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The "new" real economy

"Since my days as the chief economics ­editor at a leading daily newspaper in the Netherlands, I’ve always believed recessions are substantially made by people’s fears."

Since my days as the chief economics ­editor at a leading daily newspaper in the Netherlands, I’ve always believed recessions are substantially made by people’s fears. Yes, certain economic cycles of supply and demand may cause recessions. But at some point, we talk ourselves into it.

It starts with a few companies reporting disappointing results. The media begin seeing a trend and raise the question of a looming recession. Meanwhile, they start looking for other companies with problems, which they usually find easily. Consumers take note and start withdrawing. Then the government reports disappointing consumer statistics, etc… A cycle of fear sets in and suddenly a recession is unavoidable.

Can we stop an upcoming recession by dropping our fears? It would be a great experiment. However it would require a different leadership than the dismal-minded bankers and economists who make the headlines in challenging economic times.

I was thinking about this recently when I visited the Natural Products Expo West in Anaheim, California. Over the past two decades, it has grown into the leading international show for new organic, healthy and sustainable products. I’ve visited the show many times and I’ve become impressed with the strength and resilience of this sector. If you’re looking for proof of positive change, there are few better places to visit.

One morning as I walked the floor—as big as a couple of football fields with some 3,500 exhibitors—I realized there was a disconnect between the sad news about banks in trouble that I’d read in the morning paper and the inspiring, booming atmosphere in the exhibition hall. There was no recession in Anaheim. Nor will there be, I think, in the foreseeable future. Too many new companies are exploring the many, many options to make our planet a better, cleaner and more just place. They have to succeed and that’s what they’re doing. Never mind the other news.

Are we witnessing a new split in the economy? On the one hand, we see the companies that continue to do business as usual; on the other, we see an emerging force of new companies addressing the challenges the planet faces. That’s the force we need more than anything to fight global warming and the divide between the rich and poor. That force may face a different cycle of supply and demand than old-fashioned, ­money-oriented businesses. Maybe North America is on its way to the first ever “partial” recession that won’t hit the much-needed forces of sustainability. And maybe then we’ll prove we can avoid recessions by keeping our faith in positive change.

In our cover story, we profile some of the leaders of the sustainability movement—activists who show we can bring about change through invitation and determination rather than protest and anger. One of them—Gary Hirshberg, founder of the organic dairy company Stonyfield Farm—spent his first-ever Natural Products Expo West more than 20 years ago sleeping in his booth because he didn’t have the money to pay for a hotel. Now Hirshberg is on the board of The Dannon Company, the U.S. division of Groupe Danone to which he sold Stonyfield, transforming a food multinational into a champion of sustainability. Watch that and forget about recessions!