Paul Hawken: Finding Your Way in the Next Economy

Second, although Paul has a lot of good counsel to offer on the economy, home business and individual investments, his analysis isn’t focused exclusively on $$$ signs. Instead, he has a much broader vision that incorporates environmental and philosophical issues in a way that’s both obvious and startling. 

We think you’ll see what we mean when you read the following edited interview, recorded when our assistant editor, Pat Stone, and staff photographer, Steve Keull, visited Paul in his Mill Valley, Calif., store last June. May you find this discussion a profitable one. 

Paul, despite signs here and there of a temporary recovery, a lot of people think the economy today is in fundamentally bad shape.  

Well, in one sense, it is in bad shape. Third World countries are in the process of defaulting on their debts. We’ve got the highest real interest rates in our history, the highest bank failure rate in our history, and the highest business failure rate in our history. If you go over the last decade, you can come up with a lot of reasons that rationally support the view that the world economy is in great trouble.

But, unfortunately, once you come to that “rational” conclusion, it justifies all sorts of plans and actions to do something about it — actions that don’t tend to work. What I’m trying to say in my book is that those symptoms are true, but they do not necessarily mean what we are told they do. I don’t think that we, as a country, are defining the economy correctly. Therefore, public policy  and also private policy often errs because we are misdiagnosing the symptoms.

I see the economic symptoms today as signs of a change from one type of economy to another. And we are a country that’s kicking and fighting and resisting every step of the way. We are fighting what’s best for us.

We have an economy that’s changing more rapidly than at any time in our history. People don’t like it, and I understand that. But it’s the very best thing for us and planet Earth at this time.

What is this change? 

To answer that, I’ll first have to define the economy that is in transition … that is, as I see it, dying. I use the word mass — not industrial — for this economy, and stipulatively define it as covering the period between 1870 and 1973. In that period, there evolved a very important relationship between human beings and energy (primarily oil) in which energy became the transformer of work.

That’s why energy is so valuable. Through machinery and technology, each one of us can do more work with energy than we can do without it. The mass economy was a 100-year period in which we substituted more and more energy for labor every decade. That meant each of us became more productive. Because we produced more, the cost of whatever we were producing — whether it was tractors or toothbrushes — went down in price. And because they went down in price, we could afford to buy more. And because we bought more, we demanded more, so we produced more.

As we produced more widgets, or whatever, we used more resources to do it. Yet the cost of energy became less expensive every decade. The more energy we used to do our work, the less it cost.

All that changed in 1973 when the price of oil went up. Now, I agree with Amory Lovins on this. (Energy consultants Amory and Hunter Lovins were interviewed in 1984. — MOTHER EARTH NEWS) There wasn’t an oil shortage in 1973. There isn’t one today. We’ve got so much oil it’s coming out of our ears. The problem was that in terms of supply and demand the price was too low. And finally the voraciousness of the mass economy met — not exhausted, just met — the limitations of oil resources. It wasn’t a crash or a blast, it was more like a kiss.

And then? 

And then, when the price of oil soared, that basic fundamental relationship between the human being and work changed. All of a sudden, energy — the primary mechanism for increasing productivity — became more expensive than the productivity gains it made possible. If we did work the old way, we would become less rich.

So, of course, the economy went into a tailspin. All sorts of latent fantasies came out. The world seemed filled with gold bugs and survivalists and people who said we were going to run out of oil before the end of the decade or the century. John Denver put in a 10,000-gallon gas tank at his home.

People seriously thought that the economy was finished, that we were all going to be out there with our methane-run Rototillers, barely getting by. The ones with the country smarts were going to be the survivors.

Are you putting down rural self-reliance? 

No, I’m not criticizing people who like it in the country — I’m one of them. There are very powerful reasons to live in the country. In fact, the reverse migration that’s happening in America today is the healthiest thing that could happen to the land. But if you’re living in the country just to counter the collapsing economy, you are going to wait a long time. You’ll be an old man, and still be waiting for the world to collapse.

The period of 1974 and 1975, though, was the finest hour for that type of fearful thinking. People did all sorts of noneconomic things. So did the government, by starting to give us a huge deficit.

Why? 

Because the economy wasn’t growing. So, according to the classic Keynesian approach, to restimulate the economy, you throw some money at it. You create money — in a very complex way, so it doesn’t look like it — feed the fire with it, and sure enough, it works. It more than works: In three or four years, you have inflation.

