Infinite Growth On a Finite Earth

“If you’re waiting for others to do things for you I don’t think you quite understand what democracy means…”–Me

CAPITALISM: an economic system predicated upon infinite growth within a finite system (the earth).

If a capitalist economy isn’t growing it is contracting; and you never have a situation in economics where things are “constant.” Not really. That simply doesn’t exist in economics (except in a model created by an economist who wants to explain to students how prices reflect the principles of supply and demand).

Instead the economy, as it actually is, is far too dynamic for that. We are never constant unless we are talking about the need to constantly grow. The health of an economy like Canada is often measured by the country’s GDP. For example, the Bank of Canada could make a forecast that the economy would grow 3% in 2005. If this prediction turned out to be true, then Canada’s economy would be physically larger in 2005 than it was the year before (2004). This growth means jobs were added, industries were added, infrastructure was added, and exports may have increased.

The health of capitalism is tied to growth, growth, growth. Let me illustrate. Picture if you will a maple syrup company in Quebec; it’s a relatively small operation producing and selling locally. They can only sell so much maple syrup in a small market because the syrup isn’t something like gasoline which is consumed and purchased frequently.

So as time passes, after some initial good sales when the product is first introduced to the market, the maple syrup company’s sales stagnate and go down; their inventories are full (over-supply) and the company is losing money by having all this stock stuck in a warehouse; the company decreases production because of the decrease in consumption (which reflects low demand); that company then has to let workers go; however, if that company innovates and creates a new product and/or it penetrates new markets it can increase consumption of its product (and then continue production). That company, like capitalism, must grow or go stagnant and contract. That is how capitalism works at the most basic level; it’s also why as an economic system it poses some risk to the people using it.

To appreciate this let’s move our attention from just thinking locally and let’s turn our attention globally (because the decisions you and I make effect not only ourselves or just the current generation)….

I’ve read two of Naomi Klein’s books (This Changes Everything and Disaster Capitalism). She is definitely a socialist. Klein’s socialism in and of itself, however, shouldn’t disqualify her views from being entertained seriously. I’ve read Franz Hayek’s Road to Serfdom despite his being a right-winger. One can learn valuable things (even from those we disagree with).

Specifically, I can say Klein’s socialism doesn’t change the fact that the global economy has grown to a point where we are outstripping the planet’s capacity to recycle and replenish resources from year to year. This is why Klein named her most recent book This Changes Everything.

Climate change is real and is an existential threat to humanity (as per the scientific consensus of working climatologists); humankind has become a veritable force of nature (and the current epoch has been named the “Anthropocene” by geologists to recognize this fact). There is a 97% consensus among working scientists that climate change is real and we are the primary cause of it; and through that consensus a picture is emerging where humankind has altered the chemistry of the climate and introduced changes which have the potential to make it difficult for future generations to live sustainably (or at all) on this planet.

The game has changed according to Klein; it’s no longer the free-wheeling 80s; our economy is pressing up against the very boundaries of what Nature can support and it would be wise for a creature capable of reason and foresight to make some changes in the way they do certain things before it is too late. In short, while growth is good for an economy, the same is not true when we are talking about capitalism’s relationship to the environment; economics and the environment are inextricably tied (despite what science deniers or free marketers say); and that’s why the game has changed.

Perhaps it’s time to design a new game with a new set of rules. The fact is we can change, as the French existentialist philosopher Simone de Beauvoir observed, anything made by humankind (political, economic, social systems) can be remade. The only thing that is inevitable, at least as far as I can tell, is remaining on or current path is suicidal and selfish. In light of this reality, climate change isn’t so much a climate crisis as it is a crisis of human character.

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