2000s >> 2006 >> no-1223-july-2006

Book Reviews

Porritt remodels capitalism

Capitalism As if the World Matters. Jonathon Porritt. Earthscan. 304 pages. £18..

Capitalism can be reformed so as to be compatible with achieving an environmentally sustainable society. That’s the view put forward by Jonathon Porritt, well-known Green and unofficial political adviser to HRH Prince Charles (as he refers to him in his latest book) which presents a version of capitalism that is supposed to allow it to function while taking ecological considerations properly into account, which it doesn’t do today.

What would a society have to be like to be environmentally sustainable? Basically, says Porritt (and we can agree), this would be a society whose methods of providing for the needs of its members did not use up non-renewable resources quicker than renewable substitutes for them could be found; did not use up renewal resources quicker than nature could reproduce them; and did not release waste into nature quicker than the environment’s ability to absorb it. (Porritt himself adds – and we’d be the last to disagree, even though it ups the bar considerably – that it would have to be a society in which “human needs are met worldwide”.) If these practices are abided by, then the relationship and interactions between human society and the rest of nature would be able to continue on a long-term basis – would be able to be “sustained” – without harming or degrading the natural environment on which humans depend.

Socialists contend that these practices could be systematically applied only within the context of the Earth’s natural and industrial resources being the common heritage of all humanity under democratic control. In other words, we place ourselves unambiguously in the camp of those who argue that capitalism and a sustainable relationship with the rest of nature are not compatible. The excessive consumption of both renewal and non-renewable resources and the release of waste that nature can’t absorb that currently go on are not just accidental but an inevitable result of capitalism’s very nature.

Capitalism is a society in which:

(1) nearly all new wealth is produced for sale on a market;
(2) money is invested in production with a view to obtaining a monetary profit;
(3) those who produce the new wealth are exploited in that the source of profits is work they are not paid for;
(4) production is regulated by the market via a competitive struggle between separately-owned enterprises for profits;
(5) capital is accumulated out of profits in the form of new means of production, leading to the growth both of what can be produced and what is actually produced;

To which it can be added that capitalism exists as a single global system and not as a collection of separate national capitalisms.

Porritt accepts all of these as features of capitalism except point 3 (of course). His case is that if the government set the limits within which the market, the pursuit of profits, separately-owned enterprises and competition operated, these could operate to allow an environmentally sustainable society. According to him, capitalism and environmental sustainability “are only compatible under certain conditions (it isn’t capitalism per se that is at issue here, but which particular model of capitalism)”. He therefore subscribes to “a ‘reform from within’ strategy: identify those characteristics of today’s dominant capitalist paradigm that most damagingly impede progress towards sustainability and set out to change them through the usual levers – government intervention, consumer preference, international diplomacy, education and so on”.

In short, a classic reformist strategy. This is based on the assumption that “today’s dominant capitalist paradigm” is only one of a number of different possible capitalist “paradigms” or “models”. But the evidence is against this: there is not a range of different models of capitalism from which government can pick the one they prefer. Capitalism is a single, organic whole (to use a term Greens will understand), functioning to pursue and accumulate profits,  which cannot be remodelled mechanically. Past attempts to re-form capitalism in this sort of way, as for instance by the Labour Party and similar parties in other countries, have shown that, if there’s capitalism, it imposes its priorities – profit, competitiveness, accumulation – over all other considerations, and that in the end governments have no choice but to go along with this.

Rather than Labour-type parties changing capitalism it has been the other way round. These parties have ended up accepting that priority has to be given to capitalism’s priorities. The same is beginning to happen to the Greens, who have already participated in the government of capitalism in a number of European countries. In fact, Porritt’s own shift of position could be seen as a sign of this, though it can be admitted that some of the earlier Green positions he used to espouse but has now abandoned – such as “zero growth” and that decentralised local communities could solve global problems – were never tenable.

One of the ways in which Porritt suggests that governments could achieve a “a market-based model of sustainable capitalism” would be to force the competing enterprises to treat natural resources as if they were capital, subject to depreciation which had to be accounted for in monetary terms. He talks of “natural capital”, while acknowledging that even some Greens find treating nature as an economic category with a price-tag abhorrent.

All governments set as a policy goal increasing the “Gross Domestic Product” (GDP) of the country they govern. GDP is supposed to be a measure of the new value produced in a country in the course of a year. (Actually, strictly speaking, this should be Net National Product since GDP includes an element for depreciation and replacement of used-up fixed capital, which is not really new value.) This aim of governments is an unconscious reflection of the logic of capitalism since the new value created over and above what is consumed during the same period of time is the source of new capital which capitalism is driven to accumulate.

Endless “growth” (even if in fits and starts) – and the growing consumption of nature-given materials this involves – is built in to capitalism. However, this is not the growth of useful things as such but rather the growth of money-values, which is only indirectly the growth of things since money-value can only be embodied in things (not that all of these things are useful from a human point of view, even if they are within capitalist society, such as bombs and automatic cash machines).

Porritt cites the first law of thermodynamics (“energy is neither created nor destroyed as it is changed from one form to another”) to make the point that the production of wealth is not the creation of new material; it is merely a transformation of existing material that either comes directly from nature or originally did so into something useful or considered useful to human life (the definition of “wealth”). The material substratum of wealth comes from nature but, because it is not itself the product of labour, it has no value in the capitalist economic sense. Marx was fond of quoting the 17th century writer Sir William Petty’s remark that labour is the father and nature the mother of wealth. The problem is that, as under capitalism it is only labour that confers an economic value, nature is neglected when it comes to economic calculations and the operation of the economy.

Porritt complains that “we show nothing but contempt for the contribution from nature, valuing it at zero as some kind of free gift or subsidy” and that, as a result, “today’s dominant paradigm of capitalism” leads to the plundering of non-renewable resources (such as oil and minerals) and the over-harvesting of renewable ones (such as fish and forests).

This is true but his proposed solution – to take into account the non-renewed consumption of natural material as a negative amount when calculating GDP, as an incentive to cut back on it as a way of avoiding a reduction in GDP – is merely mucking about with the thermometer while leaving the real world unchanged. In the real world, which GDP merely attempts to measure, the competing enterprises would still only take into account as a cost what they had to pay for. As it costs no labour to produce natural materials (only to extract or harvest them, not to create them), whether or not they are renewed doesn’t enter into the calculation. If enterprises were forced to artificially take into account using up non-renewed natural resources in their business accounts, that would distort the calculation of the rate of profit which is the key economic indicator for capitalism. Mucking about with that under capitalism would cause all sorts of problems.

There is no way round this under capitalism, which simply cannot be remodelled or reformed on this point. To be fair, Porritt does concede that he could be wrong about capitalism and environmental sustainability and muses how bad it would be “to be committed to a reform agenda if the system one sought to reform was inherently incapable of accommodating the necessary changes in the first place”. Actually, this is precisely his case. This being so, he ought to draw the conclusion which he says then imposes itself:

“If, as a politically active environmentalist or campaigner for social justice, one’s answer to the question is that they are, indeed, mutually exclusive (that capitalism, in whichever manifestation, is in its very essence inherently unsustainable), then one’s only morally consistent response is to devote one’s political activities to the overthrow of capitalism”.

We have nothing to add.


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