of businesses, whatever its size, cannot restore society or the environment if it neglects the small things that need caring for.

Chapter 7

For every right we assume, there is a corresponding responsibility, and if those responsibilities are consistently breached by corporations, then it is the public’s role to impose those restraints through law.

It is granted that a well-run business is one of the most efficient forms of human endeavor, but we must also acknowledge that a poorly run corporation has the power to be one of the most dangerous forms of human activity ever invented.

Business is correct to defend its right to act in order to produce a vigorous and engaging prosperity, but it is wrong if it forgets that this freedom can only be experienced within the discipline of social responsibility.

Chapter 8

We have elevated the ideology and mores of corporate life into a belief system before which we pay homage, and we have allowed it to take over the political system.

Work, or some form of collective labor, has always been a defining element of society, but never before has the output of work become the dominant organizing principle of the world’s people.

For every addiction there is a fix, an experience that we repeat over and over again, giving us the illusion that we are alive, while in fact numbing us to the real world and our real self, until it damages or destroys us.

Nothing in our modern workplace, and ver little in society at large, encourages us to take our time, or be satisfied with what we have.

Denial will always prevent us from coming to terms with our actions as they affect the natural world, but denial is an understandable reaction in the face of the great gulf between commercial reality and ecological reality.

Our insatiable appetite for resources and the attendant waste caused by their consumption are being masked in meaningless eco-speak.

With the wholesale extraction and exploitation of stored solar energy, human beings are no longer living in synchronization with natural cycles and have accepted, however reluctantly, industrialism’s shadow – waste, degradation and dehumanization.

Corporations spend more money trying to get us to buy their products than we spend on all of secondary education in this country.

Today’s deteriorating culture, environment and economy are the fruits of decades of corporate dishonesty, a dishonesty that we have created, sanctioned and supported.

The potency of industrial systems is overwhelming. No culture in the world has been able to resist the allure, convenience, ease and wonder of materialism.

The growing power of corporations has not been accompanied by any comprehensive philosophy, any ethical construct, other than the accumulation of wealth as an end in itself.

Whenever those moments arise in life when we become aware, fully and wholly, of the transiency of our existence, we seek those tasks and roles that give our hearts, minds and hands the potential to serve truly another human being.

Rather than uplifting the less developed nations, industrial economies have caused increased polarization of rich and poor, unleashed ethnic conflict, destroyed lands, urbanized the poor to marginalized conditions and made the developed nations richer in the process.

As long as nature, children, women and workers are abused by institutions espousing free-market theories, the real deficit will continue to grow – the difference between what business has taken and what it has returned, the difference between value added and value subtracted.

If adding value is what business is, or should be, all about, then it follows that you can’t contribute values unless you have them.

Chapter 9

A cardinal principle and practice of any new business should be to perform tasks and services that are sustainably produced and/or promote sustainability in society as a whole.

Sustainability is an economic state where the demands placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations.

Golden rule for the restorative economy: Leave the world better than you found it, take no more than you need, try not to harm life or the environment, make amends if you do.

In the restorative economy, a company is based on the idea that its products or services will improve people’s lives qualitatively, not quantitatively.

Conservation does not run aground on Prince William Sound.

Sustainable businesses take responsibility for the effects they have on the natural world.

Restorative businesses must rethink entire processes, from production and materials sourcing to employment, distribution and marketing.

The economics of restoration rests on the premise that people, if given honest information, not only about price, but about cost, will make intelligent and appropriate decisions that will improve both their own lives and life around them.

Many businesses operating today treat customers as wallets disguised as human beings, assets that conform to demographic trends, passive consumers ready and willing to be manipulated.

The most profound, basic, and enduring quality uniting businesses and customers is gratitude.

The presence or absence of gratitude is a reliable measure of the health of any business relationship.

Gratitude is a part of social ecology because it is the most powerful way we feel and express our connection to others.

Chapter 10

We need a predictable and consistent market that recognizes the true, full costs of doing business and reassigns them to the marketplace, where they belong. We require a market economy that rewards the highest internalized cost, and economy in which business prospers when it is responsible both socially and ecologically.

The most profound act of leadership that could be exerted by business would be to admit that its influence over and manipulation of government is misguided.

The main function of green taxes is not to raise revenue for the government, but to provide participants in the marketplace with accurate information about cost.

It is critical that green taxes not place a burden on lower economic brackets or the middle class, because their purpose is not to punish, but to reward.

A proposal for green taxes whose aim is merely to “clean up pollution” is essentially an agenda for the status quo.

It is time that we stop pretending that industries which degrade an poison are economic or useful.

Chapter 11

Economists measure efficiency in monetary terms and produce extraordinary conclusions…Ecologists measure efficiency in terms of thermodynamics and conservation of resources, and also reach extraordinary conclusions, ones that conflict greatly with those of economists.

Any time there is inefficiency in the form of pollution or waste, it is uneconomic and therefore more costly. Increases in efficiency not only will reduce global warming gasses such as CO2, but will also save money and improve the economy.

While carbon taxes will initially lower CO2 emissions by greatly increasing energy efficiency, their ultimate purpose is the replacement of carboniferous fuels with sustainable, clean-burning energy sources that do not vitiate the dynamics of our atmosphere and climate.

By relying upon an economy based on cheapest and lowest price, and in effect promising that more people can have more things, we will absolutely create a wrold where we will have less and less, and the imbalances between rich and poor will continue to grow more pronounced and inequitable.

To continue to defend the hydrocarbon industry in light of all that we know about environmental degradation is tantamount to defending the typewriter industry by stalling the introduction of computers.

Most of the fertilizers and pesticides employed today are used on crops produced in overabundance, and thus fall under the government subsidy programs that provide price supports for their overuse. Thus, our taxes are being used not for restoration, but to subsidize environmental damage.

It seems unfair, if not unjust, that the only people who can now afford foods grown without tixic chemicals are those high on the income chain, who derive the greatest amount of money, indirectly or directly, from the economy of degradation.

Environmental problems, although local in origin, have become global in impact and have to be addressed on both levels.

Chapter 12

We have operated our world for the past few centuries on the basis that we could manage it, if not dominate it, without respect for living systems.

Society must recognize that ecological principles apply absolutely to human survival, and that if we are to long endure as a world culture, or as a group of local cultures, we will have to incorporate ecological thinking into every aspect of our mores, patterns of living, and most particularly, our economic institutions.

A critical basis for change and consensus is to find a way to introduce and discuss ecological principles in society in a manner that draws people together, rather than repelling or deterring them.

What is the rate at which, and manner in which, the world can sustain the human population that exists and is growing?

The underlying principles informing such cautionary predictions are largely correct, while the timing and nature of humankind’s destiny with earthly limits is still unknown.

What ecology offers is a way to examine all present economic and resource activities from a biological rather than a monetary point of view, including the impact that our present lifestyle will have on generations henceforth.

We have a thousand years of work ahead of us – brilliant, sustaining, innovative work, a profound act of citizenship and participation that harmonizes the relationship between commerce and nature.The Ecology of Commerce, A Declaration of Sustainability – by Paul Hawkin