The following is the eleventh installment from Sacred Economics: Money, Gift, and Society in the Age of Transition, available from EVOLVER EDITIONS/North Atlantic Books. You can read the Introduction here, and visit the Sacred Economics homepage here.
Socialism failed because it couldn't tell the economic
truth; capitalism may fail because it couldn't tell the ecological truth.–Lester Brown
Here is a certainty: the linear conversion of resources into
waste is unsustainable on a finite planet. More unsustainable still is
exponential growth, whether of resource use, money, or population.
Not only is it
unsustainable; it is also unnatural. In an ecology, no species creates waste
that other species cannot use-hence the maxim, "Waste is food." No other
species creates growing amounts of substances that are toxic to the rest of
life, such as dioxin, PCBs, and radioactive waste. Our linear/exponential
growth economy manifestly violates nature's law of return, the cycling of resources.
A sacred economy is an
extension of the ecology and obeys all of its rules, among them the law of
return. Specifically, that means that every substance produced through
industrial processes or other human activities is either used in some other
human activity or, ultimately, returned to the ecology in a form, and at a
rate, that other beings can process.1
It means there is no such thing as industrial waste. Everything cycles back to
its source. As in the rest of nature, our waste becomes another's food.
Why do I call such an
economy "sacred" rather than natural or ecological? It is because of the
sacredness of gifts. To obey the law of return is to honor the spirit of the
Gift because we receive what has been given us, and from that gift, we give in
turn. Gifts are meant to be passed on. Either we hold onto them for a while and
then give them forward, or we use them, digest them, integrate them, and pass
them on in altered form. That this is a sacred responsibility is apparent from
both a theistic and an atheistic perspective.
From the theistic
perspective, consider the source of this world we have been given. It would be
a grave error to say, as some evangelicals have told me, that it is fine to use
nature destructively, because after all God gave it to us. To squander a gift,
to use it poorly, is to devalue the gift and insult the giver. If you give
someone a present and he trashes it right in front of your face, you might feel
insulted or disappointed; certainly you'll stop giving gifts to that person. I
think that anyone who truly believes in God wouldn't dare treat Creation that
way but would instead make the most beautiful use possible of life, earth, and
everything on it. That means we treat it as the divine gift that it is. In
gratitude, we use it well and give in turn. That is the theistic reason why I
call a zero-waste economy sacred.
From an atheistic
perspective, a zero-waste economy is the economic realization of the
interconnectedness of all beings. It embodies the truth that as I do unto the
other, so I do unto myself. To the extent that we realize oneness, we desire to
pass our gifts forward, to do no harm, and to love others as we love our
selves.
On a very practical
level, this vision of sacred economy requires eliminating what economists refer
to as "externalities." Externalized costs are costs of production that someone
else pays. For example, one reason vegetables from California's Central Valley
are cheaper to buy in Pennsylvania than local produce is that they don't
reflect their full cost. Since producers are not liable to pay the current and
future costs of aquifer depletion, pesticide poisoning, soil salinization, and
other effects of their farming methods, these costs do not contribute to the
price of a head of lettuce. Moreover, the cost of trucking produce across the
continent is also highly subsidized. The price of a tank of fuel doesn't
include the cost of the pollution it generates, nor the cost of the wars fought
to secure it, nor the cost of oil spills. Transport costs don't reflect the
construction and maintenance of highways. If all these costs were embodied in a
head of lettuce, California lettuce would be prohibitively expensive in
Pennsylvania. We would buy only very special things from faraway places.
Many industries today
can only operate because their costs are externalized. For example, statutory
caps on liability for oil spills and nuclear meltdowns make offshore drilling
and nuclear power profitable for their operators, even as the net effect on
society is negative. Even if BP goes bankrupt trying, there is no way the
company will, or can, pay the full costs of the spill in the Gulf of Mexico.
Society will pay the costs, in effect transferring wealth from the public to
the company's investors.2
Any industry with the potential for catastrophic losses is essentially enacting
a transfer of wealth from public to private hands, from the many to the few.
Those industries operate with free insurance. They get the profits, we assume
the risks. It is also so in the financial industry, where the largest operators
can take huge risks knowing that they will be bailed out if those risks fail.
