What Every Environmentalist Needs to Know About Capitalism

A few snips:
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It is our contention that most of the critical environmental problems we have are either caused, or made much worse, by the workings of our economic system. Even such issues as population growth and technology are best viewed in terms of their relation to the socioeconomic organization of society. Environmental problems are not a result of human ignorance or innate greed. They do not arise because managers of individual large corporations or developers are morally deficient. Instead, we must look to the fundamental workings of the economic (and political/social) system for explanations. It is precisely the fact that ecological destruction is built into the inner nature and logic of our present system of production that makes it so difficult to solve.

In addition, we shall argue that “solutions” proposed for environmental devastation, which would allow the current system of production and distribution to proceed unabated, are not real solutions. In fact, such “solutions” will make things worse because they give the false impression that the problems are on their way to being overcome when the reality is quite different. The overwhelming environmental problems facing the world and its people will not be effectively dealt with until we institute another way for humans to interact with nature—altering the way we make decisions on what and how much to produce. Our most necessary, most rational goals require that we take into account fulfilling basic human needs, and creating just and sustainable conditions on behalf of present and future generations (which also means being concerned about the preservation of other species).[/quote]

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A. Capitalism Is a System that Must Continually Expand

No-growth capitalism is an oxymoron: when growth ceases, the system is in a state of crisis with considerable suffering among the unemployed. Capitalism’s basic driving force and its whole reason for existence is the amassing of profits and wealth through the accumulation (savings and investment) process. It recognizes no limits to its own self-expansion—not in the economy as a whole; not in the profits desired by the wealthy; and not in the increasing consumption that people are cajoled into desiring in order to generate greater profits for corporations. The environment exists, not as a place with inherent boundaries within which human beings must live together with earth’s other species, but as a realm to be exploited in a process of growing economic expansion.

Indeed, businesses, according to the inner logic of capital, which is enforced by competition, must either grow or die—as must the system itself. There is little that can be done to increase profits from production when there is slow or no growth. Under such circumstances, there is little reason to invest in new capacity, thus closing off the profits to be derived from new investment. There is also just so much increased profit that can be easily squeezed out of workers in a stagnant economy. Such measures as decreasing the number of workers and asking those remaining to “do more with less,” shifting the costs of pensions and health insurance to workers, and introducing automation that reduces the number of needed workers can only go so far without further destabilizing the system. If a corporation is large enough it can, like Wal-Mart, force suppliers, afraid of losing the business, to decrease their prices. But these means are not enough to satisfy what is, in fact, an insatiable quest for more profits, so corporations are continually engaged in struggle with their competitors (including frequently buying them out) to increase market share and gross sales.[/quote]

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C. A System that, by Its Very Nature, Must Grow and Expand Will Eventually Come Up Against the Reality of Finite Natural Resources

The irreversible exhaustion of finite natural resources will leave future generations without the possibility of having use of these resources. Natural resources are used in the process of production—oil, gas, and coal (fuel), water (in industry and agriculture), trees (for lumber and paper), a variety of mineral deposits (such as iron ore, copper, and bauxite), and so on. Some resources, such as forests and fisheries, are of a finite size, but can be renewed by natural processes if used in a planned system that is flexible enough to change as conditions warrant. Future use of other resources—oil and gas, minerals, aquifers in some desert or dryland areas (prehistorically deposited water)—are limited forever to the supply that currently exists. The water, air, and soil of the biosphere can continue to function well for the living creatures on the planet only if pollution doesn’t exceed their limited capacity to assimilate and render the pollutants harmless.

