The Restorative Economy

A money system does not change in isolation. Everything else must change with it, both as a consequence and as a precondition. My logic in the previous section is NOT “If only we could change our money system, then everything else would change too and our problems would be solved.” No. It is rather part of a vast phase transition, a gestalt, a holographic repatterning in which we could take any aspect as a starting point—and indeed must, in a linear narrative such as a book. Together, the shifts in money, property, education, medicine, art, and others that I describe in this chapter all arise from and are part of a general reconception of self and world. I’ve started with money, but that doesn’t make it primary.

As explained in Chapter Four, much of the destructiveness of our present economic system is due to the externalization of costs, which like interest attempts to impose a linearity onto nature. Externalization assumes an “out there” that is the start and end point of linear consumption. Whereas interest demands endless growth, economic externalization assumes an infinite reservoir of resources and absorptive capacity to accommodate that growth. Interest and externalization are, in fact, two sides of the same coin, a connection that has gone largely unnoticed by those who hope to halt our species’ self-destruction through the internalization of costs. Nonetheless, proposals like green taxes, consumer leasing, and pollution permits offer considerable insight into what an industrial economy might look like that no longer sees itself as apart from nature. I borrow Paul Hawken’s term for this, the “restorative economy,” because it not only halts but also reverses the progressive distancing of ourselves from community, ourselves, and nature. One way it does so is by motivating technology that mimics, strengthens, and extends the processes of nature rather than seeking to deny them.

Writers such as Hawken, Herman Daly, Bill Rees, Lester Brown, Thom Hartmann, and Kenneth Boulding have made the seemingly obvious point that no economy is sustainable that consumes energy and other resources at a faster rate than they can be renewed. They view the consumption of fossil fuels, along with other finite resources such as the ecosystem’s capacity to absorb waste, as a depletion of capital. Sustainability (an overused word which really means survival) is only possible if we live off our current income, not our capital reserves. This income includes “solar income” in addition to the earth’s ability to convert pollutants into the building blocks of new life. We might also include the “cultural income” of new art forms, new ideas, and so on, which today are instantly coopted and commodified along with the “capital reserve” of our heritage.

Our economic paradigm separates us from nature through its linearity, its demand for endless growth, and its reduction of nature into “resources”. It also separates us from each other through its consumption of social and cultural capital. An economy that reverses this separation will have a key defining feature: there will be no such thing as waste. The whole idea of waste, garbage, etc. is that there is an “out” to which to throw things. That idea can only exist within the mindset of separation.

If there is to be no waste, then everything we take from the biosphere must be returned to it in a non-toxic, non-accumulative form.[20] One proposal to implement this is Braungart and Englefield’s “intelligent product system”, which attempts to implement the ecological principle that “waste is food” through (1) A leasing economy for durables; (2) complete non-toxic biodegradability of consumables, and (3) permanent storage charges for any other waste—you can still produce dioxin if you want, but it is yours forever.[21] The first means that consumers lease large appliances such as refrigerators and washing machines instead of buying them. In effect they buy services (refrigeration, clothes-washing) instead of the machines themselves. This removes the structural incentive toward planned obsolescence while creating new incentives to make products easy to repair and recycle. The same logic applies to industrial durables, and is especially potent in the context of a demurrage system because it deemphasizes capital accumulation. The second principle is fairly self-explanatory, with the caveat that many supposedly biodegradable substances do not degrade because they are suffocated in landfills. The third principle is essential for making the first work, because it creates a huge financial incentive to make products non-toxic and recyclable. (The effect of an eternal storage fee is even more powerful in the context of a demurrage-based currency, in which future costs are not discounted.) As well, storage fees for toxic waste create an incentive to develop processes to render it non-toxic. The mycologist Paul Stamets has developed some amazing bioremediation techniques involving fungi that can detoxify many classes of toxic waste;[22] however, since the social and ecological costs of toxic waste are nearly all externalized, at present his methods have limited economic motivation. In a restorative economy, Stamets might well be the richest man on the planet!

To foster cyclicity in the industrial economy, author Paul Hawken advocates “green taxes”, modeled after the proposals of economist A.C. Pigou. Exemplified by the fossil fuel tax, these would impose a large surcharge on the cost of natural resources reflecting the damage generated by their extraction and use. The tax on oil, for instance, would incorporate the cost of habitat damage in drilling the well, the apportioned costs of oil spills, the costs of air pollution from its burning, and so forth.

