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The scarcity machine

from Jason Hickel

Even people who are concerned about ecological breakdown are forced to submit to this logic: if you care about human lives, then you must call for growth first and foremost, regardless of the ecological consequences; we can deal with the environment later, once everyone has enough. But there will be no later, because the problem of scarcity is never solved – there is never enough. Whenever scarcity is about to be solved, it is always quickly produced anew. In 1930, Keynes famously predicted that the economy would rapidly become so productive and replete that people would have to work for no more than 15 hours a week to satisfy all their material needs, thus freeing up more time for leisure. Productivity has long since surpassed the point of abundance that Keynes foresaw, and yet his prediction about work has never come true, because instead of translating productivity gains into shorter working hours, higher wages and guaranteed employment, capitalists have captured the benefits for themselves, increasing their profits while keeping wages low, and retaining the threat of unemployment in order to discipline labour. 

In this way, capitalism transforms even the most spectacular productivity gains not into abundance and human freedom, but into new forms of artificial scarcity. It must, or else it risks shutting down the engine of accumulation itself – killing off the goose that lays the golden egg.

Here it becomes clear that inequality itself drives artificial scarcity, just as enclosure did in an earlier era. In the 1970s, the United States had a lower poverty rate, higher average real wages, and higher happiness levels than it does today, despite having less than half of today’s per capita income. The difference has to do with distribution: in the 1970s, income was shared more fairly, leading to better social outcomes. Virtually all of the yields of growth since 1980 have been accumulated by the rich, leaving the rest of the society in a state of what can only be called artificial scarcity. The same process plays out in every nation that has seen rising inequality, and indeed on a global scale as well. Today 4.2 billion people in the world (60% of humanity) live on less than the equivalent of $7.40 per day, the minimum necessary for normal human life expectancy and basic nutrition. Since 1980, the incomes of the richest 1% have grown by 100 times more than those of the poorest 60%, and now stand at $18.7 trillion (World Inequality Report, 2018). This is three times more than it would take to cover the poverty gap and lift everyone in the world above $7.40/day. In other words, shifting a third of the income of the richest 1% to the poorest 4.2 billion people could end global poverty in a stroke, while still leaving the 1% with $175,000 per year.

Click to access Hickel87.pdf

  1. Ikonoclast
    July 1, 2019 at 2:17 am

    I agree with the paper. As an aside, I must say it is a relief to be able to blog on a site where I agree, in broad brush, with most posts. As an unconventional thinker, to blog on more standard economic blogs (even moderate left-ish ones) is an exercise in complete hopelessness and frustration. It is always clear, on these more conventional economic blogs, that one is dealing with pure ideology unleavened by empirical considerations; that is to say unconnected to the real world forces, laws and phenomena dealt with by science and which unavoidably impact on economics.

    It is very difficult to imagine a transition to a new paradigm. In medieval times it would have been impossible to imagine in detail a transition to mature capitalism. It would have been beyond all “social imaginary significations” to use Castorisdis’ term.

    “The kinds of formations persons can think of depend on the society they live in, which can be identified by what Cornelius Castoriadis called its social imaginary significations (SIS).” – Ulf Martin, The Autocatalytic Sprawl of Pseudorational Mastery.

    Of social imaginary significations, Martin asks;

    “… what goals can a person in a given society imagine achieving? There are two questions here:

    a) What can people imagine to be achievable?
    b) Of what they imagine to be achievable, what do they consider worth achieving?

    We are now in a somewhat different imagining position to that of the inhabitants of Medieval societies. Ulf Martin points out:

    “Castoriadis distinguishes two types of SISs and hence societies: autonomous and heteronomous. An SIS is always the collective creation of the members of the society in which it exists, but in a heteronomous society, people imagine that both the natural order, or the physis, and the social order, or the nomos, have been created not by themselves, but by some external and unreachable entity, whether God, the forefathers or human nature. Indeed, the distinction between physis and nomos does not make sense in the context of a heteronomous SIS. Typically, heteronomous SISs are closed in the sense that they offer an explanation for whatever happens. This closedness in turn makes heteronomous SISs static: they are imagined to be unchangeable and eternal. Fundamentalism, the call for a return to an imagined point of origin, is thus common in heteronomous SISs.

    In contrast, the members of an autonomous society not only know that they themselves are the creators of their imaginary significations, but also take advantage of this fact by making conscious changes if they deem them necessary, which breaks the closedness of the SIS. The social order is no longer given, but subject to change, and only in autonomous societies do we find politics proper. And the possibility of consciously changing the social order in turn gives rise to questions of how to go about changing things and of the limits of the Gestaltungsvermögen: autonomy is the discovery of the distinction between physis and nomos. Science and philosophy proper are only possible in an autonomous society. Autonomous societies have a strong tendency towards equality and equal participation in the Gestaltungstätigkeit because once all aspects of the social order are subject to change, there is no longer any higher reason for inequality and non-participation….”

