But, as John Lennon once wrote, “life is what gets in the way when you are making other plans.” Drew and Myra grew raspberries on a two-and-half acre plot, selling them first at a roadside stand, then to restaurants in nearby Carmel. They didn’t know much about farming, but because they didn’t like the smell of the chemical fertilizers and pesticides, they tried organic farming, guided by Rodale’s Encyclopedia of Organic Gardening. They grew salad greens, too, and while they made only $9,800 in their first year, 1984, they decided that grad school could wait. And then wait some more.

A quarter century later, their Earthbound Farm is America’s largest grower of organic produce. Drew and Myra were the first to sell the pre-washed bagged salads that are now on supermarket shelves everywhere, and they dominate that market. Today, Earthbound processes and markets more than 100 varieties of salads, vegetables and fruit, gathered from about 150 farmers who tend 35,000 organically-farmed acres from British Columbia to Mexico. Earthbound Farm products are available in 75% of supermarkets across the country, and the firm makes store brands for chains like Costco, Safeway and Trader Joe’s. Annual revenues top $400 million.

Talk about organic growth!

“We’ve been sprinting nonstop,” says Drew, just to keep up. Things eased up a bit lately after he  chose to step down as CEO of Earthbound to become head of strategy. Myra oversees marketing and writes cookbooks, including Food to Live By” The Earthbound Farm Organic Cooking, which tells their story. (I can personally vouch for her recipe for Whole Wheat Penne with Edamame, Portobellos, and Slow-Roasted Tomatoes, which my wife cooked this evening. I’ve posted the recipe below.)

Reporters, enjoying the spread at Earthbound

I met Myra and Drew last week during Cooking for Solutions, a conference and foodfest sponsored by the Monterey Bay Aquarium. Myra was on a panel that I moderated about business and sustainability, and the next day they hosted about 100 reporters and chefs for a delicious organic lunch under sunny skies at Earthbound’s farm stand, near their original farm. I enjoyed their company so much that I didn’t take many notes, which is why there are so few quotes in this blogpost.

We talked some about the reasons why the organic industry, which has grown steadily for years, still remains small. Less than 1 percent of farmland is farmed organically. Price, is, of course, the big issue—people can’t or don’t want to pay more for organic food. Interestingly, Earthbound Farms’ business took off not just because customers cared about organic but because they liked the convenience of pre-washed, bagged salads.

This innovation, too, was unplanned. As Myra tells the story in Food to Live By, she and Drew were working very long hours and found they were too tired to cook each night. So they made a habit on Sundays of harvesting, washing and drying a week’s worth of baby greens, and making fresh vinaigrette dressing from lemons that grew on the property. The salads stayed fresh, to their surprise. Soon after, faced with a surplus of baby greens, they took bagged salads to local health food stores and they sold very well. Myra’s father, Mendek Rubin, designed the first production line — in their living room! She writes:

We would fill a huge mesh basket with greens, dunk and swirl them in the first sink, haul out the basket with (a) rope and pulley system, then repeat the washing process in the second and third sinks. For our drying system, we used restaurant salad spinners, and absorbed any leftover moisture by shaking the salad in giant terry cloth sacks made from bath towels.

Amazing. Today, Earthbound Farms produces more than 30 million salad servings a week.

“I’m proud,” Myra told me, “because I do think we are making a difference.” Their kind of farming is good for the environment, good for farmworkers, good for people who live in neighborhoods near the farms and, she says, good for human health, although the argument that eating organic food is better for you remains unproven.

So why aren’t more farmers growing organic food? Basically because they have to charge more for it that consumers will pay. One reason Earthbound’s mixed greens have done so well—organic mixed greens account have more than 40% market share in the category—is that they are priced only slightly higher than conventional produce. Why? Because baby greens stay in the ground for as little as 21 days, which means they don’t require much, if any, weeding, organic fertilizer or pest-control methods as do vegetables like carrots, celery, broccoli or cauliflower that stay in the ground much longer. Even more costly is organic milk because cows need to be fed so much organic grain to make it. This kind of thing never occurs to those of us who a more likely to fly over farmland than to walk on it.

Organic foods cost more also cost more to grow because some farmland is typically set aside to grow flowers to attract beneficial insects like ladybugs that will eat unwanted pests. So per-acre yields are lower. Plus, organic farming is more management intensive and labor intensive.

This is why, in general, so-called Big Organic is to be welcomed and not feared: Organic food would be even more expensive were it not for the economies of scale that benefit Earthbound. And to see organic farming spread further, costs need to come down.

–

Here’s the Whole Wheat Penne recipe, the first ever on this blog. Healthy and delicious!

Whole Wheat Penne with Edamame, Portobellos, and Slow-Roasted Tomatoes
(Serves 4)

Edamame is in the spotlight here. These soybeans look like little green gemstones hidden among the strips of intensely flavored tomatoes and hearty portobellos. Edamame also make an appearance in the pesto-like puree that coats the pasta. Admittedly, this dish has a lot of components, but all the elements add up to layers of incredible flavor.

About 1 cup shelled, fresh or frozen (unthawed) edamame (soy beans, from 1 pound unshelled)
2 cups (8 ounces) dried whole wheat penne
1/4 cup olive oil
2 large portobello mushroom caps (about 8 ounces total), sliced 1/4-inch thick
1 clove garlic, peeled and crushed
2 tablespoons dry white wine or water
2/3 cup sliced Slow-Roasted Tomatoes (page 383), or 2/3 cup sliced sun-dried tomatoes (see sidebar, page 242)
1/2 cup minced fresh basil
1 tablespoon fresh thyme leaves
Pinch of dried red pepper flakes
Salt and freshly ground black pepper
3/4 cup Edamame Pesto (recipe follows)
1/2 cup freshly grated Parmesan cheese
Basil sprigs (optional), for garnish

1. Bring a large pot of salted water to a boil over high heat. Add the edamame and cook until tender, 4 to 5 minutes. Drain the edamame in a strainer, transfer them to a bowl, and set aside.
2. Let the water return to a boil, add the penne, and cook according to the package directions.
3. Meanwhile, heat the olive oil in a large skillet over medium heat and add the mushrooms. Cook, stirring occasionally, until they begin to soften, about 2 minutes. Add the garlic and wine and stir to combine. Cover the skillet, reduce the heat to medium low, and cook until the mushrooms are tender, about 5 minutes.
4. Add the edamame and the tomatoes, basil, thyme, and pepper flakes. Season with salt and pepper to taste. Cook until the tomatoes are warmed through, about 3 minutes.
5. Drain the penne in a colander, setting aside 1 cup of the pasta cooking water. Return the penne to the pot. Add 1/2 cup of the Edamame ?Pesto? and stir to combine. If the pasta is too dry, add 1/3 cup or more of the reserved pasta cooking water.
6. Add the mushroom mixture to the pot with the pasta and stir to combine. Taste for seasoning, adding more Edamame ?Pesto,? salt, pepper, or pasta cooking water, if needed.
7. Transfer the pasta to a serving platter or pasta bowls, and sprinkle the Parmesan cheese on top. Serve immediately, garnished with basil, if desired.