In practice and in principle this approach is fraught with difficulties. The practical difficulty is in calculating long-term, highly distributed costs such as economic damage caused by global climate change, to which oil burning contributes but not as a sole factor. The difficulty in principle lies in assigning monetary value to such things as species extinction, the destruction of beautiful views, and human mortality. Gesell’s “monstrous doctrine of value” rears its ugly head again! The assumptions underlying green taxes once again involve the denomination of everything in monetary units. Nonetheless, green taxes are intended to eliminate the profit strategy of dumping costs onto an other. They are the financial embodiment of the realization that what we do unto an other, we actually do unto ourselves. We are not separate from the world. Today’s economic system fosters the opposite belief, because damage dumped onto society or the environment does not usually end up as a cost on our own balance sheet. Pigovian taxes encourage a more expansive sense of self.

The immediate practical effect would be to encourage alternatives which are presently uneconomic only because the price of “natural resources” doesn’t reflect their true cost. All of a sudden, the marvelous green technologies—bicycles, composting toilets, organic agriculture, photovoltaics, zero-emissions plants, grass roofs, hypercars, rail transport, fungal bioremediation, sailing ships, non-toxic industrial processes, and many more—would benefit from huge economic incentives. Today we attempt to force manufacturers to reduce pollution through regulation and control. Green taxes would eliminate the need for regulation by aligning ecological sense with business sense.

When humanity internalizes the damage of present industrial processes, those processes must change dramatically. Mining and quarrying will become prohibitively expensive, as will the refining of ore, when it is unacceptable to leave behind mine pits and slag heaps. Our main source of raw materials might be the junk of the 20th century: the pound or more of lead in every TV set and computer monitor, the vast amounts of iron and steel rusting away in junkyards, the cinder blocks of demolished buildings. What durables we produce will be designed to be easy to repair and maintain, so they might last hundreds of years. Enormous entrepreneurial energy will pour into such endeavors, as the objectives of business come into alignment with the restoration of nature. (In contrast, the regulatory approach to environmental protection puts it into opposition with business success.)

Material goods of plastic and metal will become so precious that to simply throw them away will be unthinkable. Not only containers, but the entire distribution system for their contents, will be designed in the interests of reusability—not because the government requires it, but because that will be sound business practice. Because such services as cleaning and refilling are by nature local, less capital will be exported to distant large-scale manufacturers, strengthening local communities and expanding the viability of local mutual-credit currencies.

The entire suburban landscape will change when gasoline, cement, and asphalt are no longer artificially cheap. The community-enhancing high-density principles of contemporary urban design will no longer fight an uphill battle against developers’ economic interests. Without subsidized fuel, pesticides, and irrigation groundwater, local produce will become economically more competitive, and home gardening will gain an economic incentive in addition to its present aesthetic and spiritual benefits. Food production will become more local, and more people will become food producers.

For local travel, the bicycle (which is still undergoing technical improvements) will come into its own as the primary transportation technology of the future. Ultimately, I think that the construction and maintenance of bicycle trails is the maximum incursion into nature that is socially and environmentally sustainable. Just look at the carnage that goes into building a road, the bulldozing of trees and tearing into the earth. In the future, we will not be able to bear anything more than modest bicycle paths. Certainly, current levels of road kill—perhaps the most direct reminder that externalities equal death—would be intolerable to the conscience of any sane society. Is it mere coincidence that normal bicycle speeds—say about 20 miles per hour maximum (also the natural speed of a woonerf intersection)—also delimit the pace of mindful travel? At bicycle speed I can still notice what plant species grow on the wayside, I can react quickly enough to avoid running over rabbits, and I am moving slowly enough to enter briefly into the social universe of those I pass. There is time for a “hi”, a token of acknowledgment, a flash of recognition. Anything faster entails some degree of oblivion to the people and places traversed—all the more when traveling in an enclosed vehicle. Automobiles, no matter how low their emissions, distance us from nature simply by their speed, of which roadkill and habitat fragmentation are inevitable byproducts. Cars (and even more dramatically, airplanes) allow us to go from point A to point B without truly experiencing the places in between; they allow us to travel without journeying. No wonder we are so oblivious to the “spaces in between” the matrix of human culture, and so numb to their destruction. Unexperienced, casually traversed, sped by and flown over, it is as if they did not exist at all. Externalities.

