Just as ecosystems reuse everything in an efficient and purposeful cycle, a “circular” economic system would ensure that products were designed to be part of a value network, within which the reuse and refurbishment of products, components, and materials would ensure the continual re-exploitation of resources.
Project Syndicate
The Circular Revolution
Frans van Houten | Chief Executive Officer of Royal Philips
Like all major transitions in human history, the shift from a linear to a circular economy will be a tumultuous one. It will feature pioneers and naysayers, victories and setbacks. But, if businesses, governments, and consumers each do their part, the Circular Revolution will put the global economy on a path of sustainable long-term growth – and, 500 years from now, people will look back at it as a revolution of Copernican proportions.
Paying attention to land (natural resources, ecology) as a crucial economic factor that is finite and fragile. Is private property a sufficient incentive for appropriate stewardship? Not under the current institutional arrangements that promote unlimited growth and profit based on freely exploiting resources.
The real tragedy of the commons is turning out to be overuse, depletion and degradation due to privatization under contemporary economic liberalism (neoliberalism) as a socio-economic and political theory. The problem is traceable to power structures, institutional arrangements, negative externality, adverse selection and perverse incentives that market-based theories do not take into account in pursuing innovation and efficiency based on the assumption of (near) perfect competition.