Edamame Pesto
Edamame are fresh soybeans, pale green and oval, about the size of a fingernail.
Look for them in the grocer’s freezer section, although sometimes you can find them fresh. They are very nutritious, and when pureed like a pesto, with garlic, lemon, parsley, and pine nuts, their usually mild taste comes alive. Serve this unusual  pesto on pasta, or spread it on thin baguette slices or crackers for a quick appetizer. It’s great spread on sandwiches instead of mayonnaise, too.
Makes about 3/4 cup

3/4 cup shelled, fresh or frozen (unthawed) edamame (soybeans, from 3/4 pound unshelled)
1 clove garlic
3 tablespoons pine nuts
1/2 cup (packed) flat-leaf parsley leaves
1/3 cup extra-virgin olive oil
1 tablespoon fresh lemon juice
1/4 teaspoon salt

1. Bring a large pot of salted water to a boil over high heat. Add the edamame and cook until tender, 4 to 5 minutes. Drain the edamame in a strainer and set aside to cool completely.
2. Place the edamame in a food processor or blender and add the garlic, pine nuts, and parsley. Process until coarsely pureed, stopping to scrape down the side of the bowl once or twice.
3. Add the olive oil, lemon juice, and salt and process to combine, about 30 seconds. The ?pesto? will not be completely smooth. The pesto can be refrigerated, covered, for up to 5 days, or frozen for up to 3 months.

Shit, as they say, happens.

And yet we keep on devising those well-laid schemes, don’t we? We extrapolate the future based on the past. We imagine that we can make useful economic forecasts (because now we have more data than we did before). We imagine that regulation will protect use from the meltdowns of markets (as well as off-shore oil drilling platforms and nuclear power plants). We imagine that the Department of Energy can lead us to a clean energy future, or that scientists can make geo-engineering safe. We imagine that we understand things better than we do. And we forget the words of that other poet, John Lennon, who wrote that “life is what happens to you while you’re busy making other plans.”

So the timing is excellent for this week’s updated version of The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb, which includes a new essay called “On Robustness and Fragility.”  I’ve haven’t read the essay yet, but Taleb discussed the book and much more with my friend Russ Roberts, the Hayekian economics professor, at EconTalk. Their 67-minute conversation is never dull.

For those of you who aren’t familiar with The Black Swan, the title refers to the fact that the phrase “black swan” was used for hundreds of years in Europe to describe the impossible or near-impossible–until, that is, a Dutch explorer discovered black swans in western Australia in 1697, at which point the term morphed into the idea that the impossible sometimes happens. In Taleb’s account black swan events are rare, extreme, impossible to foresee and often world-changing. “History does not crawl, it jumps,” he writes. Brilliant and egotistical,  Taleb worried in the book, which was published in 2007, that

Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall.  The increased concentration among banks seems to have the effect of making financial crises less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur ….I shiver at the thought.

You know what happened next.

And yet, as he tells Russ, Taleb recently spoke on a panel with a top official of the International Monetary Fund, who began his remarks by offering his economic forecast for the years 2011 through 2014–infuriating Taleb, who thought

Anyone in this room who’s listening to this forecast without asking what his forecasts for 2008 and 2009 were in 2001, 2, 3, 4, 5, 6 and 7 needs to blow up again…

How can people still listen to the No. 2 man of the IMF talking about his forecasts for the future when he never got anything right in the past?

And why are we building systems based on these forecasts?

Some people say having an imperfect forecast is better than having no forecast at all. But of course that’s not so, at least not if we make big decisions based on that imperfect forecast that can impact all of our lives. The banks, remember, bet their future on complex computer models saying that housing prices could never decline by 15 to 20% in a year. Their formulas, they said, reduced the amount of value at risk. Unhappily, the fact that they were so tragically mistaken does not seem to have diminished the supply of hubris at, say, Goldman Sachs.

Now, the problem with wrong-headed forecasts is not that they are wrong-headed; that’s inevitable. The problem comes when our collective well-being depends on them. This, Taleb says in his essay, is why we need to build robust systems and not fragile ones. The global banking system was and is fragile. So was BP’s oil-rig. So, we were reminded last Friday, are stock markets when a “glitch” can cause a 1,000 point drop. So is the economy of Greece, which in an interconnected world, has global repercussions.

Taleb says:

I want to live in a society in which human error doesn’t penalize the multitudes. This is pretty much my mission. To try to figure out how to build a society in which people can make mistakes and mistakes are inconsequential.

One way to do that is to reduce debt. Personal debt, corporate debt and government debt all make borrowers more fragile. Surplus cash makes us more resilient, better able to withstand the unforeseen. (Recall the pre-recession balance sheets of GM and Ford.) Debt is driven, at least in part, by hubris. The shoppers who flock to the mall despite their negative balance sheets, GM, Chrysler, Sam Zell when he bought the Chicago Tribune, Greece or the people in charge at the U.S. Treasury grow overconfident about the future; they make their plans, borrow money and then life gets in the way and the rest of us get stuck with the bill. This can’t go on forever. As Russ put it during the podcast: “We’ll bail out Greece” — he could as easily have said Citi or AIG — “and then we’ll get bailed out by Mars or Neptune.”

Interestingly, western religions have understood hubris and debt for a long time. “All Mediterranean religions had either an explicit or implicit ban on debt,” Taleb notes. “We’ve known about how debt fragilizes systems since the Babylonians.”

So beware of economists bearing forecasts, bankers offering teaser rates and governments when they take on obligations that our children and grandchildren will have to repay. In a fragile and interconnected world, we all pay for their mistakes.

Pamela Ronald

Earlier this week at FORTUNE’s Brainstorm Green conference about business and the environment, I led a conversation about food and agriculture during which a communications executive named David Kalson asked the question: Can organic food and transgenic food be part of the effort to make agriculture more sustainable? I answered “yes, I think so,” and referred him to an excellent book called Tomorrow’s Table: Organic Farming, Genetics and the Future of Food (Oxford University Press, 2008) by Pamela Ronald and Raoul Adamchak.

