Relativism

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https://en.wikipedia.org/wiki/Relativism

Relativism is a family of philosophical views which deny claims to absolute objectivity within a particular domain and assert that valuations in that domain are relative to the perspective of an observer or the context in which they are assessed.

There are many different forms of relativism, with a great deal of variation in scope and differing degrees of controversy among them. Moral relativism encompasses the differences in moral judgments among people and cultures. Epistemic relativism holds that there are no absolute principles regarding normative belief, justification, or rationality, and that there are only relative ones. Alethic relativism (also factual relativism) is the doctrine that there are no absolute truths, i.e., that truth is always relative to some particular frame of reference, such as a language or a culture (cultural relativism), while linguistic relativism asserts that a language's structures influence a speaker's perceptions. Some forms of relativism also bear a resemblance to philosophical skepticism. Descriptive relativism seeks to describe the differences among cultures and people without evaluation, while normative relativism evaluates the word truthfulness of views within a given framework.

Forms

Anthropological versus philosophical relativism

Anthropological relativism refers to a methodological stance, in which the researcher suspends (or brackets) their own cultural prejudice while trying to understand beliefs or behaviors in their contexts. This has become known as methodological relativism, and concerns itself specifically with avoiding ethnocentrism or the application of one's own cultural standards to the assessment of other cultures. This is also the basis of the so-called "emic" and "etic" distinction, in which:

• An emic or insider account of behavior is a description of a society in terms that are meaningful to the participant or actor's own culture; an emic account is therefore culture-specific, and typically refers to what is considered "common sense" within the culture under observation.
• An etic or outsider account is a description of a society by an observer, in terms that can be applied to other cultures; that is, an etic account is culturally neutral, and typically refers to the conceptual framework of the social scientist. (This is complicated when it is scientific research itself that is under study, or when there is theoretical or terminological disagreement within the social sciences.)

Philosophical relativism, in contrast, asserts that the truth of a proposition depends on the metaphysical, or theoretical frame, or the instrumental method, or the context in which the proposition is expressed, or on the person, groups, or culture who interpret the proposition.

Methodological relativism and philosophical relativism can exist independently from one another, but most anthropologists base their methodological relativism on that of the philosophical variety.

Descriptive versus normative relativism

The concept of relativism also has importance both for philosophers and for anthropologists in another way. In general, anthropologists engage in descriptive relativism ("how things are" or "how things seem"), whereas philosophers engage in normative relativism ("how things ought to be"), although there is some overlap (for example, descriptive relativism can pertain to concepts, normative relativism to truth).

Descriptive relativism assumes that certain cultural groups have different modes of thought, standards of reasoning, and so forth, and it is the anthropologist's task to describe, but not to evaluate the validity of these principles and practices of a cultural group. It is possible for an anthropologist in his or her fieldwork to be a descriptive relativist about some things that typically concern the philosopher (e.g., ethical principles) but not about others (e.g., logical principles). However, the descriptive relativist's empirical claims about epistemic principles, moral ideals and the like are often countered by anthropological arguments that such things are universal, and much of the recent literature on these matters is explicitly concerned with the extent of, and evidence for, cultural or moral or linguistic or human universals.

The fact that the various species of descriptive relativism are empirical claims may tempt the philosopher to conclude that they are of little philosophical interest, but there are several reasons why this is not so. First, some philosophers, notably Kant, argue that certain sorts of cognitive differences between human beings (or even all rational beings) are impossible, so such differences could never be found to obtain in fact, an argument that places a priori limits on what empirical inquiry could discover and on what versions of descriptive relativism could be true. Second, claims about actual differences between groups play a central role in some arguments for normative relativism (for example, arguments for normative ethical relativism often begin with claims that different groups in fact have different moral codes or ideals). Finally, the anthropologist's descriptive account of relativism helps to separate the fixed aspects of human nature from those that can vary, and so a descriptive claim that some important aspect of experience or thought does (or does not) vary across groups of human beings tells us something important about human nature and the human condition.

Normative relativism concerns normative or evaluative claims that modes of thought, standards of reasoning, or the like are only right or wrong relative to a framework. 'Normative' is meant in a general sense, applying to a wide range of views; in the case of beliefs, for example, normative correctness equals truth. This does not mean, of course, that framework-relative correctness or truth is always clear, the first challenge being to explain what it amounts to in any given case (e.g., with respect to concepts, truth, epistemic norms). Normative relativism (say, in regard to normative ethical relativism) therefore implies that things (say, ethical claims) are not simply true in themselves, but only have truth values relative to broader frameworks (say, moral codes). (Many normative ethical relativist arguments run from premises about ethics to conclusions that assert the relativity of truth values, bypassing general claims about the nature of truth, but it is often more illuminating to consider the type of relativism under question directly.)

Legal relativism

In English common law, two (perhaps three) separate standards of proof are recognized:

• proof based on the balance of probabilities is the lesser standard used in civil litigation, which cases mostly concern money or some other penalty, that, if further and better evidence should emerge, is reasonably reversible.
• proof beyond reasonable doubt is used in criminal law cases where an accused's right to personal freedom or survival is in question, because such punishment is not reasonably reversible.
• Absolute truth is so complex as to be only capable of being fully understood by the omniscient established during the Tudor period as the one true God

Related and contrasting positions

Relationism is the theory that there are only relations between individual entities, and no intrinsic properties. Despite the similarity in name, it is held by some to be a position distinct from relativism—for instance, because "statements about relational properties [...] assert an absolute truth about things in the world". On the other hand, others wish to equate relativism, relationism and even relativity, which is a precise theory of relationships between physical objects: Nevertheless, "This confluence of relativity theory with relativism became a strong contributing factor in the increasing prominence of relativism".

Whereas previous investigations of science only sought sociological or psychological explanations of failed scientific theories or pathological science, the 'strong programme' is more relativistic, assessing scientific truth and falsehood equally in a historic and cultural context.

Criticisms

A common argument against relativism suggests that it inherently refutes itself: the statement "all is relative" classes either as a relative statement or as an absolute one. If it is relative, then this statement does not rule out absolutes. If the statement is absolute, on the other hand, then it provides an example of an absolute statement, proving that not all truths are relative. However, this argument against relativism only applies to relativism that positions truth as relative–i.e. epistemological/truth-value relativism. More specifically, it is only extreme forms of epistemological relativism that can come in for this criticism as there are many epistemological relativists who posit that some aspects of what is regarded as factually "true" are not universal, yet still accept that other universal truths exist (e.g. gas laws or moral laws).

Another argument against relativism posits the existence of natural law. Simply put, the physical universe works under basic principles: the "Laws of Nature". Some contend that a natural moral law may also exist, for example as argued by, Immanuel Kant in Critique of Practical Reason, Richard Dawkins in The God Delusion (2006) and addressed by C. S. Lewis in Mere Christianity (1952). Dawkins said "I think we face an equal but much more sinister challenge from the left, in the shape of cultural relativism - the view that scientific truth is only one kind of truth and it is not to be especially privileged". Philosopher Hilary Putnam among others, states that some forms of relativism make it impossible to believe one is in error. If there is no truth beyond an individual's belief that something is true, then an individual cannot hold their own beliefs to be false or mistaken. A related criticism is that relativizing truth to individuals destroys the distinction between truth and belief.

Philosopher Donald Davidson presented an influential critique of conceptual relativism in his 1974 essay On the Very Idea of a Conceptual Scheme. Conceptual relativism is the idea that different people or even entire communities could make sense of the world in radically different, incommensurable (meaning untranslatable) ways. One of the consequences of this idea is that truth is relative to one's way of thinking rather than objective. Davidson attacks what he believes to be the entire framework which makes conceptual relativism intelligible, namely scheme–content dualism, which is the idea that all knowledge is the result of one's scheme of concepts being imposed upon empirical content from the world. In refuting scheme–content dualism, Davidson shows that knowledge of one's scheme of concepts is necessarily inseparable from one's knowledge of the world, and so translation between different people or communities is always possible in principle.

According to Belgian philosopher of science Maarten Boudry, relativism is rarely applied consistently. In an opinion piece, he argues that no one truly acts according to the belief that truth is relative. Even self-proclaimed relativists, he suggests, do not genuinely believe their own slogans and catchphrases. They become indignant when falsely accused of a crime and laugh at those who claim the Earth is flat. Boudry contends that people abandon their relativism when it really matters—for instance, when visiting a doctor for cancer screening or boarding a plane, trusting in the laws of physics. He argues that relativism about truth is not so much a sincere conviction as it is an empty slogan or a convenient rhetorical device people deploy when it suits them. Boudry refers to this phenomenon as “occasional relativism,” highlighting what he sees as the casual and opportunistic nature of such relativist claims.

