Sustainable Capitalism and the Pursuit of Well-Being

Neil Harrison

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9780415662819
• eBook ISBN: 9781135097455
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

Sustainable development is the central challenge of the 21st Century. How can human civilization continue to develop without destroying the natural systems on which it depends?Environmentalists tell us that capitalism is the problem because it feeds our self-interest. They tell us that we have to restrain ourselves and only consume what the Earth can sustain. Or governments must tell us what we can and cannot buy. This book uses the science of complex systems to explain why governments cannot deliver sustainability or happiness and how self-interest can be used to make society sustainable.

Capitalism won the Cold War; until the Great Recession of 2008, it seemed to be the perfect system. But more of us are unhappy even as it has ravaged the planet. The central problem is the paradigm on which our social systems are founded that more (consumption, production, possessions) is always better. Based on research from political economy, philosophy, and psychology, this book shows that the problem is not self-interest. We are unhappy because we have been taught that our interests are material and that buying 'stuff' will make us happy. Yet, social pressure to consume only prevents us from satisfying our basic psychological needs and fully enjoying life. For that we need to pursue our personal well-being. Because this also reduces our material consumption, environmental sustainability comes from each of us knowing what's truly good for our selves. Even without the constant economic growth that harms the planet and damages our lives, capitalism also is sustainable. This book will be of interest to scholars and students of sustainability;civil societyactivists and social entrepreneurs; thought leaders and policymakers.

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1
The path of sustainability

As Mark Twain is alleged to have said about the weather, everyone talks about sustainability but nobody does anything about it. Companies trumpet their ‘green’ technology and their corporate responsibility. Governments fund research, choose policies, start programs, and enforce regulations. Environmentalists plea for producers and consumers to ‘do the right thing’ and cut back. Nothing works. We are still consuming the planet at an accelerating rate.

The immediate cause of this “sound and fury, signifying nothing” is, as environmentalists and many scientists warn, that the Earth is running out of resources.¹

Their argument is based in the recognition that no system can expand forever. For example, consumption of most basic resources and foodstuffs increased by several hundred percent between 1950 and 1975, several times faster than the rate of growth in population, and more than doubled again between 1975 and 2000.² As India and China rapidly industrialize and their more than two billion people learn western lifestyles, we can expect an acceleration of resource consumption. More people consuming ever more cannot continue indefinitely. However, so far, ecological systems have continued to provide the resources we need and absorb the wastes we produce, though most scientists believe that the planet is warming as a result of human emissions of “greenhouse gases” that will cause significant changes in socio-economic systems.³

The problem is not the problem; it is the solution that defeats us. Many books and scholarly articles detail the causes of our unsustainable development. They point the finger at human nature, at the structure of socio-economic systems – especially at so-called free-market capitalism – and at the political failures of democratic governments that pander to the people. Yet, these authors fall at the last hurdle: they cannot explain what would make humans behave in ways that will conserve the planet for generations to come. How do we change human nature or the political systems from which governments emerge? How can we make capitalism, the goose that has laid so many golden eggs, sustainable without killing it? Proposed solutions generally require governments to intervene in markets and directly limit our product choices and lifestyles to conserve nonrenewable natural resources. But can development be sustainable with a loss of human freedom or a decline in social welfare?

In this book, I propose an alternative solution. If the problem is the choices that humans make, under what conditions would people voluntarily reduce their consumption? Within a capitalist society people would behave sustainably if it were in their self-interest to do so. And it would be in their self-interest if they would enjoy their life more in the process. I argue that if we all pursued our personal well-being and enjoyed life more, we could make capitalism sustainable.

The sustainability challenge

In 1989, Fukuyama proclaimed the victory of liberal democracy and modern capitalism over centralized economic governance.⁴ Two decades later, the deep, debt-induced recession of 2007–2009 and the sovereign debt crisis of 2010–2012 have shaken faith in capitalism both in Europe and in the United States, the self-imposed guardian of free-market, liberal capitalism. Capitalism’s negative social and environmental impacts are ever more evident, and books with titles like A Failure of Capitalism and Capitalism at the Crossroads have multiplied.⁵ Since the late 1970s, income inequality in the rich countries – between rich and poor or between old and young – has substantially increased even as the pace of economic growth has slowed.⁶ Yet, consumption of natural goods and emissions of greenhouse gases (GHGs) and other pollutants have continued to grow, driven by soaring resource and energy demand from newly capitalist countries in Asia and Latin America. Capitalism’s very success – evidenced by its global spread – now threatens the Earth’s natural services on which society depends.

