The Political Economy of Sustainability

Abstract

Sustainability is a “contested” concept introduced at the beginning of the 18th century in German forestry circles concerned about sustainable harvests and rebranded in 1987 as “sustainable development” by the Brundtland Report, which defined it as harmonious economic, social, and ecological development that enhances both current and future potential to meet human needs and aspirations. However, after more than three decades of sustainable development, humanity is on an unsustainable path featuring rampant ecosystem damage, rising social inequality, and harmful cultural homogenization. This paper is a book review of Fred P. Gale’s Political Economy of Sustainability, a book published in 2018 by Edward Elgar Publishers. The book advances the innovative idea that the current lack of progress in implementation of the sustainable development goals is due to the narrow understanding by individuals, firms, states, and political parties of the values underlying sustainability. The book thus starts a much-needed conversation about economic values, a conversation ousted from the neo-classical economics discipline in the late 19th century by the marginalist thinkers who wanted to make it a positive science. The book identifies four elemental economic values—exchange value, labor value, use value, and function value—and argues that basing our socio-economic and political development on only one type of value with the exclusion of the others has led to the current dangerously unsustainable path humankind is on. Achieving sustainability value requires a balanced integration of all four types of values in all deliberations about socio-economic activities. How can this be accomplished? The author proposes a pragmatic solution in the form of a “tetravaluation” process, a dialogue involving multiple value holders able to reflexively negotiate and compromise until the pluralistic sustainability value is discovered and accepted by all the parties. The book challenges the unsustainable functioning of existing economic, political, and cultural institutions and invites a rethinking of their governance, which should deliberately embrace the pluralistic value of sustainability. The tetravaluation process has the potential to generate sustainable choices and inform better policy decisions able to protect at the same time the proponents of exchange value (consumers), the promoters of labor value (workers, producers), the beneficiaries of use value (communities), and the holder of functional values (the environment).

1. Introduction

The book Political Economy of Sustainability [1] is an ambitious and timely project undertaken by a distinguished scholar. Fred P. Gale is an academic with more than 30 years of practical experience, formal research, and personal reflection on the contested concept of “sustainability”. Sustainability is indeed a contested concept. We know more about humanity being on an unsustainable path than how to achieve sustainability. As a concept, it was introduced at the beginning of the 18th century in German forestry circles concerned about sustainable harvests: “it is anything but sensible to cut down more wood in the forest than grows back” [2] (p. 307). The concept has been rebranded in 1987 as “sustainable development” by the Brundtland Report, which defined it as harmonious economic, social, and ecological development that “meets the needs of the present without compromising the ability of future generations to meet their own needs” [3] (s. 2.1).

The main research question of Fred Gale’s book is why, after three decades of sustainable development, “only limited and halting steps are being taken to secure Homo Sapiens a liveable future” [1] (p. ix), one that is free of the unintended negative impacts of the current commercial society: Ecosystem damage, social inequality, and cultural homogenization [1] (p. 3). The author’s answer lies in the deficient way of articulating the meaning of sustainable development from within a received political economic paradigm that promotes a monistic concept of economic value and ignores the multiple values underlying sustainability. In the author’s opinion, “What is required is a new political economy of sustainability that does justice to sustainability’s own unique, emergent, pluralistic conception of economic value and wealth” [1] (p. 4), one that is able to “foster the emergence of this post-monistic value economy by clearly articulating the nature of the new economic objective (optimization across sustainability value’s four component values) and the means by which it is to be achieved” [1] (pp. 8–9). In order to tackle these broad goals, the author sets out to reconceptualize the nature of political economy from a sustainability perspective, by thoroughly investigating a series of contested concepts, such as economic value, development, sustainable development, etc. He then proposes a pluralistic conception of sustainability value, which embraces four different aspects of something’s usefulness, noting that it could only be known a posteriori through a process of reflexive and deliberative discovery and pragmatic negotiation, a process which the author calls tetravaluation. Finally, the author explores various existing development measurement tools in order to see whether any are adequate for measuring sustainability value, and discusses how we can govern and manage to create sustainability value in businesses, government organizations, and individuals. He also proposes some changes to cultural institutions (educational, media, etc.), which, in his opinion, can foster the greater reflexivity required to secure implementation of sustainability value.

The book’s nine chapters start with, following the introduction, a historical account of the various concepts of economic value in classical political economy, neo-classical economics, as well as in Marxist and nationalist political economy (Chapter 2). The concept of value in environmental thought is discussed in Chapter 3. Chapter 4 is a review of the concept of sustainable development and an articulation of the concept of sustainability value, and of ways in which it could be legitimately brokered through a process of negotiation across the four value components. Chapter 5 critically examines various metrics of “growth”, “environmental performance”, “progress”, and “sustainable development” and wisely concludes that none of the existing metrics are adequate to measure sustainability value, as it, being an emerging property of a value-discovery tetravaluation process, resists an overall management-by-metric rationale. Chapters 6, 7, and 8 investigate ways of implementing sustainability value in the governance of corporations and supply chains, in polities and intergovernmental organizations, and in individual preferences and behavior formation. Chapter 9 concludes and outlines the good governance criteria for a legitimate tetravaluation process, also touching on the issue of balancing power among the actors involved in the deliberative dialogue aiming to reach sustainability value.

