Incentive Systems that Support Sustainability: A First Nations Example

"Prior to contact with European settlers, the incentive and governance systems used by First Nations peoples of the Northwest coast of North America provided more sustainable use of the fisheries and other resources of that region than did subsequent systems. This paper explores the major reason for that success: the requirements of the potlatch system that chiefs share their income with each other. Because chiefs controlled well-defined territories and subjected each other to review, the potlatch governance system embodied the characteristics of negative feedback, coordination, resiliency, and robustness that political scientist John Dryzek identifies as means to support ecological rationality in the management of ecosystems. This ecological rationality occurs because the sharing of income made chiefs aware of the effects that their actions had on the income of other chiefs. In addition, public discussions that occurred at feasts would allow chiefs to coordinate their actions as needed. The paper concludes with proposals for application of the potlatch system to modern circumstances. Such application means changing the rules for the distribution of income from using ecosystem resources so that all entities share their surplus income with each other. The potlatch system can be applied to modern organizations by noting that chief executive officers are like chiefs, that profit is like surplus income, and that corporations can be viewed as similar to the houses of the traditional Northwest systems. One major change is that profit is no longer privately owned, and must be shared with other organizations that use an ecosystem. Although controls on behavior mandated by state power would be reduced, a modernized potlatch system would still need to operate within a context provided by governments and international agreements."