The sustainability challenge of capitalism is evident. The global population reached seven billion in 2011 and is expected to be 10 billion before the end of the century.⁷ However, in the 15 years before 2007, global Gross Domestic Product (GDP) increased 75 percent, nearly three times as fast as population, reflecting the rise in incomes in developing countries. Absent economic collapse or radical changes in consumption patterns, as the population continues to increase – even as the growth rate declines – average wealth and consumption per capita will continue to rise. As people become wealthier, they consume fewer basic foods and more meat products and fruits and vegetables that require more arable land and more intensive farming. Food production increased 45 percent as a result of forest clearing and more intensive cultivation while population increased by only 26 percent. Continued increases in food production are threatened by the increased reliance on fossil water and fertilizers.

As they become richer, people also demand more goods and services that consume industrial raw materials. Consumption of biomass, fossil fuels, ores and industrial minerals, and construction minerals increased 42 percent from 1992 to 2005 even as industrial efficiency increased. Electricity production increased more than 50 percent in the same period. Urban areas, which consume more energy per capita than rural areas, are home to half of the global population and are expected to continue to grow as rural people move to the cities and food production is increasingly mechanized.

With the industrialization of many poorer countries, emissions of carbon dioxide and other greenhouse gases have continued to increase and are projected to continue apace.⁸ The possibility of avoiding a “dangerous” change in global climate is diminishing.⁹ Consumption of ozone-depleting substances has decreased 93 percent as alternate materials that have a smaller effect on atmospheric ozone became available. However, many newer chemicals designed to not harm the ozone layer are potent greenhouse gases. At the same time, emissions of carbon dioxide increased by 36 percent between 1992 and 2008 because there are no ready alternatives to fossil fuels and because the continuing loss of forests has reduced the terrestrial absorption of carbon dioxide produced from burning fossil fuels. Between 1990 and 2010, 300 million hectares (an area larger than Argentina) were cleared for agricultural use or otherwise destroyed.

In 2011, potable water was available to 87 percent of the global populations but improved sanitation to only 61 percent. Tropical biodiversity declined by 30 percent from 1992 to 2007. Meanwhile the production of plastics that decay only very slowly increased 130 percent. Exploitation of fish stocks has continued to increase with 85 percent either fully exploited or overexploited and declining. The total marine fish catch continued to fall between 1992 and 2009 while the tuna catch increased 35 percent, leaving some tuna species close to extinction.

This short section only summarizes a complex reality. But the picture is clear and not attractive: we are rapidly consuming the planet and the rate of our consumption is increasing. Capitalism as it is currently practiced is not sustainable. We would need more than one Earth to continue to consume its resources at the current rate and leave as good and as much for future generations.¹⁰

Within the context of the modern liberal ideology that economic growth is the route to increased social welfare, it increasingly seems that what is good for us is bad for the environment. We need economic growth to make people wealthier and happier and that can only come from increasing the stress on ecological systems. Equally, many people and most governments believe that what is good for the environment is bad for us, that environmental protection imposes costs on production and reduces economic growth. The US makes this explicit by using a cost-benefit calculation that requires a comparison of discounted costs and benefits before implementing a regulation or policy.¹¹ If there is always an economic cost to environmental conservation, it may be that the lives we want to lead can never be sustainable; they must eventually lead to ecological collapse as they have in the past in other societies.¹²

