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Keith, served as U.S. undersecretary of state from 2019-21, currently the chairman of the Krach Institute for Tech Diplomacy at Purdue and serves as co-chair of the Global Tech Security Commission. "How China weaponizes the capitalist system against us", Hill, 8-6-2023, https://thehill.com/opinion/national-security/4139278-how-china-weaponizes-the-capitalist-system-against-us/ DB

As we navigate the escalating threat posed by China – a nation guided by communist doctrine, yet peculiarly sustained by the tenets of global capitalism – the urgency to reassess our financial engagement becomes more pressing than ever. The Chinese Communist Party (CCP), the draconian ruler of the world’s second-largest economy, has accumulated immense wealth from American investments. This wealth manifests itself through dollar-denominated Chinese bonds and a myriad of Chinese companies publicly traded on U.S. exchanges, including their shrewdly named subsidiaries, intricately woven into the fabric of index funds. In an alarming twist, the Chinese government has weaponized our own capitalist system against us. Through 401(k) retirement accounts and diverse investment vehicles, approximately 100 million Americans are unknowingly bolstering a predatory economic adversary and facilitating a military with global supremacy ambitions. The recent aftershocks from Russia’s invasion of Ukraine, prompting more than 1,000 corporations to surrender billions of dollars, underscore the potential havoc a Chinese invasion of Taiwan could wreak. The fallout, especially on retirement security and the high-tech sector (considering Taiwan’s supremacy in semiconductor manufacturing), would be dramatically amplified. It’s therefore unsurprising that seasoned board members worldwide are compelling CEOs to formulate a China risk mitigation plan. They realize this is not a drill. China’s infiltration of global capital markets is anything but incidental. Since the economic liberalization of 1978, the CCP has systematically targeted Western capital markets. Roger Robinson, the global tech security commissioner for Capital Markets, testified before the House Select Committee on the Chinese Communist Party, confirming that the U.S. has inadvertently facilitated thousands of CCP-controlled Chinese companies to infiltrate the investment portfolios of average Americans. Today, around 5,000 Chinese companies (contributing trillions to Beijing’s coffers over the past decade) are traded on U.S. exchanges. The CCP heavily depends on foreign investors to uphold its reign, particularly as a looming financial crisis threatens, driven by a crumbling real estate market, a mammoth debt burden, low consumer spending and the stringent “zero-Covid” policy. Without the influx of foreign investment, primarily from U.S. sources (accounting for 60 percent of global dollar liquidity), the Chinese government risks a total economic meltdown. While leading asset managers like BlackRock pay lip service to responsible investing, a stark inconsistency emerges when applying environmental, social and governance (ESG) standards to China — a nation notorious for pollution, genocide and financial fraud. If BlackRock and others applied the ESG standards with integrity, all Chinese companies would be excluded for three reasons — E, S and G. A recent Wharton case study highlighted that BlackRock’s CEO, Larry Fink, funnels more investment capital into China than any other individual worldwide. Indeed, many investment firms appear to dismiss the perils of investing in an authoritarian regime, as exemplified by a May 15 note from UBS Global Wealth Management downplaying the import declines and social financing data as “not as bad as they appear.” Chinese corporate misdeeds are far-reaching, with companies associated with concentration camps, forced labor trafficking, genocide and aiding the development of advanced weaponry for the People’s Liberation Army. Disturbingly, more than 100 million Americans are unwittingly invested in these sanctioned Chinese entities, thus inadvertently emboldening a potent adversary. The world’s democratic economies are awakening to the risks associated with business ventures in China. At the G7 summit in Japan, they committed to “de-risking and diversifying” to offset China’s predatory tactics and reduce dependencies in critical supply chains. While these initial steps are laudable, much more must be done. Companies under the dominion of the Chinese government must be delisted and deregistered from U.S. exchanges, including over-the-counter markets, and purged from U.S. indices and investment products pegged to these indices. Further, investment firms should be barred from holding securities of Chinese corporations that support human rights violations, ally with U.S. adversaries, answer to the Chinese military or neglect corporate governance practices including material risk disclosure and minority shareholder rights. Also, a prohibition on issuing dollar-denominated Chinese sovereign bonds should also be enforced, preventing the CCP from accumulating billions in annual discretionary cash. As Americans once faced the threat of the Soviet Union with unflinching resolve and wielded economic measures to quell its threats, we must now marshal similar resolve and decisive action against a formidable adversary that brazenly disregards international rules of fair trade and global conduct. Drawing from our history, a solid stance is not just warranted but required. We have been spectators for far too long. It is high time we harness our capitalist system – the most potent engine for economic mobility and self-determination the world has ever known – into a force for good.

Technological progress now offers us a vision of a remarkable future. The advances that have brought us onto an unsustainable pathway have also raised the quality of life dramatically for many, and have unlocked scientific directions that can lead us to a safer, cleaner, more sustainable world. With the right developments and applications of technology, in concert with advances in social, democratic, and distributional processes globally, progress can be made on all of the challenges discussed here. Advances in renewable energy and related technologies, and more efficient energy use—advances that are likely to be accelerated by progress in technologies such as artificial intelligence—can bring us to a point of zero-carbon emissions. New manufacturing capabilities provided by synthetic biology may provide cleaner ways of producing products and degrading waste. A greater scientific understanding of our natural world and the ecosystem services on which we rely will aid us in plotting a trajectory whereby critical environmental systems are maintained while allowing human flourishing. Even advances in education and women’s rights globally, which will play a role in achieving a stable global population, can be aided specifically by the information, coordination, and education tools that technology provides, and more generally by growing prosperity in the relevant parts of the world. There are catastrophic and existential risks that we will simply not be able to overcome without advances in science and technology. These include possible pandemic outbreaks, whether natural or engineered. The early identification of incoming asteroids, and approaches to shift their path, is a topic of active research at NASA and elsewhere. While currently there are no known techniques to prevent or mitigate a supervolcanic eruption, this may not be the case with the tools at our disposal a century from now. And in the longer run, a civilization that has spread permanently beyond the earth, enabled by advances in spaceflight, manufacturing, robotics, and terraforming, is one that is much more likely to endure. However, the breathtaking power of the tools we are developing is not to be taken lightly. We have been very lucky to muddle through the advent of nuclear weapons without a global catastrophe. And within this century, it is realistic to expect that we will be able to rewrite much of biology to our purposes, intervene deliberately and in a large-scale way in the workings of our global climate, and even develop agents with intelligence that is fundamentally alien to ours, and may vastly surpass our own in some or even most domains—a development that would have uniquely unpredictable consequences.

Explicit censorship laws are rightly criticized as an assault on democracy. But, India’s long legacy of socialist policies—price controls, quantity controls, and ownership controls on the means of production—also directly affects the resources Indians need to express themselves. The Yogi Adityanath government of UP is not the first to exploit this legacy and likely won’t be the last.

One famous example is the Indira Gandhi government’s attempt on 25 June 1975 to suppress news of the arrest of opposition leaders at the proclamation of Emergency. A chain of orders directed the general manager of Delhi Electric Supply Undertaking to cut off supply to newspaper offices in New Delhi. Newspaper editions from other cities carried the news, while some of the Delhi editions of 26 June struggled. The same story manifests itself in different ways —sometimes through diesel and electricity, and at other times, through social media and the internet.

The Department of Defense (DOD) is currently considering a proposal that’ll effectively nationalize 5G technology and networks in the United States. By abandoning the market-driven strategy that won the 4G race for the nation, America would merely be undermining its own progress — and losing to China. This is especially concerning since China sees itself as a rival to U.S. hegemony and is increasingly exerting its diplomatic and military influence in a brazen way. It has launched cyberattacks and attempted to acquire sensitive military secrets and intelligence. It has already made strides in the 5G race and is rapidly acquiring key 5G patents. Its flagship telecommunications giant is propped-up by $75 billion in subsidies and was slated to build the UK’s 5G network this year. The British government only reneged after U.S. diplomatic pressure. Concerningly, Chinese laws effectively compel Huawei to hand over user data and to assist it in industrial espionage and state surveillance. If the world becomes increasingly reliant on Chinese government-controlled and operated telecommunications infrastructure, then that will leave U.S. manufacturers and innovators at an ever-increasing disadvantage. With 5G technology expected to contribute $2.2 trillion, roughly 5 percent of global GDP, to the world economy within 15 years, this is a race America must win. Troublingly enough, the DOD suggests a move that mirrors China in many ways. It’d replace the existing Federal Communications Commission (FCC) plan to auction off frequency ranges within the mid-band spectrum to private companies who can then develop the necessary infrastructure networks, which is ideal for 5G development. Instead, a network built and deployed by the U.S. government would act as a wholesaler to telecommunications companies who could turn around and sell 5G plans to retail consumers. But national 5G networks are already being built across the country with private investment totaling billions of dollars. Why would taxpayers pay such a hefty sum for something that American companies are already developing? Conversely, government agencies have already compromised the nation’s position in the 5G race by allocating mainly less-than-ideal low-band and high-band frequencies for 5G development. Unlike the mid-band spectrum that the U.S. military largely monopolizes, low-band frequencies mean slow connections. High-band frequencies are localized and require significantly more infrastructure investment to cover the same range. By contrast, China has utilized its mid-band spectrum for 5G deployment. This is why a lone Chinese cellular tower now covers the same range as 100 high-speed American towers. The U.S. should be auctioning frequency ranges within the mid-band spectrum to companies that are already equipped to build infrastructure. If the U.S. wants to “catch-up” with China, then it should be taking advantage of the already robust American private sector instead of adopting China’s strategy of state control, debt-funded subsidies and loans. A federal government 5G network could take decades to build and could be replete with setbacks — at the expense of consumers and taxpayers. Take a look at South Africa and Mexico for proof. Those are two countries where nationalized telecommunications networks failed. Or look to Australia, where the “National Broadband Network” turned into a financial disaster. Originally projected to cost $29.5 billion in 2013, it was completed only this year, with the final cost running past $51 billion. And that’s not counting a recently announced $4.5 billion upgrade since the technology is out of date already. But it’s not politicians and bureaucrats’ own money they’re playing around with. It’s taxpayers’ dollars on the line. Conversely, proponents of a nationalized 5G network claim that auctioning off spectrum to private network builders could leave consumers worse off, since there’s theoretically nothing stopping them from charging high prices once they own the network. After all, American mobile services are relatively more expensive than those in many European nations. Yet, this can hardly be blamed on privately owned network infrastructure when infrastructure in European countries with significantly cheaper mobile service is also privately owned. After all, American prices are influenced by the relatively higher costs of extending coverage across a nation that’s so vast, unevenly populated and geographically diverse. Moreover, European regulations that are designed to lower prices for consumers by boosting retail competition (such as the UK rule requiring network owners to sell access to competitors at cost) come at the expense of decreased network investment that left Europe years behind the United States in 4G development. This trade-off may be undesirable, given how important fast, reliable and expansive 5G networks are for keeping innovative companies and industries in the United States competitive. Nationalization also won’t uphold security since a single nationwide network, government-owned or otherwise, is even more vulnerable to hacking. Furthermore, infrastructure builders and equipment providers who raise national security concerns are already prohibited from purchasing spectrum licenses.

