Stability=Unsustainability
The last blog entry brought us to the conclusion stability = unsustainability. That is, my participants associate economic stability (capital generation) with businesses they identify as unsustainable (big, opaque, cheap goods). Indeed, the companies that my participants identified as superior at generating profit fit well into the “unsustainable” schema identified during the first sorting exercise. Participant 11 noted that bigger companies are more likely to be solely seeking profit at the expense of responsible business.
“I think that smaller, more independent companies usually are formed with more sense of responsibility and since their share, I mean, it's sort of, it's sort of hard to tell because like, they might be formed just to become a larger company and in order to reap the benefits - the economic benefits - of it's product, but I also feel like more of them are probably [pause] more sustainability minded than the large companies that have already been, you know, corrupted by our capitalist process.” Participant 11 #73-78
Participant 25 also identified big businesses profit generation at the expense of ‘ideals.’
“Larger corporations have a…larger pressure to make more money and smaller corporations can be based more around ideals.” Participant 25 #414-416
Indeed, participants characterized these companies as likely to take advantage of regulatory differences (cheap labor, few environmental regulations) between or within nations in order to capitalize on the imbalance. For instance, Participant 36 acknowledged the size and relative economic success of Chiquita Brands, Inc. while noting their exploitive relationship to laborers.
“I think large corporations that make their product in South America, I feel more often than not, have a tendency to do unsustainable things, like pay living wages, bad factory conditions, exploit labor.” Participant 36 #413-415
Participant 11 had a similar response to McDonalds while attempting to decipher whether to sort Chipotle in to the sustainable or unsustainable category.
“I know it is owned by McDonald’s, which is a really large multinational corporation not known for treating its workers well and known for paying a very low wage.” Participant 11 #242-244
Although my respondents care about sustainable business broadly, there is evidence that they consider sustainable business practices to be antithetical to profit, which is a direct risk to a company as well as any individual engaged market. I label this attitude "concern for capital." Although primarily theoretical, concern for capital constitutes a significant barrier to demanding/purchasing sustainable goods.
This attitude a fundamental disconnect in that participants associate unsustainable firms with profit and an opportunity to accumulate monetary wealth, but they also associate these firms with negative impacts like harming the environment, employees, and the communities. While the presence of a profit-generating firm is good for individuals it may also generate significant harms, which could not be rectified without raising (environmental and labor) standards.
Moving from Stability=Unsustainability to Stability=Sustainability
So what should we do about this notion that unsustainable business practices are the way to keep our economy stable and effective? Could we encourage business to adopt sustainable practices and produce sustainable brands?
At the moment, firms seem to have relatively little reason to make trade offs between their economic ends and social/environmental goods, since their only formal end is to generate profit. Many of my respondents, however, expressed the idea that consumers could convince firms (that seek profit) to produce socially and environmentally sustainable goods by “voting with their dollar” or purchasing a sustainable good in lieu of the unsustainable version of that good. This should send a signal to the market that sustainable goods are preferred to unsustainable ones and may make it relatively easier for a company to profit from producing sustainable goods. Participant 26, 40, and 25 alluded to the impact consumers could have if they demanded sustainable products.
“I am kind of working under the assumption that if the primary consumers of a product or of a company’s product aren’t really pushing for sustainability efforts, that the company is less likely to make those efforts on their own.” Participant 26 #206-209
“Whole Foods has done it successfully, and I think that consumer tastes will always kind of triumph over cost. If you can get enough people to buy something because they care about it then I think that’s a pretty successful marketing technique.” Participant 40 #539-542
“The importance of [sustainability] depend[s] on how the consumers that want - like, if everybody, like, knew that like, oh, Adidas exploits Indonesian workers and then, like, everyone hated that, then they would all buy, you know, American-made or, you know, better shoes in a sense. And then obviously Adidas would have to change their priorities drastically.” Participant 25 #232-236
Most respondents agreed, however, that sustainable goods are currently (1) more expensive to produce (for the company), more expensive to purchase (for the consumer), (2) relatively difficult to understand (requiring a intricate knowledge of sustainability), and (3) harder to find (available only at specialty stores, in special aisles, or on the internet). At this point it is relatively unlikely that consumers could encourage companies to make this transition purely with their own buying power, as there are several barriers to purchasing these products.
