A Historical Perspective on Sustainability & Human

Potential

Belo Horizonte August 2011

Brian Milani GreenEconomics.net

York U. Faculty of Environmental Studies

OISE, U. of Toronto

Green City Construction

Eco-Materials Project

Social Change TodayStrategic priority of ALTERNATIVES

over opposition.Community as the key locus for

change, but every level requires action

Need for long-term VISIONNeed for incremental change and

PIONEER ENTERPRISES in ecological economic succession.

Need for incentives/disincentives thoughout the entire economy.

The Green Economy:a Redesign, not simply limits

Direct focus on human (& environmental) need

The Service Economy:Extended Producer Responsibility (EPR) encouraging provision of

services not stuff.

Servicizing (voluntary EPR).

The “Lake Economy”: economic biomimicry:sectoral orientation: regenerative food, energy, manufacturing, c

ommunications.

Disarming the autonomous power of money: means, not end

New forms of economic security

Conscious support of the Commons: ecosystems, public spaces, electronic commons

Support for Real Wealth creation everywhere: Informal Economy

Building a community/ecosystem base: localization.

Common Sense Economics

Herman Daly “Trade Recipes,

not Cookies.”

Increase restrictions on the flow of material goods and physical capital (to minimize transport costs, etc.)

Lessen restrictions on the flow of information and culture.

note:

Globalization does exactly the opposite: via free trade and intellectual property law.

Localization• LOIS vs. TINA• Local First not “buy

local”• Multipliers• Employment• Stability / security

– Peak Oil / Corporate Mobility

• Quality of Life• Efficiency

The Green Economy

• A Historical Transition: …from Quantity to Quality

• A Question of Potentials …not simply limits

• Key to Sustainability: Redefining Wealth

Redefining Wealth

Quantitative: Money & Material

Accumulation

Qualitative: Well-being

Regeneration

Green as Postindustrial

• from mechanics to organics• from machinery to the landscape• culture-based development• substitutes intelligence for resources

(people-intensive)• focuses on end-use, or human and

environmental need• from quantity to quality: redefining

wealth

The Centrality of the Landscape

“The industrial age replaced the natural processes of the landscape with the global machine…while regenerative design seeks now to replace the machine with landscape.”

…John Tillman Lyle

Human Development in the Green Economy

• Production: human creativity the key

• Consumption: “end-use” Direct targeting of human need = massive resource savings

• Regulation: participation at all levels.

Labour & Resource Relationship

• Industrial economy: resource-intensive. labour productivity: Substitutes resources for labour.

• Green Economy: people-intensive / resource-saving. Substitutes human creativity for resources

Scarcity, Class Power & Waste

• War production, suburbanization and effective demand.

• Waste of resources

• Waste of human potential

Propping Up Effective Demand in North America after WW II

• The Waste Economy: suburbanization, permanent war economy. The artificial reproduction of scarcity. The Effluent Society.

• The Paper Economy: planned inflation and the establishment of the debt-based economy. The economic treadmill.

The Post WW II Waste Economy

Permanent War Economy

The Suburb Economy: Oil / Autos /

SubdivisionsNote gender and racial subtext of sprawl

“The greatest misallocation of resources in human history.” …James Howard Kunstler

Fordism & the Reinforcement of Industrial Wealth

Matter

Waste

Fordism

Suburbanization/ Consumer Economy

War Industry

Money

Debt

Keynesianism

Paper Economy

Planned Inflation

New forms of credit-money

Post-Fordist Casino Economy (post 1980)

• new technologies & Megabyte Money• financialization of economy: sector 30-50

times (?) larger than the material economy• Speculation: Stomp the weak / Get rich

quick• Empty wealth creation: de facto

redistribution of wealth from poor to rich.• The End of Mass Consumption & rise of new

“producer services”: new forms of ‘effective demand’.

• Polarization of work and society– end of social contracts: attack on Welfare

State

– McJobs: from GM to Wal-Mart

– The Great Risk Shift: more economic insecurity for almost everyone.

Source: Magdoff , 2008: calculated from tables L.1 and L.2; Flow of Funds Accounts of the US; and table B-78 from the 2006 Economic Report of the President

The Global Casino: Hijacking the Information Revolution

• expansion of employment in speculative industry– Wall St.: more advanced technologically than

the military.

• Bubble Economies: last ‘frontiers’ for capitalist growth.

-stock crash of 1987

-tech stock bubble of late 90s

-housing bubble of 2001-07• Housing speculation: most destructive &

exploitative of the poor & average people.

The Soft Energy Path

• A flexible diverse mix of energy supply • Primacy of Renewable energy sources • Focus on END-USE, on Conservation, and on

efficiency of use • Energy matched to the task at hand in both

Quality and Scale • Participation-oriented structure--in both

production and consumption • People-intensive development and Job-

creation

End-Use & the Green Economy

1. The Service Economy“Hot Showers and Cold Beer”

Nutrition, Illumination, Entertainment, Access, Shelter, Community, etc.

