Book Review: (page 3 of 5)

The Ecology of Commerce
By Paul Hawken
Harper Business, New York City 1993
250 pages, $23.00 US.

By Ivan Handler
Networking for Democracy

Hawken proposes changes so business will function in a restorative rather than a degratory mode toward the environment. He offers some positive and often intriguing examples--pollution permits, reusable containers and the elimination of non-degradable toxics from industrial processes. For example, laws could be passed so that corporations had to own whatever toxics or wastes they produced. These waste products could be chemically marked at a molecular level so they could always be easily identified. Then the corporation would be charged a yearly "parking fee" for the storage of these wastes. This would give industry good incentives not to use toxics in the first place or at least good incentive for figuring out how to break them down into reusable products. He summarizes: "In a restorative economy, the least expensive means of manufacturing a product should be the most environmentally benign and constructive means."

Taxation plays an important role in Hawken's analysis. He argues: "Markets are superb at setting prices, but incapable of recognizing costs." The idea here is that business has been given a free ride for centuries. It could exploit all of the natural resources of the planet, make a profit, and not have to bear any the negative costs of the result. The public thus not only provides the source of a business' profit by allowing access to the public commons in the form of nature, it also must pay--either through taxes or decreased health and welfare--for the damage business does to the environment in pursuit of that profit.

Hawken explains that the idea for "green taxes" did not start with him. In 1920, Nicolas Pigou, an English economist, proposed taxing businesses for environmental damages. This will provide incentives for business to produce things in an environmentally sound way and it will also give a competitive advantage to products that have a smaller impact on the environment.

But what can national taxation do in a world of multinationals? Here Hawken demonstrates that multinationals have quickly become the main factors in the world economy and in world politics. He explains how large corporations are on a positive feedback loop narrowly focused on the growth of their profits. Then he shows how the purpose of the GATT treaty is really to make it more efficient for multinationals to grow without encumbrance.

One of GATT's provisions, for example, is that countries with strong environmental regulations must not inhibit the import of products that violate their own laws! The point here is that "free trade" is just an empty phrase which really means that multinationals should be able to act in their own narrow interests independent from any national, regional or international laws. Furthermore, given the enormous power of these corporations, they have been accelerating the damage to the planet.

To set a context for his solutions, Hawken explores how the modern corporation evolved. In particular he is concerned about the relative lack of accountability and limited liability of modern corporations. He shows how in early American history, U.S. corporations were looked on suspiciously and their power was limited. One of the consequences of the civil war, however, was the lifting of many of these limits. For instance, interlocking directorates and the ability of a corporation to own a newspaper were allowed.

This has caused a number of ironies. One is that the First Amendment, which was created to promote the democratic exchange of ideas among citizens, is now used primarily to protect corporate control of the news media, despite its having decreased our democratic dialog from a flood to a small trickle. Corporations also regularly use lobbying, media campaigns, lies and corruption to control events. Hawken ends this line of criticism with this question: "It is interesting to note that the death penalty for individuals is less controversial than the mere suggestion that a few corporations may have forfeited their right to exist. How many people does a company have to harm before we question if it ought to exist?" More >>