Expensive to Produce
On transitioning businesses to more environmentally friendly technology:
“In lot of situations it will require internal personnel infrastructure that might not already exist. Like, you got to have consultants. You probably have to have different sort of engineers. It is going to be expensive, but I feel it is important for the long-term viability of the industry and the planet.” Participant 9 #530
“I just think that if a company is willing to put the extraordinary resources into sustainability when regulations for that don’t even exist, like they could get away with it, but they don’t, then I feel like it’s just exceptionally admirable because it is expensive.” Participant 3 #392-396
Expensive to Purchase
On the extent to which all Americans could purchase sustainable goods:
“In our society I don’t think everyone has [the option to purchase sustainable products] because of the lower, middle, and upper class segregations. It’s more expensive because not everything is sustainable nowadays – it’s more of a luxury.” Participant 33 #679-681
On who would be likely to buy sustainable products
“The market was a very like, small circle of people who were getting sort of keen to these issues, and they could have a product sold for them, but they were like so educated, and such a small minority. They were probably willing to pay more for it than someone else who wasn't.” Participant 36 #264-267
Hard to understand
“I feel like the more sustainable people are often found in more affluent areas, because they can afford to pay premium for sustainability…and these people have more time to invest into understanding sustainability.’ Participant 6 #155-158
“I feel like environmental and labor practice concerns are one of those things where like if you aren’t always thinking about it and always on the ball, and make it part of your daily life you’re not going to be the kind of person to adopt
it. It’s one of those things, you hear about it once and you’re like ok, cool, but it’s an ever changing spectrum and to always to be able to make the most knowledgeable choice is not an easy thing.” Participant 40 #799-783
Hard to find
“You have to go to specialty stores, but then it’s really expensive -- out of my price range. You’ll see a lot of organic cotton, or things made out of hemp, or bamboo. So I think it’s there but you have to go looking for it and you can’t always afford it unless you are some chi chi environmentalist.” Participant 9 #243-245
“If you have a company you don't want people knowing the bad side of you, so I'm willing to bet that some of these major corporations -- companies are going to do their best to kind of like hush that down.” Participant 22 #441-444
In order to encourage companies to make tradeoffs between social, environmental, and economic concerns, steps must be taken to lower the barriers to consuming sustainable products: (1) high price, (2) lack of information, and (3) lack of availability, and (4) concern for capital so they may experience sales growth. By breaking down these barriers consumers may begin to see the real costs of the products they purchase, which may diminish their concern for capital, or their willingness to preference capital over sustainability concerns when they are in conflict.
In my next entry I will discuss how we can begin to lower these four barriers to consuming sustainable products. These recommendations are designed to encourage growth in the market for sustainable products through consumer demand.
Wednesday, July 14, 2010
Friday, July 2, 2010
Results and Discussion of Exercise 2
This post is dedicated presenting and discussing the results of Exercise 2. In this exercise participants were asked to sort eleven behaviors into a hierarchy according to how important they think it is that a company engages in each of the activities. Behaviors could tie for a position on the scale, and if one or more of the behaviors were not important at all the card was not included in the hierarchy.
The eleven behaviors are as follows:
1. Employees may organize and bargain collectively
2. Company is actively working to reduce energy and resource consumption
3. Company is working to reduce the amount of waste it creates
4. Company employs independent monitors to oversee overseas production
5. Company practices environmental stewardship even if the country it operates in lacks environmental regulations
6. Employees have freedom from forced labor
7. Company is engaged with the community and supportive of it
8. Company employs metrics to measure and manage energy consumption
9. Employees earn a living wage
10. Employer sponsors job-related education programs for employees
11. Company routinely collaborates with non-profit groups
Behaviors at the Top of the Hierarchy: In brief, respondents were asked about a number of characteristics of companies and their products that would typically be characterized as “sustainable.” My participants tended to sort these behaviors with an eye to ethical concerns, especially those that are not easily dismissed, by placing broad goals at the top of the hierarchy and appealing to moral values and ethical codes when defending the position of those corporate behaviors. The specific behaviors they chose to rank at the top differed between respondents, but often included basic environmental concerns like “company is actively working to reduce energy and resource consumption” and “company is working to reduce the amount of waste it creates” as well as relatively uncontroversial issues regarding basic human rights like and “employees have freedom from forced labor.”
