Home > Uncategorized > Capitalism is, overwhelmingly, the main driver of planetary ecological collapse.

Capitalism is, overwhelmingly, the main driver of planetary ecological collapse.

Smith paperbackFrom climate change to resource overconsumption to pollution, the engine that has powered three centuries of accelerating economic development revolutionizing technology, science, culture, and human life itself is, today, a roaring out-of-control locomotive mowing down continents of forests, sweeping oceans of life, clawing out mountains of minerals, drilling, pumping out lakes of fuels, devouring the planet’s last accessible resources to turn them all into “product” while destroying fragile global ecologies built up over eons of time. Between 1950 and 2000 the global human population more than doubled from 2.5 to 6 billion, but in these same decades consumption of major natural resources soared more than 6 fold on average, some much more. Natural gas consumption grew nearly 12 fold, bauxite (aluminum ore) 15 fold. And so on. At current rates, Harvard biologist E.O Wilson says that:

“half the world’s great forests have already been leveled and half the world’s plant and animal species may be gone by the end of this century.”

Corporations aren’t necessarily evil, though plenty are diabolically evil, but they can’t help themselves. They’re just doing what they’re supposed to do for the benefit of their shareholders. Shell Oil can’t help but loot Nigeria and the Arctic and cook the climate. That’s what shareholders demand. BHP Billiton, Rio Tinto and other mining giants can’t resist mining Australia’s abundant coal and exporting it to China and India. Mining accounts for 19% of Australia’s GDP and substantial employment even as coal combustion is the single worst driver of global warming. IKEA can’t help but level the forests of Siberia and Malaysia to feed the Chinese mills building its flimsy disposable furniture (IKEA is the third largest consumer of lumber in the world). Apple can’t help it if the cost of extracting the “rare earths” it needs to make millions of new iThings each year is the destruction of the eastern Congo – violence, rape, slavery, forced induction of child soldiers, along with poisoning local waterways.  Monsanto and DuPont and Syngenta and Bayer Crop Science have no choice but to wipe out bees, butterflies, birds, small farmers and extinguish crop diversity to secure their grip on the world’s food supply while drenching the planet with their Roundups and Atrazines and neonicotinoids. 7 This is how giant corporations are wiping out life on earth in the course of a routine business day. And the bigger the corporations grow, the worse the problems become.

Richard Smith
WEA eBook Library

  1. June 3, 2016 at 2:33 am

    I think economics is supposed to be about the utilization of scarce resources. Rather than the capitalist system being the problem it would seem to me that there is a great opportunity for individual initiative and private enterprise to exploit technological innovation and come up with solutions to a modern way of life that is resource intense. In a day and age when folks are wondering how to get GDP growth back on track to where it was several decades ago (in the post-WWII period of 1947 to the early 1970s), this should be a golden opportunity.

    • graccibros
      June 3, 2016 at 7:58 pm

      Isn’t this exactly what Richard Smith writes about with the early hopes of the Green Capitalists, Paul Hawkens being among the best and most sincere practitioners and promoters. Check the dates on some of his most famous books…”The Ecology of Commerce,” 1993, “Natural Capitalism: Creating the Next Industrial Revolution”, 1997…He was all the rage among Republicans in New Jersey during my environmental career, easing their fears about the conflicts between profit and protection of nature…Gov. Christie Whitman said it was all about the “green and gold,” and was enraptured with the Dutch model…so where are we today, almost a quarter of a century later, with that “Next Industrial Revolution?” Anyone here finding it in Asian manufacturing processes, or in all the amazingly untested chemicals here at home in the United States: EPA politically blocked by good capitalist lobbyists from even following the law by testing beyond the tiny percentage they’ve examined…and the U.S. the great consumer nation of “last resort” not requiring manufacturers or retailers to take responsibility for return and disposal, much less recycling of the IT components (or the products from the earlier industrial revolutions….you’re right Vic Volpe, “Golden Opportunity.” So what happened? That’s what Smith’s book is about a cold slap in the face to the “smiling, cheerful aspects” of American life – and green illusions. You may not agree with his deep reasons for the failure, that capitalists cannot make this adjustment based on their core values…that’s the heart of the matter, agree or not. If we all become Social Democrats, can that work? Smith pushes us further than that, in selected places. Can he be arrested for doing that? Trump may create a crime of secular heresy to prosecute someone like him if he gets elected. In fact, we can’t get to where Smith wants to go politically, not yet, nowhere close in the U.S. I see before me in the 2016 Presidential race…but you can’t dodge his questions or his dissections of the full life cycle of what we consume. I woke up when establishment conservative well-credentialed Gus Speth of the Yale School of Forestry wrote “The Bridge at the Edge of the World” in 2008, I kept wanting to read the title “…at the End of the World…” because what he said was “the system” was not working environmentally or economically, although before the GFC it seemed to be working better on the economic end. It was a shock to a lot of environmental groups who work on their own narrow interests and are congenitally optimistic since they’re all fund raisers and believe pessimism and despair thwart constructive efforts. Confidence fairy for donors. So here we are in 2016, and how’s it going? Smith without illusions tells us: not so well. I guess this is a plug for the book. But what do I know, I only devoted 12 years of my life working in the environmental trenches. Didn’t seem to help much. And no one in the establishment has invited me back to Chris Christie’s New Jersey.