2. Investigation of a Series of Contested Concepts

Building on Gallie’s 1955 theory of “essentially contested concepts” [4], the author investigates a series of concepts that are relevant for his purposes: Economic value, development, sustainable development, sustainability, and political economy. By their nature, these are “contested” concepts, because “while agreement can be reached regarding [their] high-level meaning, a large number of competing, lower-level interpretations are nonetheless possible” [1] (p. 80). The five conditions that set apart “contested concepts” are: [being] “appraisive, signifying some kind of achievement; internally complex rather than simple; require an ordering of their internal components; subject to reinterpretation in changing contexts; and finally, are defended by groups aware of the existence of competing conceptions” [1] (p. 80).

2.1. Economic Value

The discussion of “economic value” in political economic thought is particularly meaningful for today’s readers, given that most mainstream economics textbooks relegate the topic of “values” to a paragraph or two referring to normative economics and value judgements. For classical economists, identifying the activities that created value was important for understanding the nature and causes of the “wealth of nations” [5]. Adam Smith, and other classical liberal economists after him, defined “wealth” in materialistic terms, as the society’s capacity to produce “the necessities and conveniences of life” [1] (p. 22). Classical economists also considered that the market was the “wellspring” of wealth, based on humans’ “natural propensity to truck, barter and exchange some goods for others” [1] (p. 22) and on the “rise of the factory system, which, by enabling specialization and the division of labour, significantly increased productivity” [1] (p. 22). The exchange value generated by trade was expressed as the “natural price”, which resulted from the relative labor required to produce the exchanged goods, and which could be measured by adding up the separate components that contributed to that good’s production: Workers’ wages, landlords’ rent, and manufacturers’ profits. The value of a good was also its value to those who possessed it and who were willing to exchange it for some new goods or services. In the second half of the 19th century, when political economy was reframed as a positive science and became known as neo-classical economics, a thing’s value was “the contribution it made at the margin to enhancing individual pleasure and diminishing pain” [1] (p. 25). This was the marginalist economists’ contribution to refining the concept of exchange value, as they introduced the “axiomatic, behaviourist assumption that humans have exogenously given preferences that are revealed in the act of purchasing“ [1] (p. 26). Exchange value is, to this day, the key metric for assessing whether development, as expressed in GDP growth, is occurring or not in most nations, as the whole “world is enmeshed in the factory system…and virtually everyone’s livelihood [is] directly dependent on the market” [1] (p. 218).

Socialism’s conception of economic value, developed by K. Marx based on D. Ricardo’s labor theory of value, is called labor value. It assumes that value is created through the labor process, and goods and services’ value/price is objectively given by the amount of socially necessary labor time required to make them. Economic nationalism and communitarianism prioritize a thing’s direct use value to the state or to the group in order to guide the development process, like, for instance, in Friedrich List’s 1841 National Systems of Political Economy book [6], where use value aims to promote the realization of a state’s productive powers.

The fourth type of economic value, ecological function value, is identified in Chapter 3, which explores the works of environmentalists, ecological economists, and political ecologists. This is a rich literature overview, covering several common themes about humans’ relationship with nature, such as the impact of population growth and affluence, resource constraints, conservation or preservation, ecosystem connectedness, and damaging technology, but also philosophical debates over whether the value of nature is objective or subjective, intrinsic or extrinsic, or deontological or instrumental. The author critically discusses all these frameworks ranging from “the conservatism of Malthus, to the transcendentalism of Thoreau and Muir, the scientism of Pinchot, Carson, the Ehrlichs and Commoner and the systems thinking of Georgescu-Roegen, Club of Rome and H. Daly” [1] (p. 58). Among all these positions, he seems to favor a systemic account of value, inspired by the Limits to Growth report [7], which implies that “what is valuable relates to the larger system within which humans live and that its long-term preservation requires self-restraint in terms of human numbers and artefacts” [1] (p. 57). The author also discusses H. Daly’s proposal to replace the current model of economic development based on “growthmania” with an alternative model of a steady state economy [8], which is “no longer growing, although it may be developing”…by “undergoing only ‘qualitative change’—improvements in ‘culture, genetic inheritance, knowledge, goodness, ethical codes, and so forth embodied in human beings” [1] (p. 57). To remain within political economy’s materialist and consequentialist tradition, the author chooses a concept of ecological value called function value. According to this concept, “a thing is to be valued for the function it plays in a wider, interconnected, complex, chaotic natural system that maintains itself in an ever-shifting dynamic equilibrium in the face of external perturbations” [1] (p. 61). He explains his choice by stating: “The concept of value underpinning environmental thought of relevance to a political economy, concerned as it is with the impact of consumption along extraction-disposal chains, derives from the embeddedness of a thing in a natural system of things—from its relationship to those other things and the function it performs within the system of things” [1] (p. 61).

This incursion into the political economy and environmental thought literature on economic value reveals the disconnect between proponents of these four distinct conceptions of economic value. While they all define value as a good’s or service’s usefulness, they part ways when they insist on the pure application and maximization of just one form of economic value, be it exchange, use, labor, or function value. The author considers that this disconnect or lack of widespread negotiated cross-value balancing among the four core economic values “explains why, despite the outpouring of enthusiasm following the 1992 Earth Summit in Rio de Janeiro, little progress has been made in delivering sustainable development” [1] (p. 221).

