"Is Sustainable Capitalism Possible?"
by Schweickart, David (2010)
The subtitle of Joel Kovel's The Enemy of Nature (Zed Books, 2007) states his thesis bluntly: The End of Capitalism or the End of the World?. Kovel thinks we need a revolution—although he is fully cognizant as to how remote that prospect seems. Paul Hawken, Amory Lovins and Hunter Lovins also think we need a revolution, but of a different sort than the one envisaged by Kovel. Natural Capitalism (Little, Brown, 1999) is subtitled Creating the Next Industrial Revolution. Then-President Clinton is reported to have called it one of the five most important books in the world today. Hawken and the Lovins’ agree with Kovel that the current model of capitalism is problematic, but they do not see the problem as residing in capitalism itself. They distinguish among four kinds of capital, all necessary for production: human capital, financial capital, manufactured capital and natural capital. The problem with the current form of capitalism, they argue, is its radical mispricing of these factors. Current market prices woefully undervalue—and often do not value at all—the fourth factor: the natural resources and ecological systems “that make life possible and worth living on this planet.” This defect can be corrected, however, by appropriate taxes, subsidies and other governmental policies that direct the creative energy of capitalism toward ecological ends. This paper critically evaluates these two contrasting perspectives. It contrasts Kovel's contention that “grow or die” is an imperative of capitalism that renders sustainable capitalism impossible with the claim implicit in Natural Capitalism that either capitalism is compatible with a steady-state, non-growing economy or an economy can grow indefinitely without consuming more energy and natural resources than it can sustainably reproduce. It argues that Kovel overstates his case but is closer to the truth than are advocates of “natural capitalism.” The paper then sets out schematically a form of democratic market socialism that is well positioned to implement most of the Hawken-Lovins’ proposals, but does not require ever-expanding consumption for stability. I will draw out some implications of this analysis for an economy such as China's, for which growth remains an important objective.
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