Critique of Paul Hawken and NAtural Capitalism


August 10, 2003

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In this issue:

“Are you going to hear Paul Hawken speak in Charlottetown?” I don’t know how many times I’ve been asked this. There’s been a lot of hype surrounding his visit to PEI this week but no critique whatsoever of his ideas. This issue of the Bulletin presents critiques from a number of sources and from different perspectives.

The federal government, in co-operation with the provincial government, is bringing Hawken to PEI for a public lecture as well as to meet with the federal government’s National Round Table on the Environment and the Economy. An American businessman, lecturer and author, he is best known for his ideas on the economy and the environment as presented in a book written with Amory Lovins and L. Hunter Lovins - ‘Natural Capitalism: Creating the Next Industrial Revolution’. Hawken believes capitalism can be reformed – sort of a win-win situation – to benefit not only the environment but the corporations as well.

I won’t be going to hear Hawken. I don’t believe corporations and capitalism can be reformed to save the planet. But if you know little or nothing about his ideas, you should read his book, check the internet or go to the lecture. He is the darling of the mainstream environmental movement which mostly supports a more regulated or reformed industrial capitalism. Corporations and governments like him as well. He’s been the key note speaker for hundreds of corporations, governments and non-profit organizations, including the Liberal Party of Canada.

Sharon Labchuk

Following are 3 critiques of Paul Hawken and Natural Capitalism.

1. David Orton, Green Web, Nova Scotia. Speech to the Green Party of Canada
2. Ted Trainor, University of New South Wales, Australia. Australian Radio Interview
3. Michael Albert, activist, author, public speaker and co-founder of Z Magazine and ZNet. Z Magazine article.

1. Excerpt from Talk to the Green Party of Canada Convention in Ottawa, August 6, 2000

Is Left Biocentrism Relevant to Green Parties?

By David Orton

Natural capitalism

One way of prolonging the life of industrial society was through the propagation and acceptance of the concept of 'sustainable development.' Helga and I went to the "1st Planetary Meeting of Green Parties" in Rio, May 30/31, 1992 as observers, and the statement coming out of that meeting endorsed sustainable development. But sustainable development is now old hat.'

The latest "offering," to encourage activists to continue working with and not in fundamental opposition to this society, is to be found in the 1999 book _Natural Capitalism_, by Paul Hawken, Amory Lovins, and L. Hunter Lovins. This book, by its title, suggests that capitalism is "natural", and that Nature can be treated within a capitalist framework. The authors see the solutions to the environmental crisis as bringing Nature within this accounting framework. This assumes that forests, seas, wild animals, etc. have "prices," not, as in deep ecology, intrinsic values. Also, that the inherent growth/profit/ consume-oriented capitalist economic model should be worked with, and not opposed as fundamentally anti-ecological. The authors aim to show through their many examples that "resources" (I do not myself use this term) can be saved, more profits can be made, growth can continue, and employment can increase if we start "costing" Nature. This is the ultimate anthropocentrism!

There are lots of interesting examples in this book, of waste being eliminated and more profits being made. The book also speaks of "human capitalism", although this is a secondary focus, where "responsible government" is combined with "vital entrepreneurship". Curitiba in Brazil, is used as an example of this human capitalism. _Natural Capitalism_ acknowledges that natural capital is rapidly declining and becoming a limiting factor on continued growth. Increasing population is taken for granted by the authors. Generally in this book, there is a much more progressive view of capitalism, in alleged harmony with Nature and with a social conscience. So this is against Thatcherism or Reaganism. But the fundamental questions remain for the activists' dilemma.

Can one reform capitalism? Is it here forever? Or do we work from the position that we must create an alternative?

Contact the Green Web for full text of speech: Green Web

2. Ted Trainor, University of New South Wales, Australia. Australian Radio Interview

http://www.mnforsustain.org/trainer_fe_radio_simon_natural_capitalism_critique.htm(external link)

Natural Capitalism Challenged
Australian Radio Interview
July 22, 2000
Ted Trainer
Alexandra de Blas
Australian Broadcasting Corporation

While the idea of "Natural Capitalism", is gaining popularity. It does have its critics. Dr. Ted Trainer believes that the levels of production and consumption in developed countries is unsustainable. He thinks that the only way to help the environment is to do away with capitalism as we know it and "to almost completely scrap this economy".