2.2. Development

Dubbed as “progress”, “growth”, or “improvement”, development in the post-war era has meant a linkage between an increasing volume of goods and services produced/exchanged and an expansion in societal “welfare”, “well-being”, and “happiness”. A discipline-wide consensus has prevailed among economists that development so defined was political economy’s fundamental objective [1] (p. 18). However, “development” is a contested concept due to the different conceptions of the nature of economic value underlying the developmental objective. “When deployed within a liberal framework, development means prioritizing ‘exchange value’, within an economic nationalist framework, national ‘use value’, and within a socialist framework, ‘labour value’” [1] (p. 37). Indeed, what liberals, for instance, “meant by development was the establishment of the political and economic conditions for relatively freely functioning markets to enable the increased production consequent on the specialization and division of labor to be traded” [1] (p. 26). As a consequence, “traditional political, economic, and cultural arrangements geared towards a generalized form of subsistence production and not exchange value, are considered barriers to ‘development’ “[1] (p. 26) and not encouraged in a free-market economic system. Why is this monistic conception of economic value, which underlies socio-economic development, not appropriate for sustainability value? The author considers that the segregation of economic values leads to a type of development that involves the discrete realization of the usefulness of things for their exchange value or use value or labor value [1] (p. 39). This segregation also shapes fragmented institutional arrangements required to achieve development: A ‘nightwatchman state’ [1] (p. 68) for economic liberals, which will secure legally enforceable rights to private property, access to extensive domestic and international markets, free trade and investment agreements, and low tax and spending regimes [1] (p. 37); “a strong state with well-developed strategic planning capacity that deploys its national resources of raw materials, capital, labor and know-how to achieve rapid industrialization” [1] (p. 37), for economic nationalists; and strong state institutions that socialize (in whole or in part) the means of production, and can “play a key, socially progressive role in ensuring that workers….obtain their share of the total economic surplus” [1] (p. 37), for Marxists. I completely agree with the author that the focus of existing liberal democracies on exchange value has produced the current ills of the consumer society, which exacerbates consumers’ preferences for unlimited consumption and emboldens producers to aim for unchecked economic growth while paying lip service to the workers’ pleas for fair compensation, and to communities’ expectations that their right to decent existence be safeguarded.

2.3. Sustainable Development

Sustainable development has proven to be a contested concept since its conception and subsequent evolution (1972–1992) in international conferences. In 1999, a consensus was reached that sustainable development “is a pluralistic concept that identifies the need to balance economic, social and environmental concerns in the making of public and private consumption decisions affecting extraction-disposal chains” [1] (p. 88). The concept continues to be highly contested in how its meaning is interpreted in practice. To make his point, the author succinctly presents four different analyses of the sustainable development (SD) concept and the policy prescriptions for achieving it. In 1996, Dobson [9] conceived SD as an inherently anthropocentric concept that ranged narrowly between market and equity-based approaches and “does not encompass radical preservationist or deep ecology conceptions of what is to be sustained” [1] (p. 81). For the market-based approach, the objective is to sustain the total capital stock needed to enhance human welfare by primarily meeting the needs and wants of present generations, based on the considerable substitutability of natural capital for human-made capital [10]. For Dobson, SD means basically sustainable resource use, and the policy prescriptions he recommends for achieving sustainable resource use are secure private property rights, pricing nature, and promoting free trade. When the SD concept focuses on the equity-based approach, the importance of sustaining “critical natural capital” to secure human welfare is accepted, inter and intra-generational welfare is prioritized, and substitutability between critical natural capital and human-made capital becomes unacceptable. Some possible solutions for promoting this approach are, in Dobson’s view, a focus on economic equity, women’s rights, political empowerment, protectionism, and appropriate technology.

Jacobs (1999) [11] identified six features of sustainable development: Environment–economy integration, futurity, environmental protection, equity, quality of life, and participation. In his view, possible solutions for achieving sustainable development are government action aiming to implement the concept; contribution of civil society and media to identifying gaps between rhetoric and action; and a degree of institutional learning, as agencies reflect on what needs to be achieved or improved. The author proposes two conceptions of SD: A mainstream one and a radical one. The mainstream approach includes: Weak and strong environmental protection linked to wise-use conservatism and to limits to growth environmentalism, respectively; promoting equity between the global North and South countries; stakeholder participation; and a specific scope of the subject area: In the North, sustainability means solving environmental problems while in the South, sustainability means approaching wider social life issues. Jacobs’s radical approach sees SD as a potential vehicle for realizing a green social democratic vision [1] (p. 82). This approach identified market forces as the key drivers of environmental unsustainability and the solution proposed was economic planning through government intervention in the economy at a variety of levels, in addition to increased stakeholder democracy.

In 2005, Hopwood et al. [12] used a two-dimensional map depicting the degree to which sustainable development is conceptualized as a vehicle for increasing equality (the y variable) and increasing environmental protection (the x variable). The map displays three gradual options for the two variables: Status quo, reform, and transformation, all of which can be used to distinguish between a large number of theoretical positions on sustainable development by neo-liberal economists, ecological modernizers, eco-fascists, social ecologists, socialist cornucopians, and eco-socialists.

