h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

This has been something that I've been thinking about a lot for a long time. Although I have socialist leanings at heart, I have long since abandoned the childish idea that capitalism is completely evil. That said, I do think it needs careful regulation.

Then I started thinking to myself, humanity is slowly realising that we need to start thinking about how to develop today without compromising development in the future (which I think is the standard definition of sustainability, taken from the Brundtland Commission, IIRC). I think it's generally accepted that a 'business as usual' scenario is highly unsustainable.

Now, I'm not an economist or anything of the sort, which is partly why I'm asking for responses here - as I understand it, conventional capitalism requires constant economic growth and consumption. Can we every live sustainably under a model like this? Can we keep this model but make some changes? Or do we have to radically rethink the way countries (and the world as a whole) is governed to meet problems of sustainability? (I'm thinking environmental quality, food and water supplies, energy supplies, and of course climate change). Also, how much of the Earth's resources we are willing to 'set aside' for species other than ourselves.

Ideally, I'd like to keep away from the pro/anti-capitalism thing, because it's all been done before. This isn't a post claiming anything or making any judgement about it. On a basic level, I'm just asking, how can an economic system that requires constant growth ever become truly sustainable?

I think the constancy derives from change. Back in the 1950's who would have predicted that Britain would not build ships or cars or mine coal or make steel. But now despite the passing of the industrial age we still maintain the World's third largest economy from the service, telecommunications and high tech industries.

These modern industries are a lot less polluting than the old metal bashing ones. Our beaches are cleaner, our rivers healthier, we don't have pea soup smogs and it looks like allotments and growing your own veg is back in fashion.

I am a great believer in mankind's inherent ability to invent and design it's way forward. Global change doesn't worry me because if you look back in history mankind has constantly become more successful. If Malthus had been right we would have outgrown the planet by now but, instead we have a growing recogniton that we have to take care of it.

Capitalism will continue to be the driving force. Man is greedy or aquisative or anmbitious and capitalism meets those ambitions. Every Chinese man wants to own his own business. That's what will keep the capitalist engine turning.

Capitalism is the creation of wealth. If, for example, I write a book and I exchange copies of that book for a currency then I am a capitalist. There is no reason why this is not sustainable since the creation of books (which need not necessarily be on paper) isn't really limited.

However, lets say I discover a mine and it's got gold in it; I start an industry to mine the gold and make a huge profit. I expand the business and a town grows-up next it with people drawn by jobs. For fifty years the company profits and the town grows. But the gold will one day run out. This capitalism is not sustainable; it's classic boom-and-bust. The best way of dealing with this is for the town to diversify its industry to weather the "bust" as well as it can. The oil-producing gulf states essentially have this problem with their own capitalist economies - the oil won't last forever.

Ultimately, it comes down to a question of resources. Our current consumer society is arguably not sustainable because the resources are limited and some of our use of them is damaging (eg climate change) but our current society is not "capitalism" it is simply one form of it. Generally, capitalism adapts to changing political, economic and moral climates.

"Back in the 1950's who would have predicted that Britain would not build ships or cars or mine coal or make steel. But now despite the passing of the industrial age we still maintain the World's third largest economy from the service, telecommunications and high tech industries."

As an interesting aside, I think I've heard it argued that Britain's service-based economy might not be sustainable because we don't produce goods so much as services and services aren't tangible or stockpilable, they instead rely on a healthy economy that needs them. Essentially, if the world economy goes into a slump then the demand for services shrinks drastically and we have little manufacturing base to fall back on. The argument is that this is the weakness of strictly market-based economics: it pursues the short-term.

If anyone has an answer to this argument then I'm happy to hear it.

Flexibility, mix and innovation are the answer. Didn't I read last month that Britain's manufacturing industries were booming. Don't forget as the pound weakens exports become cheaper and foreign holidays more expensive; hence, people holiday at home and that boosts the domestic hospitality industry.

Where I live tourism, in the 1970's, used to be a mainstay of the economy. Now it represents less than 2% but overall we have never been better off due to the growth of service industries.

>>These modern industries are a lot less polluting than the old metal bashing ones. Our beaches are cleaner, our rivers healthier, we don't have pea soup smogs and it looks like allotments and growing your own veg is back in fashion.<<

Currently there are other countries doing the metal-bashing, so from a global perspective, has anything changed? Will we ever get to the stage where all that heavy industry is unnecessary? I'm pretty sure technology will make it cleaner, but I'm equally sure there's a limit to this.

An aside from me as well. I heard on Radio 4 (it must be true! ) the other day that Britons had bought 20% less car fuel this year than the same time last year. Might not be exactly the right figure, that's off the top of my head. It a small sign that 'market forces' are working. I have a tendency to believe that, while useful, it's currently fashionable to leave everything to market forces - but here, it seems they are doing something. We obviously need to cut down on fuel usage, both because it's a finite quantity we have left, and because of emissions. I don't think market forces can do this alone, but I was interested to see they could do some good.

