Capitalism is a hegemonic global, economic, and social order that increasingly shows a fatal contradiction between reality and reason, where it threatens human welfare as well as but also the continuation of most sensitive forms of life on the planet. Three critical crises make up the contemporary world condition originating from capitalist development: the emergence of global imperial instability associated with shifting world hegemony; the Great Financial Crisis and stagnation/depression; the growing threat of planetary ecological collapse.
Since the Second World War, the capitalist world has seen two main political-economic policy regimes: Keynesian (1945 and 1973), framing the last phase of corporate industrial capitalism, and neoliberal (1980 and the present), constituting the formative phase of financial capitalism. The neoliberal administration helped to organize the emergence of a specific kind of globalization that benefits the super wealthy and financialcapitalist class, mainly living in the leading Western countries, particularly the United States (Peet, R. 2).
When the growth collapsed in the 1970s, real interest rates went negative, paltry dividends and profits were the norm and the upper classes everywhere felt threatened. In the US, the control of the wealth by the top 1 percent of the population had remained genuinely stable throughout the twentieth century, however in the 1970s it plunged quickly as asset values collapsed. After the implementation of neoliberal policies in the late 1970s, the share of national income of the top 1 percent of income earners in the US soared and reach 15 percent by the end of the century (Harvey, D. – 31).
Furthermore, the economic crisis has already begun to reveal the awful hollowness of the world’s most powerful capitalist leaders. Governments of all natures carried out neo-liberal policies which collected super-profits on the rich while cutting the living standards of big sections of the working class and sections of the middle class. If a large section of middle class and skilled workers bought shares, or relying on pension schemes, annuities, life insurance, etc. , and a major stock exchange crash takes place, then their savings would be wiped out.
Financialization was the most startling and unstable capital development and if the process were to go into reverse or even to slow, the result would be a deep stagnation. At some point the rising mountain of debt would grow beyond the capacity of capitalist governments to intervene effectively as the lender of last resort, and a financial fall would result in an unprecedented crisis. Economic crises are endemic to capitalism. As capitalism moves into a deep crisis, the system will also be shaken by a generalized social and political crisis.
The ecological crisis is apparent in everyday life, not only in form of catastrophes threatening the lives of millions of people through storms, droughts, and floods but also in form of massive destruction of capital. The fundamental ecological flaws of the capitalist system have been emphasized primarily by critical political-economic thinkers coming out of or deeply influenced by the Marxist tradition. In the United States environmental sociology has been deeply affected by two critical concepts arising out of Marx, the treadmill of production, and the metabolic rift.
The treadmill of production concept is the notion that capitalism is geared above all to exponential growth, as suggested by Marx’s M-C-M’ shorthand. The level of economic activity in each period starts with the end point of the previous period, leading to a doubling of economic output. The driving force of this expansion is capital accumulation and the search for ever expanding profits. Marx’s theory of the metabolic rift helps us understand capitalism’s intensive, not merely extensive, destruction of the environment.
The metabolic rift was developed as capitalism systematically violated the basic conditions of sustainability on an increasingly large scale, through soil intensification and global transportation of nutrients, food, and fiber (Clark, B. , & York, R. 395-496). Three billion years ago, the Earth’s atmosphere had a drastically lower concentration of oxygen than it does today. It was like that until the rise of capitalism that increased the concentration of CO2 in the atmosphere through the burning of coal and petroleum ((Clark, B. , & York, R. 401).
One of effects of global warming is that of rising sea levels, which endangers low-lying countries and coastal cities. If nothing is done, people who will no longer be able to live where they live now. In addition, people in positions of power cannot conceptualize beyond liberal capitalism. In most cases, if you have a lot of money you can get away with anything. When a country faces financial crises, it doesn’t affect wealthy people until their asset value decreases. Wealthy people have all of the political power and money to protect themselves from anything.
Those in positions of power, even if they are critical of capitalism benefit from the system and may subconsciously or intentionally not want change. Developed countries have most say in what to do next when there is a crisis, for example, climate change. Developed countries must step up and use their money and resources to help create a new system because developing countries cannot afford to do so. Developing countries are more vulnerable to the political, economic and climate crisis and suffer more than developed countries.
Unless urgent and costly measures are taken, the situation could become irreversible. Even ethical and sustainable capitalism are not effective solutions, they are just temporary, a transitional phase to a better system. Business leaders find ethical capitalism desirable because consumers increasingly demand products that coincide with their moral awareness. Capitalism’s response to the ecological crisis is that the system can continue to expand by creating a new sustainable or green capitalism, bringing the efficiency of the market to bear on nature and its reproduction.
The two pillars on which green capitalism rests are technological innovation and expanding markets while keeping the existing institutions of capitalism intact. But any technological gains in efficiency in the use of natural resources are overwhelmed by the extensive and ecologically disruptive pattern of growth that characterizes this rapacious system. There are new technologies that reduce some types of pollution, but most countries and individuals cannot afford them. Capitalism is a failed system where ecological sustainability is concerned.
If capitalism remains the dominant economic order we can expect unbearable climate conditions, an intensification of social and ecological crises. Capitalism is far from perfect. We don’t need a new “ism”, we need new institutions that provide the right incentives and do the right jobs. Our survival depends on how we act now. Considering the emergence of global imperial instability associated with shifting world hegemony; the Great Financial Crisis and stagnation/depression; the increasing threat of planetary ecological collapse, our power leaders need to take actions with no self-interest.
