Commoditization and Commoditization and Consumption Efficiency:Consumption Efficiency:

Contributions to Theory Contributions to Theory in Ecological Economicsin Ecological Economics

Jack MannoJack MannoNew York Great Lakes Research ConsortiumNew York Great Lakes Research Consortium

SUNY College of Environmental Science and SUNY College of Environmental Science and ForestryForestry

Theorize the evolution of unsustainable Theorize the evolution of unsustainable economic patterns. economic patterns.

Describe structures and mechanisms Describe structures and mechanisms determining and governing these determining and governing these patterns. patterns.

Go beyond I = f(population x affluence x Go beyond I = f(population x affluence x technology). technology).

Link the personal and the political. Link the personal and the political. Identify key points of leverage for solving Identify key points of leverage for solving

the problem of sustainable development .the problem of sustainable development .

Theory needs

Sustainable developmentSustainable development

The challenge for ecological economics: The challenge for ecological economics: How do we create and sustain ways of How do we create and sustain ways of

livelihoods, communities, nations and livelihoods, communities, nations and world where people prosper without world where people prosper without undermining the life support systems undermining the life support systems upon which all prosperity ultimately upon which all prosperity ultimately depends?depends?

The economic key to The economic key to solving this problemsolving this problem

Increasing Consumption efficiency, Increasing Consumption efficiency,

welfare producedwelfare producedCICI = = energy and material resource consumedenergy and material resource consumed

* welfare : the satisfaction of human need.* welfare : the satisfaction of human need.

Marginal Consumption Efficiency is the amount Marginal Consumption Efficiency is the amount of welfare produced per any given additional unit of welfare produced per any given additional unit of energy and material consumed in the of energy and material consumed in the satisfaction of any human need.satisfaction of any human need.

Improving Improving consumption efficiency?consumption efficiency?

Sufficiency/frugality Sufficiency/frugality (living simply, lightly (living simply, lightly on the earth) on the earth)

Improving Improving consumption efficiency?consumption efficiency?

SharingSharing

Sharing

Improving Improving consumption efficiencyconsumption efficiency

““prioritizing prioritizing synergic satisfiers” synergic satisfiers” subsistence,

protection, affection, understanding, participation, leisure, identity and freedom.

freedom, leisure.

Manfred Max-Neef

Improving consumption efficiency?Improving consumption efficiency?Through biomimicy, ecoefficiency, designing with nature, appropriate technology

Nature as Model  Biomimicry is a new science that studies nature's models and then imitates or takes inspiration from these designs and processes to solve human problems, e.g., a solar cell inspired by a leaf. Nature as Mentor  Biomimicry uses an ecological standard to judge the "rightness" of our innovations. After 3.8 billion years of evolution, nature has learned: What works. What is appropriate. What lasts.Nature as Measure  Biomimicry is a new way of viewing and valuing nature. It introduces an era based not on what we can extract from the natural world, but on what we can learn from it.

~Janine Benyus (1997) Biomimicry: Innovation Inspired by Nature.

Improving consumption efficiency?Improving consumption efficiency?Through eco-synergy, synergism, permaculture

for example: The Three Sisters: Corn, beans and squash

Corn

Bean

Squash

Effective means of increasing Effective means of increasing consumption efficiency consumption efficiency (welfare/consumption) involve and (welfare/consumption) involve and require relationships, relationships require relationships, relationships between people, between people and between people, between people and the land. the land.

The Community Organic Food GardenVancouver, BC

“It’s not the earth that needs to be healed but our relationship to it.” Robin Kimmerer

“It’s not a matter of belongings but a matter of belonging.” Robin Kimmerer

Commoditization theoryCommoditization theory there exists a powerful there exists a powerful

tendency to privilege (favor) tendency to privilege (favor) those satisfiers with the those satisfiers with the greatest commoditization greatest commoditization potential in a competition for potential in a competition for limited resources (attention, limited resources (attention, power, and material inputs) power, and material inputs) among competing satisfiers among competing satisfiers to meet any and all human to meet any and all human needs and desires. needs and desires.

