Rational Capitalists: Free the Thinkers!

Print Friendly, PDF & Email

Until recently I firmly believed that bottom-up action could resolve the ecological crisis. It was therefore a shock when I realized that this view had become untenable. It is now clear to me that popular initiatives such as the environmental and progressive movements have failed to prevent the biosphere’s rapid degradation, and that they lack the potential to turn this around. If there is any hope for future generations, it lies with the world’s rational capitalists, particularly those in the richest and most ecologically destructive countries.

Why are capitalists in this unique position? The answer lies with the nature of the ecological crisis and with the political and economic roles that capitalists play in modern societies.

Overshoot-Climate ChangeThe crisis is best characterized as overshoot: the broad-based violation of environmental impact limits caused by humankind’s relentlessly expanding economic activities. Although climate change receives much of the attention, it is only part of the all-enveloping catastrophe unfolding around us. The only rational response is to move rapidly from economic expansion to economic contraction. Consumption within the rich countries must drop sharply by aligning it with human needs and natural constraints. Ecological efficiencies must rapidly increase to the limits of technical feasibility. And in the longer run, population must significantly decline.

On the political front, capitalists are not just an influential force or elite stratum, they are society’s ruling class. They gained political supremacy in the post-feudal period and today exercise comprehensive control over the populations they dominate.[1] As the ruling class they also control the economy and are therefore uniquely positioned to alter its ecological trajectory. The popular movements mentioned above simply don’t have this kind of political power and economic sway. Their members have strong moral commitments and deserve credit for beneficial reforms, but the hard truth is that, because they work outside the circles of power and control, they cannot achieve the fundamental changes that are now required. The conclusion is paradoxical but inescapable: the ruling capitalist class is the only social force that is potentially capable of radically transforming the global economy in the limited time that is ecologically available.

The crucial question is why this powerful group has not responded to the crisis by taking the necessary steps to avert ecological disaster. Ignorance is certainly no excuse. As the ruling class they have access to both detailed information and the brain power to analyze it. They know exactly what’s happening to the biosphere, but still refuse to act. It is also difficult for them to argue that the shift to a sustainable economy runs counter to their long-term interests. Continued ecological degradation will not only cause numerous businesses to go under, it will inevitably result in unmanageable social chaos, deep fissures within the class itself, and ultimately ecological and economic collapse. As well, the group surely understands that many businesses will profit far more from a long-term future in a low-output economy than a short-term future in a high-output economy. Briefly stated, inaction by this class is incomprehensible by any criterion except the short-term bottom line.

rise-of-sea-levelsSo what’s going on? Are capitalists really so avaricious and obtuse that they would kill the golden goose for their immediate gains? For some, the answer is undoubtedly yes. Those who are truly committed to ecocidal expansion will, even if the sea rises to their chins, scream that greed is good, that God loves growth, and that there’s another buck to be made before the waters prevail. It seems to me likely, however, that these extremists will find themselves increasingly isolated. Many capitalists are reasonable people who could well be persuaded to adopt a contractionary form of business if this would preserve the living world. The real question is this: what prevents these rational capitalists from sidelining their irrational colleagues and taking the necessary steps towards a sustainable economy? I believe the answer is three-fold: inherent difficulty, poor intellectual guidance, and lack of theoretical development. I will address each of these in turn.

Inherent Difficulty

Shifting from expansion to contraction is inherently difficult because humankind is a biological species that by its nature seeks to increase its numbers and levels of consumption. As a highly intelligent species we have the ability to counter this tendency, but the tendency indisputably exists: we have an innate propensity to propagate our kind, to increase our comforts, and to decrease our burdens. This is the primary reason why capitalism, with its awesome productive powers, was able to crush feudalism and rise to global dominance over the last 500 years.

A second reason is directly related to the first. The capitalist class is the embodiment of our expansionary instincts. This is the basis of their power, and it permeates the only mode of economic activity they have ever known. The ecological crisis tells us that this fixation has become highly destructive, and under normal historical circumstances a ruling class in this position would be overthrown through revolution. But these are not normal circumstances. Time is extremely short, the threat is existential, and there is no revolutionary force on the horizon. The revolution must therefore be internal: the conscious capitalist rejection of their economic heritage. This, to say the least, is an enormous challenge.

Poor Intellectual Guidance

Compounding these difficulties is the confusion arising from poor intellectual guidance. Many of capitalism’s think-tank and academic supporters are acting like bad generals by fighting the last war against socialism and Marxism. This is a ludicrous project because the battle against these Cold War enemies has been decisively won. The Soviet Union collapsed decades ago, and countries like Cuba and North Korea pose no ideological threat whatsoever. The same is true for the system’s internal opponents, who are completely outmatched by today’s sophisticated methods of surveillance and social control.

Further evidence that these supporters are living in the past is that they equate business with capitalism. During the Soviet era this was a plausible stance. Capitalism represented private production while socialism represented state production. But with the Cold War behind us and the socialist threat gone, it should be obvious that the two are conceptually distinct. Business refers broadly to commercial activities. Capitalism refers to expansionary commercial activities with the business class in power and the workers stripped of productive assets. Humankind has engaged in business for at least 5,000 years, whereas capitalism has been around for only the last 500 years. Moving beyond capitalism thus poses no threat to continued business activities.

Lack of Theoretical Development

Brain ThinkingThe third impediment facing rational capitalists is also the most significant: the lack of theoretical support for the transition to a contractionary economy. To understand the seriousness of this deficiency, imagine that the previous obstacles have all been overcome. That is, humankind’s expansionary tendencies have been subdued, the Cold War confusion has been dispelled, and the mad devotees of perpetual growth have been swept aside. What course of action would our enlightened capitalists now take? The tragic reality is that there is no coherent body of economic and political thought to which they could turn for guidance. If they were to leave the safe haven of capitalist doctrine, they would be sailing blind into the historical void.

