In the United States, and in much of the world that shares aspects of US Business culture, it is common to say the consumer is king. Politicians of parties across the ideological spectrum speak about consumer sovereignty as if it is an ordained right. Neo-classical economists blithely assume the conditions of perfect markets in their theories and models, and proclaim that the consumer is always sane, always correct – and that the actions of many consumers will serve the larger social good. The development of capitalism created the conditions for the development and distribution many innovations that have improved the lives of people around the world. Just think back to the world that your grandparents grew up in, where people who owned an icebox and a radio were considered middle class.
However, today global consumption is on an unsustainable path of growth. Global populations inexorably increase, energy resources decline and become more expensive to obtain by the day, and the ability of the biosphere to sustain the throughput of resources that our consumption requires is diminishing. How did we get here? If the consumer is king, and can do no wrong, how did we move onto this unsustainable path? First of all, regarding consumer sovereignty, it is inaccurate to lay the culpability for purchasing decisions entirely on the lap of consumers. Marketers are adept at creating needs and wants where they did not exist before. We consumers apply meaning to, and use our purchases as a sort of language, or shorthand, to denote status. Governments subsidize and incentivize certain behaviors, like the pervasive subsidies in energy industries. Governments even encourage consumption through monetary and tax policy. So the idea that the consumer is king is problematic. So, the question remains, how did we get to the point where consumption is unsustainable?
We have long treated the resources that come from the Earth not as finite commodities, but rather as our dominion. For example, we charge homeowners for the extraction, delivery, and disposal of potable water, but we do not consider the water itself a finite resource. We have only recently considered what it takes to maintain healthy watersheds, to ensure sustainable water supplies. However, water is essential to the manufacture of most consumer goods. How can the price of those goods not reflect the value of the finite resource, fresh water? When water supplies dry up, water will have to be obtained in the energy intensive process of desalination. Fossil fuel energy supplies, like water, are finite resources. We humans are not good at planning for the long term of future generations. The concept of the Seventh Generation, which originated in The Great Law of the Iroquois, asks whether the decisions made today will benefit descendents seven generations into the future. A home products company that aims to inspire that kind of long-term thinking adopted the Iroquois principle in their name. However, Seventh Generation is a rarity in the business world today. The assumption by many in society today is that resources will never decline, that we will always find a new source or supply to maintain our exponential growth. That thinking is leading us on a path toward decline.
Can we create a new prosperity, one that is sustainable? To do so we will have to consider resource use from a perspective of our collective future, and beyond our individual perspective. For some people, that may mean sacrifice. Both father and son President Bush declared that “The American way of life is not negotiable” when considering how to confront climate change. The problem is that the American way of life, as it stands today, is just not sustainable. Both the government and communities of individuals must create policies, incentives, and actions to promote a new kind of consumption, and a new consumer mindset. We must strive for quality, minimize throughput of resources, and consider the entire life cycle of products, ensuring that materials can be reused or recycled. We must design our communities so that we plan for the long term, and think generations ahead, planning for a future with expensive energy and finite resources. Many of the consumption decisions we make on a daily basis are habits that people don’t consider – we need to design products so that consumers are aware of both what the product provides, and what the cost is. However, it is not enough to buy ‘green’ products, we must reconsider what we really need. To create a sustainable consumption, we will all need to tread carefully and purposely into the future. Otherwise, we consumers will find ourselves unprepared for the future we create.
Happy Independence Day, America! Seeing all of the American flags that blanket Bristol, Rhode Island in preparation for the 225th parade tomorrow (the oldest in America), I can’t help but think back to the days after 9/11, when George W. Bush addressed the nation, and told us to join together and consume:
“When they struck, they wanted to create an atmosphere of fear. And one of the great goals of this nation’s war is to restore public confidence in the airline industry. It’s to tell the traveling public: Get on board. Do your business around the country. Fly and enjoy America’s great destination spots. Get down to Disney World in Florida. Take your families and enjoy life, the way we want it to be enjoyed.”
Americans always go big. We consider conspicuous consumption to be a sign of success, of generosity, of having achieved something. Of course, with the dust of the fallen Twin Towers still in the air, Bush asked us to go to Disney World. The debt-fueled consumption binge of the last decade is now past due, as seemingly half of America has defaulted on debt in a significant way. However, the bigger picture goes beyond the economy that is dependent on continued exponential growth. The problem is that growth cannot continue to grow endlessly; we humans are reaching the limits of what this planet can provide, and like Icarus, we may fly too close to the proverbial sun.
Sustainability has become a buzzword in corporate America, but it means more than using green products. The fact is that we waste too much energy and minerals. Many of the products we buy are designed to fail so that we will go out and buy another one. Now, that lack of quality may help create jobs in China, but that just wastes resources.
