One of my friends and I were talking the other day about “regenerative business.”  He has a company that does social and ecological good while providing an quality product. They’re an amazing company and community, but they’re not profitable.

After many years of R&D in regeneration and entrepreneurialism, we’ve come to the conclusion that this has little to do with how entrepreneurially-versed someone is, and everything to do with the current nature of economics and money.

How does financial profit work?  By externalization.  An efficient business minimizes it’s costs.  It doesn’t do this by changing the nature of physics or something else like that, but by making others pay for their costs.  The easiest way to win in a competitive game is by cheating.

Look at the world’s largest companies, like Walmart and ExxonMobil.  They sell commodities that are devoid of quality.  Walmart sells junk.  They destroy communities.  They sure make a financial profit while doing so though.

On the other hand, all of my friends doing permaculture and growing food or making products with quality barely scrape by.  I’ve been studying business for a while.  And this isn’t personal.  It’s not always that these people need more business sense - many of them are getting that.  It’s that our money can’t relate quality, because quality is unique and can’t be quantified.  In an attempt to quantify perfection, we destroy the possibility that it will arise.

Regeneration starts with the internalization of costs and continues to creativity.

So why do we have any profit anyways?  Have you ever noticed, in business planning, that a lean, self-sufficient business model isn’t profitable?  It breaks even.  This is why it’s illegal for non-profits to take home a profit; there’s absolutely no reason to do so.  Profit is inefficient.  It siphons energy off from the core business, off into pools that are underutilized.

But we have profit because of growth, because of interest.  As money’s set up right now, we need to pay off our ever-increasing debts.  On average, they’ll always grow faster than our economy.  That’s just how the system’s setup.

If this gets you thinking, check out my friend Charles’ post on the same idea.

So next time you’re trying to find quality in your food or in your wares, and it just isn’t happening, remember: it isn’t you.  It’s the system.

I’m working to change this, and I’d love to have you join me.

Don’t let people tell you that sustainable development is possible.  It’s a paradox.