Capitalism vs. Planet Earth – an Irreconcilable Conflict?

By Fawzi Ibrahim

It is puzzling that, so far, there has not been any consideration as to whether it is just a coincidence that the environment is heading towards a tipping point at the same time as capitalism faces a crisis of equally serious dimensions, or whether the two crises are related in some way. Capitalism versus Planet Earth gives serious consideration to these questions and asks if planet Earth is safe with capitalism.

Back in 2000, scientists Paul Crutzen and Eugene Stoermer challenged the world to face up to the transformation of the planet by human activity, arguing that we now live in a new geological epoch. They traced the start of the new epoch to the Industrial Revolution and called it the Anthropocene, or new era of man, in which our activity has determined the geological future of our planet.

However, it is not ‘human activity’ per se that is responsible for the these ecological changes; after all, human activity before the Industrial Revolution did not have anything like the impact it had once the market economy was in full swing.  Neither is it the much-talked about ‘population explosion.’ As Erle Ellis of the University of Maryland so succinctly put it: ‘Even with a population of seven billion, Homo sapiens is not an entirely novel force. But human systems are’. It is ‘human systems’ that change the environment, and the overriding human system of the Anthropocene is the market economy.

Apart from the damaging effect on the environment, capitalism is characterised by another unique phenomenon – the creation of vast amounts of wealth through exceptional economic growth.  In the 200 years between 1800 and 2000, the economies of the western world grew 50-fold and energy consumption 40-fold.  Not surprisingly, CO₂ concentration, the principal cause of global warming, grew by a staggering 37 percent over the same period and it continues to rise unabated.

On the face of it, the answer presenting itself to policy makers is obvious. If economic growth is the culprit then the solution is no-growth, or at least low growth.  This is easier said than done – and not because of unwillingness on the part of world leaders or because increased GDP is a sacred policy objective of all governments. Growth is something the market economy cannot do without. Capitalist investment is directed towards making a profit, and once profit is made it is re-invested, in whole or in part, in an ever expanding spiral. But if there is no growth, there can be no additional capital investment and corporations and anyone in receipt of returns on their investment have no means of deploying their profits leading to an economic slump.

The post-2007 financial/economic crisis is not the 1930s all over again, but far worse: ‘In highly developed economies such as those of the U.S. and the UK, in which the baseline capital investment is measured in trillions, even a modest drop in the rate of profit would necessitate additional investment in billions if profits were to be maintained. In general, as capitalism develops and capital accumulates, the baseline investment increases and with it the level of additional investment necessary to counteract a fall in the rate of profit. Eventually a tipping point will be reached at which the necessary increase in investment to counterbalance a drop in the rate of profit will be prohibitively high – greater than the market can provide.’ Welcome to the Credit Crunch.

I challenge the concept of ‘natural capitalism’ favoured by Jonathan Porritt and others. By designating natural resources as capital, they become commodities and, like other commodities, are open to trading for profit: ‘The effect of categorising natural resources as capital is far more subtle than merely getting business to take account of the damage it does to the environment ….. By giving free natural resources value – they become commodities. Solar energy, forests, air, water, green spaces, living organisms, the ecological system itself turn into commodities. And, like any other commodity, they can be bought and sold, traded on the commodity market and speculated upon. It opens the way for corporations to own rivers, open spaces and even the air we breathe. … Nature is thus transformed into private property, an exercise that has echoes of the land enclosures of the 16th century which launched the Industrial Revolution. Yet today it reflects not the vibrancy and energy of a new economic dawn, but the sluggishness of a decaying ageing organism.’

A stark choice faces humanity: save the planet and ditch capitalism or save capitalism and ditch the planet.

Fawzi Ibrahim is the author of Capitalism versus Planet Earth – an irreconcilable conflict, published by Muswell Press, 2012. The book is available here.