Externalized costs render economical things that are actually uneconomical,
such as deep-sea oil drilling and nuclear power.
The elimination of
externalities thwarts the business plan of the ages: "I keep the income and
someone else pays the costs." I fertilize my field with nitrogen fertilizer,
and the shrimp fishermen pay the cost of eutrophication downriver. I burn coal
to make electricity, and society pays the medical costs of mercury emissions
and the environmental costs of acid rain. All of these strategies are
variations on a theme I've already described: the monetization of the commons.
The capacity of the earth to absorb various kinds of waste is a form of
commonwealth, as is the richness of the soil, the seas, and the aquifers. The
collective leisure time of society might be considered a commons as well, which
is depleted when polluters make messes for everyone else to clean up.
"I keep the income,
and someone else pays the costs" reflects the mind-set of the separate self, in
which your well-being is fundamentally disconnected from mine. What does it
matter what happens to you? If you are poor, or sick, or in prison, what does
that matter to me, as long as I sufficiently insulate myself from the social
and environmental toxicity out there? What does it matter to me if the Gulf of
Mexico is dying under an oil slick? I'll just live somewhere else. What does it
matter to me that there is a thousand-mile-wide gyre of plastic in the Pacific
Ocean? From the perspective of separation, it doesn't matter — in principle we
can insulate ourselves from the effects of our actions. Profiting by
externalizing costs is part and parcel of that perspective. But from the
perspective of the connected self, connected to other people and to the earth,
your well-being is inseparable from my own because you and I are not
fundamentally separate. The internalization of all costs is simply the economic
embodiment of that principle of interbeingness: "As I do unto others, so I do
unto myself."
Internalizing costs
also reflects the perceptions of a gift culture. In the circle of the gift,
your good fortune is my good fortune, and your loss is my loss, because you will
have correspondingly more or less to give. From that worldview, it is a matter
of common sense to include damage to society or nature on the balance sheet. If
I depend on you for the gifts you give me, then it is illogical to enrich
myself by impoverishing you. In such a world, the best business decision is the
one that enriches everybody: society and the planet. A sacred economy must
embody this principle, aligning profit with the common weal.
Understanding this
principle, some visionary businesspeople have attempted to realize it
voluntarily through concepts like the "triple bottom line" and "full-cost
accounting." The idea is that their company will act to maximize not just its
own profits, but the aggregate of people, planet, and profit — the three bottom
lines. The problem is that these companies must compete with others who do the
opposite: export their costs onto people and the planet. The triple bottom line
and full-cost accounting are useful as a way to evaluate public policy (because
they include more than just economic benefits) but when it comes to private
enterprise, the first two Ps often run counter to the third. If I am a
fisherman trying to fish sustainably, competing with industrial trawlers with
hundred-mile-long nets, my higher costs will render me unable to compete. That
is why some means is needed to force the internalization of costs and integrate
the triple bottom line into a single bottom line that includes all three. We
cannot merely hope that people "get it." We must create a system that aligns
self-interest with the good of all.
One way to bring
externalized costs (and externalized benefits) onto the balance sheet is
through cap-and-trade systems and other tradable emissions allowances.3 Although such systems have borne
mixed results in practice (sulfur dioxide ceilings have been relatively
successful, while the EU's carbon credits have been a disaster), in principle
they allow us to implement a collective agreement on how much is enough.
"Enough" depends on the capacity of the planet or the bioregion to assimilate
the substance in question. For sulfur dioxide, Europe and America might have
separate ceilings to control acid rain; Los Angeles might have its own ozone or
nitrous oxide ceiling; the planet might have a single CO2 and CFC
ceiling. Enforcing aggregate ceilings circumvents Jevon's paradox, which says
that improvements in efficiency don't necessarily lead to less consumption but
can even lead to greater consumption by reducing prices and freeing capital for
yet more production.4
Considerable
controversy surrounds present-day cap-and-trade proposals, and by and large, I
agree with their critics. A truly effective emissions allowance program would
be an auction system with no offsets, no free credits, no grandfather clauses,
and strict sanctions on noncomplying countries. Even so, problems remain: price
volatility, speculative derivatives trading, and corruption. Enforcement is an
especially critical problem because cap-and-trade gives a big advantage to
manufacturers in places with lax enforcement, which could result in more total
pollution than the present regulatory regime.5 Another problem is that in a cap-and-trade system,
individual restraint frees up resources or allowances to be used by someone
else, leading to a feeling of personal powerlessness.
