Sustainable capitalism?

By David Travis

September 9, 2008 -- On the fringe of the green movement, one always hears the following phrases coming from the mainstream with great regularity: "green capitalism", "sustainable capitalism", "social entrepreneurs", "green entrepreneurs", etc. None of these terms tend to mean anything specific, and no one who uses them is in a great hurry to spell out, for example, how a green entrepreneur is different in any fundamental way from some other kind of entrepreneur, or how capitalism could be driven toward sustainability rather than profit. So you can imagine my pleasure at meeting the author of a book called Sustainable Capitalism: A Matter of Common Sense.

I ran into Dr. Ikerd at an energy conference in 2006, where he was speaking, and had the pleasure of dining with him afterwards. He's a passionate speaker and is obviously concerned not only with ecological sustainability but with the social impact of contemporary forms of production, although the depth of his knowledge regarding the social and political dimension of the capitalist mode is more or less what one would expect from a professor of agricultural economics.

In his estimation, the problems caused by capitalism are accidental, in the sense that he does not see anything inherently wrong with the way capitalism operates. Its ill social and environmental effects are accidents caused by the way capitalism developed. He argues that the "scientific" view of neo-classical economists (as opposed to what he saw as the morally healthy humanism of Smith and Ricardo), paired with the institution of the multinational corporation, have created a business environment that facilitates the creation profitable yet unethical decisions with impunity.1

Ikerd nevertheless regards capitalism as "the most efficient economic system", and in spite of the many "risks" that come with it, he -- like many sustainability advocates and environmentalists -- sees some permutation of its existence as essentially inevitable. The reasoning behind this "inevitability" of capitalism is usually unclear, with many of those who elect to speak about issues of sustainability unwilling to pursue (oddly enough) the question of whether or not our current economic system is inherently unsustainable, nor the question of whether or not our present system of social and economic relations can in fact be changed. Nevertheless, one usually finds the following arguments in favor of the "inevitability thesis":

(a) Capitalism is "the most efficient" economic system or "the best" system so far, and therefore any economic change must take the form of an improvement or modification to its basic workings. Most people who make this argument never go very far in elaborating on what they mean by "efficient" or "productive" or any of the other adjectives they unreflectively apply to capitalism. To what end it is productive, or for whose benefit it is efficient, generally remains unknown and unasked.

(b) Alternatives to capitalism have all "failed". People who make this argument no doubt have the Soviet Union and communist China in mind. Ironically, proponents of these "historical" arguments often ignore all history in making them, and imagine instead a kind of "level playing field" in which nations experimenting with alternative economic systems somehow lost "fair and square" against the might of Western capitalism. This interpretation has no real basis in fact, what with embargoes, propaganda, espionage, terrorism, coups, political assassination, outright invasion and every other conceivable trick in the book routinely pulled against any state foolish enough to try playing for the wrong team. What the Soviet Union and other states demonstrate is never articulated with any clarity; the value of the US legacy is evaluated in a positive light that is similarly vague and unreflective, fueled primarily by the safe assumption that US capitalism can be "the best" without being "good", and that this simple realisation justifies it going unchanged, unchallenged and unquestioned.

Ikerd does not deviate from either of these articles of modern faith:

Many people today question whether a capitalist economy can ever be sustainable. Admittedly, the ecological and social risks of capitalism are real. However, no other economic system has been found that can rival its efficiency and productivity in decisions and activities that are legitimately private, personal, or individual in nature. Societies that have tried communism, socialism, and religious theocracies have never been able to meet the physical and material needs of their people. They are ultimately rejected by their people because they are not economically sustainable. Most individual economic decisions do not deprive anyone of their basic social rights or violate any moral imperative. These decisions legitimately belong in the individual, private economy, where there is no logical alternative to capitalism. Capitalism, with all of its inherent risks, is still humanity’s best hope for sustainability. Fortunately, sustainable capitalism does not require some radical, new-age value system; it only requires that we return to the foundational principles of classical capitalism and grass-roots democracy.2

By this Ikerd means finding some way of injecting moral sensibilities back into the US economy, as they were in the good old days of Adam Smith, when land was appropriated by war and genocide, and when labour was supplied by slaves and indentured servants.

The problem here is a failure to recognise the basic logic of capitalism. The rational choice is not to attempt to reform capitalism with moralistic pleading, regulatory boondoggles, or vague hopes that an over-worked and under-educated public will miraculously coalesce and demand the enlightened and equitable oversight of policy and civil society. That seems idealistic and impractical. It would seem more productive to replace the entire system with one that is democratic, sustainable and non-exploitive at its very core, rather than as a jury-rigged afterthought. Call me a realist.