Business owners and managers generally consider the short term in their operations—most take into account the coming three to five years, or, in some rare instances, up to ten years. This is the way they must function because of unpredictable business conditions (phases of the business cycle, competition from other corporations, prices of needed inputs, etc.) and demands from speculators looking for short-term returns. They therefore act in ways that are largely oblivious of the natural limits to their activities—as if there is an unlimited supply of natural resources for exploitation. Even if the reality of limitation enters their consciousness, it merely speeds up the exploitation of a given resource, which is extracted as rapidly as possible, with capital then moving on to new areas of resource exploitation. When each individual capitalist pursues the goal of making a profit and accumulating capital, decisions are made that collectively harm society as a whole. [/quote]

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E. Capitalism Is Not Just an Economic System—It Fashions a Political, Judicial, and Social System to Support the System of Wealth and Accumulation

Under capitalism people are at the service of the economy and are viewed as needing to consume more and more to keep the economy functioning. The massive and, in the words of Joseph Schumpeter, “elaborate psychotechnics of advertising” are absolutely necessary to keep people buying.30 Morally, the system is based on the proposition that each, following his/her own interests (greed), will promote the general interest and growth. Adam Smith famously put it: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”31 In other words, individual greed (or quest for profits) drives the system and human needs are satisfied as a mere by-product. Economist Duncan Foley has called this proposition and the economic and social irrationalities it generates “Adam’s Fallacy.”32

The attitudes and mores needed for the smooth functioning of such a system, as well as for people to thrive as members of society—greed, individualism, competitiveness, exploitation of others, and “consumerism” (the drive to purchase more and more stuff, unrelated to needs and even to happiness)—are inculcated into people by schools, the media, and the workplace. The title of Benjamin Barber’s book—Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole—says a lot. [/quote]

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VII. Another Economic System Is Not Just Possible—It’s Essential

The foregoing analysis, if correct, points to the fact that the ecological crisis cannot be solved within the logic of the present system. The various suggestions for doing so have no hope of success. The system of world capitalism is clearly unsustainable in: (1) its quest for never ending accumulation of capital leading to production that must continually expand to provide profits; (2) its agriculture and food system that pollutes the environment and still does not allow universal access to a sufficient quantity and quality of food; (3) its rampant destruction of the environment; (4) its continually recreating and enhancing of the stratification of wealth within and between countries; and (5) its search for technological magic bullets as a way of avoiding the growing social and ecological problems arising from its own operations.

The transition to an ecological—which we believe must also be a socialist—economy will be a steep ascent and will not occur overnight. This is not a question of “storming the Winter Palace.” Rather, it is a dynamic, multifaceted struggle for a new cultural compact and a new productive system. The struggle is ultimately against the system of capital. It must begin, however, by opposing the logic of capital, endeavoring in the here and now to create in the interstices of the system a new social metabolism rooted in egalitarianism, community, and a sustainable relation to the earth. The basis for the creation of sustainable human development must arise from within the system dominated by capital, without being part of it, just as the bourgeoisie itself arose in the “pores” of feudal society.54 Eventually, these initiatives can become powerful enough to constitute the basis of a revolutionary new movement and society. [/quote]

http://www.monthlyreview.org/100301magdoff-foster.php

That quote from Adam's Fallacy in Section E. caught my attention. Has anyone here read it?

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The Meaning of Adam's Fallacy: An Interview with Duncan K Foley
Thursday, 08 February 2007
Adam's Fallacy: A Guide to Economic Theology has critical implications not only for the official discipline of mainstream economics, but also for various contemporary anti-capitalist movements, which frequently reproduce 'Adam's fallacy', inheriting the moral philosophy and dualisms that constitute this fallacy . Naturally, professional economists like Robert Solow , Brad DeLong and others have been quite actively seeking to dampen the book's impact. However, the book contains several lessons that are crucial for people interested or involved in social transformation, especially after the collapse of the major 20th century socialist experiments. In this regard, Radical Notes (RN) decided to forward a few questions to Prof Duncan K Foley (DKF) for his responses, which we reproduce here. Readers might find other articles that we published earlier on the book helpful.

RN: You have distinctly mentioned right in the beginning of Adam's Fallacy that for you this fallacy resides in the compartmentalization of spheres of life into the economic and the rest of social life. And you consider this dualistic view of social life as the essence of political economy and economics. Can you please elaborate on this? If this dualism is ideological can we understand it as essential for the reproduction of capitalist social life?