  2. June 3, 2016 at 5:31 am

    From clinical psychology. Compulsive behavior – a psychological condition in which a person does a behavior compulsively, having an overwhelming feeling that they must do so. From psychiatry. Obsessive–compulsive disorder – a mental disorder characterized by intrusive thoughts that produce anxiety and by repetitive behaviors aimed at reducing that anxiety. The first is part of psychology science. The latter of medical science. For the moment allow to go unaddressed the questions about how behavior as a science was invented and how the medical model is perhaps misleading in dealing with such actions as compulsion. This posting is describing obsessive-compulsive action – an action whose performance cannot be resisted. Mostly OCD (obsessive-compulsive disorder) is more a nuance with few major negative consequences. But when combined with a lack of empathy for others and/or a desire to hurt others for some reason OCD becomes part of the psychosis underlying the actions of many serial killers. The logical conclusion is that corporations are not evil but they are psychotic. And thus like serial killers dangerous and in need of outside control. Although I’ll be damned if I know how to imprison a corporation. But I do know how to imprison CEOs, CFOs, etc.

  3. jlegge
    June 3, 2016 at 6:20 am

    It isn’t the shareholders. Individually and even as a group they have little or no influence over corporate management. Companies are run by their directors, some of whom are decent human beings. Ultimately it is a political failure. Smith comments on population growth; but the one really effective measure to set limits on it is widely denounced as communist tyranny of the worst sort.

    For a sympathetic account of China’s one child policy see: http://www.lrb.co.uk/v38/n10/sheng-yun/little-emperors

    • June 3, 2016 at 6:56 am

      I’m confused by your comment. Shareholders can stop being shareholders if they disapprove of what the corporation is doing. To use the latest catch word, they can disinvest. If the directors are the psychotic ones then arrest them. Or, if you’re more humane, hospitalize them. I’m always amazed by the comment, yes he killed the family but he really is a decent guy. It’s just business, after all! So which trumps, individual freedom or public safety? We have to choose. Corporations, owned by shareholders and run by directors are ripping our lives away. And the rights of these corporations to do what they do is so important that nothing trumps them. Is that the message? Like saying “Jack the Ripper” has a right to express himself by killing a few prostitutes. And that right to individual action trumps the rights of the prostitutes not be murdered. Sad to say many in late 19th century London were quite willing to allow Jack to continue his expressions of individualism, so long as he just focused on prostitutes. But even that lame excuse can’t help us today – corporations appear to be murdering indiscriminately. No class bias. Corporations are even killing themselves. Perhaps that’s the reason Musk and Branson are working so hard on rockets – sell tickets off world to escape the apocalypse.

      • jlegge
        June 4, 2016 at 9:05 am

        Confusing shareholders with owners means acquiescing in neoclassical legerdemain. They needed to prove that investors were owners and so invented their own laws and history. See Lynn Stout, e.g., https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/

        I can’t give you the legal reference without more research than I have time to do, but many shareholders, including many pension funds, are required to set aside moral and ecological considerations in order to maximise short term returns.

        In the medium term directors may be forced to consider ethics by publicity: after the judicial murder of Ken Saro-Wiwa assisted by and in the interests of Shell the company discovered that top geology and chemical engineering graduates were refusing to consider its employment offers. Shareholders played no role in Shell’s subsequent change of behaviour.

      • June 4, 2016 at 6:15 pm

        Assume all you say is correct. But that still does not answer the questions. Why are shareholders supposedly the central/only focus of directors/CEOs; if that focus is mostly just a screen what’s it a screen for; how did corporate directors become such assholes; maybe all this is just an instance of the sort of actions Milgram’s experiments demonstrated so clearly-and if this is the case who are the “authority figures” to which the directors are responding and what is the “worthwhile” result(s) the hurtful actions lead to? With all this in mind seems like Anthropology, Psychology, and Sociology might provide a better source of understanding for corporate actions than economics.

