GDP and GDP growth are the universal metrics by which every major international organization judges and ranks economies. IMF voting is literally determined by your GDP.
There are no other metrics that are remotely commonly used to determine real international policies. Every nation on earth is in explicit competition with every other to grow faster because of this. These policies are prescriptions by capitalist countries that weren't like this before and likely wouldn't be after.
It's beyond silly to claim that capitalism doesn't require endless growth.
GDP doesn’t mean growth. A country going through an economic contraction still has a massive GDP. There are no IMF policies that favor growth rates, just the raw GDP.
> It's beyond silly to claim that capitalism doesn't require endless growth.
Capitalism requires no such thing. It’s human reproduction and striving for better conditions that requires economic expansion. That doesn’t change under socialism/communism/whatever.
Finally, GDP growth does not imply anything about carbon production. Some of the biggest growth sectors going forward are entirely about clean energy.
I said GDP and GDP growth, and if two countries are competing on GDP, the mechanism by which they compete is growth.
I know you've seen my book recommendation in the thread here; it's about the incentives behind growth, and how de-growth can work and still encourage human flourishing. Rather than just reacting negatively, why not look it up?
It doesn't drive for endless growth. It drives for endless improvements in efficiency, which are theoretically finite, but practically infinite.
A good example of this is agriculture. We have less of that precious Iowan topsoil than we did 100 years ago, but crop yields are higher than ever. That's what capitalism is.
Capitalism isn't about endless growth, it's about growing as quickly as possible. The dark ages have their name for a reason. We simply did not have a societal model that rewarded improving ourselves. We were simply stuck in the status quo. The Renaissance was purely about changing this mode of thinking on a societal level and capitalism is the most effective way of rewarding growth. Communism tends to fall behind because the system is built around people willing to accept their current life as is. If we for some reason end up in a situation where we have done everything that is possible capitalism will cease to provide growth beyond inflation.
Capitalism rewards efficiency with market share. During contraction of an industry, efficient producers should be scaling down slowly while others collapse. We may think it depends on growth, but that’s because we put it to work sustaining an exploding population for several generations.
I’m not so sure. The third sentence on that web site is untrue: “Capitalism demands perpetual expansion”. It does not. If the author is going to be so free with facts right from the beginning, why would I trust the rest of his work?
He's a marxist, so statements like that are grounded in a historical materialist analysis -- very basically, that the material result of policies is their reality, not whatever ideals they might aspire to. He makes a very solid case that capitalism can't really do anything else -- he doesn't just ask the reader to take this on faith (I would have hated it if that were the case).
The book does use a lot of such analysis, which can be pretty offputting if you're not used to it, but each such example is really cogent and well supported, so overall I found it a pretty phenomenal aggregation of history and very solid analysis/math for how we think about what's sustainable and what isn't.
His pattern in the book tends to be 1. strong assertion => 2. actual argument => 3. repeat assertion; I did find myself reacting to the first assertion there negatively because they often sound like overgeneralizations at first, but in each case he really did support them.
> He's a marxist, so statements like that are grounded in a historical materialist analysis -- very basically, that the material result of policies is their reality, not whatever ideals they might aspire to.
Not a very sound way of thinking if you care about confounding variables. Presumably there are always special exemptions when not analyzing capitalism? I.e. The material result of communist policies in the USSR (total collapse) don’t apply to communism because it wasn’t true communism? If so, then we don’t really have true capitalism either so you can’t really make any assertions about capitalism.
Totally separately and having literally nothing to do with anything else here, but since you brought it up, the USSR lost an economic war to capitalism, it didn't collapse because communism doesn't work. They spent their money lifting people out of poverty while american empire was busy extracting resources from other countries and keeping them in poverty.
Note also that I'm not defending individual policies of the soviet union.
EDIT: wanted to tack on: if in 1989 the US and western europe had collapsed and become communist, I wouldn't take that as proof -- or a particular reason at all -- that capitalism didn't work. That would be idiotic -- we were engaged in a decades-long cold war with another giant power, and lost. I may have separate arguments about capitalism, as I do now, but the collapse has nothing to do with it.
Similarly, the collapse of the soviet union has everything to do with trying to eliminate poverty WHILE staring down the barrel of the largest and most powerful empire that's ever existed.