The fourth study that the author has reviewed is Connelly’s 2007 article Mapping sustainable development as a contested concept [13]. This study used a planner’s triangle as a heuristic device to depict the total universe of positions theoretically possible with regard to the sustainable development concept’s economic, environmental, and social dimensions. The triangle identified in the three vertices the main focuses of the three dimensions of the SD concept: “economic growth” for the economic dimension, “environmental protection” for the environmental dimension, and “social justice” for the social dimension. The triangle also depicted the weak–strong sustainability axis, starting from the economic vertex, and identified the space of the contested concept of sustainable development “in an indeterminate region towards the center of the triangle” [1] (p. 84). This triangle has inspired the author to develop the pluralistic concept of sustainability value. He expanded it by trying to explain how sustainability value can be achieved in different contexts, through “some form of cross-value discovery process” [1] (p. 86).

2.4. Sustainability

Another contested concept is “sustainability”. This concept is not defined as such in the book, as the author states from the beginning that he uses the terms “sustainable development” and “sustainability” synonymously to identify a specific locus of value [1] (p. 15). However, he identifies one of the important characteristics of “sustainability”, the fact that it “requires collaborative forms of multi-stakeholder governance and management to broker compromises across entrenched differences in interests” [1] (p. ix). He also develops the concept of “sustainability value”, which he defines as “an emergent property from duly-constituted cross-value managerial and governance value-discovery processes” characterized by “contingency rather than finality” [1] (p. 8). He also hints to the specific nature of sustainability, which is more complex than sustainable development, when he states that sustainability is underlined by an “alternative, pluralistic, post-humanistic conception of economic value that is better adapted to sustainability’s multifaceted requirements” [1] (p. 88).

2.5. Political Economy

The author uses the term “political economy” in the book’s title to convey the idea of the rich, interdisciplinary nature of political economy, “a field of inquiry that should be concerned with the totality of the impacts of the production and consumption of goods and services along ever-lengthening and more complex extraction-disposal chains” [1] (p. 44). This richness of the “political economy” concept has been lost in modern “economics”, one of the three legacies of the school of marginalist thinking, “the narrowing of the discipline of political economy from one concerned with the broad, multifaceted nature and sources of “wealth” to a sub-discipline and ‘science which studies human behaviour as a relationship between ends and scarce means which have alternative uses’”, the 1932 Lionel Robbins definition of economics [14]. The author correctly states that building an economy based on sustainability value requires a return to the rich concept of political economy, as a “political economy of sustainability builds on the idea that sustainability is achieved via the aggregation of the decisions of actors in extraction-disposal chains to produce, consume and finance only those goods and services that balance the four usefulnesses that collectively compose sustainability value” [1] (p. 185).

3. Introducing Sustainability Value

In Chapter 4, the author develops the concept of sustainability value starting from Connelly’s 2007 two-dimensional, triangular sustainability heuristic [13]. Sustainability value is illustrated by a three-dimensional tetrahedron, which depicts the four fundamentally different economic value positions that have been adopted with regard to conceptions of a thing’s economic usefulness, based on its direct use value, labor value, exchange value, and function value [1] (p. 86). The sustainability value tetrahedron has four vertices: The economic vertex (exchange value), the environmental vertex (function value), the worker vertex (labor value), and the national vertex (national use value). Both the “worker vertex” and the “national vertex” capture the meaning of the category of the “social” in sustainable development. Additionally, the author identifies two values associated with the concept of “social justice”. The first, promoted by socialism, considers that “social justice consists in validating the socially necessary labour time inherent in all produced things” [1] (p. 86). The second, analyzed by economic nationalists, considers that “social justice consists in ensuring that a state realizes its productive powers by exploiting available use values” [1] (p. 86).

By using a heuristic device (a tetrahedron) and not a mathematical equation to define sustainability value, the author is better able to distinguish between conventional liberal, national, socialist, and ecological monistic accounts of the nature of value, and to promote a “rethinking of how political economy has carved up ‘reality’ to understand it. As a field, political economy remains trapped in nineteenth-century divisions between economic nationalists, liberal cosmopolitans and socialist internationalists. Proponents of each school remain wedded to their own research programme’s ‘hard core’” [1] (p. 87). In the author’s opinion, “sustainable development is not reducible to the maximization of any single value; rather, it requires optimization across all four-value components” [1] (p. 89). The author hopes that the sustainability value tetrahedron, by bringing in the ecocentric conception of value and the need to reflexively consider sustainability under its four dimensional values, has the potential to free partisans from the monistic economic value positions they previously might have held, and to move them to the “value pluralist position located towards the tetrahedron’s center” [1] (p. 88). In order for this to happen, people and groups involved in all activities of extraction-disposal chains must participate in tetravaluation processes aiming to balance, through compromise, the four constitutive dimensions of sustainability value, exchange, use, labor and function. The goal is to arrive at the sustainability value when the “lowest common denominator compromise acceptable to all” has been achieved [1] (p. 221). This is not an easy process. In the author’s opinion, it requires “a high level of individual and social reflexivity, on the one hand, and a willingness to negotiate trade-offs across deeply held value positions, on the other” [1] (p. 221). Besides, the process is “at constant risk of being distorted by social, cognitive and cultural factors that give rise to myside bias, present bias, confirmation bias, and other biases” [1] (p. 221). Tetravaluation processes can be either informal, when decisions involve only individuals and their families, or formal, when decisions affect larger groups from the community upwards. In this latter case, the formal negotiating processes must be “grounded in a set of administrative law and good governance precepts” to give them legitimacy. Later in the book, the author discusses the institutional requirements for the legitimate brokering of sustainability value, including the five conditions of a legitimate tetravaluation process, which needs to be balanced, representative, transparent, knowledge-rich, and accountable [1] (pp. 223–226).

