Al Gore and David Blood write in the WSJ today about sustainable capitalism. They claim the convergence of several insurmountable challenges such as climate change, water scarcity, income inequality, etc. require us to fundamentally change the underlying construct of our market system. They suggest we replace our free-market based system with sustainable capitalism.
They explain what sustainable capitalism looks like here:
“Before the crisis and since, we and others have called for a more responsible form of capitalism, what we call sustainable capitalism: a framework that seeks to maximize long-term economic value by reforming markets to address real needs while integrating environmental, social and governance (ESG) metrics throughout the decision-making process.” ~ WSJ.
They go on to describe some of the benefits of this new system and then give us five actions companies, investors and “others” can take to implement this new system. “Others” would necessarily include government, and this is where I jump off the wagon. I also wonder how much Mr. Gore and Blood stand to gain financially should we adopt “their” system.
I’m beginning to harbor a lot of ill will toward this word sustainability. Gore pleads with business to focus on developing sustainable products that will generate long term benefits. To this I say, quite simply, that companies should be developing products consumers want or face bankruptcy. Now, I don’t know what Mr. Gore means when he beckons for sustainable products, but I bet that electric cars would make his list. I would direct Mr. Gore to inquire with GM regarding their most recent sustainable product - the Volt. Last time I checked, sales for the much ballyhooed car were well below estimates, and there’s some evidence that the automaker hid reports about the car’s safety tests. Time will tell if GM’s gamble pays off.
My point is that when companies start marching to the sustainability creed and ignore consumers wants, we all lose. Firms that waste scarce resources on politically favored projects will not only realize losses, but consumers will be deprived of products they actually want and need. Worse, governments may actually spend taxpayer dollars propping up these failing companies, rewarding this unwanted behavior and providing a perverse incentive to keep marching ahead.
Sustainability exists only in the mind of government officials hell-bent on replacing your value system with theirs. They honestly believe that you, the consumer, are too stupid to know what’s in your long-term best interest, and therefore, for your own good, they’ll inform you. The reason the free-market system works best is because I get to express my own preferences when I enter into mutually beneficial exchange. Government is ill equipped to do this for me, and can only succeed in limiting my choices and depriving me of liberty. This is something we all must guard against.
The goals Mr. Gore and his ilk seek can best be achieved by freeing up our market system more, not by imposing more top-down government mandates. Income inequality, water scarcity, and all these other calamities will sort themselves out when, and IF, prices are an accurate portrayal based on the forces of supply and demand.
I suppose my biggest problem with Mr. Gore lay in his attitude toward the environment. Environmentalism is a religion for him, and he has shifted his worship from the Creator to creation. Under Mr. Gore’s scenario, mankind is no longer in an ownership position with regard to property, but rather an unwanted renter. Man’s use of any natural resources for whatever purpose is a sin against nature, and must be minimized. The earth is his bride and he seeks to purge from her all ugliness brought about by the capitalist’s greed, waste, and pollution. To steal from the movie The Matrix, man is a cancer...a rapist...a virus destroying all living things. Lord Gore is the cure, and in him lays salvation.
Our free market system may not be perfect, but it’s far, far better than the sustainable system Mr. Gore would impose upon us.