Can our economy continue to grow forever? Or do we need to build a finite earth economy? And … is Coronavirus showing us the way?
Our economies are measured in growth: if we had a good quarter or year, it means we grew. If we contracted or shrank, it was de facto a bad year. But is this the right way to think about our economy? Or … is it killing us?
Listen: Finite earth economy … is endless growth possible?
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Full transcript: building a sustainable economy
John Koetsier: Can our economy continue to grow forever? Welcome to future39 with John Koetsier. Economies are typically measured in growth. Did you have a good quarter? Did you have a good year? Are you up? Are you down? Growth is automatically good. Contraction is automatically bad. Well, we’re seeing a lot of bad right now with Coronavirus and the economy basically coming down to a standstill in some countries. But is this philosophy of everlasting growth a good way, a right way, to think about our economy … or is it something that’s killing us? To talk with us today I’d like to bring on Bob Leonard, who is the author of Moving to a Finite Earth Economy. Welcome, Bob!
Bob Leonard: Thank you, thank you. I want to mention that I am the co-author, the other author is the futurist David Houle.
John Koetsier: Excellent, excellent. Well, thank you for that. Thanks for spending some time with us. I mean, let’s start with the biggest fact in our lives right now, which is Coronavirus, which is affecting all of us right now. You’re sheltering in place. I’m sheltering in place as well. We’re not going out to our offices. We’re not flying anywhere, we’re not crossing borders. It actually has brought the economy somewhat to a standstill and we’ve seen some environmental impacts of that, correct?
Bob Leonard: Yes, that is correct. I mean, this is not the way you want to go about it, but we do need to stop stressing the ecosystem.
John Koetsier: It’s amazing because I have friends in India and for instance in Delhi, where often you can’t see across the street because of smog, and dust, and smoke, and other pollution, and they’ve got blue skies for the first time in decades. I’ve talked to friends in Germany where they’re seeing animals come back, the cars are gone and the animals are coming back into some of the towns, other things like that. Maybe to kick this off, because we’re not just talking about Coronavirus and this, what we hope is a temporary slow down in all activity. What is a finite earth economy? What does that look like? What does that mean?
Bob Leonard: Well, the basic concept is you can’t have infinite growth on a finite planet. Our current version of capitalism, deregulated predatory, if you will, capitalism, requires constant growth. And that’s how nations, especially the US and UK, but even China and Russia, measure the health of their countries, is with Gross Domestic Product. Now Gross Domestic Product only measures financial transactions, only measures how much stuff is manufactured and sold. So in the finite earth economy we recommend, we outline removing GDP as that single metric of health and replacing it with metrics for the well-being of people, and the well-being of the environment.
Now businesses would still be concerned with profit, but we take the government out of that business. The government no longer is only concerned with profit. There used to be a saying in the US, maybe Canada too, “What’s good for GM, is good for America.” Well, that’s not true. It might’ve been true in the 40s and 50s when there was room for growth, but now we’ve run out of room.
John Koetsier: Well, that’s interesting, right? Because in the past, there’s always been a frontier. There’s always been a place to go. There’s been the West to develop, there’s been the New World, right? There’s been other places to expand to and at least locally we’ve run out of that.
Bob Leonard: Yeah, I think we’ve run out of it … man is the only animal that can live in the Arctic, and in the jungle, and at the Equator, you know, we’ve run out of space and are chewing up habitat, chewing up biodiversity, chewing up land that is allowed to lay fallow, virgin forests, etc. which is how the earth replenishes itself.
John Koetsier: So let’s say we moved to a finite earth economy. What does that mean in terms of what we produce, how we produce, how we consider the byproducts of production, how we consider the full lifespan of a product?
Bob Leonard: Okay, well we would move … first of all, we would re-regulate capitalism and put those regulations in place that we had in the 40s and 50s that were guarded against economic collapse. It also made sure that working people made a living wage. The profits from capitalism were more fairly allotted. Now beyond that, the whole circular economy which began in the 70s, if that had caught on, if it really was 100% circular economy we would not be in the crisis that we’re in today. The reality is it’s only 8% of the global economy, so we need to extend circular. Are you familiar with cradle to cradle?
John Koetsier: Yeah, a little bit, but maybe talk about what circular economy is. I’m assuming that means that everything that comes into the economy there’s a purpose, there’s a plan for how it exits economy as well.
