Book Review

Natural Capitalism

The Next Industrial Revolution

by Paul Hawken, Amory B Lovins & L Hunter Lovins - Earthscan, 2010

This is a tenth anniversary, 'revised edition' of the book first published in 1999 to great acclaim, with its message that radical improvements in resource-efficiency and reuse, with near-elimination of pollution and waste, could be competitively profitable in a capitalist market economy.

In fact, it has a new, fairly lengthy introduction, followed by the original text.

Its analysis is based on four principles: 1 – resource productivity; 2 – 'biomimetic' production – waste into value; 3 – 'solutions economy' – leasing service, not selling product; and 4—reinvestment in nature – restore and enhance nature's fecundity.

The introduction reviews the changes over the last decade, re-emphasising the urgency for radical change. It first focuses on the 'hypercar' concept developed by the Rocky Mountains Institute (RMI) – super-lightweight but fuel-efficient, strong and powerful, with potentially only 3% of the rate of fuel consumption of conventional cars. (Coincidentally, I read in today's – 15 July –, news of Riversimple's 'network electric car', hydrogen fuel celled, super-efficient, carbon-composite bodied, small-scale manufacture, and to be leased, not sold, and with its design 'open source'!)

It goes on to cite examples in existence or theory, of profitable, radical economy of use of fossil fuels, water, wood, minerals, etc., and 'circular flow' of materials, using a 'whole system' approach to design, which are expanded in the original text which follows, with links to sources of further information. A frequent point made in the examples covered is that 'localisation' is needed, rather than 'globalisation', for economy of energy and materials – local production for local needs; for example, use of combined heat and power systems, as well as minimizing transport miles. They are also critical of the 'perverse subsidies' so common in public spending and taxation policy, supporting the wrong things and failing to support the needed ones. It is strange that the authors then suggest that to effect the reversal of these policies should take 'at least fifteen to twenty years – so that existing capital investments can continue to be depreciated over their useful lives'. This shows a failure to recognize the urgency of change, if we are to 'save the planet'!

Its claim in the introduction that 'Whether one is most concerned about prosperity and jobs, or about national security, or about climate and environment, one should do exactly the same things about energy and many other issues' is backed up by the detail which follows. Given the political will and entrepreneurial initiative, great progress toward a sustainable economy could have been made over the last decade, even despite the serious inherent flaws in the capitalist system – which the authors fail to challenge.

The city of Curitiba, in Brazil, is given special attention, as an example of what can be achieved by whole-system planning and citizen and business participation, starting in 1972. It attends to the special needs of the poor and disadvantaged, with a city plan based on prioritizing public transport and walking/cycling, and gives much attention to recycling and waste-reduction. This is an outstanding example of what can be achieved in social welfare and environmental protection, given the right whole-system approach.

'Natural capitalism' recognizes that 'an economy needs four types of capital to function properly': human capital, financial capital, manufactured capital, and natural capital; and that by treating natural capital as a 'free good', orthodox economics fails to recognize its crucial importance to the 'economy' and human survival. The authors offer a deservedly severe criticism of this, but fail to examine the debt-generating nature of finance-capitalism, based on the banks' power of money-creation by making interest-bearing loans, giving them power to determine the direction of society. Their suggestion that 'If the rich countries replaced part of their feedlot beef consumption with range beef [etc.] then Central and South America might feel less pressure to convert rainforest to pasture [etc.] …. This one action could save enough grain, if properly distributed, to feed the world's half-billion hungry people' ignores the debt-pressure on these countries' governments and businesses to act as they do.

Uncritical acceptance of 'the need for work' rather than for fair distribution of the potential abundance which our advanced technology could so easily produce (due to 'the common cultural inheritance' and 'the increment of association', as C H Douglas termed it in the1920s, arguing for 'National Dividends' to end wage-slavery) including abundance of leisure, mars their analysis.

Despite these shortcomings, this book makes an important contribution, with many valuable insights, to the debate on the changes needed to secure a future for humankind and life on Earth.

Brian Leslie