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Degrowth, green capitalism and the promise of ecosocialism
By Richard Smith
August 22, 2016 — Links International Journal of Socialist Renewal reposted from New Politics — I don’t need to tell you we face an existential threat. Scientists tell us we face a “climate emergency.” Last year was the hottest year ever recorded, beating 2014, which beat 2012. We break new records every year. The fourteen hottest years ever recorded have been recorded since 2000. January and February temperatures were torrid. Global temperatures hit new all-time highs in February; the northern hemisphere breached the 2 degrees-Celsius-above-normal mark for the first time in recorded history. Svalbard, Norway, averaged 10 degrees Celsius above normal. Parts of the Arctic were more than 16 degrees Celsius warmer—basically no winter. There were record-setting low measures of maximum Arctic sea ice this “winter.” In the United States, the winter was record-warm from coast to coast, breaking all-time temperature records for February. The same in Asia. In the tropics, record warmth is massively bleaching the Great Barrier Reef.
Keep in mind that it took from the dawn of the industrial age until last October for temperatures to climb 1.0 degree Celsius, and we’ve come an extra 0.4 degrees further in just the last five months. What’s driving this? More and more, people are coming to understand that the problem is not the climate. It’s our economic system.
In her latest book, This Changes Everything: Capitalism vs. the Climate, Naomi Klein tersely sums up our plight: “Our economic system and our planetary system are now at war.” Climate scientists tell us that “our only hope of keeping warming below … 2 degrees Celsius is for wealthy countries to cut their emissions by somewhere in the neighborhood of 8–10 percent a year.” “The ‘free’ market simply cannot accomplish this task,” Klein writes, “What the climate needs to avoid collapse is a contraction in humanity’s use of resources; what our economic model demands to avoid collapse is unfettered growth.”
So far, unfettered growth is winning. Instead of suppressing fossil fuel production, oil companies are pumping oil and gas from the ends of the earth. President Obama opened the Atlantic seaboard to drilling after he opened the Arctic and after he promoted his “All of the Above,” also known as “Drill Baby Drill,” plan to pump and drill and frack the country and beyond and bragged that he’s laid more pipelines than any president in history.
Instead of minimizing fossil fuel consumption, consumers seem bent on maximizing consumption. The glut of oil production has only encouraged people to drive more and buy gas-hog SUVs and huge trucks that get worse gas mileage than the Cadillac land yachts of the 1950s. We’re burning up more fuel flying everywhere and installing air conditioners to beat the heat.
Instead of imposing binding limits on emissions, governments have kicked the can down the road for 22 consecutive years. At Paris in December, they didn’t even try. Instead they promoted hallucinatory fantasies of huge “negative emissions” to be had by some high-tech “carbon capture and storage”—again, always “someday” in the future, never today; no such technology presently exists in any practicable form nor is ever likely to. The U.S. government has abandoned subsidizing carbon capture. Carbon capture is not a technology. Carbon capture is a propaganda tool to let consumers rationalize obscene, unsustainable overconsumption: Not to worry, we’ll fix it tomorrow. But tomorrow never comes. Year after year, decade after decade, climate summits collapse in disarray because no country will sacrifice jobs and growth today to save their children tomorrow.
And not just fossil fuels, we’re devouring everything—minerals, lumber, fresh water, fish stolen from the mouths of sharks and whales; we’re saving nothing for the future, reserving nothing for other species, which instead we’re just driving to the wall.
Instead of inventing ways to minimize resource consumption, our smartest companies like Apple and Google work only to invent “needs” we don’t really need: drones, robots, iPhones 5-6-7, 3D printers, hoverboards, the “Internet of Things,” self-driving cars, biometric T-shirts, electric planes—the endless quest for “the next big thing,” but really just new ways to devour more resources and convert them into “product.” Instead of making products to be as durable and long-lasting as possible to conserve resources, our top companies pay their brilliant engineers, designers, and marketers to devise ways to make them wear out faster, to become obsolete, disposable, replaced in ever-faster cycles.
