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What Every Environmentalist Needs to Know About Capitalism

Sunday, April 4, 2010

There is a good essay by Fred Magdoff and John Bellamy Foster in the March issue of the Monthly Review that lays out the links between the crisis in capitalism and environmental degradation:

For those concerned with the fate of the earth, the time has come to face facts: not simply the dire reality of climate change but also the pressing need for social-system change. The failure to arrive at a world climate agreement in Copenhagen in December 2009 was not simply an abdication of world leadership, as is often suggested, but had deeper roots in the inability of the capitalist system to address the accelerating threat to life on the planet. Knowledge of the nature and limits of capitalism, and the means of transcending it, has therefore become a matter of survival. In the words of Fidel Castro in December 2009: “Until very recently, the discussion [on the future of world society] revolved around the kind of society we would have. Today, the discussion centers on whether human society will survive.”

Business owners and managers generally consider the short term in their operations—most take into account the coming three to five years, or, in some rare instances, up to ten years. This is the way they must function because of unpredictable business conditions (phases of the business cycle, competition from other corporations, prices of needed inputs, etc.) and demands from speculators looking for short-term returns. They therefore act in ways that are largely oblivious of the natural limits to their activities—as if there is an unlimited supply of natural resources for exploitation. Even if the reality of limitation enters their consciousness, it merely speeds up the exploitation of a given resource, which is extracted as rapidly as possible, with capital then moving on to new areas of resource exploitation. When each individual capitalist pursues the goal of making a profit and accumulating capital, decisions are made that collectively harm society as a whole.

Under capitalism people are at the service of the economy and are viewed as needing to consume more and more to keep the economy functioning. The massive and, in the words of Joseph Schumpeter, “elaborate psychotechnics of advertising” are absolutely necessary to keep people buying. Morally, the system is based on the proposition that each, following his/her own interests (greed), will promote the general interest and growth. Adam Smith famously put it: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” In other words, individual greed (or quest for profits) drives the system and human needs are satisfied as a mere by-product. Economist Duncan Foley has called this proposition and the economic and social irrationalities it generates “Adam’s Fallacy.”

In 2007, the top 1 percent of wealth holders in the United States controlled 33.8 percent of the wealth of the country, while the bottom 50 percent of the population owned a mere 2.5 percent. Indeed, the richest 400 individuals had a combined net worth of $1.54 trillion in 2007—approaching that of the bottom 150 million people (with an aggregate net worth of $1.6 trillion). On a global scale, the wealth of the world’s 793 billionaires is, at present, more than $3 trillion—equivalent to about 5 percent of total world income ($60.3 trillion in 2008). A mere 9 million people worldwide (around one-tenth of 1 percent of world population) designated as “high net worth individuals” currently hold a combined $35 trillion in wealth—equivalent to more than 50 percent of world income.43 As wealth becomes more concentrated, the wealthy gain more political power, and they will do what they can to hold on to all the money they can—at the expense of those in lower economic strata. Most of the productive forces of society, such as factories, machinery, raw materials, and land, are controlled by a relatively small percentage of the population. And, of course, most people see nothing wrong with this seemingly natural order of things.

An economic system that is democratic, reasonably egalitarian, and able to set limits on consumption will undoubtedly mean that people will live at a significantly lower level of consumption than what is sometimes referred to in the wealthy countries as a “middle class” lifestyle (which has never been universalized even in these societies). A simpler way of life, though “poorer” in gadgets and ultra-large luxury homes, can be richer culturally and in reconnecting with other people and nature, with people working the shorter hours needed to provide life’s essentials. A large number of jobs in the wealthy capitalist countries are nonproductive and can be eliminated, indicating that the workweek can be considerably shortened in a more rationally organized economy. The slogan, sometimes seen on bumper stickers, “Live Simply so that Others May Simply Live,” has little meaning in a capitalist society. Living a simple life, such as Helen and Scott Nearing did, demonstrating that it is possible to live a rewarding and interesting life while living simply, doesn’t help the poor under present circumstances. However, the slogan will have real importance in a society under social (rather than private) control, trying to satisfy the basic needs for all people.

Today we must strive to construct a genuine socialist system; one in which bureaucracy is kept in check, and power over production and politics truly resides with the people. Just as new challenges that confront us are changing in our time, so are the possibilities for the development of freedom and sustainability.

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