By Karen Melton, Southeastern Pennsylvania Group, Sylvanian Volunteer
Many of us speak of externalities when we talk about climate change -- specifically referring to the fossil fuel industry polluting our air and water and destabilizing the climate for free, or at most occasionally paying small fines they simply consider a cost of doing business. (In economics, an externality is an indirect cost or benefit that results from an activity and affects people who are not directly involved in that activity.) Taxpayers pay for cleaning up some of the pollution, and everyone pays with their health. This book is a deep dive into externalities that goes well beyond the fossil fuel industry.
Christopher Marquis, a Business Professor at University of Cambridge, England, is author of The Profiteers as well as several previous books including the award-winning Better Business: How the B Corp Movement is Remaking Capitalism. He summarizes the fundamental weakness of our market driven economy this way:
“External goods (water, air, living beings) that are ‘used’ but are outside the exchange system are regarded in this calculus as basically free gifts. So, while environmental degradation is a result of production, our accounting systems do not disincentivize or even account for it. But it does disincentivize any efforts to repair that degradation.”
While The Profiteers focuses a great deal on the public harm caused by fossil fuels, Marquis calls attention to a variety of bad business actors (as well as some good ones). Amazon is held up as one of the worst, as Marquis recounts the many ways Amazon socializes its costs at the same time making greenwashing claims. Some of those practices include paying almost no taxes in the U.S. (and none in the U.K.) on billions in profits, while its huge fleet of polluting delivery vehicles travel publicly maintained roads, categorizing employees as seasonal although they work year-round, in order to avoid paying for health insurance, and creating hostile and unsafe work environments while aggressively fighting any efforts at unionization. Many common goods and services are exploited at no cost, or well below their value.
Marquis describes other less obvious examples of socialized costs:
- The use of antibiotics in factory farming, creating widespread antibiotic resistance
- The health impacts of junk food, sugary beverages and fast food
- Human rights and resource exploitation in countries of the global south for the benefit of wealthy consumers
- The pollution associated with power requirements of digital media and streaming
Marquis devotes a series of chapters asking the question, “who pays?” for many common resources that are exploited and unvalued by the market, such as who pays for carbon emissions, cheap goods, cheap labor, discrimination, and damage to the earth? In each case he identifies who is paying the cost, and he also identifies alternative business models.
In the chapter “Who Pays for Carbon Emissions,” he gives many examples of how businesses, responding to public pressure on climate change, employ a variety of accounting techniques along with a heavy dose of PR to appear to be “going green”. Creative accounting methods include ignoring the emissions of the supply chain, streaming services such as Netflix not accounting for the energy associated with end user devices, and ExxonMobil claiming a goal of net zero, while not including emissions of the oil it sells, which of course is most of its emissions.
The final section of The Profiteers is a series of chapters under the heading “Building a Regenerative Economy for the Twenty-first Century.” In these chapters Marquis tackles governance, finance and ownership, corporate activism and consumption. He offers many approaches to business that account for the commons while operating equitably, with examples of businesses already doing so. I was pleased to see Allbirds, my favorite shoe company, cited as one of the good guys, serious about getting to a zero-carbon footprint and making significant progress doing so. Others mentioned included IKEA, REI, Patagonia and Eileen Fischer.
This is not an easy read, because many of the assumptions and practices underlying the destructive nature of capitalism are what most of us consider the norm. Be prepared to see how we all help the profiteers get us to pay their costs, but also how business can and should operate differently.
This blog was included as part of the September 2024 Sylvanian newsletter. Please click here to check out more articles from this edition!