Fortunately, not all mainstreamers are quite as naive as the good Dr. Ikerd. James Gustave Speth's The Bridge at the End of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability, for example, clearly recognises the role of the modern capitalist economy in producing the climate crisis. All of this is carefully and compellingly laid out by John Bellamy Foster (et al.) in their article in the Monthly Review's July-August 2008 issue. Speth basically sees a kind of zero-growth capitalism as being necessary for an environmentally stable Earth. In the process, he supposedly challenges the mainstream optimism of technocrats, who believe that "dematerialisation" -- a concept in industrial ecology that refers to the reduction of material impacts per unit of services or products -- can preserve or even restore the environment while also providing the capacity for sustained economic growth.

So, for example, the United States might replace its vehicle fleet with cars and trucks that use only a half of the amount of fuel they do today. That's great. But to have economic growth, we need to be driving more and buying more cars -- by building and marketing cars in China, for example. But having twice as much of a product that has half the environmental impact gets you nowhere. To begin moving toward sustainability, you would have to maintain the vehicle fleet at its current size and make it more efficient at the same time. That's all well and good for the environment, but it's not profitable.

Coming from Speth, this is quite challenging. He was a co-founder of the National Resources Defense Council, was the chair of the Council on Environmental Quality under US President Jimmy Carter, is the founder of the World Resources Institute, is a former administrator of the United Nations Development Progra and he's currently the dean of the Yale School of Forestry and Environmental Studies. Which is to say this critique is coming from the heart of bourgeois liberal environmentalism. 3

In case any of us were getting scared at this point:

Speth is no Marxist, and he’s not attacking capitalism in its ideal and theoretic form. But he’s marshaled formidable evidence that American-style consumer capitalism of the early twenty-first century is incompatible with maintaining quality of life for all of us. It is generating unprecedented environmental risks while failing to advance the happiness and social well-being of Americans, Speth argues. Our obsession with consumption and GDP growth has overshot its target and now causes more harm—to environment, social fabric, and world security—than good. 4

God forbid we risk fire and brimstone by criticising capitalism in its "ideal or theoretic form". Instead:

  • We must change the very nature of corporations so they become legally accountable to society at large, not just to themselves and their shareholders.
  • We must challenge the current obsession with GDP growth and focus on growth in the areas that truly enhance human wellbeing: growth in good jobs, in the availability of health care, in education, in the deployment of green technologies, in the incomes of the poor, in security against illness and disability, in infrastructure, and more.
  • We must challenge materialism and consumerism as the source of happiness and seek new values about quality of life, social solidarity, and connectedness to nature.
  • We must transform the market through government action so that it works for the environment, rather than against it.
  • We must transform democracy through deep political reforms that reassert popular control, encouraging locally strong, deliberative democracy and limiting corporate influence.
  • We must forge a new environmental politics that recognises links among environmentalism, social liberalism, human and civil rights, the fight against poverty, and other issues.5

Granted, these are quick talking points aimed primarily at promoting a book and (presumably) providing basic information to the press. And there is (even for me) something enticing at least about the first proposal about making corporations legally accountable to society. I have no doubt that Mr. Speth has in mind something along the lines of mainstream environmental regulation, rather than -- I don't know -- prohibiting profit altogether and mandating democratic workplaces, although it's hard to say when someone actually advocates for a "zero growth" capitalism. The only other somewhat challenging phrase in this list is the call for "deep political reforms", by which he presumably means things like capping the power of lobbyists (the institution itself is something of a travesty) and making room for environmental voter initiatives. I don't know.

But the central theme is that we have to challenge the culture of consumerism. We need new values. We must transform the market. It is not all that different from the naive moralisms of Dr. Ikerd. This is a puzzling though not uncommon approach, and there are parts of this that make a great deal of sense. The perception of our social ills as being the result of a moral failure, or a failure to recognise value, seems immediate and commonsensical, particularly for members of a society easily fixated by personal responsibility as an explanatory device.

Individual solutions

And part of the appeal of personal responsibility and moralising is precisely that it is individualistic: it enables the criticism of vast groups of people without specificity, it allows for the appearance of concern, outrage and various forms of progressive posturing, while at the same avoiding change and the tremendous ill will of interests aligned against it. Which is not to say that people don't mean well, of course; indeed "meaning well" and "doing good" is the other side of the personal responsibility escape hatch. Within the mainstream eco-yuppie paradigm, the most you can possibly be expected to do is "right thing" in your own life. You buy your indulgences in the form of a low-carbon lifestyle and an arsenal of "eco-friendly" products, and in return you are exempt from the uncomfortable task of looking your class, your politics and your job in the face.

