Paradox 2: Tradeoffs for the “Caring”

Last time I talked about the paradox between environmental choices. (i.e. being conscious of one aspect of “saving the environment”, almost inevitably increases another).

This time the question I debate most often is how to handle the environment/social paradox.

A lot of environmentalists are socialists too. The underlying principle of both is CARE. I care about people and I care about the world we live in.

But when you really start studying it, you end up with some very mixed messages.

Main debate for helping the poor – open up trade, stop subsidies to farmers and let the developing countries trade what they do best: agriculture. (WorldBank report for more info)

On the environment side though, do we really want to do that? Do I want my grain shipped from Africa? Aren’t they telling me to buy local? Shouldn’t I support my local farmers so that my food doesn’t have so much of an impact? There are numerous articles out there about how restaurants are “greening “themselves by buying local.

How do you do both? It’s a complex issue.

Just recently I wrote an essay on how to tap the $5 trillion market at the bottom of the pyramid (there’s a book on it)

Prahalad argues that multinational companies not only can make money selling to the world’s poorest, but also that they must undertake such efforts as a way to close the growing gap between rich and poor countries.

Interesting point of view. But therein lies the paradox. I’ll share with you my homework (nerd?…you bet;)

Many reports and even the WBCSD (World Business Council on Sustainable Development) are quick to point out the opportunities for being both profitable and sustainable. Nevertheless, gaining on both sides of this equation is trickier than stated. Once these countries grab onto the development ladder, it is hard to ignore their consumer good needs. Therefore, in order to protect the environment and grow sustainably, development must be carefully monitored so as not to degrade their systems more than they have been already. Perhaps then the question becomes not how to tap into this massive developing market, but how to do so in a way that does not lead to mass consumption of non-renewable products and wasteful systems. The inevitable path to western economic development is hard to sway from as the big emerging countries can contest. Innovation and perhaps a paradigm shift will be needed to ensure that capitalism can indeed by accomplished in a sustainable manner.

As RunDMC would say…. It’s tricky tricky tricky;)

 

Uganda

 

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2 thoughts on “Paradox 2: Tradeoffs for the “Caring”

  1. Jay Godse says:

    Corporations are amoral. They are not immoral or moral. They care about profits. They’ll do plenty of immoral things as long as they don’t get taken to court for it. If that were not so, you wouldn’t have toxic waste dump outsourcing in West Africa, or diamond and mineral mines in sub-Saharan Africa run on slave labour and protected by Western-bred mercenaries.

    If you want people in developing countries to act in their own interests, financial, social, and economic, they need some quantifiable interests. They need property rights. They need the rule of law. They need fair taxes. They need public safety. They need uncorrupt governments. If they are actually allowed to have these as interests, they will do their best to optimize these interests because they own them.

    Unfortunately, their interests are not our interests. We need their oil, diamonds, minerals, etc to help our industry. We’ll make them a bit rich as long as our (high) standards on return on investment are met. This, of course, leads to compromise, which usually erodes the interests of the folks in those developing areas. Environment, social stability, and quality of life are the first interests to get compromised.

    What folks in the developed world don’t understand is that ownership, property rights, public safety, rule of law, social cohesion are interests that must precede the creation of very profitable markets. The profit comes after the other stuff…

    I’d be curious to see a method on how to develop these markets profitably before the basics are developed first.

  2. janeporter says:

    jay…. you have no faith in them eh?

    You’re not the only one! anyways, I still do (but perhaps that’s just me as a naive student. Ask me again in a few years;)

    As for the rule of law: absolutely. I totally agree on that. And that is an issue in and onto itself. However, that doesn’t solve the isse…. people are still moving into this market with or without the institutional capactiy (albeit slowly…and sometimes dragging the government with it).

    The trick is to figure out how it works for them and how to do it their way… it’s not always going to be the same as we have it. Take the Grameen bank for example (always the easiest example). They didn’t have the infrastructure but they made their payback structure for credit based on relationship (self-help structure) instead of the common collateral system. It worked… it’s a different approach that may not work here but it worked there…. so, that gives me enough optimism to keep thinking. I see the light!!!! hahha

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