Capitalism & Sustainability

Broadly speaking, capitalism is the most significant cause of climate change.  Capitalism [1] and its implementation within society (referred to as neoliberalism/ neoliberal capitalism [2]) is primarily responsible for the rampant degradation of our environment as well as other human rights abuses [3].  The problems with capitalism have been more thoroughly explored by other thinkers like Karl Marx and Noam Chomsky, but this article aims to explore the relationship between capitalism, climate change, and sustainability.  

To start, there are a lot of terms to be defined: be prepared for a lot of -isms and philosophy.  Capitalism is defined as an economic system where the means of production is privately owned and operated for profit; capitalism is characterized by free markets, personal responsibility, competition etc.  The current iteration of capitalism across the world is neoliberalism (with some exceptions), which is the ideological child of liberalism [4].  Now liberalism is primarily attributed to philosophers like John Locke who was heavily influential to the founders of the United States.  Liberalism is a political philosophy that is based on freedom and equality.  Liberalism assumes that capitalism is the only economic system, and freedom under liberalism is the freedom of an individual to spend their money, which is also known as the free market (liberalism also encompasses other freedoms like freedom of speech).  Neoliberalism believes that the free market is the best and most efficient mechanism for distributing goods and wealth to society.  Neoliberalism can be characterized by deregulation, financialization of the economy (like the mortgage derivatives that caused the 2008 financial crash), privatization of public services (like private prisons), anti-union sentiments, anti-welfare sentiments, and lower taxes.  All iterations of capitalism generally claim that competition is the mechanism by which the human race achieves progress, and neoliberalism is no different.  The most important thing to understand about capitalism is that the profit motive underscores every action taken by every company.

Using the lens of the profit motive, it becomes quite clear that capitalism is unsustainable.  There are two ways in which more profit can be generated: by cutting costs or increasing price.  Prices are generally controlled by the free market, so capitalists tend to increase their profit by paying their workers as little as they can get away with. In addition, companies also try to cut their costs by not paying for externalities [5] like the costs of climate change that are the direct result of the company’s carbon emissions. The common critique of profit and capitalism is that every dollar of profit made is money generated by workers that they are not paid for. The relentless drive for profit in capitalism means that every decision made by companies lacks a moral or ethical basis.  The result of the nonstop profit motive of companies in capitalism causes an expectation of constant growth.  This constant growth is one of the hallmarks of capitalism, as well as capitalism’s largest weakness.  The amount of resources on the Earth at any given time is finite, which means capitalism is destined to fail because of its ethos of growth and the limited natural resources available.  

Another aspect of capitalism is that those who gain wealth will leverage that wealth to gain power in order to secure more wealth.  This usually takes the form of some sort of co-optation of democratically elected governments.  For example, corporations are considered people in the United States and therefore they have the right to freedom of speech, which includes spending as much money as they want in elections [6].  Capitalist economic systems follow the same general trend of increasing wealth disparity, which concentrates wealth in the hands of elites who are then able to co-opt the political system in their favor.  For more information on this phenomenon, check out Noam Chomsky’s Requiem for the American Dream.

Capitalism is not only diametrically opposed to humanity's long term goals of survival, but it is also responsible for wide-scale exploitation of people and the exacerbation of other issues. In the United States, slavery was primarily an economic institution, and racism was the rhetoric that enforced it. This means that there needs to be an intersectional solution for racism that includes and economic aspect because the prosperity of the United States was built on the backs of black and brown bodies. The Coronavirus pandemic has made some of the effects of capitalism painfully clear. The workers deemed essential are the ones who are usually paid the least. The United States currently has farmers destroying their crops and grocery stores experiencing shortages at the same time [7].

So, what is the solution for capitalism? Well that's hard to figure out especially when the climate crisis is at a tipping point now. It's possible that fixing or replacing capitalism has to happen after the climate crisis, or it could be a central part to solving it. But when coming up with adaptation and mitigation solutions to climate change, maybe consider addressing what caused the climate crisis in the first place: capitalism.

1 Capitalism

2 Neoliberalism

3 Niger Delta & Oil, Modern Slavery

4 Liberalism

5 Externalities

6 Citizens United

7 Vice article

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