Nature of capitalism

As for the puzzling part: such views, however well informed, ignore the nature of capitalism. The extraction of profit from labour and nature isn't some accidental part of what capitalism is. It's what makes the thing go. Similarly, growth and GDP aren't just bells and whistles that can be removed from some stripped-down, enviro-friendly version of the beast. Growth is why people invest. Without profit or growth, there would be no capitalists. But the bourgeois apologists generally take the position that capitalism is value neutral and entirely mutable, freely reflecting the "values" of the consumer.

For them capitalism is a form of economic tool and little more. The works of the apologists attest to an essentially technocratic understanding of capitalism, which itself has no tendency toward any particular society or way of living, at least not beyond the acceptance of certain unequivocal social goods such as private property rights, free association, equality under the law, etc. The idea that we would have to significantly alter or remove capitalism itself in order to rectify its ills appears nonsensical to the apologist, who regards capitalism as nothing more than the "most efficient" way of doing anything. Capitalism is even the "most efficient" way of "fixing" capitalism. Go figure.

Jurgen Habermas has a few things to say about ethics and technocracy:

Technocratic consciousness reflects not the sundering of an ethical situation but the repression of 'ethics' as a category of life. The common, positivist way of thinking renders inert the frame of reference of interaction in ordinary language, in which domination and ideology both arise under conditions of distorted communication and can be reflectively detected and broken down. The depoliticization of the mass of the population, which is legitimated through technocratic consciousness, is at the same time men's self-objectification in categories equally of both purposive-rational action and adaptive behavior. The reified models of the sciences migrate into the sociocultural life-world and gain objective power over the latter's self-understanding. The ideological nucleas of this consciousness is the elimination of the distinction between the practical and the technical. 6

So what we're observing in Ikerd and Speth is a partial breakdown of this ideology. It is a breakdown in the sense that there is ultimately a recognition that the technocratic capitalism of the post-war era has failed in ways that are important enough to warrant "deep" changes in "our"7 social, political and economic behaviour. But it has failed in terms of destroying the environment and investing in an energy, transportation and residential development infrastructure that is wildly unsustainable. The Cold War conviction that capitalism succeeds in delivering social goods with an adequate level of equal opportunity and fairness remains strong even in spite of its failures in regard to climate and energy.8 That is one important sense in which the breakdown is partial, and it is fundamentally tied to the fact that environmentalism is a bourgeois movement.9

Values privatised

But the second and more important sense that this breakdown is only partial has to do with the fact that the cult of "corporate responsibility", of which people like Ikerd and Speth are the most advanced spokespeople, perceives "values" in a kind of vacuum. Values have no place to go. They are not social concepts connected to specific relations of class and power -- values are privatised. To think that our collective social behaviour is the product of personal values is a mistake, one that obfuscates the basic structural and historical forces that constitute at work in society; indeed the very idea of society is a blanket to be thrown over the web of institutions, classes, movements, and power groups to which we actually relate and live.

In any case, you can't say you want an end to the GDP and economic growth as we know it without challenging these fundamental institutions. Similarly you can't say that profit is the problem yet be unwilling to challenge capitalism in its "ideal or theoretic form". Changing our "values" or our "culture" won't magically allow us to consume our way to sustainability. Like it or not, capitalism is about extraction and profit, and when it comes to change, the sustainability movement has to decide to either shit or get off the pot.

[David Travis lives in rural New York state in the United States and his area of activity is in sustainable agriculture and community economics. He writes regularly for the Critecon blog.]


1 Sustainable Capitalism: Our Best Hope for the Future.

2 Ibid.

3 Wikipedia article on James Speth.

4 Beyond Reform.

5 Bridge at the Edge of the World.

6 Jurgen Habermas, Technology and Science as "Ideology".

7 Commentators on climate change often speak of it as being "our" fault, but these assertions of collective guilt are a little hard to understand given that a very small class of investors are the ones who ultimately drive the development, marketing and production decisions that determine the way we live. When isolated individuals who are over-worked, lied to, swindled and presented with a limited number of bad options actually end up making bad environmental decisions, what exactly are we supposed to do? Blame them in the same way we blame highly informed and highly organised institutions looking for profit? No, I didn't think so either. Among those who like to deride those who shop at Wal-Mart, I wonder how many have mutual funds or pension plans that include Wal-Mart stock.

8 In this respect, there are some uncomfortable grains of truth to the common reactionary and otherwise idiotic claim that environmentalists care more about nature than their fellow human beings.

9 But not exclusively. Rising Tide, for example, has taken a good position against carbon offsets, the most popular technocratic answer to climate change.