Perm do both—capitalism can be made sustainable, but it’s the only system that solves climate change

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.