Thursday, March 20, 2008

The Economy of Environmental Ignorance and Irresponsibility

It is easy to make a foreboding list of statistics that lament the ways humans have left a “footprint” on the earth. There is no shortage of data to testify to the negative impact humans have had on creation. And we continue to produce this data because we need to be informed about such issues. However, this does not address the root problem or reason the problems exist. Perhaps the more difficult issue to address in terms of environmental degradation is the motivation behind why we seem so willing to inflict pain on the earth. The problems we are experiencing are directly connected to our economic practice, and, unless we examine some of our economic assumptions and practices, the data on environmental degeneration will only continue to accrue. I propose, therefore, as long as the belief in the legitimacy of self-interest and unmitigated growth goes unabated, creation will continue to suffer. Our commitment to economic growth is not only unsustainable, but hinders us from measuring human activity beyond the ‘bottom line.’ Self interest works against the care of creation in that it makes profit-maximization by the individual or firm the primary concern while care for creation, on the other hand, is largely ignored. Although this topic cannot be pursued comprehensively, the goal of this paper will be to demonstrate the destructive nature which our current economic thinking has on creation and to propose an economic ethic that includes care for creation.

Growth and Other's Backyards

Our society lives as though perpetual, exponential economic growth is possible. However, given that the earth's resources are limited, this is a profoundly confusing economic belief. As the scientific data showing the destructiveness of this idea continues to pour in, we continue, unwavering, down this dead-end path in the pursuit of unhindered economic expansion. Faith in growth remains relatively unchecked. Why is this the case? I submit there are a number of reasons, but one important one is that the type of growth we pursue favours the luxurious lifestyles of certain nations at the expense of the backyards of other nations. We live in an age of comfort and prefer to live with a defective and contradictory worldview—if it best fulfills our wants and desires. This problem spans the entire market: from the producers of goods all the way to the consumers. The dilemma on the manufacturing end of the market is that our economic system exists in a constant tension between fulfilling the desires of the moment while creating an ever-present and insatiable thirst for more. The moment society becomes sated would mark the beginning of an economic collapse. Thus, it is in the best interest of the economy to keep the people wanting. But environmental problems arise because the satisfaction of our wants comes at the expense of other people’s backyards (and our own!) As Wendell Berry notes, “most people aren’t using or destroying what they can see...to build houses here, we clear-cut forests there. To have air conditioning here, we strip-mine the mountains there. To drive cars here, we sink our oil wells over there” (Berry, Wendell. “Conservation is Good Work,” 37). He further notes that as consumers, “living as we do now in almost complete dependence on a Global economy, we are put inevitably into a position of ignorance and irresponsibility” (Berry, 37). It seems to be as impossible to be well-informed about the environmental impact of our economic practices as it is to be responsible for its plunder. The simple phrase “out of sight, out of mind” well describes our relationship to the environmental damage that has been done (and perhaps will be done). It is relatively safe to assume that if our neighbourhood was being raped for these resources we would have protest signs in our front yard, or perhaps make our presence known at the next city council meeting. But the fact that the defacement of creation happens in other parts of the world removes from the consumer both the knowledge of the damage and our responsibility to it. With comfort as our god, an integral and consistent worldview has become less than first priority for most consumers and producers alike.

Self Interest and Profit Maximization

Our economy, according to Mary Jo Leddy in her book, Radical Gratitude, “is based on a belief in an ‘invisible hand’ that guides the competition between the various interests in the free market—for the benefit of all…it endorses the belief that the good of all is enhanced when each group pursues its own interests” (Leddy, Mary Jo. Radical Gratitude, 122). Though this is accepted economic practice, the pursuit of self interest has had a destructive impact on the environment. The self interest of individuals and firms, most clearly seen the pursuit of the bottom line, wards off (and writes off) a creation-care ethic because it discounts costs that fall outside its own sphere of operation; i.e. the environmental impact of its activities. Environmental cost is rarely calculated into the cost of doing business because our current economic system has no means of measuring individual responsibility directly related to particular problems. As Donald Hay notes, "A private firm will have no incentive to incur the cost of safe disposal of a poisonous effluent which will pollute the water supply to other citizens of firms. A private motorist will drive his car in a crowded city without paying the cost of congestion that his car is inflicting on other users of the city. An aeroplane flying overhead may cause acute discomfort because of noise, but the airline pays no price for it" (Hay, Donald. Economics Today, 155).
Individuals of firms who have their sights set on profit maximization can rarely factor in the environmental cost of their market operations. Most often the responsibility to creation falls into a blind-spot or becomes an operational footnote. And those who do take into account their impact on creation often see their responsibility more as a necessity to conform to governmental regulations. The false logic is often “to ‘earn’ more money through more production so that we can fund improvements to the environment” (Goudzwaard and de Lange, Beyond Poverty and Affluence, 66-67). But this approach, however, as Goudzwaard and de Lange note, does not work at a fundamental level because it “puts the cart before the horse.” This logic is typical of profit-first self-interest.