DKF: The specific fallacy is Smith's claim that the pursuit of self-interest, which has to be balanced against regard for others in other human interactions, can be trusted to lead to good outcomes both for oneself and others in the context of competitive market interactions. This idea has reconciled many people to the morally troubling consequences of capitalist development. It leads, as I show in the book, to the development of political economy and modern economics as discourses which claim a "scientific" status but whose content is in one way or another a discussion of this moral philosophical question. The dualism may not be essential for capitalist reproduction, but it seems to me to be an inevitable outgrowth of the contradictions of capitalist social relations.

RN: Many radical political economists have opined that underlying neoliberalism there is a politics of separating the political from the economic. According to them this separation has a specific significance through which the influence of popular politics, especially that of the working class, is neutralized. By alienating the power of economic decision-making from the democratic institutions, and bestowing it on market forces and financial and other supra-national bureaucratic institutions, the capitalist forces disarm the subversive influences of the counter-hegemonic forces. Do you think this is the theological-political role of the neoliberal reformulation of Adam's Fallacy?

DKF: This is a good example of Adam's Fallacy. But note that, when it finds it convenient to do so, neoliberal discourse connects politics and economics in the formulation that democracy and free markets are preconditions for each other's development. The content of democracy is often hostile to the neoliberal worldview, since voters do like measures increasing their economic security, redistributing income, and regulating the excesses of capitalist development. (They also like rising standards of living when capitalist development manages to deliver them.) The history of the twentieth century also throws doubt on the other half of this claim, since authoritarian political regimes have frequently been the sponsors of "free" market economic institutions.

RN: Can we reread Marx's "critique" of political economy, not only in Capital but also in his direct political writings, as a critique of this dualism, since he seeks to produce an ideology-critique in his exposition of the capitalist socio-economic formation, especially when he presents his theory of commodity fetishism? In your chapter on Marx, you seem to indicate this.

DKF: Marx had a lively sense of the damage capitalist institutions can do to human personality and the potential for human development. His discussions of the problem of alienation, including the section of chapter 1 of Volume I of Capital on commodity fetishism, center on various ways in which capitalist society fragments human experience. On the other hand, I am not convinced that Marx completely integrated this vision into his more analytical work on economics and his theory of socialist alternatives. In Adam's Fallacy, I argue that Marx's sketch of socialist institutions in his comments on the Gotha Programme incorporates much of the dualism he critiques elsewhere. In broad outline the society pictured in this text functions very much like the capitalist society it is supposed to have displaced.

RN: Very importantly, you have noted in the preface and briefly explained in your chapter on Marx, that despite being the "severest critic" of capitalism he reproduces Adam's fallacy in his theorization. You find this present especially in his attempt to concretize his vision of socialism. You say, "Despite his vigorous critique of the commodity form of production, Marx's concrete vision of socialism carries with it a lot of capitalist baggage".(151) Can you explain this a little bit? Further do you find this fallacy affecting his analysis of capitalism to some degree?

DKF: The economic institutions described in the Gotha Programme recapitulate many of the institutions of capitalism. Workers receive compensation in proportion to the labor time they expend, but after the "deduction" of funds for social purposes, including accumulation of the means of production. Both the distributional and macroeconomic aspects of this plan look more like capitalism, than, say, traditional agricultural society. Marx may have acknowledged this contradiction in separating the concept of "socialism" as a transitional system from "communism" as a somewhat utopian vision in which the dualisms underlying economics and political economy have somehow been transcended. Perhaps the way these issues appear in Marx's analysis of capitalism center on his claim that the commodity form itself, which is Marx's version of Smith's division of labor, is at the root of the contradictions of capitalist society. This leaves us uncertain as to Marx's attitude toward the division of labor. Does he think socialism or communism can sustain a complex division of labor without the deleterious effects capitalist social relations have on human relations and personality? Or does he believe that society can somehow do without the division of labor altogether, or that it can be sustained by some kind of conscious central direction?

