Organized around exchange-value, not use-value, the capitalist system is over-productive and steadily worsening a multi-faceted ecological crisis. Is a post-growth, post-capitalist world conceivable?
| This post is part of a reading series on Less is More by Jason Hickel. To quickly access all chapters, please click here. Disclaimer: This chapter summary is personal work and an invitation to read the book itself for a detailed view of all the author’s ideas. |
The emergency brake
Step 1. End planned obsolescence
“We like to think of capitalism as a system that’s built on rational efficiency, but in reality it is exactly the opposite. [planned obsolescence] is like shovelling ecosystems and human lives into a bottomless pit of demand.” For instance, every year, “150 million discarded computers are shipped to countries like Nigeria, where they end up in sprawling open-air dumps that leak mercury, arsenic and other toxic substances into the land.”
Blaming consumers for buying too many things misses the point; people fall victim to the production logic of capitalism. The issue is the logic itself. If washing machines or smartphones lasted four times longer than they currently do, we would consume 75% fewer of them. Not only would it be a huge reduction in material throughput, but people wouldn’t have to deal with the frustration and expense of constantly replacing some piece of equipment. How to achieve this? For starters, a mandatory extended product warranty and a “right to repair” with affordable replacement parts could be introduced. A leasing model could also be used, requiring manufacturers to assume full responsibility for all repairs and regular upgrades.
Step 2. Cut advertising
“A survey conducted in the 1990s revealed that 90% of American CEOs believed it would be impossible to sell a new product without an advertising campaign; 85% admitted that advertising ‘often’ persuaded people to buy things they did not need; and 51% said that advertising persuaded people to buy things they didn’t actually want.”1 Since then, browser cookies and social media profiles used on the internet by big data companies have allowed firms to present us with ads tailored to manipulate consuming anxieties and even to match our likely emotional state at any given time.
In the brave new world of advertising, people are constantly interrupted in what would otherwise be their personal thinking, imagination, and creative processes. The little space left in many minds for art, poetry, or messages that are meaningful and build community may explain why the feeling of loneliness is so prevalent today in our societies.2
Step 3. Shift from ownership to usership
We own a lot of products that we need only for a fraction of the day, the week, the month, or the year. A lawnmower, for instance, will be used once or twice a month during some part of the year and remain idle for the rest of the time. Manufacturers want everyone to own a garage full of things that can easily be shared.
A more rational approach would be to have neighborhood workshops storing equipment to be used on an as-needed basis. Such projects could be scaled up by city governments and enabled by apps for easy access. At any rate, shifting from ownership to “usership” could greatly impact material throughput while saving people time and money in the process. The use of cars is also emblematic of that easy shift with, notably, public transportation and bicycles, but also car sharing or lending—without the rentier intermediation that has made platforms like Uber so problematic.
Step 4. End food waste
One way or another, up to 50% of all the food produced worldwide is wasted yearly.3 Ending that waste could proportionally cut the scale of the agricultural industry and its greenhouse gas emissions while regenerating up to 2.4 billion hectares of land for wildlife habitat and carbon sequestration.4
Step 5. Scale down ecologically destructive industries
The fossil fuel industry is the most obvious example, but there are others. The beef industry, for instance, occupies nearly 60% of all agricultural land—directly for cattle pasture or indirectly for growing feed.5 “It’s one of the most resource-inefficient foods on the planet, in terms of the land and energy it requires per calorie or nutrient.” The simple shift from beef to non-ruminant meats or plant proteins like beans or pulses would allow returning vast swathes of the planet to forest and wildlife habitat, creating new carbon sinks and cutting up to 8 gigatons of carbon dioxide emissions per year, according to the IPCC. That’s around 20% of current annual emissions.6
While people get involved in steps 1 to 5 as consumers, governments need to cap resource and energy use at existing levels and ratchet them down each year until we get back into planetary boundaries. We already do this against capital’s exploitation of people with all kinds of social laws, so why not replicate it toward capital’s exploitation of nature? “The key,” says Jason Hickel, “is that this has to be done in a just and equitable way, to ensure that everyone has access to the resources and livelihoods they need to flourish, and so small businesses don’t get squeezed out by bigger players.”
