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Climate change protest funded by big business: the power of paradox

March 26, 2011

Getting to the point straight away, there is a most fundamental paradox at the heart of capitalism, one clearly articulated in the debate over the funding of ‘green’ activities by corporations. The paradox emerges when you weigh good against bad. Corporations create wealth. They create jobs. They spread employment – and therefore wealth – around as they expand into new markets. They innovate, they develop new products and they pay through corporation taxes for a significant part of the state’s spending on social necessities like law and order, affordable healthcare, education, and governance itself, while the the lion’s share is generated by the jobs, direct and indirect taxes that we all pay as employees. All largely to the good then.

Except…except that they also manipulate the crap out of us through advertising and intrusive marketing. They pollute the planet, act in corrupt and rapacious ways, care little and with some infrequency about their workforce, make many kinds of goods that are designed to fail in a set period and be unrepairable when they do. And they display a social conscience inevitably suborned to, and perpetually compromised by, the desire to make ever greater profit.

The paradox. Good and bad then: can’t live with ’em, can’t live without ’em.

* * * * *

The event known as Climate Week has invoked numerous articles of late, one of which in the Guardian features, amongst other things, a defense of corporate sponsorship – particularly by RBS, EDF and Aviva – by Climate Week founder Kevin Steele:

My view is that the threat of climate change is so catastrophic and the economic transformation required so great, that we have to involve every part of society. This includes large companies as well as charities, schools, public services, government and others. We cannot afford to waste precious time arguing about which organisations are sufficiently green to be allowed to take part in a movement for change.

His regard for ‘precious time’ doesn’t stop the posters from doing exactly that – scorning what they describe variously as one or other form of ‘greenwash’ hypocrisy – and here we see once more the ideological fist concealed in an ecological glove. My problem with these kind of arguments is not the position of those taking part, so much as the lack of nuance, the child-like simplification that reduces everything to black hats and white hats.

First of all, let’s bear in mind how little most environmentalists seem to know about how business operates. Too many comments I read from those I respect and, on environmental issues, largely agree with, smack of infantile ideology: big business is bad, everything they do is terrible, everything they do is exploitation driven by greed. The easy analysis: black hats all round.

I come from a corporate background. Consequently, I have a perspective on how business operates that is clearly very different from the theoretical, and often hilariously naive, criticisms bandied about in public. (Just to be clear on this, and to repeat my oft-stated assertion that I’m not pursuing some kind of socialist agenda behind the camouflage of environmental issues, I don’t really have a beef with capitalism, so much as I do with consumerism: the former is the barter system writ large and the least worst way of developing wealth, the latter a license to consume and waste, where we measure ourselves and our success idiotically in terms of how much we consume and how much we waste).

Board room experience informs my views, so that -for example – I can state that all business is essentially cynical and self-serving, and there is no real alternative. If you employ people, you either acknowledge and service the imperative to keep paying them and provide some notional stability in their lives, or you regard them as fodder for the industrial machine you run, another disposable asset to be discarded when it suits and times are tight. The balance between philanthropic paternalism and the need to turn a profit is forever unforgiving, a tension impossible to reconcile e.g. do you sack the few in order to maintain the employment of the many? Personally, I found making people redundant quite abhorrent, an act seen in a bearable context only when I considered the likely outcome were I to fail to do so. In the end, it was a calculation (as are all decisions in business) and the numbers involved were assessments of collateral damage.

* * * * *

Perhaps collateral damage is the best measure of the paradox I alluded to in my opening remarks. All business, all commerce, does good and does bad. There is profit and loss. There is benefit and detriment. People are beneficiaries at the same time as suffering collateral damage. The environment suffers as society improves. There is always a price to pay – no free lunches – for everything we gain, everything we invent, everything we develop.

That price has become extortionate of late. Climate change is too great a price to pay for the shallow benefits of consumerism. Steep and permanent rises in the price of energy, and subsequent shortfalls of it, are too high a price to pay for a new mobile phone, a second computer, a larger plasma TV. The challenges we now face are invoking collateral damage on the poor, on developing nations, on those who may now be denied the fruits of so much struggle and invention. We are living the paradox, some of us doing nicely while others fare less well. Millions still live in poverty, riddled with disease, blinded by ignorance and corrupted by desire for that which they cannot have, first by design, and latterly by very bad timing.