Views

Philosophical

Ancient

Sophism

Sophists are considered the founding fathers of relativism in Western philosophy. Elements of relativism emerged among the Sophists in the 5th century BC. Notably, it was Protagoras who coined the phrase, "Man is the measure of all things: of things which are, that they are, and of things which are not, that they are not." The thinking of the Sophists is mainly known through their opponent, Plato. In a paraphrase from Plato's dialogue Theaetetus, Protagoras said: "What is true for you is true for you, and what is true for me is true for me."

Modern

Bernard Crick

Bernard Crick, a British political scientist and advocate of relativism, suggested in In Defence of Politics (1962) that moral conflict between people is inevitable. He thought that only ethics can resolve such conflict, and when that occurs in public it results in politics. Accordingly, Crick saw the process of dispute resolution, harms reduction, mediation or peacemaking as central to all of moral philosophy. He became an important influence on feminists and later on the Greens.

Paul Feyerabend

Philosopher of science Paul Feyerabend is often considered to be a relativist, although he denied being one.

Feyerabend argued that modern science suffers from being methodologically monistic (the belief that only a single methodology can produce scientific progress). Feyerabend summarises his case in Against Method with the phrase "anything goes".

In an aphorism [Feyerabend] often repeated, "potentially every culture is all cultures". This is intended to convey that world views are not hermetically closed, since their leading concepts have an "ambiguity" - better, an open-endedness - which enables people from other cultures to engage with them. [...] It follows that relativism, understood as the doctrine that truth is relative to closed systems, can get no purchase. [...] For Feyerabend, both hermetic relativism and its absolutist rival [realism] serve, in their different ways, to "devalue human existence". The former encourages that unsavoury brand of political correctness which takes the refusal to criticise "other cultures" to the extreme of condoning murderous dictatorship and barbaric practices. The latter, especially in its favoured contemporary form of "scientific realism", with the excessive prestige it affords to the abstractions of "the monster 'science'", is in bed with a politics which likewise disdains variety, richness and everyday individuality - a politics which likewise "hides" its norms behind allegedly neutral facts, "blunts choices and imposes laws".

Thomas Kuhn

Thomas Kuhn's philosophy of science, as expressed in The Structure of Scientific Revolutions, is often interpreted as relativistic. He claimed that, as well as progressing steadily and incrementally ("normal science"), science undergoes periodic revolutions or "paradigm shifts", leaving scientists working in different paradigms with difficulty in even communicating. Thus the truth of a claim, or the existence of a posited entity, is relative to the paradigm employed. However, it is not necessary for him to embrace relativism because every paradigm presupposes the prior, building upon itself through history and so on. This leads to there being a fundamental, incremental, and referential structure of development which is not relative but again, fundamental.

From these remarks, one thing is however certain: Kuhn is not saying that incommensurable theories cannot be compared - what they can't be is compared in terms of a system of common measure. He very plainly says that they can be compared, and he reiterates this repeatedly in later work, in a (mostly in vain) effort to avert the crude and sometimes catastrophic misinterpretations he suffered from mainstream philosophers and post-modern relativists alike.

But Kuhn rejected the accusation of being a relativist later in his postscript:

scientific development is ... a unidirectional and irreversible process. Later scientific theories are better than earlier ones for solving puzzles ... That is not a relativist's position, and it displays the sense in which I am a convinced believer in scientific progress.

Some have argued that one can also read Kuhn's work as essentially positivist in its ontology: the revolutions he posits are epistemological, lurching toward a presumably 'better' understanding of an objective reality through the lens presented by the new paradigm. However, a number of passages in Structure do indeed appear to be distinctly relativist, and to directly challenge the notion of an objective reality and the ability of science to progress towards an ever-greater grasp of it, particularly through the process of paradigm change.

In the sciences there need not be progress of another sort. We may, to be more precise, have to relinquish the notion, explicit or implicit, that changes of paradigm carry scientists and those who learn from them closer and closer to the truth.

We are all deeply accustomed to seeing science as the one enterprise that draws constantly nearer to some goal set by nature in advance. But need there be any such goal? Can we not account for both science's existence and its success in terms of evolution from the community's state of knowledge at any given time? Does it really help to imagine that there is some one full, objective, true account of nature and that the proper measure of scientific achievement is the extent to which it brings us closer to that ultimate goal?

George Lakoff and Mark Johnson

George Lakoff and Mark Johnson define relativism in Metaphors We Live By as the rejection of both subjectivism and metaphysical objectivism in order to focus on the relationship between them, i.e. the metaphor by which we relate our current experience to our previous experience. In particular, Lakoff and Johnson characterize "objectivism" as a "straw man", and, to a lesser degree, criticize the views of Karl Popper, Kant and Aristotle.

Robert Nozick

In his book Invariances, Robert Nozick expresses a complex set of theories about the absolute and the relative. He thinks the absolute/relative distinction should be recast in terms of an invariant/variant distinction, where there are many things a proposition can be invariant with regard to or vary with. He thinks it is coherent for truth to be relative, and speculates that it might vary with time. He thinks necessity is an unobtainable notion, but can be approximated by robust invariance across a variety of conditions—although we can never identify a proposition that is invariant with regard to everything. Finally, he is not particularly warm to one of the most famous forms of relativism, moral relativism, preferring an evolutionary account.

Joseph Margolis

Joseph Margolis advocates a view he calls "robust relativism" and defends it in his books Historied Thought, Constructed World, Chapter 4 (California, 1995) and The Truth about Relativism (Blackwell, 1991). He opens his account by stating that our logics should depend on what we take to be the nature of the sphere to which we wish to apply our logics. Holding that there can be no distinctions which are not "privileged" between the alethic, the ontic, and the epistemic, he maintains that a many-valued logic just might be the most apt for aesthetics or history since, because in these practices, we are loath to hold to simple binary logic; and he also holds that many-valued logic is relativistic. (This is perhaps an unusual definition of "relativistic". Compare with his comments on "relationism".) To say that "True" and "False" are mutually exclusive and exhaustive judgements on Hamlet, for instance, really does seem absurd. A many-valued logic—with its values "apt", "reasonable", "likely", and so on—seems intuitively more applicable to interpreting Hamlet. Where apparent contradictions arise between such interpretations, we might call the interpretations "incongruent", rather than dubbing either of them "false", because using many-valued logic implies that a measured value is a mixture of two extreme possibilities. Using the subset of many-valued logic, fuzzy logic, it can be said that various interpretations can be represented by membership in more than one possible truth set simultaneously. Fuzzy logic is therefore probably the best mathematical structure for understanding "robust relativism" and has been interpreted by Bart Kosko as philosophically being related to Zen Buddhism.

It was Aristotle who held that relativism implies that we should, sticking with appearances only, end up contradicting ourselves somewhere if we could apply all attributes to all ousiai (beings). Aristotle, however, made non-contradiction dependent upon his essentialism. If his essentialism is false, then so too is his ground for disallowing relativism. (Subsequent philosophers have found other reasons for supporting the principle of non-contradiction.)

Beginning with Protagoras and invoking Charles Sanders Peirce, Margolis shows that the historic struggle to discredit relativism is an attempt to impose an unexamined belief in the world's essentially rigid rule-like nature. Plato and Aristotle merely attacked "relationalism"—the doctrine of true for l or true for k, and the like, where l and k are different speakers or different worlds—or something similar (most philosophers would call this position "relativism"). For Margolis, "true" means true; that is, the alethic use of "true" remains untouched. However, in real world contexts, and context is ubiquitous in the real world, we must apply truth values. Here, in epistemic terms, we might tout court retire "true" as an evaluation and keep "false". The rest of our value-judgements could be graded from "extremely plausible" down to "false". Judgements which on a bivalent logic would be incompatible or contradictory are further seen as "incongruent", although one may well have more weight than the other. In short, relativistic logic is not, or need not be, the bugbear it is often presented to be. It may simply be the best type of logic to apply to certain very uncertain spheres of real experiences in the world (although some sort of logic needs to be applied in order to make that judgement). Those who swear by bivalent logic might simply be the ultimate keepers of the great fear of the flux.

Richard Rorty

Philosopher Richard Rorty has a somewhat paradoxical role in the debate over relativism: he is criticized for his relativistic views by many commentators, but has always denied that relativism applies to much anybody, being nothing more than a Platonic scarecrow. Rorty claims, rather, that he is a pragmatist, and that to construe pragmatism as relativism is to beg the question.

'"Relativism" is the traditional epithet applied to pragmatism by realists'

'"Relativism" is the view that every belief on a certain topic, or perhaps about any topic, is as good as every other. No one holds this view. Except for the occasional cooperative freshman, one cannot find anybody who says that two incompatible opinions on an important topic are equally good. The philosophers who get called 'relativists' are those who say that the grounds for choosing between such opinions are less algorithmic than had been thought.

'In short, my strategy for escaping the self-referential difficulties into which "the Relativist" keeps getting himself is to move everything over from epistemology and metaphysics into cultural politics, from claims to knowledge and appeals to self-evidence to suggestions about what we should try.'

