Thursday, January 16, 2014

Beyond Green and Beyond Capitalism

“Our best scientists are telling us that to save the humans, for a start, we need to virtually shut down the coal industry, drastically reduce production of fossil fuels and phase out many toxic chemicals as quickly as possible. But, how can we do this under capitalism?...
"Socialism"? "Economic democracy"? Call it what you like. But what other choice do we have? Either we save capitalism or we save ourselves. We can't save both.” - Richard Smith

Another powerful article on capitalism and the environment by Richard Smith at the Truth Out website with furthers his case for a more radical approach to the problem  and adds to his argument that SOYMB has already posted excerpts from here.

Once more it is worth re-posting extracts from this new piece as it overlaps with the case made by the World Socialist Movement..

“...Mainstream (capitalist) ecological economists have tried to deal with problem of capitalist growth in one of two ways: Either, with Herman Daly and the anti-growth "steady-state economics" school he founded...Or, with the pro-growth "green capitalism" school led by Paul Hawken, Lester Brown, Frances Cairncross - which today includes Nicholas Stern, Paul Krugman and others - these theorists have imagined that capitalism could grow more or less forever but that growth could be rendered benign...Pro-growth or anti-growth, both approaches assume that capitalism is sufficiently malleable that capitalist fundamentals can be "inverted" such that corporations can, in one way or another, be induced to subordinate profit-making to "saving the Earth."But what unites both schools of thought is their a priori rejection of alternatives to capitalism, their rejection of any kind of economic planning or socialism...Milton Friedman used to say, "Corporations are in business to make money, not to save the world." Saving the world would require that corporations subordinate profit maximizing to ecological concerns. But how can they do this? Companies can embrace environmental reforms (recycling, green products and the like) so long as this saves or makes them money. But they can't sacrifice earnings, let alone put themselves out of business, just to save the humans, because they're not responsible to the humans, to society. They're responsible to their shareholders. And shareholders (who might even be you and me) as investors are capitalists rationally looking to make money, not to save the world...”

“...the steady state/degrowth school are indeed correct that continuous economic growth, even so-called green growth, is unsustainable on a finite planet. And they're also right that slowing down - producing less, foregoing producing goods and services we don't really need - opens up the prospect of greater freedom, a better life...But Daly, Jackson and the rest are mistaken to assume that we can get a sustainable "steady state" economy or "de-grow" the economy "within a capitalist framework." [T]he idea of a steady-state or de-growing capitalism is based on spectacularly untenable assumptions, starting with the assumption that growth is optional rather than built into capitalism. [I]rresistible and relentless pressures for growth are functions of the day-to-day requirements of capitalist reproduction in a competitive market, incumbent upon all but a few businesses, and that such pressures would prevail in any conceivable capitalism. [B]ecause market-driven growth is driving us toward collapse, ecological economists would do well to abandon this distraction and get on with the project of developing a compelling and plausible vision of a post-capitalist eco-socialist economy and to join with eco-socialists to help organize for such a resolution before it's too late to bother trying...”

“...[T]the project of a steady-state capitalism is impossible and a distraction...
[The]fundamental principles and rules for reproduction that define any capitalism and shape the dynamics of capitalist economic development [are]:
1. Producers are dependent upon the market: Capitalism is a mode of production in which specialized producers (corporations, companies, manufacturers, individual producers) produce some commodity for market but do not produce their own means of subsistence. Workers own no means of production, or insufficient means to enter into production on their own, and so have no choice but to sell their labor to the capitalists. Capitalists as a class possess a monopoly ownership of most of society's means of production, but do not directly produce their own means of subsistence. So capitalists have to sell their commodities on the market to obtain money for their own means of subsistence and to purchase new means of production and hire more labor, to re-enter production and carry on from year to year. So in a capitalist economy, everyone is - first and foremost - dependent upon the market, compelled to sell in order to buy, to buy in order to sell, to re-enter production and carry on.
2. Competition is the motor of economic development: When producers come to market, they're not free to sell their particular commodity at whatever price they wish because they find other producers selling the same commodity. They therefore have to "meet or beat" the competition to sell their product and stay in business. Competition thus forces producers to reinvest much of their profits back into productivity-enhancing technologies and processes (instead of spending it on conspicuous consumption or warfare without developing the forces of production as ruling classes did, for example, under feudalism): Producers must constantly strive to increase the efficiency of their units of production by cutting the cost of inputs, seeking ever-cheaper sources of raw materials and labor, by bringing in more advanced labor-saving machinery and technology to boost productivity, or by increasing their scale of production to take advantage of economies of scale, and in other ways, to develop the forces of production.
3. "Grow or die" is a law of survival in the marketplace: In the capitalist mode of production, most producers (there are some exceptions, which I will note below) have no choice but to live by the capitalist maxim "grow or die." First, as Adam Smith noted, the division of labor raises productivity and output, compelling producers to find more markets for this growing output. Secondly, competition compels producers to seek to expand their market share, to defend their position against competitors. Bigger is safer because, ceteris paribus, bigger producers can take advantage of economies of scale and use their greater resources to invest in technological development to more effectively dominate markets. Marginal competitors tend to be crushed or bought out by larger firms (Chrysler, Volvo, etc.). Thirdly, the modern corporate form of ownership adds irresistible and unrelenting pressures to grow from owners (shareholders). In the corporate form, CEOs do not have the freedom to choose not to grow or to subordinate profit-making to ecological concerns, because they don't own their firms even if they own substantial shares. Corporations are owned by masses of shareholders. And the shareholders are not looking for "stasis"; they are looking to maximize portfolio gains, so they drive their CEOs forward.

