Can a socially and environmentally responsible capitalism provide solutions that deliver us from the profound problems besetting humanity? Paul Hawken, author of Natural Capitalism, claims that, "Business is the only mechanism on the planet today powerful enough to produce the changes necessary to reverse global environmental and social degradation." In this he overreaches. Whatever good socially responsible businesses may have to offer — and there is much — they will not be our deliverer.
Capitalist economy functions within a range of possibilities defined by its fundamental principles. The basic assumptions defining the capitalist paradigm, which give coherence to its economic system, limit the scope for modifying that system. The more incompatible any proposed reforms are to the fundamental principles of capitalism, the more difficult they become to actualize.
The constraints inherent in the fundamental nature of capitalism eventually limit its capacity to resolve the difficult problems facing humanity. What is this fundamental nature? P R Sarkar, founder of PROUT, observed that capitalism is based on "an individual-oriented, profit-motivated psychology", and that the natural outgrowth of this psychology is for "wealth to accumulate for the benefit of a few, rather than for the welfare of all." This inherent contradiction — between the wealth accumulated by the few and the welfare of the many — contributes to most of the imbalances afflicting societies, individuals, and our biosphere today.
Humanity has come to a juncture in which it must either adopt a model of development that works for the planet as a whole, or else continue down the path of chaos and collapse. If our path is to be one of renewal, then sustainability, equity, universal prosperity, and holistic fulfillment of human needs must flow organically out of the inner logic of a new model of development — rather than be the forced result of a complex mix of green taxes, green consumerism, responsible investing, and external cost accountability valiantly but futilely trying to constrain the carcinomic greed inherent in a profit-driven economy.
Features of an Alternative Economic Paradigm
Business philosopher (and former priest), Michael Novak, in his effort to articulate a "theology of capitalism", takes a view of capitalism much like the view that Winston Churchill took toward democracy: that it is a terrible form of economy except in comparison to the alternatives. Novak's assumption that humanity is stuck with capitalism as the best alternative available is prevalent throughout the reform movements struggling to deal with the social and environmental impacts of the capitalist economy. But there are others who have not been so willing to accept the inevitability of capitalism. E F Schumacher, for example, aspired to an "economics as if people mattered" and championed a human-scaled, decentralized economy. The Progressive Utilization Theory (PROUT) also envisions a new economic system. If humanity must go beyond the capitalist paradigm to survive and prosper, what would an economic model look like that optimally meets human needs? Here are some core features of such a new economic paradigm.
Cosmic inheritance
Capitalism's principle of individual ownership rests on a materialist concept of cosmology and wealth. Greater breadth must replace such selfish retentiveism with a magnanimously expansive concept. As Sarkar explains this conception, "This universe is created in the imagination of the singular Cosmos, so the ownership of this universe does not belong to any particular individual; everything is the familial commonwealth of us all. Every living being can utilize their rightful share of this property. This whole animate world is a large joint family in which Nature has not assigned any property to any particular individual." In this concept of wealth, individual ownership of wealth cannot be accepted as absolute. Everyone has the right to use the wealth manifested by the Cosmos, but none can claim ultimate ownership. This perspective of ownership is consistent with the values of most indigenous peoples and wisdom traditions around the world.
Economic decentralization
Economic decentralization must be a central objective of a new, humanistic economy. Hawken's natural capitalism speaks of the need to "replace nationally and internationally produced items with products created locally and regionally." But it does not seem to appreciate how problematic this is within a capitalist economy, which has the natural tendency to expand markets and concentrate or centralize capital, much the same as malignant carcinomic cells zap the body's resources and essence from many more life supporting cells of the body. A capitalist economy will irrevocably move toward globalization, till its malignant carcinoma consumes the vital exsence of every living being and that of the planet itself. A human- and earth-centered economy, by contrast, will tend toward localization and optimize life for all living beings and the planet in a progressive manner.
Worker-managed economy
The three most effective production incentives are profit-sharing, equity, and participation in decision-making. The form of enterprise in which all three of these production incentive approaches are maximized is the worker-owned and managed cooperative. Cooperatives are best suited to elicit the productive potentiality of workers, and should be the predominant form of enterprise. Cooperatives also minimize worker alienation, promote equitable distribution of wealth, and foster decentralization.