To fully appreciate this situation, compare the advent of capitalism with that of socialism. Although the process was marked by blood and fire, capitalism emerged organically from the medieval world. The early manufacturers pushed pragmatically for legal reforms and social adjustments in order to realize their economic vision. Theory was eventually required, but more to formalize what was happening than to drive the transition itself. Recall that Adam Smith’s Wealth of Nations didn’t appear until 1776, more than two centuries after the system made its initial appearance. And standard economics, remarkably, didn’t find a consistent definition for cost until the 20th century, when “opportunity cost” was introduced.

Socialism was an entirely different story. This was not an organic historical development, but rather an irruption from the body of capitalism. Without Marxist theory at his disposal, Lenin would have been helpless in his efforts to unseat the Czar and move Russia towards a socialist society. Despite his extraordinary abilities, he would have been hopelessly adrift in a bewildering sea of social, economic, and political forces.

The shift from capitalism to a contractionary economy is even more dependent on pre-existing theory than socialism. As many commentators have pointed out, the two systems are based on the same expansionary conception. All socialism really does is transfer the growth machine from capitalists to workers. A contractionary economy, in sharp contrast, repudiates the growth machine itself. This is an unprecedented human enterprise, and without sound theory to light the way even the most intelligent participants would be doomed to failure.

At this point a brief summary may be helpful. I am saying that those engaged in popular movements, despite their genuine concerns and admirable intentions, are not in a position to rapidly direct the economy onto a sustainable path. Even for rational capitalists, however, this is an inherently difficult task, and the difficulty is compounded by deep confusions arising from a persistent Cold War mentality. Further, the system’s intellectuals have not developed the theoretical underpinning for the shift to a sustainable economy. ¬†Because of its central importance, this last point deserves elaboration.

As any forthright member of a university faculty will tell you, intellectuals tend to be strongly committed to the status quo. The reason for this is clear. Independent thinkers are potentially subversive because their ideas could contradict the conceptual basis of the prevailing order. To forestall this danger, alert rulers will remove potential offenders from positions of influence and ensure that the others remain within the boundary of acceptable ideas. This is what happened in the capitalist world after the turbulent 1960s and 1970s. During the conservative backlash that followed, non-conforming thought was largely expunged from university life. Offending individuals were fired, denied tenure, marginalized, or simply not hired in the first place. Research was either commercialized or tightly controlled through restrictive funding. Academics were subtly but firmly told that they could throw a few bricks onto the piles of existing knowledge, but that starting a new pile could have dire consequences. In brief, academics were transformed from moderately adventurous explorers into subservient contributors to the capitalist growth and globalization project.

Ecological Economics 2nd Ed. Book CoverFrom the environmental perspective this suppression of free thought came at the worst possible time. For example, just when a contractionary economic theory was desperately needed to counter the growth-obsessed standard discipline, what appeared was ecological economics. To understand how little this achieved, consider that the two most crucial concepts in economics are value and cost. Standard economics defines these in a way that maximizes the potential for rapid expansion: value is subjective and cost is the aforementioned opportunity cost. When ecological economics unveiled its own versions, they turned out to be … subjective value and opportunity cost. At the theoretical core, therefore, absolutely nothing had changed. In addition, the field insists that capitalism, which was born to grow, can somehow become the vehicle for economic contraction.

It would be easy to blame ecological economists themselves for their failure to break free from entrenched ideas, but this would miss the point. The field’s early adherents may well have been eager to replace the pernicious standard concepts. A key figure in fact stated early in his career that value should not be subjective because this would be dangerously expansionary.[2] The real lesson is that alternative concepts were unacceptable to the ruling class because this would undermine capitalism’s economic logic. Ecological economists were therefore compelled to embrace the standard definitions, and to pledge allegiance to the system, as the price of their admission to the hallowed halls. The primary reason for the conventional slant of ecological economics is not individual shortcomings, but pervasive social control.

This lesson applies to all the social disciplines, which explains why there has been no meaningful theoretical progress to guide a contractionary shift. I therefore conclude that rational capitalists must begin by loosening the chains of intellectual control. Free the thinkers!¬† Reform university governance, overhaul funding policies, and stimulate non-conforming thought within and without academe. Encourage talented economic thinkers, especially the young, to develop a real economics for sustainability and to formulate the associated laws, institutions, policies, and regulations. Political thinkers can also make critical contributions by exploring methods to peacefully sideline the committed expansionists and to moderate the populace’s consumption appetites.

Rational capitalists, the biosphere is in your hands, but the task is momentous and you will need all the help you can get. Supportive thinkers will unquestionably be your most indispensable asset. If you want to salvage the biosphere, you must begin by liberating intellectuals from today’s suffocating constraints.

Frank Rotering
September, 2015


[1] For details on my political perspective, see this Political Primer.

[2] Herman Daly: “Since subjective individual wants are considered infinite as well as sovereign, there is a tendency for the scale of activity devoted to satisfying them continually to expand.” Later on the same page Daly indicates that the source of value should not be subjective individual wants, but “… the objective needs of human beings … considered as biological entities…” Herman Daly, Steady-State Economics (Washington: Island Press, 1991), 213. The objective value hinted at by Daly (and already championed by John Ruskin in the 19th century) is the foundation of my conceptual framework, the Economics of Needs and Limits (ENL).

Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *