Pathways to a Post-Capitalist World

Organized around exchange-value, not use-value, the capitalist system is actively and intentionally wasteful, steadily worsening a multi-faceted ecological crisis. Is a post-growth, post-capitalist world conceivable?

This post belongs to a reading series of Less is More by Jason Hickel. For quick access to 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 thought, imagination, and creative processes. The little space left in many minds for art, poetry, or messages that build community may explain why the feeling of loneliness is so prevalent today in our societies.2

Step 3. Shift from ownership to usership

Pathways to a Post-Capitalist World: picture of the arm of a man emerging from a pile of home appliances under which he is drowning.

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 have a big impact on 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 each year.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 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.”

Pathways to a Post-Capitalist World. Picture titled "A brief history of consumption." On the left, a shopping cart filled with consumer goods; on the right, a trash can filled with the exact same ones.

The ecological benefit, moreover, would be not only that the flows of material goods would be reduced but also the 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 policies suggested above will have consequences on jobs for the concerned supply chains. The answer can only be to shorten the working week and distribute the necessary labor (and its subsequent income) more evenly among the population. What are the implications of such a policy?

First, it is worth noting that under capitalism, productivity gains have marginally been used to liberate humans from work, thus totally betraying the very Enlightenment values it claims to advance. Instead, these gains are used to fuel constant growth for higher profits, employees being required, like mere pawns, to work as much as ever.

As for the implications of transitioning toward a more rational, just, and efficient form of economy, easy access to retraining programs must become the norm. The process could be facilitated with a public job guarantee so that anyone who needs to work can do useful things that communities require and be paid a living wage.

It so happens, moreover, that reducing working hours positively impacts people’s well-being. Multiple studies show this in countries where it was implemented, 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 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

Pathways to a Post-Capitalist World. Picture of a man on top of a pile of cash holding a sign that says "Tax Cut" and angrily pointing at others down below who holds signs calling for affordable public services. He yells at them: "You just want free stuff!"

How to 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 to introduce 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 on a national scale 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, peaceful, and common-sense pre-distributing. It is just that the lords of our time use this logic of pre-distributing to their own advantage.

But income is just one side of the issue; the other is wealth. 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. On the other hand, 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. Profit-making being 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. In a different context than in times past, they are the lords of our modern-day serfdom.

Decommodify public goods and expand the commons

People will always need money. However, 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 go a long way to improve the purchasing power of people. “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

Capitalism runs on the opposite logic of scarcity, as Jason Hickel explained in the book’s first chapter. “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.

Pathways to a Post-Capitalist World: Portrait of James Maitland, the 8th Earl of Lauderdale (1759-1839), who first pointed out that there is an inverse relation between what he called ‘private riches’ and ‘public wealth’
James Maitland, the 8th Earl of Lauderdale (1759-1839)

‘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.

The same goes with income, which is steadily siphoned straight to the pockets of people who already have money while also stimulating a sense of inadequacy among the bulk of the population for not being able to keep up with the Jones. But, as the former British Prime Minister Boris Johnson aptly said, “Inequality is essential for the spirit of envy.” No doubt that, in his mind, it was a positive statement. The reality, however, is that envy can be orchestrated and planned. If it is in the DNA of capitalism, it is not for the sake of people but for that of money making. The capitalist scheme is that winners—the few—necessarily profit on the back of losers—the rest of us—who always run after the money precisely channeled by and for the few.

Austerity policies are symptomatic of that logic. Just as during the eighteenth and nineteenth centuries, welfare costs are deemed an impediment to the economic engine. People are supposed 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 our present growth-oriented system, “the objective is not to satisfy human needs, but to avoid satisfying human needs.” There is no growth if people are satisfied. Perpetual growth requires perpetual scarcity; in other words, ever more money for the Jones to make ends meet, send their kids to college, and avoid bankruptcy if someone in the family gets badly sick.15

Pathways to a Post-Capitalist World: Picture representing on the left a over-polluted world from which people escape to right in a much more peaceful and healthy world.