Rorty takes a deflationary attitude to truth, believing there is nothing of interest to be said about truth in general, including the contention that it is generally subjective. He also argues that the notion of warrant or justification can do most of the work traditionally assigned to the concept of truth, and that justification is relative; justification is justification to an audience, for Rorty.

In Contingency, Irony, and Solidarity he argues that the debate between so-called relativists and so-called objectivists is beside the point because they do not have enough premises in common for either side to prove anything to the other.

Nalin de Silva

In his book Mage Lokaya (My World), 1986, Nalin de Silva criticized the basis of the established western system of knowledge, and its propagation, which he refers as "domination throughout the world".He explained in this book that mind independent reality is impossible and knowledge is not found but constructed. Further he has introduced and developed the concept of "Constructive Relativism" as the basis on which knowledge is constructed relative to the sense organs, culture and the mind completely based on Avidya.

Postmodernism

The term "relativism" often comes up in debates over postmodernism, poststructuralism and phenomenology. Critics of these perspectives often identify advocates with the label "relativism". For example, the Sapir–Whorf hypothesis is often considered a relativist view because it posits that linguistic categories and structures shape the way people view the world. Stanley Fish has defended postmodernism and relativism.

These perspectives do not strictly count as relativist in the philosophical sense, because they express agnosticism on the nature of reality and make epistemological rather than ontological claims. Nevertheless, the term is useful to differentiate them from realists who believe that the purpose of philosophy, science, or literary critique is to locate externally true meanings. Important philosophers and theorists such as Michel Foucault, Max Stirner, political movements such as post-anarchism or post-Marxism can also be considered as relativist in this sense - though a better term might be social constructivist.

The spread and popularity of this kind of "soft" relativism varies between academic disciplines. It has wide support in anthropology and has a majority following in cultural studies. It also has advocates in political theory and political science, sociology, and continental philosophy (as distinct from Anglo-American analytical philosophy). It has inspired empirical studies of the social construction of meaning such as those associated with labelling theory, which defenders can point to as evidence of the validity of their theories (albeit risking accusations of performative contradiction in the process). Advocates of this kind of relativism often also claim that recent developments in the natural sciences, such as Heisenberg's uncertainty principle, quantum mechanics, chaos theory and complexity theory show that science is now becoming relativistic. However, many scientists who use these methods continue to identify as realist or post-positivist, and some sharply criticize the association.

Religious

Buddhism

Madhyamaka Buddhism, which forms the basis for many Mahayana Buddhist schools and which was founded by Nāgārjuna. Nāgārjuna taught the idea of relativity. In the Ratnāvalī, he gives the example that shortness exists only in relation to the idea of length. The determination of a thing or object is only possible in relation to other things or objects, especially by way of contrast. He held that the relationship between the ideas of "short" and "long" is not due to intrinsic nature (svabhāva). This idea is also found in the Pali Nikāyas and Chinese Āgamas, in which the idea of relativity is expressed similarly: "That which is the element of light ... is seen to exist on account of [in relation to] darkness; that which is the element of good is seen to exist on account of bad; that which is the element of space is seen to exist on account of form."

Madhyamaka Buddhism discerns two levels of truth: relative and ultimate. The two truths doctrine states that there are Relative or conventional, common-sense truth, which describes our daily experience of a concrete world, and Ultimate truth, which describes the ultimate reality as sunyata, empty of concrete and inherent characteristics. Conventional truth may be understood, in contrast, as "obscurative truth" or "that which obscures the true nature". It is constituted by the appearances of mistaken awareness. Conventional truth would be the appearance that includes a duality of apprehender and apprehended, and objects perceived within that. Ultimate truth is the phenomenal world free from the duality of apprehender and apprehended.

Catholicism

The Catholic Church, especially under John Paul II and Pope Benedict XVI, has identified relativism as one of the most significant problems for faith and morals today.

According to the Church and to some theologians, relativism, as a denial of absolute truth, leads to moral license and a denial of the possibility of sin and of God. Whether moral or epistemological, relativism constitutes a denial of the capacity of the human mind and reason to arrive at truth. Truth, according to Catholic theologians and philosophers (following Aristotle) consists of adequatio rei et intellectus, the correspondence of the mind and reality. Another way of putting it states that the mind has the same form as reality. This means when the form of the computer in front of someone (the type, color, shape, capacity, etc.) is also the form that is in their mind, then what they know is true because their mind corresponds to objective reality.

The denial of an absolute reference, of an axis mundi, denies God, who equates to Absolute Truth, according to these Christian theologians. They link relativism to secularism, an obstruction of religion in human life.

Leo XIII

Pope Leo XIII (1810–1903) was the first known Pope to use the word "relativism", in his encyclical Humanum genus (1884). Leo condemned Freemasonry and claimed that its philosophical and political system was largely based on relativism.

John Paul II

John Paul II wrote in Veritatis Splendor

As is immediately evident, the crisis of truth is not unconnected with this development. Once the idea of a universal truth about the good, knowable by human reason, is lost, inevitably the notion of conscience also changes. Conscience is no longer considered in its primordial reality as an act of a person's intelligence, the function of which is to apply the universal knowledge of the good in a specific situation and thus to express a judgment about the right conduct to be chosen here and now. Instead, there is a tendency to grant to the individual conscience the prerogative of independently determining the criteria of good and evil and then acting accordingly. Such an outlook is quite congenial to an individualist ethic, wherein each individual is faced with his own truth, different from the truth of others. Taken to its extreme consequences, this individualism leads to a denial of the very idea of human nature.

In Evangelium Vitae (The Gospel of Life), he says:

Freedom negates and destroys itself, and becomes a factor leading to the destruction of others, when it no longer recognizes and respects its essential link with the truth. When freedom, out of a desire to emancipate itself from all forms of tradition and authority, shuts out even the most obvious evidence of an objective and universal truth, which is the foundation of personal and social life, then the person ends up by no longer taking as the sole and indisputable point of reference for his own choices the truth about good and evil, but only his subjective and changeable opinion or, indeed, his selfish interest and whim.

Benedict XVI

In April 2005, in his homily during Mass prior to the conclave which would elect him as Pope, then Cardinal Joseph Ratzinger talked about the world "moving towards a dictatorship of relativism":

How many winds of doctrine we have known in recent decades, how many ideological currents, how many ways of thinking. The small boat of thought of many Christians has often been tossed about by these waves – thrown from one extreme to the other: from Marxism to liberalism, even to libertinism; from collectivism to radical individualism; from atheism to a vague religious mysticism; from agnosticism to syncretism, and so forth. Every day new sects are created and what Saint Paul says about human trickery comes true, with cunning which tries to draw those into error (cf Ephesians 4, 14). Having a clear Faith, based on the Creed of the Church, is often labeled today as a fundamentalism. Whereas, relativism, which is letting oneself be tossed and "swept along by every wind of teaching", looks like the only attitude acceptable to today's standards. We are moving towards a dictatorship of relativism which does not recognize anything as certain and which has as its highest goal one's own ego and one's own desires. However, we have a different goal: the Son of God, true man. He is the measure of true humanism. Being an "Adult" means having a faith which does not follow the waves of today's fashions or the latest novelties. A faith which is deeply rooted in friendship with Christ is adult and mature. It is this friendship which opens us up to all that is good and gives us the knowledge to judge true from false, and deceit from truth.

On June 6, 2005, Pope Benedict XVI told educators:

Today, a particularly insidious obstacle to the task of education is the massive presence in our society and culture of that relativism which, recognizing nothing as definitive, leaves as the ultimate criterion only the self with its desires. And under the semblance of freedom it becomes a prison for each one, for it separates people from one another, locking each person into his or her own 'ego'.

Then during the World Youth Day in August 2005, he also traced to relativism the problems produced by the communist and sexual revolutions, and provided a counter-counter argument.

In the last century we experienced revolutions with a common programme–expecting nothing more from God, they assumed total responsibility for the cause of the world in order to change it. And this, as we saw, meant that a human and partial point of view was always taken as an absolute guiding principle. Absolutizing what is not absolute but relative is called totalitarianism. It does not liberate man, but takes away his dignity and enslaves him. It is not ideologies that save the world, but only a return to the living God, our Creator, the Guarantor of our freedom, the Guarantor of what is really good and true.

Pope Francis

Pope Francis refers in Evangelii gaudium to two forms of relativism, "doctrinal relativism" and a "practical relativism" typical of "our age", noting that pastoral workers who believe in the ideals of the Church may still fall into a form of relativism based on a lack of enthusiasm for social participation and focus on individualism.

Pastoral workers can thus fall into a relativism which, whatever their particular style of spirituality or way of thinking, proves even more dangerous than doctrinal relativism. It has to do with the deepest and inmost decisions that shape their way of life. This practical relativism consists in acting as if God did not exist, making decisions as if the poor did not exist, setting goals as if others did not exist, working as if people who have not received the Gospel did not exist. It is striking that even some who clearly have solid doctrinal and spiritual convictions frequently fall into a lifestyle which leads to an attachment to financial security, or to a desire for power or human glory at all cost, rather than giving their lives to others in mission.