The climate threat is certainly dire, and carbon taxes are unlikely to be enough to solve the problem. But eco-socialism is probably not going to be an effective method of addressing that threat. Dismantling an entire economic system is never easy, and probably would touch off armed conflict and major political upheaval. In the scramble to win those battles, even the socialists would almost certainly abandon their limitation on fossil-fuel use – either to support military efforts, or to keep the population from turning against them. The precedent here is the Soviet Union, whose multidecade effort to reshape its economy by force amid confrontation with the West led to profound environmental degradation. The world's climate does not have several decades to spare. Even without international conflict, there’s little guarantee that moving away from capitalism would mitigate our impact on the environment. Since socialist leader Evo Morales took power in Bolivia, living standards have improved substantially for the average Bolivian, which is great. But this has come at the cost of higher emissions. Meanwhile, the capitalist U.S managed to decrease its per capita emissions a bit during this same period (though since the U.S. is a rich country, its absolute level of emissions is much higher). In other words, in terms of economic growth and carbon emissions, Bolivia looks similar to more capitalist developing countries. That suggests that faced with a choice of enriching their people or helping to save the climate, even socialist leaders will often choose the former. And that same political calculus will probably hold in China and the U.S., the world’s top carbon emitters – leaders who demand draconian cuts in living standards in pursuit of environmental goals will have trouble staying in power. The best hope for the climate therefore lies in reducing the tradeoff between material prosperity and carbon emissions. That requires technology – solar, wind and nuclear power, energy storage, electric cars and other vehicles, carbon-free cement production and so on. The best climate policy plans all involve technological improvement as a key feature. Recent developments show that the technology-centered approach can work. A recent report by Bloomberg New Energy Finance analyzed about 7000 projects in 46 countries, and found that large drops in the cost of solar power from photovoltaic systems, wind power and lithium-ion batteries have made utility-scale renewable electricity competitive with fossil fuels. A 76 percent decline in the cost of energy for short-term battery storage since 2012 is especially important. In a blog post, futurist and energy writer Ramez Naam underscores the significance of these developments. Naam notes the important difference between renewables being cheap enough to outprice new fossil-fuel plants, and being inexpensive enough to undercut existing plants. The former is already the case across much of the world, which is among the reasons for an 84 percent decrease in the number of new coal-fired plants worldwide since 2015. But when it becomes cheaper to scrap existing fossil-fuel plants and build renewables in their place, it will allow renewables to start replacing coal and gas much more quickly. Naam cites examples from Florida and Indiana where this is already being done. He cites industry predictions that replacing existing fossil-fuel plants with renewables will be economically efficient almost everywhere at some point in the next decade. Electricity is far from the only source of carbon emissions – there’s also transportation, manufacturing (especially of steel and cement), home and office heating, and agriculture to worry about. But the rapid advance of solar technology is a huge victory in the struggle against climate change, because it will allow people all over the world to have electricity without cooking the planet. And how was this victory achieved? A combination of smart government policy and private industry. Massachusetts Institute of Technology researchers Goksin Kavlak, James McNerney and Jessika Trancik in a recent paper evaluated the factors behind the solar-price decline from 1980 to 2012. They concluded that from 1980 to 2001, government-funded research and development was the main factor in bringing down costs, but from 2001 to 2012, the biggest factor was economies of scale. These economies of scale were driven by private industry increasing output, but with government subsidies helping to increase the incentive to ramp up production. It’s apparent, therefore, that both government and profit-seeking enterprises have their roles to play. Government funds the development of early-stage technology and then helps push the private sector toward adopting those technologies, while private companies compete to find ever-cheaper methods of implementation. Instead of eco-socialism, it’s eco-industrialism. If there’s any system that can beat climate change, this looks like it.

Fossil fuels will still account for two-thirds of the global energy mix by 2030. Clean energy strategies must take this into account - which is why carbon capture and storage must play a major role. To achieve the necessary scale, we need to mobilise private investment. Here's how. The UK has recently mandated all its companies to disclose the financial risks associated with their climate risks, impact and strategies – as per the framework set out by the Taskforce on Climate-related Financial Disclosures (TCFD) – by 2025. Not only will this help understand how a given company’s activities are contributing to climate change, but the transparency of reported data will also help unlock the investment required by the more complicated carbon emission-management technologies. Ground realities for carbon management While the transition to greener forms of energy features on most corporate agendas, two realities must be appreciated. First, despite the push towards renewables, fossil fuels could still account for around two-thirds of the global energy mix by 2030. That means the world’s strategies to move towards a net-zero carbon future cannot ignore fossil fuels. Second, emissions are yet to dip substantially despite the traction in renewables. Estimates suggest they must decline by over 7% each year until 2030 if the world is to meet the 1.5°C goal set out in the Paris Agreement. Thus, the world need strategies to reduce fossil fuel emissions at scale. These realities bring the discourse on carbon management technologies like carbon capture, utilization and storage (CCUS). Simply put, CCUS captures emitted CO2 and stores it in soil or beneath the seabed so that it does not escape into the atmosphere. The 'utilization' aspect refers to recycling and reusing that stored CO2 to produce goods of economic value such as oil recovery, fuels, construction material and plastics. The cost of capture and storage can be partially offset by this utilization, thus creating an economic incentive. This technology answers the realities outlined previously because it is focused on fossil fuels and reduces their emissions through its circular carbon-management model. This strategy can be particularly effective in managing emissions in hard-to-decarbonize sectors, such as carbonate aggregates, fuels, concrete, methanol and polymers. CCUS technology will reduce the emissions generated by these industries, whether in new or existing facilities. In cement, a sector fuelled by demand from high-growth emerging economies, CCUS may be only technology capable of delivering the necessary scale of emission reduction. CCUS-based fuels could also power the electrolysers used to produce low-carbon hydrogen, a product being spoken about increasingly in energy transition discourses. Further, an Ellen MacArthur Foundation report finds that only around 55% of emissions can be managed with renewables or energy efficiency. Achieving the remainder will require circular models that delink business activity from resource extraction. While a few nations have launched CCUS projects, Norway stands out since it is also a major fossil fuel exporter. Its Longship project transports the captured CO2 to a storage facility below the North Sea, while its Sleipner offshore gas project’s CO2 storage is now two decades old. Global CCUS capacity is climbing steadily Finding the funds? The Global CCS Institute estimates the capture capacity of the 50 or so CCUS facilities globally at around 96 million tonnes of CO2 annually, a fraction of the 40 billion tonnes of CO2 emitted globally each year. The Energy Transitions Commission estimates as much as $5 trillion is needed by 2050 to create the capacity for carbon removal, which would include technologies like carbon capture and storage. But where would funding on this scale come from? Government-funded programmes, like those overseen by the US Department of Energy, have supported CCUS. Financial incentives like tax credits, guarantees, tax-exempt bonds and grants can help, just as they have with renewable energy. Carbon offsets/credits can be monetised to mobilise capital, though the shift from the Kyoto Protocol to the Paris Agreement has pushed carbon credits to the background. But these channels are still limited vis-à-vis the scale needed. To achieve the necessary scale, it is imperative to incentivise private capital. How can financial climate disclosures help unlock private capital? Private capital is often disincentivised from looking at nascent technologies (that target the SDGs) due to a lack of reporting and disclosure of data, because this impedes financiers' ability to assess and monitor the project. This is where mandating of the TCFD disclosure framework can be a game-changer – starting with the UK and also for other geographies who follow the UK’s decision. The framework set out by the TCFD requires companies to provide specific data to evaluate climate risks, which is precisely what CCUS seeks to do. The TCFD requires detailed scope-wise emission disclosures as well as granular disclosures on metrics like carbon flaring and capture, which form part of any CCUS project, set apart from the disclosures of the financial implications of the company’s climate risks, impacts and strategies. These detailed disclosures provide investors with more holistic information that enables them to better analyse the risk-reward trade-off of carbon projects initiated by that company, assess its impact on climate and price the capital. In short, the disclosures mandated by the TCFD framework can help close the data gaps that private capital faces while assessing or monitoring new technologies such as CCUS. With the discourse on CO2 exposure and climate risk becoming ever-more pervasive, more companies will need to report on their carbon materiality. Those who do not address their CO2 footprint could face higher capital costs or scarcer sources of capital. This augurs well for the future of carbon management technologies like CCUS. Part of the journey Managing fossil fuel emissions will be a necessary part of the journey towards a net-zero future. Scaling up CCUS technology will not only address this environmental scourge but can also deliver branding benefits for companies along with lower risks for business continuity as policies increasingly turn green. But such carbon technologies will require a lot of funds, and largely from private capital. The mandating of TCFD disclosures can be the means to achieve that end.