Before embarking on an inquiry into the ways contemporary society manages and governs economic activities with the aim to achieve sustainability value, the author asks whether sustainability value can be measured. His goal is to show that existing metrics of economic performance have a role to play in informing a tetravaluation process of value discovery but cannot substitute it, as “governing and managing for sustainability value is a socio-political not a techno-managerial undertaking” [1] (p. 92). Chapter 5 undertakes a thorough critical analysis of existing metrics that might be useful in measuring sustainability value. They include single index, composite index, dashboard, and survey metrics, currently employed to measure progress towards sustainability in different analytic units: Territories, organizations, and sectors. The author is skeptical about the usefulness of these indicators for measuring sustainability value, as he considers that “all metrics have strengths and weaknesses and that the information they contain will always be partial, partially interpreted and therefore contested” [1] (p. 95).

The metrics’ evaluation starts with the gross domestic product (GDP), an indicator of an economy’s performance, summarizing whether the national economy is growing and development occurring, based on its exchange value [1] (p. 92). The author also considers a variety of adjusted GDP approaches that have been used in the attempted to improve GDP: The index for sustainable economic welfare (ISEW), the genuine progress indicator (GPI), and adjusted net savings (ANS), an indicator of “weak sustainability” based on Solow’s substitutability assumption [10] that “gains made in some forms of capital can be traded off against losses in other forms of capital, so long as the net outcome is positive” [1] (p. 104). Among the ecological single indexes, the author discusses the ecological footprint (EF) and the living planet index (LPI), two indicators assessing sustainability value’s function value, and both critical of GDP. The proponents of EF consider that “developed countries are mostly on an unsustainable trajectory because they are consuming more of the world’s biocapacity than they own” [1] (p. 106), and the proponents of the LPI think that “solutions require ‘a new economic system that enhances and supports the natural capital on which it relies’, where business is ‘repurposed’ to be accountable for social and environmental benefits and where people ‘reduce the emphasis on material wealth, confront consumerism and the throw-away culture and promote the desirability of more sustainable diets” [1] (p. 108).

The author also reviews three composite indices, the human development index (HDI), the environmental performance index (EPI), and the better life index (BLI) and concludes that “the BLI emerges as the most promising, from a political economy of sustainability perspective. Unlike the HDI and the EPI, the BLI contains a broader range of indicators, many of which are mappable into sustainability value’s four component values” [1] (p. 120). However, the BLI cannot be used for measuring sustainability value, as it “contained no mechanism for linking concerns over different types of capital depletion with objective and subjective measures of individual welfare” [1] (pp. 132–133). The two dashboard indicators assessed, the Organization for Economic Co-operation and Development’s (OECD) green growth indicators (GGIs) and United Nation’s (UN) sustainable development goals (SDGs), while potentially useful for developing an index of sustainability value, are regarded with skepticism by the author for the way they have been weighted: “the GGIs emphasizing exchange value, and the SDGs downplaying it in favor of use value” [1] (p. 133). Finally, the World Happiness Report (WHR), a survey-based indicator built on the subjective well-being model, “provides significant resources to shift the focus on exchange value back to national use value, community value and labour value” [1] (p. 131). However, the author recommends caution in its use due to its subjectivity and extremely limited capacity to grasp function value [1] (p. 133), as demonstrated by a study on the evolution of happiness in China, where it was assessed that life satisfaction had also risen, rather than fallen, with an increase in coal consumption after 2005 [1] (pp. 131–132).

The chapter concludes with an invitation to those metrically minded to take the opportunity to develop measures for the new concept of sustainability value, and recommends that they keep in mind Munda’s 2005 [15] warning that “a sustainability policy exercise implies difficult decisions such as the choice of indicators, their policy prioritization and the choice of ideal values“ [1] (p. 133).

4. Governing for Sustainability Value

An important premise of this book is that in order to achieve the goal of sustainability, a much larger proportion of the world’s population than currently must be convinced that an economic valuation problem exists, and that all actors involved in the modern market system, producers and consumers alike, must participate in tetravaluation processes. In the author’s words: “all activities implicated in extraction-disposal chains must be governed to ensure the balancing of exchange, use, labour, and function values” [1] (p. 221), a process that needs to be supported by appropriately structured new national and international governance arrangements [1] (p. 180). The aim of Chapter 6, Governing business for sustainability value, is to discuss the implications of implementing the new concept of sustainability value for societal wealth and its associated governing institutions, as well as to test the feasibility of the new concept in a practical sense, by illustrating how sustainability value is already being partially realized within some extraction-disposal supply chains and corporations.