Not only would the ecological benefit be the reduced flows of material goods but also the reduction of stocks that support them:7 “If we consume half as many products, we also need half as many factories and machines to produce them, half as many aeroplanes and trucks and ships to transport them, half as many warehouses and retail outlets to distribute them, half as many garbage trucks and waste disposal plants to process them when they’re binned, and half as much energy to produce and maintain and operate all of that infrastructure. The efficiencies begin to multiply.”
But what about jobs?
Undoubtedly, following the abovementioned policies will affect jobs for the concerned supply chains. These policies can only be implemented by shortening the working week, thus distributing the necessary labor and subsequent income more evenly among the population. What does this mean in practice?
First, it is worth noting that under capitalism, productivity gains have marginally been used to liberate humans from work. Squarely betraying the very Enlightenment values its ideology claims to advance, capitalism uses these gains to fuel constant growth for higher profits; like mere pawns, employees are systematically required to work as much as ever.
On the other hand, transitioning toward a more rational, just, and efficient economic system would require easy access to retraining programs. A public job guarantee could facilitate this process so that anyone who needs to work can do useful things that communities require and be paid a living wage.
That may seem drastic. From a practical standpoint, however, multiple studies confirm that reducing working hours positively impacts people’s well-being, even when the reduced working time is controlled against income.8 People can spend more time caring for their children or sick relatives or doing community work—all things valuable and highly meaningful, but which under capitalism are externalized or unpaid because they are unrepresented in GDP figures. Data also show that shortening the working week is one of the most immediately impactful climate policies available.9 “Overall,” says a group of scientists, “the existing research suggests that working time reduction potentially offers a triple dividend to society: reduced unemployment, increased quality of life, and reduced environmental pressures.”10
Reduce inequality
How can we finance the transition to a shorter working week? There is, in reality, plenty of room for that. In the U.K., labor’s share of national income has declined from 75% in the 1970s to 65% today. In the U.S., it’s down to 60%. CEOs in this country earn, on average and counting only for salary, 300 times more than their employees.11 In the sixties, it was about 20 times more.
One approach to stop income growing almost exclusively for top executives could be introducing a cap on wage ratios. At ten or even twenty to one, chances are that CEOs would immediately seek to raise wages as high as they can reasonably go.12 Such a cap could apply nationally by deciding, for instance, that income above a given ratio with the national minimum wage would face a 100% tax. More than a matter of Robin Hood re-distributing, as it is often portrayed, this is plain and common-sense pre-distributing to those who effectively do the work rather than to the lords of our time, who use their privileged position to siphon benefits to their advantage.
However, income is just one side of the issue; wealth is the other. In the United States, the richest 1% have nearly 40% of the nation’s wealth, while the bottom 50% have almost none—0.4%. On a global level, it is even worse: the richest 1% possess nearly 50% of the world’s wealth. Trapped in a system geared toward constant profit-making, most other people must scramble to keep up with ever-rising prices.
It is also important to note that the wealth owned by the richest 1%, or even 10%, is not earned; it is extracted from underpaid workers, cheap nature, political capture, and so on. Since profit-making is the sole engine of our current economic system, perpetual growth is its underlying implication. The few who benefit from the rent-seeking situation they create with their wealth have very little interest in seeing the machine stop.