Jainism

Mahavira (599-527 BC), the 24th Tirthankara of Jainism, developed a philosophy known as Anekantavada. John Koller describes anekāntavāda as "epistemological respect for view of others" about the nature of existence, whether it is "inherently enduring or constantly changing", but "not relativism; it does not mean conceding that all arguments and all views are equal".

Sikhism

In Sikhism the Gurus (spiritual teachers) have propagated the message of "many paths" leading to the one God and ultimate salvation for all souls who tread on the path of righteousness. They have supported the view that proponents of all faiths can, by doing good and virtuous deeds and by remembering the Lord, certainly achieve salvation. The students of the Sikh faith are told to accept all leading faiths as possible vehicles for attaining spiritual enlightenment provided the faithful study, ponder and practice the teachings of their prophets and leaders. The holy book of the Sikhs called the Sri Guru Granth Sahib says: "Do not say that the Vedas, the Bible and the Koran are false. Those who do not contemplate them are false." Guru Granth Sahib page 1350; later stating: "The seconds, minutes, and hours, days, weeks and months, and the various seasons originate from the one Sun; O nanak, in just the same way, the many forms originate from the Creator."

Health economics

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Health_economics

World health expenditure as share of global GDP.

How much did the UK spend on healthcare in 2012?

Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and healthcare. Health economics is important in determining how to improve health outcomes and lifestyle patterns through interactions between individuals, healthcare providers and clinical settings. Health economists study the functioning of healthcare systems and health-affecting behaviors such as smoking, diabetes, and obesity.

One of the biggest difficulties regarding healthcare economics is that it does not follow normal rules for economics. Price and quality are often hidden by the third-party payer system of insurance companies and employers. Additionally, QALYs (Quality Adjusted Life Years), one of the most commonly used measurements for treatments, is very difficult to measure and relies upon assumptions that are often unreasonable.

A seminal 1963 article by Kenneth Arrow is often credited with giving rise to health economics as a discipline. His theory drew conceptual distinctions between health and other goods. Factors that distinguish health economics from other areas include extensive government intervention, intractable uncertainty in several dimensions, asymmetric information, barriers to entry, externality and the presence of a third-party agent. In healthcare, the third-party agent is the patient's health insurer, who is financially responsible for the healthcare goods and services consumed by the insured patient.

Externalities arise frequently when considering health and health care, notably in the context of the health impacts as with infectious disease or opioid abuse. For example, making an effort to avoid catching the common cold affects people other than the decision maker or finding sustainable, humane and effective solutions to the opioid epidemic.

Scope

The scope of health economics is neatly encapsulated by Alan Williams' "plumbing diagram" dividing the discipline into eight distinct topics:

• What influences health? (other than healthcare)
• What is health and what is its value?
• The demand for healthcare
• The supply of healthcare
• Micro-economic evaluation at treatment level
• Market equilibrium
• Evaluation at whole system level
• Planning, budgeting and monitoring mechanisms.

History

In the third century BC, Aristotle, an ancient Greek thinker, once talked about the relationship between farmers and doctors in production and exchange. In the 17th century, William Petty, a British classical economist, pointed out that the medical and health expenses spent on workers would bring economic benefits.

Presently, contemporary health economics stands as a prominent interdisciplinary field, connecting economic theory with healthcare practice; its diverse sub-disciplines and research domains are evident. The academic roots of this knowledge are commonly traced back to the U.S. tradition.

The American Medical Association (AMA) was created in 1848, having as main goals scientific advancement, creation of standards for medical education, launching a program of medical ethics, and obtaining improved public health. Yet, it was only in 1931 that economic concerns came to the agenda, with the creation of the AMA Bureau of Medical Economics, established to study all economic matters affecting the medical profession.

After the Second World War, amid the rapid improvement of the level of medical research technology, the modernization of diagnosis and treatment means and health facilities and equipment, the aging of the population, the sharp increase of chronic diseases, and the improvement of people's demand for health care and other reasons, medical and health expenses increased significantly. For example, total U.S. health expenditures steadily increased as a share of gross domestic product (GDP), demonstrating the increased importance that society placed on health care relative to other non-health goods and services. Between 1960 and 2013, health spending as a share of GDP increased from 5.0 to 17.4 percent. Over the same period, the average annual growth in nominal national health expenditures was 9.2 percent compared to nominal GDP growth of 6.7 percent.

At the same time, the expenditure on health care in many European countries also increased, accounting for about 4% of GDP in the 1950s and 8% by the end of the 1970s. In terms of growth rate, the proportion of health care expenditure in GNP (gross national product) in many countries increased by 1% in the 1950s, 1.5% in the 1960s, and 2% in the 1970s. This high medical and health expenditure was a heavy economic burden on government, business owners, workers, and families, which required a way to restrain its growth.

In addition, the scale of health service increased, technical equipment became more advanced, and division of labor and specialization saw increases, too. The medical and health service developed into a "healthcare industry" which occupies a considerable amount of capital and labor and occupies an important position in social and economic life. The research on economic problems of the health sector became an important topic of economic research.

Selma Muskin published "Towards the definition of health economics" in 1958 and, four years later, the paper, "Health as an Investment". At that time, health was broadly regarded as rather a consumptive branch of the economy. Muhkin's analysis was the first understanding that health investment had long-term beneficial consequences for the community. Probably, the single most famous and cited contribution to the discipline was Kenneth Arrow's "Uncertainty and the welfare economics of medical care", published in 1963.

After the 1960s, research in health economics developed further, and a second academic seminar on health economics was held in the United States in 1962 followed by a third in 1968. In 1968, the World Health Organization held its first international health economics seminar in Moscow. The convening of the three meetings showed that health economics had boarded an academic forum as an independent discipline, which also marked the official formation of health economics.

After the 1970s, the health economy entered a period of rapid development and nursing economics gradually emerged. In 1979, Paul Feldstein, an American health economist, first used the principles of economics to discuss the long-term care market, registered market, and other nursing economy issues, laying the foundation for the emergence of nursing economics.

In 1983, Nursing Economic Magazine was founded in the United States, and its main research content included nursing market development, nursing cost accounting, policies related to nursing services, nursing economic management, etc. The magazine's publication was a mark of the formal formation of nursing economics. In 1993, The University of Iowa Cost Research Center conducted a systematic nursing cost study, simply the NIC System. The specific practice consisted of establishing a special research institution equipped with full-time researchers, sorting out the nursing cost accounting content, and, finally, identifying 433 items in 6 categories. At the same time, the Center adopted computer technology to carry out nursing cost management, including cost assessment, reasonable budget, decision making, etc., which played a crucial role in improving the efficiency of nursing management and alleviating the nursing management crisis.

Healthcare demand

The demand for healthcare is a derived demand from the demand for health. Healthcare is demanded as a means for consumers to achieve a larger stock of "health capital". The demand for health is unlike most other goods because individuals allocate resources in order to both consume and produce health.

The above description gives three roles of persons in health economics. The World Health Report (p. 52) states that people take four roles in healthcare:

1. Contributors
2. Citizens
3. Provider
4. Consumers

Michael Grossman's 1972 model of health production has been extremely influential in this field of study and has several unique elements that make it notable. Grossman's model views each individual as both a producer and a consumer of health. Health is treated as a stock which degrades over time in the absence of "investments" in health, so that health is viewed as a sort of capital. The model acknowledges that health is both a consumption good that yields direct satisfaction and utility, and an investment good, which yields satisfaction to consumers indirectly through fewer sick days. Investment in health is costly as consumers must trade off time and resources devoted to health, such as exercising at a local gym, against other goals. These factors are used to determine the optimal level of health that an individual will demand. The model makes predictions over the effects of changes in prices of healthcare and other goods, labour market outcomes such as employment and wages, and technological changes. These predictions and other predictions from models extending Grossman's 1972 paper form the basis of much of the econometric research conducted by health economists.

In Grossman's model, the optimal level of investment in health occurs where the marginal cost of health capital is equal to the marginal benefit. With the passing of time, health depreciates at some rate ${\displaystyle \delta }$. The interest rate faced by the consumer is denoted by ${\displaystyle r}$. The marginal cost of health capital can be found by adding these variables: ${\displaystyle M{C}_{HK}=r+\delta }$. The marginal benefit of health capital is the rate of return from this capital in both market and non-market sectors. In this model, the optimal health stock can be impacted by factors like age, wages and education. As an example, ${\displaystyle \delta }$ increases with age, so it becomes more and more costly to attain the same level of health capital or health stock as one ages. Age also decreases the marginal benefit of health stock. The optimal health stock will therefore decrease as one ages.