Inflation rewards consumption and not production, spending and not saving. The people who speculate and know how to manipulate money are rewarded, while those who engage in healthy economic behavior are punished.

We had a few years of inflation; then Jimmy Carter appointed Paul Volcker to the Federal Reserve Board, and right away Volcker tightened up the money supply. And we had the biggest bond market collapse in our history, a $500 million loss. Real interest rates just soared, and the monetary supply dried up.

We were brimming on the edge of disaster until Mexico said it was going to default on August 15, 1982. Volcker had to let up then, and we had the biggest stock market rally in history.

The point of all that is that we’re in an economy that’s very volatile. It’s like a manic-depressive: Its moods change instantaneously. The past decade produced a lot of people — and I was one of them — who were saying, “What the heck is going on? What do I do? Do I borrow? Do I pay off my mortgages? Do I button down the hatches and wait for the water to hit? Do I let out the sails and go for it?”

Well, you wrote The Next Economy as an entire book of economic analysis, so tell me, what do you do? 

My book does not say, “This is what’s happening and here’s how you can make money off it.” It offers a framework of understanding so you can have some conceptual way of understanding the change. It’s a long-term change. We’re just at the beginning of a 100-year transition.

What is that framework of understanding? 

It has to do — here we go with definitions again — with the ratio of mass to information. We can’t use rising resource consumption (or, to put it another way, ever-increasing mass) as a means for growing any longer, because the cost of that resource — be it energy or materials — is becoming more expensive the more we use, rather than cheaper the more we use.

We’re seeing a change now in every single product, service and aspect of the economy: a change in the ratio of mass to information. Every thing we produce has so much physical stuff in it; namely, the embodied resources it took to produce that thing. It also has a certain amount of information in it. And by information I mean design, utility and durability — the application of the knowledge of how best to make or accomplish something. Information is the quality and intelligence that make a product more useful, longer-lasting, easier to repair and stronger, lighter and less energy-consuming.

What we have now is an economy in which the only way you can succeed is to change that mass-to-information ratio toward information. In the coming economy, you have to move toward the goods and services that will be rich in information or you’ll be in trouble.

Let’s look at how that framework fits what’s happening today. The classic example is the automobile industry. American cars in 1973 were huge and very inefficient. After the first oil shock in 1974 and 1975, these cars became very uneconomical and a drag on the market.

In the last 10 years, we have demassified the American automobile. It’s 30-percent lighter than it was 10 years ago. That’s billions of pounds of steel, iron, chrome and all that we don’t use now in cars.

And manufacturers have done more than that. Look at the difference between a Honda and a Chevette. Both cars are light. They have the same amount of materials. But why is a Honda so desirable? Why does it have a higher resale value, last longer and take half the time to assemble? That’s due to the difference in information, in the design and intelligence and utility embodied in the car.

Look at the economy from the consumer’s end. Between 1973 and 1984 real wages dropped 16 percent, while inflation went up. People have begun to realize that they can’t have as much as before — as Mom and Dad did — so we’re seeing what I call a Europeanization of the American economy. Many of the European countries have seen their monetary systems completely wiped out two or three times by war in the last 80 years. I mean wiped out: All their currency was valueless. That kind of memory makes people very cautious about how they spend their money. That type of person tends to buy less and buy better.

This trend of becoming very selective in buying explains why, in both recent recessions in our country, the companies that were making products of very high quality — in appliances, clothing, tools, automobiles or whatever — weren’t hurt by the economic downturns. They weren’t even touched.

Does the information economy you’re talking about have anything to do with the computer age everyone else is talking about?

The computer age is part of the informative change. Somebody who puts in a woodstove and manages his own woodlot is just as much a part of this change in the economy as the guy who’s making microchips in Silicon Valley. Why? Because a woodstove trades mass for energy in a direct, economic, and efficient way. The amount of energy that stove user is getting from the sun is incredibly high in comparison to the guy down the street who’s plugged into Seabrook or some other nuclear power plant. The efficiency of energy conversion in that other guy’s baseboard heater, by the time it finally gets generated at the plant, sent down the line, and converted into heat, is so low it’s pitiful.

There are a great many other ramifications of the change toward an informative economy. A lot of large companies will shrink or liquidate as they lose out to smaller, more nimble ones. Many mass, nationwide markets will shrivel up. There’ll be fewer middlemen and more direct sales to consumers. And as money fluctuates in value, people will depend more on barter and less on cash. Even now, you see the people at the base of the economy — consumers, businesspersons, householders — adapting to the changes, while the people at the top of our economic structure in government and big business are in crisis because they don’t have a clue as to what’s going on.