Eight thousand feet in the air, illuminated by the searchlights and then disappearing into the darkness, the B14 Liberator and B29 Superfortress strategic bombers appeared over the city like a surrealist nightmare. “Sinister black, enormous moths,” the poet Albert Giraud had written, “With heavy wings fall invisibly the monstrosities, upon human hearts.” Fifty thousand people were displaced by the bombing of Shanghai on 6 February 1950. Homes and infrastructure were levelled, and a thousand people were killed or injured. The key target of the American-made bombers was the American-owned and American-operated Shanghai Power Company. It was a multinational of critical importance and powered the new, revolutionary People’s Republic of China. Even as the United States protested Taiwan’s air raids in public, the government of President Harry Truman knew they were critical to its policy of containing Communism. Declassified documents show that the Central Intelligence Agency (CIA) reported to Washington a large number of ships being fitted at Shanghai’s dockyards. This, the documents said, was in preparation for an invasion of Taiwan. Even after the bombing of the Kiangnan docks by the American-made bombers, armies of workers continued to repair damaged junks. This week, the People’s Liberation Army combat jets and ships have launched around-the-clock exercises intended to intimidate Taiwan’s new, pro-independence President Lai Ching-te. To many experts, it seems an eventual invasion of Taiwan is inevitable. Like in 1950, debates are raging on whether to deter China by containment, as President Truman insisted, or through engagement, as the magnates running Shanghai Power argued. The long-forgotten story of the Shanghai Power Company and the bombers sent to destroy it offers important lessons. It tells us about the missteps and misjudgements that could push two superpowers to war and devastate the world. A company dilemma Ever since November 1948, when the PLA broke out of northern China and began pushing down the lower Yangtze valley, Paul Hopkins had been carefully considering the options. The President of Shanghai Power had, early on, told his headquarters in the US that it should continue operations only as long as the Kuomintang held the city. That month, though, the US embassy had issued an advisory telling non-essential personnel to leave Shanghai, making clear the government’s collapse was nearing. For diplomats, though, the prospect of Shanghai Power shutting down was not a welcome one, historian Warren Tozer has recorded. The US consul in Shanghai, John Cabot, told Hopkins that the communists would also need electricity. The company’s influence, he argued, might enable it “to lead, guide, or otherwise induce the reds to revise their philosophy of life.” Warren Kopelman, Hopkins’ boss in Boise, also told him American authorities in Washington were keen for the company to stay on. The government, Kopelman said, “emphasised the desirability of continuing operations regardless of who [was] in power in China.” “They indicated that they would be very disappointed if the property got out of American hands.” The idea that continued operations by Shanghai Power would be welcomed by the communists was commonsensical. The company generated about 87 per cent of the city’s power according to Tozer, and continued operations were necessary to power its life. There were, however, serious problems: Who would guarantee continued fuel supplies to the plant? And how would the power be paid for? Even though Washington ensured Shanghai Power continued operations, it also mounted pressure on China. The retreating Kuomintang began a blockade of Shanghai port, cutting off fuel supplies with the assent of the US. This forced Shanghai Power to switch to coal, brought in by train despite air strikes carried out by the Kuomintang. The People’s Republic also raised power tariffs, Tozer records, and provided loans to enable Shanghai Power to keep operating. The historian John Service has argued that Chairman Mao Zedong’s China was, contrary to popular opinion, keen to maintain an open door to the US—in other words, to maintain at least a trade relationship, in the face of ideological problems, and the reality of American support for the Kuomintang. The government’s support for Shanghai Power suggests this was indeed the case. However, the subsequent events ensured we can only speculate on what happened. The march to war Following the liberation of Taiwan from Imperial Japan, the Kuomintang established an iron hold on the island. The unpopularity of the Kuomintang’s rule, scholar John Huebner writes, soon sparked off riots, and thousands were killed in the murderous military action that followed. The US, though, had no choice but to back the Kuomintang. Taiwan, after all, was critical in maintaining a naval line of defence against the Soviet Union, running from Japan through the Philippines and Indonesia. Truman—inspired by Cold War diplomats and ideologues Dean Acheson and George Kennan—conceded China to the Soviet Union, but hoped to minimise its utility as an industrial powerhouse or resource base, historian Warren Cohen notes. The US commercial traffic was caught up in the Kuomintang’s blockade, and air strikes on Shanghai Power’s facilities began in January 1950. Washington thus, chose to pay this price. Few in the state department seemed to have been entirely persuaded by the containment policy. The Director of the Office of Chinese Affairs, Philip Sprouse, wrote a secret memorandum noting that “the bombings are fast producing what the Consulate General describes as a state approaching chaos with attendant danger to American residents of Shanghai.” To Sprouse, it seemed “incredible that we permit the [Kuomintang] Chinese Government brazenly to do the damage to our position in [the People’s Republic of] China that it is doing.” For its part, Huebner wrote, the PLA continued to push on through 1949, with the Third Field Army taking the Kuomintang naval base at Fuzhou in August. Early in October 1949, three PLA divisions assaulted Kuomintang positions on the island of Xiamen, part of Taiwan’s outer defences. The assault, however, ended in disaster, with the PLA proving unable to mount an amphibious operation. In Shanghai, Hopkins had developed a growing respect for the new government. The communists, he wrote, were “a new type of people who, if not subject to outside pressure, will ultimately bring great progress to China.” For its part, Shanghai Power, “earned and won the confidence of the authorities as an efficient and honestly administered utility and one of the essential cogs in [Shanghai’s] industrial development.” The deteriorating relationship between Beijing and Washington, brought about by the support for the Kuomintang, was however bound to tell. In September 1950, Shanghai Power handed over management to local employees, and quietly left China. A time of hard choices Following the outbreak of the Korean War in the summer of 1950, commentator Hsu Chung-mao writes, the PLA dropped its plans to attack Fujian—plans which, according to most American diplomats, would end in defeat for the Kuomintang. The conflict, however, simmered on. In August 1954, the PLA again raided Taiwan’s offshore islands, beginning with the shelling of Kinmen and Matsu, and an assault on the Dachens. That November, the PLA encircled Yijiangshan, a base on the northern flank of the Dachens, and occupied the islands. The US responded by sending in seven aircraft carriers at the head of a fleet that evacuated some 15,000 civilians and 11,000 Taiwan troops. In December 1954, President Dwight Eisenhower’s government signed a formal mutual defence treaty with Taiwan, which was enforced in March of the next year. Although the Dachen islands were successfully captured by the PLA—and remain in the control of China even today—it moved no further. In August 1958, the PLA again tested American resolve, shelling the islands of Kinmen and Matsu, and initiating an amphibious landing on Tung Ting. This time, the US sent in a fleet with four aircraft carriers, equipped with low-yield atomic weapons to annihilate the PLA’s numerically superior landing forces. Ever since Xi reinitiated an aggressive Taiwan policy, debates on the arguments over engagement and deterrence, which raged in the 1950s, acquired renewed significance. Trade and technology sanctions have deepened, together with direct military competition. The eminent scholar John Mearsheimer, among others, has argued that the rise of China—enabled by America itself—made this confrontation inevitable. The only way for the US to prevail, he argued, is to relentlessly expand the power-gap, to the point where China realises it has no chance of success. This might well be true, but the case of Shanghai Power shows the importance of nuance. Keeping the corporation running, enabling fuel supplies, and bringing other economic incentives to the table might well have provided tools to temper the PLA’s push on Taiwan. Ending economic engagement in 1949 did not ensure the security of Taiwan. Even a limited war over Taiwan, economists have estimated, would cost the world upwards of $10 trillion, or 10 per cent of global GDP—devastating livelihoods across the world. That cost, in itself, is an excellent reason for adversaries to pull back from the brink. Engagement might not be a substitute for raw deterrence. Ensuring the economies of China and the world remain entwined, though, might yet prove a powerful force for peace.

People often claim that capitalism focuses only on short-term profits. But the venture capitalists and angel investors who fund firms such as Moderna and BioNTech are hugely patient, and they lose money on most of their investments. Typically, their model rests on the calculation that a small percentage of their investments will generate a sufficiently high return on going public or being sold to both “pay” for those that — as will often be the case in a very tricky sector — lose money (or make very little) and make the sort of good money that they and their clients are expecting when putting together an investment portfolio. In biotechnology and other leading-edge industries, after-tax investor gains are often reinvested in the next round of risky startups, thus creating a virtuous cycle. If the government had taxed away the Struengmanns’ capital gains from selling Hexal, they might not have had the cash or incentive to invest in BioNTech. One of the reason that nearly all high-income countries keep capital-gains taxes low is to help ensure that investors and entrepreneurs are incentivized to take the risk of committing time and resources to ventures that can offer no promise of a good return, the sort of ventures, in other words, so typical of ventures relying on scientific and technical innovation. Those who take high risks should be rewarded, if that risk works out, with high rewards. Unfortunately, that logic eludes President Biden and congressional Democrats. They not only would like to raise capital-gains-tax rates, but some of them would also like to broaden the capital-gains-tax base, including by taxing gains before they are realized. If applied to startup investing, that could do terrible damage to the ability of early stage companies to secure the patient capital that they need. Punishing capital gains makes no sense if we want investors and entrepreneurs to pursue valuable but risky growth opportunities. Some cynics are griping about the big profits that Moderna and BioNTech are now making, but investors in those firms absorbed losses for a decade. Besides, there is no better place for profits to flow right now than to biotech firms and their research. BioNTech announced that it will build on its mRNA advances to develop shots against malaria and tuberculosis, which together kill more than a million people a year. And numerous biotech firms are now aiming to create more effective influenza vaccines based on mRNA technologies. One of the key moments in the development of the biotech sector as we know it today was the launch of Genentech in 1976, backed by venture-capital firm Kleiner Perkins. The success of that pioneering firm “gave credence to the view that scientific research, infused with start-up firm spunk, could be a critical component of economic growth,” noted a history of the industry by Walter Powell and Kurt Sandholtz. To undermine an approach that has worked so well, and delivered so much, by raising capital gains makes no economic sense. Worse still, as we consider the lives saved or improved by companies in biotechnology and other innovative sectors, companies that relied on private risk capital, it may well come at considerable human cost, too.

Thus, policies which tend to distort markets, for example, by raising the price of primary agricultural outputs, can adversely affect the competitiveness of the food processing sector. Policies and programs that tend to induce productivity growth, such as public agricultural R&D that lower production costs in either sector, can increase the competitiveness of both sectors de- pending upon the magnitude of the price and income elasticities of food demand. TFP gains in primary agriculture are the major source of growth in its GDP, and these gains are strongly associated with public investment in agricul- tural R&D and public infrastructure. These in- vestments, while maintaining the viability of the farm sector, contribute significantly to the competitiveness of the food processing sector, with ultimate gains to consumers in the form of lower real food prices. Other sectors of the economy receive indirect benefits from the sav- ings in food expenditures, which can be allo- cated to savings and purchases on nonfood goods and service.