The chapter starts with a compelling overview of the evolution of the understandings of the term ‘governing’ over the past 30 years in national and global economies. The main benchmarks the author discusses are: The rise of the concept of “governance” in the 1980s, as a result of the disconnect between the structures of modern governments with their objectives to only “manage discrete aspects of a seamless socio-natural reality” and which “usually fail to achieve the high degree of policy integration and coherence that sustainable development demands” [1] (p. 138); the rich literature on the “new governance”, a concept adopting either a ‘state-centric approach’ (“government by different means”) or ‘society-centric approaches’ which “treat governance as qualitatively different from government and as occurring ‘beyond government’ ” [1] (p. 139); the rise of neo-liberalism in the late 1970s with agendas to limit government via a range of strategies of ‘downsizing’, ‘privatizing’, ‘corporatizing’, and ‘contracting out’ many of the government’s functions to the private sector and not-for-profit companies [1] (p. 139); the ‘dramatic’ boost in the process of globalization produced by the diffusion of neoliberalism around the world; the rise of the multinational corporations (MNCs) in the second half of the 20th century, and their ability to “exercise enormous market and political power”, and “dominate global production” and “be key actors in most extraction-disposal supply chains” [1] (p. 139); the rapid spread of the quality assurance standards issued by the International Organization for Standardization (ISO 9000) in the 1980s; the embrace by MNCs of corporate social responsibility (CSR) mechanisms or various certification schemes; the embrace by businesses of multi-stakeholder governance, which, at the domestic level, can include community-level social enterprises managing forests, fisheries, or watersheds; engaging in participatory budgeting and planning of municipal expenditures and priorities; or launching of national roundtables and consultative fora. At the international level, multi-stakeholder governance occurs in government–business–civil society partnerships aiming to secure greater transparency in natural resource management, to introduce standards for investment in developing countries, or to encourage triple-bottom line reporting, or the establishment of labeling and certification schemes. This overview clearly shows the devolution in the last three decades of governing power from the public sector to private actors. The main consequence of this shift is that the state is less plausible to play a leading role in delivering sustainable development and “the evidence shows that so far it has failed to do so” [1] (p. 10).

4.1. Governing Business for Sustainability

The next question the author asks is “If multi-stakeholder governance is the answer to the question of how to secure greater policy coherence across the economic, environmental and social dimensions of sustainable development”, then “why does the evidence suggest that progress towards sustainability is stalling and going backwards?” [1] (p. 141). He finds an explanation in the absence of clear guidelines on how to better integrate multi-stakeholder interests in decision-making, such as “which actors to include, when to include them, and what decision-making processes to employ” [1] (p. 141). He believes that multi-stakeholder governance, by reaching out and including more actors in decision-making, has the potential to realize sustainability value, but he recommends moving beyond multi-stakeholder governance to processes of tetravaluation in which “production of economic value is a discovery process that involves continuously balancing sustainability value’s four components” [1] (p. 142). This involves carefully identifying stakeholders representing the four components of sustainability value; empowering them to have a genuine influence over the outcomes by organizing multi-stakeholder governance towards the top of Arnstein’s ladder of participation [16], where stakeholders can exert “citizen power”; using a partnership model of decision-making that ensures “that the assembled stakeholders have a strong claim to speak on behalf of the constituency they claim to represent” [1] (p. 145); and establishing new rules regarding decision-making, beyond simple majority voting, which do not generate inequality or “disempower minorities and hinder the deliberation required to generate more inclusive, creative compromises” [1] (p. 146).

The chapter draws on scattered examples from supply chains in key commodity sectors (forestry, fishery, agricultural products, and minerals) and from various forms of corporations where processes of tetravaluation are emerging. “Although extraction-disposal chains remain dominated by a logic of exchange value maximization, within their interstices are found parallel production systems that also ‘deliver the goods’ without externalizing as much of the cost onto communities, workers, the marginalized and nature” [1] (p. 8).

The author uses as an example of supply-chain tetravaluation, the process that produced the gold standard in the forestry sector, the Forest Stewardship Council (FSC) certificate. “The FSC’s standard encompasses a set of eco-social forestry norms that express concern for labour, community and indigenous peoples’ rights and forest ecosystem integrity” [1] (p. 148). FSC was established in 1993 in Toronto, Canada, and certifies today almost 200 million hectares of forests, mainly in North America, Europe, and Russia. The FSC has a unique tripartite membership structure that divides membership into three chambers representing economic, social, and environmental values, with each chamber further divided into members representing the global North and South. Interests promoting exchange value in the economic chamber are balanced by interests representing a diversity of use and labor values in the social chamber (composed of labor unions, community organizations, and indigenous peoples organizations) and by interests representing function value in the environmental chamber (composed of large and small, institutionalized and grassroots environmental organizations) [1] (p. 147). The FSC also has a balanced board structure of 12 directors, four for each chamber, split between the global North and South [1] (p. 147).

