Over at the NESEA Blog, my friend Joel Gordes defines The First Tenet of Sustainablity.
Joel’s definition of Sustainability is precisely right: “meet[ing] the needs of the present without compromising the ability of future generations to meet their own needs”. He goes on to refine the definition to include: Social & Intergenerational Equity, Environmental Quality, Quality of Life and Economic Vitality.
One may also think of sustainability fundamentally as just making responsible decisions, acting as if we are accountable for the long term impacts of those decisions and being good citizens of the planet.
Many seem to think about this term Sustainability on environmental terms only. But it is no coincidence that the words ecology and economy share the same greek root, oikos, or home.
The current economic crisis is highlighting more than ever before the serious threats created by a lack of understanding of sustainability, responsibility and accountability. Specifically, the lack of sustainability and accountability embedded in the structure of the financial securities system is a major threat to all the other systems that a modern society depends on.
Our financial system has not been operating in a remotely sustainable manner for several decades. And our government is now borrowing and spending at completely irresponsible levels to prop up a financial system built on securitization and avoided accountability. The federal government’s recent economic endeavors are themselves completely unsustainable.
The global financial institutions that our government is most trying to sustain are neither sustainable, healthy or competitive. In fact they seriously distort and disrupt the functioning of healthy markets. They should not be considered too big to fail, but rather too big to exist.
Like the natural selection of ecology, a critical part of a healthy economy is truly competitive markets. We don’t need to restore the markets for complex incomprehensible and unaccountable financial securities. Indeed we need the opposite – rules that restore the health and diversity of the financial system that has been disrupted by a cancerous invasion of securitization.
As a small business owner, I have found local community banks to be the most responsive to my needs. In those seemingly old fashoned institutions, lending decisions are made by bank officers that know the borrowers personally and business loans are still often held in house.
Perhaps all the financial system needs to return to health and sustainability is a return to the older banking regulations that enabled a financial system comprised of thousands of small local banks that were accountable to the local communities they served and whose businesses were intimately dependent on the health of those local communities.
Sustainability advocates should be out in front of the effort to restore a truly sustainable financial system in which feedback mechanisms are clear and effective, enforcing real accountability, like in any healthy natural system.