From a global perspective, we have witnessed remarkable progress of mankind through the increased acceptance of free market policies in both rich and poor countries. Before the industrial revolution, 80% of the world’s population lived in abject poverty. By 1980, that number has fallen to 34.8% and by 2000, less than 20% of the population lives on less than $1 a day. In five years, the number is expected to fall to 10% if free trade is allowed to flourish. In just the past 25 years increased private ownership, increased free trade, and lower taxes all came at the hands of politicians like Deng Xiaoping in China, Margaret Thatcher in England, and Ronald Reagan in United States. In the years following the adoption of these policies by these global leaders, per capita income nearly doubled from 1980 to 2005; Tariffs fell and trade increased; Schooling and life expectancy grew rapidly, while infant mortality and poverty fell just as fast. In the average country that became more capitalist over the last 25 years, the average citizen gained a 43% increase in income, nearly half a decade in life expectancy, and a 2-year increase in the average years of schooling. In my lifetime alone, freer markets have improved the lives of billions of people from all walks of life. When we look back at our own history, the tremendous economic growth that Americans experienced from the time of the original Tea Party up to 1914 was the result of economic freedom from government regulation, open boarders for free immigration, and very few trade restrictions on the global flow of goods, services, and capital. Anyone could get on a boat, land on Ellis Island and become an immigrant and this benefited both domestic Americans and the immigrant alike. Business and labor were free to be entrepreneurial—and entrepreneurship created wealth. But we don’t want wealth for wealth’s sake. Wealth allows for the improvement of the human condition. For example, in 1905, our average life expectancy in the U.S. was 47. Today it is 78. A hundred years ago only 14% of homes had a bathtub; 8% had a phone; 95% of all births took place at home; most women washed their hair once a month; and the average worker made about $300 per year. As recent as 1984, it took the average American wage earner 456 hours of labor to earn enough to purchase a cellphone. Today, it takes the average American 4 hours. A computer has fallen from costing 435 hours of labor to less than 20. None of this accounts for the tremendous improvements in technological capacity. There are several reasons that the costs of goods have dropped so drastically, but perhaps the biggest is increased international trade. Simply put, the free market means the poor are less poor. Globalization extends and deepens a capitalist system that has for generations been lifting American living standards—for high-income households, of course, but for low-income ones as well. When the world embraces free market reforms, the world economy expanded greatly, the quality of life improves sharply for billions of people, and dire poverty was substantially scaled back. This is not a coincidence. It is a well-established fact that when people are free to buy from, sell to, and invest with one another as they choose, they can achieve far more than when governments attempt to control economic decisions. Widening the circle of people with whom we transact—including across political borders—brings benefits to consumers in the form of lower prices, greater variety, and better quality, and it allows companies to reap the benefits of innovation, specialization, and economies of scale that larger markets bring. Free markets are essential to prosperity, and expanding free markets as much as possible enhances that prosperity. Voluntary economic exchange is inherently fair and does not justify government intervention. When two free people come together on terms they have agreed upon to exchange peacefully, both benefit. Government intervention in voluntary economic exchange on behalf of some citizens at the expense of others is inherently unfair. One person is coerced in order to privilege another. It really is that simple. When goods, services, labor and capital flow freely across U.S. borders, Americans can take full advantage of the opportunities of the international marketplace. They can buy the best or least expensive goods and services the world has to offer; they can sell to the most promising markets; they can choose among the best investment opportunities; and they can tap into the worldwide pool of capital. Study after study has shown that countries that are more open to the global economy grow faster and achieve higher incomes than those that are relatively closed. This is capitalism. Growth is not guaranteed. It seems obvious that the central challenges facing America have to do with the with predatory regulatory and tax policies conducted by governments domestic and abroad. From an economic perspective, then, the case for unilateral trade liberalization—that is reducing our own trade barriers and subsidies without preconditions or reciprocal commitments from other countries—is the best policy to promote peace and prosperity globally. Politically, however, the concentrated and organized beneficiaries of protectionism are powerful relative to the much larger, disorganized, beneficiaries of free trade. Politicians tend to be most responsive to the loudest interest groups and are therefore inclined to view free trade unfavorably. But we as Americans must be clear—capitalism is not evil. It has done more good for more people than any acts of state, any stimulus spending, any health program or welfare initiative. Americans can no longer afford to fear freedom. Finally, acknowledging the relationship between free markets and economic prosperity does not make someone “dogmatic”. It is unreasonable to continue to ignore these facts. Capitalism’s superiority for economic growth and development deserves the unqualified support of everyone who believe that wealth is better than poverty, life is better than death, and liberty is better than oppression.

Like most of us in the field, I’ve come to anticipate the publication of CEO of Blackrock Larry Fink’s annual letter. Over the past several years, Fink’s missive (and its downstream impact on Blackrock’s growing emphasis on ESG) has revolved around responsible business and the role of the investor to encourage corporate responsibility. 2022 was no different. Fink’s letter (, if you haven’t read it yet) continued to emphasize the importance of environmental and social issues in corporate governance. But this year, Fink deviated slightly from his previous years’ message by reinforcing the importance of capitalism. Those who know me know I’m a dyed-in-the-wool capitalist. I believe, strongly, that the straightest and most efficient path towards innovation, growth, resource allocation, and yes, profits, is through the free market. Competitive pressure has shaped our human culture for thousands of years, and capitalism continues shaping it today. Without capitalism, many of the things we have and use and the quality of life we take for granted today may have never become a reality. As the emphasis on corporate responsibility has grown over the past decade, however, capitalism as a sustainable, resilient economic system has been called into question. At the heart of the matter is the so-called Friedman doctrine, Nobel Prize winning economist Milton Friedman’s theory that the social responsibility of a business is to increase its profits. Commonly, the soundness of the Friedman doctrine is pitted against another economic theory, the tragedy of the commons, in which individual pursuit of personal gain comes at the detriment of society. Part of what is at issue is the matter of economic growth. A common understanding in sustainability is that infinite economic growth (as supported by capitalist doctrine) is at odds with a planet of finite resources. We already consume nearly 1.5 Earth’s worth of resources every year, far overshooting our available . If anything, we must scale back this consumption to operate within our planetary boundaries. But can we do that – and remain capitalists? On this point, Larry Fink and I resoundingly agree. The answer is yes. In fact, Fink argues, capitalism is a road to sustainability, but it will require the reimagining of how we do business and generate profits today. How can capitalism be sustainable? The only way we can maintain infinite growth with finite resources is through innovation, and through circular innovation specifically. Stewardship of our natural resources is becoming a form of significant capital, and that capital is increasingly at risk. It is, therefore, the fiduciary responsibility of all leaders to protect natural resources to de-risk business. “We focus on sustainability not because we are environmentalists, but because we are capitalists and fiduciaries to our clients.” – Larry Fink This, Fink concludes, means . One of the greatest risks to our collective natural resources (including people) is climate change. The faster we can decarbonize, the more rapidly we reduce this risk. But it doesn’t stop there; we must also innovate, knowing that how we do business today will not survive a resource-constrained and risk-laden future. The business models that served us 100, or even 50, years ago must be overhauled. We must ascribe value to concepts and ideas that we may have devalued in the past. We must invest, heavily, in the development of digital solutions and services that advance our very human aims of survival while simultaneously supporting our economic ambitions of growth. Through this lens, I’d argue that capitalism itself is, in fact, sustainable. It is the competitive market pressures of the next decade that will help us to succeed through the efficient allocation of scarce resources. In fact, in an April 2022 report, BlackRock noted that it expects . It is the spirit of exploration and the promise of potential profit that will drive some of our most talented entrepreneurs and inventors, and it is the work of those individuals that will create new, resilient, sustainable, and that will allow us to drive profitability and growth in the face of finite resources. Fink challenges all of us, as business leaders, to answer a fundamental question this year: will we lead in this brave new world of sustainable capitalism – or will we follow? I know my position in this pecking order – do you?