Unfortunately, the ecological economy envisioned by Hawken and others is fundamentally at odds with our money system. The former seeks to eliminate externalities; the latter requires and creates them. The former requires the cycling of all material; the latter has a built-in imperative of endless linear growth. A green economy can never exist, except marginally, in the context of interest, which demands endless “growth”—the one-way and therefore unsustainable conversion of all the world into money. On the bright side, the unsustainability of our industrial system and the unsustainability of our financial system are converging, presenting the opportunity for the transformation of both.

In place of today’s linear (or exponential) economy will arise a cyclical industrial ecology that will be, in concept as well as in fact, an extension or a new dimension of nature. In no sense will it be unnatural. Like a plant or a whole species, each business enterprise and each industry will seek not the maximally efficient extraction of resources, but to serve an essential function in an interdependent web of relationships. Any step in the cycling of resources will be a viable business opportunity. Paul Hawken has compared the economy of the last few centuries to a field of weeds which, entering barren soil, do indeed seek maximum growth in a headlong competition for sunlight and other resources:

At the dawn of the Industrial Revolution, a vast new world of apparently unlimited natural resources became available for the taking. By constructing an economy that demanded ever-increasing supplies of all resources… humans successfully mimicked the processes of a newly formed ecosystem. Like pioneer plants, we were aggressive and competitive. We emphasized untrammeled growth and didn’t worry about efficiency, conservation, or diversity.[23]

Obviously, this can only be a temporary phase. Eventually, increasingly complex, interdependent relationships among species develop as the original opportunistic colonizers give way to a more diverse, mature ecosystem. “In immature systems, most energy is used to create new growth, so that bare soil is quickly covered. In a climax system, the greater part of energy is devoted to the continuation of the existing plant and animal communities.”[24] We are at the cusp of just such a transition. Already, even with a money system that demands constant growth and even with our conceptual distancing from nature, nascent industrial ecologies are forming within a linear framework. When we integrate the parameter of cyclicity into the system, these will gel into an ecological economy, the equivalent of a diverse jungle ecosystem of hundreds of thousands of mutually reliant species, as opposed to a field of thistle and burdock competing to cover bare ground.

In such a system, each niche is self-limiting. Success lies not in taking as much as possible for “me”, but in fulfilling one’s role in the maintenance of the whole, a mission that calls forth the unique gifts of each participant. It defines each person not by what they can keep and possess, but by what they can give, ending the age-old contradiction between service and selfishness, greed and giving. Yes, there will always be competition, just as there is in the jungle; however, it will not be the destructive competition that seeks to enclose the commonwealth and fleece the chumps, but rather a constructive competition to excel in a given niche, to be a greater contributor to the common good. Already we have these ideals but must fight for them against the grain of economic self-interest. When the conception of self that underlies the economy changes, then so will economic self-interest realign itself toward the common good.

The restorative economy is not a matter of passing some new legislation, implementing some reforms, or seeing through the errors of conventional economics. It is nothing less than a facet of an all-encompassing spiritual transformation in our fundamental relationship to the world. Martin Prechtel explains that in Mayan culture, it was necessary to pay back to nature the debt incurred in the creation of any material object, and indeed in the living of a human life.[25] The greater the disruption of nature, the more ritual effort required to pay back the debt to the other world. Thus an iron knife would demand lengthy and elaborate rituals in consideration of the cost to nature of its forging: the digging of the ore, the burning of fuel, and so forth, so much so that no one would make a knife without very good reason. Such things as air conditioners would, in this world-view, demand so much ritual recompense as to be prohibitively “expensive”. A limit to consumptive technology was thus built into the Mayan culture. And what would happen if you mass-produced knives, as we do, without paying the price in ritual? The knives would exact payment in their own way, either through direct physical violence or through the reduction of human life, hope, vitality, creativity, joy, and beauty. Can we say that this has not already come to pass?

In other words, when we produce and consume linearly, without regard for the consequences to the “other”—the planet and the rest of life—we unavoidably amass a debt that must, inevitably, be paid. One technological fix after another only postpones the day of reckoning, just as a few more drinks to prolong the buzz only brings a worse hangover in the end. The all-important myth of the Ascent of Humanity, the Technological Program, is that we can put it off forever. Yet the bankruptcy of this myth is increasingly obvious.

