Search the archive.

Living under the terrible pressure of this acute general crisis, many people are defecting from the prevailing common sense that previously more or less held things together. They no longer believe that free markets are the solution to their problems, that governments need only “remove all the red tape” and let the market do its magic. They are turning away from entrenched elites and mainstream political parties.

This adds a new dimension to the crisis, which now includes what Antonio Gramsci called a “crisis of hegemony”. People are looking for new, out-of-the-box solutions. On the one hand, this represents an opening for emancipatory left-wing projects, but it also has a dark side: many gravitate to authoritarian strong men who engage in vicious scapegoating of minorities. Every country has its own version of this, be it the alt-right white supremacy movement in the United States or the Alternative für Deutschland (AfD) in Germany.

On the other hand, all humans suffer from a number of negativity biases, which we discussed in Chapter 1. These biases tend to make us underestimate or filter out that which is good, while focusing a disproportionate amount of our attention on that which is bad. The universality of these psychological traits may help to explain why respondents who enjoy a much better quality of the environment perceive the state of the planet in ways that are fairly similar to respondents suffering from a much worse quality of the environment. Unfortunately, our negativity biases also make us underappreciate or ignore the real progress that humans have made in tackling environmental problems in the past. Furthermore, they militate against an attitude of rational optimism about our ability to solve environmental problems in the future. It is in this context that the role of improving standards of living cannot be overemphasized.

Economists have long suspected that there is a link between increasing prosperity and heightened concerns for the environment. According to the environmental Kuznets curve (EKC), a hypothesis with a large following in the field of economics, the environment worsens in tandem with economic growth until a certain income per person is reached. At that point, resources start flowing toward environmental protection, and the ecosystem is restored.74

As you may know (although a surprising number of people don’t), the Biden administration has taken a huge step forward in the fight against climate change. The strategically misleadingly named Inflation Reduction Act is mainly a climate bill, using subsidies and tax credits to promote green energy. Environmental experts I follow believe that it’s a very big deal, which, if successfully implemented, will greatly reduce greenhouse gas emissions. It’s not quite as aggressive as the climate plans in Biden’s original Build Back Better legislation, but modelers estimate that it will accomplish about 80 percent of what B.B.B. was trying to do.

The biggest factor making this kind of climate initiative possible, after so many years of inaction, is the spectacular technological progress in renewable energy that has taken place since 2009 or so. This means that we can greatly reduce emissions using carrots instead of sticks: giving people incentives to use low-emission technologies rather than trying to regulate or tax them into giving up high-emission activities. And the politics of carrots are obviously a lot easier than the politics of sticks.

First of all, it can be stated that even on the basis of pure statistics, the thesis of war-mongering capitalism does not stand up to scrutiny. With the rise of capitalism 200 years ago, the frequency of wars did not increase; it significantly decreased.

I would like to devote this chapter to an examination of three wars by way of example: the First and Second World Wars and the Iraq War of 2003. I will pursue the question of the extent to which these wars were “capitalist wars,” that is, were triggered exclusively or predominantly by capitalist interests.

Some interpret the capitalist peace argument as claiming that those that trade will never go to war (van de Haar’s 2020), but a more accurate interpretation is that trade increases the cost, on the margin, of engaging in violent conflict with trading partners (Murphy 2020). A preponderance of the empirical evidence supports this claim although there is no consensus over the magnitude of the effect or the interaction effect between markets and trade and other relevant factors (e.g., political institutions).

While empirical studies are relevant to understanding the liberal peace, they don’t capture the more fundamental point that the freedom underpinning interaction and exchange creates space for people to engage in the process of discovering cultures of peace. Cultures of peace, which refer to the ways which we navigate conflict and live with others, are diverse and open-ended, in contrast to being fixed and given (E. Boulding 2000). Moreover, they are often the result of emergent, bottom-up processes by ordinary people as compared to top-down “solutions” imposed by elites (see Autesserre 2021). The freedoms underpinning exchange also create space for the experimentation associated with discovering ways of peacefully living together.

