Updated: Jul 17, 2020
For my coursework in Ecological Economics with Tim Jackson, I attempted the hairy feat of discussing Sustainable Capitalism in our Globalized World. I had been so unsettled by the end of our lectures, thinking that perhaps by working to make the world's largest transnational corporations more "responsible" and "sustainable", it would just continue to fuel a faulty system. And so, foolishly (or bravely, you decide), I endeavored to write an essay on the topic of sustainable capitalism. At the end of it, I had more questions than I had answers, but I hope by sharing some of my thoughts from the assignment, I can engage you in this inquiry as well. While much of the below was taken from an academic paper, I hope I write in a less "academic" way, such that folks outside the academia and/or with no background in economics will be able to follow.
This is post 1 of 3 parts. You can read the complete series here: Part 1 on Capitalism and Freedom in a Globalized World, Part 2 on The Business of Doing Good & Creative Self-disruption, and Part 3 on 4 Ideas to Tame the Capitalist Beast.
Can capitalism ever be truly “sustainable” in our global economy? British environmental activist and columnist George Monbiot (2017) says that capitalism can’t save the planet; it can only destroy it. He further argues that it is not only the free market capitalism (the most extreme, as he says) that will lead to environmental crisis, but capitalism in itself. With our current conceptions of a capitalist society equating to a highly consumerist society, and therefore, an extractive, throwaway society, it’s not hard to see why Monbiot would argue this.
However, ecologically-minded economists, even passionately "degrowth" ones (ones who argue we cannot pursue unending economic growth within the limits of a finite planet), say that a sustainable economy is not necessarily without capitalism; and that it is possible for us to imagine a world that is more equitable, sustainable and meaningful even with, or because of, the right kind of capitalism with the right kind of conditions (Chang, 2010; Jackson, 2017; Porritt, 2013; Raworth, 2017).
Perhaps one of the reasons why it would be difficult to imagine capitalism in a sustainable world lies in the system of free market capitalism that has dominated economics for so many decades. It may seem like a somewhat Sisyphean task to think about an ethical, sustainable kind of capitalism in a world supposedly riddled with selfish, unscrupulous men.
However, I will explore old and new conceptions of capitalism, the different faces of an emerging type of capitalism, and the necessary conditions within which we can hope to achieve sustainable capitalism in a globalized world.
Capitalism and Freedom
In Economics: The User’s Guide, development economist, author and Cambridge professor Ha-Joon Chang (2015) defines capitalism as:
“...an economy in which production is organized in pursuit of profit, rather than for own consumption (as in subsistence farming, where you grow your own food) or for political obligations (as in feudal societies or in socialist economies, where political authorities, respectively aristocrats and the central planning authority, tell you what to produce).”
That seems like a fairly harmless definition, until you read that in Capitalism and Freedom, neoliberal economist Milton Friedman states that in a free market: “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible” (Friedman, 1962).
The neoliberal image of a businessman
Friedman's statement brings to my mind the character of the businessman in Antoine de Saint-Exupery’s The Little Prince. He spends all his days counting and recounting the stars he owns, choosing to continually “own” more stars, deeming this as the primary matter of consequence in his life (De Saint-Exupery, 1943). What a vacuous life this seems.
It probably did not help that Adam Smith, otherwise known as the "father of economics", deemed self-interest as a primary driver of human behavior; this has shaped free market or neoliberal capitalism, which has dominated economic thinking. During his time, the butcher, the baker and the brewer had much smaller scale enterprises; nothing at all like the transnational corporations (TNCs) of today. In such a small town with strong social cohesion and transparency, self-interest and specialization could lead to high efficiency; appropriate checks and balances would also exist due to interdependence and reciprocal relationships between people in such communities (Smith, 1793).
In spite of these disclaimers, Friedman (1962) capitalized on the idea of self-interest as the driver of the efficiency and productivity in free-market capitalism. He argued it was essential that this liberty to trade be maintained and left unencumbered by unnecessary government regulation. To what end?
Decreasing the value of materialism
Borrowing from the words of the unexpectedly relevant political commentator-celebrity Russell Brand: “We have been told that freedom is the ability to pursue petty, trivial desires, when true freedom is freedom from these petty, trivial desires.” (Brand, 2014)
The law of diminishing marginal utility states that the marginal utility of a good or service declines as its available supply increases (Kahneman, 2011). Why then would we be so fixated with endless accumulation of more profits if there is truth to diminishing marginal utility? What use would we have for yet another dollar/pound/euro/peso? Would it not be of greater benefit to serve our other human drives: honesty, self-respect, love, empathy, faith, community, altruism and so on?
Revisiting our fundamental human values
Chang (2010) also argues, “the world works as it does only because people are not the totally self-seeking agents that free market economics believes them to be.” Or perhaps, one may argue with neoliberal economists that if self-interest is indeed our primary motivator, wouldn’t it be in our own self-interest to seek other more meaningful goals (that feed other human drives or values) if amassing more profits or wealth would simply result in diminishing marginal utility? Surely this is what the rational man would do, no?
So again, perhaps it is not so much capitalism that is flawed, as much as our assumption or acceptance of the refutable idea that humans are selfish beings, driven only by selfish interests, solely in the pursuit of pointless material gain. Is this how you envision yourself or your life's pursuit? If yes, how's that working out for you? Are you truly happy, at peace, and fulfilled? But if you do not envision selfish self-interest as your life's goal, then surely, you don't think that you're the sole special snowflake who wants to live in / create a better, more livable world, no? Surely, this is the underlying desire in other human beings too, right?Except that maybe we've been brainwashed into thinking that the trappings of power and wealth are solely what drive all other humans apart from ourselves (insert sarcastic tone here please).
Fortunately, there are more people coming out with the desire to change the world for the better, and live in mindful coexistence with the planet's other inhabitants, human and non-human alike. There are people exploring different ways of doing business; we need radical new ways of thinking about our age old systems. More on that in my 2nd post in this series. :)
This is post 1 of 3 parts. You can read the rest of the series here: Part 1 on Capitalism and Freedom in a Globalized World, Part 2 on The Business of Doing Good & Creative Self-disruption, and Part 3 on 4 Ideas to Tame the Capitalist Beast.
Brand, R. (2014). Revolution. London: Random House.
Camus, A. (1942). Le Mythe de Sisyphe.
Chang, H. (2015). Economics: The User's Guide: A Pelican Introduction. Pelican Books.
Chang, H. (2010). 23 Things They Don’t Tell You About Capitalism. London: Penguin Books.
De Saint-Exupery, A. (1943). Le Petit Prince.
Friedman, M. (1962). Capitalism and Freedom. 1st ed. Chicago: The University of Chicago Press.
Jackson, T. (2017). Prosperity Without Growth. 2nd ed. Oxon: Routledge.
Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux.
Monbiot, G. (2017). A lesson from Hurricane Irma: capitalism can’t save the planet - it can only destroy it. [online] The Guardian.
Muni. (2013). MUNI Community Facebook album for Moonleaf 2014 Planner. [online]
Porritt, J. (2013). The World We Made. London: Phaidon Press Limited.
Raworth, K. (2017). Doughnut Economics: Seven ways to think like a 21st-century economist. London: Random House Business Books, pp.13-23.
Smith, A. (1793). An inquiry into the nature and causes of the wealth of nations.