Monday, June 23, 2008

Amory Lovins' business

Amory Lovins is clearly a successful businessman. He is in fact a salesman, and like all true salesmen everything he does is about selling. Sales men focus on their image, an image that lends their sales activities credibility. There arguments are designed to be easily persuasive, rather than to withstand intelligent criticism. Hence an analysis of a salesman's arguments may find significant flaws, flaw of which the salesman himself may be aware of. A salesman may continue to use flawed arguments even though he is aware they are fallacious, because they produce sales.  Such use of invalid argument is cynical and manipulative.  

Successful salespeople are often charming and charismatic. People like the charming and charismatic, love them, trust them, believe in them, seek to please them, will do what they ask. For the charismatic sales person, the primary product the has to sell is his personality. The sale is made once he gets his foot in the door, because as soon as he does that he begins to sell his personality.

I do have a theory about Lovins' personality. My theory allows me to make predictions about him, but unless I have a source who knows him well, and has the ability to keep a critical distance about him, I will never be able to test my theory. I do not need psychological speculation to show that Lovins is wrong, and that he uses fallacious, cynical and manipulative arguments to justify his claims.

Lovins is in the business of selling his business. His business Rocky Mountain Institute. The Rocky Mountain Institute building is a show case for Lovins' energy efficiency theories, it is also his home. Do you see what I mean when I say that everything a sales man does is part of his business, including the home he lives in. Lovins whole lifestyle, an ostensive tribut to his sincerity, and his ideals, is in fact designed to sell his services, which are for sale through the Rocky Mountain Institute and through his own person.

If Lovins were a Rabbi his rabbinic specialty would be Kashrut. For Lovins soft energy is Kosher, while nuclear power is treif. Fossil fuel energy is sometimes kosher, and sometimes not. Lovins sells a kosher stamp to businesses, politicians and government officials who want to be officially "green."

Here is how the business works. The RMI bio of Lovins states:

Mr. Lovins has advised, often at top levels, such firms as Allstate, Anheuser-Busch, Baxter, Borg-Warner, BP, Carrier, Ciba- Geigy, Coca-Cola, Dow, Equitable, General Motors, Hewlett-Packard, H.P. Bulmer, Interface, Invensys, Lockheed Martin, Mitsubishi, Monsanto, Motorola, Norsk Hydro, Phillips Petroleum, Prudential, Royal Ahold, Royal Dutch/Shell, Shearson Lehman Amex, STMicroelectronics, Sun Oil, Union Bank of Switzerland, Westinghouse, Xerox, major real-estate developers, and over 100 electric and gas utilities. Public-sector clients have included the OECD, U.N., the U.S. Congress and the Energy and Defense Departments, and many other U.S. and overseas agencies. In 2006 Wal-Mart was added to the list.
Mearly half of the RMI's revenue is placed under the category of consulting (fees). Another 24.6% comes under the category of individual and corporate contributions. While some of those contributions are undoubtedly given in appreciation of the RMI's good works, we cannot dismiss the possibility that some of it is given in appreciation of services rendered.

Another income category caught my eye. 6.9% of RMI's income comes from investments. It would be most interesting to take a peak at the RMI's investment portfolio. Those of you who understand the implications, should take note.

Benefits flow both ways. The clients, for example Wal-Mart,  get a "green" stamp of approval from Lovins that comes in exchange for the consultant fee. No one actually worries about what Lovins advised them or if they actually followed Lovins advice. In addition to he consultant fee, RMI and Lovins gets the prestigue of listing his clients.

We have in the Lovins-RMI-client nexus, a perfect example of the social construction of psudo-science. Lovins is not a scientist. He does not publish papers on energy in peer reviewed scientific journals. Indeed Lovin's papers are published by the RMI where he is designated the chief scientist, even though he carries no earned degrees in science.

Does no one see Red flags here? Of course not, because Lovins is part o f a corrupt and cynical system, that is all about public relations, all about front, not about confronting problems that exist in reality.

In addition to his Kashrut business, Lovins hasother ways to make money for RMI. His RMI biography states:

A highly sought-after speaker, Mr. Lovins has addressed many leading U.S. and overseas business, policy, energy, automotive, environment, and development groups. RMI’s principal spokesman, he has been interviewed by most major broadcast and print media, including 60 Minutes, PBS’s Future Quest, CNN, Fortune, Business Week, and Wired.
And of course there is money:

Mr. Lovins plays a leading role in setting RMI’s research agenda. As the Institute’s Treasurer, he is closely involved in finances and funder relations. As a member of RMI’s Board of Directors, he helps set policy and long-term strategy.

Almost everything that Lovins does, is on expense accounts, paid for by the RMI, or RMI clients. Lovins keeps the planet warm by burning thousands of gallons of jet fuel, jetting off to consulting engagements, speaking engagements, and awards ceremonies.

Mr. Lovins is amply compensated. In addition to his official 6 figure pay from RMI, he gets his luxurious home for free. There is no doubt a very substantial retirement account, and perhaps stock options from the for profit subsidies. But that is not all of his compensation. RMI, a non-profit organization has a number of for profit subsidiaries. He is the Chairman of Hypercar, Inc., and the Director and Principal Technical Consultant, of E Source. Lovins no doubt receives further compensation for those services. Lovins is then the perfect example of the entrepreneur who does very well by conspicuously doing good.

1 comment:

Patrick Wheat said...

Great post Charles. I have been reading your blog and listening to you on the Atomic Network, keep up the good work. The mindless consumption that Wal-Mart's business model depends on is far more damaging to the planet than nuclear energy. Lovin's is nothing more, in my mind, than an opportunistic charlatan


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