It may be counterintuitive, but degrowth is the exact opposite of austerity. It 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.” The author means by these words that abundance is 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. Moreover, the cancellation can be conducted in a phased manner, and the public banking system can be used as a backup so that confidence in the overall lending system remains if over-exposed 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.” Henry Ford once said, “It is perhaps well enough that the people of the nation do not know or understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Pathways to a Post-Capitalist World: A stunned TV game host says "Let's ask the audience, shall we?" when confronted to the seemingly unanswerable question "If all money is created out of debt and lent with the application of interest,  how can we pay it off?"

Banks create the principal for all their loans, not the money needed to pay the interest. The interest rate is, in that sense, the metric by which a relative scarcity of money is created. Overall, borrowers are thus caught in a game of musical chairs where some will necessarily get knocked out of the game, which can mean losing their house, having their kids go hungry, or not being able to pay for medical treatments. Unless you bring in more chairs for more players, of course, but as the rule of the game is scarcity, the competition to find a seat will never stop anyway. In the real world, this is socially and environmentally damaging. In short, a financial system based on compound interest is incompatible with a flourishing society and with sustaining life on our delicately balanced living planet. What to do about it?

Some argue that adopting a simple interest system instead of a compound one, where interest is paid on interest,16 would be enough.17 Others think that the debt-based currency system needs to be abolished altogether. “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.”18

The power of democracy

We are all in this together. Most people realize that, but some don’t, at least at first, and would rather keep exhausting the planet’s resources for short-term selfish gain. A study run by Harvard and Yale University 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

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. For decades, on the other hand, conventional economists have told us that putting caps on resource use and waste is impossible, but it turns out that it is precisely the kind of policy that people want.

The issue is that 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. Unfortunately, since the media tend to be concentrated and privately owned, they have a stake in the dominant liberal economic pattern. It is thus their interest to undermine any possibility of a real, democratic conversation about the economy. Internationally too, the IMF, the World Bank, and the World Trade Organization follow the lead of the wealthiest countries, regardless of the fact the majority of the world’s population, who lives in the global South, should also have a voice.

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 in two different directions and definitely at two different levels.

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Footnotes

  1. Andre Gorz, Capitalism, Socialism, Ecology, trans. Chris Turner (London: Verso, 1994).
  2. Nicole Torres, ‘Advertising makes us unhappy,’ Harvard Business Review, 2020.
  3. Global Food: Waste Not, Want Not, Institute of Mechanical Engineers, 2013.
  4. 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.
  5. Grade A Choice?Union of Concerned Scientists, 2012.
  6. Joseph Poore and Thomas Nemecek, ‘Reducing food’s environmental impacts through producers and consumers,’ Science 360(6392), 2018, pp. 987–992.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. Lawrence Mishel and Jessica Schieder, ‘CEO compensation surged in 2017,’ Economic Policy Institute, 2018.
  12. Sam Pizzigati, The Case for a Maximum Wage (Polity, 2018).
  13. Social prosperity for the future: A proposal for Universal Basic Services,’ UCL Institute for Global Prosperity, 2017.
  14. 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 on this, see John Bellamy Foster, Brett Clark and Richard York, The Ecological Rift: Capitalism’s War on the Earth (NYU Press, 2011).
  15. As Giorgos Kallis has pointed out in , “capitalism cannot operate under conditions of abundance.”
  16. Simple Interest vs. Compound Interest: The Main Differences, Investopedia.
  17. Louison Cahen-Fourot and Marc Lavoie, ‘Ecological Monetary Economics: A post-Keynesian critique,’ Ecological Economics 126, 2016, pp. 163-168.
  18. 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
  19. Oliver Hauser et al., ‘Co-operating with the future,’ Nature 511(7508), 2014, ppl 220-223.
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