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jmfred Posted: Sun, Apr 15 2012 3:53 PM

Longtime observer, first forum post. I wanted to share an example of the way capitalist theory is treated by the academics even at smaller, more conservative schools. The following article was assigned as a reading to my younger brother, who has been doing some independent study of Mises and the Austrian school, and he wanted a second opinion on these important issues.

Title: A Great Dilemma Generates Another Great Transformation: Incompatibility of Capitalism and Sustainable Environment

Author: Rubin Patterson

Let's start with what is hopefully obvious: the environment cannot sustain capitalism and capitalism certainly cannot sustain the environment. Either the environmental crises has to be addressed with eco-technologies, though doing to threatens the productive relations of capitalism, or the advancements of such technologies can be fettered in an attempt to protect those relations, though that move ironically undermines the entirety of both capitalism and nature. Either way, capitalism will be fundamentally transformed or it will be replaced by a qualitatively different system (Speth 2008). As Kovel (2007) starkly framed the issue, either we stop capitalism from destroying nature or we allow capitalism to destroy the world. This article is an exploration of principal contradictions and dilemmas induced directly or indirectly by environmental stress. While these contradictions and the synthetic technological revolutions of eco-technologies and info-technologies threaten capitalism, they simultaneously enable a vastly different economic system, one marked for the first time by an abundance and ecological sustainability as opposed to what humans have only known hitherto, namely, economics of scarcity and ecological degradation.

The principal contradictions of capitalism are associated with labor and the environment (Jorgenson 2006). Regarding the first contradiction, corporations drive technological advancement in part to de-skill labor and to push for offshoring production in low-wage countries, all to reduce labor costs and increase profits. When a limited number of enterprises do this, they gain advantage over competitors who do not. But when such an approach is universally pursued, the entire system is threatened by the inability to reap profits as domestic workers have insufficient income to purchase products they may want to consume -- whether needs are from the gut or are manipulated by clever marketers -- the system grinds to a halt. 

As for the second contradiction, corporations seek to appropriate nature for private gain while the costs of environmental abuse are shared commonly. Again, when a small number of industrial enterprises do this they experience a temporary advantage over their rivals, but when corporations universally devour nature in a mode of continuous growth with non-eco-technologies, capitalism, humanity, and other sentient beings are put in peril. The never-ending Schumpeterian gales of creative destruction continues throughout the economy to satisfy existing and future needs means more and more scooping up of natural resources, processing them with climate-altering technologies and dumping their toxic wastes back to the Earth. The cumulative ill-effects of pollution, mineral depletion, and disruption of ecosystems have now generated a new consciousness that eco-technologies must become deeply and extensively embedded in the economy, thereby forever altering its character. 

Some big capitals have vested narrow, intermediate-term interests in maintaining the destructo-industrial technologies pioneered over the past two centuries. Destructo-industrial technologies are those that degrade nature in lock step with production and consumption (Patterson 2008). Big Oil is the most conspicuous example of entities that fetter advanced renewable energy away from destructo-industrial technologies. Solar energy holds the potential of every citizen of the planet acquiring endless sources of non-environmentally damaging energy. Since the days of the Reagan administration, the state had been captured at higher orders of magnitude than before by fettering capitalists who thwart development of renewable energy. President Reagan slashed the budget by over 50% for solar research that was spurring sustained innovation. To put a finer point on just how much they had no interest in supporting the development of renewable energy, Reagan had the solar panels removed from the White House that President Carter had installed. 

A point lost on neither state-centric theorists nor capitalist class-dominated state theorists is that economy-wide replacement of an energy source does not simply mean a new industry replacing an older one. Over the past few centuries, the world's dominant economic power at any given point in time was associated with a prevailing energy source, and when that energy source was replaced by its successor, the dominant power was replaced, too. "The Dutch rose to world economic leadership through genius with wind and water and could not maintain commercial hegemony under a new international fuel regime. Coal did the same thing for Britain, until the rise of oil-powered industry and military forces gave the edge to the oil-favored United States" (Philips 2006). US corporations and political leaders are no doubt aware of this history and the operating logic that is still applicable in the US case of advanced renewables replacing oil, thereby some other hegemon replacing the United States. But, unlike the previous energy source-inducing power transitions from one nation-state hegemon to another, this shift could be from the United States to a transnational capitalist class protected by the manifestations of a transnational capitalist state. 

Overcoming Big Oil and the US push to block the transformation is partly supported by enlightened capitalists, where their enlightened status stems not from their moral compulsion to advance humanity and promote a sustainable environment, but instead from an understanding of going green as a means of resolving the chief contradictions of capitalism. Producing, installing, maintaining, and replacing eco-technologies are seen as a means of resolving both contradictions of labor and the environment. Regarding labor, since eco-technologies are presently not mass-produced, off-the-shelf products, their design, assembly, distribution, and maintenance represents a convenient way to soak up underutilized labor and provide additional opportunities for those presently employed. 

Both abstract and concrete or blue collar and white collar workers stand to gain from the shift from destructo-technologies, which are those that degrade the environment as fossil fuel-based and ecosystems-altering industrial products. With destructo-technologies, priority is given to labor productivity over natural resource productivity, which is precisely the formula exacerbating capitalism's two chief contradictions. Labor productivity is privileged over nature productivity by industrial enterprises because wages represent a private cost that corporations bear while the cost of the destruction of nature is borne by everyone. Sustained and even accelerated labor productivity ultimately undermines product distributions as workers lack the income to consume products, while de-privileging nature hurls us toward resource exhaustion and disruption of ecosystems. Conversely, eco-technologies are those technologies that privilege natural resource productivity over labor productivity. Unlike technologies of the heretofore destructo-technologies, eco-technologies severs the link between economic production and environmental degradation. Eco-technologies comprise what I call 3-D reduction principles: decarbonization, detoxification, and dematerialization of production.