Contrary to van de Haar’s (2020) assertion that the will to truck and barter cannot overcome the will to make war, numerous empirical studies demonstrate the inverse relationship between trade and conflict (see Gartzke and Li 2003; Oneal 2003; Oneal, Russett and Berbaum 2003; Dorussen 2006; Xiang, Xu and Keteku 2007).3 In addition to trade, there is evidence that foreign direct investment and financial openness positively affects peace (Souva and Prins 2006, Kim 2014). Gartzke (2005, 2007, 2009) extends the argument that trade produces a marginal reduction in violence with evidence that economic freedom and financial market openness reduce the likelihood of war. Further, Gartzke (2007) and Gartzke, Li, and Boehmer (2001) find that capitalism is the causal mechanism behind the liberal peace. They argue that when accounting for the influence of capitalism on international relations, the influence of democracy disappears. Gartzke and Hewitt (2010) analyze the effect of capitalism and democracy on crisis intensity, escalation, and longevity, finding support for the capitalist peace. Importantly, they find that democracy has no significant, independent effect on interstate crisis behavior.

McDonald (2009) finds that “First, liberal economic institutions promote peace. Second, these economic institutions have historically played a stronger role in promoting peace than democracy” (p. 281). He also finds that “public property heightens the likelihood of military conflict for all regime types” (p. 276). Public property and resources enable a ruler to pay for foreign policy irrespective of the wishes of taxpayers and opposition from other governmental actors. Moreover, large portions of public property can sustain arms races that shift the balance of power and tempt preventative strikes. McDonald (2010) also finds support that capitalism, relative to democracy, plays a larger role in limiting violent conflict between states.

The logic underpinning the peace-generating aspects of international trade is grounded in the economic benefits generated by the division of labor, specialization, and voluntary exchange. The division of labor refers to the separation of production tasks into sub-tasks. It entails individuals specializing in specific production roles which, when combined with the efforts of other specializing individuals through voluntary exchange, yields an output that is greater than what would exist if each worker worked in isolation. Further, there is variation in the distribution of resources across geographic locations. The division of labor allows people to take advantage of variations in skills and resources and, in the process, yields increasing returns whereby a given increase in inputs produces a more than proportional increase in output.

Adam Smith (1776a, p. 31-36) noted that the division of labor is limited by the extent of the market meaning that the more people who are part of the market, the greater the opportunity to take advantage of the division of labor to engage in complex production processes. Expansions in the extent of the market can take place within given borders, but also internationally. The benefits generated by expansions in the extent of the market across borders raise the relative cost of war, relative to relying on peaceful means to resolve conflict. For instance, expansions in the extent of the market lowers the cost of obtaining resources, intellectual talent, and financial capital through voluntary exchange as compared to conquest and military rule. Further, exchange is positive-sum, meaning parties residing in different geographic and political boundaries benefit. This stands in contrast to the negative-sum nature of war where resources are destroyed and one party gains at the expense of another.

Diehard degrowth advocates might now point out that such a technology-led plan to tackle climate change will require large material inputs to get every thing electrified and get new renewable power plants built. And because “you can’t produce stuff out of thin air,” as their slogan goes, that is the end of innovation; we are simply kicking the can down the road because, on a finite planet, we are bound to run out of raw materials.

On this point, as President Obama liked to say, “let me be as clear as I can be.” Innovation, and therefore economic growth, will not run out of materials, because the very definition of a production material depends on what is available. This is something we have observed throughout human history. Societies solve problems using what they have on hand. Think of a widespread basic technology like writing, developed by many societies independently to meet exigencies of commerce first, and then knowledge accumulation more broadly. Depending on location and existing technology, several writing materials have been used throughout history—stone tablets, clay tablets, bamboo slats, papyrus, wax tablets, vellum, parchment, paper, and copperplate—all depending on local availability. The same could be said of basic navigation, which has been with humanity since prehistoric time: early vessels were built using techniques and materials from bamboo and logs to reeds and leather, based on material availability and local needs.

Second, modern doomsayers, who recognize that the human population may actually shrink in the future, worry that free enterprise will continue to drive human consumption of resources to higher and higher levels.51 Again, the data do not agree. We have already noted McAfee’s 2019 book, More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next. Sophisticated economies, he found, are currently producing ever more goods and services, while at the same time using ever fewer resources. That is a result of a sustained transition in advanced countries from industry to less resource-intensive economic activities that deal with services and information.

