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.

Heartfield’s argument will not be welcome either on the left or in green circles, which is a great pity. Today’s left has, for the most part, enthusiastically embraced the green agenda, seeing it as a useful vehicle for framing a critique of capitalist social relations. Unfortunately, much of the green critique of capitalism is misplaced, focussing on individuals’ consumption and favouring retrograde measures in production that cause real world rises is commodity prices, from inefficient organic farming at one end of the scale to carbon trading, which not only encourages lower productivity but also functions as a barrier to new entrants to industry, at the other.

The left’s opportunistic attachment to the green ideal is a world away from the productivist visions of the likes of Marx. In fact, it amounts to a renunciation of the left’s key goal. The left’s goal has traditionally been not the amelioration of poverty through management but the liberation of all humanity through massively increased efficiency. This vital point is now completely obscured and ill understood by the vast majority of people who call themselves left wing today. Confusing social liberalism and today’s social democracy with socialism is now so commonplace that the word socialism itself is all but meaningless.

In fact, the emergence of so-called ‘Red Toryism’ beloved of British Conservative Party leader David Cameron and the willingness of conservatives in Ireland, Britain, Canada, Australia and elsewhere to embrace environmentalism indicates that free-market individualism has been replaced with an altogether different form of conservatism, one that no longer says greed is good but gets away with this by curbing the consumption of the lowest paid.

The green movement has long had a right wing. In fact, environmentalism was born on the political right and only moved across to the left during the 1960s. What is more interesting than this is the fact that the reinvigorated right has responded to environmentalism and the current recession not with Thatcherite rhetoric but with a patrician concern for the good of the environment and society.

Crazed, primarily US-based, conservatives who rail against greens for being communists are not only attempting to frame their anti-green message in outdated, comfortable terms for an American audience, they also are objectively wrong. The green message is one of limited industrial output and rationed resource consumption. The message of the communists, back when such a term had any meaning, was of boundless production and free consumption.

As Heartfield points out, green demands are not only elastic but contradictory: what is more important? Preserving the livelihoods of African farmers or carbon emissions on the import of foreign food?

“Each can be jettisoned or picked up in turn without damage to the core prejudice that modern life is exhausting nature’s bounty […] It is not possible to generalise the green lifestyle. By definition, an ideology that sees mass consumption as the problem cannot be adopted by the masses.”

Environmentalists, meanwhile, would do well to consider what, exactly, is the benefit of business profiting from the sale and re-sale of legal titles such as carbon trading, thus further retreating from production. Selling legal title to the air is surely the greatest con trick capitalism has ever managed.

Of course, environmentalism is not monolithic. In recent years a fissure has begun to become increasingly apparent in the green movement, but it is not between ‘fundamentalists’ and ‘pragmatists’. Instead, the battle is between those who wish to see limits imposed on capitalist production in the name of the environment (and are happy to profit from these limits) and those few remaining on the green left who wish to see capitalism replaced (though with what they would replace it remains an open question). Although Heartfield rejects eco-socialism as a kind of ‘austerity socialism’ that amounts to an attack on living standards, green critics of capitalism would do well to read his arguments. Even if they will never see eye-to-eye with the author, a dose of economic literacy would sharpen their arguments.

It would be fanciful to expect business leaders to read this book. Assuming they can pull themselves away from their colleagues’ auto-hagiographies and the asinine self-help nonsense like ‘Who Moved My Cheese?’ beloved of Newstalk, they will likely continue to read Ayn Rand, imagining themselves heroic Galt-like figures, all the while reducing their actual investment in productivity and squeezing as much pocket change as possible from outdated methods of production. Still, just because the capitalists have lost faith in their own historic mission doesn’t mean the rest of us should let them get away with denuding business of the only progressive characteristic it has: raising living standards through mass manufacturing.

As Heartfield quotes Connolly: “Our demands most moderate are, we only want the Earth.”

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