Beyond issues of the fundamental, "real" demand for medical care derived from the desire to have good health (and thus influenced by the production function for health) is the important distinction between the "marginal benefit" of medical care (which is always associated with this "real demand" curve based on derived demand), and a separate "effective demand" curve, which summarizes the amount of medical care demanded at particular market prices. Because most medical care is not purchased from providers directly, but is rather obtained at subsidized prices due to insurance, the out-of-pocket prices faced by consumers are typically much lower than the market price. The consumer sets ${\displaystyle MB=MC}$ out of pocket, and so the "effective demand" will have a separate relationship between price and quantity other than the "marginal benefit curve" or real demand relationship will have. This distinction is often described under the rubric of "ex-post moral hazard" (which is again distinct from ex-ante moral hazard, which is found in any type of market with insurance).

Health utility

See also: Health Utilities Index

Life expectancy vs healthcare spending of rich OECD countries. US average of $10,447 in 2018.

Generally, economists assume that individuals act rationally with the aim of maximizing their lifetime utility, while all are subject to the fact that they cannot buy more than their resources allow. However, this model gets complex as there exists the uncertainty over individuals' lifetime. As such, the issue is split into two parts: 1. How does health produce utility and 2. What affects health (e.g., medical care and life-style choices).

Probably the most fundamental thing in consumer demand theory is that the good increases an individual's utility. Health is not really a good in the traditional sense, but health in itself produces happiness. We can think of health as a durable good, much like for instance a car, a house or an education. Every person comes into the world with some inherent "stock" of health, and a healthy baby has a fairly high stock of health. Basically, every decision an individual take during their lifetime will affect their stock of health.

Let X be a bundle of other goods, and H a stock of health. With these variables the formula for an individual's utility is: Utility = U(X, H). For simplicity, the stock of health produces utility, but technically, is the flow of services created by the stock of health that produces utility. As the traditional fashion for goods, "more is better", in other words an increase in health leads to an increase in utility. From this assumption, X grows with health, for instance it is more enjoyable to visit the zoo when not experiencing a headache.

Like other durable goods, the stock of health wears out over time, much like other durable goods. This process can be called aging. When the stock of health has dropped low enough, a person will lose their ability to function. In economic terminology it can be said that the stock of health depreciates. Since life expectancy has risen a lot during this century, it implies that e.g., the depreciation rate has decreased during this time. Public healthcare efforts and individual medical care are in place to restore the stock of health or to decrease the depreciation rate on the stock of health. A plot graph of an individual's stock of health throughout their lifetime would be steadily increasing in the beginning during their childhood, and after that gradually decline because of aging, meanwhile having sudden drops created by random events, such as injury or illness.

There are many other things than "random" health care events, which individuals consume or do during their lives that affect the speed of aging and the severity and frequency of the drops. Lifestyle choices can deeply improve or worsen health of an individual. The variable X, the bundle of goods and services, can undertake numerous characteristics, some add value while others noticeably decrease the stock of health. Outstanding among such lifestyle choices are the decision to consume alcohol, smoke tobacco, use drugs, composition of diet, amount of exercise and so on. Not only can X and H work as substitutes for one another in producing utility, but X can also affect H in a production sense as well. X can then be split into different categories depending on which effect it has on H, for instance "good" types (e.g., moderate exercise), "bad" types (e.g., food with high cholesterol) and "neutral" types (e.g., concerts and books). Neutral goods do not have an apparent effect on individuals' health.

Some agencies, including National Institute for Health and Care Excellence (NICE) in the United Kingdom, recommend the use of cost–utility analysis (CUA). This approach can compare the Incremental cost-effectiveness ratio to the Quality-adjusted life year (QALY).

Medical economics

Often used synonymously with health economics, medical economics, according to Culyer, is the branch of economics concerned with the application of economic theory to phenomena and problems associated typically with the second and third health market outlined above: physician and institutional service providers. Typically, however, it pertains to cost–benefit analysis of pharmaceutical products and cost-effectiveness of various medical treatments. Medical economics often uses mathematical models to synthesise data from biostatistics and epidemiology for support of medical decision-making, both for individuals and for wider health policy.

Mental health economics

Mental health economics incorporates a vast array of subject matters, ranging from pharmacoeconomics to labor economics and welfare economics. Mental health can be directly related to economics by the potential of affected individuals to contribute as human capital. In 2009 Currie and Stabile published "Mental Health in Childhood and Human Capital" in which they assessed how common childhood mental health problems may alter the human capital accumulation of affected children. Externalities may include the influence that affected individuals have on surrounding human capital, such as at the workplace or in the home. In turn, the economy also affects the individual, particularly in light of globalization. For example, studies in India, where there is an increasingly high occurrence of western outsourcing, have demonstrated a growing hybrid identity in young professionals who face very different sociocultural expectations at the workplace and in at home.

Mental health economics presents a unique set of challenges to researchers. Individuals with cognitive disabilities may not be able to communicate preferences. These factors represent challenges in terms of placing value on the mental health status of an individual, especially in relation to the individual's potential as human capital. Further, employment statistics are often used in mental health economic studies as a means of evaluating individual productivity; however, these statistics do not capture "presenteeism", when an individual is at work with a lowered productivity level, quantify the loss of non-paid working time, or capture externalities such as having an affected family member. Also, considering the variation in global wage rates or in societal values, statistics used may be contextually, geographically confined, and study results may not be internationally applicable.

Though studies have demonstrated mental healthcare to reduce overall healthcare costs, demonstrate efficacy, and reduce employee absenteeism while improving employee functioning, the availability of comprehensive mental health services is in decline. Petrasek and Rapin (2002) cite the three main reasons for this decline as (1) stigma and privacy concerns, (2) the difficulty of quantifying medical savings and (3) physician incentive to medicate without specialist referral. Evers et al. (2009) have suggested that improvements could be made by promoting more active dissemination of mental health economic analysis, building partnerships through policy-makers and researchers, and employing greater use of knowledge brokers.

Health technology assessment

Main article: Health technology assessment

Economic evaluation, and in particular cost-effectiveness analysis, has become a fundamental part of technology appraisal processes for agencies in a number of countries.

Health spending

See also: Health system § International comparisons

Lists of health spending by country:

• Health spending as percent of gross domestic product (GDP) by country
• List of countries by total health expenditure per capita

Health spending as percent of GDP over time.

Health spending by function (OECD, 2018)

Health spending by country: governmental, voluntary and out-of-pocket

The average estimated cost-effectiveness threshold (CET) per Quality-adjusted life year for health care rationing varied between countries in 2019 from 0.14 of GDP per capita for Ethiopia to 1.47 GDP per capita for USA according to a study.

Healthcare markets

The five health markets typically analyzed are:

• Healthcare financing market
• Physician and nurses services market
• Institutional services market
• Input factors markets
• Professional education market

Although assumptions of textbook models of economic markets apply reasonably well to healthcare markets, there are important deviations. Many states have created risk pools in which relatively healthy enrollees subsidize the care of the rest. Insurers must cope with adverse selection which occurs when they are unable to fully predict the medical expenses of enrollees; adverse selection can destroy the risk pool. Features of insurance market risk pools, such as group purchases, preferential selection ("cherry-picking"), and preexisting condition exclusions are meant to cope with adverse selection.

Insured patients are naturally less concerned about healthcare costs than they would if they paid the full price of care. The resulting moral hazard drives up costs, as shown by the RAND Health Insurance Experiment. Insurers use several techniques to limit the costs of moral hazard, including imposing copayments on patients and limiting physician incentives to provide costly care. Insurers often compete by their choice of service offerings, cost-sharing requirements, and limitations on physicians.

Consumers in healthcare markets often lack adequate information about what services they need to buy and which providers offer the best value proposition. Health economists have documented a problem with supplier induced demand, whereby providers base treatment recommendations on economic, rather than medical criteria. Researchers have also documented substantial "practice variations", whereby the treatment also on service availability to rein in inducement and practice variations.

Some economists argue that requiring doctors to have a medical license constrains inputs, inhibits innovation, and increases cost to consumers while largely only benefiting the doctors themselves.

Risk sharing

See also: Risk management

Risk-sharing can reduce risk premiums, for example for research and development of new cures and health care equipment.

Health insurance failure

Health insurance failure can be attributed to market failure or government failure. Underinsurance can arise when the cure of disease is very expensive, such as cancer or a wide spread of new diseases such as HIV/AIDS or COVID-19. In such cases either private insurers require a high premium as the risk factor and costs are high or they may not insure the people for a particular case. This leads to a void in the market where a certain section of the population will not be able to afford healthcare. Certain insurance markets, such as those for patients with HIV/AIDS, cancer, or other pre-existing conditions who are searching for new coverage, may be incomplete in the sense that those patients may be unable to afford coverage at any price. In such cases, the government usually intervenes and provides health care for such cases. For example, during the COVID-19 pandemic, no private insurance company predicted (or could have predicted) that such an outbreak would occur; as a result, state intervention became necessary to treat people. Governments can subsidize those who cannot afford insurance or, in certain situations, those low-cost activities and facilities that non-poor citizens can afford on their own. For example; the largest health insurance scheme in the world was launched in India by the name Ayushman Bharat in 2018.

