I took a break traveling to the Midwest and East Coast of the United States visiting family and friends the last few weeks, but am back now. Today I continue my inquiry into the ‘circular economy’ by exploring its history. While it is often portrayed as a recent phenomenon, the origins date back to 1945. And since then, it’s traversed a vast landscape of economic and political ideas and philosophies that are as seemingly polarizing as today’s politics and economies!
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Now let’s go…
THE ECONOMY OF PERMANANCE
The guest room was void of furniture and the pungent stench of the squatting toilets punctured the hot humid air. Joseph’s appointment wasn’t until 2:00PM, so he waited outside along the cool banks of the Sabarmati. This significantly religious Indian river would have been free of garbage and toxins in 1929.
When it was time for his meeting, he climbed the riverbank. His steps were aided by a long walking stick. As he crested to flat ground he looked up and saw an old man under a tree spinning in circles. He stood there leaning on his stick watching the man twirl for what felt like five minutes or more. Suddenly he stopped and looked at Joseph with a toothless grin and said, “You must be Joseph.” It was then Joseph realized his 2:00 meeting was to be outside. For standing before him was the man he was to meet – Mahatma Gandhi. Gandhi sat on the ground, legs crossed, as his white robe draped over his knees. Joseph felt compelled to join him. As he sat, he felt the dirt skid under his pressed trousers as he loosened his starched white shirt and black tie.
Joseph Kumarappa, better known as J. C. Kumarappa, was there at Gandhi’s request. Gandhi had read a paper he had written on the role public finance played in poverty-stricken India and wanted him to write a column in Gandhi’s weekly magazine called Young India. By the time of this meeting, Gandhi’s revolutionary movement left him fearful he’d be imprisoned at any moment. He wanted his magazine to continue carrying his message with Kumarappa as a contributing writer.
After years of publishing successful articles, Gandhi asked Kumarappa to turn his work into a small pamphlet for further dissemination. He agreed and asked Gandhi to write the forward. Soon there after, Gandhi was imprisoned. As was Kumarappa.
Gandhi wrote the forward on a train to Bombay in August of 1945. It began, “Dr. Kumarappa's on ‘The Economy of Permanence’ is a jail production.”1 He continued that it is through “Plain Living and High Thinking” that “we shall arrive at the economy of permanence in the place of that of the fleeting nature we see around us at present.”
J. C. Kumarappa was one of Gandhi’s closest collaborators and chief economist. Kumarappa observed,
“There are certain things found in Nature which apparently have no life and do not grow or increase, and so get exhausted or consumed by being used. The world possesses a certain stock or reservoir of such materials as coal, petroleum, ores or minerals like iron, copper, gold etc. These being available in fixed quantities, may be said to be 'transient' while the current of overflowing water in a river or the constantly growing timber of a forest may be considered 'permanent' as their stock is inexhaustible in the service of man when only the flow or increase is taken advantage of.”
He advocated for maintaining an economy of continuity and circularity with nature. Using the bee as a metaphor, he wrote,
“The bees etc. while gathering the nectar and pollen from these plants for their own good, fertilize the flowers and the grains, that are formed in consequence, again become the source of life of the next generation of plants.”
While Kumarappa was trained as an economist in the West at Columbia University, he was critical of its exploitive orthodoxy. He said, “The Western plans are material centred. That is to say, they want to exploit all resources.” He was encouraged to pursue his economic philosophies by his professor and progressive economist, Edwin Seligman. Kumarappa’s book, The Economy of Permanence forms the foundation for Gandhian Economics and is one of the first known precursors to what we now call Circular Economy.
SPACE COWBOYS OF THE COMMONS
The critique of over exploitive economies returned in 1966 when the economist and cofounder of Systems Theory, Kenneth Boulding, described it as a “cowboy economy”. He chose the image of a cowboy because,
“the cowboy [is] symbolic of the illimitable plains and also associated with reckless, exploitative, romantic, and violent behavior...” He offered that “systems may be open or closed in respect to a number of classes of inputs and outputs”2
and that the ‘cowboy’ mentality assumes earth to be an open system filled with limitless natural resources as inputs for outputs – namely, products for consumption.
Instead, he offered another metaphor gaining in popularity in the late sixties – a “spaceman”. He said, “the ‘spaceman’ economy, in which the earth has become a single spaceship, [is] without unlimited reservoirs of anything, either for extraction or for pollution…therefore, man must find his place in a cyclical ecological system…” His ideas for such a circular economy were summarized in a short, but influential, paper titled, The Economics of the Coming Spaceship Earth.
Two years later, in 1968, ecologist Garrett Hardin wrote a paper for the publication Science that popularized a century old dilemma regarding the economic use of shared natural resources. It is called The Tragedy of the Commons. The tragedy, he theorized, is that any shared natural resource will become over exploited or polluted because people would act out of self-interest versus sharing and caring for the common good.
“Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit – in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.”3
He called for “coercive laws or taxing devices that make it cheaper for the polluter to treat his pollutants than to discharge them untreated.” Hardin’s primary study was population growth as was the British economist William Forster Lloyd who first introduced the theory of the commons in 1833. Hardin wasn’t the only one concerned with population growth and its impact on nature.