In the preface to the book, Sir Gordon Conway, the former president of the Rockefeller Foundation, calls Tomorrow’s Table “a tale of two marriages.” The first is the marriage between Pamela, a scientist whose research focuses on the genetic engineering of plants, notably rice, and Raoul, a teacher and lifelong organic farmer. The second is the potential marriage of two techniques: Genetic engineering and organic agriculture, which now cannot work hand-in-hand because, at least in the U.S., rules governing organic farming prohibit genetic engineering of crops.

The conversation at Brainstorm reminded me to post the edited transcript of a (long-ish) interview that I recently conducted with Pamela Ronald, who is a professor of plant pathology at the University of California, Davis. We talked about the book, her work on rice and what her family eats for dinner.

Marc: How and why did you get involved in the genetic engineering of crops?

Pamela: Genetic engineering is not really a discipline. It’s just a tool. I’m a research scientist. I do plant genetics. I became interested in genetics in college. I had a fantastic teacher and I got very interested in understanding how plants and microbes could communicate.

Gunther: Where was this?

Ronald: Reed College. I had spent a lot of time backpacking in the Sierra Nevada Mountains as I was growing up. I’ve always been interested in plant biology. My mother and grandparents were excellent gardeners and small-scale farmers.

Gunther: Well, then, how did your interest evolve into using, as you say, the tool of genetic engineering as opposed to conventional plant breeding?

Ronald: Conventional plant breeding has been carried out for thousands of years, and over that time it has evolved from primitive domestication to sophisticated molecular approaches. Most of the modern approaches are still considered conventional plant breeding, and include techniques such as bringing two species together, as we do with grafting, random mutagenesis, where chemicals or radiation are used to induce changes to the DNA, and other bio-technological approaches.

More recently, now that we have a lot more information about plants, we’re able to more precisely identify and characterize genes and bring them into plants in a new way, which is called genetic engineering. With GE only one to a few genes are introduced directly without the initial pollination step.

Gunther: When did you start working with rice?

Ronald: I completed my PhD. at the University of California, Berkeley in 1990. As I was moving towards my post-doctorate work, I wanted to work on a very important staple crop. That’s why rice attracted me. It’s not only a staple crop but it is an excellent genetic system to understand basic biology, and in particular, how plants and microbes.

Gunther: In your book, you write about work you’re doing to develop rice that’s flood tolerant. Does that remain a focus?

Ronald: I’m working in several areas of research. First, I still work on how plants and microbes communicate. We’ve isolated genes that are important for how the plant resists disease, and in particular we look at a bacterial disease. I also look at stress tolerance in rice, trying to understand what makes the plant tolerant to environmental stresses such as flooding. I’m also very interested in trying to establish new collaborations with computational biologists to use their great tools to really get a whole genome picture, to take systems approach picture to understand how plants respond to different types of stresses. Finally, I’m looking at using rice as a model for studies of switchgrass, which is an important future bio-energy crop.

Gunther: Sounds like a very full agenda! There’s a moment in the book where you plant some modified rice and discover that the strain of rice that you’re working on was able to survive fourteen days of flooding. How far are you from taking that discovery and actually bringing it out into commercial use?

Ronald: My laboratory carried out the molecular genetics and isolated a key gene for submergence tolerance. Since I began this project, I’ve had a fantastic collaborator at the International Rice Research Institute named Dave Mackill. He has now taken the genetic information and carried out precision breeding, which is a modern form of breeding that requires molecular markers. And he has developed varieties for India, Bangladesh, and the Philippines, and those are now out in farmers’ fields. I have another excellent collaborator at UC Riverside who has now taken the lead in understanding how a single gene can affect diverse plant responses that allow it to survive flooding.

Gunther: So your work is already having an impact? I recall reading in your book that the value of the rice crop destroyed by flooding was really significant.

Ronald: In India and Bangladesh alone, it’s estimated that four million tons of rice— enough to feed 30 million people—is lost every year to flooding. So the varieties that he has released into those countries should be quite useful.

Gunther: Have the new strains been accepted by farmers?

Ronald: Well, we took a trip to India and Bangladesh that Dave and his group organized — all the collaborators went — about a year and a half ago. We went with the farmers, and the rice is getting a fabulous reception. They said the rice was beautiful and I have a long blog on that trip, more than you probably would ever want to know.

[Editor’s Note: You can read Pam Ronald’s series of seven blog posts about her trip to Bangladesh, beginning with the first post here. Her blog, which is called Tomorrow’s Table, can now be found here.]

Gunther: The rice story is heartwarming, but not well known. I wonder if you think genetically engineered crops have an image problem. The early commercial genetically modified crops—I’m thinking of the Flavr-Savr tomato which wasn’t very flavorful—didn’t provide clear cut environmental benefits or help poor farmers, as I recall.

Ronald: There is no doubt that GE crops have an image problem in Europe and in some parts of the US. Still, much of the plant genetic work is carried out at publicly funded institutions and many of us are working on traits that would benefit poor farmers. We need to continue strong public funding and support for this kind of research. We cannot rely on private corporations to feed the world, that is not their goal.

In addition to Sub1 rice, there have been really fantastic varieties coming out from publicly funded research. So, for example, Dennis Gonsalves, a local Hawaiian, was very concerned about the papaya ringspot virus, which was devastating production on the island of Oahu. He and his group were able to develop papayas resistant to the virus. That virtually saved the papaya industry. The research behind that was all publicly funded.

The job of private companies is to make a profit. They’re going to produce new varieties for very, very large markets. So it doesn’t make sense to rely on private corporations to feed the world. I think that it’s something that public sector science really needs to do.

With that said, I think there should have been more publicity when the first genetically engineered crops came out. For example, with the papaya, or if the public had seen and understood the potential of Golden Rice, that would have had a big impact. But certainly some of the BT crops that have come out have had a tremendously positive environmental impact. They’ve been very helpful to the health of farmers and to the environment. There’s great data available from around the world on the reductions of insecticide.

Gunther: That’s because growers use BT corn and other BT crops as an alternative to spraying insecticides, correct?

Ronald: Yes. The huge reductions in insecticides have come, primarily, from BT cotton. There are excellent peer-reviewed reports from India and China, and they’re not all from industry; some are released by the national laboratories in those countries.

I think the public sees genetic engineering as a tool of corporations, but it’s really a tool for breeding, it’s a tool for biologists, it’s a tool for farmers.

Gunther: Maybe we’ve answered it already but what do you think, so far, has been the most significant benefit that’s been delivered by genetic engineering of crops?

Ronald: The massive reduction in insecticide use is a clear benefit. So is saving the papaya industry. That’s been a clear success story.