      • blocke the
        June 5, 2016 at 9:18 am

        See, S. Bainbridge (2006) “Director Primacy and Shareholder Disempowerment,” Harvard Law Review, Vol. 119. If you were familiar with German conceptions of the firm and its governance, you will discover that German business economists discussed alternatives to the proprietary conception of the firm after WWI, see Robert R Locke, The End of the Practical Man (1984, 2006), especially the chapter on German Business Economics: The Theoretical Acievement.” Post WWII German ideas of the organic nature of the firm produced co-determination, US UK proprietary laws produced Director Primacy.

      • jlegge
        June 6, 2016 at 3:25 am

        A bit about how it happened from my book:

        “The solutions to X-inefficiency are built on a series of false assumptions, which is to be expected, given that X-inefficiency is a myth in any case.

        The myth of shareholder ownership has been dispelled by John Kay, Aubrey Silberston, and Lynn Stout. The historic pattern of the development of corporations does not reflect the principal-agent model.

        Companies are formed by entrepreneurs who raise cash for expansion by selling shares in the prospective profits to investors. The company, as an incorporated person, is not really owned by anybody; but it is called into existence to further the entrepreneur’s ambitions, not those of the shareholders. The attempt to solve the X-inefficiency problem by the application of principal-agent theory has led to an explosion in the salaries and other benefits enjoyed by senior corporate managers and an even more cautious approach to productive investment by the corporations that they manage.

        In the rush to eliminate X-inefficiency by the provision of what economists describe as appropriate incentives, the cost to the economy as a whole of supporting the lifestyles of top management has grown by at least one and possibly two orders of magnitude: by some estimates senior management remuneration is now consuming 10 percent of corporate profits in the United States. Similar effects are probably occurring in the rest of the English-speaking world; but only in the United States is transparency taken to the point that the necessary data to form a conclusion is readily and freely available.

      • June 6, 2016 at 6:57 am

        There is only one valid definition of a business purpose: to create a customer.
        ~Peter Drucker, The Practice of Management.

        In 1986, Peter Drucker warned of a severe threat to our “long-term economic future.”
        “Corporate managements are being pushed into subordinating everything (even such long-range considerations as a company’s market standing, its technology, indeed its basic wealth-producing capacity) to immediate earnings and next week’s stock price.” Drucker’s warning proved accurate and the results as seen around us today devastating.

        How did we get from Drucker to this God awful mess we can capitalism today? As I’ve said I believe Milgram’s experiments help explain some of the change. As do the translation of neoliberal dogma into accepted “wisdom” and “institutional forms” through various forms of mass advertising and propaganda, the devaluing of certain “types” of humans, and of course the closing off of consideration of alternatives arrangements for both economics and society in general. The last 30 years have been in my view one of the most repressive and undemocratic periods in American history. And scary thing is it may get worse still.

      • jlegge
        June 7, 2016 at 9:30 am

        I wholly agree with the Drucker quote. I didn’t use it in my book but perhaps I should have. Advertising is over-rated as a force. Neoliberalism’s political success is because of the acquiescence of the social democratic parties: http://www.johnmlegge.com/blog/neoliberalism-seduced-left/

        It may get worse before it gets better, but let us avoid the mistake of the German communists who refused to support the social democrats in 1932-33 because they thought a bout of Nazism would bring the proletariat around to their point of view.

      • June 8, 2016 at 3:15 am

        In the US we don’t have a Labour Party. But the Democrats came close before and right after WWII. I grew up in Texas which because of the War Between the States had only one political party, Democratic. In Texas the party was split even before I began working in the Texas Legislature in 1959. The followers of Roosevelt’s “New Deal” controlled the party until the late 60s. Civil Rights laws, racial integration, and economic decline that hit Texas hard doomed their branch of the party. About 1970 the “conservative” wing of the Democratic Party became dominant in Texas. By 1980 this wing had become the Republican Party of Texas. A mainline supporter of Ronald Reagan, the Bushes, and Ted Cruz (44%) and Donald Trump (27%) won the recent Republican Primary. The last of the Bush boys came in dead last in that election (more about that momentarily). Under the Texas Labor Code, a person cannot be denied employment because of membership or non-membership in a labor union or other labor organization. This law enacted in 1993 made Texas a “Right to Work” state. Same logic as you describe – as competition drives greater profits for companies they will compete for the best employees and thus salaries for “competent” workers will rise. Only the less diligent and talented workers will lose out. What is wrong with that? That wage is $7.25 per hour. A full time minimum wage worker will earn $290 per week, or $15,080 per year. But less than half of minimum wage workers are full time employees, and benefits such as health insurance (until the Affordable Care Act) only come with full time employment. Overall 8% of the workforce in Texas is earning minimum wage. And of course supporting a family on $15,080 per year is impossible, especially without health insurance. And average wage for all workers in Texas is only $22 per hour, or about $46,500 per year. Just to “get by” the family of four needs to earn about $40,000 per year. Not much head room in Texas, even for the so called “middle class.” But the number of “millionaire” families in Texas rose to an all-time high of nearly 500,000 or nearly 5% of all households. Long story short, 75% of families in Texas are just getting by or not getting by while 5% are doing very well and the rest are trying to keep up. These are the results of economic rationalism in Texas. And from what my contacts in the Legislature there tell me it is not likely to change much anytime soon. Republicans (economically radical ones) control the Governorship, the Legislature, the Chamber of Commerce, most city and county councils, and the major trade organizations. Even such bastions of opposition to these policies such as the University of Texas and the City of San Antonio have been censured and silenced. It’s very bad. And as you suggest those who have suffered the most continue to accept the story line that all we need is just a little more time for everyone to find their pot of gold. But this is still a failure of democracy as fear stops many from voting against these policies and those who as a result win the elections amplify and exploit this fear and find many surrogates to blame.