Alexandra de Blas:
In the last fortnight, Earthbeat has spoken with the key proponents of Natural Capitalism: Amory Lovins from the Rocky Mountains Institute, and his co-author, Paul Hawken.

It’s a popular approach to sustainability and national leaders like President Clinton have actively promoted it. But it has its critics. Dr. Ted Trainer, a lecturer in social work at the University of New South Wales believes there are fundamental flaws in their analysis of sustainability.

Ted Trainer:
There are two separate problems here. One is the market is a mechanism that has some virtues, but it is the major source of deprivation and waste in the world at the moment, because the market makes sure that scarce resources go to the rich. Well why is more than 100-million hectares of Third World land growing export crops, and not food for hungry people? Precisely because market forces are allowed to determine what’s grown on that land and who benefits from it.

Now that’s one thing: the market system we have is a major cause of the problems around us. The more important problem is simply that our commitments to affluence and levels of production and consumption that are grossly unsustainable. Now Amory encourages the view that there’s not a problem there, that by better technical devices, we can not only keep up those levels of production and consumption, but he actually says, multiply them by a factor of eight, something like that; in the process we can save the environment, in the process we can make a lot of money, and we don’t even need to regulate, we can leave it all to the market to solve these problems.
Now the team that I’m in, the Limits to Growth Team, thinks that there’s now an overwhelming case that those assumptions are just grossly mistaken.

Alexandra de Blas:
But isn’t there a lot of value in the technical fixes that have been put forward by Amory Lovins and Paul Hawken?

Ted Trainer:
There certainly is. His Natural Capitalism book is full of good ideas, one wouldn’t oppose any of those ways of approaching production and reducing energy costs and so on. But that’s a minor issue compared with the major effect that his argument is having, and that he’s had for 30 years, and that is to encourage and reinforce the assumption that we don’t need to question consumer society. We can drive as much, we can go on as many Jetaway holidays, we can have this elaborate wardrobe, we can go to the supermarket and purchase just as much because we’re going to do it in these more efficient ways.

Alexandra de Blas:
What do you think about their claims that we’re going to see an end of oil, not because it will run out but because we’ll find renewable alternatives, like fuel cells and the hyper-car?

Ted Trainer:
Yes, look Amory is an energy man and some of the things he says about energy are just astounding; I’ve got no idea why he would say that gas is abundant and we can derive our hydrogen for our fuel cells from it and derive a lot of the products to make our plastics and hyper-cars.
Now everyone will tell you that gas is about as limited as petroleum and we’re looking at the very strong probability of an enormously serious petroleum shortage hitting us within 10 or 20 years, and of course if we try to run from the petroleum source to gas in our cars, which is what we’ll do, the use of gas will go up faster and faster, so I’ve got no idea why he would claim that gas is an abundant source for us. The other major source for his hyper-cars and for his solution to many of our electricity supply needs, is the fuel cell which would run on hydrogen. And that is going to supposedly come from biomass, from things like ethanol.

Now this is something you’d need the time to get into the nuts and bolts and the numbers, but there’s just nothing like sufficient biomass on the planet to sustain the present level of car use fuel, let alone supplying electricity from that source either. The estimates I’ve worked through indicate that if America was going to replace its petroleum use by ethanol, they’d need about 720-million hectares of good crop land. Now they’ve only got 190-million hectares; 720-hectares is twice their forest areas, twice their pasture area. So these numbers are of a magnitude you run into again and again in this game, and the limits to growth argument is that when you start looking at the numbers, the multiples are just far beyond anything that can be made sustainable.

Alexandra de Blas:
Well you argue that we need radical, structural change if we’re to address our global environmental problems. So what changes exactly do we need, Ted?

Ted Trainer:
OK, there now has accumulated over 30 years or so, a considerable literature answering that question from many angles, and I think it boils down to a consensus about three or four basic principles. You can’t design a just and sustainable world order unless you accept firstly living much more materially simply. Now that doesn’t mean deprivation of any kind, it just means living with what is sufficient.