Nearly 250 years ago, the economist and philosopher Adam Smith wrote The Wealth of Nations, in which he described the birth of a new form of human activity: industrial capitalism. It would lead to the accumulation of wealth beyond anything that he and his contemporaries could have imagined. Capitalism has fuelled the industrial, technological and green revolutions, reshaped the natural world and transformed the role of the state in relation to society. It has lifted innumerable people out of poverty over the last two centuries, significantly increased standards of living, and resulted in innovations that have radically improved human well-being, as well as making it possible to go to the Moon and read this article on the internet. However, the story is not universally positive. In recent years, capitalism's shortcomings have become ever-more apparent. Prioritising short-term profits for individuals has sometimes meant that the long-term well-being of society and the environment has lost out – especially as the world has faced the Covid-19 pandemic and climate change. And as political unrest and polarisation around the world have shown, there are growing signs of discontent with the status quo. In one 2020 survey by the marketing and public relations firm Edelman, 57% of people worldwide said that "capitalism as it exists today does more harm than good in the world". Indeed, if you judge by measures such as inequality and environmental damage, "the performance of Western capitalism in recent decades has been deeply problematic", the economists Michael Jacobs and Mariana Mazzucato wrote recently in the book Rethinking Capitalism. However, that does not mean there are no solutions. "Western capitalism is not irretrievably bound to fail; but it does need to be rethought," argue Jacobs and Mazzucato. So, will capitalism as we know it continue in its current form – or might it have another future ahead? Capitalism has spawned thousands of books and millions of words, and so it would be impossible to explore all its facets. That said, we can start to understand where capitalism could be headed in the future by exploring where it began. This tells us that capitalism hasn't always worked the way it does today ­– particularly in the West. Between the 9th and 15th Centuries, autocratic monarchies and ecclesiastical hierarchies dominated Western society. These systems began to fall away as people increasingly asserted their right to individual liberty. This push for a greater focus on the individual favoured capitalism as an economic system because of the flexibility it allowed for private property rights, personal choice, entrepreneurship and innovation. It also favoured democracy as a governing system for its focus on individual political freedom. The shift toward greater individual liberty changed the social contract. Previously, many resources were provided by those in power (land, food and protection) in exchange for significant contributions from citizens (for instance, from slave labour to hard labour with little pay, high taxes and unquestioning loyalty). With capitalism, people expected less from governing authorities, in exchange for greater civil liberties, including individual, political and economic freedom. But capitalism would evolve significantly over the following centuries – and particularly so during the second half of the 20th Century. After World War Two, the Mont Pelerin Society, an economic policy think tank, was founded with the goal of addressing the challenges confronting the West. Its specific focus was on defending the political values of an open society, rule of law, freedom of expression and free market economic policies – central tenents of classical liberalism. Its ideas eventually gave rise to "supply-side economics". This was the belief that lower taxes and minimal regulation of the free market would lead to the most economic growth – and, therefore, better lives for all. In the 1980s, coupled with the emergence of political neoliberalism, supply-side economics became a priority for the US and many European governments. This newer strain of capitalism has led to increased economic growth worldwide, while lifting a substantive number of people out of absolute poverty. But at the same time, critics argue that its tenets of lowering taxes and deregulating business has done little to support political investment in public services, such as crumbling public infrastructure, improving education and mitigating health risks. Perhaps most significantly, in many developed nations late-20th Century capitalism has contributed to a significant gap between the wealth of the richest and poorest people, as measured by the Gini Index. And in some countries, that gap is growing ever-wider. It's particularly stark in the US, where the poorest individuals have seen no real income growth since 1980, while the ultra-rich at the top have seen their income grow by around 6% per year. The richest billionaires in the world are almost all based in the US, and have amassed staggering fortunes, while at the same time the median US household income has risen only modestly since the turn of the century. The inequality gap may matter more than some politicians and corporate leaders would like to believe. Capitalism may have lifted millions of people around the world out of absolute poverty, but inequality can be corrosive within a society, says Denise Stanley, a professor of economics at California State University-Fullerton. "Absolute poverty is basically folks are able to get… $4 per day per person. It’s a threshold measure," she explains, but relative poverty can unbalance a society over the long-term. Even if the economy is growing, income inequality and stagnant wages can make people feel less secure as their relative status in the economy diminishes. Behavioural economists have shown that "our status compared to other people, our happiness, is derived more by relative measures and distribution then by absolute measures. If that’s true then capitalism has a problem," says Stanley. As a result of rising inequality, "people have less trust in institutions and experience a sense of injustice", according to the Edelman report. But the impact on people's lives may go deeper. Capitalism in its current form is destroying the lives of many working-class people, argue the economists Anne Case and Sir Angus Deaton in their book Deaths of Despair and the Future of Capitalism. Over "the past two decades, deaths of despair from suicide, drug overdose, and alcoholism have risen dramatically, and now claim hundreds of thousands of American lives each year", they write. The 2007-2008 financial crisis exacerbated these problems. The crisis was brought on by excessive deregulation, and hit the working class in developed nations particularly hard. The subsequent bailouts of big banks led to resentment and "helped fuel the rise of the… polarised politics we’ve seen over the last decade", according to Richard Cordray, the first director of the US Consumer Financial Protection Bureau (CFPB) and author of Watchdog: How Protecting Consumers Can Save Our Families, Our Economy, and Our Democracy. Liberal democracies may now be at an inflection point, where citizens contest today’s capitalist norms with greater political intensity worldwide. J Patrice McSherry, a professor of political science at Long Island University in New York, has observed this change in Chile, for instance. "Social mobilisation began with a rise in subway fares in October 2019, sparking broad-based protests that convoked more than one million people in demonstrations," she says. "The social movement has exposed the deep sources of discontent in Chile: entrenched and growing inequality, the ever-rising cost of living, and extreme privatisation in one of the world’s most neoliberal states." Those grievances can be traced back to the late 20th Century, when Chile's authoritarian government introduced constitutional reforms that "institutionalised the economic and political domination of the dictatorship and enshrined a neoliberal framework that erased the role of the state in social and economic areas. It restricted political participation, gave the [political] right disproportionate power, and installed a tutelary role for the armed forces," writes McSherry in an article for the North American Congress on Latin America, a non-profit organisation which tracks trends in the region. Similarly, the Yellow Vest movement that started in France in 2018 was initially about the increased cost of fuel for commuters, but quickly broadened to include grievances similar to those in Chile, the cost of living, growing inequality, and a demand for government to stop ignoring the needs of ordinary citizens. And in the US, the political movement which spawned Trumpism is arguably fuelled by economic inequality just as much as ideology. Among voters who have lost out due to globalisation, the Trump administration won widespread political support for its more closed approaches to global trade, including withdrawal from the Trans-Pacific Partnership and retaliatory tariffs on Chinese, Indian, Brazilian and Argentinian goods and services imported into the US. Even the US's allies were targeted by this agenda, including Europe, Canada, and Mexico. While one response to the downsides of capitalism in its current form is for nations to take a defensive posture, seeking to protect themselves by minimising external ties, protectionism "is short-sighted, particularly when it comes to trade," according to Anahita Thoms, head of Baker McKenzie's International Trade Practice in Germany and Young Global Leader of the World Economic Forum. "While it may bring some temporary benefits, in the long-term it endangers the global economy as a whole and threatens to undo decades of economic progress. It is crucial to maintain investment-friendly, open markets," says Thoms. A central challenge for governments in the 21st Century will be to work out how to balance these long-term benefits of global trade with the short-term harms that globalisation can bring to local communities affected by low wages or unemployment. Economies cannot become completely divorced from the demands of democratic majorities who seek jobs, affordable housing, education, healthcare and a clean environment. As the Chilean, Yellow Vest and Trumpist movements show, many people are asking for change to the existing system so that it accounts for these needs, rather than only enriching private interests. In sum, it may be time to reconsider the social contract for capitalism, so that it becomes more inclusive of a broader set of interests beyond individual rights and liberties. This is not impossible. Capitalism has evolved before, and if it is to continue into the longer-term future, it can evolve again. In recent years, various ideas and proposals have emerged that aim to rewrite capitalism's social contract. What they have in common is the idea that businesses need more varied measures of success than simply profit and growth. In business, there's "conscious capitalism", inspired by the practices of so-called "ethical" brands. In policy, there's "inclusive capitalism", advocated by both the Bank of England and The Vatican, which advocates harnessing "capitalism for good". And in sustainability, there's the idea of "doughnut economics", a theory proposed by economist and author Kate Raworth, which suggests that it's possible to thrive economically as a society while also staying within social and planetary boundaries. Then there's the "Five Capitals" model articulated by Jonathan Porritt, the author of Capitalism As If The World Matters. Porritt calls for the integration of five pillars of human capital – natural, human, social, manufactured, and financial capital – into existing economic models. One tangible example of where companies are beginning to embrace the Five Capitals is the B-Corporation movement. Certified companies sign up to a legal obligation to consider "the impact of their decisions on their workers, customers, suppliers, community, and the environment". Their ranks now include major corporations such as Danone, Patagonia, and Ben & Jerry's (which is owned by Unilever). This approach has become increasingly mainstream, reflected in a 2019 statement released by over 180 corporate CEOs redefining "the purpose of a corporation". For the first time, CEOs representing Wal-Mart, Apple, JP Morgan Chase, Pepsi, and others acknowledged that they must redefine the role of business in relation to society and the environment. Their statement proposes that companies must do more than deliver profits to their shareholders. In addition, they must invest in their employees and contribute to the improvement of the human, natural and social elements of capital that Porritt refers to in his model, rather than the sole focus on financial capital. In a recent interview with Yahoo Finance on the future of capitalism, the executive chairman of Best Buy, Hubert Joly, said that "what has happened is that for 30 years, from the 1980s to 10 years ago, we’ve had this singular focus on profits that has been excessive and has caused a lot of these issues. We need to unwind a bit of these 30 years. If we have a refoundation of business, it can be a refoundation of capitalism as well... I think this can be done, this has to be done." More than three decades ago, the United Nations Brundtland Commission wrote in "Our Common Future" that there was ample evidence that social and environmental impacts are relevant and need to be incorporated into development models. It is now obvious that these issues must also be considered within the social contract underpinning capitalism, so that it is more inclusive, holistic and integrated with basic human values. Ultimately, it is worth remembering that citizens in a capitalist, liberal democracy are not powerless. Collectively, they can support companies aligned with their beliefs, and continuously demand new laws and policies which transform the competitive landscape of corporations so that they might improve their practices. When Adam Smith was observing nascent industrial capitalism in 1776, he could not foresee just how much it would transform our societies today. So it follows that we might be similarly blind to what capitalism could look like in another two centuries. However, that does not mean we should not ask how it might evolve into something better in the nearer term. The future of capitalism and our planet depend on it.

Most people believe that capitalism is to blame for climate change and environmental degradation. But numerous scientific studies have arrived at a surprising conclusion. Every year, the Heritage Foundation ranks countries around the world based on economic freedom in a kind of . Analysis has shown that the world’s most economically “free” countries also registered the highest scores on Yale University’s , averaging 76.1 (on a scale from 0 to 100), while the “mostly free” countries averaged 70.2. These two groups have a significant lead over the “moderately free” countries, which received much lower ratings (59.6 points) for their environmental performance. The countries rated by the Heritage Foundation as either “mostly unfree” or “repressed” received by far the worst Environmental Performance Index scores (46.7 and 50.3, respectively). Researchers at Yale University found that there is not only a correlation between the Heritage Foundation’s index and their own EPI, but also between the EPI and the “” which is published each year as part of the World Bank’s Doing Business Report and is generally regarded as the world’s most comprehensive and reliable gauge of the ease of doing business, with higher ratings indicating better, usually simpler, regulations for businesses and stronger protections of property rights. According to the researchers at Yale University, the correlation between the “Ease of Doing Business Index,” which they refer to as a measure of “economic liberalism” (i.e., an indicator of how capitalist an economy is), and the EPI is 0.72. In 2016, researchers published in the journal Sustainability that included an evaluation of the correlation between the EPI and the “Open Market Index” (OMI) compiled by the International Chamber of Commerce (ICC). The OMI measures a country’s openness to free trade and is thus an important indicator of economic freedom. The researchers found a high degree of overlap between the OMI index and the EPI: 19 of the OMI’s 27 highest-scoring countries also appear in the top 27 of the EPI. The survey covered a total of 75 countries, including all G20 and EU members. Together, these countries account for more than 90 percent of international trade and investment. The researchers conclude: “It is evident that there is a strong connection between OMI and EPI scores, supporting our hypothesis that countries with an open economy score higher in environmental performance. Overall, our evidence shows that the level of the openness of an economy is associated with a country’s environmental protection.” Another study, “” by Antweiler, Copeland and Taylor, uses sophisticated mathematical modeling to explore the correlation between free trade – a key feature of capitalism – and environmental pollution. The study finds: “Our estimates of the scale and technique elasticities indicate that if openness to international markets raises both output and income by 1%, pollution concentrations fall by approximately 1%. Putting this calculation together with our earlier evidence on composition effects yields a somewhat surprising conclusion: freer trade is good for the environment.” Of course, it can be argued that capitalism leads to stronger economic growth, which in turn leads to an increase in resource consumption. However, the analyses show that, at an early stage of a country’s economic growth, a high level of environmental degradation is observed, while, after a critical point of economic growth, a gradual decline in environmental degradation is reported. In addition, there are two real-world observations that also disprove the argument that stronger economic growth automatically leads to greater environmental pollution: In non-capitalist countries, environmental degradation has been a far more serious problem than in capitalist countries. The correlation between economic growth and increasing resource consumption is becoming ever weaker in the age of dematerialization. On the basis of numerous data series, Andrew McAfee how economic growth has decoupled from the consumption of raw materials. Data for the USA show that of 72 raw materials, only six have not yet reached their consumption maximum. Although the US economy has grown strongly in recent years, consumption of many commodities is actually in decline. And the results of all these studies point in the same direction: capitalism is not the problem, it is the solution – both economically and environmentally.