  4. June 3, 2016 at 7:35 pm

    from your description of the book, a ready made propaganda meme and rant from the neo-lefts catechism, it doesn’t seem too intellectually rigorous.

    • jlegge
      June 4, 2016 at 9:09 am

      My text books are as academically rigorous as any. A book intended to explain economics to practical entrepreneurs and early career executives needs to use a degree of expressional comfort. If you call it a rant without reading it that says much more about you than about my book.

  5. June 3, 2016 at 8:14 pm

    Vic, the argument I’m making is that “getting GDP back on track” will only drive us off the cliff to ecological collapse sooner. There’s no magic tech fix here. We live in an economic system built on perpetual growth but we live on a finite planet with limited resources and limited “sinks” (capacity to absorb pollution). So far at least, no one has come up with a way to magically “de-materialize” production, to “decouple” growing production from growing resource consumption and pollution. Solar power solves little if it just reinforces perpetually growing consumption (the Jevons paradox), especially of ever-more junk we don’t need and can’t sustainably produce. I contend that there is no solution within the framework of any conceivable capitalism. We need an entirely different kind of economy, some elements of which I try to sketch out in my book, and which I would invite you to read and tell us what you think.

    jlege: You’re right, companies are run by management, often in their own interests and occasionally against the interests of the shareholders (notoriously, Goldman Sachs). But, at the end of the day, corporations have to answer to investors or investors will flee. The problem is corporations function in a competitive economy. Investors are constantly capitalist-rationally searching for the highest returns. And those investors include capitalists, investment banks, institutional investors like pension funds, and thus you and me (if only via our retirement portfolios). We’re all in this together — and don’t have much choice about it. The occasional CEO who gets carried away with environmental concerns and elevates saving the humans and the planet over maximizing profits will soon find himself out of a job. Look at Lord John Brown (former CEO of BP who got fired for wasting company resources on solar power projects), or the Body Shop’s CEO Antia Broderick who spent too much time trying to save Nigerians who were being murdered by Shell Oil. The point is, we’re all in this together: investors, employees, governments, under capitalism we all must be concerned to maximize growth. So long as we live under capitalism, profit maximization trumps all else. If not we all suffer in the short run. But the problem is that maximizing our short-term interest in growth only destroys the world for our children. Indeed, we’re destroying the world environment right now. So that’s why I argue that we need to rethink the whole system, we need to come up with an entirely different economic system with entirely different incentives and interests, and we need to hurry up about it or our goose is cooked.

    You’re also right that population is a problem. By any measure, there are way too many of us. But resource consumption and pollution are growing at multiples the rate of population growth — and those are driven by capitalist production for market. The only way to humanely reduce population growth is to provide resources, especially adequate retirement and healthcare funding so that people don’t feel they need to have so many kids as social insurance in their old age. That too will require revolutionary changes in the allocation of social resources. So I don’t mean to ignore this problem but the fact is, if we don’t derail the capitalist locomotive we will face a population crash across the planet such as we can’t imagine. That’s not the kind of population control we want to see.