I was surprised at how well capitalism held up after 9/11 and both gulf wars . Perhaps it is more robust than would first appear . As to whether capitalism or democracy can provide the answers to our problems , only time will tell .

best fishes......tod

>> was surprised at how well capitalism held up after 9/11 and both gulf wars<<

How were 9/11 and 2 of the 3 Gulf Wars a threat to capitalism? September 11th was just an escalation of previous Islamic fundamentalism, which isn't by nature opposed to capitalism, and all three Gulf Wars were about territory and, to a lesser degree, political ideologies.

>How were 9/11 and 2 of the 3 Gulf Wars a threat to capitalism? September 11th was just an escalation of previous Islamic fundamentalism, which isn't by nature opposed to capitalism, and all three Gulf Wars were about territory and, to a lesser degree, political ideologies.

I generally agree with this but I think 9/11 was partly a strike at US economic power which might be construed as a strike at "capitalism" although the Islamist extremists hate the West because they think it's corrupt and amoral and that it threatens to export its "rotten" values to the Islamic world rather than that it's rich (something a lot of Americans failed to understand at the time); certainly the Islamic religion does not forbid personal wealth and the Arab world has a longstanding tradition of smalltime capitalism.

>and all three Gulf Wars were about territory and, to a lesser degree, political ideologies.

I think the first two Gulf Wars were (at least initially) about Iraq's attempts to extend their influence and power; first by attacking what Saddam percieved as a weak and disorganised Iran and secondly with Saddam's rather-foolish attempt to annex Kuwait. The third Gulf War was really about the US trying to quickly bring to an end the political quagmire it had unintentionally created by choosing to leave Saddam in power in 1991 and, of course, kicked off a whole messy situation...

Unregulated capitalism would certainly not be sustainable. Take the environment as an example: polluting the environment costs a company nothing, so if they are pursuing profit (which they must to survive) they cannot take the environment into account. If some did try to minimise pollution (at a cost to them), another company would undercut them by not doing so, and this company would in the end drive out the non-polluting one. In this sense, capitalism is fundamentally not sustainable.

That said, it can of course be regulated. Various ad-hoc market solutions like carbon credits or green taxes can be introduced, or alternatively strict emissions limits could be set. The problem at the moment is that there is very little political will to do this effectively.

And actually, this is not necessarily something that can be avoided. In a global market, not only do companies compete against each other, but nations do as well. If one nation sets strict emissions limits, then another can set less strict ones and tempt companies to relocate to them. This would be disastrous for the first country because you would have huge unemployment, etc. Another political party would crop up saying that they would attract investment by setting even lower emissions limits than the second country, they'd win, etc. In other words, when the world is capitalist, nobody can act sustainably.

In conclusion my answer is no, capitalism is not and cannot be made sustainable. I tried not to make it a pro/anti-capitalist post, but I guess my position on that is fairly clear.

>Another political party would crop up saying that they would attract investment by setting even lower emissions limits than the second country, they'd win, etc. In other words, when the world is capitalist, nobody can act sustainably.

Which is why we have multi-national agreements like Kyoto whereby no nation can undercut any other because all have agreed not to increase emissions to a certain level. If everyone signs up to this (hardly an impossible scenario) then regulated capitalism *is* sustainable.

It's this sort of thing that can ultimately save capitalism from it's own weaknesses. Ironically, the ideological capitalists like John Redwood are the greatest enemy capitalism has because they allow an environment where it can be destroyed by it's own flaws. Look for the reason for the rise of Communism in the 20th century and it's the growth of largely-unregulated "laissez faire" capitalism in Europe in the 19th century which gave us such triumphs of humanity as the satanic mills and the Congo Free State.

Talking of such things (and maybe someone can back me up on this) but I heard there's a small Marxist group who actually support completely unregulated free-market capitalism because they're convinced the best way to bring about a Communist utopia is by destroying capitalism as quickly as possible via the "give them enough rope" route. Supposedly, they also backed Aparteid South Africa reasoning that under the racist system a Communist rebellion was far more likely.

"Take the environment as an example: polluting the environment costs a company nothing, so if they are pursuing profit (which they must to survive) they cannot take the environment into account. If some did try to minimise pollution (at a cost to them), another company would undercut them by not doing so, and this company would in the end drive out the non-polluting one. In this sense, capitalism is fundamentally not sustainable."

A good predecessor to the current environmental issue is the slave trade. Entire economies were built on the notion that people could be bought and sold and used as cheap labour. From a purely capitalistic perspective slavery should never have been abolished. But when it was, capitalism didn't collapse it simply adapted to the new environment which the state had imposed on it*. In any instance where the capitalist model is unsustainable for moral (slavery) or scientific (climate change) reasons, ultimately good sense and logic tends to win-over the needs of the market.

*as an aside, it doesn't take too long to slip back into old habits. Numerous private German industries gladly took free slave labour provided to them by the Nazi government in the 1940s; the issues of compensation still remain unresolved in some cases.