Our capitalist economy is geared completely wrong. All the incentives are wrong. As an American retail analyst famously wrote way back in 1955:
And so it is. For three hundred years, the engine of capitalist economic development revolutionized technology, and science improved our lives in countless ways. But now this out-of-control engine is consuming us to death, driving us off the cliff and into the abyss.
What to do? Mainstream economists have had two approaches. Economists such as Herman Daly, Tim Jackson, and Serge Latouche have advocated “degrowth.” The idea is that capitalism can be slowed down, made to run at a “steady state” or even to “degrow.” I have argued elsewhere that these theorists just don’t understand capitalism. Capitalist “degrowth” just means recession, if not depression. Imagine Rex Tillerson, CEO of Exxon Mobil, telling his investors, “Sorry, but to save the planet, we cannot grow profits next year, and in fact, we have to cut production (and thus profits) by 8–10 percent next year and every year thereafter, for the next three-and-a-half decades, by which time we will be basically out of business.” How long would it take your retirement fund to dump that stock?
The other approach is “green capitalism.” The idea here is that growth can go on forever but be rendered benign for the environment. Economists who advocate green capitalism call for carbon taxes, solar power, LED lightbulbs. We are no doubt better off for some of these policies and technologies. But green capitalism can’t save us. Here and there the planet’s needs and the corporations’ needs do coincide—but they do not align systematically. To save the planet, corporations would have to subordinate growth and profits to saving the humans—but they can’t do this. They’re not responsible to us. They’re responsible to shareholders.
Shareholders can’t subordinate growth to saving the planet and still compete in the world market—especially against China. What difference does it make if Germany gets 30 percent of electricity from renewables when what it produces with that electricity, its biggest export industry, is global warmers: gasoline-powered cars and gratuitously filthy diesels to boot? What difference if Apple powers all its servers in California with solar power when what it produces in China (and with coal power) is just completely disposable iPhones and iPads? Americans alone junk 100 million cell phones a year—mostly perfectly workable but “so last year.” The environmental cost of producing millions and billions of cellphones, computers, Gameboys, and all the other “devices” is just staggeringly unsustainable. IPhones are expensive. The cost of that new iPhone 6 is your children.
What about cap-and-trade policies? No capitalist economy, no government, will accept cap-and-trade. Why? Because it would impose a “cap.” A cap is a finite limit on greenhouse gas emissions like CO2. But every government understands that a cap on emissions means a cap on growth. That’s why no industrialized country has been willing to accept a cap. As George Bush senior put it back in 1992, “The American way of life is not up for negotiation.” And if the Americans won’t cut emissions, why should the Chinese?
What about carbon taxes? Lots of governments pass carbon taxes, but they’re all too feeble to make any real difference. Scientists tell us that to keep global temperatures from rising beyond 2 degrees Celsius and prevent runaway global warming, the industrialized countries would have to suppress emissions by 6–10 percent per year, truly draconian levels, for the next 35 years to get emissions down to where they need to be by 2050. But cutting emissions by anything like that amount would mean industrial shutdowns across the board. So governments pass carbon taxes to placate environmentalists, but they pass taxes that are too feeble to force any real change. That’s why oil company executives at Shell, ExxonMobil, and so on all support carbon taxes. Carbon taxes are just an indulgence, just another cost of doing business, which they can also just pass along to their customers. Most importantly, it’s not a cap, so it won’t stop growth. These market approaches aren’t designed to cut fossil fuel consumption. They’re designed to delay or to avoid cutting fossil fuel consumption, to keep the engines of growth revving, to keep prioritizing growth and jobs over the environment.
It’s not difficult to stop global warming. It’s completely obvious and simple. If we want to cut fossil fuel consumption we just have to enforce cuts in consumption, just ration oil and gas, like governments did during World War II, like when the U.S. government banned DDT, or when it banned ozone-depleting refrigerant chlorofluorocarbons.