    • June 4, 2016 at 3:46 am

      While returning to England from the Crusades, Richard Coeur de Lion (Richard the Lionheart) attacked, sacked, and burned the Abbey of Le Chalard and the village nearby, and several other abbeys and villages. All were on France’s “Gold Route.” Richard had spent all the money he had on fighting in the Holy Lands. He needed more. The “rich” abbeys and villages along this route seemed a good target for that purpose. He found little gold but did kill (and dismember) several thousand priests and villagers. My point – being greedy, self-centered and arrogant to the point of psychosis, and short-sighted in terms of harm done are not features exclusive to capitalism. So neither is a lack of concern for one’s natural surroundings. The oldest farming technique among humans is slash-and-burn — cutting and burning of plants in forests or woodlands to create fields for farming. The technique is still in use in parts of South America and Africa today. The technique is greatly destructive of forest ecology and bio-diversity. It also adds pollutants and particulates to the air. It ended the most successful way of life in human history – foraging (hunter-gatherer). Hurting themselves, others, and the planet has a long history among humans. Capitalism is the most successful effort in all three areas thus far invented. Which begs the question, how do we change a way of life that has such a long and infamous history? One answer was given I think by Francis of Assisi – imitate the life, and carry out the work of Christ, in Christ’s own way. A more secular response might be adhering to Aristotle’s golden mean, the desirable middle between two extremes, one of excess and the other of deficiency. A conservative way of life. Although not one most “conservative” capitalists or social conservatives today would recognize as such. Other suggestions gratefully accepted.

      • graccibros
        June 5, 2016 at 3:34 pm

        Thanks Ken, for pushing our boundaries a bit into the long historical record of human economic interactions with nature. The point you are making has a lot of validity, that human species survival has always pressed if not oppressed “nature” for its own survival, usually at nature’s expense. Full ecological awareness is a relatively late dawning form of consciousness, don’t you think, though, bits here and there throughout the 19th century, but not until Leopold and Polanyi brought it to the forefront has it risen, and post 1970, the first Earth Day in the US, into an ideological force.

        A conservative, Neoliberal most assuredly, would look at what you wrote, and say, see, it’s not capitalism, that’s merely the system we’ve developed that takes best advantage in harnessing “true” human nature to our own productive purposes. We’ve always been greedy, cruel and self-centered individuals, tribes and nations, nature here for our convenience.

        However, Karl Polanyi, among others, was an unusual economist: he went to the anthropological record to try to get at “human nature” as expressed in the realm of economics, of reproducing ourselves and didn’t find proto-capitalist traders weighing the costs and benefits on the marginal analysis. Other motivations and species characteristics were evident. Prototypes of St. Francis? I’ll leave that to others to argue.

        However, we’re here in the second decade of a new century, and the dominant economic thinking says capitalism is wonderful, and if it presses too hard on nature, as surely evidence indicates it is doing, and not just on the global warming front, then it will offer us “the” solutions. But as I tried to indicate in my posting above, in critiquing Wm. Nordhaus’ indirect answer to Richard Smith, Neoliberalism is dynamic with its “catechism,” and by that I mean it has actively undercut all the market based solutions Nordhaus recommends to deal with the warming: carbon credit trading schemes and a carbon price are both attacked in the US as taxes, hidden or direct, which is verboten, and certainly the designer and judicial overseer of such solutions, government itself, has been under attack by most of the Neoliberal spectrum for decades. So to Nordhaus I say: market based solutions from academe, so clean and logical, can’t make it in the political marketplace right now, because of power and the force of neoliberal ideology and its real world manifestations. Demonstration: the four prominent economists who attacked Gerald Friedman’s little exercise in “running the numbers” on Sanders policy proposals. ( Hardly proof of Alan Blinder’s assertions on how liberal Mainstream Economics is .)

        Of course, it is true there is a significant portion of the Greens who want to decentralize everything: energy, agriculture…as a response to the central stalemate in national legislatures for any type of decisive action, be it environmental or economic. I read Richard Smith as straddling the line between a Green New Deal relying on a powerful federal gov’t and the green decentralizers, like Gar Alperovitz…other nominations accepted.

        I’m a new Green New Dealer, dubious that we can extensively decentralize, despite the intellectual rigor of the exercise that camp brings to the table. As L. Randall Wray has pointed out in his book “Modern Monetary Theory,” a good “Jobs Guarantee” (JG) or federal “Employer of Last Resort” (ELR) program is integral to achieving full employment and price stability under the MMT worldview, and it ought to be heavily decentralized in tasks and design, even if paid and over-looked by a central government authority.

        My last comment will be that as I see things in the US in 2016, the intensity of the personal economic suffering of so many people is the political driver, for better (Sanders) or worse (Trump) and no matter the damage we are doing to nature, which we certainly are, the humans will put their essentials and their standard of living in general ahead of nature’s well-being, no matter the cost to our collective future’s interactions. It remains to be seen if an ecological emergency equivalent to the economic one of the Great Depression would change this. Most, likely, we will get a recession or another financial crisis first. We could design a JG and ELR to meet both needs, but so far, even Sanders hasn’t called for a “Right to a Job” from FDR’s Second Bill of Rights to match his call for Universal Healthcare as a right.