The world economy is currently experiencing its severest contraction since the Great Depression of the 1930s. Unlike the Great Depression and the global financial crisis (GFC) of 2008-2009, this crisis cannot be directly attributed to the dysfunctional workings of capitalism. But even if it is not a crisis of capitalism, it is a crisis for capitalism. Chronic ills of contemporary capitalism – notably rising levels of socio-economic inequality and debt of all kinds – are being exacerbated and intensify the danger of further political polarization and fresh financial instability. Capitalism will nonetheless survive this crisis as it has done previous ones. The fundamental structures of capitalism typically don’t change fast. But they can change and they do, especially at critical historical junctures, such as in response to wars and economic crises – or, potentially, pandemics. State interventionism Compared with recent decades, in post-Covid-19 capitalism the state will emerge as a more dominant actor. Even more than in the years after the GFC, central banks have been resorting to increasingly unorthodox, expansionary monetary policies to stave off economic collapse. To the same end governments have begun and will continue to pursue expansionary fiscal policies and run up ever-higher budget deficits. Austerity policies have suddenly become unfashionable. Sectoral or “industrial” policies have regained favour, with governments everywhere intervening to assist firms in those sectors, such as air transport or tourism, which the crisis otherwise would destroy. Policies to “re-localize” production of critical goods in crises, such as medical equipment and supplies, are suddenly in vogue, whereas state aid policies aimed at preventing distortions of competition are not. The intellectual champions of the free market have fallen silent. Regardless of how fast the world economy recovers from the crisis, longer-term factors – possible new pandemics and pressures to mitigate or adapt to climate change or, in the “old” advanced capitalist economies, to create a more level playing field against firms aided by the Chinese state – will keep the pressure on governments to maintain or strengthen existing levels of state intervention. To say that the state will be a more dominant actor in post-Covid-19 capitalism is not to say, however, that previously divergent capitalisms are converging on a uniform “statist” model. State economic intervention can manifest highly divergent forms. Here the 1930s may offer some salient parallels. Higher levels of state intervention characterized countries that moved politically to the left as well as to the (far) right. Numerous countries, such as in Sweden and New Zealand, where Labour and Social Democratic parties came to power in this period, or the US under President Roosevelt, embarked on Keynesian deficit-spending policies that reduced mass unemployment, strengthened organized labour and expanded collective social welfare provision. At the other end of the politico-ideological spectrum, fascist or Nazi regimes, such as Mussolini’s Italy and Hitler’s Germany, also engaged in large-scale deficit-spending, while destroying liberal democracy, smashing the labour movement, implementing protectionist economic policies, and mobilizing their societies for war. Growing polarization In the wake of the coronavirus crisis, the democratic-capitalist world may well undergo a process of political polarization comparable to what occurred in the 1930s. Depending on the shifting distribution of domestic political power, countries may tend toward one or the other of two scenarios. In one, which might be labelled “yellow capitalism” (combining the colours Social Democratic red and green), state intervention would aim to redistribute income and wealth on a greater scale than is the case in most capitalist democracies today and to take more sweeping measures to combat global warming. ‘Yellow capitalism" would be fundamentally internationalist, recognizing the fact that the most severe challenges facing humankind are global and can be managed effectively only through comprehensive international cooperation. But it would create scope for governments to protect their economies for specific purposes, such as to combat climate change, for example through carbon tariffs. In this scenario, private business would be much more tightly constrained by state regulation than at the peak of neo-liberal capitalism after the Cold War. The core support for this incarnation of capitalism, which synthesizes the aspirations of the “old” labour movement and “new” social, especially environmental, movements, would be found in the (especially younger) professional middle classes in the big cities and towns and the unionized working class. Even centrist political parties could support this kind of political agenda. The other scenario (combining the colour black for nationalism and brown for right-wing populism) might be termed “light-black capitalism”. Like “yellow capitalism”, it would also be highly interventionist, but would be fiscally regressive rather than redistributive, as has been the thrust of President Trump’s tax policy in the US. Climate change would be ignored in favour of maximizing (quantitative) economic growth. Domestic business would be increasingly protected from international competition, while comprehensive immigration controls would offer the (ethnically defined) “people” some protection from the competition of “foreign” workers. The core support for “light-black capitalism” would be in domestic-market-oriented business, among residents of small towns, villages and the countryside as well as in declining industrial regions, among “value conservatives” afraid that changes in dominant social values are destroying traditional norms and life-styles, and among “status anxious” workers hostile to immigration. Rising risks Which of these two incarnations of a state-interventionist capitalism – “yellow” or “light-black” – becomes the predominant form in the post-coronavirus era will be determined by the outcomes of political struggle and conflict in mostly national political arenas. The only thing that is certain is that, for the time being at least, market-friendly incarnations of capitalism will wither. So far, in the coronavirus crisis, citizens in most countries have rallied to their governments in a spirit of national unity akin to what has occasionally happened historically at the outbreak of wars. However, we are currently still passing through the first stage – the public-health phase – of the coronavirus crisis. Expansionary monetary and fiscal policies and the subsidization – on a massive scale – of short-time work have enabled most governments to postpone the arrival of the second, the economic and financial, phase of the crisis. But unless the recovery of the world economy is very rapid, this next phase will materialize. It will be all the more destructive now that a second wave of the coronavirus is upon is, requiring new lockdown measures that will exacerbate the economic problems caused by those taken earlier this year. This phase of the crisis will likely witness greater, perhaps much greater, social and political upheaval than the first. Regardless of how well or badly some national-populist governments have hitherto managed the crisis so far, the growing socio-economic dislocation and insecurity that will increasingly characterize this second phase of the crisis could give movements based on this kind of ideology a powerful new impetus. An upsurge of “light-black capitalism” would likely plunge the world economy into an even deeper recession. Even more ominously, it would also increase the probability of large-scale military conflict. As the American economist Otto Mallery wrote during the Second World War: “When goods don’t cross borders, soldiers will”. In this regard too, the events and trends of the 1930s still provide us today with lessons that we ignore at our peril.

I. INTRODUCTION Humanity finds itself at perhaps one of the most challenging junctures in its history. While grappling with an ever-increasing population, all with an equal right to development, it also has to consider the consequences of this unbridled development. Simultaneously, economists across the world have witnessed the gradual decoupling of economic growth from its energy use (Naqvi & Zwickl, 2017; Mulder and de Groot, 2012). In simpler words, the growth of environmental pressure, which is the pressure exerted by human activities on the state of the environment, has slowed down in comparison to its economic driving force (GDP). However, many environmentalists claim that this decoupling trend is largely a result of developed countries outsourcing their manufacturing activities rather than countries isolating their economic growth from the energy use (Hardt et al., 2018; Cunha et al., 2018). This allows us to re-examine the relationship between energy use, the economic productivity of a country and its environmental pressure. Unfortunately, earlier attempts made by researchers have largely been inconclusive (Kalimeris et al., 2014; Omri, 2014; Schurr, 1982). However, recently emerged studies advocate that the potential for examining this relationship lies in the second law of thermodynamics (Ayres & Warr, 2009; Brockway et al., 2018; Sorrell 2015). Exergy, which in simple terms can be defined as the amount of energy flow that can be used to perform physical work, originates from this very law. This article shall attempt to trace the links between the exergy efficiency and economic decoupling in the United States of America. II. LITERATURE REVIEW Exergy as a concept, purely in the context of thermodynamics, emerged in 1956, when Zoren Rant introduced this term. It originates from the second law of thermodynamics, which from one perspective states that some amount of usefulness of an energy source, i.e exergy is lost at every stage of the conversion process (Sciubba & Wall, 2007). Ayres and Warr (2009), used the concept of exergy to explain economic growth in the US and Japan. In doing so, their work produced a new theoretical innovation: exergy efficiency, an economic variable that can be used to monitor the conversion efficiency of manufacturing systems in place. They define exergy as the potential useful work that can be performed by an energy source. Exergy efficiency captures the difference between the actual work performed and the amount of work that could theoretically be performed. Brockway, Sorrel, Foxon and Miller (2018) present a chain for examining exergy flows in the context of production activities. At the top of this chain is the primary exergy (exergy derived directly from the energy source such as thermal power, fossil fuels or nuclear fission). When this source gets processed and converted into a carrier of commercial use energy, it gets transformed into secondary exergy, for example, electricity. This source is then transferred to the households and is referred to as final exergy. Final exergy is different from secondary exergy because there are some losses (resistive) along the transmission lines. The final exergy of the energy that reaches the households is the useful exergy (the portion of energy flow that actually carries out the useful work and can be stored over time) that economists deal with. This can be measured in Joules. In this regard Miller, Foxon and Sorell (2016) have significantly developed methodologies for exergy accounting. They have constructed a series of useful exergy accounts for the UK for the period of 1960-2012. They developed a classification of energy carriers group, useful exergy categories and their respective end uses. The converted exergy equivalents of primary/final energy estimates are then attributed to each of these end uses to get the final useful exergy output for an economy. When it comes to decoupling and exergy analysis, Haberl et al (2020) have synthesized evidence from 835 selected peer-reviewed articles. Based on these combined evidences of empirical research, they have concluded that relative decoupling is a common occurrence for Greenhouse gases (GHG) and CO2 emissions, but not for useful exergy. Their findings suggest that GDP can be decoupled from primary energy use, to the extent to which conversion from primary exergy to useful exergy can be improved. In simpler words, GDP can be decoupled from energy use by increasing exergy efficiency. III.THEORETICAL OVERVIEW The paper aims to trace the relationship between exergy efficiency and economic decoupling and the following section deals with the two concepts in detail. III.A. Environmental Decoupling Decoupling implies that the growth rate of an environmental burden (CO2 and/or GHG emissions) is less than that of its economic driving force ("Indicators To Measure Decoupling Of Environmental Pressure From Economic Growth", n.d.). Decoupling can be relative or absolute. Relative decoupling is witnessed when economic productivity rises at a rate higher than the emissions of harmful gases. Absolute decoupling occurs when economic productivity continues to rise while the harmful gases emissions decrease. Decoupling trends can be accounted for by simply observing the ratio between CO2 emissions and GDP or GHG emissions and GDP. III. B. Exergy Efficiency Exergy efficiency, on the other hand is a relatively new economic variable that measures the distance from the theoretical maximum potential output. The key idea behind examining the exergy efficiency accounts of an economy is that it captures the effectiveness and robustness of the manufacturing systems in place for the production process. A moment’s thought would throw light on the fact that actual useful work obtained from an energy source largely differs from the maximum useful work that could be extracted from said energy source. This is because some amount of usefulness of an energy source is lost at every conversion process in the form of heat according to the second law of thermodynamics. The ratio between useful exergy consumption and primary exergy consumption gives us the figures for exergy efficiency (Ayres & Warr, 2009). III. C. The Rebound Effects The rebound effect is witnessed when energy consumption increases as its efficiency increases. Implicitly, the actual energy savings are quite lower than the expected savings. This is because consumers are induced to consume more of the energy source, considering that the resource has become relatively cheaper as a result of increased efficiency. This could be seen as a hurdle in achieving the objective of decoupling economic growth from energy usage (Shao, 2018). However, in the exergy analysis, we’re also measuring the effectiveness of reducing the amount of usefulness of an energy source being lost in the form of heat or harmful carbon emissions. Thus, exergy efficiency is already reducing the carbon emissions because the amount of quality of energy being lost is reducing. Building upon this, as a result of this increased exergy efficiency, a rebound effect would be set into motion. As energy consumption would increase, the country’s economic productivity would also increase, since energy animates capital and labour, two determinants of productivity. This leads us to conclude that an increase in exergy efficiency would reduce the carbon emissions while economic productivity would increase as a result of the rebound effect. Thus, exergy efficiency could eventually be the key to achieving absolute decoupling in economies (Ayres & Warr, 2009). IV.DATA ANALYSIS In the following section, this article shall attempt to trace the linkages between exergy efficiency and decoupling in the United States of America for the period of 1990 - 2010. The choice of the US is partly due to availability of comprehensive data on its useful and primary exergy quads (unit of energy equal to 1015 BTUs) as well as exergy efficiency accounts. Another reason is the USA's role in environmental pressure exuded on the planet as a result of economic growth. As of 2016, the US ranked second in the list of highest CO2 emitting economies, closely following China at 15.502 metric tons per capita ("U.S. Energy Information Administration (EIA)", n.d.). Further, its total greenhouse gases emissions stood at 6,677 million metric tons of carbon dioxide equivalents. ("Inventory of U.S. Greenhouse Gas Emissions and Sinks | US EPA", n.d.). These statistics could produce even grimmer realities for the planet, considering that the US is one of the largest economies. It becomes increasingly pertinent to look at ways in which these emissions can be reduced as the country’s economic productivity continues to rise. Between 2005 and 2017, USA’s carbon emissions declined by 12% ("U.S. Energy Information Administration (EIA)", n.d.), while its GDP increased by nearly two folds. This leads us to surmise that the US has been experiencing some levels of relative decoupling of its economic growth from its energy usage. Further, if we look at Figure 1, CO2 emissions per capita have steadily declined in the USA for the period of 1990-2010.

