Is Capitalism Sustainable?

communications to Ecol-Econ List

August/September 1997


Hello All:

I have followed with great interest the discussion on "Is Capitalism Sustainable?

As far as human species is alive, it is allowable to play any kind of game. Capitalism, as Herman Daly pointed out, is a so called economic system characterized by the dictatorship of Capital over the other two classic economic players: Labor and Resources.

Capitalism has learned to maintain Labor surviving, under control, since otherwise its game would end, as in the infant Monopoly party.

The long lasting Capitalistic game has conditioned the economy to a frenetic consumption type of society; the more and faster everybody consumes, the faster turns the economic wheel, and the revenues increase to the Capital owners. The ones who concentrate the largest amount of money or other economic income are the ones qualified to growth by reinvesting in additional business. In this game there is no consideration for other values: life, ecosystem, human dignity, love, solidarity, and so on, have no defined economic value, and as consequence are not the main concern of the capitalist practice.

The Soviet so called "communism" was not other than a state owned Capitalism; the recent historic events proved that this capitalism collapsed despite the support of the largest arms arsenal and the huge red army. People simply started to quit the game in a chain reaction that left the ruling party without any support.

The same fate is inevitable for the more subtle western type Capitalism, based on the private ownership of capital. The 200 or 500 individuals, owners of the income corresponding to 52% of the total world GNP, and probably a similar fraction of the modern industrial, commercial and financial institutions, are inevitably condemned to keep concentrating wealth and accelerating their economic rithm, in a desperate effort to preserve their relative share in a global competition world.

In this game, to slow down is equivalent to loose, to be devorated by the competitors: it's a non stop, non return, non shut down, not even self questioning situation. Less space is available to care for the rest. It is like in the Faustian business after selling your spirit to a cannibal power.

The only events that may end such a stupid race are: 1. An overall system collapse caused by the inevitable ecologic catastrophe, or, 2. A deliberate and intelligent change of the perception of real values by a majority of human population, followed by a radical political, sociological, economic, technologic, philosophic, psychologic "renaissance" capable to redirect human capacity, intelligence, behaviour, and action, to a sustainable way of cohabitation in this planet.

There is no much time nor space to choose between these possible overall scenarios.

To conclude, I wish to invite you to visit my web page "Combustion in the RainForest: Ecology, Energy and Economy for a Sustainable Environment" at http://www.geocities.com/~combusem. If some of you are willing to provide suggestions, comments or criticism to my points of view, as to correct or improve this presentation, please do it, for the common good.

Sincerely yours,

Luis Klemas


Congratulation to Al Andersen proposal:

You have pointed out what the real problem of the actual "capitalism" is: it is an unfair-unjust-inequitable system, and for this reason it is damned to self extinction. The real problem is not that of private initiative and private ownership of capital; the real problem is that a limitless concentration of capital is allowed by the law and political system in rule. The result is the dramatic and unfair maldistribution of income, of wealth, and the resulting undue political power influence.

At global international level, 10% of the world rich population concentrate 60% of the world GNP, and the 500 global corporations manage an income corresponding to 52% of the total world GNP. At national levels maldistribution of income and wealth between citizens follow similar patterns, measured by the economists Gini Index. The maldistribution of wealth is increasing constantly as a result of the established economic rules and political support system.

In such circumstances, when the pressure of the environmental degradation and depletion of non renewable resources starts to stop the "economic growth" possibilities, you may bet that nobody will rise a hand to defend a system that expoiled human and natural resources with a cold blooded logic justifying ever increasing economic profits and concentration of wealth and power. Money for more money until the final crash! All for nothing good in the long run. To resume, a stupid trade.

There is nothing wrong , however, with the natural fact that some humans have a greater appetite for money, for wealth, or for power, than others, and that they should be rewarded in the same currency that they love and so value so much.

The problem resides in the fact that those who concentrate more the economic wealth are not necessarily rich in other aspects of the human condition. Some may be just rich and powerful bandits or descendants of bandits. But they share an undue and unacceptable share of power in the decision making processes that is the concern of all human society.

