Green Capitalism

* Book: Richard Smith. Green Capitalism: The God that Failed.

URL = http://www.worldeconomicsassociation.org/library/green-capitalism-the-god-that-failed/

Contextual Citation

Richard Smith:

"All such market-based efforts are doomed to fail, and a sustainable economy is inconceivable without sweeping systemic economic change. The project of sustainable capitalism based on carbon taxes, green marketing, "dematerialization" and so forth was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That's because under capitalism, CEOs and corporate boards are not responsible to society; they're responsible to private shareholders. CEOs can embrace environmentalism so long as this increases profits. But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns." (http://www.truth-out.org/news/item/21060-green-capitalism-the-god-that-failed?fref=gc)

Description

Richard Smith:

"This book deals with the prime threat to human life on earth: the tendency of global capitalist economic development to develop us to death, to drive us off the cliff to ecological collapse. It begins with a review of the origins of this economic dynamic in the transition to capitalism in England and Europe and with an analysis of the ecological implications of capitalist economics as revealed in the work of its founding theorist Adam Smith. I argue that, once installed, the requirements of reproduction under capitalism – the pressure of competition, the imperative need to innovate and develop the forces of production to beat the competition, the need to constantly grow production and expand the market and so on, induced an expansive logic that has driven economic development, and now overdevelopment, down to our day.

In successive chapters I explicate and criticize the two leading mainstream approaches to dealing with the ecological consequences of this overdevelopmental dynamic – décroisance or “degrowth,” and “green capitalism”. I show that the theorists and proponents of no-growth or de-growth like Herman Daly or Tim Jackson are correct in arguing that infinite economic growth is not possible on a finite planet but that they’re wrong to imagine that capitalism can be refashioned as a kind of “steady state” economy, let alone actually “degrow” without provoking economic collapse. There are further problems with this model, which I also investigate. I show that the theorists and proponents of “green capitalism” such as Paul Hawkin, Lester Brown and Frances Cairncross are wrong to think that tech miracles, “dematerialization,” new efficiencies, recycling and the like will permit us to growth the global economy more or less forever without consuming and polluting ourselves to death. I show that while we’re all better off with organic groceries, energy-efficient lightbulbs and appliances, recycling and the like, such developments do not fundamentally alter the eco-suicidal tendencies of capitalist development because infinite growth, even green growth, is just not possible on a finite planet.

In the final chapters I argue that since capitalism can only drive us to ecological collapse, we have no choice but to try to cashier this system and replace it with an entirely different economy and mode of life based on minimizing not maximizing resource consumption, based on public ownership of most, though not all of the economy, on large-scale economic planning and international coordination, and on a global “contraction and convergence” between the North and the South around a lower but hopefully satisfactory level of material consumption for all the world’s peoples. Whether we can pull off such a transition is another question. We may very well fail to overthrow capitalism and replace it with a viable alternative. That may be our fate. But around the world, in thousands of locations, people are organizing and fighting against corporate power, against land grabs, against extreme extraction, against the incessant commodification of our lives. Here and there, as in Greece and China, ruling classes are on the defensive. All these fights have a common demand: bottom-up democracy, popular power. In this lies our best hope. This little book is intended as more ammunition for that fight."

Discussion 1

Richard Smith:

"So business is destroying the world. But, for Hawken, the problem wasn't capitalism as such, but just bad "business practices" of corporations which, he thought, could be fundamentally "inverted" to save the world:

- "[T]his behavior is not the inherent nature of business, nor the inevitable outcome of a free-market system." The problem was that "the expense of destroying the earth is largely absent from the prices set in the marketplace. A vital and key piece of information is therefore missing in all levels of the economy."

The key was to get the market to "tell the ecological truth."

In her Harvard Business School manifesto for green capitalism, "Costing the Earth," the Economist magazine's environmental editor, Francis Cairncross, said - "Governments need to step in to align private costs with social costs ... [as] embodied by the 'polluter pays' principle.' "

And in his book Eco-Economy, Worldwatch Institute founder Lester Brown explained that

- Ecologists and economists - working together - can calculate the ecological costs of various economic activities. These costs could then be incorporated into the market price of a product or service in the form of a tax."

So carbon taxes and the like would "discourage such activities as coal burning, ... the generation of toxic waste, the use of virgin raw materials ... the use of pesticides, and the use of throwaway products."

Paul Hawken even went so far as to claim that

- "[T]here is no question that we could introduce a steady, incremental phase-in of a carbon tax on coal, one that would eventually tax coal out of business in two decades' time." "The whole key to redesigning the economy is to shift incrementally most, if not all, of the taxes presently derived from 'goods' to 'bads,' from income and payroll taxes to taxes on pollution, environmental degradation and nonrenewable energy consumption. ... The resulting changes in the marketplace would be dramatic. Every purchase would become more constructive and less destructive."