Gunther: And as long as we’re on the topic, where do you see the greatest potential, looking ahead?

Ronald: I think we’re going to continue to see benefits in minimizing the amount of land that we use for growing crops, which is critical, because most arable land has already been farmed. We’re going to see reductions in harm to human health as we reduce the use of insecticides. And we are hopefully very soon going to see massive changes in nutrition for very impoverished countries. Again, I’m talking about Golden Rice, which is supposed to be released in a couple years.

Gunther: Could you explain Golden Rice?

Ronald: Golden Rice was supported by the Rockefeller Foundation. The idea was to develop rice that had higher levels of pro-vitamin A. The reason is that 500,000 children die each year from vitamin A deficiency disorders.

Golden Rice has been quite a successful project, led by a group in Switzerland. Now the International Rice Research Institute is playing a large role in making those traits available to locally adapted varieties in different parts of the world. I think it’s going to be released in the Philippines first.

Gunther: I want to cover two more topics. The first are concerns some people have about genetic engineering. It might be helpful here to explain how genetic engineering differs from conventional breeding.

Ronald: The process is different than conventional breeding in a couple ways. One, with genetic engineering, you can take a gene from any species and put it into a crop plant; that’s not true with conventional breeding. With conventional breeding, you need two fairly closely related species. The other big difference is that genetic engineering is very precise: you can bring in a single gene.

The National Academy of Sciences has looked at different processes of conventional breeding and different processes of genetic engineering and concluded that each process has some unpredictable consequences. You can’t ever have a process that has no risk. But, interestingly, genetic engineering poses similar risks of unintended consequences as that of many of the types of conventional breeding. And certain types of conventional breeding such as random mutagenesis, where you introduce random mutations throughout the genome, is predicted to have higher levels of unintended consequences than most types of genetic engineering.

Gunther: Why is that?

Ronald: Once you develop a new variety through mutagenesis you can alter the trait you want but there are likely other mutations that get carried along in the new breeding line that are not tracked. In contrast, with GE, you know exactly which gene you are transferring. We have an example of our own work. My collaborator Dave Mackill used a precision breeding approach for introducing the submergence tolerance gene into rice. This is a modern molecular-assisted conventional breeding and is not considered GE. The new varieties were highly tolerant of flooding as we predicted but the grains were a different color. That’s an example of an unpredicted consequence. Most consequences are very simple, and the color change is one the farmers don’t mind at all. They’re just happy they’re getting a three-fold increase in yield under conditions of flooding.

Gunther: Speaking of risks, aren’t there significant risks when countries decide not to use genetic engineering, as some of the Europeans have done?

Ronald: I think the risk is that their food is probably going to get more expensive. Many of these countries are quite wealthy. It’s an interesting question for the future; if many of the large countries — China, the United States, Argentina, Brazil — start producing genetically engineered crops, then it’s going to be difficult for Europe to access food that is not genetically engineered. But even the EU is changing. I think the EU is now allowing member states to make their own decisions on GE.

Raoul and Pam

Gunther: Let’s wrap up by talking about your family dinner table. Like many, if not most, Americans, you eat some foods that are organically grown and others from genetically engineered crops. Could you talk a little bit about how you see organic and GE foods working hand in hand in the future?

Ronald: My husband’s a certified organic farmer so everything we eat from his farm is organic. And we eat genetically engineered tofu from genetically engineered soybeans. We’ll eat tortillas from genetically engineered corn.

Gunther: Do both organics and genetically-engineered crops have a role to play at the American dinner table?

Ronald: I think certainly they do. I don’t think it matters if something is certified organic or if it’s genetically engineered. What matters is whether or not it was grown in a manner that is consistent with principles of sustainability. We need to use all the best tools available when it comes to creating a sustainable agricultural system.

Note: This interview originally appeared on Produce More Conserve More, a website run by Monsanto, which has commissioned me to do a series of interviews on sustainable agriculture.

As companies step up their spending on green marketing, the confusion about what’s truly green is getting worse.

For consumers, it’s a challenge to cut through the clutter and decide whether to buy green products or support green companies.

Here’s a guideline that is easy to follow:

We should absolutely not support green products from companies that use them to distract us from their larger negative environmental and social impacts. We need systemically green companies to address the challenges we face, not business-as-usual companies that hold up one green hand while hiding another toxic, CO2-emitting, waste-producing one behind their backs.

Two examples:

The Clorox company has done an impressive job of adding an earth-friendly luster to its image by acquiring Burt’s Bees and launching the GreenWorks line of natural cleaners, which compete with Seventh Generation’s cleaners. But despite its best efforts to renew its image, Clorox can’t quite conceal the fact that at its core, it’s still a big-time bleach company.

Take, for example, a series of ads that the bleach maker ran in early 2009 for its amped-to-the-max cleaner Formula 409. Clorox boasted that it had the desire and the capacity to develop an even brawnier product, Formula 410, “but it would be illegal in twelve states.” The ad implied that if Clorox reformulated 409 just one more time, environmental regulators would ban the chemical-laced product. Perhaps Clorox’s true color is not quite as green as it would like us to believe.

For its part, BP used its “Beyond Petroleum” ad campaign to bolster its green credentials and highlight its comparatively modest spending on renewable energy. But the oil titan’s high-profile rhetoric failed to square with its scarring of a vast wilderness landscape to extract crude from Canada’s tar sands. Not surprisingly, a backlash soon followed. Activists described tar-sands oil extraction as “one of the world’s greatest environmental crimes.”

By the spring of 2009, the oil colossus announced that safety was now its “number one priority,” which led some environmental groups to conclude that the company was retreating to its all-petrol roots. Inevitably, more than a few wags suggested that BP should henceforth stand for “Back to Petroleum.”

To learn how consumers think about greenwashing, New Scientist magazine recently teamed up with EarthSense, which polled U.S. shoppers on their perceptions of the “greenness” of various companies, and with Trucost, which has compiled a quantitative assessment of companies’ global environmental impact.

Together, they looked at whether consumer opinion matched reality. Unfortunately, it didn’t. Take, for example the contrast between Fresh Del Monte Produce and Green Mountain Coffee Roasters. The research concludes that:

Both of these companies are seen by consumers as very environmentally friendly, yet they stand at opposite ends of the spectrum for environmental impact among our sample of food and beverage firms. Words like “fresh” and “green” immediately suggest a wholesome image. This is central to the identity of Green Mountain, a producer of whole-bean and ground coffee, including organically grown varieties. It is, indeed, the greenest of all our food and beverage companies, according to Trucost’s analysis.