Profit margin in healthcare industry

See also: Profit margin

Government might want to intervene in case of market failure in healthcare industry. Several health-care markets tend to have the potential for monopoly control to be exercised. Medical care in markets with few hospitals, patent-protected prescription products, and some health insurance markets is the major reason for higher costs and especially in cases where the providers are private companies. Limitations on physician-owned hospitals are argued to reduce competition between hospitals.

Sustainable business

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Sustainable_business 

Sustainable business is an enterprise that aims to do business minimizing negative impacts on the global or local environment, community, and society. Such businesses aim to achieve the triple bottom line: profit, people, and the planet, by integrating environmental, economic, and social considerations when making business decisions. Sustainable businesses often adopt practices that promote environmental protection, and long-term economic growth.

A green business is characterized by four pillars: First, the business incorporates environmentally friendly products or services that reduce the demand for harmful products and services, and help conserve natural resources. Second, the business preserves financial capital through responsible and efficient business models. Third, the company focuses on social responsibility by upholding human rights. Finally, it emphasizes cultural sustainability by supporting inclusion and respect for local and global communities.

Terminology

The concept of sustainability refers to the ability to meet the needs without compromising the ability of future generations to meet their own. In business, sustainability includes aligning economic growth with environmental protection. It emphasizes practices that minimize ecological damage, such as the reduction of waste and the limitation of greenhouse gas emissions that contribute to rising atmospheric CO2 levels.

The term sustainable business is related to other concepts such as corporate social responsibility (CSR), corporate citizenship, and responsible business. The triple bottom line, introduced by John Elkington in the 1990s, expands all this idea by evaluating business success across people, planet, and profit dimensions.

In contrast, short-termism refers to the prioritizing short-term financial outcome at the expense of long-term interests. Short-termism discourages investment in sustainable initiatives, contributing to source depletion and increased CO2 emissions. Short-termism has become a relevant theme in sustainability discussions, as balancing financial outcomes with environmental and social considerations is a challenge within modern business practices.

Green businesses are sometimes considered as possible mediators of economic-environmental relations, even if the business has a minimal effect on lowering atmospheric CO₂ levels. The definition of "green jobs" is ambiguous. Still, it is generally agreed that these jobs, the result of green business, should be linked to sustainable energy and contribute to reducing greenhouse gases. These corporations can be seen as generators of not only "green energy" but as producers of new "materializes" that are the product of the technologies these firms developed and deployed.

Environmental Dimension

A major initiative of sustainable businesses is to eliminate or decrease the environmental harm caused by the production and consumption of their goods. The impact of such human activities in terms of the number of greenhouse gases produced can be measured in units of carbon dioxide and is referred to as the carbon footprint. The carbon footprint concept is derived from the ecological footprint analysis, which examines the ecological capacity required to support the consumption of products.

Businesses can adopt a wide range of green initiatives: Tao et al. refer to a variety of "green" business practices including green strategy, green design, green production and green operation. One of the most common examples of a "green" business practice is the act of "going paperless" or sending electronic correspondence in instead of paper when possible. On a higher level, examples of sustainable business practices include: refurbishing used products (e.g., tuning up lightly used commercial fitness equipment for resale); revising production processes to eliminate waste (such as using a more accurate template to cut out designs), and choosing nontoxic raw materials and processes. For example, Canadian farmers have found that hemp is a sustainable alternative to rapeseed in their traditional crop rotation; hemp grown for fiber or seed requires no pesticides or herbicides. Another example is upcycling clothes or textiles, in which businesses can upcycle products to maintain or increase their quality.

Sustainable businesses aim to reduce environmental harm caused by production and consumption. This includes measuring carbon footprints, minimizing greenhouse gas emissions, and adopting practices such as: Refurbishing or upcycling products, Revising production processes to reduce wast, Using nontoxic materials, implementing design for the environment principles.

Examples include using hemp as a crop alternative, adopting paperless practices, and designing products for longer lifespans.

Sustainable business leaders also take into account the life cycle costs for the items they produce. Input costs must be considered regarding regulations, energy use, storage, and disposal. Designing for the environment (DFE) is also an element of sustainable business. This process enables users to consider the potential environmental impacts of a product and the process used to make that product.

The many possibilities for adopting green practices have led to considerable pressure being put upon companies from consumers, employees, government regulators, and other stakeholders. Some companies have resorted to "greenwashing" instead of making meaningful changes, merely marketing their products in ways that suggest green practices. For example, various producers in the bamboo fiber industry have been taken to court for advertising their products as "greener" than they are. In their book Corporate Sustainability in International Comparison, Schaltegger et al. (2014) analyze the current state of corporate sustainability management and corporate social responsibility across eleven countries. Their research is based on an extensive survey focusing on the companies’ intention to pursue sustainability management (i.e. motivation; issues), the integration of sustainability in the organization (i.e. connecting sustainability to the core business; involving corporate functions; using drivers of business cases for sustainability) and the actual implementation of sustainability management measures (i.e. stakeholder management; sustainability management tools and standards; measurements). An effective way for businesses to contribute towards waste reduction is to remanufacture products so that the materials used can have a longer lifespan.

Examples of sustainable companies

The Harvard Business School business historian Geoffrey Jones traces the historical origins of green business back to pioneering start-ups in organic food and wind and solar energy before World War 1. Among large corporations, Ford Motor Company occupies an odd role in the story of sustainability. Ironically, founder Henry Ford was a pioneer in the sustainable business realm, experimenting with plant-based fuels during the days of the Model T. Ford Motor Company also shipped the Model A truck in crates that then became the vehicle floorboards at the factory destination. This was a form of upcycling, retaining high quality in a closed-loop industrial cycle. Furthermore, the original auto body was made of a stronger-than-steel hemp composite. Today, of course, Fords aren't made of hemp, nor do they run on the most sensible fuel. Currently, Ford's claim to eco-friendly fame is the use of seat fabric made from 100% post-industrial materials and renewable soy foam seat bases. Ford executives recently appointed the company’s first senior vice president of sustainability, environment, and safety engineering. This position is responsible for establishing a long-range sustainability strategy and environmental policy, developing the products and processes necessary to satisfy customers and society as a whole while working toward energy independence. It remains to be seen whether Ford will return to its founder's vision of a petroleum-free automobile, a vehicle powered by the remains of plant matter.

The automobile manufacturer Subaru has also made efforts to tackle sustainability. In 2008 a Subaru assembly plant in Lafayette became the first auto manufacturer to achieve zero landfill status when the plant implemented sustainable policies. The company successfully managed to implement a plan that increased refuse recycling to 99.8%. In 2012, the corporation increased the reuse of Styrofoam by 9%. And from the year 2008 to the year 2012, environmental incidents and accidents were reduced from 18 to 4.

Smaller companies such as Nature's Path, an organic cereal and snack-making business, have also made sustainability gains in the 21st century. CEO Arran Stephens and his associates have ensured that the quickly growing company's products are produced without toxic farm chemicals. Furthermore, employees are encouraged to find ways to reduce consumption. Sustainability is an essential part of corporate discussions. Another example comes from Salt Spring Coffee, a company created in 1996 as a certified organic, fair trade, coffee producer. In recent years they have become carbon neutral, lowering emissions by reducing long-range trucking and using bio-diesel in delivery trucks, upgrading to energy-efficient equipment, and purchasing carbon offsets. The company claims to offer the first carbon-neutral coffee sold in Canada. Salt Spring Coffee was recognized by the David Suzuki Foundation in the 2010 report Doing Business in a New Climate. A third example comes from Korea, where rice husks are used as nontoxic packaging for stereo components and other electronics. The same material is later recycled to make bricks.

Some companies in the textile industry have been moving towards more sustainable business practices. Specifically, the clothing company Patagonia has focused on reducing consumption and waste. The company limits its environmental impact by ensuring only recycled and organic materials, repairing damaged clothes, and by complying with strong environmental protection standards for its entire supply chain.

Some companies in the mining and specifically gold mining industries are attempting to move towards more sustainable practices, especially given that the industry is one of the most environmentally destructive. Regarding gold mining, Northwestern University scientists have, in the laboratory, discovered an inexpensive and environmentally sustainable method that uses simple cornstarch—instead of cyanide—to isolate gold from raw materials in a selective manner. Such a method can reduce the amount of cyanide released into the environment during gold extraction from raw ore, with one of the Northwestern University scientists, Sir Fraser Stoddart stating that: “The elimination of cyanide from the gold industry is of the utmost importance environmentally". Additionally, the retail jewelry industry is now trying to be more sustainable, with companies using green energy providers and recycling more, as well as preventing the use of mined-so called 'virgin gold' by applying re-finishing methods on pieces and re-selling them. Furthermore, the customer may opt for Fairtrade Gold, which gives a better deal to small-scale and artisanal miners, and is an element of sustainable business. However, not everyone thinks that mining can be sustainable and many believe that much more must be done, noting that mining in general requires greater regional and international legislation and regulation, which is a valid point given the huge impact mining has on the planet and the huge number of products and goods that are made wholly or partly from mined materials.