This is historical revisionism. The soviet leaders tried to copy the success story of Deng Xiaoping's transitions from socialism to capitalism in China. The planned economy system just didn't work. The "US Empire" can't explain why by the late 1980s, the Soviet Union had 4x tractors as the United States which was totally wasteful.
If you want to complain about meaning of the economic system just think of a virtual economy simulation. Why would any human participate in such a virtual economy? No matter how much money you possess in the virtual economy it is ultimately meaningless. All the goods and factories that you own are also virtual. Why even care? Well, because we like playing the game.
The real world is exactly the same. We live because we like living. Even if you only produce the most essential products you will still run into the meaning of life problem. Sure your food production is allowing people to live but why even let them live? If they didn't exist you wouldn't have to make food for them. It's completely circular at its core. Essential needs are purely artificial just as non essential needs are purely artificial. The reality is that people are selfish (both in a good and in a bad way), they want things, especially those that don't serve any essential purpose.
They don't care about endless growth, they just care about getting the best deal possible and that's exactly what capitalism offers. Communism at its core doesn't care at all. It just cares about the essentials and nothing else.
I’m counting on capitalism. We have already seen renewables become more affordable than coal and nuclear. Now it’s just a matter of handling base loads and we have no shortage of ideas there. Excess energy can be dumped in to carbon sequestration. Market forces have and will drive all of this.
But what if humanity only gets one chance? Is it still best to rely on the capitalist market? This market only reacts to regulation. It is not proactive. All stick, carrot don’t work no more.
Well the ussr had its chance and collapsed into oligarchy. But maybe the Chinese system of authoritarianism and reeducation camps for uighurs can still save us.
What market force do you see driving the use of excess energy to sequester carbon? What force is going to ensure enough carbon is sequestered?
Climate change is a kind of prototypical example of a tragedy of the commons. Capitalism has not been particularly noteworthy for solving these sorts of problems. I can certainly see it helping to make renewables more affordable, but that's simply not enough at this point.
Quick quack suggests CO2 can be converted to carbon fiber. Also looks promising as a feed stock in the chemical and plastics industries. We figured out a use for gasoline, I’m sure we will think of something. Doesn’t hurt for the government to put a thumb on the scale either.
Well we could bury it. Is that so different from taking it out of the air and putting it directly in an old oil well?
Not sure what the recycling story is with carbon fiber. I suppose we could make extremely durable goods but that may not be desirable until we pull enough carbon out of the air.
These were just quick examples though. There’s bound to be a lot of uses for carbon, it’s abundant for a reason.
The point is we can leverage our consumer nature to incentivize markets that help solve climate change. We can literally consume our way out of this mess.
> Capitalism is exceptionally good at solving problems when there is money to be made.
Well, unless the money is to be made by exacerbating the problem, but sure.
> Putting the right price on carbon will solve that.
State intervention to set prices to try to steer the market to make progress on social goals that it would not without State intervention is not capitalism.
>State intervention to set prices to try to steer the market to make progress on social goals that it would not without State intervention is not capitalism.
I don't understand this comment. Capitalism is about maximizing outcomes within the context of a system. It's not about the rules that govern the system itself. It doesn't actually matter what goal you are optimizing for. There is also no such thing as having no policies. Not having a policy is a policy in itself.
The producer of an externality is actively using the laws of physics to extract value from all other individuals. That's not capitalism either. It's just someone abusing their power. It's like using a gun to rob someone except the harm is spread over more people.
If nothing is done against the externality then the government is implicitly accepting the externality and is effectively subsidizing the producers of the externality.
Now that we have established that government policies can be compatible with capitalism lets talk about the most extreme capitalist policies possible. Well, a capitalist policy would be based around aligning profit incentives with policy goals. Basically what you want is that companies and people that do the right thing make a load of money and those who don't, make a loss.
So what is an extreme example of a non capitalist policy? Rent control. You've just destroyed the ability for "greedy" landlords to make money off of doing the right thing, namely providing housing. Another non capitalist policy? Prop 13. The policy encourages hoarding housing instead of rebuilding and providing more housing. It's even self reinforcing because it lures normal people in and turns them into hoarders. Again, it's because you have destroyed the ability for greedy people to do the right thing.