Consumption-motivated economy
Capitalism is a profit-motivated economy. Making profit cannot be ignored, as occurred in Soviet style state-run enterprises, but neither should it serve as the central rationale of economic activity. The central purpose of economic activity should be to meet the needs of people. Such an economy would increase the availability of consumer goods, and at prices that are affordable. It would also work to increase people's purchasing capacity and see that none are without the earning power needed to acquire their basic necessities.
Economic democracy
Concentration of, centristic economic power and wealth perverts the political process. Moneyed interests invest campaigns, influence legislation, and corrupt regulatory agencies. And the moguls of capital maintain the ultimate veto power through capital flight, so that if government policies are enacted which threaten their financial interests, they can move their capital out of the local or national economy, leaving behind economic ruin. For democratic governance to be of the people, by the people, and for the people, economic power must be dispersed. Said another way, democracy must be extended beyond the political sphere to include popular participation in the control of capital and the control of economic decisions.
Self-determined regional economies
People can best coordinate social and economic development when they share certain unifying factors, such as a common culture, shared economic potentials and problems, similar geography, and a common sentiment about their heritage. Such factors organically define regional socioeconomic units. Social and economic development undertaken within such regional units can be easily adjusted with local conditions, and so development can be better geared to satisfy human needs. For locally sensitive development to take place, regional economies need to have control of their resources and capital and to be free from domination by outside economic forces.
Balance
Balance is essential to all living systems, and balance needs to be restored to human society. Nowhere is this more true than in economics. As detailed in the World Commission on Environment and Development report, Our Common Future, most destruction of ecological systems is driven by imbalanced economic forces. An ideal economy should exhibit the stability of process that is found in natural systems, not the disruptive growth processes found in malignant ancer cells.
NeoHumanistic values
The philosophy of humanism uses human welfare as the measure of social good. yet our world is home not only to humans, but to all of Earth's life forms. PROUT’s NeoHumanist value system recognizes the existential rights of all living beings. Economic activity would not be allowed to violate the right to existence and expression of other species. It is not sufficient to want "an economics as if people matter", as E F Schumacher called for. What is required is an economics as if living beings matter. The NeoHumanistic outlook recognizes that humanity exists within the larger web of life, so that any harm we do to the web will ultimately affect us all as well.
Spiritually-based concept of progress
Generally absent from the discussion about how best to conceive and pursue sustainable development is consideration of the purpose of development. If the purpose of development is only to increase material amenities, then sustainable development will result in little more than maintaining our materialist lifestyle without destroying the environment. Yet it will not help us attain inner fulfillment. For this we must reorient our idea of progress from a narrow focus upon material increase to the inclusion of subtler realms, the progressive movement toward self-realization. As people cannot pursue spiritual growth without a supportive material environment, a spiritually-based conception of progress should include recognition of the need for material development. The purpose of development then becomes an aid to our search for inner meaning, not to fill our lives with things emptying our existence of meaning.
Generally absent from the discussion about how best to conceive and pursue sustainable development is consideration of the purpose of development. If the purpose of development is only to increase material amenities, then sustainable development will result in little more than maintaining our materialist lifestyle without destroying the environment. Yet it will not help us attain inner fulfillment. For this we must reorient our idea of progress from a narrow focus upon material increase to the inclusion of subtler realms, the progressive movement toward self-realization. As people cannot pursue spiritual growth without a supportive material environment, a spiritually-based conception of progress should include recognition of the need for material development. The purpose of development then becomes an aid to our search for inner meaning, not to fill our lives with things emptying our existence of meaning.
A More Powerful Vision
Movements to reform capitalism are well-intended responses to the critical need to deal with the detrimental effects of capitalist investment, production, and consumption. Green consumerism, socially responsible investing, and ethical businesses deserve popular support. Progressive-minded people should embrace new ways of consuming, investing, producing — of building up new behaviors and new institutions, and of bringing change from within the old economy.
Though if we stop here the problems that beset humanity will only worsen. More fundamental solutions must be truly considered and implemented. No matter how much scope there may be within the capitalist, free market economy to humanize production, protect the environment, support social justice, and vitalize local communities, this system is simply unsuited for fulfilling human needs on a universal basis. We should embrace the progressive reforms of the green capitalists, but we should not embrace the limiting and defective premises of capitalism, for humanity is in need of a more powerful vision — one which can embrace the fullness of our spirit and the greatness of our human potentiality.
