Natural Capitalism?

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

The cover story of the April issue of Mother
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

  • "…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
  • "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

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

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

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