Hawken described his vision of "Natural Capitalism" thusly:

- The restorative economy described in this book ... unites ecology and commerce into one sustainable act of production and distribution that mimics and enhances natural processes. In such an economy ... restoring the environment and making money would be the same process. Business ... needs a plan, a vision, a basis - a broad social mandate that will turn it away from the linear, addictive, short-term economic activities in which it is enmeshed and trapped. ... Rather than argue about where to put our wastes, who will pay for it, and how long it will be before toxins leak out into the groundwater, we should be trying to design systems that are elegantly imitative of climax ecosystems found in nature. Companies must re-envision and re-imagine themselves as cyclical corporations, whose products either literally disappear into harmless components, or ... [produce] no waste [at all.]"

NRDC founder and Yale Dean Gus Speth summed up this utopian vision of the market in green capitalism as well as anyone:

- The market can be transformed into an instrument for environmental restoration; humanity's ecological footprint can be reduced to what can be sustained environmentally; the incentives that govern corporate behavior can be rewritten; growth can be focused on things that truly need to grow and consumption on having enough, not always on more; the rights of future generations and other species can be respected.

The "sustainable" "green" "natural" capitalism movement took off in the 1980s and '90s: Organic farming came into the mainstream, and Whole Foods became the fastest-growing sector of the grocery industry. Green businesses sprouted up in every sector from renewable energy to organic cottons to eco-travel. Stores added green products in every aisle. Hip, eco-conscious businesses like Patagonia gave "1% to nature." (Ben & Jerry's gave 7½ percent!) "Sustainable investing" mutual funds looked to fund renewable energy. "Green certification" outfits sprung up to save the tropical forests and the sea turtles. Eventually, even big corporations like 3M and Walmart embraced green "business practices," cutting waste, recycling, and producing and adopting less toxic products. Europe introduced the first large-scale cap-and-trade system in January 2005. Finland introduced the first carbon tax in 1990, and many other countries followed suit, including Sweden, Germany, Britain, South Korea, South Africa, Korea, some provinces of Canada and even some American states, including Maryland, Colorado and California." (http://www.truth-out.org/news/item/21060-green-capitalism-the-god-that-failed?fref=gc)

Discussion 2

Five Theses against green capitalism

Richard Smith:

"To start with, I'm going to state five theses about green capitalism and then develop these arguments in the rest of this article.

1. First, the project of "sustainable" "green" capitalism was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That's because, under capitalism, CEOs and corporate boards are not responsible to society; they're responsible to private owners and shareholders. CEOs might embrace environmentalism so long as this also increases profits, but they're not free to subordinate profit maximizing to saving the world - because to do so would be to risk shareholder flight or worse. I claim that profit-maximization is an iron rule of capitalism, a rule that trumps all else and sets the possibilities and limits of ecological reform - and not the other way around, as green capitalism theorists suppose.

2. Second, no capitalist government on Earth can impose "green taxes" that would drive the coal industry or any other industry out of business, or even force major retrenchments by suppressing production because, among other important reasons, given capitalism, this would just provoke recession and mass unemployment - if not worse. This means the carbon tax strategy to stop global warming is a non-starter. Without green taxes, the entire green capitalist project collapses.

3. Third, green capitalism enthusiasts vastly underestimate the gravity, scope and speed of the global ecological collapse we face and thus unrealistically imagine that growth can continue forever if we just tweak the incentives and penalties a bit here and there with green taxes and such. But the capitalist market system is inherently eco-suicidal. Endless growth can end only in catastrophic eco-collapse. No amount of tinkering can alter the market system's suicidal trajectory. Therefore, like it or not, humanity has no choice but to try to find a way to replace capitalism with some kind of post-capitalist ecologically sustainable economy.

4. Fourth, green capitalism theorists grossly overestimate the potential of "clean green" production and "dematerializing" the economy, whereas, in reality, much if not most, of the economy - from resource extraction like mining and drilling to metals smelting and chemicals production - as well as most manufacturing and many services cannot be greened in any meaningful sense at all. This means that the only way to reduce greenhouse gas emissions by the 80 percent that scientists say we need to do to save the humans, is to enforce a drastic contraction of production in the industrialized countries, especially in the most polluting and wasteful sectors. Most industries will have to be sharply retrenched. Some, the very worst polluting and wasteful, will have to be closed entirely. Because, under capitalism, industries can't be expected to voluntarily commit economic suicide, even to save the humans, the only way to carry out these necessary contractions and closures is to nationalize industry and socialize the losses, redeploy labor to sectors society does actually need to develop, like renewable energy, public transit, decent housing for all and so on and shorten the working day to spread the remaining work around.

