Citizen Action Monitor

Why you can’t “green” capitalism

No 178 Posted by fw, May 21, 2011

Seems like everyone these days is hopping on the green super-train to sustainability. The words “green” and “sustainability” are getting lots of play in the popular press and are on the lips of every politician, tripping over one another in their mad rush to attract “green and clean” technologies to their regions to spur economic development and job growth.

Not so fast, says ecological historian, Dr Richard Smith, Research Associate of the Institute for Policy Research & Development. You can’t “green capitalism”. Not only is the phrase oxymoronic, it’s just plain moronic. And it’s certainly not sustainable.

Smith says as much in his paper, Green capitalism: the god that failed, published in real-world economic review, issue no. 56, 11 March 2011, pp. 112-144. Starting at the end, here are his concluding remarks, with my sub-headings and text highlighting added for enhanced emphasis and readability purposes:

“We can’t shop our way to sustainability”

We can’t shop our way to sustainability because the problems we face cannot be solved by individual choices in the marketplace. In fact most of the ecological problems we face from global warming to deforestation, to overfishing, to pollution, to species extinction and many others, are way beyond the scope of companies, industries, even countries. They require concerted, large-scale national and international action. And they require direct economic planning at global, national and local levels.

Exxon Mobil is not about to sacrifice its shareholders merely to save humans

For example, the world’s climate scientists tell us we’re doomed unless we shut down the coal industry and sharply reduce our consumption of all fossil fuels. But even the world’s largest corporations, such as Exxon Mobil, can’t afford to take such losses, to sacrifice its owners — merely to save the humans. Corporations can’t make the socially and ecologically rational decisions that need to be made to save the humans because they represent only private particular interests, not the social and universal interests of humanity, the environment, and future generations.

“The only way to align production with society’s interests is to do so directly

But society can afford to close down coal, retrench oil production and socialize those losses. Society can ration oil, like we did during World War II, and society can redeploy labor and resources to construct the things we do need to save the humans, like renewable energy, public transit, energy efficient housing for all, and many other social needs that are currently unmet by the market system. In the final analysis, the only way to align production with society’s interests and the needs of the environment is to do so directly. The huge global problems we face require the visible hand of direct economic planning to re-organize the world economy to meet the needs of humans and the environment, to enforce limits on consumption and pollution, to fairly ration and distribute goods and services we produce for the benefit of each every person on the planet, and to conserve resources so that future generations of humans and other life forms can also live their lives to the full.

The abolition of private property in the means of production is required to prevent the collapse of civilization

All this is inconceivable without the abolition of capitalist private property in the means of production and the institution of collective bottom-up democratic control over the economy and society. And it will be impossible to build functioning national and global economic democracies unless we also abolish global economic inequality. This is both the greatest moral imperative of our time and it is also essential to winning world-wide popular support for the profound changes we must make to prevent the collapse of civilization. A tall order to be sure. But we will need taller waterproof boots if we don’t make this happen. If Paul Hawken, Lester Brown, Francis Cairncross and Paul Krugman have a better plan, where is it?

What an ending! Under what circumstances can you, dear reader, ever see the transformation of a capitalist system to an eco-socialist one? And what, one wonders, will all the dedicated, industrious members of Transition Initiatives (TIs) make of this passage: “. . . most of the ecological problems we face from global warming to deforestation, to overfishing, to pollution, to species extinction and many others, are way beyond the scope of companies, industries, even countries. They require concerted, large-scale national and international action. And they require direct economic planning at global, national and local levels.” In this daunting context, what meaningful niche role will small TIs — sans significant economic and diverse human resource expertise — be able to carve out for themselves? But that’s a subject for a future post.

Dr Smith’s full 33-page report is, to say the least, thought-provoking and well worth the time and cognitive investment. At the very least, read the Abstract, which follows:

In rejecting the antigrowth approach of the first wave of environmentalists in the 1970s, pro-growth “green capitalism” theorists of the 1980s-90s like Paul Hawken, Lester Brown, and Francis Cairncross argued that green technology, green taxes, eco-conscious shopping and the like could “align” profitseeking with environmental goals, even “invert many fundamentals” of business practice such that “restoring the environment and making money become one and the same process.” This strategy has clearly failed.

I claim first, that the project of sustainable capitalism was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That’s because under capitalism, CEOs and corporate boards are not responsible to society, they’re responsible to private shareholders. CEOs can embrace environmentalism so long as this increases profits. But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns: For example, the science says that to save the humans, we have to drastically cut fossil fuel consumption, even close down industries like coal. But no corporate board can sacrifice earnings to save the humans because to do so would be to risk shareholder flight or worse. I claim that profit-maximization is an iron rule of capitalism, a rule that trumps all else, and this sets the limits to ecological reform — and not the other way around as green capitalism theorists supposed.

Secondly, I claim that contrary to green capitalism proponents, across the spectrum from resource extraction to manufacturing, the practical possibilities for “greening” and “dematerializing” production are severely limited. This means, I contend, that the only way to prevent overshoot and collapse is to enforce a massive economic contraction in the industrialized economies, retrenching production across a broad range of unnecessary, resource-hogging, wasteful and polluting industries, even virtually shutting down the worst. Yet this option is foreclosed under capitalism because this is not socialism: no one is promising new jobs to unemployed coal miners, oil-drillers, automakers, airline pilots, chemists, plastic junk makers, and others whose jobs would be lost because their industries would have to be retrenched — and unemployed workers don’t pay taxes. So CEOs, workers, and governments find that they all “need” to maximize growth, overconsumption, even pollution, to destroy their children’s tomorrows to hang onto their jobs today because, if they don’t, the system falls into crisis, or worse. So we’re all onboard the TGV* of ravenous and ever-growing plunder and pollution. [*French: Train à Grande Vitesse, meaning high-speed train]. And as our locomotive races toward the cliff of ecological collapse, the only thoughts on the minds of our CEOS, capitalist economists, politicians and labor leaders is how to stoke the locomotive to get us there faster. Corporations aren’t necessarily evil. They just can’t help themselves. They’re doing what they’re supposed to do for the benefit of their owners.

But this means that, so long as the global economy is based on capitalist private/corporate property and competitive production for market, we’re doomed to collective social suicide and no amount of tinkering with the market can brake the drive to global ecological collapse. We can’t shop our way to sustainability because the problems we face cannot be solved by individual choices in the marketplace. They require collective democratic control over the economy to prioritize the needs of society and the environment. And they require national and international economic planning to re-organize the economy and redeploy labor and resources to these ends. I conclude, therefore, that if humanity is to save itself, we have no choice but to overthrow capitalism and replace it with a democratically-planned socialist economy.

Dr Smith invites comments on his paper on this web page.

RELATED READING

  • Report: Beyond Growth, or Beyond Capitalism? also by Dr Richard Smith, Institute for Policy Research and Development, February, 2010. This 25-page report argues that the idea of a steady-state capitalism is based on untenable assumptions, starting with the assumption that growth is optional rather than built into capitalism.
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