Paul, I’d like to talk some more about what this change means for small businesses and individuals. But first, let me ask you something else. When I read The Next Economy, I felt you were predicting two different near futures. On the one hand, you say the shift to an informative economy is going to be a little rough here and there, but we’re not going to have a crash; it’s all going to work out all right. But on the other hand, you say an economic collapse may occur any day now. I read both futures in your book and never felt a resolution between the two.

Right.

Well, what is the future going to be? 

The reason I didn’t write a resolution between the two is that we create the economy; it’s not happening to us. So it’s really arrogant for me or anyone else to say what’s going to happen.

True, all the elements are in place for a bank collapse. It’s a textbook case. You have this tremendous buildup of personal, corporate, bank, government, and Third World debt. You have a money system that’s tightly controlled. If the economy starts to contract, a collapse could happen tomorrow. I’m very clear about that. But I also say I don’t think it’s going to happen.

That still sounds contradictory to me. 

I’m just saying that I, Paul Hawken, don’t think it will happen. That’s not making a prediction. This is why I think this way: First of all, widely predicted things almost never happen. Mass opinion, frankly, is usually wrong. That’s not a cynical statement but a logical one.

There weren’t a whole lot of people sitting around in 1928 saying, “Boy, are we headed for credit collapse!” Today, everybody knows about that possibility, so they’ll start to act in a way that changes the conclusion. We’re not like lemmings blindly running toward a cliff and off into the ocean, because we can see that cliff and say, “Wait a minute, I think there’s a better way to get there!”

The second reason I don’t think we’re headed for collapse is that the economy has so much vitality. In 1929 there was a real tiredness, a real winding down of the economy. But today this country is alive; it’s dynamic. Sure, we have an economy that’s contracting, but we also have one that’s flourishing. We have the highest rate of business failure in our history right now. We also have the highest rate of new business start-ups. We’ve never had a recession before that also had businesses starting up at 600,000 per year.

Look at Apple and Steve Jobs. We talk about how, gee whiz, International Harvester just closed this plant, and 1,432 people were laid off from work. But there must be 50,000 or 100,000 people who owe their jobs, directly or indirectly, to Apple.

Or look at the energy and nuclear power industry. Utilities are in real trouble, right? But again — as Amory Lovins points out better than I can — 80 percent of the electricity presently generated by all power plants cannot compete with the energy technologies that have been created in the last 36 months. There are tens of thousands of people in business out there who are thriving precisely because the nuclear power industry is on its way out.

So you say, “Is the economy contracting?” Absolutely. “Is it growing?” Absolutely. And what happens when cold and hot air meet? You get tornadoes, thunderstorms, turbulence, wind shear, hailstones — you don’t know what to expect. So my best guess is that the decade to come, like the one that’s past, will be turbulent, volatile. We’ll have a lot happening in a short time. That’s why you have to have a way of looking at the economy that allows you to feel that you’re part of a long-term dynamic change and not reacting to the day-to-day or month-to-month events.

As you pointed out, a lot of businesses are going to flourish in such turbulent times, and a lot will die. What are the keys to success for either an existing big company or a little home-based business? 

First off, if you don’t have a company that’s learning-based, you’re dead. I don’t mean it has to have new technology. Rather, it has to be open to change, to have the attitude of soaking up good information and giving it out whether you’re dealing with the circuitry in a microprocessor or a utilitarian knife made by a good craftsperson.

That information comes only from being a learning base. If a company isn’t one where people are actually developing and growing, it will not do well. Oh, you may do well for a few years — come out with a chocolate chip cookie or something that has immediate popularity, and retire to a bluegrass farm with your blooded horses — but the company itself won’t last.

Also, the learning has to accumulate. It can’t be kept by one person at the expense of other employees and associates. Everybody has to be involved in the process.

Another criterion for success is that, big or small, the companies that succeed are the ones where the people who produce the product are the market. No more pandering. It’s up to the Taiwanese to create the knockoffs now, to try to imagine what we want, to come up with the pink bathroom scales. The companies in America that are going to succeed have to sell essentially to themselves. So if you are starting a business making or selling something you won’t buy, you’re in the wrong business. And I mean it. If you are the market, you don’t get out of touch with it.