I am not advocating that we imitate Mayan rituals, but that we translate the idea into a context that makes sense today. The ritual price to be paid translates into devoting care, consideration, and thought into anything we make. For there to be no left-over debt requires that this consideration cover the origin of the raw materials, the effects on the ecosystem of producing and shipping them, the effects on people’s lives, the effect the use of the object will have, and how it will eventually return to the earth. Translated into economics, it requires the full internalization of all costs. If we neglect any of these considerations and allow costs to remain external, then consequences will surely come to haunt us—a debt will be written into our future—because there is no “out there” to which to externalize.

Can you imagine, then, the enormous debt that our society has amassed over the last few millennia? While it may seem that we have escaped more or less scot-free and passed the debt on to future generations (which is bad enough), the truth is much worse. We pay the price ourselves too. The price comes out of our own flesh and, worse yet, out of our souls. The just reward for our ignorant, arrogant, deluded despoliation of planet and culture is the ocean of suffering that engulfs our species, the wars and atrocities, rape and genocide, the brutalized children, the slums of the Third World, the lives without hope, the diseases and famines, and in the rich countries, the depression and despair, anxiety and ennui, anomie and loneliness, the tragic reduction of human potential that leaves even the winners of the rat race among the sorriest rats of all.

An interesting parallel to Prechtel’s view that the spirit world (underlying nature) takes its payment in the form of human violence and suffering can be found in the cosmology of G.I. Gurdjieff, who called it “food for the moon”. Gurdjieff’s prescription for human development—to act in the full consciousness of “self-remembering”—is also consistent with Prechtel’s prescription for a ritualistic approach to life. True ritual is not a sequence of steps performed by rote, but a means to induce mindfulness and expand consciousness beyond the limited self that reached its extreme in Western culture as Descartes’ “I am”, Adam Smith’s economic man, and biology’s phenotype. Indigenous culture never reached anything near that extreme of separation, but they did recognize the tendency and took active steps to counteract it. Remember the Yurok story of the Wo’gey in Chapter Two, who “knew how to live in harmony with the earth.” Before they departed, “because they knew that humans did not always follow the laws of the world, they taught them how to perform ceremonies that could restore the earth’s balance.” Ceremonies or rituals allow us to internalize, psychologically, the cost of our actions, in effect paying the debt right now instead of postponing it that it might be taken instead from our souls and the lives of our children. Here again is a parallel with Gurdjieff, whose primary prescription for recovering mindfullness was “intentional suffering”, by which he meant an unwavering intention not to avoid or escape the consequences due. On a psychological level, this closely parallels the internalization of costs in economics. Both recognize that the Technological Program must ultimately fail, that the technological fix cannot work forever, that life will elude infinite control, and that the debt incurred through the destructiveness that arises from our separation must inevitably be paid. Every technological fix by which we generate yet more environmental damage in order to insulate ourselves from the consequences of previous environmental damage contributes to a vast Ponzi scheme, a debt pyramid, a bubble no more sustainable than our perpetual-growth economy. The longer we accumulate that debt, the greater the eventual crash, and the more complete our eventual bankruptcy.

The restorative economy I have described grows out of a recognition of this debt. It is motivated by a love of the world around us—the love of life and the love of our own lives—and a sincere desire to make amends. I have said little about the mechanisms by which the transition will take place, but I believe that the requisite changes are so deep that nothing less than a complete collapse of the current regime will do it, a collective hitting bottom. When the illusion of our separateness becomes utterly untenable, then new structures of money and economy will crystallize that enforce and embody our reemerging wholeness.

How far must we fall to hit bottom? That is up to us.


[20] “Non-toxic” is not an absolute category. Substances must be produced in quantities small enough for the biosphere to utilize, as many substances that are beneficial in small quantities are destructive in large quantities. It is not the chemical constitution of the substance, it is whether it contributes to a cyclical flow. That means that no action can be understood in isolation from its place and time. The same substance that is poison in one location might be food in another.


[21] The discussion of the “intelligent product system”, green taxes, and pollution permits draws its basic facts from Paul Hawken’s The Ecology of Commerce, as well as Natural Capital by Hawken and Lovins.


[22] I am not exaggerating when I say “amazing”. Your heart will probably leap when you read “Mushroom Power” by Paul Stamets, Yes!, Spring 2003.


[23] Hawken, Paul, The Ecology of Commerce, Harper, 1993. p. 21


[24] Hawken, p. 20


[25] Interview with Derrick Jensen, The Sun, April 2001