Now carbon taxes are the extreme opposite, they are so extremely capitalist that they should bring tears to your eyes. The greediest business owner is the one that produces the least CO2 (or any other externality). It's a system for doing the right thing. The only flaw is that carbon taxes have to be global but since they can be enforced through CO2 tariffs an easy fix is available. There are extreme domestic growth opportunities available in green technologies but without the right incentives nobody will do it. It's absurd that we even have to have this discussion. People are begging for profitable domestic investments because the central banks are flooding the markets. It's not like we end up sacrificing anything if we put underemployed people to work.
> Capitalism is about maximizing outcomes within the context of a system.
No, that's rationality (in the social science sense) not capitalism.
Capitalism is a specific politico-economic system that reached its peak of dominance of the developed world in the late 19th and early 20th Centuries that was named and first systematically described and critiqued by its 19th Century opponents.
(The two are connected in that there are popular arguments for the optimality of capitalism grounded in the assumption of rationality.)
Regulation is an important part of a capitalist system. “Setting the price” is something the market does. Regulation can influence that by manipulating incentives. That does not mean prices are set by the state.
> Regulation is an important part of a capitalist system.
If by “capitalist system” you mean “bourgeois socialist mixed economy that replaced capitalism throughout the developed West generally around the mid-20th Century through the efforts of a broad coalition of people fed up with the horrors of actual capitalism”, that's true.
But that system isn't actually capitalism, and the central role of government regulation aimed at channeling the effort of “private” industry by rearranging incentives to different places than they would be set by the free market is one of the central ways in which it differs from capitalism.
The only reason people pretend otherwise is to maintain the fiction that they are on the opposite side of the global capitalist/socialist struggle that predated general disillusionment with capitalism in the West, because even though actual ideology shifted, ideological tribal identity didn't.
hear hear. capitalism already works in solar’s favour and the moment solar+storage become cheaper than coal the energy sector will switch almost instantly.
with other sectors we need governments still to make the transition
We also need to make sure that the government does not prevent the transition to solar. This is a huge problem, with large moneyed interests sponsoring state legislation to prevent deployment of renewables.
State legislators have been arrested in Ohio for taking bribes to pass anti-renewable legislation, but despite their arrest, the legislation they enacted is still on the books. The companies got what they wanted, the government still is suppressing solar in Ohio, despite the legal system putting corrupt politicians in jail.
| renewables become more affordable than coal and nuclear
And yet emissions keep climbing, because capitalism requires growth and demands deregulation.
| Excess energy can be dumped in to carbon sequestration
There is literally no scalable strategy for this, and no serious combination of strategies. Really. Nobody who actually studies this (who's not also trying to profit) thinks there is. Do the math on the world economy continuing to double every <20 years. Or maybe check out the book I shared above, it's really very good.
Also, capitalism is just fine with a shrinking economy, there's depressions and recessions. What does this grand theory say about those?
Throwing around broad terms with shifting meanings, and then changing those meanings around to fit each set of facts about the world, is a crazy way to deal with the world.
> Do the math on the world economy continuing to double every <20 years.
Easy enough, what's the problem. What sort of resource constraint are you thinking we hit? What defines a "dollar" or "doubling"? Based on your descriptions, there's zero chance I will bother to read the book you recommend, because it sounds like it has negative information content.
I mean, come on, what sort of BS statement is "capitalism demands deregulation"?? Capitalism demands regulation through policing. What sort of possible definition of "deregulation" can you ever provide that fits both these situations? The best reflection on your source is that there is some sort of very technical definition where this statement makes sense. But repurposing common words to narrow meanings such that they become jargon, then attempting to use jargon without explaining that there's a difference with the commonly accepted meanings of those words is just a completely unproductive way to communicate to the world.
Emissions are not down -- they've just been exported. The analysis you're looking at is a common one, but it's a shell game. Plenty has been written on this topic and on actual, hard, ecological limits we face; the book I recommended above also covers this.
Capitalism is obviously not "fine" with recessions -- we dump enormous amounts of money into the economy when they occur in an attempt to stimulate it, and inequality tends to widen permanently in the absence of policies to counteract this.