Page 29 - The Green Building Bottom Line The Real Cost of Sustainable Building

8 CHAPTER 1

For one thing, the narrative of capitalism with a difference points out that Adam
Smith’s theories of a free market, espoused in his The Wealth of Nations (1776) are
misinterpreted without reading this work in the context of Smith’s earlier study, The
Theory of Moral Sentiments (1759). Read together, a different picture of capitalism
emerges, one in which commerce is “composed of small, owner-managed enterprises
8
located in the communities where the owners reside,” where market efficiency com-
plements moral sympathy for all members of a community. Capitalism, so the argu-
ment goes, has missed the boat by historically focusing on free markets to the exclusion
of collective moral sympathy. The various freedoms that capitalism has provided us
have not come without costs. The opportunity to “make something of ourselves” has
resulted in losing the sense that our individual identities are wrapped in others—fam-
ily, community, connection to society. Instead of creating simply the greatest number
of goods, or even creating the greatest number of goods for the greatest number of
people, the narrative of capitalism with a difference holds out the vision, as Gandhi
put it, of simply the greatest good for all.
The narrative of capitalism with a difference holds that businesses have not only
created great value but have also destroyed value, in terms of environmental degrada-
tion and social disintegration. Rather than focus on short-term horizons and financial
returns measured in ever-diminishing increments, capitalism with a difference takes a
longer view of value creation. Instead of a financial bottom line focus, the narrative of
capitalism with a difference emphasizes a multiple bottom line orientation, taking into
account stewardship of the environment, nurturing the social fabric of community,
providing a living livelihood, job security, diverse work opportunities, craftsmanship,
and purpose. Rather than focus on the sheer ongoing survival of a company—on its
longevity—the narrative of capitalism with a difference wonders to what uses such
longevity is put. It asks, are the practices of capitalism sustainable for our land and for
our community? And (to paraphrase architect Carol Venolia’s definition of sustain-
ability) it asks simply this: If you keep doing what you’re doing, will you be able to
keep doing what you’re doing? 9
Thoughts about a different type of capitalism began to emerge in the early 20th
century as people such as Herbert Croly, Walter Lippmann, Adolf Berle, and Gardiner
Means variously suggested notions of stakeholder capitalism, whereby business
would either voluntarily or through government mandate consider the interests of a
broader spectrum of society than simply its shareholders. At about the same time, the
notion of socially responsible investing first took hold, with Gary Moore’s publication
in the 1920s of The Thoughtful Christian’s Guide to Investing and the launching of the
morally focused Pioneer Fund in 1928.
But it was not until indifferent capitalism took off in the mid-1970s that an alterna-
tive story began to take shape and become fully formed. At that time, the first United
Nations Conference on the Human Environment took place in Stockholm (1972),
Pax—the first of what would evolve into a $2 billion socially responsible investing
(SRI) mutual fund industry—was formed (1971), and small though now iconic alter-
native businesses such as Tom’s of Maine (1970), Patagonia (1972), and Ben & Jerry’s
(1978) all got their start. Environmental author Paul Hawken, who got his start run-