The problems with
cap-and-trade suggest a different approach: direct taxes on pollution, such as
Paul Hawken's carbon tax. Fossil fuels could be taxed on import, and the
proceeds rebated to the public. This is another way to force the
internalization of costs, and would be especially appropriate in situations
where the social and environmental costs are easy to quantify and remedy. As
with cap-and-trade, international enforcement is a big problem, as
manufacturing would become more profitable in countries that refused to levy
the tax or collected it inefficiently. It might also require frequent rate
adjustment in order to attain the desired ceiling.
For those readers who
recoil at the suggestion of another tax, consider that the two mechanisms I
have described, cap-and-trade systems and green taxes, are not actually new
levies upon society. Someone is going to be paying the costs of environmental
destruction regardless. In the present system, this "someone" is either
innocent bystanders or future generations. These proposals merely shift these
costs onto those who create them and profit from them.
However it is
accomplished, when the costs of pollution are internalized, the best business
decision comes into alignment with the best environmental decision. Suppose you
are an inventor and you come up with a great idea for a factory to cut
pollution by 90 percent with no loss of productivity. Today, that factory has
no incentive to implement your idea because it doesn't pay the costs of that
pollution. If, however, the cost of pollution were internalized, your invention
would be a hot item. A whole new set of economic incentives emerges from the
internalization of costs. The goodness of our hearts, which want to cut
pollution even if it isn't economic, would no longer have to do battle with the
pressures of money.
While both
cap-and-trade programs and pollution taxes have a role to play in the
internalization of social and ecological costs, we could also integrate them
into the structure of money itself, an intentional kind of money that embodies
our reverence for the planet and our emerging sense of the role and purpose of
humanity on earth. It unites the internalization of costs with the
rectification of the great injustice of property described in Chapter 4,
returning the commons to the people while nonetheless giving free rein to the
spirit of entrepreneurship. It implements the principle of Chapter 9: to make
money sacred by backing it with the things that have become sacred to us. Among
them are precisely the same things that green taxes and the like aim to
preserve. While the details of cap-and-trade, currency issue, and so forth may
have a technocratic feel to them, the underlying impulse, which the next
chapter will flesh out, is to align money with the things we hold sacred.
Whether it is
accomplished through traditional taxation or cap-and-trade, or by integrating
it into money itself, we are embarking on a profoundly different relationship
to Earth. In the days of the Ascent, the story of the growth of the human realm
and the conquest of the wild, in the time of humanity's childhood, when the
world seemed to have infinite room to accommodate our growth, there was no need
for collective agreements on how many fish to catch, how many trees to cut, how
much ore to dig, or how much of the atmosphere's capacity to absorb waste to
use. Today, our relationship to the rest of nature is changing on a fundamental
level, as it is impossible to ignore the limits of the environment. The fisheries,
the forests, the clean water, and the clean air are all obviously close to
depletion. We have the power to destroy the earth, or at least to cause her
grievous harm. She is vulnerable to us, as a lover is to a lover. In that
sense, it is no longer appropriate to think of her only as Mother Earth. A
child, in his wanting, does not take his mother's limits into account. Between
lovers it is different. That is why I foresee a future in which we maintain
local, regional, and global ceilings on the use of various resources. Fishery
catches, groundwater use, carbon emissions, timber harvests, topsoil depletion,
and many more will be carefully monitored and held to sustainable levels. These
resources — clean water, clean air, minerals, biota, and more — will be sacred to
us, so sacred that I doubt we will refer to them as "resources," any more than
we refer to our own vital organs as resources, or dream of depleting them.