The problem is that, given capitalism, cutting fossil fuel consumption would immediately bankrupt the largest companies in the world and plunge us into economic collapse, mass unemployment, and depression.
Our whole economy is based on fossil fuel: mining, manufacturing, heating, transportation, petrochemicals, construction, industrial farming, tourism, you name it. Electricity and heat account for 25 percent of CO2 emissions; industry, 21 percent; transportation, 14 percent; agriculture, forestry, and deforestation, 24 percent. If we have to cut emissions by 90 percent, renewable energy is a start but only part of the picture. We need a completely different kind of economy, an economy geared to minimizing resource consumption, not maximizing it, an economy geared to sustainability and equity, not profit.
My argument can be summed up in three points:
The problems we face, the problems of “planet management,” can’t be solved by individual choice in the marketplace. They require conscious, rational planning, international cooperation, and collective democratic control over the economy—not market anarchy. Climate scientists have been telling us for decades that we need a binding, global plan to suppress fossil fuel emissions. Ocean scientists tell us we need a global five-year plan to save the oceans. We need rational, comprehensive, legally binding plans and agreements to save the world’s remaining forests; to protect and restore rivers, lakes, and fisheries; to save millions of imperiled species around the globe; and to conserve natural resources of all kinds for future generations.
I don’t think people really grasp how big a change we need to make. Cutting emissions by 8–10 percent per year would require selective but substantial deindustrialization in the global North. We would have to contract and converge our levels of production and consumption around a globally sustainable and hopefully happy average that can provide a dignified living standard for all the world’s peoples. In the global North, the industrialized nations would have to radically suppress fossil fuel consumption across the economy. We would have to phase out use of coal, drastically curtail oil consumption, ration it, and drastically retrench auto production, trucking, shipping, airlines, petrochemicals, construction, and other sectors.
We would have to abolish the consumerist designed-in obsolescence, repetitive-production disposables industries (plastic junk, H&M disposable clothes, IKEA chipboard furniture, throwaway products of every sort) and replace those with durable, rebuildable, recyclable, and shareable products instead of disposable products. We would have to reorganize production of the goods and services we do need to minimize resource consumption, instead of maximizing consumption by producing goods to be “burned up, worn out, replaced, and discarded as fast as possible.” We would have to discontinue harmful and energy-intensive industrial agriculture, industrial fishing, and logging and replace these with organic farming, husbandry, forest conservation, and so on.
We would have to redirect investments into renewable energy, public transportation, public water systems, public health, public schools, and social services—so that we can get more of what we need collectively instead of privately. And if we have to shut down harmful, wasteful industries, then we have to provide equivalent jobs for all those displaced workers, not only because this is a moral imperative but because without guaranteed employment elsewhere, those workers can’t support the huge structural changes we need to save the humans. So we would need substantial deindustrialization in the global North.
In the global South, however, we need to ramp up sustainable development. We in the North have a responsibility to help the South build basic infrastructure, electrification, sanitation systems, public schools, health care, and so on. We would help their citizens achieve a comfortable material standard of living without repeating all the disastrous wastes of capitalist consumerism in the North.
Planning can’t work?
Of course, capitalist economists never tire of telling us that economic planning “can’t work.” It’s “too complicated” and “the first step on the road to serfdom, to Stalinism. Look at the Soviet Union.” I don’t buy that. Planning for whom by whom? Stalinist planning worked poorly because in the Stalinist states planning was of, by, and for the party bureaucracy. This proves nothing about the potentials of planning per se or democratic planning. Today, China plans most of the second largest economy in the world. They plan it badly, squandering money on massive overproduction of steel, coal, and cement; massive overproduction of housing, roads, rails, dams; and so on. So China is just another bad example.
