Ethical Markets: The Exuberance of What is Possible, the Reality of What is Likely

September 7th, 2007

By Carolyn Baker of Speaking Truth to Power

Just recently I learned of Hazel Henderson and her latest book, Ethical Markets: Growing The Green Economy as well as Henderson’s Quality of Life Indicators which assess America’s Gross Domestic Product (GDP), not in the terms used by traditional economics, but in terms of qualities such as: education, income, employment, infrastructure, energy, national security, environment, public safety, health, recreation, human rights and shelter. A quality-of-life assessment of every indicator reveals that contrary to the macroeconomists, America’s GDP may be impressive and exceed that of any other nation, but its quality of life according to these indicators is mediocre, and in some cases, abysmal. Henderson also produces Ethical Markets TV which addresses these same issues and more and takes her message into the public television arena.
Ethical Markets is a wonderfully “feel-good” book because it illumines what is possible in the United States and in the world in terms of re-engineering our economic system into one that is authentically sustainable. However, I cannot digest the book in a vacuum unless I choose to ignore the current reality which is inimical to everything promoted by Henderson and the stories of the extraordinary people included in her book. Therefore, I must read and review the book not with an either/or perspective but rather a both/and outlook because many of the concepts enthusiastically presented in Ethical Markets are impossible to implement on a broad scale under the current paradigm. And in my opinion, the paradigm will not transform sufficiently in order to make widespread changes possible without the collapse of every American institution-which incidentally, we are now witnessing and most dramatically in terms of the world and national economy.

Henderson begins Ethical Markets by grouping the three main areas of change that she envisions in moving toward a green economy: 1) lifestyles of health and sustainability, 2) socially responsible investing, and 3) corporate social responsibility. All of these have meaning only when viewed in the context of quality of life as the fundamental definition of success.

That said, Henderson follows her chapter on Redefining Success with a hard-hitting demand for Global Corporate Citizenship, for it is the corporation after all, that has behaved most egregiously, not only against consumers, but especially against the environment. The crux of Henderson’s argument is that “Corporations can be good citizens-and provide good financial returns. Hundreds of studies now show that companies do well by doing good.” (36) Her chapter on global corporate citizenship is replete with stories and photos of CEO’s and other corporate players who are remaking their industries by requiring that their companies behave responsibly toward consumers and toward the planet.

Yet, neither GDP nor quality of life can be accurately assessed without inclusion of the Unpaid “Love” Economy” of housewives and other uncompensated providers of goods and services. This “hidden” economy is a crucial factor in times of an economic depression or currency crisis such as the one experienced in Argentina in 2001 and in the U.S. during the Great Depression when banks collapsed and people “remember that they can create their own local ’scrip’ currencies, barter clubs, flea markets, and community credit-systems to keep local exchange and production humming.” (45)

It is at this point in the book that we begin to catch the flavor of relocalization and the transition from global to local that is pivotal in transforming the current economic system into one that serves human beings and the environment. For example, Henderson refers to Riane Eisler who believes that “economics is basically about what we value, and we must value the work of caring and care giving and develop caring policies.” In the current system of empire, the most effective milieu for accomplishing this is at the local level.

Edgar Cahn, founder of the Time Dollar Institute which has devised a local system of time/work exchange, says that in this system “You put in an hour, you get an hour’s credit then you can spend it to get help for yourself or your family or you can give that time credit to someone else who needs it more.” One result of this arrangement is the rebuilding of a sense of extended family in the communities where the system is utilized.

Ithaca Hours is another scheme implemented in upstate New York. It is essentially a barter program which is currency-based rather than time-based. At its inception each person who wanted to participate received $20 worth of money for free for joining and after that the Ithaca Hours newspaper shopping directory of offerings grew slowly, but soon businesses began accepting the program, and Ithaca Hours became a successful program because it kept money in the community a little longer than other money. The program helps build community by getting people talking to each other and in some cases enables them to get interest-free loans, mortgages, and healthcare. While traditional economists still disparage bartering as “primitive”, we now have the world’s largest garage sale online, ebay, which demonstrates how the mainstream economy can be bypassed.

Another section of the book highlights green building projects constructed with sustainable, environmentally-friendly products, as well as the proliferation of companies, such as the Fairmont Hotel chain, which uses organic cleaning products instead of the usual toxic cleaning products and encourages its Washington, D.C. employees by subsidizing their use of public transportation rather than driving their cars to work.

In a chapter on investing in one’s local community, the Business Alliance For Local Living Economies (BALLE) is highlighted as an example of how sustainable local economies can be created and maintained. Countering the global economy, BALLE works with local communities to provide products such as coffee and chocolate which cannot normally be obtained locally. “…it’s not about buying everything local. It’s about buying everything in a way that supports a local community where that project originates; in other words, paying fair trade prices.” (77) TransFair USA is an organization that certifies companies and products that meet the international Fair Trade standards and audits the entire global supply chain. Henderson lists the principles of Sustainable World Trade as:

1. Adherence to all United Nations principles, treaties
2. A well-regulated transparent, democratic global financial architecture
3. Ending corruption
4. Ending relocation practices based on tax holidays
5. Calculating all traded goods and negotiations in full-cost prices
6. Truly level playing fields on subsidies
7. Connecting GDP per capita based economic growth measures: Rio de Janeiro in Agenda 21 (1992)
8. Correcting stock and bond markets evaluations (101)

Although fully acknowledging the reality of Peak Oil, Ethical Markets, while offering a number of energy conservation guidelines, does not mention the fact that no amount of conservation or technological innovation can be implemented in time to avoid a massive global energy crisis. Nor does Henderson mention the suppression of alternative energy technology during the past 60 years or the fact that globalization will be reversed by Peak Oil alongside the global economic catastrophe whose storm clouds we now see gathering.