2. The “Lake Economy”Economic Biomimicry, flowing with nature,

Every output an input, Closed-loop organization, Let nature do the work

The Economy in Loops

Industrial Ecology & Service• Ecosystem model: nature-imitating• Industrial ecostructure: Reuse-based Manufacturing• entails new levels of producer liability• reduces both the flow of resources and their speed through the

economy• encourages local/regional economies, and• facilitates high skill levels

Extended Producer Responsibility (EPR)

• designing ownership patterns to achieve stewardship

• a positive form of accountability that can “change the DNA” of corporate entities

• closes loops and encourages service production

• takes different forms in different industries and situations.

Expressions OF EPR

• Product take back for waste management• Life-cycle partnerships for waste management• Materials selection• Materials management• Extended environmental management programs• Leasing systems• Delivering service and function instead of products• Design-for-the-environment programs• Environmental purchasing

Market Transformation

• Social & Environmental Values become drivers of “mindful markets”

• Money & capital increasingly a means (not the end-goal) of economic development

• Involves the transformation of regulation —incentives & disincentives built into everyday economic life

Distributed Regulation• Need for incentives &

disincentives embedded in everyday production & exchange.

• 3rd Party certification systems as non-state regulation.

• Finance & taxation as regulation• Power of “collective consumerism”• B-Corp: certification of corporate

governance: changing corporate DNA

• Ownership tailored to stewardship and democracy.

A Dashboard for the Cockpit

The ‘Family’ of indicators:– Urban Metabolism or regional mass balance– Green GDP (e.g. Genuine Progress Indicator—GPI )– Ecological Footprint– Carbon accounting / carbon footprint– Life-cycle Assessment (products, processes, landscapes)– Industry-based accounts: food, building, forestry, etc.– ISO 14000– Local Development Standards– 5 ‘capitals’: personal, professional, spiritual, environmental

and financial– Firm sustainability accounting– Risk Assessment, EIA, etc.

– Sustainable Community Indicators

Dimensions of ‘Real’ Economic Strategy

• Focus on production for needs; devise means to do this

• Integrate formal / informal economies: home-based production—food, energy, craft, reuse, and community-design to support it

• Target key areas of conventional waste and inefficiency for paid work: retrofit, renovation, deconstruction, reuse centres, local-sustainable food, horticulture.

• Transform conventional work on green principles—every job and sector

• Downsize destructive & parasitic sectors: financial, advertising/propaganda, incarceration

Dimensions of Strategy II• Transform unionism: based on the

purpose of work and nature of wealth--community-based

• Transform business & markets: – new drivers for regeneration (based on real

rather than financial objectives)– new forms of stewardship– new forms of ownership & participation

• disarm the totalitarian power of money scarcity

• end debt-based money system, erode speculative finance

• decommodify knowledge: strengthen the electronic commons

Living in De-Material World

Redesign not simply controlsDirect focus on human (& environmental) need

The Service Economy:Extended Producer Responsibility (EPR)

encouraging provision of services not stuff.

Servicizing (voluntary EPR).

The “Lake Economy”: economic biomimicry:sectoral orientation: regenerative food, energy,

manufacturing, c ommunications.

New forms of economic security

Conscious support of the Commons

Disarming the autonomous power of money

Building a community/ecosystem base: localization.

Knowledge-based / Quality-based development

• Greater focus on the ‘human factor’– From mindless to mindful markets:

• Centrality of end-use & purpose of production• Integrated design: multi-dimensional goals

• Greater levels of democracy/participation– From hierarchical to decentralized regulation– From external to internal self-regulation– Greater stakeholder involvement– Greater integration with everyday exchange & civil

society– Role of The Commons: ecological, physical,

electronic; Sharing & saving

Varieties of EPR• liability where responsibility for environmental damages

caused by a product—in production, use, or disposal—is borne by the producer;

• economic responsibility where a producer covers all or part of the costs for managing wastes at the end of a product’s life (e.g. collection, processing, treatment or disposal);

• physical responsibility where the producer is involved in the physical management of the products, used products or the impacts of the products through development of technology or provision of services; one common expression of this would be…

• ownership where the producer retains ownership of the product over it entire service life, and

• informative responsibility where the producer is required to provide information on the product and its effects during various stages of its life cycle.

(Thorpe and Kruszewska,1999; Linquist, 1998)

Strategic Modes of Regulation

• Civil Society-based Certification systems• Ecological Tax Reform / tax shifting• Subsidies / green scissors • Green Procurement• EPR legislation• Guidelines for Green Finance: green

development plans, etc.