The corollary of that is to stay close to your employees. Most people, especially those in small businesses, imitate their big brothers. Right away, they get the big office with the fancy carpet and trimmings. But the business where the top stays in touch with the bottom and can do everything hands-on — that’s the business that’s going to succeed. You can’t treat employees the way you used to. To put more information into products, you have to put more information into employees through education, communication, and honesty.

Likewise, you have to stay close to your customers. With the mass economy, what worked best was concentration and centralization. Resource costs were going down so rapidly and buying power was increasing so rapidly that it was not economical to build a quality washing machine or repair a broken one. It was cheaper to buy a lowgrade one and replace it with a new one after the parts wore out.

In the next economy, those things don’t work. There was an article in Business Week about how GE has learned to gear its production lines to what people experience with the products out in the field. This is GE’s “new” marketing tool: The company is discovering that the more responsive it is to what it learns from service calls, the more repeat business it gets.

Well, hallelujah. Everybody knows that’s the decent way to act. And now companies are starting to act that way, not because they’re doing the right things for the right reasons, but because the right things work. Today 90 percent of the people who have a bad experience with a business they’re dealing with will never return to it. That wasn’t always true.

What are some other keys to business success today? 

Choose a business, and stay with it. A lot of people make the mistake of trying to run two businesses at the same time. They’ll say, “We’re going to make solar collectors, so let’s start an installation service.” But those are two totally different businesses. They’re completely unaware that they’re getting in over their heads. The truth is that the world gives you permission to do a second thing only after you’ve done the first one well. If you take one thing and do it well, customers, banks, investors all allow you to try another. If you start out trying to do two things at once, it’s like trying to walk on two feet at the same time.

Another guideline is “Borrow a lot or none.” If you don’t need to borrow at all, great. If you should borrow, though, there’s no point in borrowing small amounts of money. Borrow a large amount of money. Then nobody can mess with you. Argentina, Bolivia, Mexico and Brazil have all proved that when you are out of money, you hold all the marbles. Your creditors don’t have the marbles. You do. You control the capital.

What about repaying it? 

Well, you sure better have a business plan. In fact, if you don’t have a written-out business plan — or can’t make one — you shouldn’t be in business. Most money is never repaid. It’s just refinanced and held over. As a matter of fact, if you’re a small, growing company, you eat cash. You may show big profits on paper, but meanwhile you’re consuming cash. So cash flow is much more important than profit.

Another thing: If possible, go into business with a partner. Recognize your strengths and weaknesses from the outset, and look for someone who complements you. Having a partner can also help keep you from seeing yourself as the big boss at the top of the pyramid.

Don’t go into business unless you’re very comfortable with numbers — unless you can do a 33-percent markup in an instant and get the price. A lot of people who go into business are very uncomfortable with those things. Or they are uncomfortable about making money. They feel that every time they make a buck they should charge less. So they do, and pretty soon they’re out of business. They didn’t realize that profit is a cost of doing business. It’s a cost, not a surplus.

What about people who come from the other point of view, whose only reason to go into business is to make money? 

Well, I wish them all the luck in the world, but if it’s not learning-based … no, I have to say more than that. If you read about so-called successful entrepreneurs, you’ll find that few of them go into business because of materialistic motives. They may be greedy, all right, but even so, that’s not why they went into business. They had some other agenda; they wanted to do something.

That’s been true in my life. Every time I tried to make money, it’s just been a joke. But any time I’ve gone out and done something unconventional that corresponded to my passions, I’ve just been shocked by the fact that I made money every single time.

The reason people should run a business is that there is something they want to accomplish in business. It’s a very effective way to get things done. It’s also a very honest way to get things done, because this culture is very, very demanding when it comes to business. Make one mistake, and you’re out.

So if people who don’t have that passion say, “I’d like to be in mail order,” I’ll say, “Don’t, because that’s a silly thing to want to be in.” But if you come to me and say, “I love camping. I love to go camping, to talk about camping. And I can’t find everything I want to buy to use for camping,” then we can start talking about a camping business.

I have a criticism of MOTHER EARTH NEWS on this point. Every issue has a “you can make $100 a day” business story. Usually it’s the headline that’s bad. Sometimes the articles are good. They’ll go in and analyze and give a great case study of what one person did. But the headers aren’t, in my opinion, very good.

A business has to resonate with your sense of who you are and what you want to do in the world, not with your need to earn $100 a day. The business things are secondary to that. They are extremely important. Cash flow, accounting, marketing — all those things are like changing the oil and keeping air in the tires so the car won’t fall apart and you’ll get to where you want to go. But don’t confuse the vehicle with the destination. Business is a way to accomplish something. It in itself is not an accomplishment.