In the competition for energy In the competition for energy and material investments, and material investments, those satisfiers with those satisfiers with characteristics that make characteristics that make them them fitfit for functioning as a for functioning as a commodity will always out-commodity will always out-compete those less able.compete those less able.

Reduce Reuse Recycle Recover Manage

The highest priority and greatest potential effectiveness also has the least commoditization potential. The greatest share of waste-related dollars goes to the lowest priority, i.e., waste management.

•Reduce packaging and materials in products.

•Make products that last longer and are easy to repair, recycle, reuse.

•Change industrial processes to eliminate use of harmful chemicals.

•Reuse products.

•Repair Products.

•Compost.

•Buy reusable products.

•Recycle products.

•Buy recycled products.

•Treat waste to reduce toxicity.

•Incinerate waste.

•Bury waste in landfills.

•Release waste for dilution or dispersion into the environment.

•Recover embodied energy and materials

In order of descending priority potential waste reduction and pollution prevention effectiveness

What are the qualities that characterize What are the qualities that characterize something as being subject to the pricing something as being subject to the pricing mechanism, in other words, what makes mechanism, in other words, what makes something a commodity?something a commodity?

Not all satisfiers have equal potential to Not all satisfiers have equal potential to function in an economy as a commodity.function in an economy as a commodity.

House Home

The fundamental distinction b/w commodities and The fundamental distinction b/w commodities and non-commodities lies in whether value can be non-commodities lies in whether value can be alienated from relationships. alienated from relationships.

The basic feature of something that can function The basic feature of something that can function as a commodity is that its needs-satisfying as a commodity is that its needs-satisfying character can be extracted and readily transferred character can be extracted and readily transferred to a buyer.to a buyer.

Non-market values are typically those values that Non-market values are typically those values that exist in relationships between and among people exist in relationships between and among people or between a person or a group of people or between a person or a group of people (community) and a place. (community) and a place.

Changes in the relationship result in changes in Changes in the relationship result in changes in the welfare-producing value. the welfare-producing value.

One party to the relationship cannot transfer it to One party to the relationship cannot transfer it to another party, the other party needs to first another party, the other party needs to first establish its own relationship. establish its own relationship.

The net result of the constant The net result of the constant privileging of commodities over non-privileging of commodities over non-commodities is an evolutionary commodities is an evolutionary process of development that hyper-process of development that hyper-develops commodities and under- develops commodities and under- develops relationships, leading to a develops relationships, leading to a distortion of overall economic distortion of overall economic development, maldevelopment, development, maldevelopment, unsustainable development.unsustainable development.

Sector

High Commoditization

Potential (Commercial goods)Unlimited market/ value

independent of relationship

Walmart

Medium Commoditization

Potential(Exchange goods and

services)Local market/value

affected by relationship/ difficult to separateFarm market/craft

market/hands-on service

Low Commoditization Potential

(Relationships)Limited or no market/value determined by

relationship/almost impossible to separate

No market except direct exchange

Children’s Play

Barbie dolls, Action figures, packaged entertainment

Handicrafts, childcare, live entertainment

Direct child-led interaction with natural surroundings, group play, interpersonal goods

Food production

Commercial fertilizers, pesticides, engineered seeds, mechanization tools, genetic material

Commercial manure, stored seeds, farm animals, tools for small farm, agricultural extension and research services.

Knowledge of soil, locally co-evolved skills and techniques

Health care Mass-marketed drugs, diagnostic equipment, hospital supplies, insurance

Doctor-provided services, hands-on therapies and treatments

Knowledge of healing, personal health maintenance and illness prevention, life-style adaptations, sense of well-being

Table 1(continued). Commoditization Potential

Sector

High Commoditization

Potential

Medium Commoditizati

on Potential

Low Commoditization

Potential

Energy Grid-dispersed electricity, power plant equipment, fossil and nuclear fuels

Renewable energy sources, energy conservation services, wage labor

Personal energy conservation strategies, passive solar design, cooperative sharing activities

