The Free Market appears to be a logical utopian vision but it is also being criticised for leading to the failure of the banking system and the questioning of Capitalism. As the debate continues one of the biggest questions that should be asked is why do monopolies exist in a free market? If during the last decade regulation has been too weak and markets too free why didn’t monopolies get broken by free competition? There are a number of reasons, some political, but perhaps the greatest is the lack of transparency in business and the free market.
With hindsight most people can see that the complex repackaging of toxic debt relabelled and sold as AAA grade investment was not only unethical but also improbably stupid. Yet it happened. Some would argue that this was down to lack of regulation but the more regulation you have the more complex the system becomes and exactly the same hidden problems will eventually arise but just in a different light. The problem is that the language of the products sold and the illusion of the free market fooled people into naively not looking too hard at what was being traded. Some people did act unethically but I suspect a lot of people were just playing a system that they genuinely believed was stable. Now ignorance isn’t necessarily a defence for incompetence but further regulation just provides an even greater level of misplaced reassurance as problems bubble away. Would these problems have occurred had the products sold been transparently labelled as toxic and in a free market why didn’t this automatically occur?
The collapse of various banks has led people to portray Capitalism as a system that feeds off the people through a competitive ideology rather than support the people through cooperation. Yet if you do any research into charity models you begin to question how ‘companies’ that make no profit and pertain to do good in the world seem to achieve so little but still manage to pay such generous salaries. Maybe both sides of the ideological battle need to swallow the bitter pill of transparency. This is especially true if you receive any sort of state support or tax benefits from the people. There are many systems in our civilisation that are corrupt but hopefully the human species isn’t one of them. Maybe Competition + Transparency = Cooperation?
Planet Earth ‘Winners’
One of the main challenges of our civilisation is that we have failed to think circularly. Our linear thought processes have led to unsustainable levels of waste which is harming our planet and our species. A perfect example of linear thinking is the drive to recycle which has had whole countries using large quantities of energy to turn waste glass bottles into mountains of recycled glass. We now have the problem of inventing new products, that involve large quantities of energy, to turn this recycled glass into insulation, kitchen worktops, etc. This is an example of linear thinking where society has been led to believe that they have been acting sustainably when in fact it was just creating a new energy intensive problem further down the line. If the bottles could be reused, or the recycled glass used to make new low energy bottles then we would have a circular process but unfortunately this isn’t the case because the quality of the recycled glass isn’t deemed pure enough. To justify the input of energy you have to produce products from the recycled material which have a higher value than the original product and this is where the problem lies. Meanwhile we all carry on as normal consuming huge quantities of glass and paper warm in the knowledge that it is being recycled!
A good example of circular thinking will be the solar revolution that will not only solve a growing energy crisis but will mark a shift in public thinking as people realise the sustainable benefits of taking responsibility for their own energy generation and so creating a circular process. We are at a tipping point where investment will enhance the panel efficiencies and developments in organic solar materials will make their production more sustainable. Researchers are even finding ways to generate energy from the growth of plants as they photosynthesis! Photovoltaics will mark a step change away from an out of sight, out of mind centralised processes and begin a more sustainable path to circular thinking.
Other circular thinking ideas include whole life costing, products that are sold as services to be returned to the manufacturer at the end of their life, Living Machine wastewater treatment systems and even business models such as the Infinity Loop which can be read about here. The idea behind the free market is that if everybody has enough linear thoughts than an interconnected web will form which is inherently stable. Not only has the economic crisis proven this theory wrong but more importantly it is a way of thinking that does not encourage people to take responsibility for their actions. Why worry about environmental and social issues when the ‘Market’ will solve all these inconvenient problems for you?! Linear thinking has forced the need for further bureaucratic regulation which is obviously in conflict with free market ideals. Maybe a free market of circular processes is a sustainable possibility where people take responsibility for their investments? A world where success is measured by factors other than GDP?
Isolated examples of circular thinking won’t create a sustainable society on their own but the more we can chain these loops together and create a network of interlinked circular processes the more we can prevent our linear path to the sixth extinction and stop our consumption spiralling out of control.