RN: While delving into the actual practice of socialism, you note that the Russian and Chinese experiments were instances "of the modernizing face of Marxism as a path to capitalism". Can we understand this use of Marxism as its reduction into an ideology for justifying nationalist capitalist practices, excising its revolutionary essence? If yes, do you think the possibility of such reduction is a sign of the presence of Adam's Fallacy in Marx's incomplete theorization of socialism and inconsistencies?

DKF: The Russian and Chinese experiments were revolutionary enough. It was only through the unleashing and organizing of revolutionary impulses that these regimes could survive modernization without being submerged in the capitalist world system. The economic content of these experiments was modernization and the establishment of recognizably capitalist institutions, industrial urbanization, proletarianization, the destruction of traditional agriculture, etc., in the countries involved. I don't think it is completely satisfactory to characterize this complex of developments as a "reduction" of Marxism, since it involved a melding of Marxist ideas with nationalism and economic development. If Marx had produced a "purer" and more consistent critique of capitalism, his ideas might not have had nearly the influence they did on a world scale.

RN: Marxists have understood capitalism as a global (world) system, and have found national or regional underdevelopment intrinsic to uneven global capitalist accumulation. What do you think about the development theories (including the radical ones) that attempt to identify the internal and external constraints to endogenous development and inform national political economic practices for 'catching up', without rejecting the logic of capital, market and commodity production? Do you think such attempt is self-defeating, and reproduce Adam's Fallacy - of combining self-interests with national goods?

DKF: History shows that capital accumulation reproduces unevenness on whatever stage it operates, and we have a pretty good notion of why this is true. The metabolism of capitalism Smith described, and the other political economists I discuss in the book elaborated, destroys existing institutions and creates backwardness as a precondition of its successes. Schumpeter expressed this in describing capital accumulation in the phrase "creative destruction", but it is also behind Malthus' demographic pessimism, Keynes' anxiety about the stability of capitalist development, and Veblen's vision of the clash between the pecuniary and workmanlike instincts. I doubt that the world will see any smooth "convergence" eliminating the phenomenon of uneven development. The pathos of development policy, especially in less-favored economies, lies in its constant temptation to sacrifice the actual conditions of well-being of the population to meet the (sometimes imagined) demands of the world market. Why not base economic policy on securing as best one can the actual conditions of life in a country, and create a base from which a society can exploit the world market rather than the other way around?

RN: Recent political mobilizations and struggles against neoliberalism, especially in Latin America, have once again brought the agenda of alternatives to capitalism to the fore. Many Marxists see in these struggles an alternative to productivist and vanguardist practices of the erstwhile socialist experiments. You too have noted,



The forces Marx saw as leading to revolutionary social change in capitalist societies remain potent and present.... The moment in which these forces might have concentrated in decisive centralized revolutionary change, however, has most likely passed. We live in an epoch in which these potential agents of change are dispersed into thousands of particular, often apparently unconnected, struggles over income distribution, social justice, environment protection, and personal security and freedom. It remains to be seen whether these moments of social transformation will coalesce to transform capitalist society".(153-54)


Could you elaborate your idea of social transformation, in the context of these recent struggles?

DKF: Political alternatives rest on some specific social-economic base, as an expression of some particular constellation of class interests and alliances. In the middle of the twentieth century Latin American politics tended to be dominated by a coalition of national capitalists and urban workers. The collapse of this coalition set the stage for the current political developments in these countries. (The collapse of this coalition also was a crucial precondition for the opening of Latin American markets to international capital through liberalized trade and investment.) It is not easy to maintain rigorous links between specific struggles for basic human rights and economic policy. Feminism, for example, has as many quarrels with the paternalistic face of capitalism as it does with capitalism itself, and in the immediate situation what women have to fight for is fuller access to capitalist institutions. It is capitalist industrialization that is producing a world environmental crisis, but it is easier to control the actual environmental impacts through market-oriented institutional reform than through changing the organization of production. But there is also tremendous cumulative power in social transformations, and a world which is decisively greener and less sexist would have to undergo transformations of basic capitalist institutions, too.