Any more advice? 

Don’t start where you want to end up. I can’t say enough for starting small,  because that allows you to learn in an environment where there are no major consequences if you fail. Starting small is simply acknowledgment of the fact that you’re committed to learning. And the thing about learning is that, sooner or later, everybody makes a big mistake — the kind that’s life-threatening to the business. It’s like a child pushing to find where the parents’ limits are. We’re that way in business: likely to take a flier. Usually it ends up in near failure of the business, and we become chastened.

Have you made those kinds of big mistakes yourself? 

At Erewhon I made every mistake there is. I’m trying to think of what I did right!

Would you care to give an example? 

No capitalization … I borrowed a lot, which was careless but understandable. My real mistake was not having my own capital.

What were the consequences? 

I almost went out of business. All my cash belonged to somebody else. Between my customers and my bills and my bank, I never had my own money.

Just how could you have avoided that predicament? 

By getting investors. The scale and type of business I was in warranted that. Another mistake we made at Erewhon was not enfranchising the employees. Just about any new business should do that. You have to do it right. They have to earn it. If you just give it away, they’ll resent you. But if you do it right, it’s very good. At People’s Express, for instance, the average employee has $70,000 to $80,000 equity in the airline, and it’s been a tremendous incentive. People want to be a part of the whole. They require that sense of involvement with their work and life in order to do their best.

One last piece of advice for the small-business person is simply this: Have fun.

Have fun? That sounds like a frivolous remark. 

It’s more like the canary in the mine. If the canary stops singing, you’d better get out of that mine real fast, because there’s no oxygen in there. The level of how much oxygen there is in a business is the level of laughter, spontaneity, of real human warmth and contact. If you create a place that’s so serious and gloomy it imprisons people’s spirits, people won’t want to work there. You’ll create a kind of slave.

I love customers. I love to deal with people. And so does everyone else at Smith & Hawken. We do $700 a square foot per year of retail business in our store here. That’s phenomenal. We do more business than stores five to ten times our size. But we do it because of the quality of our employees and the level of our service. We pay well, and we don’t have uninformed workers. They communicate a lot with customers, and they don’t exploit anybody.

Paul, we’ve talked about financial issues on societal and business levels. Now, let’s get down to home: How does an individual make good financial decisions in these turbulent times? 

In other words, “What do you do with your money?” I’ll answer that, but first I want you to understand two things: This is just how I see it, and I hope I am wrong.

We talked earlier about the massive buildup of debt and the inability of OPEC countries and Third World countries to service that debt, which is compounding and growing as a force unto itself. Well, that debt is going to be liquidated, somehow and some way, sooner or later.

There are two ways it can be liquidated. One is through contraction: the credit collapse we talked about earlier. The other is through inflation. The way things are now, we’re due for one or the other.

So what do you do?

The first thing you do, if you have cash, is to be cautious and watch. I said that in my book, and then the bull market of ’83 came, so book reviewers said, “If you’d done what Paul Hawken said, you would have lost money.” But you have to understand, I’m not trying to give advice on how to make money. I’m giving you advice on how to keep money. There’s a difference.

Sure, people made money in that bull market. Consequently, the last quarter of 1983 saw the highest sale of mutual funds ever. But everybody who bought them then lost money in the stock market. And that’s the more typical experience. Ninety percent of all individual investors lose money in the stock market. Seventy percent of the portfolios do worse than stock market indexes. In other words, if you bought one of everything, you’d do better than 70 percent of the managed, institutional portfolios.

It’s like Las Vegas: The odds are rigged against you. 

What I’m saying is, don’t start by playing the stock market. You should have at least a year’s income saved. Traditionally, in all cultures at all times, you save money first. You invest it second. And then, if you want to have fun, you speculate with it … if that’s fun for you, which it isn’t for me. 

So the first thing you do is save. Buy treasury bills. If you can’t afford the $5,000 or $10,000 to buy T-bills yourself, buy money market funds that hold only government treasuries. The second thing, oddly enough, that I think you should do is to buy real estate if you can afford it and can service it. Don’t leverage real estate. And if you can’t afford to buy a house, buy a lot and save money for the house. Land is a very good investment.

Those are two different strategies, but right now I’m not too happy with anything in between.

What about buying gold? 

That’s the worst. If you have cash savings and real estate, one of them represents your work and the other your home. Both these things are extensions of your life.

