Capitalism dominates the globe. It has become so enmeshed into the cultural narrative that it seems almost axiomatic. Private owners (of capital) control the means of production. The goal: build profits. The best part about it is that if everyone pursues self-interest, the market will grow and society will benefit. The invisible hand helps the market to self-regulate, creating socially desirable results.
No. When it comes to dealing with issues such as poverty, the income gap, unemployment, economic crises, human rights, war, imperialism, and the externalization of costs on society and the environment, the invisible hand that Adam Smith once imagined is not invisible, it is nonexistent.
We are currently experiencing, without a doubt, the greatest crisis to face human kind. Indications of climate change are being seen around the globe: accelerated melting of the Arctic sea ice, rapidly receding glaciers, rising sea levels, warming oceans and ocean acidification, more frequent and longer-lasting droughts, stronger and more frequent storms, higher temperatures than ever recorded, and a rapid extinction of species are direct result of a warming climate.
There is a scientific consensus that the climate is rapidly changing and that these rapid changes are due to anthropogenic causes. The science is clear: the human-caused emissions of great amounts of greenhouse gases – primarily carbon dioxide, methane, and nitrous oxide – are causing global environmental damage.
Many argue that market and techo-based approaches are the way to combat climate change. They push for carbon taxing and trading, geo-engineering, and renewable energy without considering the fact that the system itself is incompatible with sustainability. By its very nature, capitalism seeks only to grow and accumulate – an idea that is diametrically opposed to a sustainable existence.
In this series, I will examine how the capitalist system has brought us to climate disaster, and why it cannot get us out of it.
The Growth Problem
Ecological economist Herman Daly perhaps best emphasized the issue of unlimited economic growth acting within a limited environment. He called the idea of sustainable growth a “bad oxymoron” that is simply impossible.
“Impossibility statements are the very foundation of science. It is impossible to: travel faster than the speed of light; create or destroy matter-energy; build a perpetual motion machine, etc. By respecting impossibility theorems we avoid wasting resources on projects that are bound to fail. Therefore economists should be very interested in impossibility theorems, especially the one to be demonstrated here, namely that it is impossible for the world economy to grow its way out of poverty and environmental degradation. In other words, sustainable growth is impossible.”
Earth’s ecosystem is finite, yet our culture has developed a system whereby economic stability is gained only through unlimited growth. Within the capitalist market system, growth is essential, and the larger the growth, the healthier the economy. When growth slows, or worse, stops entirely, the system is in crisis.
Ecological health, on the other hand, is experiencing its own crisis as climate change threatens the stability of the entire planet. We’ve already exceeded the earth’s carrying capacity, and yet unfettered growth of the world’s population and greater resource consumption have continued. The Worldwatch Institute estimated that if the world consumed resources at the same rate per person as the average person in the United States, the Earth could support only 1.4 billion people. A world population of 6.2 billion (a number we’ve already far exceeded) could only support an average per capita income at about $5,100 per year. In the US, the average income per year is about $28,000.
Yet reducing our consumptive habits is antithetical to the capitalist enterprise, which functions only if the economy is growing. We have created a world system where economic health is directly opposed to environmental health. Capitalism necessitates ever increasing resource use, while the natural capacities of the environment require a severe cutback in consumption.
John Stuart Mill recognized this problem early on. He saw that capitalism’s focus on unlimited growth within a limited environment would logically lead to immense environmental destruction. Yet, instead of dismissing the system all together, Mill argued for a “stationary state”, or a state where economic growth ceases.
“If the earth must lose that great portion of its pleasantness which it owes to things that the unlimited increase of wealth and population would extirpate from it, for the mere purpose of enabling it to support a larger but not a better or a happier population, I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compels them to it.”
Yet a stationary state would mean certain disaster for a capitalist economy. Growth is simply essential for its survival. Spurred on by competition, capitalism seeks to constantly re-invest surplus into more capital; a system of self-expansion seeking only greater accumulation. The concept of stationary capitalism is an oxymoron.
Not only does capitalism need to expand its resource production and consumption, it also must seek out new markets in which to establish itself. Population growth is basic to capitalism, which is always seeking to grow the labor force and increase production of goods and thus capital. Growth in population means demands increase for new housing, furniture, appliances, schools, roads, cars, agriculture, and so forth, creating a healthier capitalist economy at the great expense of the environment and all species that inhabit it. The more people there are to purchase a car and fill it with gasoline, the more money that floods the market. The more people we can get hooked on iPads, yearly cellphone upgrades, shoes, makeup,
Directly opposed to the constant need for growth are Earth’s natural systems and carrying capacity. Scientists at the Stockholm Resilience Centre analyzed several of earth’s systems and calculated the “planetary boundaries” for each that are vital to maintaining an environment livable for humans. Many of these boundaries have already been exceeded. In the case of carbon dioxide, the preindustrial value was 280 parts per million (ppm) concentrated in the atmosphere. The planetary boundary is estimated at 350 ppm. Currently, the earth is at 390 ppm.
The measurements for biodiversity loss read similarly dire. Some of the systems measured for the planetary boundary have not yet been surpassed, yet the data is hardly comforting: the phosphorus cycle (the quantity flowing into the oceans) had a preindustrial value of 1 million tons; the boundary is estimated at 11 million tons; and the current status is 8.5 to 9.5 million tons.
Ocean acidification, freshwater use, and land use are likewise teetering at the precipice of disaster. And yet, in the face of this potential catastrophe, capitalism would have us only grow more. Land use for agriculture and development are encouraged in order to grow the economy and increase capital, freshwater is being used at alarming rates for industrial production and industrial farming, rivers, lakes, and the oceans are being polluted with plastics, heavy metals, runoff from farmlands using pesticides and other chemicals, and as temperatures increase from the burning of fossil fuels, the temperature of the planet rises, further increasing ocean acidification and permafrost melt. This “healthy” economy is leading to a very unhealthy planet.