Hay illustrates these ideas well by using the example of fishing firms whose primary focus is profit maximization (Hay, 296-306). In this illustration he shows the interplay between a profit maximizing firm and the environment consequences. He further shows how consequences are magnified when there are a number of firms operating in close quarters. As mentioned earlier, in a firm primarily driven by profit and self-interest, the resource from which the profit comes is often denied any inherent value unless it is being used (Hay, 300). From this perspective, the cost of the resource can only be measured in terms of the cost of production (Hay, 300). The goal then becomes a matter of running “down the resource as fast as possible within the constraints of the fleet” (Hay, 300). To put this into the context of the fish farm, the individual firm maximizes their ability to catch the maximum number of fish before the population of the fish will plummet to the point of either uselessness or unprofitability; both of which result in the destruction of creation. Therefore, because this economic practice finds little or no creational value in a resource and the “biological process is just too slight to make it worth waiting for it to produce a natural surplus” the law of supply and demand supersedes all natural law (Hay, 300. Italics added).

We have also introduced another problem here with self-interest –and that is that firms acting in their own interest fail to take into consideration other firms working within close proximity. In the case of a fishery, each firm is trying to catch as many fish as possible without considering that their collective activity could have destructive consequences for the resource. If each fishery were limited to the control of one firm per geographic location the environmental impact would be far more subdued—but this is not the case. Rather, the problem is magnified because it is most often the case that many firms are competing in the same area and using the same principle of self interest. The first, and most obvious problem with many firms sucking up the fish from one location, is that the stock of the fish will diminish at an exponential rate compared to the depletion rate of just one firm. So, even if the firms can clearly see that the fishery’s resources will be destroyed, “no one firm has an incentive to change its behaviour” (Hay, 300). There is no system of control in an economy that is controlled by the law of supply and demand. And there has yet to be an incentive to consider the environmental cost of doing business. Therefore, as long as self interest remains as a legitimate pursuit, creation will never have its say on the limits of economic operation. Thus self interest works against creation care because it can only measure operational costs and because it fails to take into account others working with similar interests in close proximity.

An Economic of Care

As we can see from our discussion, we have only briefly addressed the destructive nature of our current way of economic thinking. However, from this small introduction, we can none-the-less critique the economic system in place and begin constructing an economic system based on care instead of self interest and perpetual growth. In this final evaluation, I would like to outline three areas that contribute to an economic system of care. My first evaluation is in regards to creational value. I suspect that an economist would plead innocent to the accusation of reducing all of creation to a list of resources or latent financial value—as I am sure that they could assign some kind of value to it (sentimental, aesthetic, etc.)—but their actions are often self-incriminating. As a Christian, I firmly believe that creation has a much greater value than we could ever describe (or ascribe to it). For example, it is impossible to assign a value that can measure the amount which something reflects the glory of God, or, for something that God proclaimed “Good.” An economy of care rests in the belief that creation is, indeed, valuable—to God, to us and to future generations. Second, I find it very difficult to biblically support an economic system that is guided by wants, needs and the desires of the heart. In our current economic system “all critical questions affecting our use of the earth are left to be answered by ‘the market’ or the law of supply and demand, which propose no limit of supply or demand” (Berry, 37). The law of supply and demand is entirely subject to the wishes of the heart, but scripture often refers to the dangers of relying on the deceitfulness of our hearts, and our demented world is living proof that often what seems to be the best way to satisfy the desires of our heart is the worst thing for creation. And finally, we need to recover the understanding that we are part of creation. It is only in the past one hundred years or so that we have really developed the idea that we are transcendent over creation, but in reality we are part of its every ecosystem.

In order to lay the foundation of an ethical economy of care, we need to begin by replacing the principle of growth and self interest with a primary interest in God. When our interests are rooted in our relationship to God, our other relationships (with the non-human creation as well as with our fellow human beings, for example) become better aligned. We begin to understand the intrinsic value of creation; we can allow ourselves to become guided by the Holy Spirit in contrast to the deceitful desires of the heart; and finally, we will recover the biblical view that we are, in fact, part of Creation.

Work Cited

Berry, Wendell. Sex, Economy, Freedom & Community. 'Conservation is Good Work'. New York: Pantheon Books, 1991.

Goudzwaard, Bob , and Harry de Lange. Beyond Poverty and Affluence: Toward and Economy of Care. Grand Rapids, Michigan: Eerdmans Publishing Company, 1995.

Hay, Donald . Economics Today - A Christian Critique . Vancouver, British Columbia: Regent College Publishing, 2004.

Leddy, Mary J. Radical Gratitude. Maryknoll, New York: Orbis Books, 2002.

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