Review: Green Capitalism: Manufacturing Scarcity in an Age of Abundance

Green Capitalism: Manufacturing Scarcity in an Age of Abundance
By James Heartfield
Openmute
ISBN 978 906496102

Today’s orthodoxy of green ideology would have us believe that it stands in opposition to capitalism, that it is no friend of the businessman or politician. And yet, how can this be so when it is indeed the orthodoxy and the business and political worlds continue to putter along, albeit with lower output and reduced credibility?

The answer is a simple one: environmentalism is not a critic of business, it in fact is a friend of capitalism’s failure to not only distribute its wealth evenly but industry’s failure to sufficiently advance even in simple capitalist terms. The key political point in Green Capitalism: Manufacturing Scarcity in an Age of Abundance is that the ‘anti-capitalist’ message of environmentalism in fact offers business cover for its unwillingness to engage in widespread productive investment, instead increasingly seeking to profit through rent-seeking and other unproductive activities.

Heartfield shows how, in the 1980s, businesses were first able to profit from decay through the actions of the ‘corporate raiders’ and argues that this lesson was not lost on the up and coming green capitalists who made deindustrialisation a key policy goal:

“Scarcity increases price, and manufacturing scarcity can increase returns. What could be more old hat, they said, than trying to make money by making things cheaper? That was rubbished as a ‘race to the bottom’.”

For Heartfield, the creation of artificial scarcity is the organising dynamic of contemporary capitalism. Historically, capitalism’s ability to continue to profit was through technological improvements in the production process resulting in lower costs and higher outputs – yesterday’s luxuries became tomorrow’s mass consumer goods.
(As an aside, cheapened commodities did lower the value of labour power because the same wages could now purchase more, meaning wage cuts could be lived with – there’s a lesson in there for Ireland today).

However, today this is no longer the case. The process of investment in mass production has been over-ridden by the attempt to increase commodity values. This is helpful to business because maximum efficiency ultimately results in businesses destroying themselves: technological investment replaces living labour with machines but machines produce no additional value of their own with the result that, over time, the rate of return falls.

Indeed, the desire on the part of business to avoid the ‘diminishing rate of return’ is one of the key factors in how business and environmentalism ended-up in bid together. The placing of artificial restrictions on industrial output offers a short-term solution for business by circumventing simple economics: reducing investment results in part-stagnation of industrial processes and, ultimately, higher costs for the goods produced, thus securing higher profits not through mass production but high prices. In the process, of course, capitalism fails to live up to its propaganda of raising living standards for all. Happily for business ideologues, even this can explained away by notions of ‘sustainability’ and ‘natural limits’ – the very arguments made by much of today’s left.

In a world in which information technology in particular is all pervasive it may seem fanciful to argue that investment is down, but it is true. Many businesses found that their assets were more valuable than their actual business. Enron is the classic example. As Heartfield notes, the company made more money manipulating financial markets than it did through generating and supplying electricity. Meanwhile, the ‘New Economy’ of the internet was founded on a severing of the link between a company’s share value and its ability to generate a profit. Making money was divorced from making goods and increasingly business sought to profit from non-productive activity such as financial speculation, government welfare in the form of the absurd make-work schemes called public-private partnerships (PPPs) and the provision of pointless ‘consultancy’ services to the public sector and rent-seeking on so-called ‘intellectual property’.

Politics, naturally
The twin factors which saw the rise of green politics to the mainstream were the demise of the Soviet Union which left radicals, even those who abhorred the Eastern Bloc countries, rudderless and saw them take up green politics as the basis for opposition to capitalist social and economic relations and, secondly, capitalism’s own retreat from production.