Decommodify public goods and expand the commons
People will always need money. Yet, contrary to the capitalist imperative of forcing to earn ever-higher incomes to fulfill basic needs, it is not income itself that matters but its purchasing power. Decommodifying essential goods and services while expanding commons such as libraries, parks, and sports grounds can greatly improve people’s purchasing power. “Researchers at the University of London have demonstrated that a full range of what they call Universal Basic Services could be publicly funded (with progressive taxation on wealth, land, carbon, etc.) at costs much lower than we presently spend, while guaranteeing everyone access to a decent, dignified life.”13
As Jason Hickel explained in the book’s first chapter, capitalism, on the contrary, runs on the logic of scarcity. “How odd that the history of capitalism – a system that generated such extraordinary material productivity – is marked by the constant creation of scarcity, scarred by devastating famines and a centuries-long process of immiseration. This apparent contradiction was first noticed in 1804 by James Maitland, the 8th Earl of Lauderdale.14 Maitland pointed out that there is an inverse relation between what he called ‘private riches’ and ‘public wealth’, or commons, such that an increase in the former can only ever come at the expense of the latter. ‘Public wealth,’ Maitland wrote, ‘may be accurately defined to consist of all that man desires, as useful or delightful to him.’ In other words, it has to do with goods that have an intrinsic use value even when they are abundant, including air, water and food. Private riches, on the other hand, consist ‘of all that man desires as useful or delightful to him; which exists in a degree of scarcity.’ The scarcer something is, the more money you can extort from people who need it. For instance, if you enclose an abundant resource like water and establish a monopoly over it, you can charge people to access it and therefore increase your private riches. This would also increase what Maitland called the ‘sum-total of individual riches’ – what today we might call GDP. But this can be accomplished only by curtailing people’s access to what was once abundant and free. Private riches go up, but public wealth goes down.”
A theory of radical abundance
Artificial scarcity serves as the engine of capital accumulation. As productivity rises, workers get laid off, and governments scramble to find ways to grow the economy to create new jobs. Workers themselves join in the chorus calling for growth, electing politicians who promise to achieve it. Little do we realize that productivity gains could instead be delivered back to workers in the form of higher wages and shorter hours and that the constant threat of unemployment is due to an artificial scarcity of jobs.
Since this system is geared toward profit-making rather than answering people’s needs, the same goes for income. Money is steadily siphoned into the pockets of people who already have money, leaving the majority barely able to pay their bills. The logic of capitalism is that winners—the few—necessarily profit from the work of others—the rest of us. It is a zero-sum game played at the expense of the many.
Austerity policies are symptomatic of that capitalist logic. Though this may sound counterintuitive, in a growth-oriented system, “the objective is not to satisfy human needs, but to avoid satisfying human needs.” If people are satisfied, there is no need for growth; for that reason, perpetual growth requires perpetual scarcity. It follows that welfare costs are deemed an impediment to the economic engine, implicitly inviting people to work harder and be more productive to access what, in a sane world, should be regarded as rightful and well-deserved social benefits. In absolute terms, capitalist societies are replete with material abundance. In relative but very practical ones, the Jones need ever more money to make ends meet, send their kids to college, and avoid bankruptcy if someone in the family gets badly sick.
Degrowth, by opposition, is a theory of radical abundance. “Liberated from the pressures of artificial scarcity, and with basic needs met, the compulsion for people to compete for ever-increasing productivity would wither away. The economy would produce less as a result, yes—but it would also need less. It would be smaller and yet nonetheless much more abundant.” Abundance is, in that sense, the antidote to growth. Use-value and, subsequently, public wealth must go up while exchange-value—profit for the sake of profit—must go down. Degrowth calls for abundance, and it calls for it to render growth unnecessary.
The Law of Jubilee
Another growth imperative to neutralize is debt. When you take a loan, you have no choice but to earn back more than what you originally borrowed to reimburse the capital of your loan and its compounding interest. If you don’t, debt keeps piling up and eventually triggers a financial crisis. This is why countries loaded with external debts are summoned by their creditors to deregulate their extractive industries, forcing them to plunder their ecosystems to meet debt obligations.
In an era of ecological breakdown, some debt cancellation is part of a more sustainable economy. All the more when debts owed by global South countries are, to a significant extent, holdovers from the 1980s, when the US Federal Reserve raised interest rates so high as to put whole countries into permanent bondage to Wall Street. Canceling these debts, says Jason Hickel, “is an important first step towards the reparations that rich countries owe for the climate debts they hold with respect to the rest of the world.” Debt for debt, so to speak—except that one stems from artificial financial decisions that can always be re-arranged, whereas the other can’t.