Fresh Del Monte Produce similarly projects a green image, but London-based Trucost’s numbers paint a different picture. Growing fruit and vegetables involves heavy use of fertilizers and pesticides, but the main issue again is water consumption, which accounts for more than three-quarters of the company’s high environmental impact score.

That’s quite a gap between belief and truth.

But fear not — the age of transparency is coming as I predict in The Responsibility Revolution, the new book I have written with Bill Breen. Analyses like New Scientist‘s will allow us all to make more responsible decisions, and companies will have a harder and harder time projecting green images while hiding bad habits in their back pockets.

Until it all becomes clear, companies are well advised to use the seven principles for corporate responsibility defined in The Responsibility Revolution, and consumers should make sure that they have the Good Guide loaded on their mobile devices before they go shopping.

But the book that I most want to recommend to readers of this blog is Whole Earth Discipline: An Ecopragmatist Manifesto by Stewart Brand. It’s brilliant, controversial, unconventional and lively. Nothing I read in 2009 changed my thinking more.

I’m not alone in my admiration for Stewart’s book. Paul Hawken calls it “likely one of the most original and important books of the century.…” Edward O. Wilson says it is “ominous and exhilirating.” Larry Brilliant says it is “an absolutely seminal work, extraordinarily well written, a tour de force of so many interconnected worlds and lives and studies.” Nice blurbs, no?

The praise is all the more remarkable because Whole Earth Discipline argues that we need nuclear power to combat global warming, that we need biotechnology to feed the world and that we need to take  geo-engineering seriously — ideas that are anathema to much, though not all, of the environmental movement that Stewart helped create roughly 40 years ago.

For those of you (younger readers) who aren’t familiar with his work, Stewart, who is a vigorous 72-year-old, is best known as the editor of Whole Earth Catalog, an influential compendium of all things countercultural, published in the late 1960s and 1970s, with a photo of the earth seen from space on its cover. After an LSD-induced experience that got him thinking about the curve of the earth, Stewart campaigned to have NASA release the picture. Later, he wrote:

It is no accident of history that the first Earth Day, in April 1970, came so soon after color photographs of the whole earth from space were made by homesick astronauts on the Apollo 8 mission to the moon in December 1968. Those riveting Earth photos reframed everything. For the first time humanity saw itself from outside… Humanity’s habitat looked tiny, fragile and rare. Suddenly humans had a planet to tend to.

Since then, Stewart has been a writer, a speaker, an organizer, a pioneer of online communities as a founder of the WELL (the “Whole Eart ‘Lectronic Link,” where I first discovered the power of the Internet), a consultant to companies and the owner of a tugboat in San Francisco where he lives with his wife, Ryan Phelan. He writes:

Because I’m an ecologist by training, a futurist by profession and a hacker (lazy engineer) at heart, my bent is scientific rigor, geoeconomic perspective, and an engineer’s bias, which sees everything in terms of solving design problems.

Fun fact about Stewart: He owns the table where Otis Redding reportedly wrote “Dock of the Bay.”

I’m not going to try to summarize Stewart’s arguments about nukes, GMOs or geo-engineering here, but let me try to give you a flavor of his thinking and writing.

On nukes, he says, given the urgency of the climate crisis,  it’s a little nutty to worry about how to dispose of radioactive waste hundreds or even thousands of years from now since we can’t predict technological progress between now and then (although we can sure there will be lots of it). And, as he notes:

Nuclear waste is minuscule in size—on Coke can’s worth per person-lifetime of electricity if it was all nuclear…Coal waste is massive—68 tons of solid stuff and 77 tons of carbon dioxide per person-lifetime of strictly coal electricity.

France, which built a fleet of 56 reactors in about 20 years because of an efficient licensing process, now has

the cleanest air in Europe, the lowest electrical bills and a $4 billion export business selling energy to all its neighbors, including Green Germany and nuclear Britain (2 gigawatts a year flows west under the English Channel). France shut down its last coal-fired plant in 20094. It emits 70 percent less carbon dioxide per capita than the United States.

I didn’t know that. Did you?

On biotech food, Stewart is characteristically blunt:

I daresay the environmental movement has done more harm with its opposition to genetic engineering than with any other thing we’ve been wrong about. We’ve starved people, hindered science, hurt the natural environment and denied our own practitioners a crucial tool.

He has a great rant about “natural food” (see page 133) as well as a fascinating account of the debate over genetic engineering inside the environmental movement in the 1970s which, among other things, led the scientists Lewis Thomas and Paul Ehrlich to part ways with Friends of the Earth. Since the mid-1990s, as Stewart notes, we (meaning earthlings) have conducted “the most massive dietary experiment in history” with most everyone in North America eating biotech foods and most everyone in Europe doing without them. The results are in, and no difference can be detected between the test and the control group. He goes on to write about what he calls a “GE-inclusive organic agriculture” as well as the potential of foods engineered to produce health benefits.

There’s much more to recommend in Whole Earth Discipline. It turns out that Stewart is a fan of urbanization, having abandoned what he calls his “Gandhiesque romanticism about villages.” Slums in the global south, he says, are hotbeds of innovation and cooperation, they cure overpopulation and they are better for people and the planet than the subsistence farms seen by many as “soulful and organic.”

I’ll save Stewart’s ideas about geo-engineering for another blogpost. Meanwhile, read this book. And, if you can, join us at FORTUNE’s Brainstorm Green conference about business and the environment, where I’m delighted that Stewart Brand will be one of the featured speakers.

Whole Earth Catalog, 1968

Whole Earth Discipline, 2009

Whether population tops out at the high or the low end of those projections will have a huge impact on climate change. So population control is again claiming a place on the environmental agenda.

Nairobi slums

Oops! Did I say “population control”? I should have said “addressing population growth” or “assuring reproductive rights for women” or even “securing population justice” — because some people get very nervous when environmentalists start talking about population, and for good reason.

Yet the conversation is worth having, which is why I went to a discussion today at the Center for American Progress in Washington featuring Laurie Mazur, the editor of a new book called A Pivotal Moment: Population, Justice & The Environmental Challenge (Island Press, $30).

Mazur argues that we are at a pivotal moment, not just environmentally, because of the lethal overheating of the planet, but demographically, because, as she writes,

the ultimate size of the human population will be decided in the next decade or so.

That’s because right now the largest generation of young people in human history is coming of age. Nearly half the world’s population—some 3 billion people—is under the age of twenty-five. Those young people will, quite literally, shape the future.

Like it or not, population is an environmental issue. Although many of our new neighbors will live in such poor countries as India, Bangladesh and Indonesia, they will have carbon footprints, too, albeit much smaller ones that those we make here in the U.S.

