A Reformist View: Business as if the Earth Matters

by Joe Kresse

February 5, 2001



Imagine that you've come from the center of the Galaxy to look at planet Earth. You haven't been here for a thousand years so you're going to go back and report on its condition. You'd see some positive things such as the communications revolution that enables humans to talk across the planet in ways they never could before, and lots of other new technologies.

But what would be most obvious would be the huge negative impact on the planet humans have had: loss of biodiversity, loss of topsoil, loss of rain forest, less clean air and water, global warming, acid rain, the ozone hole, chemicals showing up in everything.

Not a very reassuring report.

As a business person, I have to admit that we've been a big part of the problem. Economics - business - is the major driver, planetwide. Business is more powerful than governments. Some transnational corporations are bigger than some national governments. Businesses can go wherever they want to go. If they don't like a government in one country, they can move to one somewhere else.

Of the three most powerful institutions in the world - business, the church, and the nation-state - only business does not have as a part of its charter the well-being of the whole. At least nominally, a church is concerned with the values that would enable a person to live a fulfilled life, and a national government tries to assure that its citizens have their basic needs met. But the primary concern of business is a single criterion: return on investment (or increasing shareholder value, as it is currently described).

If things are to improve for future generations, business must change. Fortunately, business provides a tremendous outlet for creativity. Creativity is one of our unique contributions as humans - most other animals are pretty much genetically programmed. The bird goes south in the winter and north in the summer, no variation. But we have created so much of what is around us out of our imagination. Business rewards this creativity incredibly well, so it's very attractive to us and has a tremendous possibility for creating something positive as well as something negative.

The Big Shift

Now, we are in a big shift which creates the possibility of something new. The shift is cultural, technological, and includes a continued on next page change of consciousness. Culturally, old institutions are losing their effectiveness and the power to hold us. Churches have lost a great deal of their ability to mold beliefs and to educate and to set values. The educational system has all sorts of problems; even universities are no longer beacons of what is possible, but have become purveyors of the status quo. The media are the same way. They used to stand outside of society and call out what was wrong; now they are owned by large corporations with widely dispersed interests, and the news we get is far too often what's in the best interest of money.

So we don't have a lot of faith in our old institutions, and we no longer believe in much of what we see and hear. At the same time, because of global communications, we're aware of the whole world around us, including the opportunity to realize that the way our country does things is not necessarily the only way to do them.

Technology, which is one of the things the economic system produces, is another reason for this shift. Biotechnology is addressing the very genetic makeup of life. We're right down to asking, "Can we decide exactly what our kids are going to be?" Designer babies. Computer gurus say we'll have computers that are a million times faster and more powerful than the ones today. Software is moving toward voice recognition. Fiber optics now allow huge amounts of data to be moved in nanoseconds so everybody is going to know everything immediately. There will be information overload, but you'll also be able to get whatever you need.

But perhaps the biggest shift is the story being revealed by science - one of an emergent, unfolding, dynamic universe. It is not some static background that we were plunked into, but a continuous, unfolding, 13 or 14 billion-year-old energy event that has produced everything we see, including us. We're all intimately a part of it, and interconnected with it, and it continues to unfold and move in an emergent kind of way. This new understanding can change our consciousness of who we are and why we're here, as we experience the awe and wonder of the process which starts with elementary particles, proceeds to hydrogen, to helium, to stars, to supernovas that produce the heavy elements that produce another generation of stars and planets that produces a planet like Earth, which produces life which produces us.

Nothing one could observe at the beginning would predict that there would be sentient beings 14 billion years later who could look back and understand this whole sweep of cosmic history. And we are the first generation of humans to have this understanding. If what Jonas Salk said is true - that consciousness of evolution leads to the evolution of consciousness - then the more conscious we are of how we got here, the more our consciousness will develop.

Shaping the Shift

How are we going to shape this wave of change? One thing I'm convinced of is that it's more valuable to focus on the future than to try to fix the present. With the rate of change today, fixing the present is too late - it's already past and too well entrenched. For example, we could be worrying about fossil fuels and our use of oil. It's something we don't want to completely turn our back on, but the leaders in the oil companies and in the car companies already know that that game is over - oil is running out and future cars will run on hydrogen. Shell, British Petroleum, Ford, the Japanese automobile manufacturers - they're not fighting the petroleum foot-dragging game anymore. They gave that up probably two or three years ago, and now are in a race to see who is the greenest and who is going to develop the alternative to oil.

I believe the basis for shaping the future requires a fundamental change at the level of worldview, of principles, of values. All of those come out of the stories we tell ourselves about who are we, why we are here, and what it is we are to do as a species and as individuals. Stories are at the core of everything we believe and think, and every culture has its stories. The cultural historian Thomas Berry would say that in the West we're between stories. The old stories no longer inform our behavior in this world and we do not yet have a new story of how we are to function in this new environment. But given our power to affect the future, we'd better get a new and adequate story fast.