    Medieval society, in my interpretation of Martin, was a largely heteronomous society. By comparison today, we appear to live in an autonomous society. Thus it is possible for papers like Hickel’s paper to be written and for us, or some of us at least, to imagine a radically new system. It seems to me however, that a large proportion of modern society tries continually to reconstruct our SIS as heteronomous. Only scientists and heterodox philosophical, social science and economic thinkers inhabit imaginative fields outside the orthodox heteronomous SIS which now holds that endless growth capitalism is an eternal system. Capitalism is supposedly natural (fitting with what is claimed to be humanity’s central and essential nature of dominant greed and competitiveness), capable of equilibrium and endless growth at the same time (which is impossible) and free-standing of any natural limits (in contradistinction to all the discoveries of science).

    The elites of course are in favor of the status quo. They are made immensely richer than average and most of this oligarchy (being rich, white men over 60) expect to be dead or still wealth-insulated when the unsustainable system begin collapsing. They are probably fairly evenly divided between those who don’t know and those who don’t care that a collapse is inevitable with business as usual.

    The masses are largely too poorly educated to know what is coming. Public education and especially science literacy education in the West has been deliberately dumbed down. A small STEM technical elite is all that is needed to keep production science going whilst impact science (the study of ecological, climate and general biospheric impacts and limits) is de-funded and even actively opposed and destroyed. A knowledge scarcity is deliberately engineered. Yet it is only critical thinking in the scientific and social science fields (and in philosophy) which can generate the autonomous ability to develop new social imaginary significations: to envision a radically different society and political economy.

  2. July 1, 2019 at 5:52 am

    But is the artificial scarcity helping or hurting the environment?

    • Ikonoclast
      July 1, 2019 at 11:41 am

      Scorched earth creates scarcity and it doesn’t help the environment either. “Scorched earth” is an appropriate metaphor given global warming. The brutal and systematic implementation of artificial scarcity, as described by Hickel, does not preserve some nature un-plundered. Rather it lays waste to all of ecological nature recklessly, indiscriminately and on a wide scale. Scarcity at the lower levels of society is implemented by highly hierarchical capital-power and income systems (including their attached military systems). It takes a lot of extra physical energy (most still from fossil fuels) to maintain a highly hierarchical system and to continually suppress the lower rungs and regions. Think of the oil burned to suppress the peoples of the Middle East (mostly their oil too).

      In Australia, we have seen events like the death of 50% of the Great Barrier Reef in just a couple of years due to coral bleaching. In the Gulf of Carpentaria, 10,000 hectares of mangroves died along 700 kilometers of shore in one die-back event in one season (2015). It was a world-first in terms of its scale. This mangrove die-back occurred in the space of a month and closely coincident with a major coral bleaching event on the Great Barrier Reef. This is even though the mangroves and the reef are beside or in quite separate seas with 1,000 kilometers or so of land barrier between them. This indicates a huge and pervasive atmospheric and oceanic heat event. These events and others have unambiguously been attributed to global warming by scientists expert in the relevant fields.

      It’s not just the many events but the clear tied nature of these events which give us the picture. The Canadian, Fort McMurray, Boreal forest wildfires occurred about seven months after the mangrove die-back event in Australia (as summer moved from south to north). Again, there is a general connecting pattern due to climate change; especially the pattern of unusually hot years and missing summer rains.

      It’s something of a paranoid cliche to say “it’s all connected” but actually it IS all connected. Complex systems science, from the arenas of human power systems (social and energetic), to climate science and ecological science do demonstrate that all these phenomena are measurably connected by energy transfers.

  3. Ken Zimmerman
    July 5, 2019 at 10:47 am

    Oligarchy is an old form for economic and political organization. It was invented long before the invention of capitalism. From about 1500 forward all western nations have been organized as oligarchies politically and economically. All modern capitalist nations today are democratic oligarchies. That means in many areas of life pluralities of citizens, or even populist demands make the decisions about major areas of concern. But oligarchies attempt to protect their advantages. Since all oligarchies in these nations are concerned with protecting the advantage they have in wealth, these oligarchies are concerned with property rights and taxes. Since most believe loss of property rights in these nations in unlikely, most of their efforts focus on tax policy and rates. The simplest and most effective way for oligarchies to effect tax policy and rates is to purchase the policies and rates they want. After all they possess more wealth that other members of society which allows them to purchase and control media sources such as newspapers, social media companies, and, of course politicians. This doesn’t guarantee success, however, as some in these groups may resist bribes. But great wealth also purchases propaganda, alliances with groups with “dirt” on opponents, and high walls, both physical and digital. As a last resort, the members of the oligarchy can always hire thieves to steal what they need to win. But oligarchy and democracy can coexist in the same nation and do in many parts of the western world. Some are more successful than others. The Nordic nations for example struck a bargain with their oligarchies – the government will protect a portion of your wealth up to an identified point so long as the oligarchies stay out of the political game. It’s not 100% successful but it works well enough to make the Nordic nations 300% more economically equal than the US. It’s not unlike the more tacit agreement between the British Parliament and the British Royal family.