Capitalist economists tell us that governments can’t pick winners. Hardly a week goes by that the Wall Street Journal fails to remind us that the 2011 bankruptcy of solar startup Solyndra Corporation, bankrolled by the Obama administration, is proof that governments can’t pick winners. But since when do capitalists have a crystal ball? CEOs and corporate boards make bad bets on “loser” technologies and products all the time. Look at Fisker Automotive, or Better Place, the Israeli electric vehicle charging stations. Companies fail all the time. Silicon Valley is littered with failures. Corporate CEOs lose money all the time. Remember Lehman Brothers, Washington Mutual, Enron, WorldCom, Pan American Airways. Who knows if Facebook or Zipcar or Tesla Motors will ever make money? Capitalists just bet on the future. Sometimes they win, sometimes they lose.
Government-backed Solyndra lost $535 million. But when Jamie Dimon lost two $2 billion for JP Morgan Chase, I didn’t hear the Wall Street Journal howling that capitalists “can’t pick winners.” When Enron collapsed, I didn’t hear any blanket condemnation of the “inevitable incompetence of the private sector.” When Shell abandoned its fool’s-errand Arctic-drilling adventure last year, losing $8 billion of its shareholders’ money, the Wall Street Journal blamed excessive government regulations, not the company.
So the free market is no better at “picking winners” than governments. Actually, private industry is not nearly as good as even capitalist governments. Because when governments plan investments in national rail systems or power plants or ports, and so on, they do so from the standpoint of the needs of the whole society, and for the long-term, not just the needs of corporate shareholders and quarterly returns. Governments not only regularly pick winners, but the U.S. government, through its own agencies and targeted support of innovation funding at universities, has been the leading engine of technological innovation in the United States since World War II (as recent studies have confirmed: Matthew Keller, State of Innovation: The U.S. Government’s Role in Technology Development (2011) and Mariana Mazzucato, The Entrepreneurial State: Debunking Public vs. Private Sector Myths (2013)).
Government-funded and -directed applied research produced nuclear energy, radar, rockets, the jet engine, the transistor, the microchip, the internet, satellite broadcasting, satellite GPS, critical breakthroughs in biotechnology, and many more. Government-developed and -produced ballistic missiles terrorized the Soviets and government-designed and -operated bombers bombed the Reds in Korea and Vietnam to contain Communism and to secure dominance of the Free World for corporate America to exploit. The most important innovations of the twentieth and twenty-first centuries were government startups. What’s more, most of these were then handed over to capitalist corporations to profit from, even to the same capitalists who badmouth government.
But you don’t hear the Wall Street Journal applauding the government successes. All you hear is “Solyndra shows government can’t pick winners.”
Capitalist planning works just fine
Moreover, within their own enterprises, capitalists are fanatically rational planners. Today, the revenues of the world’s largest corporations are bigger than many national economies. Of the world’s one hundred largest economic entities, 37 are corporations, the rest countries. Large multinational companies operate in dozens of countries with hundreds of thousands of employees. Walmart has 2.2 million employees—almost equal to half the population of Denmark. Boeing Aircraft sources its 787 components from 50 companies in more than a dozen countries, among them Japan, Italy, Korea, Germany, China, the U.K., Sweden, and France.
Take the Boeing Corporation as an example of capitalist planning. Boeing’s ultra-high-tech and far-flung operations are all “centrally planned,” coordinated, and managed from the corporate head office in Chicago. Airplane production is systematically planned, coordinated, tightly sequenced, and choreographed. Every minute and dollar is counted. Waste and inefficiency are fanatically rooted out. Production is rigorously precise, disciplined, and efficient. Besides production, Boeing manages crew training, maintenance, repair, and upgrading of thousands of aircraft around the world. Then there are offices for product development, sales, personnel, and government regulation management, and more.
If companies with revenues greater than the GDPs of most countries can rationally and efficiently plan their economies, why can’t nations? Why can’t we rationally plan the world industrial economy for the needs of the world’s peoples? Of course, planning a national economy and coordinating global economies is more difficult than planning production, sale, and maintenance of airplanes. But I don’t see any technological barrier to this. Besides, we don’t have a choice. It’s plan or die. If we don’t rationally plan our major industrial economies for the needs of people and planet, if, instead, we continue to let market anarchy and profit-maximization guide our global economic life, the result will be collective human suicide.
