Natural Capitalism

Topics: Capital, Sustainability, Capital accumulation Pages: 3 (725 words) Published: November 20, 2011
Natural Capitalism by Amory Lovins (
Capital - It’s the accumulated wealth in the form of investments, factories, and equipment.

An economy requires four types of capitalism to function:
1. Human capital – labour & intelligence, culture and organization 2. Financial capital – cash investments, and monetary instruments 3. Manufactured capital – infrastructure, machines, tools and factories 4. Natural capital – resources, living systems & ecosystem services

The first 3 forms of capital are used to transform natural capital into the stuff of our daily lives: cars, highways, cities, bridges, houses, food, medicine, hospitals and schools.

Capitalism is a financially profitable, non-sustainable aberration in human development and does not conform to its own accounting principles. It liquidates capital and calls it income and it neglects to assign any value to the largest stocks of capital it employs – the natural resources and living systems, as well as the social and cultural systems that are the basis of human capital.

This deficiency in business operation can’t be corrected by simply assigning monetary values to natural capital for 3 reasons:

1. Many of the services we receive from living systems have no known substitutes at any price. Ex; oxygen production by green plants.
2. Valuating natural capital is a difficult and imprecise exercise. -Biological services flowing directly into society from the stock of natural capital are estimated at $36 trillion vs the annual gross world product estimated at $39 trillion. 3. Machines are unable to provide a substitute for human intelligence, knowledge, wisdom, organizational abilities and culture. -The sum value of human capital is 3x greater than all the financial & manufactured capital reflected on global balance sheets.

Conventional Capitalism:
In order to bring about any comprehensive economic and ecological change we must understand the basis of...
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