A fascinating chapter on the Transformation Of Work proposes practical strategies for implementing ever-shorter work weeks which allow workers to enjoy the arts, sports, self-improvement, learning new skills, and having more time for travel and vacations, ultimately creating a whole new economy. Three concepts make this possible: 1) A guaranteed minimum income for all 2) guaranteed jobs, 3) employee stock ownership plans. A genuine “ownership society”, not the one proposed by George W. Bush, is possible-a form of ownership benefiting the working and middle classes, not the ruling elite.

“Clean Food” is a chapter that illuminates the machinations of agribusiness and its intention to own and dominate world food supplies. Alternative food production and education endeavors such as Rodale Press and Institute, Forestrade, Inc., the Clif Bar company, and others are models for the creation of non-toxic food products and supplements. Yet once again, because so many formerly “healthy” food companies such as Ben and Jerry’s, Horizon Organics, and Boca Foods have been purchased by corporate giants, it is relocalization and local food security programs that are more likely to ensure the proliferation of clean food.

Especially helpful at the end of the “Clean Food” chapter is Frances Moore Lappe’s “Ten Actions For Just Food And For A Just World”:

1. Enjoy food fresh from the [local] farm
2. Vote your values with your dollar
3. Eat a sustainable and whole-foods diet
4. Support fair trade products and workers’ rights
5. Transform the buying power of your community, ie. Bringing fresh, local, organic foods into your schools, hospitals, etc.
6. Create brand-free zones
7. Get a diverse media diet
8. Get involved with issues that matter to you
9. Host a teach-in, study group, or gathering in your area around any cause you choose [But what about one that educates the citizens of your area about food?]
10. Vote [And to this I must add that the local level may be the only venue where legitimate, non-fraudulent elections still exist. I cannot concur with Lappe on the importance of voting in federal elections where the likelihood of fraudulent, computerized election tampering is rampant. See Bev Harris’s documentary “Hacking Democracy“.]

Fortunately, Ethical Markets is not a book for “white people”. Its pages are filled with stories of Hispanic, African American, Native American, Asian, and Middle Eastern women and men who are working to transform the global economy into more localized, community-based endeavors that seek to expand and enhance genuine prosperity, produce safe and healthy products and services, and remake the capitalist system. In terms of ethical investment, the Calvert Group was the leading mutual fund to divest from companies doing business with South Africa during apartheid.

For those interested in socially responsible investing, Henderson offers an entire chapter which along with Catherine Austin Fitts series on “Socially Responsible Investing” is an invaluable resource for individuals who are looking for profitable yet ethical investment opportunities.

In summary, Ethical Markets is a must-read for anyone committed to relocalized powering down and creating sustainable economics. Nevertheless, I must interject some concerns. The first is that Henderson does not clearly or adequately address the levels of greed, fraud, and corruption that pervade corporate America, nor does she explain the corporatocracy-that is the enmeshment of government with corporations which makes it virtually impossible to distinguish where one ends and the other begins. , this is the fundamental definition of fascism. Failure to do so may foster hope where it is not fully warranted because when one understands the symbiosis of government and corporations, not to mention the legal precedent of “corporate personhood” which evolved from 1886 until the present, one can easily grasps that the inevitable outcome is government being conducted as a criminal enterprise in concert with organized crime. (See “Godfather Government: A Way of Life Is Not A Scandal” which I wrote in 2007 and “Godfather Government: The Sopranos Aren’t Leaving” in 2006.)

And, as stated above, I believe that since all institutions are in a state of collapse in juxtaposition with Peak Oil, global economic meltdown, and climate chaos, activism which does not take into account the conjunction of these phenomena alongside a government that has morphed into a police state and continues to do so daily in front of our very eyes-such activism can only operate myopically. Rather, I believe that current events overwhelmingly indicate that an economic catastrophe on the order of or exceeding the severity of the Great Depression is unfolding rapidly which may result in the collapse of many of the remarkable enterprises documented in Ethical Markets. At the same time, the opportunity exists for all of those enterprises to rebirth or re-invent themselves on a local level both in the throes of collapse and post-collapse. The latter, in my opinion, is the ultimate value of Ethical Markets-a blueprint of sorts for how we might survive and create localized economic opportunity in a post-petroleum, post-paper currency world.

For Hazel Henderson’s commentary on current issues, see her September update. Her articles may be downloaded at Ethical Markets TV, and the book may be ordered at Calvert-Henderson website.

Entry Filed under: NEGATIVE SPACE, GUEST AUTHOR, DISPARATE WORLDS