Public regulation of utilities
The United States may be the world’s leading champion of the free market, but it nonetheless possesses a large and indispensable sector of the economy that is not governed by the free market but instead is regulated democratically by public oversight—and that is the public utilities: electricity, heating fuel, water and sewerage, local telephone service. These are the most efficient and cheapest utility systems in the world. Greg Palast and co-authors wrote a book about it. They write:
Another little known fact is that, despite the recent experiments with markets in electricity—the authors published this book in 2003, just three years after the Enron privatization debacle—the U.S. holds to the strictest, most elaborate and detailed system of regulation anywhere: Private utilities’ profits are capped and investments directed or vetoed by public agencies. Privately owned utilities are directed to reduce prices for the poor, fund environmentally friendly investments, protect community employment, and open themselves to physical and financial inspection. Americans, while strongly attached to private property and ownership, demand stern and exacting government control over vital utility services.
So, regulation of large-scale utilities is a real-world example of something like a “proto-socialism.” I see no obvious reason something like this model of democracy and transparency could not be scaled up to encompass the entire industrial economy. And of course in Western Europe you have lots of state-owned industries and utilities, they mostly work fine, better than private services, and you live in democracies, not state-serfdom.
Saving small producers
In arguing for large-scale industrial planning, I’m not saying that we should nationalize family farms, farmers’ markets, artisans, groceries, bakeries, local restaurants, repair shops, workers’ cooperatives, and so on. Small producers aren’t destroying the world. But large-scale corporations are. If we want to save the planet, the corporations would have to be nationalized, socialized, and completely reorganized. Many will need to be closed down, others scaled back, others repurposed. But I don’t see any reason why small-scale, local, independent producers cannot carry on more or less as they are, within the framework of a larger planned economy.
I contend that the only way to plan the economy for the common good is if we do it ourselves, democratically. I believe that rational planning must be democratic. Solar or coal? Frack the planet or work our way off fossil fuels? Drench the world’s farms in toxic pesticides or return to organic agriculture? Public transportation or private cars as the mainstay? We can put the big questions up for a vote. Shouldn’t everyone have a say in decisions that affect us all? Isn’t that the essential idea of democracy?
We don’t have to be experts to make such decisions. Corporate boards aren’t composed of experts. They’re composed of major investors and prominent, often politically connected, VIPs. Yet corporate boards decide and vote on what they want to do and then hire experts to figure out how to get it done. Why can’t society do the same, but in the interest of the common good instead of Wall Street investors?
Well, you may ask, “How do we know people would vote for the common good?” We don’t. After all, people vote against their own interests in elections all the time. Look at the U.S. primaries. Yet on closer inspection it’s not so surprising, given the limited choices they’re offered in capitalist democracy. What we see is that in the abstract, people would vote their conscience on environmental issues: so 69 percent of Americans favor binding limits on CO2 emissions and 93 percent want GMO labeling. This shows, I believe, that people have pretty good instincts about the environment.
But when the issue is framed as a choice between environment versus jobs, people often vote for the economy and against the environment. If we want democracy to work, we would have to have exclusively public funding of elections and referendums, free and open debate on issues, and zero tolerance for Fox News and similar propaganda machines—and we need an economy in which workers in industries that need to be cashiered to save the planet are guaranteed other comparable jobs.
When, in the midst of the Great Depression, that great “People’s Lawyer” Supreme Court Justice Louis Brandeis said, “We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can’t have both,” he was more right than he knew. We have to recognize that genuine democracy requires a society that approximates socio-economic equality. Today we have by far the greatest concentration of wealth in history. Not just the 1 percent. Worldwide, Oxfam found that just 80 individuals own as much wealth as the bottom half, 3.6 billion, of the world’s population. So it’s hardly surprising that today we have the weakest and most corrupt democracies since the Gilded Age.