5. Fifth, consumerism and overconsumption are not "dispensable" and cannot be exorcised because they're not just "cultural" or "habitual." They are built into capitalism and indispensable for the day-to-day reproduction of corporate producers in a competitive market system in which capitalists, workers, consumers and governments alike are dependent upon an endless cycle of perpetually increasing consumption to maintain profits, jobs and tax revenues. We can't shop our way to sustainability because the problems we face cannot be solved by individual choices in the marketplace. The global ecological crisis we face cannot be solved by even the largest individual companies. Problems such as global warming, overfishing and ocean chemistry are beyond the scope of nation states. They require national and international economic planning. That requires collective bottom-up democratic control over the entire world economy. And because global economic democracy could thrive only in the context of rough economic equality, this presupposes a global redistribution of wealth as well." (http://www.truth-out.org/news/item/21060-green-capitalism-the-god-that-failed?fref=gc)

20 Theses against green capitalism

URL = http://slash.autonomedia.org/node/11656

By: Tadzio Mueller and Alexis Passadakis:

1. The current world economic crisis marks the end of the neoliberal phase of capitalism. ‘Business as usual’ (financialisation, deregulation, privatisation…) is thus no longer an option: new spaces of accumulation and types of political regulation will need to be found by governments and corporations to keep capitalism going

2. Alongside the economic and political as well as energy crises, there is another crisis rocking the world: the biocrisis, the result of a suicidal mismatch between the ecological life support system that guarantees our collective human survival and capital’s need for constant growth

3. This biocrisis is an immense danger to our collective survival, but like all crises it also presents us, social movements, with a historic opportunity: to really go for capitalism's exposed jugular, its need for unceasing, destructive, insane growth

4. Of the proposals that have emerged from global elites, the only one that promises to address all these crises is the ‘Green New Deal’. This is not the cuddly green capitalism 1.0 of organic agriculture and D.I.Y. windmills, but a proposal for a new ’green’ phase of capitalism that seeks to generate profits from the piecemeal ecological modernisation of certain key areas of production (cars, energy, etc.)

5. Green capitalism 2.0 cannot solve the biocrisis (climate change and other ecological problems such as the dangerous reduction of biodiversity), but rather tries to profit from it. It therefore does not fundamentally alter the collision course on which any market-driven economy sets humanity with the biosphere.

6. This isn’t the 1930s. Then, under the pressure of powerful social movements, the old ‘New Deal’ redistributed power and wealth downwards. The ‘New New’ and ‘Green New Deal’ discussed by Obama, green parties all around the world, and even some multinationals is more about welfare for corporations than for people

7. Green Capitalism won't challenge the power of those who actually produce most greenhouse gases: the energy companies, airlines and carmakers, industrial agriculture, but will simply shower them with more money to help maintain their profit rates by making small ecological changes that will be too little, too late

8. Because globally, working people have lost their power to bargain and demand rights and decent wages, in a green capitalist setup, wages will probably stagnate or even decline to offset the rising costs of ‘ecological modernisation’

9. The 'green capitalist state' will be an authoritarian one. Justified by the threat of ecological crisis it will ‘manage’ the social unrest that will necessarily grow from the impoverishment that lies in the wake of rising cost of living (food, energy, etc.) and falling wages

10. In green capitalism, the poor will have to be excluded from consumption, pushed to the margins, while the wealthy will get to ‘offset’ their continued environmentally destructive behaviour, shopping and saving the planet at the same time

11. An authoritarian state, massive class inequalities, welfare given to corporations: from the point of view of social and ecological emancipation, green capitalism will be a disaster that we can never recover from. Today, we have a chance to get beyond the suicidal madness of constant growth. Tomorrow, by the time we’ve all gotten used to the new green regime, that chance may be gone

12. In green capitalism, there is a danger that established, mainstream environmental groups will come to play the role that trade unions played in the Fordist era: acting as safety valves to make sure that demands for social change, that our collective rage remain within the boundaries set by the needs of capital and governments

13. Albert Einstein defined ‘insanity’ as “doing the same thing over and over again and expecting different results.” In the past decade, in spite of Kyoto, not only has the concentration of greenhouse gases in the atmosphere increased – so, too, has the rate of increase. Do we simply want more of the same? Wouldn’t that be insane?