As for corporations, the author considers that they currently are poorly structured in order to realize sustainable economic value due to their institutional form and purpose, which prioritizes the realization of exchange value over sustainability value’s other component elements [1] (p.11). However, the author identifies efforts to meet the definitional requirements of sustainability value in some past and emerging corporate forms, such as community corporations, social enterprises, cooperatives, and beneficial corporations (B Corps). The search for new corporate business models has been prompted by the “now widespread recognition in the academic and practitioner literature of the need for corporations to adopt a beyond-profit conception of value and, somehow, deliver broad economic value” [1] (p. 154). A rich literature now exists in the fields of business ethics, corporate social responsibility (CSR), and supply-side management, which examines mechanisms available to corporations to deliver societal benefits beyond profits to shareholders. Such mechanisms include revised laws of incorporation, restructured corporate boards, realigned managerial incentives, and a range of managerial tools [1] (p. 150). The author refers to the positive “turn” of entrepreneurs to social enterprise, whose broad aim is “to produce the needed goods and services at a price that covers the cost of production while ensuring no harm is inflicted on community and nature” [1] (p. 150). He gives some examples of successful social enterprises, such as the Tennessee Valley Authority (TVA) established in 1933 and still in operation. Financially independent, TVA earns money from the sale of electricity, which it reinvests in the Tennessee Valley region to foster social and economic development. Another example of government–business enterprise with a public purpose that the author cites is the UK British Broadcasting Corporation (BBC), whose broad purpose is “to inform, educate and entertain”. The author also discusses the “B Corp” movement that started in 2006 with the goal of setting up certified beneficial corporations, as “companies that demonstrably have a beyond-profit business ethos and are ‘doing well by doing good’” [1] (p.151). Today, there are more than 1800 companies in the B Corp database. “The B Corp movement has clearly grasped the key principle underlying sustainability value: that exchange value (customers) is only one component of value that also includes labour value (workers), function value (environment) and use value (community). Decisions have to be made on how these values are to be traded against each other” [1] (p. 155).

4.2. Governing the Polity for Sustainability

In Chapter 7, Governing the polity for sustainability value, the author investigates whether the structure and mode of operation of Western politics are appropriate for delivering or supporting the delivery of sustainability value. His answer is that existing governing arrangements in developed countries are largely not delivering sustainability value [1] (p. 180), mostly due to the party-political systems of government in which “competitive elections put the state temporarily in the hands of a political party that prioritizes a subset of sustainability value’s four component values to the detriment of the others” [1] (p. 10). Such systems “do little to prevent powerful actors from exerting undue influence on people’s political and economic preferences” and are prone to foster inter-value competition between business, community, labor, and environmental groups, “instead of bringing actors together in a deliberative negotiation to directly ascertain the nature of sustainability value in a specific decision-making context” [1] (p. 11). The author also mentions that such a system “has a built-in bias towards unsustainability as manifested in a virtually unchallenged and unchallengeable logic of ever-expanding consumption” [1] (p. 11).

The chapter does, however, identify two existing governance systems with potential to promote tetravaluation processes, one at the national level and another one at the international level. At the national level, the open corporatist political systems of North European countries, Norway, Sweden, Denmark, the Netherlands, and Germany, have the best empirical record for fostering multiparty coalitions, as they “have learned to broker cross-value deals involving exchange, use and labor value and, in the post-UNCED era, a degree of function value” [1] (p. 170). At the global level, the International Labour Organization (ILO), the only tripartite UN agency, which, since 1919, brings together governments, employers, and workers to negotiate labor standards and develop policies and programs promoting decent work for all women and men, “offers promise” [1] (p. 160) from a political economy of sustainability perspective. The author considers that “suitably reformed”, both the open corporatist political system and the ILO “could make major contributions to the realization of sustainability value domestically and internationally” [1] (p. 180).