Secondly, we have to design settlements that are highly economically self-sufficient, highly local economies where most of the things we need come from within a few kilometres of where we live, because if I’m right about the energy issue, we’re just not going to be able to transport stuff all the way round the world.

Thirdly, we have to do things in much more co-operative and participatory ways.
At the moment we’ve got lots of energy so we can live individualistically and privately and we can compete. But when things are scarce, it makes sense to co-operate, and that means doing things round our neighbourhoods, through things like working bees and committees and communal property-in-commons and workshops and things
Fourthly, we could add in alternative technologies; we have to use things like building out of mud brick and so on that don’t use so much energy.

And finally, the hard one: we have to almost completely scrap this economy. You cannot talk about a sustainable society in which you have an economy that not only produces vast quantities of throwaway stuff, but has to increase them at 3% to 4% per annum. That’s the sort of assumption that is built into our economy. Unless you increase output by 3% or 4% per annum, then problems accelerate.

Alexandra de Blas:
Well you’re certainly talking about radical change. How do you make that happen in the face of the juggernaut of globalisation?

Ted Trainer:
Yes well, globalisation I think is -

Alexandra de Blas:
I mean how realistic is this?

Ted Trainer:
It’s clearly rapidly worsening all these problems because it’s freeing the market, it’s freeing the corporations to go thundering down this track at an ever faster path. I for a long time, like many others, have worked at this in an educational way, tried to raise awareness. I’m now very pessimistic about that. I think for decades now we’ve seen very little response. My hope is that our best hopes lie in encouraging the global eco-village movement to come on and show that there are alternatives and that they are very attractive and workable. In the last 20 years or so we’ve had the emergence of an eco-village movement all round the world.

There are hundreds of little settlements now being built by groups who can see the stupidity of the consumer way and who are determined to just carve out another track, and to me the fate of the planet depends on whether those people succeed in the next 20 years or so in building examples that show that there’s not just another way that defuses the big problems, but which is intrinsically worthwhile and a much more pleasant way to go.

Alexandra de Blas:
Well, the appealing thing about the Natural Capitalism approach is that it is achievable and it is inviting, whereas the enormous change required for your so-called simpler way, is deeply threatening to a lot of people, and is possibly far more complex to achieve.

Ted Trainer:
Of course it’s more complicated and difficult and less likely to be achieved, but it shouldn’t be threatening. I think it’s threatening only if people don’t understand what’s going on here. What’s really threatening is the path we’re on now, because how secure do you feel in a world where one-billion are getting all the wealth, and the rest are increasingly impoverished? A third of the world’s people are getting poorer, year by year now. How satisfactory is that, how safe and secure will you feel as that path accelerates? I think one of our biggest problems in the eco-village movement is to get people to understand that the alternative of the simpler way has enormous benefits in terms of quality of life.

Alexandra de Blas:
Guests on this program:

Ted Trainer
Dr. Ted Trainer from the University of New South Wales.
Lecturer in Social Work.
"Saving the Environment", Publisher: UNSW Press, 1998
"The Conserver Society," Publisher: Zed, 1995.
Alexandra de Blas

3. Michael Albert, activist, author, public speaker and co-founder of Z Magazine and ZNet

http://www.zmag.org/zmag/articles/apr97albert.html(external link)

Natural Capitalism?" Michael Albert, Z Magazine, April 1997 — Critique from the left of another, emergent eco-ideology: Paul Hawken's "Natural Capitalism."

From the pages of Z Magazine

Natural Capitalism?

By Michael Albert

I remember debating the potential of the environment as a radical focus back when it was first becoming visible. Most early 1970s radicals felt environmentalism would be the next big spur to activism. Being fried by ozone depletion or gassed by industrial pollutants could certainly yield important activism. But there were skeptical. Elites also suffer environmental decay and could address environmental problems without addressing other social ills. Environmentalists might try to convince elites to make changes instead of organizing public militancy. They might even seek clean up for the rich at the expense of everyone else, as in cleaning up their beaches, their air, their resorts, and their water, while the rest of us wallow in toxic effluvium until we drop.

