Appeal for a change of system
Sustainability, or rather the call for a more sustainable economy, is omnipresent. In the meantime, the term can be found regularly and inflationarily not only in the business section of newspapers. But the understanding of what being sustainable means for companies could not be more different: For some it is the production of solar energy on the roof and for others it is the electric cars in the company car pool. But the issue is much more fundamental: namely, the need to radically adapt our economic system. Why? That will be explained in the following article.
At the beginning a note: This article was written by the author before the Corona emergency situation. This gives some of the hypotheses formulated in it additional significance.
Since the 1980s, the Brundtland Report has provided us with a definition of what sustainability means: "Sustainability is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. So a sustainable economy must be measured by how it manages the earth's resources. And even more concretely: Sustainable business means that we refrain from consuming non-renewable resources, preserve biodiversity and thus do not destroy our habitat through our actions. Thus, the demand for a sustainable economy is not only related to the current climate discussion.
The sustainability formula
In sustainability research, the realization is gaining ground that sustainable action is oriented towards the three dimensions of economy, ecology and social issues. If we really want to achieve "genuine" sustainability, we need to understand which aspects lie behind these dimensions. A useful approach is provided by the World Bank's capital stock model (1):
K Sustainability = K Environment + K Economy + K Society
According to this formula, sustainability exists when our actions do not diminish environmental, economic or social capital.
If we now look at our actions, we see that humanity developed sustainably until industrialisation, albeit with varying degrees of intensity, but nevertheless overall. Until 200 years ago, no irreversible environmental changes were initiated by our behaviour. On the contrary, many positive social developments can be noted, especially with regard to freedom, justice and human dignity. Economic development also made an increasingly better life possible. Social and economic capital increased, still largely without negative consequences on ecological capital.
The principle of "growth
Industrialization and the associated massive increase in productivity caused this balance to tip. The production of goods became cheaper and cheaper through the machines and affordable for more people. Factories mushroomed, providing jobs and income. These rising incomes created more demand and so a dynamic developed which continually increased economic capital. Economic development brought electricity and water to households, and the resulting increase in goods made life easier. In particular, the availability of food and better hygiene conditions ensured increasing population growth. Wealth and population increased. From 1800 to 1950, the world population grew from about one billion to two and a half billion. However, this was accompanied by an increase in resource consumption. In 100 years of the industrial age (1850 - 1950), the life of a middle-class family changed more massively than in the agricultural age over a thousand years earlier. Income and wealth continued to rise as a result. Until well into the twentieth century, people acted as if resources were unlimited. In the course of this positive social development, an economic system based on the principle of growth and consumption developed. At the same time, basic economic principles have prevailed in society: states strive to increase the quantity of goods and services produced (GDP), companies want to increase their sales and profits, and people want to increase their income. As a result, economic capital has skyrocketed to dizzying heights. As an example: In the USA alone, the money supply increased from approx. 200 trillion USD to 10,000 (!) trillion USD between 1960 and 2005.
Primacy of the economy
Profit has become the measure of our actions. Economic success creates prestige and has now reached theological dimensions (2). "What's the point?" is not only central in companies, but increasingly finds its way into social action (3). Money, possessions and consumption have become guiding values in society. This focus on constant growth has also led to products becoming more short-lived. A growth-driven economy is dependent on homo consumens - the unrestrained consumer (4). We live in a system in which the primacy of the economy prevails and man defines himself through consumption. This action allows above all the economic capital stock to grow.
Finite resources and a polluted environment
But since the 1970s, it has become apparent that this system, which is based on growth, must be questioned. Initially, this was due to the simple realization that the earth's resources are simply not sufficient to provide a western standard of living for all people in this world. In the meantime, we recognize that we are already causing damage with this economic system that endangers the livelihood of humanity. The ecological capital stock has been neglected in the consumption frenzy and has shrunk significantly in the excessive years of consumption. Between 1950 and 2010 alone, resource consumption more than quadrupled (5). Infinite growth in a finite world is not possible. Despite all efforts, resource consumption is increasing. The rate of CO2 has been rising faster and faster on average since the 1970s: from 0.7 ppm annually to 2.2 ppm. In May 2019, it was as high as 3.5 ppm (6). The industrial age has brought us many advances and positive developments. But just not only: we are currently experiencing the suicidal basic disposition of the system. We are probably at a maximum point of upheaval in society.
System Change - Culture of Welfare
The way we act (economically) (produce and consume) is simply not sustainable and not fit for the future. If we want a sustainable society, we need a sustainable economy. Resource consumption and environmental pollution must be reduced. Although this has been known for years, it has not yet been achieved. And this is because we are working in the system instead of on the system. A change is needed: the social system must detach itself from the material growth disposition and develop a cultural welfare orientation. A sustainable economic system must be oriented towards the (basic) needs of society and not continually create (unnecessary) needs (mass consumption). The rush to consume has obscured our view of the abyss, but above all of what is essential: a meaningful life in dignity, for all people. This work on the spiritual and moral (higher) development of man must gain in importance. We must break with the current premises (primacy of the economy). It is necessary to preserve a viable environment and to create a society worth living in. In addition to arithmetic, reading and writing, the examination of ethics, morals and virtue and thinking about the meaning of man (philosophy) belong to the basic canon of education at all levels. Frugality and modesty must become socially worthwhile again. We cannot avoid redefining the rules and adjusting the values. This requires all actors in society, first and foremost the state, which is responsible for the welfare of its citizens and sets the framework with a changed set of rules. We can all contribute to this: by working in our respective roles (as citizens, consumers, employees or entrepreneurs) for changes and system adjustments. Together towards a system that takes all three capital stocks into account.
