Healthy Capitalism or a Sick Planet?

Capitalism dominates the globe. Owners of capital control the means of production and their goal is to build profits. Many argue that market is the way to combat climate change and push for carbon taxing and trading and geo-engineering technical fixes.  By its very nature, capitalism seeks only to grow and accumulate – an idea that is diametrically opposed to a sustainable existence. 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. The capitalist system requires continual growth, which means expansion of production. Because production is for private profit, growth is necessary to maintain profitability — and continually increasing profitability is the actual goal. If a corporation doesn’t expand, its competitor will and put it out of business.

Healthy capitalism has led to a very sick planet.

The structural necessity of continual expansion is expressed in the mandate of corporations with stock traded on exchanges to maximise profits on behalf of their shareholders above all other considerations. There are well-meaning people who criticise the excess profits of corporate plunder and seek a remedy through restraint. One need only observe how swiftly institutional investors and stock-holders at AGMs punish director boards that fail to meet expectations. “Enhancing shareholder value” is a corporation’s reason for existence.

Joel Bakan recounted in his book, ‘The Corporation: The Pathological Pursuit of Profit and Power’ of his interview with Milton Friedman at the time when John Browne, then the chief executive officer of BP, had launched a public-relations offensive claiming that environmental stewardship would now be a primary goal for BP. Bakan writes:
“ When I asked him how far John Browne could go with his green convictions...‘He can do it with his own money. If he pursues those environmental interests in such a way as to run the corporation less effectively for its stockholders, then I think he’s being immoral. He’s an employee of the stockholders, however elevated his position may appear to be. As such, he has a very strong moral responsibility to them.’ ”

Richard Smith, in a paper published in the Real-World Economics Review, describes another problem with “green capitalism”:
“The problem is not just special interests, lobbyists and corruption...Under capitalism, it is, perversely, in the general interest, in everyone’s immediate interests to do all we can to maximize growth right now, therefore, unavoidably, to maximize fossil fuel consumption right now — because practically every job in the country is, in one way or another, dependent upon fossil fuel consumption...There is no way to cut CO2 emissions by anything like 80 percent without imposing drastic cuts across the board in industrial production. But since we live under capitalism, not socialism, no one is promising new jobs to all those ...whose jobs would be at risk if fossil fuel use were really seriously curtailed...Given capitalism, they have little choice but to focus on the short-term, to prioritize saving their jobs in the here and now to feed their kids today — and worry about tomorrow, tomorrow.”

 “Green” enterprises are not exempt. They, too, are pushed by market forces the same as any other enterprise. Smith writes:
“Biofuels, windpower and organic crops — all might be environmentally rational here or there, but not necessarily in every case or forever. But once investments are sunk, green industries have no choice but to seek to maximize profits and grow forever regardless of social need and scientific rationality, just like any other for-profit business.”

Because of the built-in pressure to maintain profits in the face of relentless competition, corporations continually must reduce costs, employee wages not excepted. Production is moved to low-wage countries with fewer regulations, enabling not only more pollution but driving up energy and carbon-dioxide costs with the need for transportation across greater distances.

Under capitalism, all the incentives are to continue business as usual, no matter the dire future that business as usual is leading humanity. Putting the environment first in a capitalist economy is not realistic, and doing so anyway would be very costly due to capitalist dynamics. The fundamental issue is that it can’t imagine a world without capitalism. It has much company in that. But a future in which we live in harmony with nature, rather than destroying nature for profit, can only be a very different world.  However, there is much truth in Frederic Jameson's claim then that it is easier for many people to "imagine the end of the world than it is the end of capitalism"

Hope appears increasingly to have fallen prey to predatory global capitalism and its engulfing insecurity that have reduced human life to the task of merely striving to survive. Never have we required more urgency for a new political imagination to transform the world for the better.

A good society of the future, one with a sustainable economy, must be a socialist society.