There will be more collateral damage, and what I’ve been writing about for a decade now is how we can limit it. The issue is transition. Either we manage the change, or it will manage us: evolution versus revolution. In business, a company that doesn’t manage change, that doesn’t evolve, will inevitably experience revolution instead, usually accompanied by bankruptcy, mass redundancies, a change of name and leadership, loss of capital and credit – the worst outcome imaginable.

So when I read all the condemnatory posts about big business and how they sully the environmental movement with their filthy lucre, I am dismayed by the simplistic, and deeply unrealistic assessments on offer. Of course EFD burn fossil fuels and manage nuclear power stations – that’s what they do, and will continue to do. Are they bad because they invest in our energy future, knowing that fossil fuels and nuclear are currently the only way to keep the lights on? And that given the procrastination of western governments, particularly the US and UK, there are no coherent strategies to mitigate our dependence on fossil fuels. It’s all very well comparing an energy supplier to a drug dealer, for it is true we are notionally addicted to fossil fuels, but the notion of addiction is another misleading over-simplification. Drug addiction is either hedonistic or escapist. Fossil fuel ‘addiction’ is a dependency on one form of energy to power our society. Hardly an indulgence then, and perhaps this addiction business is an analogy too far.

As for RBS, of course they invest in tar sands and other fossil fuel opportunities. Fossil fuel will be part of the foreseeable future. If all funding was withdrawn tomorrow, the lights would go out in short order. RBS will invest in sure things, as they will invest in risk too. And they, like Shell and BP and the rest, will also invest in renewables, because they know the future will depend on alternatives. To what extent they commit themselves to long-term investments in alternative energy generation remains to be seen, but the very fact they are making any commitment at all – including support for climate week – is a good thing. Through that engagement, perhaps they can be encouraged to participate further, and deeper, and for longer.

I have been saying for some time that commerce needs to take a long view, because in the end their profits will fail unless they too adapt and evolve, along with the society that supports capitalism even as we also depend on it. It is in all our interests to be involved in, and contribute to, the gradual change that invokes the least collateral damage. Alienating corporations because they obey the imperatives of profitability (and therefore viability) is counter-productive. Of course corporations will be hypocritical, seeking PR advantage from any ‘good’ deed. We should not be surprised, however, because the very nature of consumerism is hypocritical and manipulative. We may hate the corporations for the way they use us, but we do love the employment they give us, and the goods they make for us.

Like I said, it’s a paradox. We can understand it, but I don’t think we can change it unless we dump consumerism altogether. That may be a case of trying to run before we walk, so in the meantime, let’s welcome big business to the fold and seek to promote change from within. Let’s also try to evoke a sense of purposeful evolution towards better things, and recognise that transforming the economic model we all depend on requires us to work with the corporate world, not condemn it as if they were to blame for the ills of the world. We’re all in this together, and since nobody benefits from violent change, it would be well if we could bring a little more subtlety to our opinions on the way commerce works, and our part in it (this last particularly when one considers pension funds, and what they invest in – armaments for example).

If we don’t stop alienating commerce, lambasting them out of some mythical, faux-Marxist angst, we will effectively render cosmetic the small concessions made by big business towards the environment, while failing to promote larger and more sustained commitments from within.

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16 Comments leave one →
  1. March 26, 2011 11:59 am

    Hi Graham,
    The small concessions made by big business towards the environment are often touted as ‘saving the planet’, as are recycling and numerous products such as canvas shopping bags. It’s similar to the ‘we can shop our way out of global warming ‘ canard that I think you’ve covered before. This all makes AGW seem easily solvable when it aint. In that context we cant take corporations banging the drum that they are saving the planet etc seriously.

  2. The King In Yellow permalink
    March 26, 2011 12:47 pm

    I agree.
    Whilst I welcome any effort to reduce or mitigate our impact on the environment the the climate, its distracting us from the bigger and deeper changes that we should be concentrating on.