“Does population, per se, matter for the environment?” Mazur asked at the Center for American Progress. “Yes, it does.” It will matter even more as poor people improve their standard of living, gaining access to automobiles, electricity, computers and big-screen TVs. “Our planet can’t sustain 7 billion people consuming as we do, much less 9 or 11 billion,” she says.

What is to be done? It’s no mystery. “Over the last 50 years, we’ve learned a huge amount about how to slow population growth,” Mazur says. Quite simply, the goal should be to provide people with the means and the power to make their own decisions about when to have children. Women first need access to family planning and reproductive health services. Beyond that, they need to be able to determine their own fate. That means confronting gender inequality, providing girls with education, ending child marriage and reducing global poverty.

It’s a daunting agenda but  the first step–providing reproductive health services for every woman on earth—is surprisingly inexpensive. The developed countries’ share of that cost is about $20 billion, according to Mazur, and she pegs the U.S.’s share at about $1 billion, less than the daily price tag of the war in Afghanistan.

The benefits are significant. Stabilizing world population at 8 billion, rather than 9 billion or more, would reduce greenhouse gas emissions by one gigaton or more by 2050, the equivalent of one or more of the “wedges” in the well-known analysis of climate mitigation by Princeton professors Stephen Pacala and Robert Sokolow, according to Brian C. O’Neill, a scientist at the National Center for Atmospheric Research, who contributed a chapter to A Pivotal Moment.

Nevertheless, environmentalists tiptoe around the population issue for a couple of reasons, says Andrew Light, a senior fellow at the Center for American Progress. The first is that the apocalyptic warnings about overpopulation that were sounded in the late 1960s when the Sierra Club published Paul Ehrlich’s The Population Bomb proved unfounded.

The other reason for trepidation is political sensitivity. Environmentalists don’t want to be seen as caring more about nature than people. The word “misanthropic” came up during the discussion, as did the names of Edward Abbey and David Brower. Whatever you think of Abbey, he was not a social animal.

Environmentalist are also aware of the ugly history of “population control.” While the international family planning movement brought contraceptives to the developing world and drove down fertility rates down between the mid-1960s and mid-1990s, family planning programs were controversial, as Mazur notes:

Some–notably in India and China–flagrantly abused human rights with coercive practices such as forced sterilization and abortion (which continue to this day in China). And many first-generation programs focused more on demographic “targets” than on individual needs.

In the U.S., the Federation for American Immigration Reform, or FAIR, an organization seen by many as hostile to immigrants, was founded by members of the Sierra Club and John Tanton, then president of Zero Population Growth, which advocated birth control and tax incentives to limit population growth, according to A Pivotal Moment. In 2007, an Australian medical journal advocated a $5,000 carbon tax per child for families with more than two children.  And, just a few weeks ago, Rush Limbaugh suggested, facetiously, that Andrew Refkin, the distinguished climate change reporter for The New York Times, kill himself after Revkin mused in print about the possibility of awarding carbon credits for avoided children, much like they are awarded for avoided deforestation. So, yes, talking about population is a tricky business.

Two final thoughts. First, while curbing population will help mitigate global warming, that is not the same thing as saying that population growth caused the climate crisis. Overconsumption is by far the bigger culprit, with Americans way out in the lead. The Washington, D.C., area, Mazur said, produces 25% more CO2 than all of Sweden, which has nearly twice as many people.

Second, the idea of “population justice,” which emphasizes individual freedoms to make decisions about sexuality, reproduction and family, should help avoid the future use of coercive tactics. As Light put it: “Any method you want to use for decreasing population has to pass some obvious moral tests.” Better yet, providing parents with access to family planning, educating girls and dealing with gender inequality are all steps worth taking for their own sake, regardless of their impact on population. You can read more at The Population Justice Project and at the Women’s Environment and Development Organization.

So is paying people not to have children moral? Comments, anyone?

This, as it happens, is typical. When a meat-based entrée is being served, and people are offered a vegetarian alternative, about 5 to 10% will request it.

But what if the choices were reversed? Organizers of the 2009 Behavior, Energy and Climate Change Conference, which began today in Washington, tried an experiment: They made a vegetarian lunch the default option, and gave meat eaters the choice of opting out.

Some 80% went for the veggies, not because there were lots of vegetarians in the crowd of about 700 people but because the choice was framed differently. We know that because, at a prior BECC conference, when meat was the default option, attendees chose the meat by an 83% to 17% margin.

More than lunch is at stake here. “Omnivores contribute seven times the greenhouse gas emissions, when compared to vegans,” says Karen Ehrhardt-Martinez, the conference chair, who works for the American Council for an Energy Efficient Economy.

Might there be broad-based ways to promote a vegetarian diet, while giving people the freedom to choose what they want? How can smart-grid technology be designed to encourage people to conserve energy? Which “green” marketing messages work, and which don’t? Can the insights of behavioral economics help fight climate change?

Those are the questions that engaged the policy makers, academics, and business executives at this BECC event, which differs from most conversations about climate change. Typically, when politicians, environmentalists or corporate executives  discuss the issue, they focus on technology (solar, wind, electric cars) or regulation (cap-and-trade, the UN climate talks). The BECC crowd focuses on another powerful lever, albeit one that doesn’t get as much attention: human behavior, and in particular the irrational, emotional, self-defeating, short-term, inconsiderate and plain old silly human behavior that most of us engage in every day.

Like keeping  incandescent light bulbs burning, when we know  CFLs are cheaper (and most work very well). Or looking at  the price tag of an appliance, rather than its lifecycle costs. Or buying things–like over-sized homes–that we can’t afford.

As Erhardt-Martinez notes, personal choices have a huge collective impact on the climate crisis. Home energy use and the use of personal vehicles—that is, the way we live—accounts for about 38% of U.S. energy consumption. Behavior change could generate energy savings of 25 to 30% over the next five to eight years, she said.

There’s no need to wait for technology breakthroughs. “We already have much better choices,” she said. “People aren’t making them.”

Dan Ariely

Dan Ariely, professor of behaviorial economics at Duke and director of the Center for Advanced Hindsight (!) — gave the opening keynote at BECC, and he left no doubt that most of us are not nearly as rational in our decision-making as we would like to think we are. (I blogged in June about Ariely’s entertaining book, Predictably Irrational: The Hidden Forces that Shape Our Decisions. If this topic interests you, I can also enthusiastically recommend Nudge: Improving Decisions about Health, Wealth and Happiness by Richard  Thaler and Cass Sunstein. Sunstein has since joined the Obama administration as a shaper of regulations.) Ariely, Sunstein, Thaler and others have all brought the insights of psychology to the study of economics, helping explain how we humans actually behave> Hint: we’re not always the dispassionate, rational, self-interested, utility-maximizers of Econ 101.

