blindpig
11-02-2009, 02:24 PM
[div class="excerpt"]
The Paradox of Wealth: Capitalism and Ecological Destruction
Today orthodox economics is reputedly being harnessed to an entirely new end: saving the planet from the ecological destruction wrought by capitalist expansion. It promises to accomplish this through the further expansion of capitalism itself, cleared of its excesses and excrescences. A growing army of self-styled “sustainable developers” argues that there is no contradiction between the unlimited accumulation of capital — the credo of economic liberalism from Adam Smith to the present — and the preservation of the earth. The system can continue to expand by creating a new “sustainable capitalism,” bringing the efficiency of the market to bear on nature and its reproduction. In reality, these visions amount to little more than a renewed strategy for profiting on planetary destruction.
Behind this tragedy-cum-farce is a distorted accounting deeply rooted in the workings of the system that sees wealth entirely in terms of value generated through exchange. In such a system, only commodities for sale on the market really count. External nature — water, air, living species — outside this system of exchange is viewed as a “free gift.” Once such blinders have been put on, it is possible to speak, as the leading U.S. climate economist William Nordhaus has, of the relatively unhindered growth of the economy a century or so from now, under conditions of business as usual — despite the fact that leading climate scientists see following the identical path over the same time span as absolutely catastrophic both for human civilization and life on the planet as a whole.1
Such widely disparate predictions from mainstream economists and natural scientists are due to the fact that, in the normal reckoning of the capitalist system, both nature’s contribution to wealth and the destruction of natural conditions are largely invisible. Insulated in their cocoon, orthodox economists either implicitly deny the existence of nature altogether or assume that it can be completely subordinated to narrow, acquisitive ends.
This fatal flaw of received economics can be traced back to its conceptual foundations. The rise of neoclassical economics in the late nineteenth and early twentieth centuries is commonly associated with the rejection of the labor theory of value of classical political economy and its replacement by notions of marginal utility/productivity. What is seldom recognized, however, is that another critical perspective was abandoned at the same time: the distinction between wealth and value (use value and exchange value). With this was lost the possibility of a broader ecological and social conception of wealth. These blinders of orthodox economics, shutting out the larger natural and human world, were challenged by figures inhabiting what John Maynard Keynes called the “underworlds” of economics. This included critics such as James Maitland (Earl of Lauderdale), Karl Marx, Henry George, Thorstein Veblen, and Frederick Soddy. Today, in a time of unlimited environmental destruction, such heterodox views are having a comeback.2
The Lauderdale Paradox
The ecological contradictions of the prevailing economic ideology are best explained in terms of what is known in the history of economics as the “Lauderdale Paradox.” James Maitland, the eighth Earl of Lauderdale (1759-1839), was the author of An Inquiry into the Nature and Origin of Public Wealth and into the Means and Causes of its Increase (1804). In the paradox with which his name came to be associated, Lauderdale argued that there was an inverse correlation between public wealth and private riches such that an increase in the latter often served to diminish the former. “Public wealth,” he wrote, “may be accurately defined, — to consist of all that man desires, as useful or delightful to him.” Such goods have use value and thus constitute wealth. But private riches, as opposed to wealth, required something additional (i.e., had an added limitation), consisting “of all that man desires as useful or delightful to him; which exists in a degree of scarcity.”
Scarcity, in other words, is a necessary requirement for something to have value in exchange, and to augment private riches. But this is not the case for public wealth, which encompasses all value in use, and thus includes not only what is scarce but also what is abundant. This paradox led Lauderdale to argue that increases in scarcity in such formerly abundant but necessary elements of life as air, water, and food would, if exchange values were then attached to them, enhance individual private riches, and indeed the riches of the country — conceived of as “the sum-totalof individual riches” — but only at the expense of the common wealth. For example, if one could monopolize water that had previously been freely available by placing a fee on wells, the measured riches of the nation would be increased at the expense of the growing thirst of the population.
“The common sense of mankind,” Lauderdale contended, “would revolt” at any proposal to augment private riches “by creating a scarcity of any commodity generally useful and necessary to man.” Nevertheless, he was aware that the bourgeois society in which he lived was already, in many ways, doing something of the very sort. He explained that, in particularly fertile periods, Dutch colonialists burned “spiceries” or paid natives to “collect the young blossoms or green leaves of the nutmeg trees” to kill them off; and that in plentiful years “the tobacco-planters in Virginia,” by legal enactment, burned “a certain proportion of tobacco” for every slave working their fields. Such practices were designed to increase scarcity, augmenting private riches (and the wealth of a few) by destroying what constituted public wealth — in this case, the produce of the earth. “So truly is this principle understood by those whose interest leads them to take advantage of it,” Lauderdale wrote, “that nothing but the impossibility of general combination protects the public wealth against the rapacity of private avarice.”3
From the beginning, wealth, as opposed to mere riches, was associated in classical political economy with what John Locke called “intrinsic value,” and what later political economists were to call “use value.”4 Material use values had, of course, always existed, and were the basis of human existence. But commodities produced for sale on the market under capitalism also embodied something else: exchange value (value). Every commodity was thus viewed as having “a twofold aspect,” consisting of use value and exchange value.5 The Lauderdale Paradox was nothing but an expression of this twofold aspect of wealth/value, which generated the contradiction between total public wealth (the sum of use values) and the aggregation of private riches (the sum of exchange values).
http://www.monthlyreview.org/091101foster-clark.php[/quote]
Lots more to this. This is a excellent companion to our reading of Capital.
