Skip to main content
shopping_basket Basket 0
Log in

Adding Real Value in Sustainable Capitalism

Adding value is the name given to the process of creating a product that is worth more than the sum of its constituent parts. This concept is largely used as a simple tool to measure anything from the markup of a single item to the strength of a whole economy. However, as this is a largely financial concept, it often fails to account for the environmental and sustainability factors that are desperately needed in the age of rising carbon emissions, deforestation, plastic pollution and other existential issues.

Currently, our value system largely fails to acknowledge sustainability as a factor in the calculation of macroeconomic success, where fiscal policy still obsesses over the continued and relentless pursuit of growth through vague metrics like GDP. The question that I would like to pose therefore is, why do these deficits exist in our current value system and can we change our priorities in the interest of long-term sustainability?

Measuring Value

Perhaps the most glaring explanation for this deficit is that businesses predominantly exist to make money, and although there has been a rise in social enterprises and B Corp style movements, this is still the exception, not the rule. By design, the private sector will always find the most financially efficient way of doing things first, and while there is nothing wrong with companies making a profit, it is often prioritised at the expense of other social and environmental values.

sewage overflows causing widespread pollution

Water utility companies in the UK fail to invest in adequate sewage overflows causing widespread pollution

The reality of unhealthy trading environments, lobbying and lack of regulatory controls has given rise to huge monopolies and damaging diseconomies. This could be OPEC fixing global oil prices and raising the cost of living, water utility companies destroying biodiversity by polluting native waterways, or private healthcare companies putting profits before their patient’s wellbeing. These are all qualitative factors that current performance-based metrics fail to measure, so in the interest of sustainability, how do we create and monitor a business environment that’s conducive to more than just financial value?

Superfluous Consumption

Any form of false value puts pressure on people, the environment, and ironically the economy, where it increases inequality, pollution and living costs as the working population needs to be more productive to offset any resulting inflation. This pressure to add value leads to the needless consumption of natural resources and the increased production of carbon, pollution and waste that is incompatible with any long-term sustainable strategy.

ONS data - UK house price inflation Vs economic growth

ONS data shows the difference between UK house price inflation and economic growth

The cost-of-living crisis is the predictable consequence of these diseconomies, where the price of necessities like fuel, energy, food and housing is rocketing up, so in real terms, people are getting poorer for their productivity. When critical reinvestment into continuous improvement, people and sustainability strategies is replaced with shareholder dividends, cryptocurrencies, property and other forms of unproductive wealth, is it acceptable to continue with this model of artificial scarcity during a global crisis in which we need to be conscious of our consumption, emissions and waste?

Diseconomies of Scale

The growth of globalisation has historically been a good thing, but as we emerge from a pandemic, the model that has seen our ability to trade freely with the international community, build strong interdependent economies and raise universal living standards, now has the world competing for goods like oil, computer chips and even food as we start to realise the limits of these supply chains.

The conflict in Ukraine and the all too familiar tensions in Taiwan have shown us that this assumption comes at a price and that finding a good balance of globalisation and self-sufficiency is not only good for net-zero, stability and the cost of living where our resources are secured domestically, but should also impede any threat to democratic values.

Amazon rainforest

The Amazon rainforest is felled in response to demand for mass-produced palm oil and soy-fed beef

Taking action to invest more in decentralised infrastructure like renewable energy and increasing the production of fundamentals like food internally, not only helps lower our carbon and plastic footprint but will reduce the impact on critical natural resources like the Amazon while disincentivising these damaging economies. Albeit that this will not always be possible, but in the interest of honouring our international environmental commitments, is bold global leadership the most valuable thing we need right now?

Conclusion

Clearly, there is a lot to think about in the interest of sustainability and the changes we might like to see to our value system as capitalism evolves to meet growing environmental demands. Hopefully, this article has started by asking the right questions and please feel free to share how these issues have affected you as an activist maker or engineer.

A keen maker and electronic engineer with a passion for the environment, renewables, alternative transport and anything off-grid. Man with a van and founder of the Kickstart Kamper sustainable campervan project. Grassroots Education Sustainability Ambassador. Compulsive tea-drinker. BrightSpark 2017. BEng.
DesignSpark Electrical Logolinkedin