The circular economy is one in which biological and industrial materials are kept in circulation via recycling, reuse, refurbishment, composting, etc. This means that producers have to change the design of their products and make them modular to enable repair, refurbishment, upcycling, or simply extraction of valuable materials they contain to give them new life. According to the Ellen McArthur Foundation, this also means that all of us who consume industrial products should stop being owners and become users. It is suggested and widely accepted in the literature that “circular economy advocates the need for a ‘functional service’ model in which manufacturers or retailers increasingly retain the ownership of their products and, where possible, act as service providers—selling the use of products, not their one-way consumption. “This is seen as a necessary measure to motivate the producers to make their products durable and CE-friendly. The argument is that when producers retain ownership over their products and lease them and provide connected services instead of selling them, they have the incentive to make them durable and CE-friendly and are able, based on the retained ownership, to extract valuable materials from them that they will reuse. The result of this transition from selling goods to renting them in combination with services should be an environmentally friendly economy, cheaper services for consumers, and more new jobs.
Red flags
While CE is an appealing concept that makes a lot of sense, the insistence on a functional service model and the narrative supporting it raises some red flags. First, coating the functional service model into the catchy title “The End of Ownership” is misleading. Switching to renting everything from the producer or retailer instead of buying it does not end ownership. It leads to the end of ownership for some – the common citizens, and to the concentration of ownership on everything in the hands of few and already rich. Furthermore, describing the current property law system as one that places “at the centre the interests of property owner and has as its primary aim to provide incentives for individuals” as something at odds with the CE is hypocritical. The whole narrative supporting the CE and transfer to a functional service model is justified by the claim that it gives incentives to producers (the owners) to behave more sustainably. So, it is OK to revolve around owner’s interests and it is OK to incentivize owners to act more sustainably as long as these owners are corporations? The rest of us should not be motivated to act more sustainably, we are just too selfish and thus should be stripped of our possessions.
Another red flag is that there is no serious analysis of the possible downsides of the transfer to leasing instead of owning. For instance, what stops the producer from claiming a “higher monthly payment if he replaces the current thing with a nicer, better, more extensive model”? A similar problem already happened. In the USA the tractor manufacturer John Deere makes tractors with software-enabled functionalities. Given that that software is the intellectual property of the producer it is illegal for farmers to repair their tractors on their own. John Deere uses this software to lock the owners out of their tractors, as they are not allowed to break the digital lock because it would present a breach of copyright law. So, if something is wrong with the tractor farmers have to contact the authorized John Deere dealer, which can be far away, and then wait for a technician to come and diagnose the problem, and only then fix it which can also take a lot of time, and timing in agriculture is everything as one of the farmers warned. Another farmer could not even afford to pay for access to the John Deere-approved diagnostic software, and consequently could not repair his expensive tractor. And this is done via copyright law. What could then go wrong if John Deeres of the world would rent us their products instead of selling them to us?
What could go wrong indeed especially if we surrender ownership over our homes? Namely, there is a suggestion that people should only buy and own a shell of real estate while leasing all the furniture, appliances, and even inner walls, floors, and bathrooms. In light of the John Deere case, such a suggestion raises a large red flag. ‘A twelve-story red flag with a magnificent entrance hall, carpeting throughout, 24-hour portage, and an enormous sign on the roof, saying “This Is a Large Red Flag” ‘, to paraphrase good old Captain Black Adder. We all have already experienced the consequences of corporate greed in 2008 and have seen that no one was held accountable. Why should we trust that they will not abuse their position once they own everything?
A More Balanced Approach
Now I do not call for the total rejection of the functional service model. I, however, think that all the initiatives to introduce a functional service model, and the supporting narratives, should be critically assessed. They remind me too closely of the current state of the art regarding our smart gadgets like smartphones and computers, where we own shells while everything that we bought them for is leased to us via EULAs by which big tech companies retain the rights to do pretty much anything they want to. Regarding that problem, Fairfield suggested modifying property law instruments and rights for the digital context. On that note, I question the thesis of the owner-centricity of the current property law system. Private law, property law included, has proven throughout history that it can limit the omnipotence of owners for the good of others or society as a whole. This has been done via mechanisms like the doctrine of the abuse of rights. Another interesting mechanism originates from the Socialist Yugoslavia. In 1978, when the Law on Obligations was enacted, the actio popularis was introduced to protect the environment authorizing anyone to ask the court to stop the owner from his activities if they pose a risk of damage to an undefined number of persons. And this is to mention just a couple of examples. So, before we discard the current property law system, we should explore how it could be adjusted to be more conducive to CE.
There are good suggestions on how to proceed in that direction. Furthermore, options like takeback and buyback schemes could be reinforced and enhanced. Possibly new property rights resembling servitudes or security rights could be developed to provide some certainty to the producers that they will be able to extract the materials once their products reach the end of life without retaining the ownership and thus excessively limiting consumers’ options. Finally, it should be carefully assessed where it is appropriate to use the functional service model. The uncritical and ubiquitous application of that model is not wise and can lead to dreadful distributive consequences and can have adverse effects on individual freedom. “Not owning my lamp only restricts my permissible actions with regard to that lamp. Not owning anything in my daily environment, and not having a say in how access contracts with regard to my daily environment are constructed, restricts all of my actions.” (Salman and Claassen, 2018: 575)
What is needed is a balanced approach based on data and information reached through non-biased research; research not sponsored by foundations funded and established by corporations; an approach that aims to set a fair balance between personal freedom and a clean and healthy environment.
Conclusion
According to the dominant narrative about CE, the right of ownership is not at odds with the circular economy as long as everything is owned by the producers and retailers. Such change is advocated for to make CE possible. However, there is no proof that this switch is conditio sine qua non for the transition to CE. It is a condition to make this transition cheaper for those who pollute and make them richer and more powerful than ever before.
Another way is possible through careful weighing of interests and unbiased research on the effects of particular measures, and through modification of property law rules and doctrines to the CE context without devastating distributive effects. We should at least explore what are the options in this direction before we decide that the only way to save our planet is to initiate feudalism 2.0.
Art by Tomoko Nagao
Il quarto stato with motta, campari, firelli, armani, prada, chicco, alitalia and visa at piazza duomo
2016 Digital contents
© 2024 TOMOKO NAGAO