For instance, Participant 46 explained “employees earn a living wage” was at the top of her hierarchy because it is a matter of respect and should be prioritized.
“I think earning a living wage is just like a respect to the people who are, like the, like are the actual force behind the production of your product. And I think -- I mean, I just think a living wage is really important because it like, just like ensures that the employee stays above water and if they get sick, or if they have an accident, or if they, if they – if their spouse loses their job, they have enough savings and they have enough -- they have like a moderate cushion, not to go, not to go like below the poverty line, so I just think it’s important to like treat employees with that respect.” Participant 46 #180-186
Participant 6 appealed to human rights when he ranked “employees have freedom from forced labor” at the top of his hierarchy.
“I’m against slavery. I think it's wrong, um, I guess I've never been asked this before. I guess it's a human right than a freedom of your life.” Participant 6 #363-365
Participant 36 also appealed to human rights in his defense of “employees have freedom from forced labor” as his highest ranked behavior.
“I think that's just from, like, a human rights standpoint, you know, it's—forced labor is, you know, really morally indefensible.” Participant 36 #432-433
Behaviors at the Bottom of the Hierarchy: The bottom of hierarchies tended to consist of corporate behaviors that were perceived to require stringent corporate regulation or a significant expenditure of corporate capital. These behaviors overwhelmingly included “employees my organize and bargain collectively,” “employees earn a living wage,” “company employs independent monitors to oversee overseas production,” “company is engaged with the community and supportive of it,” “employer sponsors job related education programs for employees,” “company practices environmental stewardship even if the country it operates in lacks environmental regulations” and “company routinely collaborates with non-profit groups.” Most often participants would express a favorable disposition toward these ideas in theory, but see them as contradictory to the generation of capital.
Participant 6 identified the preference for capital over environmental protection when he explained why less developed countries allow more pollution than more developed countries.
“I think it all comes down to economics. In more developed countries were we can afford to put levies on pollution, we do. In less developed countries, they value the return on their industry more, so they allow pollution and contamination to occur, but I still think it's bad.” Participant 6 #460-463
Participant 3 appealed to the benefit of simply having a job, even if the wages were unreasonably low by her standards.
“And that even if they do like make their goods in America, they’re still likely, very likely, using material that came from, you know, somewhere where they pay people less than a dollar a day, but that’s a whole different story cause they do some of the best jobs in those regions.” Participant 3 #107-110
Participant 29 also appealed to the benefit of simply having a job when he argued that there is some value to performing sweatshop labor that could be lost if wages rose.
“I think it’s good that there’s any money in those places at all, and if they had to pay a living wage they probably wouldn’t be in those places, and there would be no money for those people.” Participant 29 #330-332
Participant 18 considered how companies would be impacted by being made to publish information about their energy usage, and was most concerned by the capital impacts.
“I mean if every single company would have to do it, then it'd probably be good for the consumer just because they would know which companies hurting the environment and which ones are making more of an effort to conserve it. But I just see -- it would just take a blow to the company itself -- just a lot more money to put out and a lot more work.” Participant 18 #438-442
Concern for Capital: It appears that my respondents (and probably Americans in general) see some sort of “good” emanating from the existence of profit-generating firms, which is capital. At some level respondents are willing to trade socially and environmentally sustainable practices for capital concerns, and would expect others to agree – even those others who were employed in the sweatshop or who were citizens of the polluted country. Respondents also alluded to the negative impacts of regulating negative effects by noting that regulations tend to make capital unhappy and likely to flee to less regulated areas, which would disadvantage the population who insisted on regulation in the first place.