      • June 5, 2016 at 6:59 pm

        As you suggest Anthropology is a way to consider these questions that has few rivals in terms of insights and potential paths of action. So let me approach these questions anthropologically. Humans, unlike their near cousins Chimpanzees and Gorillas have limited social abilities. Unlike our cousins humans do not work together as a natural course of affairs. Consequently, humans must construct social arrangements for living together, sharing, and finding/acquiring the means for survival. Humans create what’s called, depending on your academic inclination, institutions, social structures, moral codes, laws, cognitive theories, etc. This means humans are never really comfortable in any of these, since none give humans all the support they want and need. This also means that unlike our cousins a primary concern for humans is whether the “things” we’ve built actually are doing the job of allowing humans to live and survive together. For it is quite clear that humans, like their cousins can only survive together. To “truck and barter” is one offer on how humans can live and survive. Neoliberal economics an amplified version of this basic structure. But humans have also constructed ways of life around cooperation and direct/indirect sharing of resources and care. So capitalism’s (whichever form you choose) contention that it is the only way of life that works or can work for human survival is just incorrect. With this in mind it’s essential that humans continue to assess how they’ve chosen to set up their social arrangements and what those arrangements are. The arrangements must on average help more than hurt the chances for human survival. Capitalism, of all forms scores low on this assessment. Capitalism scores low for two reasons. First, it harms more than most other options the physical relationships (air, water, land) on which human survival depends. Second, it pits humans against one another in the pursuit of something that has virtually no survival value for humans – money. So on the basis of human survival capitalism is a poor choice, and if carried to an extreme an extinction choice for humans.

  6. graccibros
    June 4, 2016 at 3:13 pm

    Richard Smith:

    I’m glad you’re listening in – and commenting. I’ve been meaning to undertake a more rigorous analysis of your answers on why capitalism cannot protect the environment, and I’m going to use William D. Nordhaus’ review of the book, “Climate Shock” by Gernot Wagner and Martin Weitzman in the June 4, 2015 print edition of the NY Review of Books as the jumping off point. Nordhaus has been a recent President of the American Economics Association, and seems to have been given the task of defending capitalism, with adjustments, in the face of environmental criticisms coming from the left, Naomi Klein and you, Richard – of course, without bestowing the dignity of naming those “charged.” And the book comes from a leading non-profit economist at the conservative leaning group Environmental Defense; Weitzman is a new name for me but his praises and fame are sung in the review by Nordhaus, so I’ll accept them at face value for the purpose at hand here.

    So what’s going on with Nordhaus? Well, he’s asking the obvious question: “Why has progress in climate change policy been so slow?” Later, in the last third of the article he ventures, heaven forbid, (and if he were inclined to invoke Klein and you, Richard, here was the place to do it) to conjecture that “We might think that capitalism is the problem because economic growth has led to rising emissions. But (the authors under review) argue, a modified invisible hand is the only workable solution: ‘It’s capitalism with all its innovative and entrepreneurial powers that is our only hope of steering clear of the looming climate shock.'”

    Now let’s get to the nitty gritty. There are two levels to your book, Richard, as I look at it. The first is why capitalism failed in Hawkens’ Second Industrial Revolution…why it couldn’t reform itself to substitute the least toxic and extractively disruptive inputs and create the largest number of recyclable products from our industrial and chemical “manufacturing” processes? I tend to view the losing fight against global warming as a larger example of this dynamic, although some would say that is arguable, and indeed, Nordhaus says its because of free-riding, or, in less polite terms, free-loading: nations refusing to pay their share of cleaning up the broader atmospheric commons. By looking at it this way, it seems to me, Nordhaus evades the more uncomfortable analysis Smith undertakes, which gets close to the nature of capitalism’s internal processes, which, if I understand The God that Failed, centers upon a ruthless cost competition in the pre-monopoly and oligopoly phases. So where did Hawkens go wrong, since his work, which I no longer have in front of me, implied that there were good traditional capitalist savings to be had by changing the processes and substituting the least toxic inputs and maximizing recycling outputs. On the whole, though, that hasn’t happened, and Richard Smith has a case study of a die-hard carpet manufacturing who tried but didn’t come up with an industry break-through. And didn’t set off a wave of imitators.

    So Smith’s conclusion seems to be this: the intensity of competition means that firms cannot take the time and research costs to fully explore the risks Hawkens wanted them to run…it is a cost/dime drain which has no guarantees and apparently doesn’t have enough takers or positive breakthrough outcomes to position the green products advantageously for price…even as we acknowledge that some consumers will pay a price premium for greener products: that remains a consumer and product nitche, although a growing one. But it has not transformed the nature or the impacts of our basic processes in the direction Hawkens has hoped. Decision to Richard Smith.