In the luxury sector, in 2012, the group Kering developed the "Environmental Profit & Loss account" (EP&L) accounting method to track the progress of its sustainability goals, a strategy aligned with the UN Sustainable Development Goals. In 2019, on a request from the President Emmanuel Macron, François-Henri Pinault, Chairman and CEO of the luxury group Kering, presented the Fashion Pact during the summit, an initiative signed by 32 fashion firms committing to concrete measures to reduce their environmental impact. By 2020, 60 firms joined the Fashion Pact.

Fair Trade is a form of sustainable business and among the highest forms of CSR (Corporate Social Responsibility). Organizations that participate in Fair Trade typically adhere to the ten principles of the World Fair Trade Organization (WFTO). Moreover, Fair Trade promotes entrepreneurial development among communities in developing countries and it encourages communities to be responsible and accountable for their economic development via market engagement. Fair Trade is a form of marketing with a strong and direct social benefit beyond the economic supply chain.

In Sub-Saharan Africa, Ghanaian micro, small, and medium enterprises (MSMEs) have also engaged in environmentally sustainable business practices despite limited resources. According to a 2023 study, MSMEs across sectors such as plastic recycling, oil marketing, financial services, and consumer goods have adopted strategies that align with environmental stewardship, process efficiency, and sustainability-oriented culture. These include utilizing electronic documentation to minimize paper waste, incorporating renewable energy sources, implementing effective waste disposal systems, and educating staff on sustainability awareness. The study highlights that drivers such as sustainability-focused leadership, eco-preneurship, and resource optimization contribute not only to environmental impact reduction but also to competitive advantage and business longevity in Ghana’s growing informal and formal MSME sectors.

While many studies highlight the long-term benefits of sustainable practices, recent research suggests that firms may also face short-term trade-offs. A 2023 study of European listed firms found that, contrary to the common assumption of a "win-win," stronger sustainability practices were associated with reduced profitability, indicating that sustainability initiatives can temporarily lower financial performance.

Social dimension of sustainability

Sustainability in the social sphere refers to a business's responsibility to maintain the well-being of their employees, customers and community. Organizations may contribute to sustainability by supporting education, encouraging employee volunteering, and making charitable contributions. Organizations that give back to the community, whether through employees volunteering their time or through charitable donations, are often considered socially sustainable.

Socially sustainable practices can improve the quality of life in local communities and stregthen stakeholder relationship. Social sustainability is often linked to environmental justice, emphasizing that social equity and environmental responsibility are related and one affects the other. For a business to be sustainable, it must sustain not only the necessary environmental resources, but also social resources, including employees, customers, and its reputation.

Nonprofit organizations are recognizing the importance of environmental sustainability, not only in advocacy but in operational practices. Recent research suggests that adopting an environmental culture can mediate and strengthen the relationship between sustainability efforts and organizational performance outcomes in nonprofits. In a 2023 study, Ramdhony and Rajadurai found that nonprofits embedding environmental sustainability into their organizational values experienced improvements in stakeholder trust, funding outcomes, and long-term resilience. These findings highlight the evolving role of nonprofits not just as beneficiaries of sustainable development goals, but as implementers of green operational practices in the broader ecosystem of sustainable business.

Consumer-producer dynamics

Modern sustainability includes social and environmental factors often overlooked in the traditional business models. More consumers are demanding more sustainable goods and services, particularly when they perceive companies neglect their environmental responsibilities. Ecological awareness, sometimes viewed as a personal preference instead of a necessity, is a strategic marketing tool for firms that want to enhance their brand image. However, it is essential that companies re-state their environmental claims, greenwashing leads to consumer distrust and long-term reputational damage.

Greenwashing

Main article: Greenwashing

As sustainability has become a significant consideration in the last decade, companies face a greater perusal regarding the credibility of their environmental claims. In the United States, the Federal Trade Commission (FTC) Green guides enforces Green Guides, helping businesses avoid misleading advertising through deceptive environmental statements. Greenwashing refers to the act of presenting false, vague, or exaggerated benefits a company products, policies, or services offer. Greenwashing includes exaggerated claims about sustainability, stating the use of eco-friendly materials, or promoting harmful practices as "green".

When companies do not follow such guides, they may be subject to legal consequences and harmed reputations. Sustainable businesses often invest in experienced legal practitioners who can understand and can provide counsel on the FTC Guides and other such frameworks.

A related example is the 2015 Volkswagen emissions case, in which the company marketed diesel vehicles as environmentally friendly while using software that manipulated emissions test results. Subsequent investigations revealed the vehicles were equipped with "defeat" devices to cheat emission test, producing nitrogen oxide far above legal limits. This incident led to significant fines, charges, and loss of consumer trust.

The following case study illustrates how consumer awareness and behavior influence the sustainability practices adopted by producers, particularly in the fashion industry

Case study: consumer attitudes toward sustainable fashion

A qualitative study conducted in Lisbon, Portugal, by Leandro Pereira, Rita Carvalho, Alvaro Dias, Renato Costa, and Nelson Antonio examined how sustainability affects consumer choices in the fashion industry. Based on fifty interviews, researchers identified two groups: those who actively practice sustainable habits (60%), and those who are aware of sustainability, but not yet taken concrete action (40%). Active consumers practice recycling, purchasing second-hand garments, and supporting sustainable fashion brands. Less engaged consumers cited barriers including price, limited access, and lack of education. The study concluded that although awareness of sustainability is increasing, widespread change requires more affordable and convenient ecological options, as well as improved consumer education.

Organizations

The European community’s Restriction of Hazardous Substances Directive restricts the use of certain hazardous materials in the production of various electronic and electrical products. Waste Electrical and Electronic Equipment (WEEE) directives provide collection, recycling, and recovery practices for electrical goods. The World Business Council for Sustainable Development and the World Resources Institute are two organizations working together to set a standard for reporting on corporate carbon footprints. From October 2013, all quoted companies in the UK are legally required to report their annual greenhouse gas emissions in their directors’ report, under the Companies Act 2006 (Strategic and Directors’ Reports) Regulations 2013.

Lester Brown’s Plan B 2.0 and Hunter Lovins’s Natural Capitalism provide information on sustainability initiatives.

Corporate sustainability strategies

Corporate sustainability strategies can aim to take advantage of sustainable revenue opportunities, while protecting the value of business against increasing energy costs, the costs of meeting regulatory requirements, changes in the way customers perceive brands and products, the volatile price of resources.

Not all eco-strategies can be incorporated into a company's business immediately. The widely practiced strategies include Innovation, Collaboration, Process Improvement and Sustainability reporting.

1. Innovation & Technology: This method focuses on a company's ability to change its products and services towards better environmental impacts, for example less waste production.
2. Collaboration: The formation of networks with similar or partner companies facilitates knowledge sharing and propels innovation.
3. Process Improvement: Continuous process surveying and improvement are essential to reduction in negative impacts. Employee awareness of company-wide sustainability plan further aids the integration of new and improved processes.
4. Sustainability Reporting: Periodic reporting of company performance in relation to goals encourages performance monitoring internally and transparency and accountability externally. The goals might then be incorporated into the corporate mission.
5. Greening the Supply Chain: Sustainable procurement is important for any sustainability strategy as a company's impact on the environment is much bigger than the products that they consume. The B Corporation (certification) model is a good example of one that encourages companies to focus on this.
6. Choosing the Right Leaders: Having CEOs informed about the opportunities from sustainability guides companies in the right steps to being eco-friendly. As the world is slowly transitioning to sustainability, it is important for our company leaders to prioritize and have a sense of urgency.

Companies should adopt a sound measurement and management system to collect data on their sustainability impacts and dependencies, as well as a regular forum for all stakeholders to discuss sustainability issues. The Sustainability Balanced Scorecard is a performance measurement and management system aiming at balancing financial and non-financial as well as short and long-term measures. It explicitly integrates strategically relevant environmental, social and ethical goals into the overall performance management system and supports strategic sustainability management.

Noteworthy examples of sustainable business practices that are often part of corporate sustainability strategies can include: transitioning to renewable energy sources, implementing effective recycling programs, minimizing waste generation in industrial processes, developing eco-friendly product designs, prioritizing the adoption of sustainable packaging materials, fostering an ethical and responsible supply chain, partnering with charities, encouraging volunteerism, upholding equitable treatment of employees, and prioritizing their overall welfare, among numerous other initiatives.

