PRODUCTS / STUFF / CONSUMPTION
THE LIFE-BLOOD OF THE ENVIR0-SOCIO-TECHNO-ECONOMIC SYSTEM
SUPPORTS QUALITY OF LIFE / EARNS PROFITS / PROVIDES JOBS
ALSO CONSUMES RESOURCES AND PRODUCES PROBLEMATIC WASTE
|
Vegetables
|
Meat
|
Housing
|
Clothes
|
Mobility
|
Recreation
|
INTRODUCTION
PRODUCTS (STUFF) AND CONSUMPTION ARE THE MAIN LINK BETWEEN
PEOPLE, PROFITS AND PLANET AND ALL THE ELEMENTS OF THE SYSTEM
The enviro-socio-economic system comprises:
- the natural world ... nature's bounty and foundation for everything;
- people ... a society of now more than 7 billion people;
- the economic world... a human built environment of knowledge, physical structures, institutions and systems.
CONSUMPTION has IMPACT on ALL the CAPITALS
- GOOD for SOCIAL CAPITAL
CONSUMPTION enables a decent quality of life and standard of living, and therefore positive for SOCIAL CAPITAL.
- BAD for NATURAL CAPITAL
CONSUMPTION requires PRODUCTION which depletes and degrades NATURAL CAPITAL in many different ways. Some consumption is worse than others.
- GOOD and BAD for ECONOMIC CAPITAL
CONSUMPTION is good for business which profits from production at every stage of the supply chain. Some companies do major damage to natural capital and with effective accountability woul lose significant reputational value because of their behavior.
STANDARD VALUE PROFILE
TVM is developing a STANDARD VALUE PROFILE methodology so that the characteristics of all PRODUCTS (goods and services) may be numbered and quantified easily and in an effective way.
Basic 'stuff'
There is some basic stuff that people must consume to stay alive. For most people, the economy works well enough so that people do not have to worry about reaching this threshold of quality of life.
There are however, a number of places around the world where the economic system has broken down ... where there is a 'failed state' and nothing works ... where there is war ... in which case the population can be faced without the basics to stay alive.
At the time this is being written (October 2018) , the situation in Yemen is an example of war, a failed state, and massive famine, and people dying by the tens of thousands.
Consumption that supports a good standard of living
Fo many years there was a very strong correlation between consumption growth (as measublack by GDP) and improvement in quality of life and standard of living, but when consumption got to a certain level more consumption did not correlate any more with improvement in quality of life. In advanced mature economies quality of life has become much more than merely more consumption, but neither political nor business leaders seem to operate based on this reality.
Consumption at the top of the pyramid
Consumption at the top of the pyramid is a problem. Conventional economics enable high consumption by thos with great wealth and ultra high incomes, but the unsustainability of this consumption is not accounted for in conventional analysis. TVM's enhanced system of analysis and accountability shows that the luxury segments of the economy and the related lifestyle have massive true costs for both social impact and environmental impact.
The 'true cost' of consumption
Business has operated on the basis that 'more and more' means 'better and better', and this works where there is just one metric and that is 'profit performance' and associated 'stock market prices'. The 'true cost' reality is very different. More GDP based on more consumption means more natural resource depletion and environmental degradation ... and with a global population approaching 8 billion people, this is dangerously unsustainable. It would take 5 planets to support consumption if every person on the planet lived like the average American, Some serious change in the way things work has to be achieved, and soon.
Product / Products
Product is shorthand for both goods and services. People need product to maintain and improve their quality of life and their standard of living. In the end the purpose of all economic activity is to improve quality of life and standard of living, it follows that product is a key to high performance of the socio-enviro-economic system.
Product to serve the needs of people originates with resources from the natural world, flows through processes in the man built environment and ends up serving the needs of people. After use the product has a post use waste chain that may well degrade the natural environment. The performance of a product is the amount of good that reaches people, relative to the amount of damage that is being done to the natural world.
There are very powerful metrics about the profit performance of business organizations in the man built environment and the accumulation of financial capital by people who are owners, but there are no metrics with similar power to measure the good that products do for people and the bad impact products have on the natural environment.
As a product flows through the supply chain, there is good that benefits employees and there is bad where the operations do damage to the environment and sometimes the employees. There is good when the operations in the supply chain fund pro-good activities and pay taxes to fund government services.
When the dominant metrics are all about profit and financial wealth, then over time all the big decisions get made in the interest of these metrics. We need to change the way the world keeps score in order to change the way the game is played!
|
