Economics in an Anthropocene era

The sound of growing economies is deafening. So complete is the fascination of the roar of money to Australian politicians that they are mostly oblivious to the signs of an impending global meltdown. Ignoring the growing intensity of bushfires is one thing, however, addressing the causes of an apparently irreversible global decline is definitely off the agenda. No growth, no jobs, no votes. That’s it.

If we can accept that the growth of economies and populations, and continuing global warming, are the main causes of an ongoing ecological crisis, the big question is what can be done? What can be done in a new planetary epoch that is now the Anthropocene – that is, a human made phase of planetary existence?

In approaching that question, I’d like to present parts of an ongoing conversation I’ve been having with Gary, an old friend. The material presented below concerns the nature of any future economies that might address these problems within an ecological context. Specifically, can a capitalist economy be low/no growth, allowing governments to intervene to retain viable ecologies, and promote economic equity?

Gary:

[I would suggest that] pluralist democracy and private property are not incompatible with a society that seeks to distribute resources more equitably and ensure that imbalances in wealth are not so large that they prevent many members of society from realising more of their potential - even apart from the moral considerations, there is such an enormous waste of human potential in the world.

However, when it comes to the health of the planet incremental improvement is not going to cut it. Social control of the use of the planet’s resources in the near term is essential if we are to have any chance of not inflicting upon the planet the environmental catastrophe we both think is probably going to happen - in fact is already underway . . . I find it difficult to imagine how a low/no growth economy would operate. Presumably markets would still operate - as they did in pre capitalist economies that generally grew quite slowly and mostly only in line with population growth. But the market could no longer be the primary regulator of economic activity - if it were, then limits on growth could not be assured and we are back in the frying pan.

It would be a very different world. Capital invests its profit in the expectation of future profit from future growth. If growth is no or very slow then entrepreneurs have no incentive to invest - capitalism comes to an end. So many questions arise. What do the wealthy do with their money - consume it more extravagantly? Where will they acquire more wealth - back to being robber barons? Where will innovation come from? If the acquisition of wealth (rather than just making a living) can no longer be a primary incentive then what can take it's place - prestige, altruism, duty, simply the joy of doing?

It would seem that in parallel with the establishment of a different sort of economy there will have to be the establishment of an entirely different ethos. If growth and wealth is no longer the myth around which we coalesce we need a new myth - one that places us back in the natural world where we created our first myths and one that can become the dominant myth for a sizeable portion of humanity. There are glimpses of the beginnings of such a myth emerging but it's a big world with a squillion people in it (some of whom are bastards) and there's not much time.

Tom:

These are difficult issues to confront. I’d argue that the retention of some parts of capitalism will necessarily occur (markets, private ownership, capital investment, government intervention, and limited profitability) but if we are to survive long term this will not be capitalism as we know it. The current alternatives have not been shown to be viable (with the loss of human rights, in the case of China’s one party state capitalism, and that of Russia, for example. Both these examples are also ecologically problematic).

The broad question remains whether there can be profitability for individual firms in an economic context of low growth, or no growth. At present growing economies provide government revenues through taxes that are reinvested in infrastructure and the provision of basic services. This growth is currently secured through the growth of markets and populations. Can we, in wealthy countries, be confident that declining rates of profit can support the quality of life we enjoy now? And if living standards decline what will be the consequences?

This is the major problem. Possibly the best idea raised by others so far is the idea of a ‘steady state economy’ but this is still a kind of utopian ideal which does seem unlikely to succeed given ‘human nature’ – in particular, the natural occurrence of greed, and the natural tendency of conflict within all societies. Any move towards a steady state economy would require a shift from assumptions of high rates of profitability, and economic growth. Most profits would need be absorbed as reinvestment – in ecologies, economic equity, R&D (particularly scientific and technological), in individual firms, and in the provision of infrastructure and amenities for routine social life. Recycling would have to become a way of life – as suggested, for example, by the idea of a ‘circular economy’ (Michael Marshall, ‘From Pollution to Solution’, New Scientist, 17 March 2018, p. 37).

If governments did tax more heavily to promote ecological measures such as controlling global warming, and also to further promote economic equity, one can only wonder what would happen. At present we seem a long way away from any public and political acceptance of the good sense of such measures.

With respect to the wasted human potential of the current time I have to say that from an ecological perspective a big problem with humans is that they are so human centered and are so willing to sacrifice the planet for the purpose of individual consumption. That seems to me to be a priority for education programs globally. That is also the key for successful lower growth scenarios. They would need to be driven by awareness that there is a survival need behind lower consumption and higher taxes for government intervention pro environment/ecology.

It would be good if governments could consider the idea of ecological carrying capacities to start the debate about controlling human populations in the contexts of particular environments and ecologies. That would also be a very positive move towards the creation of any new mythology

There is clearly a need for a new mythology, or what today amounts to the same thing, new emphases in popular culture. We have to come to terms with living in a new Anthropocene, or human made, epoch. Any new mythology has to recognise that much. It won’t do to try and re-invent the noble savage, or other new technology-ignoring scenarios. But one has to be realistic about the global force of traditional religion. The only new mythology that I can seriously contemplate would be a scientific ecological cosmology. I’m not sure what shape that might take, but the basic ideas seem a long way away from the beliefs of most people on Earth.

I would suggest that whatever form future economies take, mass survival needs will eventually force some move away from capitalism as we know it. Declining rates of profit and increasing government intervention (due to crisis management and the continuing deflection of major economic inequalities) will amount to something that can hardly be called ‘capitalism’. Market based economies will probably never disappear, but large corporations and obscene rates of profit may become less prevalent. The way things are going it seems inevitable that any major changes will be forced upon us by catastrophe. Forget long term planning. The sound of money is too beguiling.

Tom Jagtenberg

Author - Beyond the Limits