The End of Business as Usual

When it comes to operating costs, industry likes business as usual. Take an industry that I’m a little too familiar with, health insurance. When you’re dealing with mass quantities of people, you can predict how many people are going to have kidney failure, or how many people will end up with diabetes, or how many trips to the emergency room an average person will make in a year. Of course, years of poor diet, or poor health habits (encouraged by other industries) tends to skew these long term predictions in a direction that ends up costing everyone more money in the long run.

Business as usual for the rest of industrial society is threatened, surprisingly (or unsurprisingly) by the very method of production itself. Our linear industrial model threatens to run itself dry in a number of ways (air, water, fuel, land, etc). People suggest radical change of the way we do business and the way we produce. In theory, I agree with them, but I also know that we can’t simply change the way things have always been done over night, especially when so much power and wealth is concentrated on the powerful side.

This is why I’m such a big fan of Paul Hawken’s Natural Capitalism. While there are many things wrong with capitalism, one of the easiest things to fix, when you think about it, is the externalization of environmental costs. Capitalism is already strictly regulated when it comes to economics. Why not add similar regulations to add value to clean air or water? I know it’s not a perfect solution, but it think that the ideas he proposes in his book have the greatest chance of succeeding in the near term, simply because they allow those in power a way to change their ways, yet not loose their grip on what they have. Yes, some industries will go the way of the dodo, but even the most polluting industries can succeed if they play their cards right and change their model to a service-based business instead of a product-based business (example, GM can sell transportation instead of cars).

Those in charge of some companies have also realized that their resources are limited and that it will be much cheaper for them in the long run if they impose artificial limitations early before actual limitations are imposed upon the whole system. Interface Carpet CEO Ray Anderson, in an interview for the movie The Corporation has a great description of the way our economy runs now, as opposed to how it needs to run. He likens modern industrial business practices to early airplanes before the Wright brothers. These planes would end up coasting for a time, and for a few seconds it must have actually looked like they were flying, but they would inevitably crash to the ground. The only difference between modern industry and those planes is that the ground is a lot farther away. We need to stop coasting and start flying.

I also think that capitalism, much like many types of organized religions that were created before a time when we could actually explain how the Earth rotated around the sun, really came to dominate in a time when our natural resources seemed endless and the consequences of pollution were not fully understood. The same way that religion is having a difficult time with science, capitalism is having a difficult time with finite resources.