To that process, we may also add dematerialization, which refers to declining consumption of material and energy per unit of gross domestic product (GDP). According to Jesse Ausubel from Rockefeller University and Paul E. Waggoner from the Connecticut Agricultural Experiment Station, “If consumers dematerialize their intensity of use of goods and technicians produce the goods with a lower intensity of impact, people can grow in numbers and affluence without a proportionally greater environmental impact.”52

First, as Ted Nordhaus from the Breakthrough Institute in California observed in 2019, the frameworks assume that humans will continue to reproduce with abandon. In reality, data show that as an economy becomes more developed, birth rates begin to fall. The massive population growth in recent decades is due to rising life expectancy, not rising fertility.49 The birth rates of the United States, Europe, Japan, China, and large parts of Latin America have actually fallen below the replacement level of 2.1 children per woman for some time. That means that their populations are actually starting to shrink. It’s likely that the rest of the world will follow that trend. What does that mean?

According to Bailey, the “world population will likely peak at 9.8 billion people at around 2080 and fall to 9.5 billion by 2100 in the medium fertility scenario calculated by demographer Wolfgang Lutz and his colleagues at the International Institute of Applied Systems Analysis. Alternatively, assuming rapid economic growth, technological advancement, and rising levels of educational attainment for both sexes—all factors that tend to lower fertility—Lutz projects that world population will more likely peak at around 8.9 billion by 2060 and decline to 7.8 billion by the end of the twenty-first century.”50

This book is not about the present state of environmental science, the causes and the extent of global warming, and the precise nature and potential consequences of climatic changes. That said, it is worth noting that even within the environmental sphere, there is plenty of positive news. Between 1982 and 2016, for example, the global tree canopy cover increased by an area larger than Alaska and Montana combined.69 As Reason magazine science correspondent Ronald Bailey put it, “Expanding woodlands suggests that humanity has begun the process of withdrawing from the natural world, which in turn will provide greater scope for other species to rebound and thrive.”70

According to the same author, “The chance of a person dying in a natural catastrophe—earthquake, flood, drought, storm, wildfire, landslide or epidemic—has declined by nearly 99 percent since the 1920s and 1930s.... Buildings are better constructed to survive earthquakes; weather satellites and sophisticated computer models provide early storm warnings that give folks time to prepare and evacuate; and broad disease surveillance enables swift medical interventions to halt developing epidemics.”71

The master plan would pan out as follows. Industrialized countries with high greenhouse gas emissions would power through with the green transition, and this is more and more likely to happen now that, as we saw in Chapter 6, this is becoming a profitable investment opportunity. This includes not only the West, or OECD countries, but also China, which from the standpoint of resources and technological capacity is well positioned to be a green early adopter. These countries have a strong, self-interested incentive to fast-track the adoption of these new technologies to gain an edge in what will be the energy and production system of the future. By so doing they will be capturing network effects, setting regulatory and technological standards, and effectively shaping the very course of the green industrial revolution.66

In the process, early adopters will show the way to the rest of the world, through two channels. First, their actions will prove that the transition is feasible, and even beneficial, given local benefits such as a better air quality and positive effects on citizens’ health and well-being. Second, they will demonstrate how such a complex transformation can be achieved in practice.

Year after year, slowly but surely, environmental regulations have been piling up, investment in green R&D has been accumulating, and government-supported pilot projects have proliferated. As a result of the actions and investments of visionary first movers, philanthropists, and dedicated early adopters, renewable technologies have been rolled out more and more. We saw in Chapter 5 what happens when this is the case: production prices fall, as firms benefit from learning curves. The learning curve for solar photovoltaic is particularly stunning, as production prices are down 99.6 percent since 1976, from $106 to $0.38 per watt (Figure 6.1). Even professional forecasters knowledgeable about the business have been taken aback by the speed at which this has happened. In 2014, the International Energy Agency predicted that average solar prices would reach $0.05 / kWh by 2050, thirty-six years later. In fact, this took six years.

