Socially and environmentally responsible investing, consuming and business practices represent a major paradigm shift in the way we think about and react to the world of work and the economy. In his path-breaking study, The Structure of Scientific Revolutions (University of Chicago Press, 1970), Thomas Kuhn explored the historic evolution of major scientific paradigms --- world views that tell scientists what to look for and how to look. Einstein's theory of relativity and Keynesian economics are examples of scientific paradigms. Without paradigms, scientists couldn't conduct their studies, but the catch is that paradigms also tell scientists what they should find. Thus, much of science consists of filling in the holes in existing paradigms, not creating new ways of viewing the world. As a matter of fact, challenges to existing paradigms are not accepted graciously.

No matter what the science, the real world always creates things that seem not to work the way they should according to the existing paradigm. The challenge to scientists is to deal with these anomalies. For example, as the accompanying graphic illustrates, economic excesses in a capitalist economy appear to challenge the Wall Street belief that the only business of business is to make as much money as possible and not deal with social issues:

When anomalies are discovered, scientists either dismiss them as unimportant, label (libel?) the supporters of anomalies that might call for new paradigms as frauds or charlatans, or squeeze the anomalies back into the prevailing paradigm:

Thus, much scientific work is not ground-breaking or the creation of new knowledge. Defenders of prevailing paradigms have their scientific prestige, reputations, and futures on the line. The fights over alternative world views can be fierce and nasty. Therefore, it is not surprising that proponents of SRI and SRC have been roundly condemned by the traditional business and economics communities.

The traditional economic and business paradigm argues that there are three types of capital --- land, labor, and manufactured (buildings, machines, technologies, tools, etc.). All of these are bought, manipulated, and/or sold to create work which, in turn, produces goods and services. As these goods and services are consumed, profits are reinvested in capital to create more and better goods and services, which results in progress and an improved standard of living:

What this traditional paradigm overlooks is that more is not necessarily better. Increased production can reduce worker satisfaction and performance and seriously deplete environmental resources. Increased production and consumption can negatively impact organizational and social life through mounting consumer debt, workplace intrusion on family life, and the like.

The newly emerging "Green Economics" paradigm begins by reconceptualizing capital. Manufactured capital remains, but land now becomes ecological capital, which consists of land, plus air, water, plants and animals. Labor is replaced by the concept of human capital, which consists of the health, knowledge, skills and motivation of all people including employees. Equally important is a fourth social/organizational capital, consisting of families, communities, trade unions, interpersonal relations and the like:

This capital results in work to produce goods and services for consumption. But, unlike the traditional paradigm, the new paradigm recognizes that both work and consumption has costs in term of waste, environmental degradation, and the creation of social problems. Therefore, investment in the four types of capital must be directed toward the resolution and amelioration of these problems.

There is another important way in which the new paradigm conceives of the economy compared to the traditional paradigm. The latter essentially deals with the recognized economy, which is monetized in the sense that it is officially measured and tracked. This is the "private" sector (which is not so "private" because it consists of production, employment, investment and consumption that involves and effects all of us), the public sector, and the "illegal" economy of tax dodges, hidden wages, economic scams, and the like.

However, the new paradigm also includes two equally important aspects of the unrecognized and largely unmeasured economy. The environment is all natural resources that can only absorb the costs of exploitation if tolerance and sustainability levels are not exceeded. The social economy includes all those things that are rarely seen as work --- do-it-yourself, bartering, unpaid home work, voluntary action, and subsistence living --- without which no society could profitably survive.

Finally, the popular view of who has power in a political democracy and a capitalist economy is an elite of the top leaders in politics, business, and the like. The rest of us are rank and file "followers". Indeed, most of us look to leadership to solve social and economic problems and feel that we are relatively powerless to do what is necessary.



This view is seriously flawed in several ways. First, in a political democracy and a capitalist economy real power resides in the voters and consumers. In other words, power resides in those who control politics and the economy. President Richard Nixon resigned, not because of anything that happened at the pinnacle of the political power structure, but rather because impeachment bills were sweeping through state legislatures, backed by the average voter. In the economy, those who have purchasing and investing power control what happens.



Second, every major, important social movement in U.S. history has come from the bottom up, not the top down. The most recent example was the Civil Rights Movement. It was the Rev. Martin Luther King and his demonstrators in the U.S. South that caught the attention of the White House, not the other way around. The Democratic White House had been reluctant to raise civil rights issues because of the power of the Southern Democrats in the party.

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