    All the best.

  3. Graham Wayne permalink*
    March 26, 2011 3:21 pm

    Hengist – while it is true that any PR dept or firm will bang a drum as loud as they can, it does not detract from what good things any company does, at any scale. There will always be cynical thoughts and motives behind all corporate decision making, but this does not sully the contribution. We need to embrace the act, rather than interrogate the motive. I must also add something important that I left out of the article: the worst kind of historian is one that thinks there is a single motive or force behind any action. In the same way, there will always be many reasons for corporations to act in a manner that ‘appears’ responsible. This is why I don’t care about motive. Their good intentions, turned into some action, will still be better than indifference and inaction, but we will never understand quite why they did it, or how much they are really contributing. What we will know is that they did indeed contribute, and that’s the start we need to build on.

  4. March 26, 2011 4:55 pm

    My point is though that if a good deed is dwarfed by a bigger bad deed that goes with it then the claim “we are saving the planet by our good deed” is not just false but also bad per se because it misleads us to thinking that the problems facing the planet are much smaller than they really are.
    My argument will lead to the point that we do not have an economic solution and thus corporations which claim to address the issue are doing so in support of their function in our capitalist economic model. What evidence is there that the capitalist economic model is going to address climate change?
    Check this out: http://patrickmccurdy.wordpress.com/2011/02/16/comic-relief-and-british-airways-clever-marketing-hypocrisy-or-paradox-of-consumer-capitalism/

  5. Graham Wayne permalink*
    March 26, 2011 6:29 pm

    Hengist – who is it making such a sweeping claim – that they are saving the planet? Surely, the most credible claim any corporation could make is that they are contributing in a small way. Any other claim would simply be stupid.

    You also ask “What evidence is there that the capitalist economic model is going to address climate change?”. Funny enough, this is a key argument of mine – that commerce will address the matter far quicker and more effectively than fawning democratic governments, because the public want jam today and will throw out any administration that denies them. Businesses are not beholden to public opinion, and will address climate change as soon as it impacts sufficiently on their profits. But not before.

    But ultimately, and as I wrote in the opening statement, consumerism (and perhaps capitalism too) are not ethical constructs, and we cannot look to adherents for radical change towards something better, something less destructive and competetive.

  6. Ken McEvoy permalink
    March 26, 2011 9:07 pm

    Well said Graham. It’s refreshing to read something that doesn’t come from the strident close-minded extreme left or right. I am fed up with the “It’s my way or the Highway” from both these camps. A reasoned discussion from all sides is needed. You seem to be the standard bearer. Keep up the good work.

    Thanks

  7. Watching the Deniers permalink
    March 28, 2011 2:34 am

    I also work in large corporates, and share your analysis.

    As a senior manager for my organisation I have to make decisions for the short, medium and long term.

    From my perspective, climate change is an enormous risk to those businesses and industries that ignore it.

    Indeed, it very much reminds the debate reminds me of the attitude just before the “global financial crisis” hit…

    Many people understood the American financial system was a house of cards and headed for collapse. So many voices raised the “alarm”.

    But most in power chose to ignore the warnings. It did not suit their ideology or their focus on short term expediency.

    One wonders what the former managers of those large banks and brokerages think… “If only I’d listened”.

  8. adelady permalink
    April 2, 2011 12:01 am

    My simplistic view is that the more ‘greenwashing’ sells, the better chance there is that more businesses will go the next step. “We’re better than ……. because our product, process, service is the real deal because …… .”

    And when they make money doing =that=, more businesses will follow.

  9. May 16, 2011 5:59 pm

    they pay through corporation taxes for most of the state’s spending
    9% in ’08/’09. Most?

  10. Graham Wayne permalink*
    May 16, 2011 6:48 pm

    Byron – thanks for the correction. I do apologise for my laziness in this case, for I made an assumption and didn’t bother to check. I’ve modified the text accordingly, although the issue doesn’t impinge on my argument much since the ‘secondary’ benefits of corporations – employment – is where nearly all the rest of the money comes from. Good graph too – I’ll be using that again.