Historical Roots of Concern for Capital: The notion that an individuals pursuit of capital has beneficial consequences for the society has deep roots in the American psyche that can be traced back to Bernard Mandeville’s Fable of the Bees, which elucidated many key principles of classical economics including the division of labor and the invisible hand. The Fable of the Bees also propositioned the idea that the true causes of social welfare and social progress are a result of human vice – people work out of greed, are polite out of self-interest, and keep the law for fear of punishment.
"As Sharpers, Parasites, Pimps, Players,
Pick-Pockets, Coiners, Quacks, Sooth-Sayers,
And all those, that, in Enmity
With down-right Working, cunningly
Convert to their own Use the Labour
Of their good-natur'd heedless Neighbour.
These were called Knaves; but, bar the Name,
The grave Industrious were the Same" (Mandeville, 1705).
This notion was picked up on by Adam Smith and further propagated in the Wealth of Nations, which was undoubtedly influential in laying the basic groundwork for capitalist economic theory in America. Smith’s version of this concept is as follows: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love” (Smith, 1776).
The Conclusion: Stability = Unsustainability: Although my respondents care about sustainable business broadly, they do not seem to fully support regulatory standards or the expenditure of corporate capital to reorient business toward operating sustainably. They see sustainable business practices as antithetical to profit, which is a direct risk to a company as well as any individual engaged market.
My participants associate economic stability (capital generation) with businesses they identify as unsustainable (big, opaque, cheap goods) and because of a concern for capital are not ready to associate economic stability with sustainable production, no matter how positively they view sustainability. These attitudes signal a fundamental disconnect in that participants associate unsustainable firms with profit and an opportunity to accumulate monetary wealth for themselves, but they also associate these firms with negative impacts like harming the environment, employees, and the communities.
More on this conclusion soon…
The eleven behaviors are as follows:
1. Employees may organize and bargain collectively
2. Company is actively working to reduce energy and resource consumption
3. Company is working to reduce the amount of waste it creates
4. Company employs independent monitors to oversee overseas production
5. Company practices environmental stewardship even if the country it operates in lacks environmental regulations
6. Employees have freedom from forced labor
7. Company is engaged with the community and supportive of it
8. Company employs metrics to measure and manage energy consumption
9. Employees earn a living wage
10. Employer sponsors job-related education programs for employees
11. Company routinely collaborates with non-profit groups
Behaviors at the Top of the Hierarchy: In brief, respondents were asked about a number of characteristics of companies and their products that would typically be characterized as “sustainable.” My participants tended to sort these behaviors with an eye to ethical concerns, especially those that are not easily dismissed, by placing broad goals at the top of the hierarchy and appealing to moral values and ethical codes when defending the position of those corporate behaviors. The specific behaviors they chose to rank at the top differed between respondents, but often included basic environmental concerns like “company is actively working to reduce energy and resource consumption” and “company is working to reduce the amount of waste it creates” as well as relatively uncontroversial issues regarding basic human rights like and “employees have freedom from forced labor.”
For instance, Participant 46 explained “employees earn a living wage” was at the top of her hierarchy because it is a matter of respect and should be prioritized.
“I think earning a living wage is just like a respect to the people who are, like the, like are the actual force behind the production of your product. And I think -- I mean, I just think a living wage is really important because it like, just like ensures that the employee stays above water and if they get sick, or if they have an accident, or if they, if they – if their spouse loses their job, they have enough savings and they have enough -- they have like a moderate cushion, not to go, not to go like below the poverty line, so I just think it’s important to like treat employees with that respect.” Participant 46 #180-186
Participant 6 appealed to human rights when he ranked “employees have freedom from forced labor” at the top of his hierarchy.
“I’m against slavery. I think it's wrong, um, I guess I've never been asked this before. I guess it's a human right than a freedom of your life.” Participant 6 #363-365
Participant 36 also appealed to human rights in his defense of “employees have freedom from forced labor” as his highest ranked behavior.
