Biomimicry as a Business Model

Michael Shuman's The Small Mart Revolution is largely a response the dominant economic paradigm of non-place based, big business as the only viable model for doing business in the era of globalization. Shuman calls this model TINA (There Is No Alternative) and pitches the case for a LOIS (Locally Owned Import Substitution) model. Here are some key thoughts that I took from this book:

Not only is it socially and ecologically destructive to support TINA businesses (reason enough for me to support LOIS, but much of the U.S. cares more about the bottom line of profits), it is just factually incorrect that TINAs enjoy competitive advantages because of their size, structure, and ability to search out ever cheaper labor and infrastructure. Every year U.S. taxpayers pay $50 billion in local and state taxes because officials offer subsidies to attract TINAs (Wal-Mart, BMW, Citibank, Whole Foods, Verizon, Home Depot, Boeing, etc.) to set up shop on their communities. This same advantage is not offered to local small businesses because we do not need to entice locally owned businesses to stay local. When TINAs move in, they promise a certain number of jobs, revenue, social contributions, and the beginning of a long lasting relationship with the community. They usually do not fulfill those promises and will move their operations in a matter of years if cheaper opportunities are available elsewhere. This means that the community's investment in tax dollars quickly disappears unless they cough up another impressive subsidy to encourage the TINA not to leave town. In addition, federal business tax code allows businesses to write off the costs of moving and can declare taxes they incur in foreign countries as U.S. tax credits, making the costs of moving completely FREE!

The dominant paradigm justifies TINA social and ecological destruction over the ethical benefits of LOIS by saying that TINAs can offer lower prices, that is the bottom line for Americans. However, as we can see, the price tag is false. The price tag is further falsified when we look comparatively at local wealth creation.

A group of economists from Civic Economists did studies that showed that locally owned businesses have higher economic multipliers than TINAs, meaning they contribute more dollars that cycle within the community and create more jobs that are more permanent. They did a study in Austin, Texas with a Borders and two local bookstores. They found that for every $100 spent at Borders, $13 circulated in the Austin economy, while they local bookstores circulated $45, three times the economic multiplier.

Then there are the societal costs of paying for workers because our leaders set up a system that further increases the price tag of the TINA model. Last post I referenced the stat that taxpayers spend $2.5 billion per year on welfare assistance to Wal-Mart workers alone. Does anyone have stats on the combined welfare bill for workers of McDonald's, ADM, Campbell's and the like? Here is my synthesis: Politcal and business leaders work together to set minimum wage levels. Then large businesses pay their workers low wages and do not provide benefits. The government uses social programs to pay for the basic needs of the wage earners. This means that because wages are set so low that workers do not have access to the basics, everyone has to front the bill for the difference. This seems to me like yet another example of corporations being allowed to shirk responsibilities and putting the actual costs of doing business on the citizens. This takes away my right to support businesses I like and boycott ones I do not like. Whether I like it or not, I have to financially support businesses that have unfair practices with my taxes.

The economic free passes enjoyed by TINAs are allowing these businesses to grow without natural limits. Limitless growth simply does not exist. All growth is within the context of the characteristics of the organism and its environment. Promoting limitless growth may only hurt small local businesses and small community wealth at first, but the TINAs will also start to hurt because only one species is being cared for, not the whole system.

Some trees do grow very tall. Some are short. Trees have different characteristics. These are bold statements. Some companies, because of the characteristics of the products or services they provide, might promote community health and wealth as large companies. I am not sure what might be: telecommunications and electronics, airplanes, power generation, table saws, book publishing? However, most companies do not need to be absolutely enormous, especially food growth and production and construction materials. Starting a descent culture for these two industries would contribute enormously to the health of our communities and the life support systems on this planet.