The Restorative Economy

by Paul Hawken



In a restorative, "least cost economy," we move to that system of agriculture, forestry, transportation, construction, and communication that has the least cost to the environment. It's as if we have been playing with half a deck since industrialism was created. We say it's a capitalist system, but as it currently operates, only some capital is valued the human made capital. But the resources we have inherited, both renewable and nonrenewable, have been treated as free goods, valueless until they are transformed into products and services.

In a least-cost system, those resources, our "natural capital," are valued at their true replacement cost. Instead of competing to produce the cheapest goods in terms of price, we compete to produce the goods and services we need according to which have the lowest impact on those resources, and thus the lowest cost to current and future generations. For example, we now have cheap chemicals, and cheap food, but we can't drink our water.

In the restorative economy, we still use the same basic mechanisms of commerce: markets, competition, and value-added innovation, but the incentives are reversed so that instead of being rewarded for producing things at the lowest price, business is rewarded for producing at the lowest cost. The lowest-cost system is the most efficient, in both industrial and biological terms, and is better for the individual who is the customer, the worker who manufactures it, the habitat from which it's drawn, and for the generations unborn.

Restorative economies increase the productivity of our natural capital and use fewer and fewer resources to provide equivalent goods and services. When you increase the productivity of natural systems instead of the human productivity of industrial systems, you get a complete reversal of the deteriorating social and environmental conditions we see today. It takes more people to farm organically, to practice sustainable forestry, or to create closed-loop industrial systems where all materials are reused and nothing is thrown away or wasted.

In other words, the intelligent manufacturing systems of the future that sharply reduce our impact on the environment will create a resurgence of meaningful employment around the world. And this is of critical importance, because not only are one-third of the world's workers unemployed or unable to support their families, but there will be another two billion people coming into the workplace within the next 20 years.

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