Kevin > Books: critique-liberalism‎ (67)

It touched a nerve. Limits to Growth exploded onto the scene and became one of the best-selling environmental titles in history, tapping into the countercultural ethos that prevailed in the wake of the youth rebellions of 1968.

Here’s how it works. Imagine you’re an investor. You want returns of, say, 5% per year, so you decide to invest in Facebook. Remember, this is an exponential function. So if Facebook keeps churning out the same profits year after year (i.e., 0% growth), it will be able to repay your initial investment but it won’t be able to pay you any interest on it. The only way to generate enough surplus for investor returns is to generate more profit each year than the year before. This is why when investors assess the ‘health’ of a firm, they don’t look at net profits; they look at the rate of profit – in other words, how much the firm’s profits grow each year. From the perspective of capital, profit alone doesn’t count. It is meaningless. All that counts is growth.

Investors – people who hold accumulated capital – scour the globe in desperate search of anything that smells like growth. If Facebook’s growth shows signs of slowing down, they’ll pump their money into Exxon instead, or into tobacco companies, or into student loans – wherever the growth is at. This restless movement of capital puts companies under enormous pressure to do whatever they can to grow – in the case of Facebook, advertising more aggressively, creating ever-more addictive algorithms, selling users’ data to unscrupulous agents, breaking privacy laws, generating political polarisation and even undermining democratic institutions – because if they fail to grow then investors will pull out and the firm will collapse. The choice is stark: grow or die. […]

Why do investors engage in this restless quest for growth? Because when capital sits still, it loses value (due to inflation, depreciation, etc.). So as capital piles up in the hands of accumulators, it creates enormous pressures for growth. And the more that capital accumulates, the more the pressure builds. […]

These are not ‘bad apples’ – they are obeying the iron law of capital.

Over the past 500 years, an entire infrastructure has been created to facilitate the expansion of capital: limited liability, corporate personhood, stock markets, shareholder value rules, fractional reserve banking, credit ratings – we live in a world that’s increasingly organised around the imperatives of accumulation.

Growth is the motive Degrowth advocates assert capitalism is driven by – and this is a key error. The assertion here is that motive dictates mode [of production], that because “humans are greedy,” we engage in the kind of production our species engages in. However, the exact opposite is correct; the ruling motive is entirely downstream of the ruling interest. The current, capitalist mode of production contains a fundamental flaw that creates classes of haves and have-nots, rulers and ruled. The motive of the ruling class, the one that makes the decisions about what happens in society, is to preserve the concentration of capital through profit and/or ownership. Any change in motive Degrowth advocates propose without a change in interest, this would merely be symbolic. But Hickel doesn’t advocate for any change in ownership, so there’s no reason to believe Degrowth would be done in a way that is anything but exploitative, because if ownership isn’t addressed, exploitation isn’t addressed.

Here’s the key point we need to grasp: GDP is not an arbitrary metric of economic performance. It’s not as though it’s some kind of mistake – an accounting error that just needs to be corrected. It was devised specifically in order to measure the welfare of capitalism. It externalises social and ecological costs because capitalism externalises social and ecological costs. It’s naïve to imagine that if policymakers stop measuring GDP, capital will automatically cease its constant pursuit of ever-increasing returns, and our economies will become more sustainable. Those who call for a shift towards well-being as the sole solution tend to miss this point. If we want to release our society from the grip of the growth imperative, we have to be smarter than that.

This is called the falling rate of profit. It is baked into our economic system. It is totally unavoidable. Because of this, it isn’t actually in the interest of capitalists to fulfill demand in the long term. In fact, if capitalists continually focused on supplying to fulfill demand, they’d eventually go out of business. Hence, degrowth.

Perhaps Marx put it best: we make our own history, but not under conditions of our own choosing.

Max Planck once remarked that new scientific truths don’t replace old ones by convincing established scientists that they were wrong; they do so because proponents of the older theory eventually die, and generations that follow find the new truths and theories to be familiar, obvious even. We are optimists. We like to think it will not take that long.

In fact, we have already taken a first step. We can see more clearly now what is going on when, for example, a study that is rigorous in every other respect begins from the unexamined assumption that there was some ‘original’ form of human society; that its nature was fundamentally good or evil; that a time before inequality and political awareness existed; that something happened to change all this; that ‘civilization’ and ‘complexity’ always come at the price of human freedoms; that participatory democracy is natural in small groups but cannot possibly scale up to anything like a city or a nation state.

We know, now, that we are in the presence of myths.

We know the economy has to be de-financialized and de-carbonized, that there needs to be planning and a big rise in the share of income that goes to the working classes and so on.

What we don’t know yet is whether some new, yet-to-be invented form of capitalism could satisfy those imperatives—or whether the only possible solution is a postcapitalist society, whether we want to call it socialist or something else.

Today neoliberal capitalism governs virtually the entire world. It’s constantly morphing and it has been able to absorb crises—even the ones that seem terminal, like the recession in 2008. Where or why do you identify a crisis of hegemony— especially since you also see continuities in certain aspects of the economic agenda of the Trumps and the Obamas and the Clintons of the world?

Just consider the explosion of antineoliberal movements throughout the world. We are usually focused on the right-wing populist variants, such as the Brexit vote in the United Kingdom; the rise of racist, anti-immigrant parties in northern and east-central Europe, Latin America, and Asia; and of course the victory of Trump in the United States. But that is only part of the story. We should not overlook left-wing antineoliberal forces, including the Corbyn surge in Britain, which has moved the Labour Party well to the left, the forces that have coalesced around Jean-Luc Mélenchon’s La France Insoumise, Podemos in Spain, the early days of Syriza in Greece, and the Bernie Sanders campaign in the United States. Whether right or left, these are all cases in which people are saying that they don’t believe the reigning neoliberal narratives anymore. They don’t have faith in the established political parties in the center-left or center-right that promoted them. They want to try something completely different.