Decades later, there are indeed some approaches to addressing environmental problems that deal with many injustices in society, some that carefully skirt non environmental injustices even pandering to the interests of pollution’s main perpetrators, and some that brazenly enhance the situation of elites at the expense of everyone else.

The cover story of the April issue of Mother Jones by Paul Hawken is titled "Natural Capitalism." Hawken finds symptoms of illness, describes the full disease, explains its cause, and proposes a remedy. The trouble is, Hawken confuses the issue more than he clarifies it.

Hawken’s thesis is that something called industrialism and its associated wrong-headed habits causes over-utilization of resources, inefficient squandering of productive potentials, and loss of the benefits of natural systems.

He writes, "Commercial institutions, proud of their achievements, do not see that healthy living systems—clean air and water, healthy soil, stable climates—are integral to a functioning economy. As our living systems deteriorate, traditional forecasting and business economics become the equivalent of house rules on a sinking cruise ship." Hawken reveals many symptoms. For example:

"…cars are barely 1 percent efficient in the sense that, for every 100 gallons of gasoline, only one gallon actually moves the passengers. Likewise, only 8 to 10 percent of the energy used in heating the filament of an incandescent light bulb actually becomes visible light…. Modern carpeting remains on the floor for up to 12 years, after which it remains in landfills for as long as 20,000 years or more—less than .06 percent efficiency."

"In the U.S., of the 127 million people working, 38 million work part time, and 35 million have full time work that doesn’t pay enough to support a family." Add "the actual unemployed, who number 7.4 million, as well as another 7 million who are discouraged, forcibly retired, or work as temps." And then, to top it off, "nineteen million people work in retail and earn less than $10,000 per year, usually without any health or retirement benefits," and over 5 million are in jails, awaiting trial, or supervised by the criminal justice system.

Hawken relates all the social ills he uncovers back to resource mis-utilization and bad accounting. For example, he makes a compelling case that there is an immense productive capacity wasted—he says $2 trillion out of $7 trillion in annual output—due to roadway congestion, highway accidents, free parking, guarding sea lanes for oil, inefficient energy expenditures, non-essential and fraudulent medical care, substance abuse, obesity treatments, air pollution related health problems, tax code idiocy, and crime. He concludes that if we could save all this expenditure, it would be available for education and good health care.

Part of the problem is that Hawken has a limited view of what is wrong. For example his waste list doesn’t include lost work due to worker recalcitrance to deliver for bosses, investment in otherwise unproductive tools to disempower and control workers, education to limited social slots instead of for human fulfillment and development, losses due to racist and sexist assumptions about whole populations, bureaucratic waste, advertizing and packaging to sell regardless of need, over production of private goods and under production of public ones, duplication of efforts, or anything else that points inexorably toward oppressive social relations and particularly oppressive class, race, or gender relations.

Additionally, Hawken seems clueless as to the real underlying causes of the misallocation problems he perceives. He writes "one is tempted to say that there is nothing wrong with capitalism except that it has never been tried. Our current industrial system is based on accounting principles that would bankrupt any company." And "industries destroy natural capital because they historically benefited from doing so."

Hawken thinks the big problem is that modern industry and technology have untracked the minds of entrepreneurs, causing them to become habituated to ignoring the intrinsic value of natural systems and the importance of husbanding resources. Because of this (a) we are destroying the ecology and suffering grave hardships and dangers, (b) we are immensely wasteful, leaving little for important social expenditures, and (c) we fail to utilize human labor sufficiently, always preferring to use resources instead, causing unemployment. The upshot is that we (in this case presumably meaning those who make corporate decisions) need to re-attune ourselves to the importance of husbanding natural systems and using our technical intelligence more wisely, and Hawken is optimistic this will happen because he thinks it will be in capitalists’ interest to wake up—Hawken says that it will be "profitable."

It is a comforting framework. Hawken can plead loudly and even militantly for change, yet never once indicate that anyone is doing anything oppressive. Ignorance and outmoded habits are the only problem. More, there is no need to take on the rich and famous. The change sought is in their interest, too. We don’t have to force elites to relent to our agenda, we just have to converse with them and they will see the light and do business right—the natural way. Yes, there will have to be wiser use of taxes to provide proper incentives, but there is no need to mention redistributing wealth or power, much less changing defining institutions such as private ownership or allocation by means of market competition. We just have to give capitalism plus ecological wisdom a chance. Capitalism will do fine for us all, once we remove the crusty anachronistic habits of resource profligacy that the age of steam engines hoisted on our entrepreneurs.