The same year Hardin published The Tragedy of the Commons, 1968, a Stanford biologist and his wife, Paul and Anne Ehrlich, published a book on the effects of population growth called The Population Bomb. It warned of a worldwide famine and social upheaval due to human overpopulation on a planet of limited resources. They called for “legislation to stop the wasting of resources” asking governments to “move toward creating a vast waste recovery industry, an industry that might well make ‘trash’ obsolete. Reusable containers might be required by law for virtually all products”4, they believed.
More technological solutions began creeping into precursors to circular economy four years later in a 1972 report called The Limits of Growth. The lead author was Donella Meadows, an environmental scientist, professor, and writer who started as a research fellow under Jay Forrester at MIT. I mentioned Forrester back in May; he is the founder of the field of system dynamics – the study of nonlinear behavior of complex systems over time. The Limits of Growth was the culmination of a computer simulation using the World3 model developed by Forrester.
The researchers used “population, food production, industrialization, pollution, and consumption of nonrenewable natural resources" as five primary variables in computing the effects of exponential population and economic growth in a world of limited resources. It predicted that
"the most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity."5
They surmised, like the Ehrlich’s, that “technological advance would be both necessary and welcome in the equilibrium state” including “new methods of waste collection to decrease pollution and make discarded material available for recycling.”
Throughout the 1970s came more calls for ‘ecological design’, ‘steady-state economics’, and studies of ‘deep ecology’ aimed at staving off a catastrophic ‘overshoot’. In 2020 a group of researchers compiled a literature review of publications from 1945 to 2020 and developed a typology of circular economy discourse that includes a timeline. This early work marked what they called the ‘Preamble Period’ of circular economy research stretching from 1945 to 1980. Much of the research leading up to the 80s focused on ‘techno-fixes’, like recycling and water treatment, to deal with increased waste.
DOUGHNUTS OF REFORM OR BUILD THE WALL?
The 1980s then marked the beginning of what they call the ‘Excitement Period’ which includes the first use of the conjoined words ‘circular’ and ‘economy’ by David Pearce and Kerry Turner in their 1989 book Economics of Natural Resources and the Environment. This period lasted through 2010 with research focused on ‘connecting input and output in strategies for eco-efficiency’. It included inquiries into ‘biomimicry’, ‘closed-loop supply chains’, and ‘industrial metabolism’.
This period also saw the introduction of the ‘first holistic circularity frameworks.’ This includes the 1992 United Nations Rio Declaration on Environment and Development, research into complex systems to conduct ‘regenerative design’, and ideas around the fusing of ‘ecological integrity’ with ‘business acumen’ through ‘natural capitalism’. The literature review revealed these were all early forays into ‘reformist views on circularity’ that ‘integrated socio-economic approaches to resources, consumption, and waste.’
Those efforts continued from 2010 into the current period these researchers call the ‘validity challenge period’ which include ‘new holistic views on circularity.’ This includes one of my favorites from the British economist Kate Raworth in her 2017 book, Doughnut Economics. She describes a visual framework that envisions a doughnut shaped economy combining elements of planetary and societal boundaries to create a ‘safe and just space for humanity’. Other research uses color as a metaphor. The ‘blue economy’ seeks a regenerative economy that avoids debt cycles that lead to people to living in the ‘red’ through a more practicable approach than offered by the environmentalist’s ‘green’ economy.
The literature review also uncovered more radical ‘transformational views of circularity’ that call for ‘degrowth’, ‘eco-socialism’, and ‘voluntary simplicity’. The Pope’s 2015 ‘Laudato Si’ even gets a nod. Transformational views also included non-western visions from the ‘Global South’ like the Ecuadorian government’s 2008 constitution – the worlds first codified ‘Rights to Nature’. Zimbabwean educator Overson Shumba offers a call for Commons thinking, ecological intelligence and the ethical and moral framework of Ubuntu as “an imperative for sustainable development.” Also included is a 2019 collection of over 100 essays offering “radically different worldviews and practices from around the world that point to an ecologically wise and socially just world” and call for a ‘pluriverse’ – a society “where members of diverse ethnic, racial, religious, or social groups can maintain and develop their own traditional culture or special interest within the confines of a common civilization.”
The researchers who assembled this timeline of influential papers, books, and essays then constructed a two-by-two matrix of themes found in the work. On the horizontal axis are ‘approaches to social, economic, environmental, and political considerations’ that divide into two categories: ‘Holistic’ and ‘Segmented.’ On the vertical axis is ‘technological innovation and ecological collapse’ divided into the categories of ‘Skeptical’ and ‘Optimistic’.6
This forms a quadrant with the upper left corner being ‘optimistic’ and ‘holistic’ framing a ‘reformist circular society’. This society assumes a ‘reformed form of capitalism is compatible with sustainability’ with the help of technology that decouples ‘ecology’ from ‘economy’. The goal would be ‘economic prosperity and human well-being within the biophysical boundaries of the earth’. The means would be ‘technological breakthroughs and new business models that improve ecological health, resource security, and material prosperity for all.’