“We wake up every morning with an incredible sense of agency,” Ariely says, meaning that we see ourselves as masters of our own fate. But evidence suggests that emotion, not to mention the people who design user interfaces—from the lunch menu to the choices presented by our 401-K plans—play a large role in our lives.

The climate crisis is a particular challenge for behavioral economists. It’s a long-term problem, and we tend to focus on the immediate. (That’s why Americans can’t resist dessert, and had a negative savings rate for many years.) Greenhouse gases are invisible, unlike other pollutants. Measuring the impact of individual actions is all but impossible. Global warming will harm other people, mostly poor people in the global south, before it damages the U.S.

“If you said, I want to create a problem that people don’t care about, you would probably come up with global warming,” Ariely says.

Still, there’s creative work being done to change behavior. Check out the Energy Smackdown, a community-based competition to excite people about saving energy. Some utility companies put smiley faces on bills of efficient consumers, promoting friendly neighborhood rivalries. Speakers at the conference addressed such topics as “Consumption-Based Carbon Footprint Accounting Tools,” “Pay as You Drive Insurance” and “Framing Matters: The Impact of Policy Context on Willingness to Change Energy Consumption Behavior.”

Call me a geek, but I’d like to know more. Unfortunately, I couldn’t attend most of the conference. So if you presented, or want to offer insights on how behaviorial economics can mitigate climate change, feel free to comment below, send me an email or propose a guest blogpost on the topic.

Beinecke’s new book, Clean Energy Common Sense: An American Call to Action on Global Climate Change (Rowan & Littlefield, $9.95), is aimed at those who are skeptical–or at least curious–about the climate change debate. It’s a slim (106 pages), straightforward, easy-to-read argument that  that attempts to connect the climate issue to everyday concerns like jobs, the economy and national security.

“When you go out to Gary, Indiana, Cleveland or Chicago, people are still uncertain,” Beinecke said, as she unveiled the book at the National Press Club in Washington.” They’re not clear on what the science is, what the solutions are, what the threats are, what the impacts are.”

And so Beinecke, as you’d expect, makes the case that the problem is dire, the solutions affordable and the benefits tangible–new jobs, less reliance on imported oil and a livable planet.

To her credit, though, she’s willing to go beyond the what’s-in-it-for-you argument and describe the climate crisis as what it is–the overarching moral issue of the moment, and one requiring immediate action:

Global climate change is the single greatest environmental challenge of our time. And yet, it is far more than that. It is a humanitarian challenge. It is an economic challenge. It is a national security challenge. It is the great moral challenge of our time.

If only more political leaders would frame the issue that way, instead of appealing only to the narrow self interest of voters.

And, while Americans don’t like to hear it, she also goes straight at the issue of climate justice, writing:

The United States and other high-income nations produced, on average, 15 tones of greenhouse gases per person in 2005, according to World Bank calculations. That’s more than seven times the per-capita rate in low-income countries. And yet, it is low-income people who bear the sharpest risk and most immediate consequence of global climate change.

If that’s not unjust, then I don’t know the meaning of the word.

Beinecke has worked for NRDC for 35 years, since graduating from Yale with one of the first classes of women to do so and earning a master’s degree from the Yale School of Forestry. (Yes, for Yale alums reading this blog, she comes from the family that gave its money and its name to the Beinecke Rare Book and Manuscript Library and she’s a former member of the Yale Corporation, which governs the university.) She has been president of NRDC since 2006, and has devoted herself passionately to the climate change issue for about a decade.

Her book does a couple of things well. First, it makes clear that the science of climate change, while uncertain in many respects, is unequivocal when it comes to the question of whether burning fossil fuels is warming the earth. While temperatures have leveled off for about a decade, she reminds us that “the 15 hottest years on record have all occurred since 1991.” That’s no accident. It should be a big worry. Then there’s this: “Artic ice is essential to the world as we know it, and the fact is it’s melting at an alarming rate.”

Second, the book makes clear that the cost of mitigating carbon emissions is manageable:

Clean energy legislation would cost the average American household $160 a day in 2020, according to the CBO [Congressional Budget Office], or right at 44 cents a day. The EPA estimates the average per-house cost at between $80 and $111 per year–or 30 cents, on the high side, per day. And the DOE has set the cost of this kind of legislation at $83 a year by 2030, or 23 cents a day.

Not a big price to pay for, oh, preserving civilization as we know it.

The book isn’t as specific about solutions. Beinecke writes that we need to do three things: Reduce global warming pollution (duh), promote alternatives to fossil fuels (OK, but which ones?) and help our country make a smooth transition to the clean energy future we need (well, yes, but how?).  NRDC supports a cap-and-trade system, which, in theory, would leave  specifics to the market, but legislation now making its way through Congress is laden with subsidies and prescriptive measures, ranging from efficiency standards for appliances and buildings to big bets with your tax dollars on so-called clean coal. Bipartisan negotiations among Sens. Kerry, Graham and Lieberman (who makes it tripartisan) bring such options as nuclear energy and offshore drilling into play.

I asked Beinecke whether nuclear power was part of the climate solution. She was a little vague, saying “it will continue to play a role.” Well, sure, but should environmentalists be pressing for more nukes? She replied:

…there are several issues that we care a lot about, like waste and security and proliferation, that we think still need to be addressed.  But the overall issue for nuclear has and continues to be cost.

Later, she told me:

We are not in favor of additional subsidies to the nuclear industry. They’ve been subsidized for the last 50 years. It’s a mature industry….Let it compete, on its own, without subsidies.

That’s not a bad answer, except that NRDC and other enviros favor subsidies for cleaner coal (which, to be sure, is newer), wind and solar (which have been around a lot longer). I’m reading Stewart Brand’s fascinating new book, Whole Earth Discipline, and will return to the nuclear issue soon. Ideally, since no one knows for sure which solution is best, and subsidizing all of the above is a cop-out, as well as expensive, we’d wipe out subsidies, put a steep price on carbon and let the market decide–which was the whole idea behind cap-and-trade before the bills in Congress grew past the 1,000-page mark.

If you’ve followed the climate debate, you need not read Clean Energy Common Sense. Read Stewart’s book instead, or Al Gore’s new tome. But if you have a friend or relative who is open-minded or disengaged, buy the book as a gift. As Beinecke says: “This is the time for people to pay attention.” And to act.