There was one sentence in the article that hinted at an alternative understanding. I think it was a bit of a slip. Hawken never indicates that some people owning billions in capital and property and others owning less than zero is a problem, and, indeed, the idea of private ownership of productive assets is never questioned at all, but about allocation Hawken does write: "The value of natural capital is masked by a financial system that gives us improper information—a classic case of `garbage in, garbage out.’ Money and prices and markets don’t give us exact information about how much our suburbs, freeways, and spandex cost."

True enough, but why? Is this due, as Hawken argues, to holdover ideas from the golden age of industrial growth limiting our perceptions in a wildly altered context? Or is it because, as more radical ecologists contend, our allocation system structurally imposes just these results? Let’s take it a step at a time.

First off, is it old habits dying hard? In fact, one of the few positive attributes of capitalist systems is dynamism. Habits of mind or behavior which are not institutionally enforced and which become anachronistic from the perspective of system maintenance simply disappear. An individual habituated to writing with a pen or a typewriter might well continue to do so even against the wave of new options that computers offer. But no capitalist workplace will stick to old ways the minute superior new ways for fulfilling their corporate aims exist. Crusty old approaches won’t live beyond their time because market pressures ensure a continuous compulsion to reduce costs and increase revenues while simultaneously being sure not to do anything that will endanger long term profits.

Suppose an auto plant undertakes a study of a new way to make cars. Suppose the study comes back and shows that with the new approach the cost of production of each car will drop a few percent. Is the new approach immediately adopted? Well, how much will it cost to renovate? Suppose it isn’t much compared to the return, then will the new approach be adopted? Not so fast. Will the new approach spew poison into the ground water or dirty air into the local park?

Actually, it doesn’t matter what the answer to this question is because the answer has no direct bearing on the buyer or seller and therefore does not affect costs or revenues or the decision about the technology. So is the new approach enacted? There is one more consideration for the capitalist. Will instituting the new approach affect social relations over the long haul to endanger the proper rewarding of the difference between revenues and costs to owners alone? If so, and this can be because it empowers workers or it could be because it makes such an ecological mess that it will turn the neighborhood into an army of activists attacking the firm, forget it.

The capitalist understands that it doesn’t do any good to increase next week’s profits by a new production process that makes workers in the plant, or the union, or the entire local community, or even the whole working class so much more powerful a bargaining agent, that down the road they will accrue for themselves the productivity gains of the firm, perhaps even to the point of severely threatening capital’s dominance.

In light of the above, there are many problems with Hawken’s analysis.
First, Hawken ignores that the reason markets and prices do not account for ecological impact is that markets account only for the direct effects of transactions on the immediate buyers and sellers. This is all the agents involved learn about or have reason to care about, given the behaviors their roles dictate. And Hawken also fails to understand that a real effort to seriously address this weakness of markets would counter capital’s retaining and expanding its dominance, though modest interventions to prevent calamities that would hurt capital, are, of course, what the state is economically for.

Second, Hawken fails to recognize that each individual plant is not in the business of doing good for consumers, much less for society, but is in the business of making a profit for its owners and maintaining their dominant position, and that each business will continue to do this with a vengeance (or go out of business), short of being redefined into an entirely new mold, or coercively restrained.

Third, there is no understanding that the allocation of resources and energies to useless production rather than to socially beneficial production is not a horrible by-product of stupid holdover habits, but an important virtue of the system, at least from the perspective of those who run it. Allocation to waste and warfare instead of social wages and welfare does not happen because capitalists are sadists or mired in some outdated mindset of the past. They do not spend money on useless missiles, or on systems to thwart their workers’ initiative, or on cleaning up preventable messes, because they enjoy seeing poor people suffer for want of proper housing, health care, or education, or because they are in the habit of doing it and can’t break out.

