“Corporations are in business to make money, not to save the world.” - Milton Friedman
Half a million climate activists marched through Madrid. The face of those climate change protesters Greta Thunberg said, "We have have raised public awareness and we have created opinion and that is a big step in the right direction. But of course it's nowhere near enough. The CO2 emissions aren't reducing. They are in fact increasing," Thunberg continued, "so of course there is no victory because the only thing we want to see is real action and real action has not been happening. So of course we have achieved a lot," she added, "but if you look at it from a certain point of view we have achieved nothing."
Capitalism is on its way to destroy the relationships on which all human societies rests upon. Efforts to ease these problems through such measures, such as reformed environ-mental policies and eco-friendly consumption, have failed. What unites climate scientists and activists is the rejection of alternatives to capitalism. The need is to challenge and overcome capitalism and socialist knowledge could help to contribute to the environmental struggle and solution. Most climate scientists and most activists have yet to grapple with the implication that to reduce GHG would require an economic contraction in the developed industrialised countries, and economic contraction is incompatible with a capitalism. That’s why, regardless of protests, no capitalist government will accept legislation and regulation that leads to mandatory cuts in GHG emissions. A sustainable economy is inconceivable without sweeping systemic economic change. However, what is on offer are market-based efforts which are doomed to fail, for example, misconceived carbon taxes, carbon trading and off-setting. They are doomed because maximising profit and saving the planet are inherently in conflict. under capitalism, CEOs and corporation management boards are not responsible to society; they’re responsible to private shareholders. But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns. No corporation can sacrifice revenue, let alone put themselves out of business, just to protect the planet and save humanity. No government can impose green policies upon industry because to do so would precipitate economic collapse. Profit-maximization and capital accumulation drives capitalism. So business is destroying the environment and it can only be stopped by ending the rule of capitalism, not wishfully re-designing it. We need an economy that lives within nature’s limits, that minimizes and even eliminates waste from production. But it is completely wrong to imagine that we could ever get this under capitalism. We cannot get a sustainable “steady-state” economy or “de-growth” economy within a capitalist framework. Expansion is the irresistible and relentless pressure and a day-to-day requirement for capitalists in a competitive market and would prevail in any conceivable form of capitalism.
1. Capitalism is a mode of production in which companies and manufacturers, produce a commodity for market. Workers own no means of production and so have no choice but to sell their labour to the capitalists. Capitalists as a class possess a monopoly ownership of most of society’s means of production, and have to sell their commodities on the market to obtain money for their own subsistence and to purchase new means of production to carry on from year to year. So in a capitalist economy, 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.
2. Competition is the motor of economic development: When producers come to market, they’re not free to sell their particular commodity at whatever price they wish because they find other producers selling the same commodity. They therefore have to “meet or beat” the competition to sell their product and stay in business. Competition thus forces producers to reinvest much of their profits back into productivity-enhancing technology. Producers must constantly strive to increase the efficiency of their units of production by cutting the cost of inputs, seeking ever-cheaper sources of raw materials and labour, by bringing in more advanced labour-saving machinery to boost productivity, or by increasing their scale of production to take advantage of economies of scale, and in other ways, to develop the forces of production.
3. “Grow or die” is a law of survival in the marketplace: In the capitalist mode of production, most producers have no choice but to live by the capitalist maxim “grow or die.” First, as Adam Smith noted, the division of labour 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 defend their position against competitors. Bigger producers can take advantage of economies of scale and use their greater resources to invest in technological development to more effectively dominate markets. Marginal competitors tend to be crushed or bought out by larger firms . Thirdly, the modern corporate form of ownership adds irresistible and unrelenting pressures to grow from owners (shareholders). In the corporate form, CEOs do not have the freedom to choose not to grow or to subordinate profit-making to ecological concerns, because they don’t own their firms even if they own substantial shares. Corporations are owned by masses of shareholders. And the shareholders are not looking for “stasis”; they are looking to maximize portfolio gains, so they drive their CEOs forward.
The growth imperative is a virtual a law of nature, built into any conceivable capitalism. Corporations have no choice but to seek to grow. It is not “subjective.” Capitalists are not possessed by some evil entity. They cannot be exorcised.
Like it or not, it’s time to abandon the fantasy of a steady-state green capitalism, and to go back to the drawing boards and come up with a new system, a practical, workable post-capitalist ecological economy, an economy by the people, for the people that is geared to production for need, not for profit. “Socialism”? “Economic democracy”? Call it what you like. But what other choice do we have? Either we save capitalism or we save ourselves. We can’t save both.
Abridged and adapted from here
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