Actually, we do
deplete our own vital organs, for purposes analogous to those for which we deplete
the vital organs of the earth. As one would expect from an understanding of the
connected self, what we do to the earth, we do to ourselves. The parallels run
deep, so for brevity's sake I'll limit myself to just one: the parallel between
our drawdown of the earth's stored fossil fuel and the depletion of the adrenal
glands through chemical and psychological stimulants. In traditional Chinese
medical thought, the adrenal glands are part of the kidney organ system, which
is understood to be the reservoir of the original qi, the life force, as well
as the gateway to an ongoing supply of acquired qi. When we are in harmony with
our life purpose, these gateways to the life force open wide and give us a
constant supply of energy. But when we lose this alignment, we must use
increasingly violent methods (coffee, motivational techniques, threats) to jerk
the life force through the adrenals. Similarly, the technologies we use to
access fossil fuels have become more and more violent — hydraulic fracturing (or
fracking), mountaintop removal, tar sand exploitation, and so on — and we are
using these fuels for frivolous or destructive purposes that are evidently out
of alignment with the purpose of the human species on earth. The personal and
planetary mirror each other. The connection is more than mere analogy: the kind
of work that we use coffee and external motivation (e.g., money) to force
ourselves to do is precisely the kind of work that contributes to the
despoliation of the planet. We don't really want to do it to our bodies; we
don't really want to do it to the world.
We want to become
givers and not just takers in our relationship to Earth. With that in mind, I
will touch upon one more aspect of the law of return and the cosmic unity of
giving and receiving. It would seem that there is a flagrant exception to the
law of return in nature, something that ecosystems do not recycle, something
that enters constantly anew and exits always as waste. That something is
energy. Radiating out from the sun, it is captured by plants and converted
along the food chain from one form to another, moving irreversibly toward its
final destination: waste heat. Sooner or later, all the low-entropy
electromagnetic radiation from the sun is radiated back out from the earth as
high-entropy heat.6
I am not surprised
that ancient people worshiped the sun, the only thing we know that gives
without expectation or even possibility of return. The sun is generosity
manifest. It powers the entire kingdom of life, and, in the form of fossil fuels,
solar, wind, and hydroelectric power, can power the technosphere as well.
Marveling at this virtually limitless source of free energy, I can touch upon
the utter, almost infantile, gratitude that ancient sun-worshipers must have
felt.
But there is more to
the story. A vein runs through spiritual tradition that says that we, too, give
back to the sun; indeed that the sun only continues to shine through our
gratitude.7 Ancient sun
rituals weren't only to thank the sun — they were to keep it shining. Solar energy
is the light of earthly love reflected back at us. Here, too, the circle of the
gift operates. We are not separate from even the sun, which is why, perhaps, we
can sometimes feel an inner sun shining from within us, irradiating all others
with the warmth and light of generosity.
1. That means that certain substances, even if they are
biodegradable, violate the law if we produce them in excessive quantities.
2. Even if the company goes bankrupt and wipes out current
stock- and bondholders, past investors have already profited.
3. In such systems, a total emissions ceiling is set, and
the right to emit allocated among countries or enterprises. Pollution rights
may be bought and sold, so that if a factory reduces its emissions, it can sell
its unused quota to someone else.
4. For example, when the cost of lighting drops due to the
introduction of CFC bulbs, some facilities respond by increasing their use of
outdoor lighting. When computer memory gets cheaper, developers write software
that requires more memory. When any resource is used more efficiently, the
demand for it goes down and lowers the price, thereby increasing demand.
5. Polluters in lax-enforcement countries could sell
allowances to polluters in countries with good enforcement, allowing the latter
to pollute at low cost and the former to pollute beyond the total emissions
ceiling.
6. "Later" could be hundreds of millions of years, for
example when we burn coal.
7. Interestingly, as the age of ingratitude has reached its
peak over the past thirty years, the sun's radiation has apparently changed,
and the strength of the heliosphere has decreased significantly. It might be my
imagination, but I remember the sun being more yellow when I was a child. And
from 2008 to 2010, sunspot activity diminished to unprecedented levels (see,
e.g., Clark, "Absence of Sunspots"). Could it be that the sun, the epitome of
generosity, is entering a turbulent phase mirroring the financial crisis on
earth, which is after all a crisis of giving and receiving?
Image by Brooks Elliott, courtesy of Creative Commons license.