Thus, eco-technologies accelerate the reduction of carbon-emissions as production increases. Similarly, the industrial chemicals that never or only break down slowly in the ecosystems as pollutants are driven toward elimination with as much intensity politically and technologically as is with reducing the carbon-footprint. Dematerialization of production is achieved by steadily reducing the material and energy intake embodied in each product and service. These products and services and their attendant production processes are more efficient, contain more intelligence, perform more functions, and are more upgradeable with downloadable new knowledge. 

Throughout the entire world, concrete workers stand to benefit from the shift to eco-technologies. From Sub-Saharan Africans and South Asians who cook food and gain night-light from open air, biomass burning shifting to more advanced technologies all the way over to blue-collar Americans in the rustbelt shifting to employment involving retrofitting existing buildings in their geographical areas as these buildings and related jobs cannot be offshored. And as for the abstract labor portion of eco-industrial labor, from engineering, finance, logistics, management, and marketing, though much will remain in the North, large percentages will increasingly off shored. Additionally, newly industrialized countries and BRICS nations (i.e., Brazil, Russia, India, China, and South Africa) will not only do subcontracting work for Northern-based TNCs, but they will also be innovating eco-technologies themselves. For example, with regard to solar hot water, China alone accounts for two-thirds of the world's output, and as for ethanol production, Brazil and the United States produce 90% of world output. (UNEP et al 2009).

Corporations are now in a race to be among the leading pioneers of sundry eco-technologies. Those corporations that innovate quickly and adopt the technologies stand to gain greater profits than those that merely subsequently adopt the technologies over time. Additionally, those states that ultimately have more of these technologies produced within their territories stand to gain from more economic growth, political stability, international prestige, gainful employment, and public revenue as more workers pay more taxes.

Dobson (2007) and other deep ecologists regard analyses such as that above as "environmentalist-thinking" as opposed to "ecologist-thinking." The former assumes that the existing environmental problems can be managed without fundamentally changing our values. Environmentalists think that there are technological fixes for the problems of climate-altering production, biodiversity loss and other ecosystem transformation, and mineral depletion. Conversely, deep ecologists presuppose that sustainability requires radical changes in our mode of social and political life. To them, the problems are far beyond technological fixes and such problems stem from our existing political, economic, and cultural relations that mutually encourage unsustainable practices. In order for my analysis to from the 3-D principles and be lightly more in line with that of the deep ecologists, it is necessary to add at least a fourth "D," namely delimitation of consumption. Deep ecologists would contend that it isn't simply a matter of reducing the carbon content, toxicity, and material and energy content per product and service, but rather it is about simply having less production, period. Much of the production in the West has nothing to do with need and has a lot do with manufactured and manipulated wants, thereby transforming wants into perceived needs. As Dobson, Schweickart (2002), and Speth (2008), among many other have pointed out, greater consumption beyond a surprisingly lower threshold has scarcely anything to do with additional happiness. So since additional consumption beyond a given threshold doesn't generate additional happiness, it makes no sense to have ever more production of finite resources where the pollution is absorbed by an environment with a finite capacity.

Such thinking is, of course, inimical to capitalism. Additional investment and angling for greater profits are not only inherent within, but is the principal essence of capitalism itself. Truncating beyond some sort of aggregate happiness threshold -- assuming it could be determined empirically -- would be tantamount to truncating and ending capitalism. 


There's more but typing this all out has made me angry thinking of all this nonsense foisted upon undergraduates who have no understanding of even the most basic principles of economic theory, and thus, are completely unarmed in such an important ideological struggle. 




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Are you asking for us to comment on the article? 

Or just sharing?  (which I appreciate of course, as it would cost $35 to read more than the abstract).


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z1235 replied on Sun, Apr 15 2012 4:32 PM


That's some scary stuff. An orgy of Marx, Zeitgeist, Venus, etc fallacies. I couldn't read past the first 1/3. And this is a "conservative" private school?

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jmfred replied on Sun, Apr 15 2012 4:44 PM

Mostly just sharing, as I was myself shocked that this sort of nonsense would pass for serious academic discussion. My only hope was that the people that congregate here would appreciate, if not get a good laugh, out of some of this craziness.

If there's any interest I'll finish the remainder of the article sometime tonight so that you guys can read through the whole thing. 

As for my brother, I've directed him to the Austrian Economics and the Environment section, which I believe you put together John so many thanks for that, and lent him my copy of Economics on One lesson to set him on the right path. 

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As for my brother, I've directed him to the Austrian Economics and the Environment section, which I believe you put together John so many thanks for that, and lent him my copy of Economics on One lesson to set him on the right path.


It's precisly what the Mises Institute is here for.  Plenty of resources to provide the armor you're looking for:

Tom Woods’s Liberty Classroom

Guides and Knowledge for your Intellectual Journey

Reading lists


(also not sure if you were talking about this list of articles or this playlist of videos, so whichever one it isn't, you might send him that one too wink)


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