This article aims to seek how much of the changes in USA’s decoupling figures can be explained with its exergy efficiency accounts. If we look at figure 2, we observe that USA’ s exergy efficiency has steadily increased for the period of 1990-2010, until it suffered a sharp decline in 2010.

In recent years, various ideas and proposals have emerged that aim to rewrite capitalism's social contract. What they have in common is the idea that businesses need more varied measures of success than simply profit and growth. In business, there's "", inspired by the practices of so-called "ethical" brands. In policy, there's "", advocated by both the and The Vatican, which advocates harnessing "capitalism for good". And in sustainability, there's the idea of "", a theory proposed by economist and author Kate Raworth, which suggests that while also staying within social and planetary boundaries. Then there's the "" model articulated by Jonathan Porritt, the author of Capitalism As If The World Matters. Porritt calls for the integration of five pillars of human capital – natural, human, social, manufactured, and financial capital – into existing economic models. One tangible example of where companies are beginning to embrace the Five Capitals is the . Certified companies sign up to a legal obligation to consider "the impact of their decisions on their workers, customers, suppliers, community, and the environment". Their ranks now include major corporations such as Danone, Patagonia, and Ben & Jerry's (which is owned by Unilever). This approach has become increasingly mainstream, reflected in a 2019 statement released by over 180 corporate CEOs redefining "". For the first time, CEOs representing Wal-Mart, Apple, JP Morgan Chase, Pepsi, and others acknowledged that they must redefine the role of business in relation to society and the environment. Their statement proposes that companies must do more than deliver profits to their shareholders. In addition, they must invest in their employees and contribute to the improvement of the human, natural and social elements of capital that Porritt refers to in his model, rather than the sole focus on financial capital. In a recent interview with Yahoo Finance on the future of capitalism, the executive chairman of Best Buy, Hubert Joly, said that "what has happened is that for 30 years, from the 1980s to 10 years ago, we’ve had this singular focus on profits that has been excessive and has caused a lot of these issues. We need to unwind a bit of these 30 years. If we have a refoundation of business, it can be a refoundation of capitalism as well... I think this can be done, this has to be done." A new direction More than three decades ago, the United Nations Brundtland Commission wrote in "" that there was ample evidence that social and environmental impacts are relevant and need to be incorporated into development models. It is now obvious that these issues must also be considered within the social contract underpinning capitalism, so that it is more inclusive, holistic and integrated with basic human values. Ultimately, it is worth remembering that citizens in a capitalist, liberal democracy are not powerless. Collectively, they can support companies aligned with their beliefs, and continuously demand new laws and policies which transform the competitive landscape of corporations so that they might improve their practices. When Adam Smith was observing nascent industrial capitalism in 1776, he could not foresee just how much it would transform our societies today. So it follows that we might be similarly blind to what capitalism could look like in another two centuries. However, that does not mean we should not ask how it might evolve into something better in the nearer term. The future of capitalism and our planet depend on it.

This book has applied what I believe is the immensely powerful idea of a mission to solving the ‘wicked’ problems we face today. In it, I have argued that tackling grand challenges will only happen if we reimagine government as a prerequisite for restructuring capitalism in a way that is inclusive, sustainable and driven by innovation.

First and foremost, this means reinventing government for the twenty-first century – equipping it with the tools, organization and culture it needs to drive a mission-oriented approach. It also means bringing purpose to the core of corporate governance and taking a very broad stakeholder position across the economy. It means changing the relationship between public and private sectors, and between them and civil society, so they all work symbiotically for a common goal. The reason for the emphasis on rethinking government is simple: only government has the capacity to bring about transformation on the scale needed. The relationship between economic actors and civil society shows our problems at their most profound, and this is what we must unravel.

Hannes, Professor of Geography at the University of West Georgia. “The Digital Commons’ Elusive Potential.” From Capital to Commons: Exploring the Promise of a World Beyond Capitalism. University of Bristol. Pp 48-52. /LJS

While the state, in its current form, is not in a strong position to spearhead a publicly funded expansion of the digital commons, state engagement is by no means a lost cause. Even if certain seismic shifts in governance seem distant today, it is important to keep in mind that over time, conditions and realities do change. In the meantime, there are several important concessions and interventions that could still be squeezed from variously scaled tiers of government, especially in those windows of opportunity when a commons friendly administration is in power. Regarding the digital realm, in particular, compeerist political engagement would most directly translate into demands to establish and expand government involvement in the production and dissemination of commons based digital value, including in the GLAM and public broadcasting realms. Similarly, pressure could be exerted to increase support for publicly funded research institutions, with calls for the explicit commitment to greater openness and collaboration in the research process and an insistence that all academic work be released to the digital commons. Additionally, appeals could be made for the delivery of grants, tax breaks, and other financial assistance to external actors engaged in commons-based digital production, ranging from transnational initiatives such as the Open Source Drug Discovery (OSDD) project to smaller local cooperatives focused on various forms of place-specific, commons-based digital value production. Lastly, compeerists could home in on the significant role the state plays in the determination and execution of intellectual property laws. In response to this power, there is a long established and growing movement of both copyright reform and outright copyright abolition as the intellectual property regime is viewed by an increasing number of people as leading to an unjust ‘intellectual monopoly’ (Lindsey and Teles, 2017, np). While getting the state to abandon copyright protections altogether is undoubtedly unrealistic in the near term, clear demands relating to intellectual property are mounting, for instance from the likes of the Access to Knowledge movement and anti-copyright Pirate Parties (Timmermann, 2014; Cammaerts, 2015). These demands include the suspension of intellectual property on goods linked to humanity’s inalienable rights, shortening the expiration dates of standard patents and copyrights, and establishing greater transparency and contributor rights in the assignment of patents. Additionally, given that the state also plays a critical role in overseeing and enforcing copyleft alternatives, compeerists will naturally insist that the relevant state institutions enforcing and adjudicating these cases apply the same type of rigour and commitment as they do when dealing with copyright infringements. Following compeerist thinking, however, while concerted, state-based initiatives are an important way to support the digital commons, in the end, they are insufficient on their own. This is because, for the general intellect to truly become liberated – and hence reach its full counter-capitalist promise – requires the populace itself (the true source of the general intellect) to be the driving force behind the commoning of information/knowledge. In other words, it is up to commoners to foster and expand the digital commons into a vibrant, enabling space by and for the people, unrestrained or corrupted by the extractive tendencies of capital. At the same time, as we have seen, this is a tall order considering the broader context where the apparatus of capture significantly limits people’s ability to engage in commons-based work. Massimo De Angelis has written at length about the importance of leveraging synergistic relations between commons-oriented entities themselves, to create a more concerted impetus for commoning from the bottom up. More specifically, he refers to a commons ecosystem that can be strengthened and expanded through what he terms, ‘boundary commoning’. According to De Angelis (2017b, p 287), boundary commoning ‘activates and sustains relations among commons thus giving shape to commons at larger scales, pervading social spaces and intensifying the presence of commons within them’. In this sense we are dealing with a meso-level form of economic/political organization that aims to cohere local, prefigurative commons-based initiatives into a more unified force in the face of macro-level assemblages/apparatuses undergirding the capital-state nexus. There are, ultimately, numerous ways that such boundary commoning can express itself, from variously formal arrangements facilitating the pooling, management, and sharing of resources to establishing commons-oriented guild-like organizations that work to enhance both the economic and political power of their members (Arvidsson, 2020; De Moor, 2008; Kostakis and Bauwens, 2019). In terms of the aim of expanding the digital commons, then, an important boundary-commoning initiative that comes to the fore is that of establishing a more proactive and solidaristic form of commons-based digital property governance, that is, peer property. The emerging concept of peer property denotes an alternative to both top-down state ownership and fully individualized property rights (Bauwens, 2009; Kleiner, 2010). Instead, peer property is ‘commons property’, understood in the vein of Ostrom (2015) as being produced, maintained, and governed by a particular community and made available, as any well-functioning commons, according to particular rules, norms, and restrictions. In this sense property must also be grasped, as commons advocates David Bollier and Silke Helfrich (2019) insist, as relational, not something to possess but rather something to negotiate. In the digital realm, GPL and CC are the two major alternatives to proprietary property laws, with each approaching copyright’s deficiencies in different ways: while GPL emphasizes the expansion of the commons, CC focuses on the empowerment of creative/cognitive workers. What is needed, however, is a licensing arrangement that can do both more effectively, that is, one that can further the commons while also supporting the right of the digital value producer to not only control their work, but to be remunerated for it. This goal can ultimately be achieved by making free access to commons-sourced value conditional. Bauwens et al (2017, p 38) present the matter quite plainly by stating that ‘while knowledge sharing should always be maintained, we should also demand reciprocity for the commercial exploitation of the commons’. In essence, then, peer-property licensing reverse engineers existing copyright and patent laws to form a contingency component to the license, where use rights change depending on how or by whom the peer-property asset is used. In this way, if you are in the commons in-group, you may use the peer licensed asset freely, including commercially. If you are in the capital outgroup, any use is either prohibited or comes with the mandate to pay some form of compensation. Enforcement would here be based on commons based actors using the legal status of peer-property in litigation suits against offenders, just as capital pursues the enforcement of copyright. Hence, by demanding that capital pay something for its use of commons-sourced digital value, a transference of much-needed resources into the commons is created. Such an arrangement would then open the opportunity to actually pay commons workers and cover other operational costs, thus offering a partial reprieve from the dependency on capital and facilitating the production and dissemination of commons-based digital value. Yet, a key question here is how the in- and out-groups and their subsequent rights are to be determined. One approach, termed ‘coopyright’, has sought to build a reciprocity-like license using already existing CC licensing as a foundation (P2PF Wiki, 2019b). Being grounded in the globally recognized and fully open-sourced Creative Commons regime, the terms of the license can be easily modified to include a dual mechanism in which a restrictive, non-commercial use license is primary (including unaltered use within other commodities), while a more open license becomes operational if certain commons-contribution criteria are met. In this sense, while similar to a reciprocity demand, the key issue is not so much one of share-alike, but rather share-with-whom. What ultimately counts as an adequate commons-contribution would be left to the issuer of the license. While one option would be to institute some form of tit-for-tat condition, which would require quantifying what is taken and what is returned to the commons, a simpler alternative would be to make the commons contribution criteria linked to some form of membership. This is the approach taken by FairShares, self-described as the ‘association for multi-stakeholder cooperation in member-owned social enterprises’ (FairShares, 2017). FairShares has thus embraced coopyright in a way where the digital resources produced by FairShares are available for a wide array of uses, including commercial ones, to active, contributing members of the association while non-members must pay fees, regardless of whether their interest in the resource is commercial or not. Establishing clear in-group privileges in this way helps not only to overcome questions of how to determine reciprocity, but it minimizes the difficult task of needing to oversee and enforce commercial use conditionalities, a recurring burden within CC licensing. Taking the idea of membership beyond a relatively confined in-group, Copyfarleft, developed by Dmitry Kleiner, stipulates a peer property regime in which the digital asset under its license is open and free of intellectual property protections, unless it is used with the primary intent to achieve profit, in which case some form of payment is required (Kleiner, 2010). This approach has since been adopted by the P2P Foundation as Copyfair licensing, where the in-group is now defined to include all intentional, worker-empowered enterprises, hence again dealing with the issue of difficult-to-adjudicate profit intentionality. Some, however, have argued Copyfair’s operationalization is too strict, preferring an expansion to include the commons-aligned ‘social and solidarity economy’ (SSE) (P2PF Wiki, 2019b, np). Indeed, if the aim is to create a large enough commons sphere to where peer-property can offer a significant benefit, it would make sense to also include non-profits and intentional member cooperatives. Importantly, each of these also maintain recognized legal status, thus creating clear and indisputable distinctions in determining in- and out-group designations. Regardless of its eventual form, a peer-property licensing regime that could reach adequate scale holds the potential of creating a massive collection of open-source code, design, know-how, and other digital content that would be guarded from capitalist extraction. While some critics on the left argue that the bounding of resources in this way is contrary to commoning and ultimately reflects capitalist, market-oriented thinking, it is an argument that compeerism firmly rejects (Rigi, 2014). As we have seen, compeerism regards successful market engagements as a necessity if economic and political power are ever to be transferred from capital to the commons, and peer property is a valuable tool to achieve this aim. Furthermore, as the upcoming chapters make clear, the way true compeerists, in the digital realm and beyond, interact with markets is rooted in fundamentally non-capitalist values and modes of operation. Indeed, it is due to the embrace of these values that significant market disadvantages arise, which is precisely why establishing an expansive and robust peer-property regime is so important.

