True Cost Economics

Economic theory states that social and environmental concerns should be left to the function of regulators and the Government and that businesses should stick to what they do best, which is making profits for their shareholders. Any move on the behalf on a corporation to invest time, money and resources in general in the pursuit of improving the conditions of anything other than that of the bank balance of their shareholders would be in contradiction of their charter and hence irresponsible and possibly even unethical.

This has always been something that bothered me. I mean when you consider that the corporation itself is considered in a legal sense as a individual and hence bestowed with the rights of the individual, would it not be fair that all the responsibilities of being an individual and hence citizen be levied on a corporation? The question is what are the responsibilities of a citizen? Is it ethical for a person to focus on the profits of their shareholders (themselves and immediate family) at the expense of all other parties of the society in which the individual lives?

I guess I have been thinking of this a great deal ever since I took economics at university. What do corporations owe society? Is the payment of tax all that is required? Should the social function of a corporation not extend beyond this point? The same should be asked of the citizen. Does the citizen owe anything else to society?

A good example is war. In times gone past, when a country goes to war it was a “duty” of the citizen to support the war effort of their nation, whether by physically fighting on the front line or simply by accepting the rationing of their personal resources in the support of the campaign. Now although conscription is a thing of the past it is important to my point here. The citizen is intrinsically, as part of their involvement with society, expected to be willing and able to give more of themselves than simply their annual tax payment. So given this, it should be expected that more than corporate tax revenues should be expected from corporations.

So what? What does this mean? We are not at war anyways so who cares, right? Well besides the fact that we are technically at war (most western nations are involved in the ongoing war on terror and occupations of Iraq, Afghanistan etc) the logic of owing something to society should hold true at all times, whether at war or not.

Given we are arguably in the middle of the fight for the survival of the planet I would say that the call for something more than just taxes is called from all global citizens, including corporations. By saying “survival” I refer to the numerous negative impacts the human race is having upon our biosphere (Climate Charge, habit destruction, toxic waste etc), impacts that will in the next fifty years start to seriously impact not only the successful functioning of the biosphere but of the existence of the human race and heaven forbid the fat bottom line of the world’s major corporations.

So when the call the arms comes (it has already come, we are just waiting for the official declaration of war to be announced) we should expect corporations to join the fight with all the resources at their disposal. Profits for shareholders are not enough, corporations, as part of their contribution, beyond taxes (which they attempt to minimise at all times anyway), is the start help solve the problem. Corporations need to consider all their impacts on the society they function in. They need to factor in costs of advertising (which increases unsustainable consumption of goods [insert info on record personal debt levels in developed nations here] which are often unhealthy for their consumers and the world as a whole), pollution (CO2, hazardous waste etc), workers rights (increasing employee insecurity and over work is causing an epidemic of stress/depression in the west resulting in a great strain on our health care systems worldwide), contributions to cultural diversity (rapid globalization has tended to greatly reduce cultural diversity – Just look at Central America or the Gulf countries in the Middle East or even Indian and Chinese “Pop Culture”) and creativity (What movies and music are the most profitable? How many remakes and sequels are on at the movies these days?), Journalistic independence (anyone watched Fox News or CNN of late?) etc and etc.

The corporation after all is the same as a Government, it is just owned by fewer people and is mandated only to care about the needs of these few. But in the end the fate of the corporation, the Government and the citizen are all tied to the fate of the planet. It has been the attempted compartmentalization of society by economists and other theorists that have caused so many of the problems we face today. The sooner we all realize that we are in this fight together the sooner we will be able to rally all resources for the good fight, the fight that will help ensure the sustainable future of the planet and of the human race. Were corporations and individuals to focus on their immediate needs at the expense of their true and complete involvement with the world as a whole then we, corporations, Governments and citizens included are all doomed.

The goal: True cost economics. We need to include all costs and impacts in all decisions. We need to have the confidence that when we invest money in BHP Billiton that they are making decisions that promote sustainable interactions with the biosphere, increases to fourth quarter earnings are no longer sufficient custodianship of our resources. As all resources come from the earth and all will go back. The sooner the business world realizes that the sooner we can start to rebuild the economic order in a manner that suits the children born in one thousand years time as today will be gone tomorrow but forever will be with us for eternity.

http://www.truecosteconomics.org

Also have put up photos of Paris... what a place... and what better person to be there with than Farah aka Brown Squirrel! http://lucas.intercate.net/gallery/farahnlucas