The world’s resources are running out. Currently, we are limited to the resources of our one planet Earth. The world’s population has grown from 2.5 billion in 1950 to 7 billion in 2011 and is projected to reach 8.9 billion by 2050. More problematic, consumption per individual is rising dramatically. Protecting, conserving, and recycling the Earth’s resources will be essential in the coming centuries. While governments and regulatory bodies will play an important role, it is the private sector that must be harnessed in order to build a sustainable future.
Milton Friedman wrote that corporations should not concern themselves with “social responsibility”. His argument is intricate, but boils down to the notion that forcing corporations to engage in “social responsibility” is a form of coercion and can unjustly tax customers, employs, investors and the company itself. In this sense, he is right, if companies are indeed being coerced into sacrificing profits to engage in social responsibility. If consumers demand green goods, however, then savvy businesses should work to meet those demands and reap the profits.
Markets have proven themselves to be the most efficient means to allocate and distribute resources, even if the results still remain mixed. Markets are not inherently designed, however, to deliver sustainable products, they are designed to meet demand. Thus to direct the power of the market economy to supply sustainable goods, demand for said goods must be present.
Fortunately the continued advancement of education systems, information technology, and consumer’s awareness of the impact of their consumption is in-fact increasing the demand for green goods. A survey by Dupont recently showed that 89 percent of their customers see “delivering products with environmental benefits represents a long-term market opportunity. ” (PWC) Meanwhile Whole Foods Market, a purveyor of organic and natural foods, has been showing double digit revenue growth and its stock prices have surged from USD 10 in 2000 to USD 90 in 2012.
For the market economy to continue to function in the face of limited resources it will have to become a “conduit” of morale choices. Continuing to provide truthful education and a frank analysis of the downsides of economic activities will provide more information to consumers. This information must always remain truthful and not used to cause “undue” influence on consumer choices, or else risk creating a market distortion.
Demand is the best regulator of markets and consequently businesses. This is all the more true in the information age when information can be passed instantaneously and virally to and across the masses. Demand for sustainable goods will continue to increase as the damage of consumption. This demand for sustainable goods is not an indictment on the short-comings of the market system, it is proof of the market’s ability to function and adapt to changing conditions.