The Paradox of Wealth: Capitalism and Ecological Destruction
Today orthodox economics is reputedly being harnessed to an entirely new end: saving the planet from the ecological destruction wrought by capitalist expansion. It promises to accomplish this through the further expansion of capitalism itself, cleared of its excesses and excrescences. A growing army of self-styled “sustainable developers” argues that there is no contradiction between the unlimited accumulation of capital — the credo of economic liberalism from Adam Smith to the present — and the preservation of the earth. The system can continue to expand by creating a new “sustainable capitalism,” bringing the efficiency of the market to bear on nature and its reproduction. In reality, these visions amount to little more than a renewed strategy for profiting on planetary destruction.
Behind this tragedy-cum-farce is a distorted accounting deeply rooted in the workings of the system that sees wealth entirely in terms of value generated through exchange. In such a system, only commodities for sale on the market really count. External nature — water, air, living species — outside this system of exchange is viewed as a “free gift.” Once such blinders have been put on, it is possible to speak, as the leading U.S. climate economist William Nordhaus has, of the relatively unhindered growth of the economy a century or so from now, under conditions of business as usual — despite the fact that leading climate scientists see following the identical path over the same time span as absolutely catastrophic both for human civilization and life on the planet as a whole.1
Such widely disparate predictions from mainstream economists and natural scientists are due to the fact that, in the normal reckoning of the capitalist system, both nature’s contribution to wealth and the destruction of natural conditions are largely invisible. Insulated in their cocoon, orthodox economists either implicitly deny the existence of nature altogether or assume that it can be completely subordinated to narrow, acquisitive ends.
This fatal flaw of received economics can be traced back to its conceptual foundations. The rise of neoclassical economics in the late nineteenth and early twentieth centuries is commonly associated with the rejection of the labor theory of value of classical political economy and its replacement by notions of marginal utility/productivity. What is seldom recognized, however, is that another critical perspective was abandoned at the same time: the distinction between wealth and value (use value and exchange value). With this was lost the possibility of a broader ecological and social conception of wealth. These blinders of orthodox economics, shutting out the larger natural and human world, were challenged by figures inhabiting what John Maynard Keynes called the “underworlds” of economics. This included critics such as James Maitland (Earl of Lauderdale), Karl Marx, Henry George, Thorstein Veblen, and Frederick Soddy. Today, in a time of unlimited environmental destruction, such heterodox views are having a comeback.2
The Lauderdale Paradox
The ecological contradictions of the prevailing economic ideology are best explained in terms of what is known in the history of economics as the “Lauderdale Paradox.” James Maitland, the eighth Earl of Lauderdale (1759-1839), was the author of An Inquiry into the Nature and Origin of Public Wealth and into the Means and Causes of its Increase (1804). In the paradox with which his name came to be associated, Lauderdale argued that there was an inverse correlation between public wealth and private riches such that an increase in the latter often served to diminish the former. “Public wealth,” he wrote, “may be accurately defined, — to consist of all that man desires, as useful or delightful to him.” Such goods have use value and thus constitute wealth. But private riches, as opposed to wealth, required something additional (i.e., had an added limitation), consisting “of all that man desires as useful or delightful to him; which exists in a degree of scarcity.”
Scarcity, in other words, is a necessary requirement for something to have value in exchange, and to augment private riches. But this is not the case for public wealth, which encompasses all value in use, and thus includes not only what is scarce but also what is abundant. This paradox led Lauderdale to argue that increases in scarcity in such formerly abundant but necessary elements of life as air, water, and food would, if exchange values were then attached to them, enhance individual private riches, and indeed the riches of the country — conceived of as “the sum-totalof individual riches” — but only at the expense of the common wealth. For example, if one could monopolize water that had previously been freely available by placing a fee on wells, the measured riches of the nation would be increased at the expense of the growing thirst of the population.
“The common sense of mankind,” Lauderdale contended, “would revolt” at any proposal to augment private riches “by creating a scarcity of any commodity generally useful and necessary to man.” Nevertheless, he was aware that the bourgeois society in which he lived was already, in many ways, doing something of the very sort. He explained that, in particularly fertile periods, Dutch colonialists burned “spiceries” or paid natives to “collect the young blossoms or green leaves of the nutmeg trees” to kill them off; and that in plentiful years “the tobacco-planters in Virginia,” by legal enactment, burned “a certain proportion of tobacco” for every slave working their fields. Such practices were designed to increase scarcity, augmenting private riches (and the wealth of a few) by destroying what constituted public wealth — in this case, the produce of the earth. “So truly is this principle understood by those whose interest leads them to take advantage of it,” Lauderdale wrote, “that nothing but the impossibility of general combination protects the public wealth against the rapacity of private avarice.”3
From the beginning, wealth, as opposed to mere riches, was associated in classical political economy with what John Locke called “intrinsic value,” and what later political economists were to call “use value.”4 Material use values had, of course, always existed, and were the basis of human existence. But commodities produced for sale on the market under capitalism also embodied something else: exchange value (value). Every commodity was thus viewed as having “a twofold aspect,” consisting of use value and exchange value.5 The Lauderdale Paradox was nothing but an expression of this twofold aspect of wealth/value, which generated the contradiction between total public wealth (the sum of use values) and the aggregation of private riches (the sum of exchange values).
http://www.monthlyreview.org/091101foster-clark.php[/quote]
Lots more to this. This is a excellent companion to our reading of Capital.