Examples of sustainable businesses

Ford Motor Company: Uses renewable materials and has appointed executives to lead sustainability strategies. Subaru: Achieved zero landfill status at its Lafayette assembly plant and increased recycling practices. Patagonia: Focuses on recycled materials, product repair, and supply chain environmental standards. Nature’s Path & Salt Spring Coffee: Organic and fair trade practices, energy efficiency, and carbon neutrality. Luxury Sector (Kering): Tracks sustainability with the Environmental Profit & Loss account and participates in the Fashion Pact. Gold Mining: Innovative methods using cornstarch instead of cyanide reduce environmental impact.

Implementation in SMEs

Small and medium-sized enterprises face distinctive challenges when adopting corporate sustainability strategies. A 2023 Swiss survey of 514 SMEs reported that 89% had never produced a sustainability report, citing limited internal resources and unfamiliarity with international standards as main barriers. Nevertheless, SMEs that embraced systematic sustainability reporting recorded a 25% self-reported improvement in corporate reputation and an 18% improvement in workplace quality, indicating that even partial adoption can yield competitive advantages.

Standards

Enormous economic and population growth worldwide in the second half of the twentieth century aggravated the factors that threaten health and the environment — including ozone depletion, climate change, resource depletion, fouling of natural resources, and extensive loss of biodiversity and habitat. In the past, the standard approaches to environmental problems generated by business and industry have been regulatory-driven "end-of-the-pipe" remediation efforts. In the 1990s, efforts by governments, NGOs, corporations, and investors began to grow to develop awareness and plans for voluntary standards and investment in sustainability by business.

One critical milestone was the establishment of the ISO 14000 standards whose development came as a result of the Rio Summit on the Environment held in 1992. ISO 14001 is the cornerstone standard of the ISO 14000 series. This specifies a framework of control for an Environmental Management System against which an organization can be certified by a third party. Other ISO 14000 Series Standards are actually guidelines, many to help you achieve registration to ISO 14001. They include the following:

• ISO 14004 provides guidance on the development and implementation of environmental management systems.
• ISO 14010 provides general principles of environmental auditing (now superseded by ISO 19011)
• ISO 14011 provides specific guidance on audit an environmental management system (now superseded by ISO 19011)
• ISO 14012 provides guidance on qualification criteria for environmental auditors and lead auditors (now superseded by ISO 19011)
• ISO 14013/5 provides audit program review and assessment material.
• ISO 14020+ labeling issues
• ISO 14030+ provides guidance on performance targets and monitoring within an Environmental Management System
• ISO 14040+ covers life cycle issues

There are now a wide range of sustainability accounting frameworks that organizations use to measure and disclose on their sustainability impacts and dependencies. These have evolved since the 1990s to encompass metrics spanning a wide range of social, environmental, economic and ethical issues.

Circular business models

Further information: Circular Economy

Early academic, industry, and policy discussions around circularity primarily focused on re-X strategies such as recycling, remanufacturing, reuse, and recovery. However, it became evident that technological capabilities advanced faster than the practical implementation. For a successful transition toward a circular economy, collaboration among stakeholders is required. The business model innovation is a key driver for integrating circular technologies into organizations.

Circular business models aim to reduce resource consumption, minimize waste, and regenerate natural systems by rethinking production and consumption dynamics. Corporations are increasingly implementing circular strategies to achieve both environmental and financial benefits. Circular business can be classified into four main strategies. First, by narrowing resource loops that involves increasing production efficiency, by using fewer materials, often as implementing initiatives that optimize manufacturing processes. For example, in the cosmetics industry, upcycling—the repurposing of byproduct waste materials or useless products—emerges as a powerful strategy to advance circularity, minimize waste, and conserve resources. Second, by slowing resource loops, extending the lifespan of products through repair, reuse, resale, or rental services. Closing resource loops, focusing on reusing or recycling materials to return them into new production cycles. Regenerating natural systems emphasizes restoring resources used for production, for example, through agricultural practices.

These strategies allow companies to reduce costs, create new value propositions, and improve sustainability, though there are still challenges such as technology, consumer adaptation to ecological practices, and profitability considerations.

Writing and sustainable businesses

Writing about and communicating clean initiatives and ways to reduce emissions inspires other businesses and their possibilities of adopting these practices. Since businesses are able to reach groups of people, they have a significant role in the advancement of sustainable practices and environmental protection, by influencing both public policy, their customers, and other businesses. It has been suggested that businesses “take up the rhetorics and literacies necessary to communicate, analyze, organize, and mitigate environmental crises such as climate change”. This task is challenging due to climate change’s innate scientific complexity, abstract nature, and politically polarized character.

However, there are some ways to increase the effectiveness of this communication. By shedding light on local and more immediate issues, people can be more easily influenced to take action. Additionally, bringing attention to how it will impact humans, specifically human health, can help stress the urgency and severity of the situation. Lastly, suggesting action items and ways one can do their part can help make the climate crisis less daunting.

Certification

See also: Certification

Main article: Sustainability standards and certification

Challenges and opportunities

Implementing sustainable business practices may have an effect on profits and a firm's financial 'bottom line'. However, during a time where environmental awareness is popular, green strategies are likely to be embraced by employees, consumers, and other stakeholders. Many organizations concerned about the environmental impact of their business are taking initiatives to invest in sustainable business practices. In fact, a positive correlation has been reported between environmental performance and economic performance. Businesses trying to implement sustainable business need to have insights on balancing the social equity, economic prosperity and environmental quality elements.

If an organization’s current business model is inherently unsustainable, becoming truly sustainable requires a complete makeover of the business model (e.g. from selling cars to offering car sharing and other mobility services). This can present a major challenge due to the differences between the old and the new model and the respective skills, resources and infrastructure needed. A new business model can offer major opportunities by entering or even creating new markets and reaching new customer groups. The main challenges faced in the sustainable business practices implementation by businesses in developing countries include lack of skilled personnel, technological challenges, socio-economic challenges, organizational challenges and lack of proper policy framework. Skilled personnel plays a crucial role in quality management, enhanced compliance with international quality standards, and preventative and operational maintenance attitude necessary to ensure sustainable business. In the absence of skilled work forces, companies fail to implement a sustainable business model.

Another major challenge to the effective implementation of sustainable business is organizational challenges. Organizational challenges to the implementation of sustainable business activities arise from the difficulties associated with the planning, implementation and evaluation of sustainable business models. Addressing the organizational challenges for the implementation of sustainable business practices need to begin by analyzing the whole value chain of the business rather than focusing solely on the company's internal operations. Another major challenge is the lack of an appropriate policy framework for sustainable business. Companies often comply with the lowest economic, social and environmental sustainability standards, when in fact the true sustainability can be achieved when the business is focused beyond compliance with integrated strategy and purpose.

Companies leading the way in sustainable business practices can take advantage of sustainable revenue opportunities: according to the Department for Business, Innovation and Skills the UK green economy will grow by 4.9 to 5.5 percent a year by 2015, and the average internal rate of return on energy efficiency investments for large businesses is 48%. A 2013 survey suggests that demand for green products appears to be increasing: 27% of respondents said they are more likely to buy a sustainable product and/or service than 5 years ago. Furthermore, sustainable business practices may attract talent and generate tax breaks.

Digitalization can also challenge and enhance the implementation of sustainable business models (SBMs). A systematic review by Broccardo et al. (2023) found that digital technologies, such as big data, blockchain, Internet of Things (IoT), and artificial intelligence (AI), can enable businesses to transform traditional business models toward sustainability. Some transforms include improving efficiency, promoting resource sharing, facilitating recycling and remanufacturing, and fostering stakeholder collaboration. These digital tools can create "virtuous circles," in which investments in digital transformation can generate operational savings and establish new revenue streams that further support sustainable initiatives. However, the study expresses that digitalization is not automatically beneficial; it requires strategic alignment with social, environmental, and economic goals to avoid unintended trade-offs, such as high energy consumption or unequal access to technology.

Employee Engagement and Organizational Culture in Sustainability

Sustainable business practices are significantly influenced by the degree of employee engagement and the prevailing organizational culture. Organizations that cultivate a culture oriented toward sustainability frequently demonstrate elevated levels of employee involvement in environmentally focused initiatives, including efforts to reduce energy consumption and participation in community programs. Employee engagement mechanisms, such as the establishment of "green teams" or the implementation of internal sustainability competitions, serve to motivate staff to contribute innovative ideas and assume responsibility for advancing environmental and social objectives.

Empirical research indicates that organizations characterized by a culture emphasizing sustainability tend to report improved employee morale, reduced turnover rates, and increased levels of innovation. Employees are more inclined to propose environmentally sustainable solutions when their contributions are recognized and perceived as aligned with organizational objectives. Leadership is considered instrumental in this context, as leaders who model sustainable behaviors, articulate clear sustainability goals, and acknowledge or reward sustainability-related initiatives contribute to the advancement of environmental and social outcomes within the organization.

The integration of sustainability into organizational culture is associated with the potential to reduce an organization’s ecological footprint, strengthen internal cohesion, foster trust among stakeholders, and enhance its reputation as a socially responsible entity.