    So what happened? Is this a more widespread example of “free-riding” not, as Nordhaus applies the term, to the competitive economic “wars” (my term) between nations on cost, but internally between domestically competing firms, which makes less and less sense even for the US because of the extent of globalization by 2016? Is Nordhaus just looking for less ideologically charged historical terms that Smith doesn’t shy away from using, that the competitive process on cost, and the financialization process since 1973 pushing ever towards the short run means that firms don’t have the luxury to experiment in the directions Hawkens hoped for, and illustrated by the carpet company CEO example Smith supplies us with? It seems Lester Thurow was correct, capitalism cannot project societal and environmental cost/benefit analysis very far into the future. Nordhaus says that tough, good governance, the regulatory state, has proven, with Sulphur Dioxide trading mechanisms, that it can be done sometimes, but I think that’s a special case that was not make or break across the whole economy, much less internationally, in the way carbon-energy dynamics are in reality. And if he has to go to state imposition, he implies, against the conclusion of the book he reviews, and I suspect, his own ideological leanings, that the internal processes of capitalism itself cannot accomplish the environmental ends Hawkens et al wanted, including stopping global warming (but Hawkens was looking at much more widespread examples of chemical degradation; land-use impacts from development, not so much…) by its own reform mechanism, by “better” business practices.

    So I think Richard Smith has won by having the courage to face up to the fact that internal capitalist processes are still sufficiently ruthless, selfish and short run to prevent a widespread transformation of processes, which, let me be clear, really ask firms and the system to organize – or better, re-organize their whole operation along a new value scheme spectrum. One supposes, given a much greater public opinion pressure, that they could be forced to do this, to overturn capitalism’s old value system for its processes, but based on what we know today, capitalism has captured more of the processes of the political system for its own present methods than the environmental “community” has been able to do for its values. Let’s not be absolute about this: some capitalists have wanted to transform themselves to be greener, but not enough to tip the balance anywhere near where Hawkens wanted it to go.

    Nordhaus’ solution, to create an international “club” (dare I say modelled, without naming it, on the exclusive men’s clubs in the industrial nation’s from the Victorian period) which would then impose a tariff upon developing nation’s like India and China, to name the most likely targets, who wouldn’t get to sell their products in the old way without triggering the cost-tariff “fine” unless they reformed their ways and set a price of $40 per ton on carbon inside their nations. Good luck with this…In the end, democracy would seem to suffer, and Yanis Varoufakis will have more than a sly smile on his face, that this is the best the Neoliberal west could come up with: a tariff imposing Victorian men’s club.

    Of course, what William Nordhaus de-emphasizes, by indirection, is how the 30 year plus dominance of Neoliberal values has undermined even the case for national environmental regulatory processes. He can divert us to “free-riding,” a temptation internationally which “human nature” (he implies) can’t overcome, but by doing this he evades the explicitly anti-regulatory thrust of Neoliberalism in the United States since 1980…and elsewhere, although German successes will have to be footnoted heavily.

    • June 4, 2016 at 6:37 pm

      Trying to change the fundamentals of capitalism is akin to removing the Tiger’s stripes. They go with the beast, whether wanted or not. The “better life” capitalism is claimed to provide is gained only by the focus on growth, production, resource depletion, and pollution (of several sorts). So my take is something else, some other fundamentals need to be substituted for capitalism. “In all of your deliberations in the Confederate Council, in your efforts at law making, in all your official acts, self-interest shall be cast into oblivion. Cast not over your shoulder behind you the warnings of the nephews and nieces should they chide you for any error or wrong you may do, but return to the way of the Great Law which is just and right. Look and listen for the welfare of the whole people and have always in view not only the present but also the coming generations, even those whose faces are yet beneath the surface of the ground – the unborn of the future Nation.” (The Constitution of the Iroquois Nations: The Great Binding Law) Or in the words of Oren Lyons, Chief of the Onondaga Nation: “We are looking ahead, as is one of the first mandates given us as chiefs, to make sure and to make every decision that we make relate to the welfare and well-being of the seventh generation to come. … What about the seventh generation? Where are you taking them? What will they have?” (1980) I don’t believe such ways of life can be integrated into capitalism. But they could replace it.

  7. June 4, 2016 at 7:09 pm

    Actually its not the capitalists but the landlords who are the monopolists who are spoiling the economy. What we need is a new style of taxation to give wage-earners, spenders and investors more freedom whist landlords have to pay for what they occupy and stop others from having the opportunity to use properly their sites.

    tax land not people; tax takings not makings!

