Overhauling Capitalism
Michael Hallam
(02 April 2003)
Many of the well-intentioned people who wish for global equality and justice reject capitalism. This is a mistake. However, there is a caveat. For the emerging Global Economy to be truly sustainable the real environmental costs of human activity need to be brought fully within the economies costing structure. This would radically re-define what constitutes a profitable activity and would set the stage for the development of a form of economic globalisation which is genuinely egalitarian.
Given the choice few of us would chose to go back to the kind of subsistence land-locked lifestyle of the average Medieval European. Since the Enlightenment European (and American) society has changed beyond all recognition, largely due to a newly discovered relationship to nature which allowed for the development of modern science and the application of new technologies in economic life. These technologies gave birth to the industrial revolution which has since emancipated the population of the West from the burden of subsistence work and which has delivered a range of goods and services previously undreamed of.
In the last few decades this aspiration towards a Western lifestyle has become the stated aim of the greater part of the worlds population and is the official reasoning behind the move towards developing a single global market place. The free-market economic model, which has come to be known as capitalism, represents a big step in the evolution of human culture when it is contrasted with the system which is replacing, namely the feudal system. In feudalism the economy is based upon social position. Land is apportioned, or granted, according to social status and the economic activity arising from the land is directed and controlled by the land-lord. The industrial revolution was the consequence of free-thinking, as applied to the processes of nature, and the consequent development of new technological inovations. The benefits of these new technologies were not dependent on land ownership but on the ability of machines to enhance human labour and human effort in the ritual of converting the raw materials of nature into finished articles and products. Over the last 300 years this manufacturing industry has eclipsed the old land based system, liberating both people and capital from land-ownership.
The chief benefit of capitalism over the old system is the liberation of individual initiative. In principle anyone can be an entrepreneur independent of social rank. The will of the individual is liberated by the free-floating nature of money. Capital follows good ideas and, through the markets, the fruits of those ideas and insights flow out to the whole of human kind. Or at least that is the theory. The reality is a little more complicated.
In the last 1000 years Western conciousness of the World has changed profoundly. The Medieval mind was much more inward-looking. Knowldege of the physical world was much more intimate and parochial. for most people the horizon was stattic, with many people sspending their whole lives in the village in which they were born. After the Enlightenment the explosion of interest in and exploration of the world was dramatic. New vistas were opened up not just for individuals but for whole societies. For several hundred years society in the west was flooded with new novelties from far away places, especially the Americas as the world literaly became a much vaster and fuller place.
The European social order became rich on the exploitation of the endless bounty of the world. That sense of natures capacity to endlessly offer up its raw materials to our industrial civilisation has been challenged only recently. It is only within the last 30 years that we have become fully aware of the possibility of exceeding the limits of the earths natural living systems, upon which we all depend for our continued survival.
It is juste concievable that free-market capitalism could indeed yield the promise of a better physical existence for all, in which individual inventiveness and labour could be liberated from social serfdom. But unfortunately such a system has yet to be tested. If we think that we, in the West are living and promoting the ideals of the free-market we are living an illusion.
The science of economics, as we currently, understand it, is a recent invention. The ground-rules for modern economics were laid down in the 18th and 19th centuries at the same time that the rules of classical mechanical science were also being honed. What they both share in common is an ability to construct and manipulate simple systems - to set up situations in with predictable outcomes - as long as there are not too many variables (moving parts) to keep track of. Certain things were assumed, such as the quality of time being the same in all places and for always, or that the stock of the earths natural resources was unlimited. Consequently, in the case of economics, the value of the earths natural systems was not fully valued, indeed it was, and still is, valued at zero. Now that we are degrading these systems, and as the consequences of doing so begin to diminish humanities quality of life, we begin to recognise that they do have a value after all.
Untill now this value has been dis-regarded. Natural capital does not make an appearence on the balance sheet. When we clear a pristine forrest to make paper we record a nominal ammount in the ledger for the right (ownership) to exploit the land upon which the forrest stands but we record no cost for the loss of oxygen no longer being produced by the trees, and upon which we depend to breath, nor for the 101 other hidden and taken for granted benefits that the living forrest provides us with. Or relationship to nature, therefore is every bit as feudal and exploitative as that of our pre-capitalist forefathers. This, of course also includes those cultures and human systems outside of Europe which have been subject to empire and which have provided the benefit of their peoples labour and resources at little or no charge.
For both social and environmental reasons there is now no alternative to a reform of the economic system. These externaised costs have to
This situation is more serious than we realise because it not only includes natures raw materials but most of those human outside of the European zone