  11. May 16, 2011 9:18 pm

    No problem. One question to ask is whether the benefits of corporations can be gained in ways that don’t require so many of the downsides. That is, I would support very wide-reaching modifications to corporate law to reduce corporate influence over politics and the media, to make corporations more responsible for damage (social and ecological) that they cause, and to relativise the pursuit of the profit motive so that it is no longer the overarching and primary criteria of for-profit entities.

    I agree that consumerism is a more pressing problem than capitalism, though think that what we currently have is a form of capitalism very far removed from the capitalism of the founding theorists, in which corporate power has grown out of all control, a kind of hyper-capitalism, with all kinds of disastrous consequences.

  12. May 17, 2011 4:03 pm

    I don’t have any stats for the UK, but in the US, more people are employed by small businesses (less than 500 employees) than big businesses. Do you think that there are ways in which big businesses tend towards more manipulation, more ruthless pursuit of profit above all else (esp in public companies) and more problematic ecological irresponsibilities? I don’t have statistics for this, but my instinct (which could well be entirely wrong) is that companies that are not publicly listed and which exist on a more human-scale (a loaded term, of course), are more likely to be responsible to priorities other than the almighty profit margin: more likely to treat workers as humans; more likely to be concerned about their local environment (especially if they are located in a relatively small area). Of course I am sure there are counterexamples (large companies with humane employment cultures; small companies that screw local ecology), but I do wonder whether there are trends in these matters that are relevant to the discussion.

    It seems as though large companies simply have the advantage of efficiency, which, all other things being equal, is a good thing. But all other things are not, of course, equal. I would rather than inefficient company that looked after their employees and environment than a massively profitable one happy to shed workers and pollutants at a moment’s notice if they can squeeze another dollar/pound/yen/euro/yuan out of it.

    Are there other reasons to think big is best? My rule of thumb is to treat a corporation with a level of suspicion commensurate with its size until I learn more about it.

  13. Graham Wayne permalink*
    May 18, 2011 6:17 am

    Byron:

    Do you think that there are ways in which big businesses tend toward more manipulation, more ruthless pursuit of profit above all else (esp in public companies) and more problematic ecological irresponsibilities?

    The differences I have observed are these: small businesses are run by entrepreneurs, often with expertise in the business itself (technical knowledge or sales/marketing, the latter being about connections within an industry). They tend to know all their staff, will have a core team that are deeply loyal to the man more than the company, and when successful it is in part at least because they display common aspects of good ‘team’ leadership.

    Larger organisations become, to those that run them, rather anonymous. Staff become de-personalised and discussed as ‘assets’, to be acquired or discarded at will. Leadership becomes political instead of personal, with a board or boards displacing the individualism that shapes the SMEs.

    But in my view, the main difference is the bean counters. The larger the organisation, the more the criteria, all criteria, are determined by accountants. Serving the shareholder becomes a synonym for profit at any cost. Workers (and customers) are an amorphous mass to be exploited as much as possible, but within the boundaries of the law (this leading of course to the use of overseas workforces where employment laws are less ‘costly’ – recent revelations about Apple’s Chinese manufacturing at FoxConn is a perfect example).

    I was talking to a very good friend recently, who is well placed in the corporate world. We agreed that business could never really be a moral enterprise, because there is too much tension between the good of the staff and the environment, and the constant need to satisfy shareholders, keep the business afloat, fend off domestic and international competition, and keep those already employed in work. There are always paradoxes in the capitalist model, and they are, in my view and his, quite unresolvable unless one adopts a ‘steady state’ model and can make it work while so many other companies are seeking to take your customers from you.

    In the end, it is the constant search for more profit, and the unbridled competition, that is the undoing of restraint, of moral purpose, and of decent behaviour.

    (If you have time, take a look at my essay House of Mirrors, in which I discuss the drive to profit and the way it shapes nearly everything we do).

  14. May 18, 2011 5:33 pm

    Yes, these are some very helpful observations, putting some flesh on my instincts about the effects of size on business culture and practice, as well as the way in which the profit motive can distort human enterprises at the same time as motivating them. Thanks – I’ll check out your link.

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