, , , , , , , , , , , , , , , ,

Snap 2013-07-04 at 11.46.08

Two important papers on capitalism by Richard Smith were published in the last few years explaining how capitalism, due to its structural mechanisms, cannot be reformed in any way to make it “sustainable”. In Smith’s papers, Green Capitalism: the God that Failed and Beyond Growth or Beyond Capitalism, four primary dictates of capitalism illustrate that no matter how herculean the effort to “green the economy”, whether through energy or other areas, the end result of inexorable environmental destruction as well as incredible social inequality are inevitable.

1.) “Grow or die” is a law of survival in the marketplace:
In capitalism most producers… have no choice but to live by the capitalist maxim “grow or die.” First, as Adam Smith noted, the ever-increasing division of labor raises productivity and output, compelling producers to find more markets for this growing output. Secondly, competition compels producers to seek to expand their market share, to better defend their position against competitors. Bigger is safer because, ceteris paribus, bigger producers can take advantage of economies of scale and can use their greater resources to invest in technological development, so can more effectively dominate markets. Marginal competitors tend to be crushed or bought out by larger firms. Thirdly, the modern corporate form of ownership, which separates ownership from operation, adds further irresistible and unrelenting pressures to grow from owner-shareholders. And shareholders are not looking for “stasis”; they are looking to maximize portfolio gains, so they drive their CEOs forward.
“…relentless and irresistible pressures for growth are functions of the day-to-day requirements of capitalist reproduction in a competitive market, incumbent upon all but a few businesses, and that such pressures would prevail in any conceivable capitalism. Further, I contend that, given capitalism, the first result of any serious reduction in economic output (GDP) to get production back down to some reasonably sustainable level, would be to provoke mass unemployment. So here again, there will never be mass public support for de-growth unless it’s coupled with explicit guarantees of employment for redundant workers, which are unacceptable to capital and would require a socialist economy…”

2.) Maximizing profit and saving the environment are inherently in conflict:
“…Corporations can embrace pro-environmental policies but only so long as these boost profits. Saving the world, however, would require that profit-making be systematically subordinated to ecological concerns…”
“Most of the economy is comprised of large corporations owned by investor-shareholders. And shareholders, even those who are environmentally-minded professors investing via their TIAA-CREF accounts, are constantly seeking to maximize returns on investment. So they sensibly look to invest where they can make the highest return. This means that corporate CEOs do not have the freedom to choose to produce as much or little as they like, to make the same profits this year as last year. Instead, they face relentless pressure to maximize profits, to make more profits this year than last year (or even last quarter), therefore to maximize sales, therefore to grow quantitatively…
In the real world, therefore, few corporations can resist the relentless pressure to “grow sales,” “grow the company,” “expand market share”– to grow quantitatively. The corporation that fails to outdo its past performance risks falling share value, stockholder flight, or worse… And if economic pressures weren’t sufficient to shape CEO behavior, CEOs are, moreover, legally obligated to maximize profits — and nothing else…”

3.) Consumerism and overconsumption are built into capitalism:
“…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 all locked into 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 like global warming, deforestation, overfishing, species extinction, the changing ocean chemistry are even beyond the scope of nation states. They require national and international cooperation and global economic planning. This requires collective bottom-up democratic control over the entire world economy. And since a global economic democracy could only thrive in the context of a rough economic equality, this presupposes a global redistribution of wealth as well.

4.) The masses are dependent on the market:
“Capitalism is a mode of production in which specialized producers (corporations, companies, manufacturers, individual producers) produce some commodity for market but do not possess their own means of subsistence. So in a capitalisteconomy, everyone is first and foremost, dependent upon the market, compelled to sell in order to buy, to buy in order to sell, to re-enter production and carry on.”

To illustrate a case study in how impossible it is for even an “environmentally conscious” corporation to be sustainable, Smith discusses Ray Anderson and his company Interface, Inc.

Saint Ray Anderson and the limits of the possible:

“…CEO Ray Anderson has probably pushed the limits of industrial environmentalism as far as it’s humanly possible to go in an actual factory operating within the framework of capitalism. Ray Anderson is everybody’s favorite eco-capitalist and he and his company Interface Inc. have been applauded by virtually every eco-futurist book written since the 1990s as the eco-capitalist example to emulate. But what Ray Anderson’s case really shows us is the limits of the possible, especially under capitalism. For after almost two decades of sustained effort, the goal of “zero pollutants” is still as unreachable as ever at Interface Inc. It is not in the least to diminish Ray Anderson’s sincerity, his passionate dedication, his efforts or his impressive achievements. But the fact is, according to The Interface Sustainability Report of 2009, Interface has “cut waste sent to landfills by more than half while continuing to increase production,” “reduced greenhouse gas emissions by more than 30%,” “reduced energy intensity by 45%,” while “over 25% of raw materials used in interface carpet are recycled and biobased materials in 2007,” and non-sustainable materials consumed per unit of product have declined from 10.2 lbs/yd2 in 1996 to 8.6 lb/yd2 in 2008. Read that last sentence again. Make no mistake: These are impressive, even heroic industrial-environmental achievements. But if after more than fifteen years of sustained effort, the most environmentally dedicated large company in the United States, if not the entire world, can only manage to cut non-sustainable inputs from 10.2 to 8.6 pounds per square yard of finished product, to inject a mere 25% recycled and biobased feedstock into its production process, so still requiring 75% of new, mostly petroleum-based nonsustainable feedstock in every unit of production, then the inescapable conclusion must be that even the greenest businesses are also on course to “destroy the world.” So if the reality is that, when all is said and done, there is “only so much you can do” in most industries, then the only way to bend the economy in an ecological direction is to sharply limit production, especially of toxic products, which means completely redesigning production and consumption – all of which is certainly doable, but impossible under capitalism.

Screen shot 2013-07-04 at 2.50.16 PM