You’re going to have to stick with me. I’m stuck in the
library and reading books that I shouldn’t be reading so now I have this urge
to write a post on capitalism. I apologize in advance. The economic system that
dominates the planet is obviously capitalism. It is based on continual economic
growth which is why many people question its compatibility with environmental
sustainability.
For a good introduction to the basics of capitalism you
should read Robert Heilbroner’s “The Nature and Logic of Capitalism”. It’s one
of the only books on capitalism and economics that I actually enjoyed reading.
Capital is not simply money or goods. If you own money and
goods, they’re not necessarily capital as it pertains to the capitalist
economy. The money and goods need to be part of the production process. Money
in the bank is thus not capital. A commodity is a product to be sold in the
market place. The potatoes that you grow in your garden for your family’s consumption
are not part of the capitalist economy. The money needs to be used for
commodities which are then sold back for more money. They all need to be in the
cycle to be in the capitalist economy. The best way to show this is through
Marx’s little equation of M-C-M’, M’-C-M’’ where M, money, continuously gains
value.
Central to the capitalist economy is the market. Capitalist
systems require a free market of labour to function. In the middle ages the
surfs were tied to their land. There was no flow of work or services. They
could own their crops, but were heavily taxed or expected to give ½ of their
crop to their lord or whoever. In the capitalist system you don’t own what you
produce, you own your labour power.
This is where the profit really comes from. You may work for
a toy factory for $500/week, and every toy that you work on adds $10 to the
value of the toy. You don’t stop working for the week after you work on 50 toys;
you work for the entire week regardless of how many toys you work on. You’re
not working for the value that your services are worth for the company, you’re
working for the value of the services that you are worth for your labour. Let’s
say you work on 40 toys a day, you are making a surplus for the company of
$1500, because it only costs $500 a week for someone in your job division to
sustain their life for a week. If you were only going to work for the actual
value of the company then there would be no point in the company hiring you
because they would make no money.
Capitalism is not neutral; it has an ideology attached to
it. Ancient civilizations are known to be more “in touch” with the land. The
view the earth as endowed with love and earthly spirits, believing the earth
should be thanked and worshiped rather than ransacked and ignored. I think I did a post a while ago about tracing
the view of the earth as a closet for resources to Christianity, mostly
Genesis, where humans are basically told to use the earth to what ever extent
they feel they need to. From there you see the production of temples, which I
believe literally translates into “cut off”. They are “cutting off” the sacred
from the earth because the earth should be used as often and as much as we
want.
This is obviously a justification for capitalism as it depersonalizes
the environment and puts it into a sector in which it doesn’t even need to be
considered as a cost, it is an externality. Capitalism is the “callous cash
nexus” (you can all harp on me later for actually quoting the communist
manifesto… gag.)
This limitless invasion of the world is impossible to do in
an earth loving society…pr a sacralised society. Nature is the grounds of all
economic processes, and capitalism is all about growth – thus it isn’t
sustainable because there are no concepts of the ramifications that it may be
causing to the resources. It’s strange when you actually consider that even our
ideas are becoming commodities. I remember reading an article about 2 months
ago after having actually finished reading No Logo, and I guess the author of
the book, Naomi Klein, was approached by a company and asked if she wanted to
create a line of products using the No Logo logo. That is the kind of world we’re
living in. I think it was Lenin who said something like “Capitalists will
compete with one another to sell you the noose to hang them with.” (I think now
is a good time to state that I think communism is silly, but the communists
happen to have the best anti-capitalist quotes, for obvious reasons.)
I mentioned before about how capitalism is based on
continuing growth, which is because of the competition. I won’t get into that,
I’ll assume that we all know how competition works and pushes people to do
bigger and better things. Capitalism requires endless expansion and needs to
keep drawing people into the system. Even the ‘communist’ country of China is run by
a capitalist economy. The expansion has been totally rapid too. Now I need to
think of the book that I got these numbers from, I read it in grade 12, but I
think it was Harry Braverman’s Labor and Monopoly Capital. He explains
that in the early 19th century 4/5 of the population was self
employed. By 1870: 1/3, 1940: 1/5, 1970: 1/10. The detailed division of labor
has been pushed into every single society. Adam Smith describes it best with
his famous pin factory example.
If I were all gung-ho about economics I’d go and find it,
but basically he outlines the work and processes that are needed to make a pin,
and he counts 18 steps that are needed, for one single pin. You would think
that this would a) take long and b) cost more because there are more steps and
more people however the assembly line process has proven to be extremely fast,
and the people that are working in the line are unskilled and are simply performing
one repetitive task all day so you don’t need to pay them as much as you would
need to pay a specialist.
Now, about the book I just read, Natural Capistalism, it
suggests a modified form of capitalism that is sustainable, which should also
indicate to you that it says the current state of capitalism is not
sustainable. The books main arguments for this is that current capitalism liquidates
capital and calls it income and uses natural systems as the base of the economy
with no consideration.
There are 4 types of capital in the book 1. human 2. financial
3. manufactured and 4. natural. 4, they say, is the most important and includes
the water, soil, fish, trees, rainforests, grasslands etc. much like Leopold’s
land ethic, it includes resources and ecosystems. The main argument of the book
is then that capitalism needs to value not just money but also human capital
and more importantly natural capital and they then outline 4 strategies to do
so. These four strategies are where the common idealistic and hopeful wishes of
every environmentalist comes in, which are very… unrealistic.
- radical resource productivity: use resources effectively, slow the usage and lower pollution.
- biomimicry: reduce waste and recycle. Create a sort of closed system of products.
- service and flow economy: services should replace commodities.
- investing in natural capital: invest in the biosphere, in maintaining the earth as to create a more sustainable platform of resources continuously
Well no shit. I read the book thinking I would get some sort
of cool insight into new ways to mix economics and environmentalism. Basically
what Natural Capitalism is suggesting is that we completely reinvent the way
capitalism is done. Yes, we *should* do that. However, telling a giant company
to a) slow down production b) invest in the environment and c) recycle
everything isn’t going to work unless ALL companies are willing to do it. For a
while it is going to completely backfire and reduce economic growth. Everything
I just described in the first ¾ of my post is based entirely around being
selfish and ensuring that no other company is getting a head of you.
Theoretically speaking the company that did prepare its self
to recycle and invest in the environment will be ahead in the long run. However,
the economy of the world is run on short term gain for long term pain, because
no one really cares about the next generation. A really good utopia book on
this, by the way, is by …Morris, I don’t remember his first name, but it’s
called News From Nowhere and it was originally written as a response to Edward
Bellamy’s book Looking Backwards. (Edward Bellamy, by the way, never graduated
from college and was completely successful…heh) They are completely opposite
books and I recommend that everyone reads them, but Morris’s utopia is a
radically de-centralized, post-industrial world that isn’t worried about
maximizing consumption or profit at all because everyone has just slowed down. Which
I realize is completely necessary in order to have an earth that is functional
for us for many years to come, but is completely unrealistic because of the
societies that we’ve created.
Anyway, these are some of my thoughts on capitalism and
economics. We need to slow down, we need to invest in the environment, we need
look at a tree as something that costs $7000 in order to properly pay for what
we use, but in all reality, this isn’t going to happen. At least in my life
time, unless we want to see a huge economic collapse, but the capitalists would
rather see an ecological collapse rather than an economic collapse.
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