Green capitalism: the god that failed

By Richard Smith
Real World Economics Review #56

In rejecting the antigrowth approach of the first wave of environmentalists in the 1970s, pro-growth “green capitalism” theorists of the 1980s-90s like Paul Hawken, Lester Brown, and Francis Cairncross argued that green technology, green taxes, eco-conscious shopping and the like could “align” profit-seeking with environmental goals, even “invert many fundamentals” of business practice such that “restoring the environment and making money become one and the same process.”

This strategy has clearly failed. I claim first, that the project of sustainable capitalism was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That’s because under capitalism, CEOs and corporate boards are not responsible to society, they’re responsible to private shareholders. CEOs can embrace environmentalism so long as this increases profits.

But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns: For example, the science says that to save the humans, we have to drastically cut fossil fuel consumption, even close down industries like coal. But no corporate board can sacrifice earnings to save the humans because to do so would be to risk shareholder flight or worse. I claim that profit-maximization is an iron rule of capitalism, a rule that trumps all else, and this sets the limits to ecological reform -- and not the other way around as green capitalism theorists supposed.

Secondly, I claim that contrary to green capitalism proponents, across the spectrum from resource extraction to manufacturing, the practical possibilities for “greening” and “dematerializing” production are severely limited. This means, I contend, that the only way to prevent overshoot and collapse is to enforce a massive economic contraction in the industrialized economies, retrenching production across a broad range of unnecessary, resource-hogging, wasteful and polluting industries, even virtually shutting down the worst.

Yet this option is foreclosed under capitalism because this is not socialism: no one is promising new jobs to unemployed coal miners, oil-drillers, automakers, airline pilots, chemists, plastic junk makers, and others whose jobs would be lost because their industries would have to be retrenched -- and unemployed workers don’t pay taxes. So CEOs, workers, and governments find that they all “need” to maximize growth, overconsumption, even pollution, to destroy their childrens’ tomorrows to hang onto their jobs today because, if they don’t, the system falls into crisis, or worse. So we’re all onboard the TGV of ravenous and ever-growing plunder and pollution. And as our locomotive races toward the cliff of ecological collapse, the only thoughts on the minds of our CEOS, capitalist economists, politicians and labor leaders is how to stoke the locomotive to get us there faster. Corporations aren’t necessarily evil. They just can’t help themselves. They’re doing what they’re supposed to do for the benefit of their owners. But this means that, so long as the global economy is based on capitalist private/corporate property and competitive production for market, we’re doomed to collective social suicide and no amount of tinkering with the market can brake the drive to global ecological collapse.

We can’t shop our way to sustainability because the problems we face cannot be solved by individual choices in the marketplace. They require collective democratic control over the economy to prioritize the needs of society and the environment. And they require national and international economic planning to re-organize the economy and redeploy labor and resources to these ends. I conclude, therefore, that if humanity is to save itself, we have no choice but to overthrow capitalism and replace it with a democratically-planned socialist economy.

Read the full paper HERE (pdf)