I contend that if we want a real democracy, we will have to abolish the great wealth concentrated in the hands of the few. That means we will have to abolish not just capitalist private property in the means of production, but also extremes of income, exorbitant salaries, accumulated wealth, great property, and inheritance. The only way to prevent the corruption of democracy is to make it impossible to materially gain, by creating a society with neither rich nor poor. If it’s illegal to be rich, then there’s little or no incentive to be corrupt.
Does that mean we would all have to dress in blue Mao suits and dine in communal mess halls? Hardly. Lots of studies, like Wilkinson and Pickett’s The Spirit Level: Why More Equal Societies Almost Always Do Better, argue convincingly that people are happier, life is better, there’s less crime and violence, and fewer mental health problems in societies that are more equal, where income differences are small and concentrated wealth is limited, societies like Denmark.
Gandhi was right in saying “the world has enough for everyone’s needs, but not everyone’s greed.” We don’t have five planets to provide the resources for the whole world to live a consumerist lifestyle. But we have more than enough wealth to provide every human being on the planet with safe water and sanitation, quality food, housing, public transportation, great schools, and health care—all the authentic necessities. These should all be guaranteed as a matter of right. Indeed, most of these were already declared as such in the United Nations’ Universal Declaration of Human Rights of 1948:
The promise of ecosocialism
Freeing ourselves from the toil of producing unnecessary and harmful commodities would free us to shorten the workday, to enjoy the leisure promised but never delivered by capitalism, to redefine the meaning of the standard of living to connote a way of life that is actually richer, while consuming less. We can all build a beautiful world to pass on to our children while leaving space and resources for the wonderful life forms with which we share this amazing blue planet. That’s the potential of ecosocialism.
We’re living in one of those pivotal world-changing moments in history; indeed, this is the most critical moment in human history. Capitalism has had a good 300-year run. But economic systems come and go, as do governments. There is no gainsaying the magnitude of the changes we are going to have to make to save ourselves. There is no doubt that closing the book on capitalism and moving on to a higher stage of civilization—ecosocialism—by replacing the culture of “possessive individualism” with a culture of sharing, community, and love, is the greatest challenge humanity has ever faced. This is the revolution to come. We may very well fail. But what other choice do we have but to try.
All around the world, on every continent, we see vibrant and growing struggles against capital; against layoffs and unemployment; against privatization, ecological destruction, dams, and dumps; against overdevelopment. They have fought and won, beating back water privatization in Bolivia and health care privatization in El Salvador; won against the siting of chemical plants and garbage incinerators in China, against drug company piracy in South Africa and India, against factory schooling. They have won community control over schooling and social services, successfully defended indigenous rights (against Keystone XL and pipelines in Canada), restored teaching of indigenous languages in Hawai’i, successfully defended workers’ cooperatives, won land for the tiller (as by the Via Campesina movement), and more. Diverse as they are, these struggles all share a common demand for bottom-up democracy. They may not yet be organized in a common party, a global organization, but they’re headed in that direction. Unifying those struggles for an alternative, a new world, is our best hope.
Richard Smith is an economic historian and has written extensively on capitalism and the environment for academic and Left journals. His book Green Capitalism: the God That Failed (WEA Books) was published in 2015 and his China’s Engine of Ecological Apocalypse (Verso) will be published in 2017.
This paper was originally presented at the conference Red/Green Alternatives: Breaking with Growth and Neoliberalism, which was held in Copenhagen on March 12, 2016, and sponsored by the Red Green Alliance and transform! network.
 Victor Lebow, “Price Competition in 1955,” Journal of Retailing (Spring 1955), quoted in Vance Packard, The Wastemakers (David McKay, 1960), 24.
 U.S. EPA, "Global Greenhouse Gas Emissions Data."
 Jenna Iacurci, “Report Calls for Five-Year Plan to Save World’s Overfished Oceans,” Nature World News, June 24, 2014.