John, Professor Emeritus, University of Missouri, Columbia, MO. “Sustainable Capitalism: Our Best Hope for the Future.” Prepared for presentation in Cabin Fever Lecture Series, Baraboo, WI, January 23, 2008. https://ikerdj.mufaculty.umsystem.edu/presentation-papers/sustainable-economies/sustainable-capitalism-our-best-hope-for-the-future //InTr

Many people today question whether a capitalist economy can ever be sustainable. Admittedly, the ecological and social risks of capitalism are real. However, no other economic system has been found that can rival its efficiency and productivity in decisions and activities that are legitimately private, personal, or individual in nature. Societies that have tried communism, socialism, and religious theocracies have never been able to meet the physical and material needs of their people. They are ultimately rejected by their people because they are not economically sustainable. Most individual economic decisions do not deprive anyone of their basic social rights or violate any moral imperative. These decisions legitimately belong in the individual, private economy, where there is no logical alternative to capitalism. Capitalism, with all of its inherent risks, is still humanity’s best hope for sustainability. Fortunately, sustainable capitalism does not require some radical, new-age value system; it only requires that we return to the foundational principles of classical capitalism and grass-roots democracy. We already have the necessary political and institutional structures in place to create a sustainable economy. We have the means of ensuring the renewal and regeneration of ecological and social capital needed to sustain the development of economic capital because we have a constitution that could be amended to ensure the rights of all people, including both current and future generations, to a healthy and productive natural environment. The U.S. constitution was designed to be changed, as is spelled out in Article V. The Founding Fathers anticipated such changes would be necessary to maintain the “consent of the governed.” The United States today is in desperate need of a new “bill of rights” to ensure the sustainability of this great nation. However, constitutional changes cannot be imposed upon the governed, but instead must reflect the consent of the governed. We must have a national discussion to reach a new consensus regarding ecological, social, and economic justice. Eventually, we Americans must abandon our pursuit of individual material wealth for the pursuit of a more enlightened concept of self-interest. We are material beings and we need to be concerned about our individual, economic well-being. But we are also social beings; we need other people. We need interpersonal relationships that are not predicated on the expectation of economic benefits. We also are ethical and moral beings. We need to feel a sense of rightness and goodness in the things we do to give purpose and meaning to our lives. Sustainability requires only that we seek a more enlightened self-interest. This is not some radical, new idea. In the early 1800s, in his classic book, Democracy in America, Alex De Tocqueville referred to it as sense of “self-interest rightly understood”[8] and deemed it a necessity of democracy. Sustainability ultimately is a matter of ethics and morality. We must be willing to treat other people as we would like to be treated if we were in their situation and they were in ours. We must be willing to practice the Golden rule both within and across generations by doing for those of future generations as we would have them do for us, if we were of their generation and they were of ours. We must come to the common understanding that it is not a sacrifice to care for other people or to take care of the earth because these things make our lives better. We must reflect our common sense of rightness and goodness in our relationships with each other and our relationships with the earth. Ironically, classical capitalism was built upon a strong moral and ethical foundation. Classical economists, including Adam Smith, David Ricardo, and Thomas Malthus, were very much concerned with the well-being of society and humanity. Adam Smith wrote in his 1776 classic, Wealth of Nations, “improvement in the circumstances of the lower ranks” should never be regarded as “an inconvenience to the society… what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole.”[9] He also wrote that land, meaning natural resources, “constitutes by far the greatest, the most important, and the most durable part of the wealth of every extensive country,”[10] suggesting that the public must accept responsibility for protecting their common wealth. Classical economists understood that a capitalistic economy must function within the social and ethical bounds of a moral and just society, if it is to function for the well-being of people in general. However, neoclassical economists, who appeared around the turn of the 20th century, wanted to be true scientists. They eventually abandoned the social and ethical foundations of classical economics in their pursuit of impersonal scientific objectivity. Over time, market economies were allowed to drift away from the necessary conditions of competitive capitalism, in the pursuit of greater economies of scale from large, industrial organizations. Competitive capitalism requires a larger number of buyers and sellers, freedom of entry and exit, accurate information, and consumer sovereignty. These conditions existed in the days of Adam Smith, with large numbers of small proprietorships and face-to-face transactions, and the associated inability to coerce, deceive, or persuade through advertising. However, today’s capitalistic economies are dominated by giant multinational corporations, with entry and exit restrained by large investment requirements and patents, and with billions of dollars spent for misleading and persuasive advertising. International trade is no longer free trade among sovereign individuals who are not free to “not trade” but instead is coerced trade between rich and poor nations, many of whom feel obligated or forced to trade. Eventually, publicly owned corporations, not sovereign individuals, came to dominate decisions made within capitalistic economies. Corporations are not human beings. They have no sense of right or wrong, good or bad, they have no capacity for ethics or morality. Today’s capitalist economy may produce lots of “cheap stuff” but there is absolutely no assurance that it is producing the “right stuff,” certainly not the right stuff for future generations. We have antitrust laws in place to ensure competitive markets, but their enforcement has been largely abandoned. Perhaps we also need constitutional amendments designed expressly to limit the powers of corporations and to restore true capitalism to our economy. However, constitutional amendments to ensure the rights of all people to a clean and healthy natural environment and to ensure equal rights for those of future generations would do more to ensure economic sustainability than any political act of the people. Only when our economy again functions competitively within the context of an equitable and just society, will we be ensured of its sustainability. This is not communism or socialism; this is fundamental capitalistic democracy. We have the necessary legal and governmental structures and processes in place to create, interpret, and enforce laws necessary to ensure economic sustainability. We need only allow our government to do what it was designed to do. The Declaration of Independence states, “We hold these truths to be self-evident that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are life, liberty, and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.” The preamble to the U.S. Constitution states, “We the people of the of the United States, in order to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty for ourselves and our posterity, do ordain and establish this constitution of the United States of America.” Nowhere in our founding documents do we find “ensuring economic growth” identified as a primary responsibility of government. All we need to do to establish a sustainable capitalistic economy is to return to the core values of democracy and the core principles of capitalism. We are in the midst of a great transition. We simply cannot continue doing what we have been doing because we are rapidly depleting the natural and human resources upon which the very survival of humanity ultimately depends. Today’s capitalist economies are not sustainable. We must renew and regenerate our ecological and social capital if we are to sustain the economic capital necessary for a sustainable economy. A sustainable economy is not an option; it is a necessity, if there is to be a future for humanity. Together we can and must build a new sustainable economy and society, and in so doing, we will create a fundamentally better way of life for ourselves today and for those who follow in the future.

Abdul Rehman, research assistant at the Institute of Development and Economics Alternatives (IDEAS); Ali Asad Sabir, political economist and senior research assistant at IDEAS; 5-28-2023, "Profit over planet: capitalism's impact on climate crisis", T-Magazine, https://tribune.com.pk/story/2419022/profit-over-planet-capitalisms-impact-on-climate-crisis /LJS

However, there are ways in which capitalism could be restructured to address the climate crisis. Some argue that a new form of capitalism, sometimes referred to as "sustainable capitalism" or "stakeholder capitalism," could prioritize sustainability, social responsibility, and long-term value creation over short-term profit maximization. This form of capitalism would require businesses to consider the impacts of their actions on the environment, society, and future generations, rather than just their shareholders. It would require investment in renewable energy, sustainable transportation, and energy-efficient buildings, and the adoption of circular economy principles to reduce waste and increase resource efficiency. Furthermore, governments can play a significant role in shaping the market to incentivize sustainability, through regulations, taxes, and subsidies. They can also invest in infrastructure, research, and development to support the transition to a low-carbon economy and create green jobs. However, the transition to a sustainable form of capitalism would require significant changes to the current economic system and a collective commitment to addressing the climate crisis. It would require the participation of all stakeholders, including businesses, governments, civil society, and individuals. In the face of mounting evidence linking capitalism to climate change, urgent steps need to be taken by governments and corporations to address this pressing global issue. The relentless pursuit of profit and unbridled consumption inherent in the capitalist system has contributed significantly to environmental degradation. To mitigate these impacts, a paradigm shift is needed, necessitating swift and decisive action. Governments must spearhead the transition by investing in renewable energy sources, encouraging sustainable agricultural practices, and implementing stringent policies that incentivize businesses to prioritize environmental sustainability over maximizing profits. By embracing these measures, we can pave the way for a more sustainable and climate-resilient future.