The only time that gold does well is when the world fails. When you put your cash — the symbol of your energy — into gold, you put it into an investment vehicle that only does well when your neighbor, next door or in the world, doesn’t. I’m not saying you will or won’t make money. I’m saying it’s psychologically debilitating. I mean, when Kharg Island blows up, what happens? Do you say, “Hey, it’s really heating up there in the gulf. I’m going to make out like a champ”? You’ve ostracized yourself.

Now, if you buy gold and think this is an insurance policy against losing money the same way I have an insurance policy against this building burning down, that’s fine. I hope I don’t ever have to collect on my insurance policies. Then you haven’t moved away from yourself. You aren’t banking on trouble.

Even in that sense, though, you’re probably better off investing in yourself, in learning skills that you can use. Look at what happened to the hoarders and the doers in other crashes. The doers always came out ahead. When the Weimar Republic collapsed, the people who had valuable skills were in business the next day. They almost didn’t skip a beat.

The hoarders had real problems. First, everybody knew who they were. Second, they had to get rid of the hoard. Gold’s been nationalized many times. Then all the government has to do is say, “You got gold? Don’t worry, we’re not going to come get it. But there’s only one place you can sell it, and that is with our bank right here.”

You know, Paul, for someone who talks about economics and business and investments, you often seem to be not talking about economics and business and investments. For instance, you said you shouldn’t try to make money just for the sake of making money. 

There’s nothing wrong with making money. I’ve got no problem with that. And there’s nothing wrong with trying to make money with money, with investing for financial gain. All I’m asking is, what are you doing with your time? Do you really want to spend your time plugging your Apple to the Dow-Jones and tracing your investments and selling this and making an eighth of a point on that? Is this a good way to spend your abilities, your intelligence? For most people, most of the time, it’s the dumbest thing they can do.

Unfortunately, so many things keep taking us away from this fundamental question of purpose. We keep being seduced by our own culture.

We don’t have an education system that really nurtures intelligence within the child. We have a seduction system that takes people away from themselves. It sets up expectations of what we ought to be when we grow up, and we try to live up to them. After all, we were born to try to please. That’s a natural human quality. But just like any other quality, it can be perverted.

All right, if there are so many seductions and wrong messages, how do people find the right purpose for themselves? 

Don’t ask me.

But, according to you, that’s the most important question anyone can ask!

If you ask me to find your answer, I might tell you. And I’d be wrong.

But I didn’t ask you what one’s purpose is. 

I know.

I asked you how a person finds it. 

That’s right. I can’t tell you that.

I want to press you on this a bit because so much of what you’ve said sounds similar to the hip “be yourself” movements of today that I wonder if you aren’t pushing some specific “solution.” 

Definitely not. In my opinion, many of the so-called human potential or New Age movements are rip-offs. Many of them are sincere and well-intentioned too, but some of the worst things you can do to somebody happen when you are sincere and well-intentioned. The road to hell is paved, you know.

The problem with my generation is that, because we grew up with and around so much uncertainty, we’ve created a seller’s market for certainty. Many people, for instance, have no discrimination whatsoever concerning religious teachers — teachers who often came here because they were recognized as charlatans in their own countries! Frank Lloyd Wright said that if you shook America, everything loose would end up in L.A. In a sense, if you shook the earth, everything loose — including a lot of these “teachers” — would end up in the United States.

But though you’re not recommending how a person should find a life purpose, you are recommending that people should do so. 

I’m just saying, “People, wake up!” It’s a tremendous effort to wake up. Shibboleths, old concepts, cuddly ideas, and past priorities fall. You lose the things that used to orient you to the life around you. And that’s part of becoming more alive. That’s also a part of economic growth — and it’s essential for it.

Paul, I’ve been very surprised to find us on this subject. I admit that when I read your book, I thought it was, in a way, subversive. But I thought you were secretly trying to spread environmental ideas through economic analysis: “You’ll lose money if you waste resources. Good ecology is now good economics.” 

You saw that there, but I kept my ecological metaphors in the book to a bare minimum. I was fastidious in avoiding all buzz words in The Next Economy. I didn’t use borrowed language.

Well, you have to admit that sounds subversive. 

Absolutely. The book was intended to be totally subversive. It wasn’t written for the counterculture. I wanted it to slip between the membranes into the mainstream.

But just because a book is written for the mainstream doesn’t mean it’s subversive unless it has a subversive purpose. 

It has a subversive purpose.

What’s that? 

To make people think.

Yes … ? 

To give them permission to know that their highest aspirations work.