Sustainability

Natural Capitalism

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No doubt the free market has brought great benefits to people throughout a diverse array of nations. But there are two fundamental problems to Western style capitalism – it destroys nature and it destroys people.

Over the last decades, several alternative economic systems have been developed, one of them is Natural Capitalism. At its core the model suggests four major shifts in business practices to overcome the problems of resource depletion and to a lesser extent social inequity:

 

  • Radically increase the productivity of natural resources
  • Shift to biologically inspired production models and materials
  • Move to a “service-and-flow” business model
  • Reinvest in natural capital

An interesting aspect of the model is its view on capital, identifying money and goods (like infrastructure or machines) as ordinary, well managed capital, while two other forms of capital, nature and people, are neglected and therefore wasted.

The book “Natural Capitalism: The Next Industrial Revolution” describing the model  was first published 15 years ago but until yet, its ideas have not led to major changes to the way business is conducted today.

Nevertheless, the authors offer interesting explainations of the circumstances that led to the current challenges, for example the following lines on scarcity and waste written by Paul Hawken for “Mother Jones” magazine

“Modern industrialism came into being in a world very different from the one we live in today: fewer people, less material well-being, plentiful natural resources. As a result of the successes of industry and capitalism, these conditions have now reversed. Today, more people are chasing fewer natural resources.
But industry still operates by the same rules, using more resources to make fewer people more productive. The consequence: massive waste — of both resources and people.”

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