The worldview, the principles that are adequate for our time, actually come out of the rapidly increasing knowledge of how the Universe/Earth system works.
  1. Most basic is that everything is connected. What we do affects all. For most of our history, we've been able to ignore this. Early on, there weren't many of us and we didn't have much power, so if we fouled up in one area, we could always move on to the next one. Now our power is so great that we have to realize that everything we do has an effect everywhere else.
  2. Earth has supported countless forms of life for almost four billion years, starting with single cells - bacteria - and ending up with the profusion of life we see today, always increasing in complexity and consciousness. That says to me that life favors consciousness, it favors complexity, it provides everything we need.
  3. We're born of the Earth, we're part of it, we're dependent upon it. Since it nurtures us, it is only natural that we call it mother.
  4. Diversity - culturally, politically, biologically - strengthens the system. Diverse ecosystems are strong. Monoculture doesn't work.
  5. Life is a complex, adaptive, self-organizing system. Such a system depends on autonomous agents that make their own decisions, yet act out of the same set of instructions. In response to evolutionary pressures, autonomous agents are able to reorganize at a higher level of complexity or consciousness. For example, when birds are flying in a flock, it isn't that one head bird says "everybody up - you go right or left." Every bird has a basic set of instructions: keep a minimum distance from the bird next to you, match speeds with the birds around you, and tend towards the center of mass of the birds near you. Since they all follow these instructions, you get the elegant, flocking behavior that enables them to avoid predators and survive.
As human beings, we have the same issue. Here we are creating this incredible technology and power which has created evolutionary pressure. We're degrading our environment. We're crowding ourselves in. We have all these weapons.

How are we going to reorganize ourselves at a higher level of consciousness and complexity? It requires that we have a common set of instructions, and those instructions come from the natural world. They are derived from the five principles listed above. We don't have to make them up, and no one has the received wisdom over anybody else. We don't need intermediaries anymore. We don't have to depend on priests or gurus or anyone else. Just observe how the natural system works. What is it telling us we need to do? What is our function as human beings?

Our basic instructions ought to provide an economic system that enhances life, not one that degrades it. We should recognize that all life - everything - is sacred, not just human beings. We can no longer act as if the Earth is here for us to use, that we have dominion over it, and we can do with it whatever we want.

A New Economic Paradigm

Business people and economists still love Adam Smith, a thinker two centuries ago, whose tagline was the invisible hand guiding the market. Today people assume that means, "Let there be a free market and the invisible hand will lead to the best outcome." That's great, except that Adam Smith lived in a time of local ownership where owners were subject directly to the results of their actions. It was a we-are-one, everything-is-connected principle where you couldn't foul your own nest and get away with it. If the factory put out smoke, people came and knocked on the factory owner's door. Or the owner's wife complained to him that her laundry was sooty. Or the river became dirty and no one could drink the water, including the owner of the factory. In those days, they saw the company, the business, as part of the whole.

Today, with absentee owners, the idea of the invisible hand doesn't work, because the owners don't suffer the direct consequences of what their company does. And their consciousness isn't high enough to see that when you turn Guatemala or Honduras into a monoculture of bananas, it's going to cause a problem - maybe not immediately, but a problem for their children or grandchildren.

Another theory - that of economist David Ricardo - stressed comparative advantage. It basically said that if a country can do something twice as well as anybody else, that's what the country ought to focus on. But Ricardo also assumed local ownership and did not consider there would be free flows of capital. He assumed that the people in Honduras would be autonomous, decide what to do, and finance and build their own plants. He didn't consider that people in the United States could buy Honduras and turn the country into a plantation with the result that the Hondurans could no longer grow their own food and would end up at the mercy of a world market.

With globalization, that is pretty much the way the world now works in third world countries. Modern free markets ignore the bioregional basis of life - what would be best to be grown in that place for the long-term well-being of that place, of that soil, of the people in that place. As a result, locals are displaced, people are thrown into the cities in slums, or forced to sharecrop on somebody else's farm instead of owning their own land.

So we need a new economic paradigm, one that has a broader set of criteria than return on investment or increasing shareholder value. Fortunately there are some good signs. One, now spreading in Europe, is known variously as the triple bottom line, the three "P's," or the three "E' s." The idea says that corporate success should be measured by the way it treats the three P's - people, the planet and profits, or the three E's - equity, ecology, and economy.

Shell is one company using this approach. In a recent report titled How do we stand? People, the planet, and profits, the Shell Report 2000, the company president writes: "My colleagues and I are totally committed to a business strategy that generates profits while contributing to the well-being of the planet and its people. We see no alternative." By publishing the report, Shell is saying, "We'll be accountable." Obviously, we have to hold their feet to the fire - it's not going to happen automatically. But the public has the power to hold them to it.

Employees also have power, more than at any time in history. At the most recent Parliament of World Religions, one consultant talked about the evolution of ethics and meaning in companies today. Her message: Within a dozen years, if a business does not recognize the need for work to provide a sense of meaning for employees, does not function with integrity, openness, and ecological sensitivity, does not foster trust and fun, does not value the intuitive, it will be unable to attract top?quality employees, because they will have alternative opportunities which do provide these qualities. And I would add they won't have customers to buy their products or investors who want to buy their shares.