Two final notes. I’m delighted that Frances has agreed to speak at FORTUNE’s third Brainstorm Green conference, about business and the environment, which will be held April 12-14 in Laguna Niguel, CA. And here’s a shout out to my Bethesda neighbor Bob Deans, the former White House reporter for Cox Newspapers, who joined NRDC last summer (after writing this lovely farewell), just in time to help Frances write the book.

Frances Beinecke, president, NRDC

Two things struck me about today’s race. The first is that the MCM made a significant effort to “go green.” Marathons are, inevitably, messy affairs and they generate enormous amounts of trash. An estimated 850,000 (!) paper cups are needed to stock the water and Powerade stops to keep 21,000 runners well hydrated. Add to that 26,000 Clif shots, 25,000 bag of sports beans, 10,000 sliced oranges—well, you get the idea. Lots of garbage, much of it unavoidable.

The MCM says its goal this year was to cut the trash in half, and produce less than a pound of landfill waste per runner. Sponsor Aquafina set up recycling kiosks near the start and finish line. Race waste, including cups, is composted. And, in an experiment, the race bibs given out at a fun run for kids were made of recycled post-consumer and wildflower seeds. The young runners can plant their bibs and enjoy growing Black-Eyed Susans along with the satisfaction of being green. MCM also collected used running shoes at its expos, for donation to people who need them.

While much of this is symbolic, symbols matter. Promoting environmentally-friendly sports events is a nonprofit called the Council for Responsible Sport (ReSport), along with a group called Athletes for a Fit Planet (“greening the world one race at a time”). Cool.

On a more sober note, running in the Marine Corps marathon is always a reminder of the sacrifices so many people make for our country. Many of the volunteers are active-duty Marines, and you won’t be surprised to hear that the organization of the MCM is world-class. More important, many of the runners are military men and women and their families. This year, I saw lots of people running in memory of soldiers who had died in Iraq or Afghanistan—fellow soldiers running in honor of a buddy, young women paying tribute to their dads or brothers, more than a few mothers and fathers running to in memory of their sons and daughters. A good number of injured veterans, many affiliated with the Achilles Track Club, also participated in the race.

By coincidence, I tuned in C-Span in the car on the way to the race and listened to an interview with David Finkel, a Washington Post reporter and author of a book called The Good Soldiers, about an Army battalion sent to Iraq during the surge 2007. I’d read a rave review of the book in The Times, and the interview persuaded me to order it. (I’m also going to make a donation to the Injured Marine Semper Fi Fund–saw lots of people running on behalf of that organization.) Both the radio program and the race reminded me of how shielded those of us who live upper-class lives are from the human costs of the wars in Iraq and Afghanistan. I only know one person who served and, as it happens, I met him in my marathon training group. My daughters are 22 and 25 and I don’t believe any of their friends have served.

Whatever you think about both wars, it’s too easy for many of us to forget about the terrible toll they have taken on thousands of families.

At the finish line, with daughter Becca and wife Karen

For a long time, companies have sought to be our friends, neighbors and companions. Many tell their workers that they are all part of the family. Or at a minimum playing on the same team.

Is this all marketing b.s. or can companies care? I believe they can. My 2004 book, Faith and Fortune: How Compassionate Capitalism is Transforming American Business argued that smart companies (Herman Miller, Timberland, UPS, Southwest Airlines and Starbucks, among others) are driven by an ethic of service—to their employees, their customers and their shareholders, frequently in that order. This ethic of service generates loyalty and creates a powerful competitive advantage: Happier and more fulfilled employees mean satisfied customers, and satisfied customers generate long-term value for shareholders. Caring is good business.

The thing is, companies that say they care need to behave that way.  In tough times, that’s tough: Starbucks eliminated more than 6,000 jobs when its business went south last year. This doesn’t make Starbucks hypocritical when it cames to be a good employer, but, at the least, it puts a burden on the company to treat people well on the way out.

A provocative and lively book I’ve been reading, called Predictably Irrational: The Hidden Forces That Shape Our Decisions, explores these question in a chapter called The Cost of Social Norms: Why We Are Happy to Do Things, but Not When We Are Paid to Them. The author, Dan Ariely, argues that we live simultaneously in two worlds, one characterized by social exchanges and the other characterized by market exchanges. The first is the world of family, friends, neighbors and community, the second the world of business, wages, prices and rents. “When we keep social norms and market norms on their separate paths,” Ariely writes, “life hums along pretty well.” But when they collide, look out. Think about what happens when a guy tries to persuade his wife or girlfriend to have sex with him because he just bought her an expensive dinner—Ariely’s example, not mine.

Businesses gain when they bring social norms to the marketplace, Ariely says:

If customers and a company are family, then the company gets several benefits. Loyalty is paramount. Minor infractions—screwing up your bill or even imposing a modest hike in your insurance rates—are accommodated. Relationships of course have ups and downs but of course they are a pretty good thing.

I’m willing to bet that Southwest customers are less grumpy about flight delays than those on United or Delta because they have a sense that the company wants to treat them right. When I buy something at Nordstrom or L.L. Bean and something’s amiss, I’m okay with that because I know they’ll happily take the merchandise back.

Trouble arises when companies don’t deliver what they promise. We know that we can’t literally “talk to Chuck” but Charles Schwab had better make sure that the people who answer its phones are friendly, responsive and knowledgeable. State Farm has to act like a neighbor when a customer submits a claim. As Ariely writes:

If you’re a company, my advice is to remember that you can’t have it both ways. You can’t treat your customers like family one moment, and then treat them impersonally—or even worse as a nuisance or a competitor—a moment later when this becomes more convenient or profitable.

Just to be clear, Ariely isn’t saying that companies should only operate by market norms. He believes in the power of social norms, and his experiments in behavioral economics back him up.

“Cash will only take you so far,” he writes. “Social norms are the forces that can make a difference in the long run.” Money, he goes on to say, is “very often the most expensive way to motivate people. Social norms are not only cheaper, but more effective.”

Put simply, we’ll all work hard for a cause – or a company – that we believe in. Look at the success of open-source software or Wikipedia, where creators don’t get paid at all.

Much of this dovetails (pun intended) with the work of one of my writing/consulting clients, Dov Seidman, the founder and CEO of a company called LRN and author of a book, HOW: Why HOW We Do Anything Means Everything in Business (and in Life). Dov talks about how companies need to inspire, rather than coerce or motivate, their workforce. He also says that the best businesses need to “out-behave” their competition. I agree, but Ariely reminds us that this is a risky way of doing business.

Those who say that they care create high expectations that they had better meet.