In short... the growth imperative is a virtual a law of nature, built into any conceivable capitalism. Corporations have no choice but to seek to grow. It is not "subjective." It is not just an "obsession" or a "spell." And it cannot be exorcised...But Herman Daly, Tim Jackson and the rest of the pro-market anti-growth school of ecological economists must deny these elementary capitalist rules for reproduction because their project for a "steady-state" eco-capitalism rests on the assumption that capitalist economic fundamentals are not immutable, that growth is "optional" and thus dispensable....
....And if economic pressures weren't sufficient to shape CEO behavior, CEOs are, in addition, legally obligated to maximize profits - and nothing else.. Law dictates what their directors and managers can do, what they cannot do and what they must do...It compels executives to prioritize the interests of their companies and shareholders above all others and forbids them from being socially responsible ...”

“Why Would Anyone Want a Steady-State Capitalism?
Of course there are times when capitalist economies do slow down ... It's not a pretty sight: capital destruction, mass unemployment, devastated communities, growing poverty, foreclosures, homelessness and environmental considerations shunted aside in the all-out effort to restore growth...under capitalism workers don't have job security like tenured professors. This fact may partially explain why it is that, despite all the anti-growth books published since the 1970s, there is no public support out there for a capitalist steady-state economy. And why should there be? ...Poll after poll shows that ordinary citizens want to see the environment cleaned up, want to see a stop to the pillage of the planet, the threat of destruction of their children's future. But as workers in a capitalist economy, "no growth" just means no jobs. If limits to growth are imposed, and some industries have to cut back, where would laid-off workers find re-employment? And if corporations and the economy do not continuously grow, where would the jobs come from for the workers' children? Today, in the United States, there are said to be at least seven applicants for every available job. Where are those other six people going to find jobs if there is no growth? And this situation is far worse in the developing world, where unemployment levels are off the charts. So throughout the world, given capitalism, the only hope for workers is more growth....
... But how could any capitalist government deliberately reduce overall consumption to a "sustainable level" or impose steep cuts on particular industries? Reducing consumption means reducing production. And under capitalism, as we just noted, that just means recession, unemployment, falling revenues or worse. So right now, no capitalist government on the planet is looking to do anything but restore and accelerate growth. That's why Congress killed the cap-and-trade bill, weak as it was. That's why at Copenhagen, no capitalist government was willing to sacrifice growth to save the environment. But even during the recent long economic boom, no government would accept binding limits on emissions. So Copenhagen is only the latest in a long sorry string of failures: Bali, Nairobi, Rio, and all the way back to Kyoto in 1997. It would appear, therefore, that the chances of any capitalist government "reducing consumption to sustainable levels" are nonexistent...”

“...[T]he ecological crisis we face is not only caused by the overall scale of production and consumption, it is just as much caused by the specific irrational, inefficient, wasteful, and destructive nature of the capitalist market's "allocation of resources" - and equally, the by market's failure to allocate resources to things we do need. The problem is what we produce, what we consume, what we dump, what we destroy... If we want to save the humans and many other species, then we have to give up the freedom of capitalists to produce and sell as they please and consumers to buy whatever they like and can afford - to win the greater freedom for humanity to breathe clean air, to have safe water to drink, to have safe food to eat, to live long and healthy lives free of toxins-induced diseases, to restore a forested, clean, safe, habitable planet we can pass on to our children...”

“Jonathon Porrit says that "like it or not" we have to try to find sustainability within a "capitalist framework" and forget about alternatives. But if the engine of capitalist growth and consumption can't be stopped, or even throttled back, and if the logic of capitalist efficiency and capitalist rationality is killing us, what choice do we have but to rethink the theory? Like it or not Jonathon, it's time to abandon the fantasy of a steady-state capitalism, go back to the drawing boards and come up with a real "new macro-economic model," a practical, workable post-capitalist ecological economy, an economy by the people, for the people that is geared to production for need, not for profit...”

The full article unabridged  here


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