“Conscious Capitalism”: Lipstick on a Pig?

Not Business Usual

Directed by Lawrence Le Lam, Rik Klingle-Watt (2014)

Film Review

Not Business as Usual challenges the maxim promoted by neoliberal economist Milton Friedman that corporations have no social obligation beyond providing a short term financial return to their shareholders. It traces the rise of “conscious capitalism” and the “B corporation,” which started from a 1989 Colorado meeting of the founders of various socially responsible corporations, including Patagonia, the Body Shop and Ben and Jerry’s.

The goal of the B corporation is to introduce social responsibility to capitalism. Thus far 20 states have introduced regulations for chartering B corporations, and 18 are working on pending legislation. Criteria for becoming a B corporation include responsible environmental practices, demonstrated commitment to the community and fair treatment of employees. According to the film, a B corporation commits to high environmental and employment standards along the entire supply chain. Thus a B corporation selling eco- apparel commits that the contractor producing the garments isn’t ruthlessly exploiting workers or discharging harmful chemicals into Bangladeshi waterways.

The documentary highlights a number of B corporations whose activism has resulted in groundbreaking changes in their communities and, in some cases, the third world. I was particularly intrigued by a B corporation called Lunapads. Lunapads has introduced low cost, washable menstrual pads to 120,000 women in the third world. In Uganda and other African countries, teenage girls typical skip school during their period when they lack access to affordable menstrual pads. In addition to keeping teenage girls in school (and unmarried), local manufacture of Afropads has created hundreds of local jobs.

Can the “Conscious Capitalism” Movement Save Capitalism?

The filmmakers contend the “conscious capitalism” movement will save the capitalist economic system. They argue that consumer pressure will eventually force all corporations to become more socially responsible – insisting consumers are demanding more socially responsible products and are happy to pay more for them.

I find a number of fallacies in this argument. In the first place, it’s only middle class consumers who are “demanding” ethical products, a middle class that is rapidly vanishing in most of the industrialized world. Minimum wage workers who are a paycheck away from the street have no choice but to opt for the cheapest clothes, foods and household goods they can find.

Secondly the present economic and environmental crisis is driven by powerful monopolies, particularly in the banking and defense industry. The thought of banking monopolies like Goldman Sachs or JP Morgan suddenly transforming themselves into B corporations is ludicrous. At present the main obstacle preventing entrepreneurs from forming B corporations is the unwillingness of Wall Street banks to provide start-up funding.

Thirdly while the social activism of individual B corporations is extremely laudable, I question the criteria used for measuring community responsibility. Surely a B corporation that’s truly committed to their community wouldn’t be seeking out “ethical” apparel contractors in Bangladesh. Surely they would be bringing these jobs back home to their local region.

The irony here is that many of the entrepreneurs who started the “conscious capitalism” movement made their fortunes by selling up to multinationals who clearly don’t share their vision. Ben and Jerry’s sold up to Anglo-Dutch food giant Unilever in 2000, and in 2006 the Body Shop agreed to a takeover by l’Oreal.

We have approached our local Body Shop outlet numerous times about supporting local environmental issues (ie fracking, fecal runoff from dairy farms). Claiming “corporate-wide policy,” they won’t even permit us put a poster in their front window.

The Renewable Energy Revolution

The Future of Energy: Lateral Power to the People

By Maximilian Dearman and Missy Lahren (2015)

Film Review

This film takes its title from Jeremy Rifkin’s 2011 book The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy and the World. The students who crowdfunded this documentary are clearly influenced by Rifkin’s relative blindness to the realities of class society. That being said, the film presents much valuable information about key players in the renewable energy revolution.

The video sets out to prove Rifkin’s thesis that “revolution” inevitably occurs when there are major simultaneous breakthroughs in energy production and communication. According to Rifkin, the first industrial revolution occurred in 1820, with the simultaneous development of coal-based steam power and letter-press printing; the second in 1900 with the simultaneous development of the combustion engine and electronic communication (telephone, radio and TV). He asserts the third industrial revolution has already started, owing to the simultaneous rise of renewable energy and the Internet. He’s convinced that the combined efforts of the business community and the nonprofit sector have already put the US on track to achieve 100% renewable energy by 2050 – regardless of government inactivity on climate change.

The filmmakers are clear converts to Rifkin’s views on market-based solar energy conversion. They argue the above trajectory is inevitable now that solar energy has become cheaper than fossil fuels. They erroneously attribute the price drop for solar photo voltaic cells (PVCs) to an “economy of scale” effect (ie high demand for an item allows you to mass produce it and the price drops). They also argue the cost of renewable energy will continue to fall, while fossil fuel costs will increase as finite resources diminish.

A more realistic analysis would attribute the current low cost of PVCs to low production costs – in Chinese sweatshops using super cheap electricity from coal-fired power plants. These costs will increase exponentially as Chinese wages continue to improve and as China’s government reduces their reliance on dirty coal.

On the other hand, the film is chock full of useful information about US cities that have already switched to 100% renewable energy, as well as numerous groups and programs that have helped make this possible:

• Grid Alternatives – a national nonprofit organization that installs free solar panels in low income communities, while simultaneously low income volunteers to become solar technicians.
• Community Choice Aggregation – a system adopted into law in the states of Massachusetts, New York, Ohio, California, New Jersey, Rhode Island, and Illinois which allows cities and counties to aggregate the buying power of individual customers within a defined jurisdiction in order to secure alternative energy supply contracts on a community-wide basis. Energy will always be cheaper, more efficient and more planet-friendly when it stays in the communities where it’s produced and is controlled by those communities.
• Green for All – a national organization founded to ensure that low income communities and communities of color have access to renewable energy technology and jobs.
• B-Corporations – a framework and certification for corporations wishing to benefit their communities, as well as their shareholders.
• Mosaic – a conduit for small renewable energy entrepreneurs to obtain financing when banks refuse to loan them money.
• Power Shift, Cool the Earth, Alliance for Climate Education – national groups working to get rood information about renewable energy alternatives into schools.
• Longevity – a 20 year solar lease program for families who can’t afford to pay $7,000 upfront for their solar energy panels.

 

•