    No oligarchy in any western nation is monolithic. That is, there are clear divisions in the oligarchy. While generally pursuing protection of their wealth the members of an oligarchy often differ on ways to achieve this end, who is and is not a member whose wealth ought to be protected, and the belief in and support for democratic decision making. For example, some members of the American oligarchy see no prohibition on murder to protect their wealth. Also, Donald Trump is generally not accepted by the other members of the American oligarchy as someone whose wealth ought to be protected. Finally, some members of the American oligarchy support American democracy (within the bounds of wealth protection). For example, two famous Presidents, Franklin Delano Roosevelt and John F. Kennedy. On the other hand, David and Charles Koch present a libertarian version of democracy that undercuts government efforts to ensure elections are fair and honest, or that the average American should receive help from their own government to ensure each has enough resources to survive. In the “Samaritan’s Dilemma,” James Buchanan, the libertarian economist funded by David and Charles Koch, claimed Jesus was mistaken. Enlisting the Good Samaritan story, Buchanan made his case that “modern man [had] ‘gone soft’”: he lacked the “strategic courage” needed to restore the market to its proper ordering. From this perspective, what seemed to be the ethical thing to do—help someone in need—was not, in fact, the correct thing to do, because the assistance would encourage the recipient to “exploit” the giver rather than the recipient solving her/his own problems. Buchanan used as an analogy the spanking of children by parents: it might hurt, but it taught “the fear of punishment that will inhibit future misbehavior.” Similarly, “the potential parasite” needed curbing to prevent efforts to “deliberately exploit” society’s “producers” (businesspersons and other members of the oligarchy accepted by the Kochs, etc.). More than any other writings by Buchanan, this article captures the stark morality of libertarianism, giving us the movement’s prescription for how America’s third century could reverse the “soft” errors of its second. Perhaps they didn’t recognize what they had done, or perhaps they didn’t care, but Buchanan with money from the Kochs re-invented “Social Darwinism,” the most malicious theoretic intrusion in human society before the racial theories of the Nazis.

    Ensuring that resources needed for survival are scarce for those not part of the oligarchy is one effective tool for use by the oligarchy to protect its wealth. It doesn’t matter if there really is a shortage of these resources. It matters only that those the oligarchy wants to control and keep subservient believe that a shortage exists. This is the primary reason that the bought-and-paid-for political servants of the oligarchy hammer constantly on the national debt, budget deficits, and the need to reduce payout by the government for such basic citizen aid programs as social security, food assistance, government assistance for education, and government aid when ordinary citizens suffer violent crime. Some in the oligarchy have accepted Buchanan’s “Good Samaritan” story as fact, and thus see any sort of government aid to “non-producers” as both an attack on society and unlikely to make the recipients better off. Those not sold on Buchanan’s story simply see the denial of public aid as an effective and inexpensive way to protect their wealth.

    Over the last 10 years the Koch brothers and other rich right-wing donors provided vast quantities of “dark money” (political spending that, by law, had become untraceable) to groups and candidates whose missions, if successful, would hobble unions, limit voting, deregulate corporations, shift taxes to the less well-off, and even deny climate change. The master plan here was to turn the US into the libertarian paradise described by economist James Buchanan. Or, more accurately to use the national and state governments to recreate the US in this image. This was done without any vote or even cursory request for permission from the American public. The American oligarchy, or at these segments of it have gone too far. They obviously don’t want a discussion or compromises with other segments of American society. They choose instead to recreate American culture in any way they see fit. This is not acceptable. This is insurrection under the Constitution and must be treated as such.

  4. Helen Sakho
    July 7, 2019 at 12:41 am

    Thank you all for the contributions. The dark secrets of “dark money” are fortunately out, thanks to global connections. The reality is that America has never been so polarised. But neither has the rest of the world. The poor are getting poorer everywhere and the rich richer from their hard labour. The trickle down effect has for decades now been trickle up. And, unfortunately, no “Good Samaritan” or any other charitable source can reverse the process. It is simply too late, and it will take decades to get back to a situation of realism.

    • Ken Zimmerman
      July 7, 2019 at 2:06 am

      Helen, Robert Reich suggests that one thing we could do to deal with these problems is to abolish billionaires. Robert, lays out the ways billionaires are able to accumulate that much money. First, monopoly. We can address this by vigorously enforcing anti-trust laws already on the books. Second, copyrights and patents. Robert suggests shortening these by half or more. Third, insider information. Here we need to both enforce fines to take away all the money gotten in this way, and in egregious cases send those who seek out and use such information to prison. Fourth, pay off politicians. This screams for Congress to take private money out of elections completely. And long prison sentences for those convicted of giving and receiving private money wouldn’t be a bad idea. This was accomplished during the 1970s after the last major government scandals. But Americans seem to constantly forget history. Fifth, inheritance. Again, a problem addressed before. High inheritance taxes and a limit on the amount that can be inherited address this problem. These are not revolutionary changes. We’ve done them before in the US. But 50 years of propaganda by the American oligarchy have reversed most. We need to address them now before another 50 years of propaganda makes them impossible to even conceive.

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