Apr 05 2010
The ecology of commerce
I’ve just finished yet another environmental book: The Ecology of Commerce (by Paul Hawken). The book is from ’93, which makes it rather old (can you believe it’s almost 20 years since ’93?) – but it’s still excellent and highly recommended.
The main thesis of this book is that the markets today are not efficient, because we are externalizing costs: health costs, cleaning costs, etc. Anything that is paid by someone else and not the company that makes the product. In fact our markets today are optimized for companies that are good at externalizing costs. For example: let’s say we both make a TV. My TV plant uses a lot of bad chemicals that I throw in the garbage. These create health problems and need to be cleaned up, but I’m not the one paying for the cleaning or the health bills- the local authority and your health insurance is the one that has to pay. So in fact we are all subsidizing the wasteful plant.
He compares Organic food to “normal” food. He says that actually Organic is cheaper to make, because it does not destroy the soil with chemicals which gets to our water and food (not to mention Organic is healthier, and can actually produce more food per acre eventually). He also says the same about cigarettes. Did you know for example, the 1/3 of the fires caused in US homes are because of cigarettes? and you know why? because they contain special chemicals that keeps them burning. He claims that the cigarettes makers should pay for this, not all of us who do not smoke. Obviously the same goes for health issues – we are all paying more because of the smokers, and because the companies deliberately use dangerous and addictive chemicals.
He raises some nice ideas on how to advance towards a “sustainable economy”. He is in favor of Cradle-to-cradle which is rather a hot topic today. Another idea is to raise high green taxes and use the money to lower income tax. That’s a great idea. Think about it – we can raise electricity prices by 1000%, and then give the money back by lowering taxes. So eventually you’re not worse-off (at least not in average), but you have a HUGE incentive to cut your electricity usage. The same can be used for water, gas, etc.
The book is a bit depressing in parts, as all environmental books tend to be… but go ahead and read it. Like some reviewer said : “the book is a must read for anyone who cares about living”…