14. International climate agreements promote false solutions that are often more about energy security than climate change. Far from solving the crisis, emissions trading, CMD, joint implementation, offsets and so on, all provide a political shield for the continued production of greenhouse gases with impunity

15. For many communities in the global South, these false solutions (agrofuels, ‘green deserts’, CDM-projects) are by now often a greater threat than climate change itself

16. Real solutions to the climate crisis won't be dreamt up by governments or corporations. They can only emerge from below, from globally networked social movements for climate justice

17. Such solutions include: no to free trade, no to privatisation, no to flexible mechanisms. Yes to food sovereignty, yes to degrowth, yes to radical democracy and to leaving the resources in the ground

18. As an emerging global climate justice movement, we must fight two enemies: on one hand climate change and the fossilistic capitalism that causes it, and on the other, an emergent green capitalism that won’t stop it, but will limit our ability to do so

19. Of course, climate change and free trade aren’t the same thing, but: the Copenhagen-protocol will be a central regulatory instance of green capitalism just as the WTO was central to neoliberal capitalism. So how to relate to it? The Danish group KlimaX argues: A good deal is better than no deal - but no deal is way better than a bad one

20. The chance that governments will come up with a 'good deal' in Copenhagen is slim to none. Our aim must therefore be to demand agreement on real solutions. Failing that: to forget Kyoto, and shut down Copenhagen! (whatever the tactic)

(http://slash.autonomedia.org/node/11656)

Critique by Richard Smith

Richard Smith [1]:

"In rejecting the antigrowth approach of the first wave of environmentalists in the 1970s, pro-growth “green capitalism” theorists of the 1980s-90s like Paul Hawken, Lester Brown, and Francis Cairncross argued that green technology, green taxes, eco-conscious shopping and the like could “align” profit-seeking with environmental goals, even “invert many fundamentals” of business practice such that “restoring the environment and making money become one and the same process.” This strategy has clearly failed. I claim first, that the project of sustainable capitalism was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That’s because under capitalism, CEOs and corporate boards are not responsible to society, they’re responsible to private shareholders. CEOs can embrace environmentalism so long as this increases profits. But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns: For example, the science says that to save the humans, we have to drastically cut fossil fuel consumption, even close down industries like coal, and massively retrench production across a broad range of unnecessary, resource-hogging and polluting industries. But no corporate board can sacrifice earnings to save the humans because to do so would be to risk shareholder flight or worse. I claim that profit-maximization is an iron rule of capitalism, a rule that trumps all else, and sets the limits to ecological reform -- and not the other way around as green capitalism theorists supposed

Secondly, I contend that given capitalism, workers and governments have little choice but to support “their own” corporations’ drive for growth because this is not socialism: No one is promising new jobs to unemployed coal miners, oil-drillers, automakers, airline pilots, chemists, junk food producers, plastic bag makers, advertisers, credit card vendors and others whose jobs would be lost because their industries would have to be shut down or retrenched to save the humans -- and unemployed workers don’t pay taxes. So CEOs, workers, and governments find that they all “need” to maximize growth, overconsumption, even pollution, to destroy their children’s tomorrows in order to hold onto their jobs today, because, if they don’t, the system falls into crisis, or worse. We can’t “cut back” to save the planet because capitalism can’t solve the unemployment crisis any more than it can solve the ecological crisis. We’re all onboard the TGV of ravenous and ever-growing plunder and pollution. But as our locomotive races toward the cliff of ecological collapse, the only thoughts on the minds of our CEOS, capitalist economists, politicians and labor leaders, is how to stoke the locomotive to get us there faster. Corporations aren’t necessarily evil. They just can’t help themselves. They’re doing what they’re supposed to do for the benefit of their owners. But this means that, so long as the global economy is based on capitalist private/corporate property and competitive production for market, we’re doomed to collective social suicide and no amount of tinkering with the market can brake the drive to global ecological collapse. We can’t shop our way to sustainability because the problems we face cannot be solved by individual choices in the marketplace. They require collective democratic control over the economy to prioritize the needs of society and the environment. And they require national and international economic planning to re-organize the economy and redeploy labor and resources to these ends." (http://www.paecon.net/PAEReview/issue56/Smith56.pdf)

Visualization

• By Kyla Tienhaara - Varieties of green capitalism: economy and environment in the wake of the global financial crisis

• By Peter Ferguson - The green economy agenda: business as usual or transformational discourse?

More Information

• Alexis is a member of attac Germany’s coordinating council, Tadzio a part of the Turbulence editorial collective (www.turbulence.org.uk). They are both active in the emerging climate justice movement, and can be reached at againstgreencapitalism (at) googlemail.com