“I think that's just from, like, a human rights standpoint, you know, it's—forced labor is, you know, really morally indefensible.” Participant 36 #432-433
Behaviors at the Bottom of the Hierarchy: The bottom of hierarchies tended to consist of corporate behaviors that were perceived to require stringent corporate regulation or a significant expenditure of corporate capital. These behaviors overwhelmingly included “employees my organize and bargain collectively,” “employees earn a living wage,” “company employs independent monitors to oversee overseas production,” “company is engaged with the community and supportive of it,” “employer sponsors job related education programs for employees,” “company practices environmental stewardship even if the country it operates in lacks environmental regulations” and “company routinely collaborates with non-profit groups.” Most often participants would express a favorable disposition toward these ideas in theory, but see them as contradictory to the generation of capital.
Participant 6 identified the preference for capital over environmental protection when he explained why less developed countries allow more pollution than more developed countries.
“I think it all comes down to economics. In more developed countries were we can afford to put levies on pollution, we do. In less developed countries, they value the return on their industry more, so they allow pollution and contamination to occur, but I still think it's bad.” Participant 6 #460-463
Participant 3 appealed to the benefit of simply having a job, even if the wages were unreasonably low by her standards.
“And that even if they do like make their goods in America, they’re still likely, very likely, using material that came from, you know, somewhere where they pay people less than a dollar a day, but that’s a whole different story cause they do some of the best jobs in those regions.” Participant 3 #107-110
Participant 29 also appealed to the benefit of simply having a job when he argued that there is some value to performing sweatshop labor that could be lost if wages rose.
“I think it’s good that there’s any money in those places at all, and if they had to pay a living wage they probably wouldn’t be in those places, and there would be no money for those people.” Participant 29 #330-332
Participant 18 considered how companies would be impacted by being made to publish information about their energy usage, and was most concerned by the capital impacts.
“I mean if every single company would have to do it, then it'd probably be good for the consumer just because they would know which companies hurting the environment and which ones are making more of an effort to conserve it. But I just see -- it would just take a blow to the company itself -- just a lot more money to put out and a lot more work.” Participant 18 #438-442
Concern for Capital: It appears that my respondents (and probably Americans in general) see some sort of “good” emanating from the existence of profit-generating firms, which is capital. At some level respondents are willing to trade socially and environmentally sustainable practices for capital concerns, and would expect others to agree – even those others who were employed in the sweatshop or who were citizens of the polluted country. Respondents also alluded to the negative impacts of regulating negative effects by noting that regulations tend to make capital unhappy and likely to flee to less regulated areas, which would disadvantage the population who insisted on regulation in the first place.
Historical Roots of Concern for Capital: The notion that an individuals pursuit of capital has beneficial consequences for the society has deep roots in the American psyche that can be traced back to Bernard Mandeville’s Fable of the Bees, which elucidated many key principles of classical economics including the division of labor and the invisible hand. The Fable of the Bees also propositioned the idea that the true causes of social welfare and social progress are a result of human vice – people work out of greed, are polite out of self-interest, and keep the law for fear of punishment.
"As Sharpers, Parasites, Pimps, Players,
Pick-Pockets, Coiners, Quacks, Sooth-Sayers,
And all those, that, in Enmity
With down-right Working, cunningly
Convert to their own Use the Labour
Of their good-natur'd heedless Neighbour.
These were called Knaves; but, bar the Name,
The grave Industrious were the Same" (Mandeville, 1705).
This notion was picked up on by Adam Smith and further propagated in the Wealth of Nations, which was undoubtedly influential in laying the basic groundwork for capitalist economic theory in America. Smith’s version of this concept is as follows: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love” (Smith, 1776).
The Conclusion: Stability = Unsustainability: Although my respondents care about sustainable business broadly, they do not seem to fully support regulatory standards or the expenditure of corporate capital to reorient business toward operating sustainably. They see sustainable business practices as antithetical to profit, which is a direct risk to a company as well as any individual engaged market.
My participants associate economic stability (capital generation) with businesses they identify as unsustainable (big, opaque, cheap goods) and because of a concern for capital are not ready to associate economic stability with sustainable production, no matter how positively they view sustainability. These attitudes signal a fundamental disconnect in that participants associate unsustainable firms with profit and an opportunity to accumulate monetary wealth for themselves, but they also associate these firms with negative impacts like harming the environment, employees, and the communities.
More on this conclusion soon…
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