I had a somewhat disheartening conversation with a colleague this week. He lamented that in working with building managers who really wanted to pursue low-to-no-energy building solutions and positive indoor air quality measures, they ran into conflict with their creditors who "did not include it as a separate line item on the pro forma". The finance industry, in this case, does not recognize the risk or value of zero impact or net positive buildings, so he had no case to the investors on why they should pursue the right route.
Compare this with another conversation I had earlier in the week discussing Elizabeth Warren's book The Two Income Trap about the financial relationship between society and parents raising children. For most of the first two-thirds of our nation's history, parents raising children would realize the financial benefit of that effort when the children took over the farm/family business or supported them in their old age. Now, our economy needs parents to raise productive, healthy, and motivated people, then pay for them to go to college, then send them quickly out into the world to buy/rent shelter, consume goods and services, and settle into new lives often far from their parents. These parents no longer receive the "return on investment" for raising a child, society as a whole receives that benefit - and namely the financial industry that invests in the businesses that these individuals support. Our economy asks - almost requires - parents to make all of the investment of time and resources, with little to none of the economic gain, and why?
Because it's "the right thing to do".
Warren argues that in this scenario, we as a society owe those parents all the help with that investment as possible. We should provide free, high-quality daycare, universal healthcare, high-quality public education through college, and maternity/paternity leave that rewards the obligations parents are to undertake (my list based on Warren's ideas). In short, society as a whole gets the benefit, so society as a whole invests. Instead of this realistic, and economically sound, approach, we get the punitive one: parents conceived the child, and now they must "pay the consequences". Then once the parents have served their financial penance, society will reap the reward.
In a functioning economy, we would have the right balance of both, and applied fairly to business and individuals alike. Parents and society would have a proper balance economically in the raising of children, recognizing that parents do have an obligation to do the right thing. On the other side, business - which already gets a reasonable subsidy from society in terms of infrastructure, security, and a regulate/insured marketplace - would have the same level of responsibility to do no harm to the environment, behave ethically, and proactively concern itself with the coming generations and not just the present. In the same way we punish parents who do not maintain their obligation, society can agree on laws that transfer businesses from operators and investors who cannot meet their obligation to society to those who have not only the ability, but the desire.
This is not some sort of utopia, this is the only form of reality that combines justice with possibility. The current way we organize society is the utopia. Thinking we can continue to burden the middle class with expenses from which they never realize a return, but allowing business to destroy our natural capital without consequence...
That is an unsustainable utopia, and our financial industry needs to recognize this.
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