A Decent Capitalism for a Good Society
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Abstract
A Good Society needs to be built on an economic system that differs significantly from the current finance capitalist models around the world. In light of the claim of personal freedom, emancipation and choice within and through a Good Society, a market system is the most functional, dynamic and feasible alternative on the table. However, a number of national, regional and global changes would be necessary to provide for the economic preconditions for a Good Society based on stable growth, equality and sustainability. In the following, we will sketch out the main arguments and pillars for a reformed capitalist model, which we labelled “Decent Capitalism”.
While I have sympathies with the intent of these authors, there is a fundamental weakness in their paper. They seek to define the requirements for decent capitalism and acknowledge that this would require ecological sustainability, mentioning the prevention of global warming and avoiding loss of biodiversity. However, they remain committed to “green growth” without addressing any of the literature that criticizes prospects the sustainability of future growth, even with the substantively greener technologies that they advocate for. What is their basis for concluding that green growth is viable? It would seem that it is based on their belief or wishful thinking, as they write:
“In spite of this fact, we do not see a fundamental conflict between growth as such and ecological needs like the prevention of global warming or finding methods of production and consumption without depleting non-renewable resources. With radical changes in the structure of production and consumption and technological developments, which will of course deeply affect our way of living, green growth without negative ecological effects is possible.”
This bold—or perhaps flippant—statement of possibility is not backed up in any way and does not engage with the considerable literature that suggests that given the immense scale of throughput in the contemporary economy, further growth, even if greened, is likely to be futile in terms of human wellbeing if not suicidal (Ayres & van den Bergh, 2005; Daly, 1993; Jackson, 2011; Kallis, 2011; Victor, 2009, 2010; Victor & Rosenbluth, 2007). The problem can be seen simply by the fact that improvements in eco-efficiency by their very nature involve diminishing marginal returns (e.g., in improving the energy efficiency of one’s home, the first steps are inexpensive and save a considerable amount of energy, but as the low-hanging fruit are picked, the gains become more slight and cost more to achieve; similarly with efforts to reduce environmental impact per dollar of output), while economic growth involves a number that increases exponentially. Multiplying the two together over time, the exponentially increasing scale of the economy quickly overwhelms ever more slight improvements in eco-efficiency.
Note that the second law of thermodynamics imposes efficiency constraints: a car engine cannot transform 100% of the available energy of gasoline into movement, so while we should see some gains in fuel efficiency, there are limits to what technological breakthroughs can achieve (Ayres, 2007; Ayres, Turton, & Casten, 2007; Victor, 2009).
Furthermore, most indicators suggest we are already close to, if not already beyond, safe planetary boundaries for ecological sustainability (Rockstrom et al., 2009; Turner, 2008; United Nations Environment Program, 2005), such that there is little or no room for future growth without worsening the environmental risks and insults that the authors imply they are committed to avoiding. Of course, if prospects for future green growth are slight, this creates huge challenges given current inequities and social injustices—but assuming away the problem is not the way to address the issue.
The authors should engage substantively with this literature and these issues before the paper is accepted for publication.
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