July 13, 2007
Book Review--Ethical Markets: Growing the Green Economy
by Bill Baue
Author Hazel Henderson's exhaustive survey of the sustainable business landscape serves as a
perfect primer on green economics and tracks lesser-known trends and developments.
The implicit goal of Ethical Markets is to push
the green economy toward the tipping point and supplant our current unsustainable economic models
with socially and environmentally responsible practices, such as fair trade and green building.
Author Hazel Henderson, a futurist
(which really means she is an astute observer of past and present trends), is uniquely qualified to
“tip,” as she combines all three qualities described as essential components of tipping by Malcolm
Gladwell in his book
on the topic. She is a “connector” with wide and diverse social circles, a “maven” with broad
knowledge about sustainability issues, and a salesperson with charismatic persuasive abilities.
These qualities propel the book. Following the format of the television show on which the book is based, Ethical
Markets (co-authored by show host Simran Sethi) conveys information primarily through the
voices of experts, lending a living room discussion feel. Many of the experts interviewed serve on
the Ethical Markets Research
Advisory Board (the appendix list of members runs two full pages in tiny font!), which adds
This format ultimately serves the mission of the book best, as readers
unfamiliar with sustainability will find comfort in the book’s talkative nature, while those
toiling in the field of sustainability may find some of the information old hat to them. For
example, the information on socially responsible investing (SRI) will likely inspire many readers
who do not already screen their portfolios to do so, but SRI veterans should not expect to discover
new angles or strategies.
The breadth of Henderson’s expertise, however, practically
ensures that all readers will encounter some novel information. For example, in a tangential
discussion in the SRI chapter, she questions the central assumption of economists--that
self-interest trumps altruism.
“Psychologist and futurist David Loye’s Darwin’s Lost
Theory of Love (2004) finds that the great explorer and biologist was widely misinterpreted by
Victorian elites in Britain who seized on the phrase, “the survival of the fittest” (actually
coined by Herbert Spencer, not Darwin), to justify their own privilege,” Henderson writes. “As
David Loye points out, Darwin only used Spencer’s phrase and mentioned competition less than ten
times in The Descent of Man and The Origin of Species, while referring to human cooperation
hundreds of times.”
“Darwin actually believed that human survival was largely due to our
genius for cooperation,” Henderson states.
This point circles back to her earlier critique
of standard economic yardsticks such as gross national product (GNP) and gross domestic product
(GDP), which ignore many vital aspects of our economy and creating disincentives for positive
action, such as health maintenance. She points out that the “love economy,” encompassing work such
as home-making, parenting, and eldercare that traditional economists ignore as unpaid work,
accounted for $16 trillion globally according to the UN Human Development Report in 1995.
That figure was missing from the official global GDP calculation of $24 trillion. (Of course a
more current statistic would be preferable.)
Henderson provides a long list of alternative
measures of economic vitality and wellbeing, including the UN Human Development Index (HDI), WWF's Living
Planet Index, Redefining Progress’s Genuine Progress Index, and Ecological Footprint Analysis. Of course she mentions
the Calvert-Henderson Quality of Life
Indicators, which, as the name suggests, she created in conjunction with Calvert, one of the leading SRI mutual fund companies in the US.
She also stresses the importance of taking into account what money can’t buy--namely
contentment--which is a key component of the country of Bhutan’s Gross National Happiness
measurement and the Happy Planet Index
from the New Economics Foundation in London.
While the mainstream press focuses on whether
or not carbon offsetting is a viable solution to climate change, Henderson highlights less
publicized, but more innovative and equitable (and perhaps even more effective) solutions to
lowering carbon emissions.
“[T]he Contraction and Convergence plan of the Global Commons Institute, based in the UK, . . .
calls for globally shared ‘emission rights’ for every man, woman, and child, so that poorer people
could sell theirs to the richer--thereby converging on equitable reductions of CO2,” Henderson
In the “Clean Food” chapter, Henderson remains even-handed in contrasting Stonyfield Farms, which was bought out by
global giant Group Danone, and ClifBar, which remains fiercely independent. She quotes Stonyfield
Farms founder Gary Hirshberg discussing the positive impact he can have by transforming a huge
global corporation toward sustainability from the inside, and also quotes Clif Bar founder Gary Erikson about the benefits of retaining
private ownership. In other words, she does not impose her judgment that one is better (or
“greener”) than the other, but that both represent valid strategies for shifting toward a more
sustainable economy and world.
In the preface, Natural Capitalism guru Hunter Lovins perfectly sums up how
Henderson’s book transforms apparent contradictions into sustainability solutions.
primary instrument of the [ecosystem] destruction is business as it seeks to meet our increasingly
rapacious appetite for goods and services,” writes Lovins. “But business is also the most likely
instrument of our delivery.
“Hazel is among the leaders of those proving . . . that there
is a very good business case for behaving in ways that not only generate profit but that also
protect people and the planet,” Lovins concludes.
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