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Externalities, May 11, 2055
When I got downstairs, Jon was sitting in one of the big deep chairs in the rec room, the bottle of wine on a low table in front of him. “I have an idea I want to bounce off you,” he said, gesturing at the wine.
“Okay, but first I have to tell you something.”
When he is not pushing some political theory, Jon is inclined to be judgemental, especially when it comes to Matt, but he surprised me by laughing when I told him why the marriage was off.
“I warned him his prick would get him into trouble, ” he chuckled, and then he proposed a toast. “To sensible women!”
How could I not drink to that?
“Now what is this idea you mentioned?”
“Oh it’s simple really, in the grand scheme of things. We have to change the financial operating system of the planet.”
“Whoa! Wait a minute. I thought the plan was to set up a network of self sufficient enclaves, some of which would survive the collapse.”
“Yeah, that was six months ago. This is more fundamental.”
“Okay. And how do we ‘change the financial operating system’?”
“By changing the legal definition of the corporation.”
“And how do we do that?”
“Look at how the corporation is currently defined. You must have taken Business 101 at some time in your academic career.”
I shook my head.
“Well first, it’s important to realize that corporations are legal fictions.”
Jon nodded. “It’s true. There is nothing necessary or natural about them. These are laws people have made up, for their own convenience.”
“There is nothing immutable about them.”
“Okay, I’ll grant you that. I don’t know that it is true, but just for the sake of argument. How do you change that?”
“Well to put it in a nutshell, the corps are by design concerned only with making money.” He stopped and reacted to his own statement. “The corps I like that. It rings their death knell and sounds like a stiff.”
“Anyway, if I am a shareholder in a company and I think the executive is not acting for my benefit, I can sue his ass off, but if I think the executive is not being ecologically responsible, I am powerless. The most outrageous examples of environmental degradation and maltreatment of people have happened because the sole guiding light of the corporation is maximizing profit.
“And on top of that we have the outrage of limited liability. The Revolution removed corporate personhood, but did nothing about liabilities. If my million dollar company causes a billion dollars worth of damage, the most my company can be dinged for is a million bucks. There are get-out-of-jail-free cards and perverse incentives all over corporate law.”
“Okay, but you’re still avoiding the question. How do you change it?”
“By mandating another guiding light.”
“The element that is missing in the political and financial analyses is ecology. For too long, economists have been handing out free lunches in the form of externalities.”
“Side effects. Like, toxic wastes that arise from industrial processes.”
“I know what it is. I just don’t see the connection.”
“If we’re going to craft a long term ecologically viable economic system, we must get past this infantile quest for quantity and begin to grow in quality.”
“Yeah sure, but how?”
“The reason that corporations pollute and degrade the environment is that these actions have no financial repercussions for them. What we need is an elemental accounting. Every input and every output has to be accounted for. If every industrial input and output were costed, the behaviour of these companies would change overnight.
“What is it worth when mining companies poison a river with arsenic? When power companies leave tons of coal ash lying about? When oil companies release huge quantities of hydrogen sulfide into the air? Or for that matter, carbon dioxide? You see what that is costing us now.”
I shook my head. “The devil is in the details.”
Jon sat back with a wide smile. “That’s funny. The Quakers say that god is in the details.”
Just then Jon’s phone rang. He was wearing one of those smart shirts with the integrated electronics. He slapped a button and looked at a small holoscreen.
“Hang on a sec. I don’t want to miss this one.” He flicked a holo toggle to open the connection.
“Hi Susie. What’s up?”
I didn’t want to listen in to his side of the conversation, so I got up and wandered down the hall toward my room. We each had our own small rooms in the basment, although Matt hadn’t lived at home since he started making serious money. I was standing at the door to Matt’s room musing at all the boxes and stuff he had left behind when Jon called.
“I’m sorry to run out on you, but I want to see this woman before the interview.”
“A hot date?”
“Possibly. But she is also the senator’s cousin.”
“Aha. The plot sickens. Well, don’t worry about it. I should be heading off to the lab anyway.”
“You didn’t tell me what you think of my idea.”
“Okay.” I paused for a second. “Why do you think economics is not a science?”
“Because of the human factor — self interest and ideology gets in the way.”
“Right. And that’s what you’re up against here too. There are a lot of vested interests that like the way the game is played right now, thank you very much.”
“Oh don’t I know it. Existing industry has a huge inertia. Politically they are conservative, unwilling to change, unwilling to risk losing their privilige. It’s a lot of minds to change. The existing infrastructure is a huge amount of equipment to change and financially it represents a massive investment backed by decade long bonds and that whole economic substructure of things. But it has to be done. That is why getting this job with the Senator is so important.”
“Well good luck.”
Jon took off up the stairs two at a time and seconds later I heard the back door slam. I smiled picking up the almost untouched wine. I took it back upstairs, put the bottle in the fridge and dumped the remains down the sink.
I stuck my head in dad’s room to see if he was sleeping. He was bright eyed, staring at the ceiling.
“I’ll just be a couple of hours dad.”
He looked at me and nodded, without saying anything.
Excerpted from _The Bottleneck Years_ by H.E. Taylor
For further information see:
A Gentle Introduction.
Last modified August 14, 2012