Saturday, 26 July 2014

Article: How circular economies put need before wants

If you think that a circular economy is an ideal that does not exist already you are wrong, it does but only partially. Taxation is the vehicle by which governments supply funding to communities for housing, health, transport systems, energy, security services and much more. Provision of funding for communities is common place but it is more clearly and comprehensively executed by social enterprises than by any government since civilisation began.

The difference is that governments do not have the time to outline in detail how money for communities is spent.If they were to take control of it I suspect they would become deeply unpopular because governments also do not have the time or resources to understand every single need that needs fulfilling. They are not able to raise enough funds to cover everything as excessive taxation goes down like a lead balloon. They are also  not on the front line daily to ever be able to get to grips with what is really needed, we are.

It therefore becomes a necessity for each of us to take responsibility for every bit of funding we get to make things work smoothly. I believe the primary role of any ethical democratic government should be to ensure that as few people of possible are missed out with regard to being able to function at all. If people do not have access to the means to be able to function then problems soon escalate. Needs increase to the point that it costs ever more time, money and resources to combat them.

If governments don't provide ways for people to afford housing it results in more homeless people which in turn increases the risk of disease, which increases the need for more medical services and the same is true of food and and clean water supply. Governments should not be there to encourage persecution and profiting from other people's misfortune by making it easier for businesses to take advantage of the most vulnerable and deprived.

There is little point in stopping irresponsible lending on mortgages if you are merely going to exchange it for irresponsible lending in another form such as loans at 2000% APR. In developed countries most people can afford 50% interest but the poorest throughout the world cannot even afford that initially. This is why it  is always best not to lie about financial situation. Assuming you will suddenly become successful when you have no irons in coals to make that happen is not going to help either. It's best to be realistic and to work with what is known and provable. History has proved that irresponsible lending of any kind directly leads to economic crisis after economic crisis which in turn results in the poorest becoming even poorer.

A charity's soul reason for existence is to consistently aid people in dire need by practical rather than financial means. They are not there to manufacture or produce products and services for all, so many are are not and cannot qualify as social enterprises. We are fortunate that banks help charities as wisely they can see the long term benefits of doing so. We are less fortunate that advertising costs charities money which could be used to help people directly. Distinct from most charities, what social enterprises do is help alleviate basic needs by answering the naturally occurring demands of ordinary people while running as a business providing products and services to any and all who want them. A percentage of their work and profits is allocated to helping the most vulnerable via a myriad of ways either directly or indirectly.

To me the experts of a circular economy in action are social enterprises. By providing products and services to all while enabling the more vulnerable among us to integrate and function can only ever result in a win win situation. When people are able to function within society they are then in a position to spend and take out loans that they can afford. They are in fact the untapped customer base for the future. Are they likely to choose to buy from those who have helped or hindered their lives though. The answer is obvious so long as they are well informed as to what is a fair deal on anything. Financial literacy soon becomes paramount to all.

The best social enterprises not only keep a close eye on market forces but, more crucially keep an even closer eye on what people need to function more easily. The latter informs them on how to respond to the former and results in many innovative ideas for new products and services to benefit all. They don't tend to enter into false claims such as 'the majority of people have bad breath so it's best to buy mouth wash.' Nor do they produce products designed to fail to make you buy a replacement (planned obsolescence) or invent shampoos that make your hair greasy within a day so you have to use more of it. More commonly, they recycle as much as they can and some, fed up with waiting for energy companies not doing enough to make supply renewable, even go so far as to install their own energy supply so that everything is as sustainable as possible. Social enterprises do not create false needs or desires, but instead respond to what is actually being asked for. To me things should always have been this way and not as outlined in BBC2's documentary The Men Who Made Us Spend To me this is a must watch series. Click on the title to watch it.

It disgusted me to the core to learn that so many unsold new computers, phones and technologies at best gets shipped for recycling round and round the planet when it could be put to immediate use to enable our most vulnerable get connected to the world and function. Much of the content of this series I found shocking. Episode 2, highlighted how we are encouraged to fear for our health to buy products we don't need and tie up medical teams in unwarranted explorations of illnesses and diseases that we don't actually have. It is nothing short of the pinnacle of irresponsibility for businesses and their marketing teams to operate in such a manner. Those that conduct business this way in my view are a menace to our world for there are more than enough genuine needs that combat without creating fictitious ones that disturb us to generate unrest and panic.

I would like to challenge all businesses to try to help improve the lives of people a different way by first helping the most deprived in order to create new customers of the future. A way to do so is through donations of products and services to where they are most needed to charities and secondly to become a social enterprise. There's plenty of profit to gain from it but the difference would be that it was gained ethically and not to the detriment of all. It would be a refreshing change for the better I think to live in a world where everyone benefits from trading and supporting each other and where it is still possible to become wealthy through trading in such a way. Prior to social enterprises there were philanthropic businessmen who behaved in much the same way who were highly successful.

Will we a more complete form of a global circular economy it in our lifetime? That rather depends on us all wanting to make it happen and making it possible. I hope you decide it will be worth trying. I certainly believe that social enterprises in every industry sector throughout the globe are showing us already that it is possible and that it works.

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