Capitalism vs Survival

It might be accurate to describe the human species as suicidal. The threat of nuclear annihilation and the reality of climate chaos loom over everything we do. We are getting dangerously close to the extinction of our species, and we are taking out many others with us: possibly 50 percent of all species according to some scientists. But how did we get like this? I think that a look at the inner workings of capitalism will give us a fairly good idea. Capitalism is a system that is based on continuous growth and it is the economic system in which our whole society operates. This means that capitalism has had to grow into areas such as fossil fuel production, even though they are destroying the earth in the process. This combines with a pricing system that does not factor environmental destruction or other externalities into the price of a product. Together these make capitalism a hazard to human existence. 

 The process of capitalistic growth goes something like this: all money is distributed through banks. It cannot come from anywhere else. Since banks charge interest, the bank might lend me £1 million and get back £2 million. This extra money has to come from somewhere but money can only be distributed through banks. So more money has to be created.1 This means that a capitalist economy must continually grow or else it will collapse. So it keeps growing, eventually expanding into every area of life, the way an expanding bubble in your living room will eventually fill your entire house. These areas of life inevitably include weapons production and exploiting fossil fuels, among other nasty activities. But since banks have to make profit, someone continually loses out from this growth. This could be on a micro level of you going bankrupt, or on a macro level of your country being forced into a harsh structural adjustment program, thrusting the majority of the population into poverty. There are infinite possibilities for how people can lose out from this process, including humanity ceasing to exist. This is also the reason why imperialism and war are necessary parts of capitalism.

 But this process does not only work on a systemic scale. We see it in the actions of individual corporations. Each corporation must continue to expand to keep its profits above its competitors or it will be forced out of business or taken over. This combines with the repayment of debts to force corporations to grow indefinitely. Since to start up a business you must borrow money, usually from a bank, and the company will have to keep paying debts on that money, with interest. But in order to pay the debts before they inflate too much, and the business loses profit, the company has to borrow more money. So the corporation first has to grow to repay the first debt, and then has to grow more to repay the debt they borrowed to repay the first debt. But they will then have to borrow more money in order to pay this second level of debt before it inflates too much, thus necessitating more growth. So corporations, and people, get stuck in an endless cycle of growth and debts. So moral concerns such as environmental destruction or human rights concerns get ignored unless they are profitable.

 Take energy companies as an example: ExxonMobil is working on a pipeline through Chad and Cameroon that is blocking villagers’ access to water and farmers’ access to land; Chevron is involved in building a pipeline through Burma even though the ruling junta is using slave labour and forced relocation of villagers to build it; Shell is illegally flaring 256 million cubic feet of natural gas a day in the Niger Delta – the biggest contribution to climate change in sub-Saharan Africa, according to Friends of the Earth. Chevron has also been cutting down large parts of the Amazon rainforest to drill for oil and have dumped more than 18 billion gallons of toxic waste, the results from the drilling, into the rainforest, leaving the locals with a legacy of cancers, birth defects and other diseases. Several energy companies, including Syncrude, ExxonMobil, Imperial Oil, ConocoPhillips, Murphy Oil, BP, Shell, Chevron and Total are all involved in exploiting oil from tar sands in Alberta, Canada. The production of which emits nearly 3 times as much carbon dioxide as the production of conventional oil.2 The pressures of the capitalist system force these companies to act like this. And this is merely one example of the endless destruction that corporations must wreak in order to keep expanding and stay ahead of the competition.

 If the prices of goods were calculated differently then this need for eternal growth might not be so catastrophic. For example, if damage to the environment or human rights abuses were calculated into costs then environmentally destructive products would be avoided. This would mean that we would be forced to greatly advance the production of environmentally friendly products because it would be cheaper and profits, and thus growth, would necessitate it. But such a solution is so profoundly anti-capitalist in it’s values that the chances of it being introduced are extremely grim. We must instead rely on the prices that the market sets.

 But the market does not set fair prices. Market prices leave out what economists call externalities. For example, if I have a choice between buying something that runs on fossil fuels and something that runs on wind energy, the fact that one choice is leading to the destruction of the environment does not factor into the price. And it is cheaper to use the oil, or coal, that we already have all the technology for and have already built access to. The only thing that matters to the price is the effect it has on the producer (the corporation, not the underpaid, and often impoverished, labourers) and the consumer. Because externalities are left out, it is cheaper to exploit someone than give them a fair wage. So standards of living go down and people get desperate and will do anything to survive, even if it is destroying the planet. In short, market prices promote human rights abuses and do not factor in environmental destruction.

 So because of a combination of it’s endless need for growth and profit and it’s exclusion of externalities in prices, capitalism is sending our species hurtling towards destruction. As we look into the issue further we might find that the survival of the human species is impossible under capitalism.

1 This process is described in “Life Inc.” by Douglas Rushkoff

2 This information on oil companies comes from Ethical Consumer Magazine, September/October 2009 issue


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