Bob Leonard: That’s right. Reduce, reuse, recycle. Well, the recycle piece is broken. In the 60s there was a ‘Keep America Beautiful’ campaign that was actually a front for a lobby for the beverage industry. They wanted to move from glass bottles for beer, and milk, and soda, to disposable containers and they very cleverly launched this campaign which put the blame on the consumer. You’ve got this soda can, you’ve got this milk carton, now if you throw it in the street that’s your fault, so now you need to recycle it. Okay, so we all got our little canisters and we recycle our stuff. And that went okay for a while until the volume got to be too much, and then China was sending cargo here, goods here, and the ships were returning to China empty. So they said, ‘Well let’s take some stuff from America, we can get paid for it, those ships won’t be empty on the return,’ so they said, ‘Give us your plastic waste.’ So for 25 years they took our plastic waste and then in 2018 they said, ‘You know what? No more, we’re not doing that.’ So now the plastic waste goes into landfills or it gets incinerated, or it gets thrown back into the environment and ends up in the oceans. So it’s not really circular.
John Koetsier: Well, and in a lot of cases I don’t think it ever was, because some places didn’t actually collect it. So maybe California was fairly green and there was a bit of a circular economy there, but I remember going to the Grand Ole Opry in Nashville, Tennessee probably about seven years ago, and we ordered food at this place called, I think it was Stax inside that big hotel that’s connected there that’s like five or six acres under glass, and boats and canals and restaurants in there, whatever … we ordered food there. I got a burger and every piece of that burger came in an individual plastic container. The pickle was in an individual plastic container. The tomato was in an individual plastic container, the onion, the bun, the meat, everything. And it was like I felt, I’ve never felt more sinful eating a meal because there was no place to separate that out either. That all went to the landfill.
Bob Leonard: Okay, in this case it would be the restaurant I guess, but the manufacturers become responsible for that, they have to. So, laundry detergent, they are responsible for taking that plastic bottle back and reusing it, whether it’s put back into production or they just refill it, whatever it is, the manufacturers become responsible for the waste that happens with their products.
John Koetsier: I think that’s been something that we’ve passed on to the future, maybe passed on to the earth, the full cost of a product. I mean, it’s something that I’ve wondered about for some time, that you create a plastic container, and by the way you were talking about the beverage industry, I think Coca-Cola was labeled as the biggest polluter on the planet because of their plastic containers this past year. But we pass onto the future that cost because that cost isn’t just hey, I’ve got to produce this thing … where does it go afterwards? And the costs are actually dealing with that, an old TV, an old computer, an old phone. All that stuff needs to be built into the cost of not just production, but also sale so that we’ve got that ability to return those materials into this life cycle of products, correct?
Bob Leonard: Well that’s, I mentioned cradle to cradle, that’s designing a product from the ground up to be recycled. So after it’s useful, first of all, no more planned obsolescence. Quality not quantity. So you design and manufacture products that are built to last, will cost more, the consumer will have to pay that, but they won’t be buying a new iPhone every two years. The … so I lost my train of thought.
John Koetsier: You know what that makes me think of though, it’s quite interesting. You’re talking cradle to grave, so I’m sure your thought will come back to you. My wife has an umbrella that her grandmother gave her 25 years ago that we still use regularly. This umbrella is in perfect working order, perfect condition. I’m sure it was not cheap, but how many umbrellas don’t last the season that they were bought for, right? Producing products that will last there’s some beauty and elegance in that as well as environmental sense.
Bob Leonard: Yes. It’s a different paradigm. We’ve come into this disposable paradigm and planned obsolescence, so quality not quantity. There’s also a science called biomimicry. Nature creates abundance all day, every day, with no waste. Nature has had 3.8 billion years of trial and error R&D to come up with elegant solutions. So by studying nature we can do that too and it is being done. It’s already being done, it’s growing. Biomimicry up til now it has mostly been faster, lighter, stronger, you know those kinds of things. But if you marry that with cradle to cradle, which is actually a chapter that I wrote in the book, you create a system that has very little waste and requires much less extraction of minerals from the earth, etc. So it’s a much cleaner system and a sustainable or even regenerative system.
John Koetsier: So if we look at a finite earth economy, what does growth look like? How do we measure growth in a finite earth economy?
Bob Leonard: You don’t, you don’t. It doesn’t … again companies are going to want to profit but they can profit by making less. Yvon Chouinard, the CEO of Patagonia, 20 years ago launched a company with an anti-growth strategy and he’s a billionaire. He’s been very successful, so it can be done. It’s just, changing mindsets and political will, passing the regulations. Some corporations will do it on their own, others won’t. The CEO of Unilever came out with a statement. Unilever’s gigantic, multi-national consumer products good company came out with a statement, and I’m not going to get this word for word, but basically he was saying ‘killing the planet is not a good business model.’