As a result of such rapid progress, 2020 marked a turning point: in that year, new energy production became cheaper for renewables, specifically via solar and onshore wind power, than for the cheapest fossil-fuel alternative (Figure 6.2). This powerfully implies that, going forward, the most cost-effective way of producing electricity will also be climate-friendly. This shifts the green transition from a luxury consumption choice, reserved to rich countries and citizens, to a profitable investment opportunity—and, at the macroeconomic level, firmly into new economic growth model territory. It is of greatest importance that this has happened for electricity generation, because this is a fundamental building block. Most climate mitigation plans specify a two-step approach: first, electrify every thing that can be electrified (which is why, for example, we see today’s strong push toward electric cars, substituting for combustion engine vehicles); and second, ramp up the share of renewable energies in the electricity generation mix.36

The first question which the authors have been asked to address is: what has gone wrong? But that presupposes that something has gone wrong, which is far from evident. On the contrary, according to many traditional metrics capitalism is behaving exactly the way it is supposed to.

The classical economists, from Smith to Marx, as well as later theorists such as Weber, believed that what defined capitalism above all else was its ceaseless pursuit of accumulation for its own sake. High savings rates were the engine propelling capitalism forward. Readers from Britain (where the gross adjusted savings rate in 2018 was just 13.5 per cent) or the United States (where it was 18.3 per cent) will be well aware that their countries are not saving as much as they once did, but the Anglosphere is not the world, and the global savings rate has been trending upwards since the 1990s (Figure 1): there is no sign of any crisis on this score.

A related point can be made about resilience, or the capacity of ecovillages to respond to unexpected shocks. Ecovillages are a fair-weather social construct, and function insofar as the sea is not rough. They count on the fact that the wider (capitalist) society is there to serve as safety net should things go south. What if a new pathogen spreads and agricultural crops are lost? What if an epidemic erupts? How about if antibiotic resistance becomes widespread? Or a natural disaster hits?36 Or extreme weather events become prevalent?37 Would ecosocialism be able to respond to these shocks effectively—or at least, would it be able to adapt and react as well as today’s advanced economies do? In the context of Covid-19, would a centralized degrowth economy have been able to mobilize resources quickly and scale up the infrastructure to deal with a surge in hospitalizations, or the knowledge facility to rapidly develop and distribute a vaccine? These are all open questions, and the answers cannot be found in the experience of ecovillages, which have relied on the wider capitalist system to fend off such threats.

“You’re not thinking fourth dimensionally!”

Of course, broadening the domain of application of management theory beyond its original concern with organizations and their management does not logically entail that management theory needs a great reset in terms of building new theory that is more fit for various alleged new challenges. And yet, a number of scholars have called for a radical change, perhaps even a reset, of management theory. Thus, one of the editors of the present Special Issue argues that we can view “politics, economy, science, health” as distinct “function systems” that change “from context to context and over time,” implying that “Management and organization theories, which are by default geared to economic and political issues, are thus likely to produce caricatures of their research domains that systematically exaggerate the significance of these two subsystems and underestimate the role of all others” (Roth, 2021a). Put differently, he calls for an improved understanding of interlevel relations (e.g., politics and business) and in general less “sealing off” between phenomenal domains (e.g., health and management).

Others argue that while business schools must further change their priorities and missions to “respond to the pace of change in technology, competition and social expectations” and that COVID-19 has provided impetus to rise to the call for business to lead social change” (Kelly & Dodgson, 2021), there isn’t necessarily a need to develop new theory. Along such lines, Williams and Whiteman’s (2021: 526) argue that “our focus must move away from a theory-fetish toward a more applied action orientation that contributes to theory-building but does not make that its main or singular aim” and that management research needs to focus more on “how our organizational and management theories can contribute concretely to helping humanity prepare for and respond to these shocks and build long-term societal resilience.” Delivering in these dimensions does not require the creation of new theory or a fundamental rethink of existing management theory. The body of thinking across the various social sciences is, we argue, sufficiently robust and adaptable to cope with the major management issues of the 21st century.

The second key distinction we work to make here is that cash transfers, and particularly a durable, redistributive UBI, might well induce much greater political economic change. If cash transfers were merely ameliorative, reducing economic inequality, this might be reason enough to support them. The argument we make here, however, is that the impacts of cash transfers go beyond this, and that a redistributive UBI might well be used to underwrite postcapitalist economies. Greater economic security and improved relations with the state and each other might well increase many people’s willingness and ability to participate in political economic change. Further, progressive scholars and activists might well be able to shape practice, highlighting the benefits of using increased funds and time to underwrite radical political economic change. What might the securing of a state-provided universal, unconditional basic income do? In what ways might embracing modest statecraft, changing relationships between citizens and the state, rework how we see and interact with the state and each other? We point to four interrelated possibilities here: (i) freed time might be used to participate in democracy, (ii) increased incomes might be used to support diverse economies, (iii) reduced reliance on the capitalist economy might enable greater regulation as well as social and ecological re-embedding, and (iv) reconfigured state-citizenship relations might also transform how people collectively understand themselves and the possibilities for change. These impacts are not given, but might be created as part of a radical politics.