Sustainability is normally described in terms of the opposite of current practices, as being essentially the opposite of what we do now. We plan for the short term when the long term is more critical. We consume a fixed stock of fossil fuels and are only concerned for current supplies and prices. Debates about “peak oil” have become more heated with the ability of hydraulic fracturing (or “fracking”) to extract oil and gas from previously impenetrable shale structures. However, the burning of fossil fuels is warming the Earth. Scientists forecast that within 50 years, sea level will rise appreciably, storms will become more frequent and severe, and local climates will change across the planet. Our modern capitalist economies run on consumption: consumption creates jobs, which pay for consumption. Capitalism allows savings from this cycle in the form of profits that can be reinvested in more efficient production equipment to increase the supply of goods, reduce their cost, and increase consumption. The capitalist engine of economic growth is well tuned to the very production and consumption that is consuming the Earth, and we fail to develop the technologies that may mitigate these changes because there is no profit in them.¹³

In the rich countries, it might be possible to minimize economic growth and still provide for a good living for all by reducing economic inequality. But the majority of the world’s population that lives in poorer countries will not accept their current living standards; they want better. Indeed, they need the improvements in social welfare that are thought to come from the economic growth that capitalism usually delivers. Yet, sustainability with even this low social target would require a substantial increase in the environmental efficiency of human industry without taking into account the 40 percent increase in global population expected by 2050.¹⁴

This raises the question: why do we talk about sustainable development and sustainability if it is only a matter of conserving or preserving ecological systems? The short answer is that sustainability is something more. The classic definition is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”¹⁵ We currently consume well beyond our needs, and we have no idea what future generations will need. If we reduced consumption to what we only need, what we cannot live without, our lives would be much different. We burn fossil fuels for our peripatetic lifestyles, but to be ‘sustainable’ we are encouraged to use more public transport or walk or bicycle to work. If public transportation is impractical or work is too far away, we are told that we can be sustainable by buying a new hybrid or electric car. To live sustainably, we need to move into the city from the suburbs, only buy eco-labeled produce, and recycle. But this approach of picking holes at the margin of our present lifestyles does not explain what true sustainability amounts to. It leaves us wondering what “sustainability” or “sustainable development” really mean. What would a sustainable society look like?

The meaning of sustainability

The short answer is that there is no answer. It is not possible to define a sustainable society for two reasons: a sustainable society is constantly changing and our conceptions of sustainable development are too malleable. First, the two terms most commonly used and often used interchangeably – sustainability and sustainable development – really are different concepts. Sustainability is literally the ability to sustain.¹⁶ Therefore, it means that we just maintain the status quo indefinitely and keep society as it is for the foreseeable future. The economy would be in a ‘steady-state’ at current levels and society would change little. But societies always change – a point that is central to the discussion of systems in Chapter 3. Even North Korea, an inward-looking authoritarian personal fiefdom of a hereditary monarch, has allowed marginal changes in its economy, has developed new technology (primarily military), and has adjusted its (very few) foreign relations.¹⁷ People in the rest of the world feel change daily. The more open the society, the more rapid is the pace of change as local economies are challenged by goods, and local societies by expectations and ideas, from across the world.

Sustainable development is about perpetual change that makes society “more human” without straying beyond the limits of the ecological systems on which we depend.¹⁸ In this sense, “development” is quite different from the economic meaning that equates growth with social improvement by assuming that greater national wealth inevitably makes more citizens happier. Development is better understood as an evolution of society that allows every member to develop his or her human potential and enjoy life more. As we shall see in chapters 4 and 5, economic growth, higher incomes, and growing wealth are neither necessary nor sufficient for such development to be sustained.

What sustainable development means in practical terms depends on where one is in the socio-economic hierarchy. For the nearly one billion souls who live in absolute poverty as defined by the World Bank, an increase in material resources certainly is a major part of development. Simple things like clean water and elementary education will increase enjoyment of life and ability to develop personal potential. In the rich countries, inequalities of income and wealth mean that a significant minority are r...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of figures and tables
• Preface and acknowledgments
• 1 The path of sustainability
• 2 The failure of authority and altruism
• 3 The complexity of sustainable development
• 4 Consuming unhappiness
• 5 Happiness, well-being, and sustainability
• 6 Needs and wants
• 7 Leveraging wants
• 8 Changing the system paradigm
• 9 Adapting to sustainable capitalism
• 10 A sustainable system
• Appendix
• Bibliography
• Index