The point is to revise the allowable limits for wealth concentration and for influence in the overall political and economical rules, simply if we are to preserve a real democracy. The capitalism of these days preaches the concepts of "free market" and "globalization" as sinonimous to "democracy". However in the actual and the projected maldistribution conditions, the capitalist system is cannibalizing the democracy, the same as cancerous cells producing huge tumors destroy their host organism.

A radical shift in values and of political economy regulations are required to save "democracy" and "free enterprise". These concepts, well managed and understood, are real values of our civilization, worth to be preserved and optimized. Left to themselves the capitalist behaviour of today is destroying those values, and so doing is caving its own tomb.

But who will do the necessary changes? current people like us have not enough economic and political power. Even proffesional economists often get confused discussing technical minuceries, and remain divided trapped in their own cognitive system limitations.

Al Andersen appeal for the "Right Sharing of the World Resources" is certainly a reasonable and urgent proposal. Such a point should become a matter for a "referendum" in any really democratic society. But are our societies real democracies? Are most citizens "free individuals"?

I invite you to visit "Combustion in the RainForest: Ecology, Energy, and Economy for a Sustainable Environment" at
http://www.geocities.com/~combusem

With best wishes,

Luis Klemas


No doubt that "sustainable" and "just" are two different words apparently unrelated:

-- However, if we accept that an "unsustainable" behaviour of mankind, is one that threatens destruction, either by depletion or by contamination, of the planet ecosystem resources and biosphere - regardless if it is caused by ignorance, by error of calculation, by accepted political or economic ideologies, by a mistaken technology, by selfishness and egoism, by hubris, by megalomania, by social addiction for material consumption, by economic addiction for money, or by any other form of human stupidity manifestation- ,

-- and on the other hand, "unjust" is a human behaviour characterized by all types of intra-species insolidarity and aggression, that threatens the survival of sectors of human society, such as: war, oppression, apriori discrimination, slavery, exploitation, speculation, manipulation, indoctrination, wealth concentration, deliberate limitation of access to common knowledge, to fundamental rights, to fair income, to adequate nutrition, health and shelter, etc.,

-- then we may understand that those humans capable to disregard the "just" survival needs of other humans are even less qualified to care for an "externality" such as the ecosystem, unless that it all becomes of their private property.

If we are concerned with the problem of "sustainability" it is because we have a profound desire that our descendants may find a decent planet to continue the journey of human civilized life. Otherwise who cares? In my case, not being a professional economist or politician, I dont care much for "capitalism" or any other "...ism" per se, for its economic beauties or pseudo-efficiencies. However this "word" represents somehow a social-economic-political-financial system of beliefs, of rules, of laws, of behaviours, and of accumulated particular privileges, that undoubtly rules our world, and it does it in a socially unjust and ecologically dangerously unsustainable way.

No question that mankind has known and survived worse systems in the past, but that is a poor consolation for our present predicament, as never before the overall damaging capacity potential of human society had reached nothing comparable. Remember the simple environmental impact correlation proposed by Commoner: I = P x A x T. All three factors (Population, Affluence and Technology) are higher today than last year, much higher than 50 years ago, and several orders of magnitude higher than at the beginnings of the "Industrial Revolution". And this keeps growing and growing to justify the survival of our excellent economic system.

Please consult further Herman Daly in his "Steady State Economics: A Catechism of Growth Fallacies" for a lucid and brilliant explanation of the meaning of economy and its implications (for those who dont have access to the publication, see
http://www.geocities.com/~combusem/DALY.HTM

If you are only pure "economists", then most of the terms above mentioned -as well my previous 2 communications - fall at the side as extraneous perturbations to your debate, and then, I have talked already too much and must apologize for intruding your private meeting, and consequently I must quit.

But if, as the list heading proclaims its interest in ecological-economics, then remember that in Ecology, "everything is connected to everything else" (again Commoner)

So long,

Luis Klemas

PS. The other day I was walking with Amadeus, my Boxer dog, who is usually kind and gentle with most humans. All of a sudden he run away and started barking and menacing a worker who was installing a glass in a window. Although I had seen previously Amadeus being unkind towards several sorts of workers, this time I realized that he has an innate aversion to laborers and at the same time he is a defensor of the abstract concept of private property, as the window in case had nothing to do with our home. Now it is clear to me which are the human inborn neuro-psychologic motivations that support those capitalism values.