  8. June 5, 2016 at 7:44 pm

    “Capitalism is, overwhelmingly, the main driver of planetary ecological collapse”. What a sad truth! What a sad short-sighted lot we humans are: full of our own needs and visions, greedy, unsharing, usurious, unwilling to be taxed, with rarely a thank you and care for what mankind has been given. David Chester is similarly short-sighted about landlordism, for it is just one species of capitalism: making fraudulent money out of other people’s lack of money (be that to acquire sustenance, a home, a workshop, industrial resources, means of communication, or monopolies of these or of the land on which they stand). Without easy money we barely rose above substence level. The achievements of the past were built on slave labour or financed by accumulated giving. Since the re-legalisation of usury and the instutionalisation of the Goldsmith’s Fraud as reserve banking, fraudulent money has provided the means of incremental monopolisation at each of these levels,

    “If you are struggling with toothe-ache, try biting your finger”! Poor men remain hopeful, not by agonising about what’s messed up, but by giving thanks for what they have been given. These snippets delight to Sibelius’s music and a lively tune with an unusual five-beat rhythm:

    “Be still my soul: your God will undertake
    to guide your future as he has the past.
    Your hope, your confidence, let nothing shake,
    all now mysterious shall be clear at last.
    Be still, my soul; the tempests still obey
    his voice, who ruled them once on Galilee”. And

    “Come then all you nations,
    sing out your Lord’s goodness,
    melodies of praise and thanks to God.
    Sing out the Lord’s glory,
    praise him with your music,
    worship him and bless his name”.

  9. June 6, 2016 at 8:54 am

    So maybe there will be no tomorrow; but perhaps there will. The poor man plants seed anyway, and dreams of the harvest which otherwise would never come. The rich man enslaves others to do the planting, and feeds them enough to live on while there is a surplus; but the slaves are rebelling, though the thought of where tomorrow’s dinner will come from still concerns most of them more than next year’s.

    Back in 1864, John Ruskin planted the seed of a Citizen’s Income, telling the story of a curate who, because the work needed doing, worked his socks off for a stipend any rich man could afford to give him. That has grown, influenced lately by Huber and Robertson, until yesterday the Swiss had a referendum on it, with negative results revealing that Positive Money is still a hot-house plant:

    http://www.zerohedge.com/news/2016-06-05/landslide-vote-swiss-reject-proposal-hand-out-free-money-everyone.

    “Critics of the measure say that disconnecting the link between work done and money earned would be bad for society. But Che Wagner from the campaign group Basic Income Switzerland, says it wouldn’t be money for nothing. “In Switzerland over 50% of total work that is done is unpaid. It’s care work, it’s at home, it’s in different communities, so that work would be more valued with a basic income.”

    The curious omission here is the work we need to do looking after ourselves. But:

    “Andreas Ladner, a political scientist at Lausanne University, told RTS the Swiss were “realistic” in their assessment of the UBI plan. Accepting that people can “be paid without having to work would have been a very big step” for the industrious Swiss, he said”.

    More to the point, the only way they see of paying for it involves taxes, which they detest. So I’ve been investing my pension in planting the seed of Negative Money, the love of which is the root of all evil, and arguing how it can and should be simply written off when the credit which is all it is has enabled us to do the work in which it was invested. For this to work, three conditions are necessary:

    a. One is still expected to earn one’s keep, but the concept of “employment” has to be widened from that of employment by others, and natural seasons in the need for doing so respected.

    b. The job of goverment has to change from enforcing industrial slavery to determining how much credit we can afford to give by assessing what is available to buy with it and directing us towards reproduction of that.

    c. Insofar as human work is automated, communities need to keep themselves human by investing in allotments and workshops and laboratories etc in which men can amuse and educate and experiment and enjoy the comeraderie of shared interests in growing fresh food and maintaining, using and developing the likes of cycles, old cars and steam engines, and the old discrete component types of electronics.

    In my eightieth year, is it too much to hope the critics here will kindly stop tramping my infant seedling underfoot and try watering and feeding it a little?

    • June 8, 2016 at 4:39 pm

      ANSWER : Balanced Capitalism with a return to the public purse on any commercially-created money. Central-bank-issued money at discounted rates of 0.5% then allow re-lending at 1.5% for Eco-Fit more thorough enveloping of buildings.

      SECONDLY : Keep screwing down consumerism with luxury-goods tax and taxes on “goods” that are based on deceptive marketing
      THIRDLY : PAY PROPER INTEREST to Depositors – recognising the social value of healthy bank balances and with the above measures MUCH MORE STABLE MONEY VALUE

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