Big creditors would undoubtedly lose out but for the sake of a fairer and more ecological society. Debt cancellation can be phased, and the public banking system can be used as a backup so that confidence in the overall lending system remains if overexposed banks go under.
New money for a new economy
How indispensable it might be, debt cancellation is a one-off fix; it does not tackle the root issue of the economic growth pattern. Our money system itself is debt. Banks are only required to hold reserves worth about 10% of the money they lend out, or even less. They literally loan money into existence. In such a system, almost every dollar that passes through our hands represents somebody’s debt, and this debt has to be paid back with interest—with more work, more extraction, and more production. Therefore, “banks effectively sell a product (money) that they produce out of nothing, for free, and then require people to go out into the real world and extract and produce real value to pay for it.” In his 1922 book My Life and Work, Henry Ford said that ordinary people “are so unalterably on the side of sound money that it is a serious question how they would regard the system under which they live, if they once knew what the initiate [financiers] can do with it.”
Since there is always more debt than money at any given moment, people are caught in a productivity whirl to keep their living standards. This system is predicated on perpetual economic growth: without investment opportunities for which more money will be created (and even more given back), money creation will lag behind debt. Then, as the author and thinker Charles Eisenstein explains, “comes a vicious circle of defaults, falling demand, production cutbacks, unemployment, and so on in a classic crisis of capital.”15
Therefore, a financial system based on compound interest is incompatible with a flourishing society and sustaining life on our delicately balanced planet. What can we do about it? Solutions are multifaceted, and their implementation involves a great deal of complexity, but the rules of money—i.e., the set of social agreements on how to count, store, and exchange value—can absolutely be modified.
Some argue that adopting a simple interest system instead of a compound one, where interest is paid on interest, would be enough.16 Others think the debt-based currency system must be abolished altogether. As the author explains, “Instead of letting commercial banks create credit money, we could have the state create it – free of debt – and then spend it into the economy instead of lending it into the economy. The responsibility for money creation could be placed with an independent agency that is democratic, accountable and transparent, with a mandate to balance human well-being with ecological stability. Banks would still be able to lend money, of course, but they would have to back it with 100% reserves, dollar for dollar.”17
Charles Eisenstein mentions the possibility of negative interest rates. He says, “The theoretical basis for a negative-interest-based system was laid down in the early 20th century by German economist Silvio Gesell, elaborated on by American economist Irving Fisher in the 1930s, and even endorsed by John Maynard Keynes in his masterpiece The General Theory of Employment, Interest, and Money, where he called it ‘theoretically sound.’”18 To understand the mechanism, let’s say you have 100 loaves of bread. Since you do not have the leverage to charge interest on something that will go bad soon if not eaten, you would give everyone you can a loaf, telling them, “When you have an extra loaf of fresh bread and I need one, pay me back.” Negative interest subjects money to the universal law of decay that defines ecology. It does not stop the economy but makes it flow a different way.
The power of democracy
A Harvard and Yale University study in 2014 found that when groups are asked to make decisions collectively rather than individually, the democratic decision process ensures that everyone eventually adheres to the idea that acting sustainably is the right way.19 Besides, most people realize that the current indefinite growth trajectory is not sustainable. Though conventional economic wisdom is that putting caps on resource use and waste is impossible, it turns out that this is precisely the kind of policy that people want.
Opening up to others and the primacy of the common good is the basis of what ecological economists call a “steady-state” economy: 1/ Never extract more than ecosystems can generate; 2/ Never waste or pollute more than ecosystems can safely absorb. Unfortunately, due to a lack of political will, what would seem common sense in a rational world is impossible in the present regional and global power administration.
Corporate elites have managed to capture our democratic systems. It is very much in-your-face in the United States but as real everywhere else under the auspices of the “growth” imperium. Mainstream media also have a stake in that status quo. Highly concentrated and privately owned in many countries, their economic interest is to increase the flow of advertising money from corporations, not to offer a platform for in-depth debates about a steady-state economy. Internationally, the IMF, the World Bank, and the World Trade Organization are led by the wealthiest countries, who have little interest in bending the rules in favor of the poorest ones, even though the latter form the majority of the world’s population. The fable is that the wealth of the few will necessarily trickle down. It never does, and for a good reason: if poor countries had genuine economic independence, they would cease to be the cheap providers of resources the global North desperately needs.
