Lawyers, Guns and Money

Filed in Episode 3 by on March 12, 2014 0 Comments

Last week I tweeted

If corporations were socially responsible, we wouldn’t need a name for it.

and was taken aback by how many retweets I got for it. It obviously struck a chord with a lot of folks. And, picking up on my previous post, it has everything to do with how vested interests respond to things that challenge their business model. Things like getting rid of planned obsolescence and moving to a circular economy. And getting my washing machine repaired.

To understand why those vested interests have a problem with this, we need to step back a bit and try to see it from their perspective. Let’s look in a bit more detail at planned obsolescence.

The idea itself was dreamed up by Bernard London, a New York estate agent (says it all) during the great depression of the 1920’s. He figured that if things just stopped working after a (regulated) certain time, everyone would go out and buy new ones and that would make the economy go round. He even suggested that the government should penalize people who walked around in shabby clothing.

In the post-war era companies rapidly realized they didn’t need the government or Mr. London’s Orwellian fantasies to help them with this (which is not to say that the criminalization of dissent under McCarthy didn’t help). Building in obsolescence was an easy way to keep the value (well cash actually) flowing. Who wouldn’t buy into a value proposition like that?

more planned obsolescence

What’s happened since then is that even the option to repair has been deliberately shut down. And by introducing more and more “touch this at your own peril” sealed units, the way has been barred for the independent skilled craftsman that used to fix stuff anyway. Including my washing machine.

We don’t need to look for conspiracies here. If your goal is the accumulation of capital (which is, by the way, the defining feature of capitalism), then growth is a holy grail and you will adopt the methods of anyone who’s accumulating faster than you. The pursuit of growth is also inextricably linked to “shareholder value”, which is not about investing in companies the shareholder believes in but in shares that can be bought and sold as market value (linked to growth) fluctuates. Shareholder value is expressed in growth.

So it’s pretty obvious that large, powerful companies whose economic model depends on accumulating capital and who are largely owned by major shareholders, are not going to rush to adopt an economic model that  essentially undermines that. Let’s be very clear, circular economy is not consistent with the accumulation of capital as a driving force. If our objective is to re-use/recirculate/re-cycle wherever possible, how could it be?

Vested interests - Sinclair

Vested interests don’t just roll over. They have lawyers, guns and money. And advertising agencies and lobbyists. And they use all these things.

When you have enough money, one of the things you can do is to appropriate the ideas that are challenging you and make them harmless. Call it co-option (“The revolutionaries are on CBS”). You could, for example, set up a Corporate Social Responsibility program. It’s a relatively low cost activity that can do a lot for your image and even get you a certificate of good behaviour. And it can disarm your critics. Without changing an iota of your old business model.

Of course there are fine initiatives that come out of CRP programs. My own company (KPN Netherlands) has a few – including support for the Fairphone. But the fact remains that all these corporations know where their priorities lie:  accumulation and shareholder value – and that locks them into a destructive cycle of grow or die. And that’s why CRP still has a name.

How else can these vested interests defend themselves? Well, they have lobbyists – thousands of them – and the money to pay them. And those lobbyists are employed to undermine attempts to legislate against environmental destruction. It’s a full time job for them. And they have lawyers to help them fight new legislation and defend dubious patents. And they can control markets. And, when push comes to shove, they can find deniable folks with guns. This isn’t paranoia. Check out what goes on around coal mining in Central and South America – and in particular the Cerrejón (article in Dutch only) mine in Colombia.

I’m really not trying to paint a negative picture, just a realistic one. I really believe we can turn things around. But it’s not going to happen overnight or just like that. If we paint too rosy a picture, if we treat CSR as if it were more than it is or assume that the vested interests will see the light or just roll over, we become our own worst enemy.

So does that mean that our future is dependent on what now is a relatively small number of relatively small companies, social businesses and cooperatives? Do they have the wherewithal to withstand the power of the vested interests? Do we need a kind of guerrilla business, where the “good guys” stay under the radar and pop out from time to time to gain a bit of territory? Can significant change take place within large corporations? What would make that possible?

I don’t claim to know the answers. I’m sure there is no one answer but one thing is certain and that is also inherent in the circular economy model. We are replacing scale and dominance by agility and collaboration. The scale and opportunity is not located in an organization but in an ecosystem. We need to support each other, promote each other, network, co-create and cooperate. We need to support those folks doing the CSR projects, who really believe in what they’re doing. We need to support people who are just starting to experiment with the new economy. We need to bring them all into the network…..because:

Vested interests - Goodman





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