RN: If we are correct, right from the time when your paper entitled "Problems vs. Conflicts: Economic Theory and Ideology" (American Economic Review, Volume 65, issue 2, 1975) was published, a major concentration of your work has been a critique of methodological individualism that underlies much of the economic 'ideologies'. Even in your highly technical and mathematical works, you have sought to expose the internal fallacies and inconsistencies of sophisticated economic theories. We see Adam's Fallacy as a powerful indictment of the ideological/theological practices of economics as a discipline. What do you think is the future of this discipline and what should be the role of Marxist and radical 'economists' in the discipline? Can there be any meaningful exchange and collaboration between the orthodoxy and heterodoxy in the discipline, as some have attempted?

DKF: You certainly thought up a lot of hard questions for this interview! In some ways economics as a "discipline" is dissolving in front of our eyes. The idea of economics as a unified and universal science of allocation of scarce resources in the face of competing goals seems to be in decline. The practice of economics resembles more and more generic social science, with a focus on small problems that can provide the pretext for a dazzling display of modelling and econometric virtuosity. Physics, psychology, and sociology each in their way are encroaching on the traditional turf of economics. The traditional "big" questions of economics are increasingly of interest only to heterodox thinkers, who are old-fashioned enough to continue to work on issues the mainstream views as having been long settled beyond debate. I think economics has always reproduced itself through divisions between orthodoxy and heterodoxy. The role of heterodoxy in this long-standing division of intellectual labor is to make mainstream economists as uncomfortable as possible. Whether this constantly-reproduced interaction can rise to the level of "exchange and collaboration" remains to be seen.[/quote]

http://radicalnotes.com/content/view/33/30/

This should generate some comments...

I had to put in some asshole time on DU, but I'm ready for a break.

DKF: The specific fallacy is Smith's claim that the pursuit of self-interest, which has to be balanced against regard for others in other human interactions, can be trusted to lead to good outcomes both for oneself and others in the context of competitive market interactions. This idea has reconciled many people to the morally troubling consequences of capitalist development. It leads, as I show in the book, to the development of political economy and modern economics as discourses which claim a "scientific" status but whose content is in one way or another a discussion of this moral philosophical question. The dualism may not be essential for capitalist reproduction, but it seems to me to be an inevitable outgrowth of the contradictions of capitalist social relations.


The invisible hand of the free market isn't invisible at all. There is hidden baggage in there. It's based on faulty assumptions about "enlightened self-interest". I think that's what he's saying...is that right? I really like this paragraph but I want to make sure I'm reading it right.

ecological issues detailed in this article are accurate, as far as the science can project and that they are reasonable assumptions as to what the future holds if things continue as they are now

BUT, the problem comes in here:


VII. Another Economic System Is Not Just Possible—It’s Essential

The foregoing analysis, if correct, points to the fact that the ecological crisis cannot be solved within the logic of the present system. The various suggestions for doing so have no hope of success. The system of world capitalism is clearly unsustainable in: (1) its quest for never ending accumulation of capital leading to production that must continually expand to provide profits; (2) its agriculture and food system that pollutes the environment and still does not allow universal access to a sufficient quantity and quality of food; (3) its rampant destruction of the environment; (4) its continually recreating and enhancing of the stratification of wealth within and between countries; and (5) its search for technological magic bullets as a way of avoiding the growing social and ecological problems arising from its own operations.

The transition to an ecological—which we believe must also be a socialist—economy will be a steep ascent and will not occur overnight. This is not a question of “storming the Winter Palace.” Rather, it is a dynamic, multifaceted struggle for a new cultural compact and a new productive system. The struggle is ultimately against the system of capital. It must begin, however, by opposing the logic of capital, endeavoring in the here and now to create in the interstices of the system a new social metabolism rooted in egalitarianism, community, and a sustainable relation to the earth. The basis for the creation of sustainable human development must arise from within the system dominated by capital, without being part of it, just as the bourgeoisie itself arose in the “pores” of feudal society.54 Eventually, these initiatives can become powerful enough to constitute the basis of a revolutionary new movement and society.