The upper right quadrant is ‘optimistic’ and ‘segmented’ through a ‘technocentric circular economy’. This assumes capitalism is already compatible with sustainability and, like the ‘reformists’, relies on technology innovation to prevent ecological collapse. The goal is ‘sustainable human progress and prosperity without negative environmental externalities.’ This would require ‘economic innovations, new business models, and unprecedented breakthroughs in circular economy technologies.’
The lower left is made up of ‘skeptical’ and ‘holistic’ creating a ‘transformational circular society’. Unlike the last two quadrants, this assumes ‘capitalism is incompatible with sustainability and socio-technical innovation cannot bring absolute eco-economic decoupling to prevent ecological collapse.’ The goal would be ‘a world of conviviality and frugal abundance for all, while fairly distributing the biophysical resources of the earth.’ To get there would require ‘complete reconfiguration of the current socio-political system and a shift away from productivist and anthropocentric worldviews.” Humanity’s ecological footprint would need drastic reduction to ‘ensure that everyone can live meaningfully and in harmony with the earth.’
Lastly, the lower right consists of ‘skeptical’ and ‘segmented’ creating a ‘fortress circular economy’. This assumes ‘there is no alternative to capitalism and socio-technical innovation cannot bring absolute eco-economic decoupling to prevent ecological collapse.’ The goal would be to ‘maintain geostrategic resource security and earth system stability in a global condition where widespread resource scarcity and human overpopulation cannot provide for all.’ This would rely on ‘innovative technologies and business models combined with rationalized resource use, imposed frugality and strict migration and population controls.’
As I suggested in my last piece on challenges to corporate and economic environmental and social governance, and as these researchers have discovered, attempts at moving toward elements of a circular economy run the risk of also being met with a ‘validity challenge’. With this literature review and subsequent typologies of academic discourse over the last 77 years, these researchers hope to provide academics and practitioners with a framework to “better analyse current policies and practices on circularity and sustainability transitions in general.” They do warn, however, that “if corporate and government actors continue to use a Circular Economy framing that doesn't consider systemic socio-ecological implications, the term could easily become discredited as a refurbished form of greenwashing.”
It’s not hard to see how the holistic optimists and skeptics may perpetually be disappointed in progress toward reformation and transformation as the current U.S. fortress of economic authority is reinforced. Meanwhile, the segmented holistic and skeptical capitalistic technocrats will continue to pray to the Gods of innovation, casting environmentalists as hysterical scare mongers perennially ‘crying wolf’ on ecological collapse – even as worldwide social, political, environmental, and economic systems become increasingly erratic, unpredictable, and vulnerable.
I, for one, prefer to draw a square in the middle of their matrix labeled ‘pragmatic adaptive economy’. This would be home to those who accept the future is increasingly unpredictable, where all ideas of certainty should be viewed with skepticism, pessimistic there is some magic technology or top-down government action that will save us, and optimistic that individual humans at the fringes of society will continue to come together seeking solutions to guarantee their permanence.
Joseph Kumarappa concluded his Economy of Permanance by warning that until society’s are based “on nonviolence and truth there can be no hope of any permanence in our economic, social or political life.” He said, “The present type of organization based on competition and centralized industries lands us periodically into terrific upheavals.” He believed, “These have to be avoided if nations are to progress steadily towards a set goal, which will bring peace amongst nations and prosperity to the citizen.”
Gandhi wrote the forward to this book just a few days after the United States drop an atomic bomb called ‘Little Boy’ on Hiroshima. Showing little remorse, the act was legitimized as a “necessary evil” and marked the beginning of U.S. worldwide military and economic domination. Some argue that the environmental destruction at the hands of the current economic system is also a ‘necessary evil.’ Evidently that is true, because the prospect of a globally agreed upon alternative in this highly segmented and polarized political and social environment seems bleak.
But surely prospects for a bright future were much worse when Kumarappa and Gandhi were summoning their own optimistic words as nuclear fallout from two atomic bombs circled the globe at the end of a second world war. While Kumarappa, a trained economist, indeed envisioned an economic model that sought ‘justice for the common man’ and a society that doesn’t have ‘the glamour of ill-gotten gains’, in the end it wasn’t some top-down governmental scheme on which he hinged success for an ‘economy of permanence’. His final words called for individual introspection. I'm with Kumarappa when he concludes, to “enable us to see the advent of the economy of permanence”, what today might be called a just, fair, and ecologically viable circular economy, “calls for a considerable amount of self-discipline and self-control.”7
A typology of circular economy discourses — Supplementary Material. Martin Calisto Friant, et al. 2020.
The Limits to Growth; A Report for the Club of Rome's Project on the Predicament of Mankind. Donella Meadows, et al. 1972.
A typology of circular economy discourses: Navigating the diverse visions of a contested paradigm. Martin Calisto Friant, Walter J.V. Vermeulen, Roberta Salomone. 2020.