John Koetsier: Who would have thought?
Bob Leonard: Yeah, yeah.
John Koetsier: News flash.
Bob Leonard: We don’t want to kill our customers. Yeah.
John Koetsier: Exactly, exactly. Now, there could be some difference in terms of measuring growth as we have an increasingly digital economy and as we have increasingly digital products. And so, for instance, we can’t go to the movie theaters right now so our family rented something, actually bought a movie on Apple, from Apple iTunes. I don’t even know if they call it iTunes anymore when it’s on the Apple TV, but we bought a movie and we watched it. Now there is economic cost to that, right? Our TV is running, server farm is running, there’s electricity on the wires, there’s data coming to our house, all that stuff. But there isn’t a physical product being created, and so how do you see growth happening as our economy moves more to digital goods?
Bob Leonard: Well, you’re going to be instead of getting in your car and driving to the movie theater, you’re doing it at home and you’re still paying, probably not as much, there aren’t as many middlemen involved in the transaction, but Universal Studios or whoever created the product gets paid. Apple or Netflix they get paid. The transport of the system they get paid. So all that is good and fine, and if the energy that underwrites that powers the server farm and powers the distribution channel, if that all comes from solar, or hydro, or wind then it’s clean and that’s, you know, the sun doesn’t send a bill.
John Koetsier: That’s the best thing about the sun. That’s wonderful. And that’s a great segue actually, because the next question I was going to ask you is about energy production and where are you seeing that needing to go?
Bob Leonard: Well, it’s here. You know, so instead of subsidizing the fossil fuel industry which we still do, to the tune of hundreds of billions of dollars, take that money and put it into R&D and helping solar, helping wind, hydro’s pretty much a mature industry so I don’t know that it needs help. This is a little bit of a controversial topic, but in the book we recommend nuclear. There’s a new nuclear stage four, something four, they’re smaller units much cheaper to build, distributed that use spent fuel from nuclear reactors. So that is another, and I’m sure there are others, fusion, there’s many, … well there’s some that need to be funded. They need to R&D in order to bring those to market and we are not doing that or we’re not doing enough of it at this point.
John Koetsier: Well, and the US is actually doing a lot less of it in the last six years or so. I mean, solar has lost some of its subsidies, other things like that. And yet in spite of that solar has been growing. Solar has been growing globally. There are Scandinavian countries that have run themselves, operated themselves entirely on renewable energy including solar and wind, that’s a big deal in the North Sea there for periods of time. So we see that the future is possible there. Are you also of the opinion that we should distribute that farther so that we go away from a totally centralized distribution model of energy into a more decentralized model where I might have solar panels, you might have a wind power, somebody else might have a little bit of hydroelectricity or whatever the case might be, and we all kind of feed into a grid?
Bob Leonard: Yeah. Into the grid or off the grid, distributed. The utility companies they want to maintain that monopoly, they want to maintain control because if they don’t they’re out of business. So regulations today require that you hook into the grid and if you have more power than you need, then you feed it to the grid. If you don’t have enough power from the sun’s not shining today, or you don’t have the batteries, then they feed into you. But it’s a much more resilient system than having it centralized.
John Koetsier: Exactly, much more fault tolerant. If there’s an earthquake or there’s a fire somewhere
Bob Leonard: Hurricane.
John Koetsier: Or California has issues with fires and sparking wires. I’ve often felt that the utilities shouldn’t feel like they would die if energy production was decentralized. We still need some centralized places when you know there’s an accident or we need some extra energy pumped in for peak demand or other things like that, but their business could transition from being solely about producing and distributing, to distributing and distributing equitably, and then allocating resources to people based on how much they contribute and how much they use. I think there’s a valid business model to be had in there still.
Bob Leonard: Sure, sure there is. It’s much more of a decentralized and not control of the resource, share/rent type of business models.
John Koetsier: Now one thing that you talk about, you have a passenger versus crew mentality as you’re talking about a finite earth economy. Can you talk a little bit about what that means and what that implies?