Democracy is, therefore, key to a sustainable economy. Though democracy and capitalism have long been sold as part of the same package, democracy tends to be anti-capitalist, and capitalism tends to be anti-democratic. Their respective logic works not only at two different levels but also in two different directions.
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Footnotes
- Andre Gorz, Capitalism, Socialism, Ecology, trans. Chris Turner (London: Verso, 1994).
- Nicole Torres, ‘Advertising makes us unhappy,’ Harvard Business Review, 2020.
- Global Food: Waste Not, Want Not, Institute of Mechanical Engineers, 2013.
- ‘Food is responsible for one-quarter of the world’s greenhouse gas emissions,’ Our World in Data, 2019; ‘Land use,’ Our World in Data, 2019.
- ‘Grade A Choice?’ Union of Concerned Scientists, 2012.
- Joseph Poore and Thomas Nemecek, ‘Reducing food’s environmental impacts through producers and consumers,’ Science 360(6392), 2018, pp. 987–992.
- Fridolin Krausmann et al., ‘Global socioeconomic material stocks rise 23-fold over the 20th century and require half of annual resource use,’ Proceedings of the National Academy of Sciences 114(8), 2017, pp. 1880–1885.
- Anders Hayden, ‘France’s 35-hour week: Attack on business? Win-win reform? Or betrayal of disadvantaged workers?’ Politics & Society 34(4), 2006, pp. 503–542; ‘Reduced working hours and stress in the Swedish social services: A longitudinal study,’ International Social Work 60(4), 2017, pp. 897–913; Boris Baltes, et al., ‘Flexible and compressed workweek schedules: A meta-analysis of their effects on work-related criteria,’ Journal of Applied Psychology 84(4), 1999; Anna Coote et al., ‘21 hours: why a shorter working week can help us all flourish in the 21st century,’ New Economics Foundation, 2009.
- David Rosnick and Mark Weisbrot, ‘Are shorter work hours good for the environment? A comparison of US and European energy consumption,’ International Journal of Health Services 37(3), 2007, pp. 405–417.
- Jared B. Fitzgerald, Juliet B. Schor and Andrew K. Jorgenson, ‘Working hours and carbon dioxide emissions in the United States, 2007–2013,’ Social Forces 96(4), 2018, pp. 1851–1874.
- Lawrence Mishel and Jessica Schieder, ‘CEO compensation surged in 2017,’ Economic Policy Institute, 2018.
- Sam Pizzigati, The Case for a Maximum Wage (Polity, 2018).
- ‘Social prosperity for the future: A proposal for Universal Basic Services,’ UCL Institute for Global Prosperity, 2017.
- Maitland explored this paradox in a book titled Inquiry into the Nature and Origin of Public Wealth and into the Means and Causes of its Increase. For more, see John Bellamy Foster, Brett Clark and Richard York, The Ecological Rift: Capitalism’s War on the Earth (NYU Press, 2011).
- How a game of musical chairs can help explain our broken economy, by Charles Eisenstein, Yahoo, August 2019.
- Simple Interest vs. Compound Interest: The Main Differences, Investopedia; Louison Cahen-Fourot and Marc Lavoie, ‘Ecological Monetary Economics: A post-Keynesian critique,’ Ecological Economics 126, 2016, pp. 163-168.
- Mary Mellor, The Future of Money. Pluto Press, 2010. See as well, Escaping Growth Dependency (Positive Money 2020); Stephane Kelton, The Deficit Myth: Modern Monetary Theory and How to Build a Better Economy (Hachette UK, 2020); Jason Hickel, ‘Degrowth and MMT: a thought experiment,’ 2020
- How a game of musical chairs can help explain our broken economy, by Charles Eisenstein, Yahoo, August 2019.
- Oliver Hauser et al., ‘Co-operating with the future,’ Nature 511(7508), 2014, ppl 220-223.