. "Environmental Constraints and the Evolution of the Private Firm." The Industrial Green Game: Implications for Environmental Design and Management. Washington, DC: The National Academies Press, 1997.
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The Industrial Green Game: Implications for Environmental Design and Management
system and thus difficult to define a priori? To this question a tentative answer is offered, albeit more in hopes of stimulating discussion than in any firm belief in its correctness.
Initially, an interesting conceptual point should be noted. This paper is implicitly assuming that,through policies or individual initiatives, firms can be structured within the context of a complex economy to migrate toward a long-term stable carrying capacity, or sustainability. Sustainability, however, is quite possibly going to be an emergent characteristic of a properly bounded and structured economy, thus unrecognizable until achieved. One must wonder whether we are capable of understanding this complex system (or acting on that understanding) so as to structure it to result in the emergence of the desirable self-organization. In simple terms, what does it mean operationally when a complex system (ourselves, our cultures, our economies) begins to become so fundamentally internally self-referential? This is not, obviously, a new issue. Throughout history, people have taken great pleasure in writing about themselves in myriad ways. Nonetheless, the issue is now raised in a more critical context. Avoiding serious cultural, social, economic, and population perturbations may depend on humanity's ability to understand complex systems (economies, and physical, financial, cultural as well as underlying natural systems) and how and where we may be able to interfere with and change them constructively. This is not a skill we as individuals or societies have developed.
In this light, then, there may be one significant advantage to the profit-driven model of the corporation: It is relatively easy to establish meaningful boundary conditions for such an agent. Simplistic economic models to the contrary, firms already incorporate many aspects of their cultures and societies within their operations and are able to adopt more even as the dominance of the profit motivation is maintained. Manufacturing as a collaborative effort, increased environmental responsibility within economic constraints, and new models of interfirm organization to implement life cycle programs and responsibilities are trends that imply but do not necessitate a broadening of the firm's mandate to include, for example, responsibility and authority for achieving sustainability. Moreover, maintaining the primacy of the profit motive in a sense maintains the natural selection pressures of the economy, which are arguably critical if rapid evolution within the system is sought. No externally imposed regulatory mandate can substitute for the constant pressure, the brutal frankness, of potential commercial failure. We want to maintain Schumpeter's "gale of creative destruction" precisely because we need creativity and evolution.
If, however, private corporations are to remain narrowly defined, public policy must become far more sophisticated. What will be required is the establishment of boundary conditions that propel the evolution—especially diffusion—of environmentally appropriate technologies leading to the achievement of sustainability, when those technologies cannot be defined until after the fact. Some aspects of such a policy can be defined: more and better data on emissions,