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May 14, 2012 | by  | in Features |
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Is Capitalism Compatible with Saving the Planet?

Wilbur ‘Moonbeam Townsend: No.

It’s astonishing how quickly we forget; how soon the tides of collective amnesia wash our memory into rumour and our rumours into myth. You won’t remember it, but in January 2008, the Kiwi economy was in recession. Six months before the Global Financial Crisis capsized the global economy, we were already struggling to stay afloat.

It wasn’t credit derivatives or cowboy bankers that toppled the kiwi battler; our problems were simpler. From Spring 2007 to Autumn 2008, our farms shriveled, drought cost us 2.8 billion dollars. Simultaneously, the world realised that we were running out of oil, and unprecedented petrol prices strained our wallets. Very suddenly, our nation glimpsed our future: a world in which our wealth was running out.

The 21st century will be defined by the return of true scarcity. For a century we have grown lazy, always asking how quickly we can exploit our environment. We must now grapple with a new question: how much of our old wealth is left? We understand peak oil; that the automobile’s golden age is over. Well, we’re facing peak everything: peak fish, 70 per cent of the world’s fisheries are fully exploited or depleted; peak uranium, nuclear reactors will be fuelless by 2050; peak phosphorus, we have only 50 years left of modern fertiliser. The copper that carries our electricity, the water that sustains our crops, the forests that build our houses. Every natural resource that we have, we have squandered.

The Earth is a finite sphere, and yet capitalism has insisted that it is infinite. That cannot last. But when faced with the evidence, the capitalists are unfased. Technology, they insist, will save us all.

It’s an inspiring thing to be told: mankind’s undeterrable creativity will find a way, our collective genius will inspire paths back to prosperity. It’s also a lie. Technology has never led to great increases in efficiency. While Angry Birds is a lot of fun, global resource use is as wasteful as ever. American cars are, on average, only 1.3 km/l more efficient than in 1923. That’s not surprising: the physics of car design require a certain amount of energy to push a car up a hill, and, though we can minimise waste, that waste is insignificant. New technology isn’t about using scarce resources more efficiently. It’s about using more: bigger ships to mine our oceans, bigger machines to excavate our mountains. That can no longer deliver us wealth. If technology saves us then it will do something that it has never done before.

We once thought that we had infinite resources and an infinite basin into which we could pour our waste, but infinity was a myth. Though that basin is now clogged, global capitalism continues to crap in it. Our endless longing for material wealth is drenching us in our own shit. We need a new capitalism. One in which governments don’t desperately gouge our taonga, but instead celebrate a long-term mindset. One in which we accept that we have to live within our means, no longer yearning for anachronistic fool’s gold. One in which, as communities and as people, we learn to flourish in the simple pleasures of humanity, working together towards a better world.

If society is to survive, we will need a new capitalism.

Nicholas ‘Capitalist Pig-Dog’ Cross: Yes.

One lesson of history is that it’s never prudent to bet against the long-term future of the human race. Throughout history many have done so, but have all been wrong. Modern environmentalism and anti-capitalism are simply the latest in a long line of theories which predict the decline of humanity. Problems may exist but our capacity to overcome them is greater.

Let’s start with the assumption that the economy will remain Earth-bound. Obviously this places limitations on the amount of physical matter available to be exploited by the human race: the Earth is made of a finite number of atoms. This is important, but economic growth is about the value we can extract from matter, not the absolute amount of it.

We are told by the environmentalists that global resources cannot support expected population increases: it’s estimated the world population will peak at 10 billion by 2100. This view ignores something important; people are not just consumers of resources, they are a resource. Consider that productivity in the developed world is many times higher than the developing world. This is because we have more capital. This tells that global production can be increased many times over without even relying on technological innovation, we just have to bring the technology that makes us so productive to the developed world; i.e. build up their capital stock. This process is already occurring, which is why the gap in GDP per capita between developed and developing countries is shrinking.

But what about the natural resources required to sustain all those people? Some of them are non-renewable, but capitalism has the answers. Firstly we should continue to exploit existing resources. It has never made much sense to me to say that we shouldn’t exploit some resources, such as oil, because they are non-renewable: That’s like saying it wasn’t worth making the Harry Potter movies because there are only 7 books worth of material; “It’s a non-renewable resource, J.K. Rowling isn’t writing anymore!” Higher prices make exploration which we previously couldn’t afford viable, which is why we constantly discover more and more oil. They also create an incentive for consumers to better conserve and recycle existing resources.

The invisible hand knows that some resources are non renewable, so the price mechanism rewards those who develop alternate solutions. Currently we are investing in renewable electricity and are developing electric cars, and even cars that run on water to replace fossil fuels. We’re investing in genetic engineering to increase agricultural yields, de-salination technology to solve water shortages. Technology can give us more utility out of fewer resources, or utilise previously useless resources to solve our practical needs. Technological growth cannot last forever: there is only so much we can manipulate atoms. But you would be brave to bet against further amazing developments in the 21st century given what happened in the 20th.

Suppose that I am wrong and we really do face resource Armageddon within our lifetime. Capitalism still offers the optimum solution. You don’t have to be a science fiction or gaming nerd to believe that within the century we will have working virtual reality. And with enough computer power economic growth really can continue forever in simulations. I for one would rather be the emperor of my own virtual reality than live in some shitty environmentally sustainable subsistence commune. ▲

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  1. Hugh says:

    Wow. Rather the virtual reality -with no connection to your place within the organic system that gave you life, your body, and your mind- than live within the means available? The very means with which the earth accomplished the phenomenal feat of producing life? You rate yourself too highly, little man. Or rather, you rate your ideas too highly.

  2. Adam Sith says:

    really looking forward to the invisible hand getting its fingers broken by the creeping march of agronomic decline

    • Theory Master says:

      To me, it seems quite contradictory how an economic system based on the idea of infinite resources can be compatible with sustaining life on Earth. Even if we propose the Heideggerian claim that technology will save us in the long run, we cannot forget the fact that we are a rather vulnerable species. Particularly because our satellites can easily be destroyed.

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