Another factor business people have to face is the grave consequence in being seen as an environmental or social destroyer. Witness Nike, the Gap, and other companies that have been blindsided by something they never thought would be a problem - using cheap labor in a foreign country - but turned out to be one. That's one side - the stick. The other side is the carrot. The book Natural Capitalism, for example, is filled with examples of increases in efficiency, the reduction of pollution, and reuse of materials by companies in all kinds of industries.

There are certainly some people in corporations who love to be the biggest shark in the pool and think it all ought to be a big blood bath, and if they can be the one to kill everybody off, great. But there are other people who are saying, "I wish I didn't have to fire people just because it looks like it's going to be a bad quarter, or run the risk of my board throwing me out, or make a bad environmental decision right now because it's going to hurt earnings for the next two quarters." That's the dilemma CEOs are faced with when the board and the stockholders have one criterion: How's your return on investment versus your competitors?

Helping Shift the Economic Paradigm

There are some new movements that support this paradigm shift. One is The Natural Step, which was started in Sweden by Karl-Henrik Robèrt. He consulted with a group of scientists and came up with four basic system conditions that he said we need to hew to, and business ought to operate by. He said every time you make a decision, ask "Am I going in the right direction? Or am I violating one of those conditions?"

What are some specific changes that should be made? Don't allow corporations to make political contributions. Place limits on corporate charters and provide for revocation for behavior detrimental to life. Limit ownership of major media outlets to one per corporation. Now three corporations own most of the major media outlets in this country - not good for democracy, since we're not getting a diverse point of view any more. That's one of beauties of the Internet. It has broadened our ability to get news from sources other than the ones which just tell you the same story.

We ought to shift from taxes on income to taxes on carbon, the use of virgin materials, and the production of waste and pollution. It's a no?brainer. Why would you tax people for working? You want people to work. If you got rid of income and payroll taxes, you could employ more people because the cost per employee would be lower for every dollar of take?home pay.

While we must look at the changes needed in business, we also need to pay attention to our personal consumption, how we live. A great little book called The Consumer's Guide to Effective Environmental Choices, put out by the Union of Concerned Scientists, says you can drive yourself crazy trying to figure out whether to use paper or plastic, cloth or disposable diapers. They said don't sweat the small stuff. There are seven things you really need to pay attention to.

First, the car or truck you drive. Is it a gas guzzler or does it use little or no gas at all? Second is meat and poultry. Together, they cause 20 percent of common water pollution and use 860 million acres for livestock raising and animal feeds. Third is conventional cultivation of fruits, vegetables, and grains. Eating organic foods means less chemical fertilizers and pesticides to run off the ground and into the water system.

Fourth is your home heating, hot water, and air conditioning. Here conservation is the key. Fifth is household appliances and lighting. Most refrigerators are big energy hogs. Use compact fluorescent bulbs. Home construction is sixth: How big a house? Is there anything recycled in your house or is everything new? Household water and sewage are number seven.

Another thing to do is use the book Your Money or Your Life. It has a nine-step process for reducing the amount you consume to that which gives you true satisfaction. It gives you a tool to ask: "How much time did I spend to actually earn this money, including commuting time, the clothes I had to buy, the vacation time to unwind, the taxes I paid?" You find out your actual hourly pay is about a quarter of the nominal number. And then you look at what you're buying. Just by doing that, you'll quit buying a lot of stuff. It's a tool for living more simply and more on purpose. There is no prescription for what you ought to do; you just discover what you want to do with your life.

We're all, at various times, buyers of products, investors, and employees. So we can vote all three ways. One eighth of all the money now in the financial markets has some sort of social screen on it. It's called socially responsible investing and it's growing twice as fast as the nonscreened money. As more and more dollars go there, other companies don't have access to those dollars. A lot of the screens now are just "no guns, no liquor, no tobacco." Those screens are going to get better and tighter because people will demand it.

I believe the tide is actually turning and that we will transform our culture into one that supports the long-term flourishing of life. There is evidence everywhere that humans desire a better world and that they're willing to work for it. The question is whether it will happen quickly enough to avoid irreparable damage.

One way I guarantee the shift will never happen is if we say, "I'm fighting the good fight, but it's a rear-guard action and there are overwhelming forces against me." On the other hand, if enough of us take a stand for that transformation, saying, "It will occur, it must occur, I'm committed to it occurring," I believe the universe will support us in that turning. That's the way the world works. If there is enough human intention, things will change.


         Joe Kresse, a former partner with Arthur Andersen, works tiredlessly to conceptualize a possible future. This piece, a transcript of a speech given on various occasions, was originally published in the magazine Timeline. It is re-published with the author's written permission.


         Please, DO NOT steal, scavenge or repost this work on the Web without the expressed written authorization of Swans, which will seek permission from the author. This material is copyrighted, © Joe Kresse 2001. All rights reserved. No part of this material may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher.



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