First, it is easy to imagine that a UBI might free up time and that this might well enable citizens to be more informed, active and engaged with politics (Fitzpatrick, 2004). Further, cash transfers – especially those with limited conditions – have not led to docile populations, but often to more politically engaged citizens who, at the very least, fight to keep these benefits. The position we develop here advances the idea that freeing up time is politically useful, building on this towards understanding the role of a UBI in enabling a different type of politics, and a different type of economy.

A State with high economic agency need not rely on companies either to create enough jobs, nor to fund its spending. It could pass a public Job Guarantee so as to offer everyone a good job paid at a living wage in low-carbon work to prepare our societies for the challenges before us. A Job Guarantee could chart a course towards social-ecological transition by revitalising sectors like renewable energy, nature conservation, public transport, care, affordable housing, health and education. For example, the current energy crisis provides a great opportunity for States to shift societies away from car dependency by investing in public transportation. States could fund good jobs in the transportation sector, including the work of electrifying the public transit fleet. Simultaneously, a shift away from cars could be encouraged by making public transportation free at the point of use. The 9-euro ticket with which Germany experimented over the summer proved an extraordinary success for both people and planet, with 52 million tickets sold in a country of 83 million people, at least 1.8 million tons of CO2 saved, and roughly one car trip in ten replaced with public transit. States with high economic agency need not wait for private investment to fund transformations like these, but instead can crowd it in by leading the way.

Moreover, a Job Guarantee has the potential for a major power shift from capital to workers. The policy would create a de-facto minimum wage with which the private sector would have to compete. The Job Guarantee would also remove the reserve army of labour—the group of unemployed and underemployed workers in society that capital depends upon to discipline workers into accepting exploitative working conditions. While the policy would be funded by State spending, the jobs on offer and the conditions under which they are performed could be decided from the bottom up, thus serving to democratise the work sphere and to reduce the alienation of workers. Combined, these features of the Job Guarantee represent huge shifts in bargaining power from capital to labour. In this way, the policy constitutes a revolutionary reform which opens up space for further struggle.

The Green New Deal is a viable and realistic alternative. In its vision of workers holding good jobs—as they convert and rebuild energy production, transform human communities to be energy efficient and shielded from climate change, and restore the natural environment—it offers a sharp contrast to the dismal vision of sacrifice presented by analysts such as William Barnes and Nils Gilman. The only alternative, they argue, in the absence of a fortuitous technological breakthrough or the investment of unprecedented resources and geographical space to green energy, “is a drastic reduction in aggregate global production, which will require enormous shifts in the way people in many societies live: less travel, less heating in winter, less cooling in summer, less light at night, less opu- lent housing, less gadgetry, less elaborate clothing . . . and the list goes on. In sum, with regard to all forms of material production and consumption, serious emissions reduction boils down to just one word: LESS.” 22

With a Green New Deal there would be less of some things. Less opportunities for capitalists to profit as much of the economy would be decommodified and there would be fewer workers to exploit since so many of them would be working for governments and publicly owned entities at local, regional, and national levels. And there would be less government bailout of capitalists from the consequences of the global warming they created.

Rao’s findings ought to have a profound impact on the divisive discourse on climate change, which continues to pit the attempts of developing countries to eliminate poverty by mimicking Western modes of development against many in the West who see this path as ruinous for the planet and ultimately self-defeating for the poor. They are both wrong. In truth, there need be no incompatibility. Ecomodernists are right: humanity can have its cake and eat it, too.

Rao, who grew up in a middle-class family in Mumbai but with poverty around him, is now at Yale University and the International Institute for Applied Systems Analysis (IIASA), an Austria-based intergovernmental think tank. He has spent years as what he calls an “interdisciplinary scholar,” addressing both technological advances and social equity and how they might interact.