Zagreb,

"Which is why we have multi-national agreements like Kyoto whereby no nation can undercut any other because all have agreed not to increase emissions to a certain level. If everyone signs up to this (hardly an impossible scenario) then regulated capitalism *is* sustainable."

And Kyoto has been such a success hasn't it?

Seriously though, it's not just by coincidence and the intransigence of the US that Kyoto isn't working. All of the structural pressures of capitalism make it not work.

In principle though I agree, a sufficiently well planned initiative like Kyoto that takes account of all of the factors that make it difficult (benefits of not signing up, difficulty of enforcement, etc.) might just conceivably work. I don't see any signs of it though, and it won't come in time.

I agree with you though about the ultra-free market capitalists being their own worst enemy. There's an interesting aspect of this, with global markets and competition between nations for lower regulation of capitalism, it's possible that this form of unregulated capitalism will eventually come along despite it not being in the interests of capitalism as a whole.

And yeah, I heard about some Marxists who are in favour of unregulated capitalism too. Can't tell you any more about them though.

"And Kyoto has been such a success hasn't it? winkeye

Seriously though, it's not just by coincidence and the intransigence of the US that Kyoto isn't working. All of the structural pressures of capitalism make it not work."

But a lot of the countries who signed-up to Kyoto *are* capitalist economies. I know Kyoto hasn't been a success but my point is that there is nothing actually stopping it from being so. And regarding the USA, it's more the glut of noisy ideological capitalists in that country that are the problem rather than "the structural pressures of capitalism"; those exist in Britain, France, Germany and other pro-Kyoto countries.

"From a purely capitalistic perspective slavery should never have been abolished."

Not necessarily. I think there are good economic reasons to suggest that slavery wasn't terribly efficient, but it's been a while since I thought about this. Why force someone to work if their own need to work to survive forces them to work for a pittance? That way, you don't need to take care of them either.

Also, isn't it true that there are more slaves (or bonded labourers) today that at the height of the slave trade?

"In any instance where the capitalist model is unsustainable for moral (slavery) or scientific (climate change) reasons, ultimately good sense and logic tends to win-over the needs of the market."

Not necessarily, that's the chief insight of the prisoner's dilemma (which I'm sure you're familiar with). Sometimes rationality isn't enough, you need the right incentives and social structures too.

"I know Kyoto hasn't been a success but my point is that there is nothing actually stopping it from being so."

I think there are things stopping it from being a success, it's against the interests of the big capitalists - it would hurt profits. It's also far from enough to stop climate change, and that's not coincidence either. The fact that it's got as far as it has relied on the fact that it was a watered down proposal that wouldn't hurt profits too much (but also wouldn't solve the problems).

"Not necessarily. I think there are good economic reasons to suggest that slavery wasn't terribly efficient, but it's been a while since I thought about this. Why force someone to work if their own need to work to survive forces them to work for a pittance? That way, you don't need to take care of them either."

That's possibly true but nonetheless an enormous amount of business relied on the slave trade and the legality of slave labour and it was a massive upset to change things. I've heard it mentioned in response to the old "Jefferson believed in freedom yet he owned slaves!" argument that Jefferson was perfectly aware that slave-owning was wrong and yet it was such an intergral part of the economic system of which he was a part that he couldn't simply free his slaves without bringing economic ruin upon himself; ultimately this inconsistency between the liberal ideals the American revolution was founded on and the injustice of slavery lead to Lincoln and the Civil War.

The struggle to re-jig capitalism to the demands of scientifically-backed environmental concerns strikes me as being another case of market-tradition having to be broken in the name of progress.

"Not necessarily"

I agree, not *necessarily* but it's both possible and (in my opinion) most likely given events of the past. My argument here is about whether capitalism is inevitably or inherently unstable rather than if it will be. It's perfectly possible that the Randroids might take control in fifty years and ultimately deliver us another Soviet Union I just don't think it's terribly likely .

Incidentally, I *hadn't* heard of the Prisoner's Dilemma so I'm currently educating myself in it via wonkypedia.

"I think there are things stopping it from being a success, it's against the interests of the big capitalists - it would hurt profits."

That assumes that the "big capitalists" are invariably ideological capitalists themselves. Some of them are and some of them aren't; regardless their companies would still continue to function and profit under Kyoto because nobody could legally offer an environment that undercuts them.

"It's also far from enough to stop climate change, and that's not coincidence either. The fact that it's got as far as it has relied on the fact that it was a watered down proposal that wouldn't hurt profits too much (but also wouldn't solve the problems)."

It's not supposed to stop climate change (which we couldn't really do - it's not that we're causing climate change it's that we're making it worse through our unnatural amount of CO2 output) merely to reduce the damage done. The real way of combating human-created CO2 output is to move from fossil fuels to different forms of energy. Kyoto is one small part of a big shift in how we create energy.