The Crisis of Markets

The Swing to Regulation

3-D’s of Green Development

• Dematerialization• Detoxification

• Decentralization

Manufacturing & the Ecological Service Economy

• Subordination to Mission / end-use / need / quality• Waste Equals Food • Dematerialization of Production and Higher

Resource Efficiency• Reduction of the Speed of Resource Flow through

the Economy• Appropriate Scale• Regenerative Work is Created• New Rules & Closed Loops: LCA and EPR

Indicators & real wealth• Qualitative Wealth is far more complex:

requires more quantification

• Qualitative Wealth is place-based or specific to circumstances

• Qualitative Wealth is needs-based, requiring examination of consumption.

• Accounting takes place on many levels in terms appropriate to that level

Industrialism: Accumulation• Production-for-production’s-sake• Invisibility of key factors• Centralization of production, massive upfront

investment • Focus on labour productivity : resources

substitute for human energy• Cog-labour: humans as component parts• Regulation: controls as limits• Scarcity-based: role of waste since WWII• Globalization: free trade & intellectual property

Postindustrialism: Regeneration• New relationship of culture to economics: centrality of

human development• Substitution of human creativity for resources• Direct targeting of human need: conscious consumption• Human-scale technologies: production ‘distributed’ over

the landscape ; Integration: ALL places are places of production

• Qualitative Wealth is PLACE-BASED• Distributed regulation: incentives for positive action

throughout economy.• Self-reliance / interdependence:

“Trade recipes, not cookies”

Structural obstacles to sustainability

• Nature of the Corporation

• Centrality of Economic Growth

• Ownership patterns inconsistent with Stewardship

• Alienated relationship to human need– Creating rather than responding to it

Corporate Strategies• Corporations as financial, not

production, entities• Structural problems: the ‘bottom

line’ • documentary: The Corporation• Need to change corporate DNA• Need for outside help: regulation

(EPR), new enterprises networks, certification

• The Stakeholder Corporation & democracy

Community / Small Business • The realm of cutting-edge alternatives in almost

every sector• Need for new & stronger networks• Local market power based on solid knowledge• Import substitution • Regenerative finance• Necessity of empowering all sections of the

community• Community development Plans & Indicators

                                                                                           

                                       

Companies that provide products or services that improve the quality of life in their communities

Companies that operate more responsibly

Companies that invests their profits in

social or environmental causes

Values-Driven Business

River (Industrial-Linear) vs. Lake (Green-Cyclical) Economy

• resources: Life cycle approach• human need: end-use approach• EPR and design for environment• is industrial capitalism a form of quantitative

development or accumulation?– explains why efficiency or even profit isn't

enough: question of self interest

• Stahel: issue of liability• Beyond Capitalism & Socialism:

What forms of Ownership support

Stewardship?

Entrepreneurial Value Creation

Local Food Plus:

valuation

regulation

marketing

education

Indicators & Trends in Regulation

• Raw material for certification systems

• Regulation as more civil society-based

• Markets as ‘values-driven’• FSC wood / LEED building /

etc.• integrated evaluation /

regulation / marketing systems

Historical Trends in Regulation

• Early industrial capitalism: – Unconscious-decentralized / focus on material needs /

subordination of state to markets: Invisible Hand / focus on production / unbridled exploitation of nature / theoretical democracy

• Fordist & state-socialist industrialism: – Conscious-centralized / new (and disguised) focus on non-material

needs / Need for more planning: political intervention / More concern with consumption & (quantitative) demand / managed exploitation of nature / representative democracy

• Postindustrial Potentials (today):– Conscious-decentralized / direct focus on non-material needs /

integration & transformation of state & markets / integration with nature / direct democracy

– Super-industrialism: Post-Fordist globalization: avoidance, suppression or channeling of the above. Crisis.

Localization

• LOIS vs. TINA

• Local First not “buy local”

• Multipliers

• Employment

• Stability / security – Peak Oil / Corporate Mobility

• Quality of Life

• Efficiency

Markets and MaterialConnection between needs,

wealth & markets.

the Invisible Hand: worked...

1. for an economy focused on meeting primary needs—simplicity.

2. in a situation of relative scarcity

3. in the absence of sophisticated information technology

Class Society

...based in relative scarcity:

1. control of scarce resources & ...

2. monopoly of high culture

...by a minority.

Industrialism: The Divided Economy

Invisible Visible Use-value Exchange-value “Consumption” “Production” People Things Unpaid Paid Women Men Informal Formal Private Public

Invisible Economy (1) Total Productive System of an Industrial

Society(layer cake with icing)

GNP-Monetized

½ of CakeTop two layers

Non-Monetized

Productive ½ of Cake

Lower two layers

GNP “Private” SectorRests on

GNP “Public” SectorRests on

Social Cooperative

Love EconomyRests on

Nature’s Layer

“Private” Sector

“Public”Sector

“underground economy

“Love Economy”

Mother Nature

All rights reserved. Copyright© 1982 Hazel Henderson

2