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Business - Natural Capitalism.docx

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Department
Philosophy
Course
Philosophy 2074F/G
Professor
Michael Herbert
Semester
Winter

Description
 NATURAL CAPITALISM: HAWKEN, LOVINS,  Living standards for all people have dramatically improved particularly for the poor and those in developing countries  It is about the possibilities that will arise from the birth of a new type of industrialism, one that differs in its philosophy, goals, and fundamental processes from the industrial system that is the standard today  The industrial revolution that gave rise to modern capitalism greatly expanded the possibilities for the material development of humankind  Natural capital on which civilization depends to create economic prosperity is rapidly declining, and the rate of loss is increasing proportionate to gains in material well being  As more people and businesses place greater strain on living systems, limits prosperity are coming to be determined by natural capital rather than industrial prowess  While technology keeps ahead of depletion providing what appear to be ever cheaper metals they only appear cheap because they stripped rainforest and the mountain of toxic tailings spilling into rivers the impoverished villages and eroded indigenous cultures  A healthy environment automatically supplies not only clear air and water, rainfall, ocean productivity, fertile soil and watershed resilience but also such less appreciated functions as waste processing buffering against the extremes of weather and regeneration of the atmosphere  The stock of natural capital is plummeting and the vital life giving services that flow from it are critical to our prosperity  Natural capitalism recognizes the critical interdependency between the production and use of human made capital and the maintenance and supply of natural capital  An economy needs four types of capital to function properly  - human capital, in the form of labor and intelligence, culture and organization  - financial capital, consisting of cash, investments and monetary instruments  - manufactured capital, including infrastructure machines, tools and factories  - natural capital, made u of resources, living systems and ecosystem services  The climate debate is a public issue in which the assets at risk are not specific resources, like oil, fish, or timber but a life supporting system  This recycling service is provided by nature free of charge  The capacity of the natural system to recycle carbon dioxide has been exceeded, just as overfishing can exceed the capacity of a fishery to replenish stocks  In the past three decades, one third of the planet’s resources, its natural wealth has been consumed. We are losing freshwater ecosystems at a rate of 6% per year  Capitalism as practices is a financially profitable non-sustainable aberration in human development  The natural resources and living systems as well as the social and cultural systems that are the basis of human capital  Valuing natural capital is a difficult and imprecise exercise at best  The figure is close to the annual gross world product of approximately 39 trillion – a striking measure of the value of natural capital to the economy  Economic progress can best occur in free market systems of production and distribution where reinvested profits make labour and capital increasingly productive  Competitive advantage is gained when bigger more efficient plants manufacture more products for sale to expanding markets  Growth in total output maximizes human well being  Any resource shortages that do occur will elicit the development of substitutes  Concerns for a healthy environment are important but must be balanced against the requirement of economic growth  Free enterprise and market forces will allocate people and resources to their highest and best uses  Human productive capabilities began to grow exponentially  The labour force was able to manufacture a vastly larger volume of basic necessities like cloth at a greatly reduced cost  The creation of value is portrayed as a linear sequence of extraction, production, and distribution. Raw materials are introduced  But there is an even more fundamental critique to be applied here, and it is one based on simple logic. The evidence of our senses is sufficient to tell us that all economic activity – all that human beings are, all that they can even accomplish – is embedded within the workings of a particular  At the beginning of the industrial revolution, labour was overworked and relatively scarce while global stocks of natural capital were abundant and unexploited  It is people who have become an abundant resource, while nature is becoming disturbingly scarce  If there is to be prosperity in the future, society must make its use of resources vastly more productive  Human beings already use over half of the worlds accessible surface freshwater, have transformed one third to one half of its land surface  The doubling of these burdens with rising population will displace many of the millions of other species, undermining the very web of life  What would our economy look like if it fully valued all forms of capital, including human and natural capital  Natural capitalism and the possibility of a new industrial system are based on a very different mindset and set of values than conventional capitalism  The environment is not a minor factor of production but rather is an envelope containing provisioning and sustaining the entire economy  Misconceived or badly designed business systems population growth and wasteful patterns of consumption are the primary causes of the loss of natural capital wealth  Human welfare is best served by improving the quality and flow of desired services delivered rather than by merely increasingly the total dollar flow  The best long term environment for commerce is provided by true democratic systems of governance that are based on the needs of people rather than business  Ra
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