4.3. Governing Individuals’ Preferences for Sustainability

Chapter 8 extends the governance for sustainability challenge to each individual in the civil society. The chapter analyzes “the role that individual and group preferences play in discriminating between and purchasing only those products that realize sustainability value” [1] (p. 185), based on the author’s previously expressed belief that a new category of consumers is emerging, the “consumer-citizens”, who “have the potential to motivate more integrated and sustainable production practices” [1] (p. 9). The chapter starts by debunking a long-held assumption in economics that homo economicus is a rational utility maximizing individual able to make perfect choices based on income, goods’ prices, and preferences. The author cites recent studies in behavioral economics, biology, psychology, sociology, and cultural research, which reveal a much more complex picture about human nature and preference formation. These studies show that an “individual’s preferences are often non-reflexive and form only in the act of making a decision; and that they are not necessarily rationally-ordered, may be lexically structured, may differ from meta-preferences, occur under conditions of bounded rationality, and may be ‘nudged’ by biological, cognitive, sociological, media and advertising factors outside of conscious perception” [1] (pp. 9–10). Most of the time, individuals engage in a default behavior based on the fast-and-frugal, system 1, autonomous thinking [17], grounded in social upbringing, cognitive beliefs, and cultural embeddedness, while a deliberate choice for sustainability value implies a “new tetranormalized behavioural repertoire derived from slow-and-deliberative, system 2, reflexive thought that often challenges what an individual believes to be the case” [1] (p. xii). The author notes that increasingly “consumer-citizens” display this type of reflexive thinking when they “no longer purchase goods based solely on price, quality and availability but are also concerned to ensure that products and process and production methods meet a broader set of requirements and ‘do no harm’ to nature, workers and communities” [1] (p. 9). What accounts for this more reflexive behavior? The author mentions “the important role played by underlying personal values and the political, economic, social and cultural institutions that shape the length and content of individual preference schedules. There is, moreover, no way out of the hermeneutic circle of value that individuals are seized of and have an elective affinity for…” [1] (p. 229). This is a welcome attempt by the author to extend the concept of value that individuals hold beyond the utilitarian economic value discussed throughout the book. An individual inclined toward sustainable choices might be so because he/she thinks that this is the right thing to do. Among the institutions that can contribute to increasing the reflexive behavior necessary for an informed participation in a sustainability tetravaluation process the author discusses higher education. The formal commitment of higher education to embrace sustainable development started in 1990 when several universities signed the Talloires declaration, a 10-point action plan for incorporating sustainability and environmental literacy in teaching, research, operations, and outreach at colleges and universities. However, the author notes that the 30-year record of higher education’s engagement with sustainability (including the UN Decade on Education for Sustainable Development, 2005–2014) has been “disappointing”, as “most institutions maintain an ‘instrumental’ approach to sustainability and focus on ‘system-determined problems’” [1] (p. 210). I completely agree with the author’s view that in higher education institutions, which “are so poorly designed to realize sustainability value” [1] (p. 212), “the necessary, wider structural transformation has yet to occur” [1] (p. 210). Among the reasons for the dismal performance of universities in promoting sustainability value, the author cites the poor design of the concept of higher education for sustainability, which has been ‘tamed’ to fit a ‘business as usual’ approach; new public management-type reforms, which have introduced an ethos of ‘academic capitalism’; and a shift in the university governance towards ‘strong’ presidents, rectors, and vice-chancellors presiding over smaller business-dominated governing boards “who manage through an appointed executive staff an increasingly alienated and time-poor faculty, subject to a range of internal and external teaching, research and impact metrics” [1] (p. 211). Another more general reason is the failure of higher education to promote critical reflexivity concerning all knowledge claims, by generating and disseminating perspectives, which, from a perspectivist conception of science, constitute “imperfect mindware”. Such is the case of the discipline of neoclassical economics, which, starting in the 1970s, has encouraged millions of academics and students to “interpret a thing’s usefulness exclusively from an exchange value standpoint”, making them unable to perceive any values beyond exchange value [1] (p. 212).

5. Discussion

The book is well referenced, with a bibliography of more than 600 titles, not counting titles quoted in the very ample notes section at the end of each chapter where the author, true to his belief that knowledge is always partial and incomplete, reaches out across disciplinary boundaries in search for alternative explanations and insights. Reading the endnotes is as rewarding as reading the book itself.

The Political Economy of Sustainability is a challenging book inviting the reader to introspection about the economic values that underlie our unsustainable choices and shape the existing economic, political, social, and cultural institutions, which have mostly failed to steer societies onto a sustainable path. The author is to be commended for starting this values clarification discussion, which is essential, not only academically but also pragmatically, for finding a cure to the humanity’s current unsustainable ways. He has correctly identified four different types of economic values that guide people’s value judgements about the usefulness of the things they need in their lives and in the productive processes, as exchange, labor, use, and function values. He has also developed a plausible explanation of the failure of the existing competing liberal, socialist, nationalist, or political ecology frameworks to produce, on their own, the “process of change” envisioned by the 1987 WCED report on sustainable development: Each of these political economies monistically embraces one form of economic value and denies all other forms, while achieving ecological, social, and economic sustainability requires the concurrent embrace of all forms of value. Can we ever hope to achieve the global consensus needed for the large-scale implementation of the lofty goals of sustainability, that ”state of collective grace” [18] that will allow humanity to continue enjoying life on this marvelous planet for many more generations to come? What needs to happen for the currently fragmented sustainability movement to become mainstream and involve corporations, political, and social institutions, and individuals, as both producers and consumers, in new social practices that fundamentally redefine our relationship with the environment and with each other? How can we get the critical mass of sustainability inclined people, who are potentially able to shape new social and ecological priorities and create the conditions for their implementation? These are deep questions that surface throughout the book, and require urgent responses. The author is aware that technical or administrative actions are not sufficient for bringing about sustainable outcomes, and that new institutions and governance structures are needed to help people, as active agents of change, make radically new economic choices. He proposes a new governance arrangement in the form of a reflexive deliberative values balancing dialogue aiming to lead to discovery of the sustainability value, in particular contexts, as a negotiated compromise among all the divergent forms of values held by participants. By proposing to bring at the negotiating table, on an equal footing, the holders of divergent economic values, the author assumes that they possess high individual and social reflexivity and are open to sacrificing part of their deeply cherished particular values [1] (p. 221) for the sake of achieving the higher value of sustainability. I find the idea of mandatory tetravaluation processes in all private and public activities carried on in extraction-disposal chains, which the author advocates for, both appealing and feasible. It is appealing for its potential to define sustainability value as an objective value, discovered or co-created by many dialogue partners, a meta-value that is above all other particular values, as it expresses the permanent and aggregated values of the community and of nature, in which the community is embedded. It is feasible, as I have seen sustainable solutions being reached through a type of tetravaluation dialogue in a small-scale fishing community in Tárcoles, Costa Rica [19], a dialogue that has led to both thriving fish stocks and happy fishing people. I highly recommend this book to policy decision-makers, to political economists of all stripes, to researchers and students interested in sustainability and governance, and to all those who care about our sustainable future.