It wastes water, for one. Fresh water is a resource that we all take for granted; do you know how much water goes into a hamburger? I bet you would be shocked. Second, we have a finite amount of energy and mineral resources, and we remain in denial about the need to shift to alternative energy resources. The Energy Returned on Energy Invested for oil, coal, natural gas, and most common minerals continues to drop, which means that each new unit of resource will require the use of even more energy. Once upon a time oil had an EROEI of close to 100-1; now we get only three barrels for every one barrel we use in the extraction process. That problem will only get worse. Additionally, those finite energy resources are destroying our climate by increasing the concentration of greenhouse gases.
On this July 4th, I wonder why conservation, efficiency, and sustainability can’t be considered patriotic. See, our grandchildren and great grandchildren will inherit the world that we leave to them. We can have one last big party, or we can give them an opportunity to flourish as well.
The Wall Street Journal, the thoroughbred of the Murdoch Media Empire, has some great photos of an abondoned, Columbus, OH AC Delphi factory being torn down so that a casino can go up in its place. The article describes how in states across the country, voters are willingly “banking on vice” to refurbish the state coffers. 14 States are considering bills to relax restrictions on marajuana sales. 12 States are expanding gambling. Even Sunday alchohol restrictions are being eased, in five states.
The reason that these steps are being taken, of course, is due to a projected $89 Billion debt in 2011 across 38 States. Governments and citizens are willing to sacrifice moral objections in order to plug holes in the budget. I am reminded of a scene at the end of the 1975 film Three Days of the Condor. CIA Deputy Director Higgins is explaining to Robert Redford’s Joe Turner why it is OK to overthrow governments for oil:
Higgins: It’s simple economics. Today it’s oil, right? In ten or fifteen years, food. Plutonium. Maybe even sooner. Now, what do you think the people are gonna want us to do then?
Joe Turner: Ask them?
Higgins: Not now – then! Ask ’em when they’re running out. Ask ’em when there’s no heat in their homes and they’re cold. Ask ’em when their engines stop. Ask ’em when people who have never known hunger start going hungry. You wanna know something? They won’t want us to ask ’em. They’ll just want us to get it for ’em!
Alright, so marajuana, booze, and gambling are not the same as energy policy, right? Well, the bottom line is that in America we have become accustomed to a certain standard of living. Today, when unemployment pushes already tight State budgets over the edge, governments willingly turn to vice restrictions. Just consider, for a moment, what will happen if we find out that we do not have enough energy to continue to expland our economy.
A few years ago, the U.S. Military established AFRICOM, a speficic African military command, whose mission is to “in concert with other U.S. government agencies and international partners, conducts sustained security engagement through military-to-military programs, military-sponsored activities, and other military operations as directed to promote a stable and secure African environment in support of U.S. foreign policy.” Now, until October 2008, we did not require a designated African command. However, a look at this July 2008 report from the Council on Foreign Affairs is telling:
“China is intent on getting the resources needed to sustain its rapid growth, and is taking its quest to lock down sources of oil and other necessary raw materials across the globe. As part of this effort, China has turned to Africa, an oil-producing source whose risks and challenges have often caused it to be overlooked economically. Some reports describe a race between China and the United States to secure the continent’s oil supplies.”
Oil drives our economy, and it is a finite resource. We are accustomed to consuming so much energy that we do not really understand what our consumption costs. Take beef, for instance. It takes a lot of fuel and water to provide you a Big Mac. However, if you look across our economy, at everything we consume, at everything that is thrown away, energy is used to create those products. We consider it our right as Americans to live in accordance with our standard of living, without taking a long term view of what future generations will inherit.
Well, what will happen when that standard of living becomes untenable? The Department of Defense studied the National Security implications of Global Warming in 2008. The DoD found that our changing climate could topple governments, create new terrorist movements, and destabilize entire regions, requiring our military to engage.
Politicians are often too willing to consider only what will happen during their time in office, and not consider the long view. Just consider the career of Arlen Specter, Republican/Democrat of Pennsylvania (of course, Joe Sestak is now ahead of him in the polls). However, the future now requires us to wisely step back and consider what the impact of our current practices will have on our grandchildren.
Sustainability means looking at the long view. The Iroquois used a rule called the Great Law of the Iroquois, in which they looked seven generations ahead, about 175 years, whether the decisions they made would benefit that seventh generation. Today, it is time for us to consider that seventh generation, when it comes to our energy policy, our development and use of chemicals, and how we develop the economy and impact the world. If we just consider living in the present, our decendants will suffer the consequences.