By the same token, there is no way that they are interested in seeing all these funds applied to mitigating social ills. A self-centered, socially oblivious outlook is imposed by nearly every aspect of corporate life. As a result, capitalist care about everyone else’s condition only insofar as everyone else’s condition bears on their profits and power. To give the public good housing, education, health care, and protection against want would make society’s worst off much better off, and it would, as a by product, dramatically alter the balance of power between labor and capital, threatening capital’s ability to scarf up profits.

It’s just like unemployment. Anyone who works knows that when unemployment is high and the fear of losing one’s job is overwhelming, workers run scared and overtime will increase, conditions will worsen, and pay will drop. But when unemployment is low, and the threat to move on to a new job and leave the owner saddled with a hard-to-fill slot is real, workers get uppity, conditions improve, and pay increases. Social programs have the same effect on bargaining power and thus on the distribution of wealth, and this means their impact goes way beyond their immediate effect on recipients. That is why useless waste production is so much better from capital’s perspective than production that betters the lot of the worst off.

It doesn’t even matter if socially beneficial production can be done with short term profits higher than the short term profits of cleaning up spillage or making weapons, or that social production can be done employing more people than high tech waste production (actually, this is a debit from capital’s perspective). What matters is the effect not only on immediate profits, but also on the conditions of being able to continually accrue more profits in the future. Indeed, this is what most things economic are ultimately about – how much of the social product will go to capital, how much to the intermediary class of managers and other "coordinators," and how much to labor, and what will happen over time to the balance of power between these classes and thus to future allocation of product among them.

It isn’t industry—meaning, presumably, that we use steam engines or computers or assembly lines—that establishes the criteria of judgement behind allocative decisions. It is the criteria of judgement imposed by our economic institutions of ownership and allocation, that determines what type industry we will have, at what scale, with what products, distributed in what manner.

Take another example, technology. There is no such thing as a technological imperative any more than there is such thing as an industrial imperative. There is no anti-social bias that comes inexorably from thinking about technical options any more than there is an anti-ecological bias that derives from using industry. Neither using high tech nor thinking about it imposes any bias toward or away from accounting for ecological impacts. (Indeed, this is pretty obvious from Hawken’s own article, as he spends lots of time recounting and admiring how folks are trying to turn technological cleverness to the task of environmental cleanliness.)

The negative trajectories of engineering consciousness and technological artifacts alike derive instead from the defining impact of markets and private ownership. It’s the economy stupid, doesn’t mean that it is human curiosity, or productivity, or the desire to have lots of output—it means it is the roles associated with our production, consumption, and allocation institutions, and the effects they have on our behavior and interests.

When I was a student at MIT I noticed something interesting. The school’s design, ethos, and pedagogy were as much geared to a social outcome as an intellectual one. The aim was to graduate brilliant and capable problem solvers who would apply themselves wholeheartedly to any sufficiently demanding and interesting technical task they were assigned.

To use an example Chomsky proposed at the time, if the government or a big corporation asked MIT grads to design a hand gun that a peasant soldier could use to shoot down a B-52 (then carpet bombing Vietnam) the grads would be just as happy to comply as when they were asked to design a smart bomb that could be dropped from the fast moving B-52 to blow up a dam to flood the Vietnamese countryside.

What would ensure that all their technological creativity was always put to system serving rather than subversive ends was that the paymasters employing the engineers and providing their funds would only finance the former undertakings. The problem, therefore, isn’t that thinking about technology and science or using technology creates an anti-social bias, it is that pedagogy provided by capital elevates to engineer level only those who are largely undiscerning and won’t rebel, weeding out the rest, and that the market system guarantees that investments in engineers’ talents will only elicit products that reproduce social relations, not disrupt them.

Hawken doesn’t seem to understand any of this. Not private ownership, not the market system, not the state’s role, not the educational system. Nothing structural. And so even leaving aside the fact that Hawken ignores gender and cultural relations, the result of his article is that he proposes a strategy for gaining a better economy that may yield an occasional minor positive adjustment, if it isn’t totally bought out by corporate sponsorship, and that will help forestall some catastrophes (which capitalists would work to do even without Hawken’s entreaties), but that will do little beyond that.

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