It is not enough to say that "we beleive it must be a socialist ecconomy". Lotsa people believe in space aliens too.

The limits of the capitalist system are not geological, ecological, or thermodynamic (peak oil). They are entirely social. Use value is not the driver for capitalist expansion either (so thus scarcity is not an absolute quality either, but a social one)

All this crap about "sustainability" is just thumb twittering and dithering. It means nothing: there is not going to be a serious worker's movement for sustainability, certainly not a revolutionary movement. Society is not going to be rebuilt on the basis of demands of ecological sustainability. That sounds like a call for the rule/regualtion of techno-cratic greenies. I think Odin2005 over on DU calls for the same thing.

If the argument is that ecological crisis and catastrophe will invariably produce a socialist movement and revolution, don't get your hopes up.

So I think they have a good point to make here, but I don't know where it leads.

Also there is this:
"The basis for the creation of sustainable human development must arise from within the system dominated by capital, without being part of it, just as the bourgeoisie itself arose in the “pores” of feudal society."
That is a little disingenuous. The bourgeoisie did arise in the "pores" of feudal society, but as an ancillary, abetting class in the feudal system - not as an anti-feudal movement. Any "movement" that is ancillary and abetting to capitalism is hard for me to see as a "good thing". I do not think that this author was thinking in terms of "ancillary and abetting", so his use of this example is pretty far off - IMO...

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It is not enough to say that "we beleive it must be a socialist ecconomy". Lotsa people believe in space aliens too.

The limits of the capitalist system are not geological, ecological, or thermodynamic (peak oil). They are entirely social. Use value is not the driver for capitalist expansion either (so thus scarcity is not an absolute quality either, but a social one)

All this crap about "sustainability" is just thumb twittering and dithering. It means nothing: there is not going to be a serious worker's movement for sustainability, certainly not a revolutionary movement. Society is not going to be rebuilt on the basis of demands of ecological sustainability. That sounds like a call for the rule/regualtion of techno-cratic greenies. I think Odin2005 over on DU calls for the same thing.

If the argument is that ecological crisis and catastrophe will invariably produce a socialist movement and revolution, don't get your hopes up.

So I think they have a good point to make here, but I don't know where it leads.
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Ya know, it's not so much what we want or believe, it's what is and what will almost surely will be necessary. Ecological sustainability will be achieved by society or it will not, if not, society will be reduced to a mean thing, at best. Ecological sustainability is a requisite for human wellbeing, the two cannot be separated.

I think I see your point about the limits of capitalism, seems like they always find another thing to commodify to keep the machine greased, yet to deny the effects of resource depletion and pollution is overly abstract. The scarcities resultant may indeed produce new capitalist 'opportunities' yet this is another way in which they 'sell us the shovels'.

As for the Odin2005 gambit, don't have to be that way at all, consider Cuba, so far the best model we got.

( I did not mean to re-open this seemingly intractable disagreement between us but had meant to point you to post #3 and this Foley guy, who leaves me a little confused and ambivalent.)

What about the nuclear question here? Lately the push has been nuclear as an "alternative" energy? Why? Government subsidies are being offered for this, as nuclear is not a profit making venture, quite the reverse. Why nuclear? excuses for intervention in other countries? maybe a small part? Iran is the biggie here? Mainly, as a means to produce the materials needed for weapons? There we start to see the profit emerge: but the current plants aren't efficient enough to produce the materials, maybe?

Bottom line, the waste, the weapons, the danger of accidents, the ecological destruction, annihilation of this planet QUICKLY, is inherent in the nuclear question, and Why isn't this being discussed in a gigantic way? Argh, Sorry no links here, just Sunday morning rant...

Its the end of the world, not just as we know it, and I feel like shit...

ON edit: and the plants can't be blown up by "eco-terrrorists" now can they?

On edit again, Dhal posted this related article:

http://www.progressiveindependent.com/dc/dcboard.php?az=show_topic&forum=127&topic_id=6398