Benefits of circular economy fake trend

Circular economy is not fake news but fake trend. Why? Because the concept that attracts such wide public attention is nothing but cleverly designed mask for “consultants” craving for collective funds (state budgets). So far I have explained the scam in Kitchen Logic (1): The Holism, Circular Economy Scam and Sharing Economy Scam.

But fortunately this circular economy fake trend helps us to understand complex nature of our existence better. Sheer number of circular economy fake trend prophets creates perhaps the first instance in history when larger number of individuals that know nothing about non-linear nature of our existence escaped from death trap of linear thinking that is most obviously represented by linear causality that still dominates all spheres of our life and even most sciences as well.

Rationalism as a base of centrally planned economy

Let’s go step by step. As I have already unmasked circular economy prophets as prophets of centrally planned economy, I will not repeat this part of a scam. It is their ambition to centralize (take care of) something that is in its deepest nature nothing but a proof that centralized economy not only does not work but also cannot even exist in reality. Their ambition rests on their rationalism. If economy is rational, then the existence of rational authority with central planning function has to exist. If our nature is rational then some highest rational institution has to decide what is good (rational) for each and any aspect of life. Centrally planned economy is necessary consequence of rationalism. Totalitarian economy of socialism, fascism and any other collectivist system is necessary if one stands on position that rationality provides a key to doors of our existence.

E.A. Hayek so excellently described this necessary dead end of rationalism in his book The Fatal Conceit that it would make no sense for me to reproduce it. Circular economy is just one new attempt of socialistic utopia expressed through rationalism/constructivism to secure further replication of central planning office meme. Farmer who lives circularity and complexity of his farming economy intuitively, understands all hype, workshops, EU funded projects on circular economy as intellectual’s masturbation.

Window of opportunity

But as I have already pointed out, circular economy fake trend opened an option for self-destruction. If one wants to understand a concept of circular economy, one has to go deeper and deeper in mechanisms, laws and consequences of circularity. Circular economy fake trend normally starts with circularity in mass production related to natural resources. It was the aim of circular economy prophets in the beginning to rationally redefine a flow of natural capital in such a way that those using natural resources by becoming abusers would be forced to redistribute a part of added value to collective funds (operated by circular economy socialists).

This initial model of circular economy trend was based on guilt. And then a sense of guilt produced repercussions in the form of various types of taxes. A company that uses natural resources should compensate such abuse by wide range of taxes that redistribute created added value to collective that then further feeds circular economy fake trend gurus.

Taxation v.s. corporate social responsibility

Let me here make a clear distinction between taxes as forced redistribution and corporate actions regarding stakeholders that are not customers. Standard Branding Model defines both the vision that concentrates on the needs of customers and the mission that includes stakeholders (publics) into its business model. A company that develops housing and with such development negatively affect neighbouring inhabitants compensates such negative effects in one or another way if such company wants to avoid a clash. Companies understand that they do not serve only customers needs but have to take in account all other stakeholders that are positively or negatively affected by their actions. In wider sense such actions are to be understood as social responsibility activities. It is quite clear that if such activities are integrated in business model on the basis of company own economic calculation, they are beneficial not only to the environment but also to the company itself while if enforced by external authority (like the state) they are most probably beneficial to the state but not necessary to the environment and are necessary harmful to the company.

Many capitals – many flows – many taxations?

But the flow of natural capital is only one of many that organizations digest (with their respective business models). Circularity in full dimension means circularity of all capitals and all value chain processes. Each of six capitals defined by a concept of integrated reporting has many, many loops and sub loops. There is not one huge circle, in which economy happens, but zillions of small, smallest, larger and largest circles on all possible levels. We are talking about chaos of self-regulating complexes. We are talking about zillions of agents operating on the basis of personal limited information that adapts to changing environment all the time even for the simplest action.

Circular economy fake trend prophets thus unintentionally opened a huge threat for central planners. It is not only one capital only that companies are (ab)using, but all six of them. All of such (ab)uses should be taxed. And since each capital is involved in many loops of added value creation the rationality of taxation becomes more and more complicated.

Let me conclude with two statements:

  1. I am quite sure that respective government institution will find a way for taxations even in most complex situations. Since they act on highly irrational basis from the very beginning they are well adapted to unpredictability of life.
  2. Circular economy fake trend producers are already abusing the corporate social responsibility part of business model pretending as being part of added value creation. As funded by taxes they represent unnecessary costs to any commercial operation.

Andrej Drapal