Transportation Personal transport vehicles and the infrastructure of roads, etc. that supports it

Public transportation

Transportation reduction strategies (such as cluster housing near workplaces, etc. ), walking

EnvironmentalProtection

Pollution control equipment, waste-to-energy incinerators and equipment

Recycling, pollution reduction/prevention services

Pollution prevention redesign, materials and energy use reduction strategies

Mental Health Mood altering drugs Therapists, Fitness clubs

Peer counseling and mutual help, friendship, exercise

Finance/credit Options, junk bonds, credit cards

Neighborhood banking, credit unions

Personal loans, gifts

Attributes of Goods and Services and their Effects of Commoditization on Development

Attributes of goods and services with Effects of CommoditizationHCP LCP Negative Effects Positive Effects

Alienable, Excludable, Enclosable, Assignable, Patentable: simpler to establish right of ownership, easier to establish price.

Openly accessible, inalienable: difficult to establish rights, widely available, difficult to accurately price

Privatization accelerates decline of sense of community and the common good and increases commoditization of all aspects of life. Skills and capacity for managing common property and promoting common good is underdeveloped.

Releases individual and corporate entrepreneurial energy. Ability to manage individual property and promote personal gain is highly developed.

Standardized, Universal, Centralized and Uniform: adaptable to many contexts.

Particular, Customized, Decentralized and Diverse: each culture potentially derives the best practices for its particular environmental context leading to diverse customized goods and practices

Reduces cultural and geographic diversity, standardized methods may not be suited to particular ecosystems, as a result efficiency potential is reduced. Locally appropriate development options remain underdevelopment.

Allows rationalization of production economics of scale and transfer of skills. Greatly increases production efficiency.

Table 2.(continued) Attributes of Goods and Services and their Effects of Commoditization on Development

Attributes of goods and services with Effects of Commoditization on Development

HCP LCP Negative Effects Positive EffectsAutonomous, depersonalized, use or practice occurs largely independent of social relationships. Primary relationship is between consum-er and product.

Embedded, use or practice occurs in a web of social and ecological relationships.

Promotion of individual consumption reduces the efficiency gains made possible by sharing, in-creases flow of energy and materials. Excessive autonomy undermines social relationships, redundancy and resilience.

Minimizes the complications of relationships. Advances freedom of the individual.

Embedded knowledge or skills, convenient, use simplified and inherent in design and material.

Disperse knowledge and skills, convenience is not goal, use requires relevant knowledge and skills

Impoverishes knowledge base particularly at the personal, local and regional levels.

Convenience frees human attention for other activities.

Mobile, transferable, easy to package and transport

Rooted in local ecosystem and community

Propensity for mobility increases flows and export of energy and materials. Local knowledge and connectivity underdeveloped.

Makes trade possible with accompanying spread of benefits. Trade and markets become highly developed.

ExpandingPopulation

Global Ecosystem

Expanding Economic Subsystem

Shrinking

LCP

EconomicNutrients

(capital, raw materials,human attention)

ExpandingMaterialDemand

HumanNeeds

High-entropyMatter/energy

Low-entropyMatter/energy

SOLAR ENERGY

Expanding

HCP

WASTE HEAT

ShrinkingLCPR&D

ExpandingHCPR&D

The process of commoditization.

Advertising& other

Consumption Stimulants

Next Steps in Developing Next Steps in Developing Commoditization TheoryCommoditization Theory

Developing measures of commoditization Developing measures of commoditization potential. potential.

Conceptualinzing the two economies: the Conceptualinzing the two economies: the economy of commodities and the economy economy of commodities and the economy of relationships (an economy of care and of relationships (an economy of care and connection).connection).

Developing the proper balance between Developing the proper balance between the two. the two.

Developing the concept of “attention” as a Developing the concept of “attention” as a scarce resource. scarce resource.

Policy. Policy.

Remember the key to healing Remember the key to healing our relationship to the Earth is our relationship to the Earth is paying attention. You have the paying attention. You have the power to decide where to place power to decide where to place

your attention.your attention.