Bob Leonard: Sure. Prior to this book, David wrote a book called This Spaceship Earth, and it comes from a term coined by R. Buckminster Fuller. And David came up with the concept of crew consciousness, and what that means is most of us, including myself until about a decade ago, thought of ourselves or didn’t really think about it, but lived like a passive passenger on spaceship earth. We need to evolve to understanding and acting like active crew members on spaceship earth so that we become stewards of the resources, so that we are aware of our carbon footprint or other footprint of things, like we were talking about before about garbage. We put the can out by the street and the guy comes and they take it away. Well, it doesn’t go away, it’s just not in front of your house anymore. And different people will have different ideas, there’s a thousand different things that you can do to improve how we live on the planet and promote the health of the ecosystem which we all rely on.
John Koetsier: Absolutely.
Bob Leonard: You don’t have to do a thousand, pick the two or three that resonate with you because they’re going to be different than the ones that resonate with me. And if we all do it we’re good.
John Koetsier: That’s like the Helen Keller quote, “I can’t do everything, but I can do one thing, and I will do the one thing that I can do” right? Absolutely. There are some obviously who are trying to do some of those things and so I’m going to refer to Elon Musk here. He’s doing a lot of solar, a lot of electrification of transport and other things like that, but also has a very strong Mars vision and is building something like a thousand starships over the next few years, which is an immense number, an unprecedented number, incredible number to ostensibly launch a permanent human presence on Mars. Thoughts on that?
Bob Leonard: Well, you know, I’m not in Elon Musk’s league. He is a genius and he has accomplished a lot. And along with the solar are the batteries which is a huge piece of that because the sun doesn’t always shine. The whole Mars concept I disagree with personally. We have an atmosphere here. Why go someplace where there’s no atmosphere? Let’s fix, let’s take all that investment, but which he is doing too, and fix our issues here. So make our home livable here.
John Koetsier: Yeah, there are a lot of people who feel that way, let’s not spend billions of dollars going to the stars which we’re not going to reach anyways, but the other planets, and maybe the moon, and space and other things like that, and let’s fix our problems here. I hope that we can do both. I see a lot of potential for the future and our imaginations need to grow even if our economy doesn’t and I absolutely love the idea of humans landing and living on another planet in our solar system. I wanted to turn … go ahead.
Bob Leonard: It comes back to that expansion idea you were saying before, we’ve run out of frontiers. Well, Elon has not run out of frontiers.
John Koetsier: 100% absolutely, good point. I wanted to bring in Bhutan because they do something super interesting, right? They measure Gross National Happiness. Now that sounds to some that’s airy fairy, that’s lame, that’s you know, how do you even measure that? Other things like that. To others that’s kind of what a country is about, right? A country is all of us coming together and saying, ‘Hey, you know, we’re going to help each other. We’re going to work together. We’re going to build this thing that none of us could build individually and build it together and we’re going to care for each other.’ Thoughts on that?
Bob Leonard: It’s part of the finite earth economy. What you’re replacing GDP with, Gross National Happiness … New Zealand last year also came out with a similar concept and they call it a ‘well-being budget.’ They’re measuring things like quality of education, quality of healthcare, longevity, mental health, physical health, the poverty levels. Those are the things that, the components that go into the Gross National Happiness. It’s not you know …
John Koetsier: There’s actual reality there, there’s statistics, there’s numbers, it’s hard evidence.
Bob Leonard: Yeah, yeah. And it’s not a frivolous approach. It’s a very pragmatic approach.
John Koetsier: Yeah, yeah. Interesting, interesting. So let’s just end here maybe, we have this Coronavirus epidemic, pandemic going on. We kind of see something of what putting the brakes on the global economy has done. We see that in New Delhi, we see that all across the US, we see it in Canada, we see that in China where pollution indexes have gone way down. Do you think that this could be a bit of a watershed moment maybe for people to see, hey, you know what, it’s nice to breathe clean air. It’s nice to have clean water. It’s great to have a thriving environment. Do you think this can be a watershed moment to maybe galvanizing more opinion for that?
Bob Leonard: I hope so. I hope that people see we can change, we can change the way we live. Governments can step up and take action … maybe there is a better way. Maybe there is a different way. I hope it promotes that kind of evolution to accrue consciousness to looking at things a bit differently. Just because this is the way it’s always been doesn’t mean that it always has to be that way.
John Koetsier: That’s a great comment and that’s a great place to end. I want to thank you, Bob, for being part of this. It’s a real pleasure to have you on. And for everybody who’s been with us joining us on future39, whatever platform you’re on, thank you. Please like it, subscribe, comment. If you’re listening to the podcast later on, if you like this, please rate it, review it.
Thank you so much. Until next time, this is John Koetsier with future39.