the failure of capitalism

A week ago, I read a report on the BBC news website about how coal is powering much of China’s economic expansion, which is bad enough given its likely effect on global warming and climate change, but the part that really struck me was the following:

Jeff and Ada Qian both work as IT specialists for international firms in Shanghai. At home in their flat they and their 10-month-old son Tim enjoy many of the comforts of modern life. They have air conditioning, a car, a fridge, a washing machine and two televisions.

“I feel so far our life is good,” said Jeff. “But I think people always have ambitions, you always want to have more. If I have more money I want to have a better car, a bigger apartment.”

Today perhaps one-third of China’s 1.4 billion people live like this, and many of the rest aspire to.

“I think many of China’s people would like a lifestyle like us," said Ada.

This extract succinctly sums up what’s wrong with the modern capitalist system, which encourages wasteful, needless consumption by focusing on the individual and the satisfaction of personal desires over the collective needs of the world as a whole. Unfortunately, consumption is integral to the capitalist system and is seen as virtuous, even mandatory. During the early part of the Industrial Revolution, capitalism was clearly the optimum form of social organization; indeed, it drove much of the social progress of the nineteenth century. However, resources were plentiful then, and few cared much about tomorrow. Resources are no longer so abundant, yet the present system encourages aspirations that can only deplete those dwindling resources at an ever-increasing pace rather than conserve them to be channelled into useful applications.

In the quoted extract we have, by any standards, an obviously prosperous couple who still want more, while hundreds of millions of their fellow Chinese remain in poverty. It is a scenario that is repeated around the world, both by citizens of the developed nations with respect to those in the developing world, and by elites in developing countries with respect to their compatriots. Yet by satisfying such demand we merely accelerate the inevitable. When are we going to develop a social and political system that encourages people to use less, not consume more? Answer: only when the various crises that are likely to kick in over the next couple of decades really hurt, when people are affected personally.

The recent financial meltdown should have been a wake-up call, but already we’re almost back to business as usual, particularly for the bankers, brokers and others at the top of the greasy pole of acquisition and accumulation who created that problem in the first place. Wealth creation? The global financial system is merely a clever wheeze for channelling money from poor countries into the already bulging pockets of the rich. We’re poorly placed to withstand the next crisis when it comes along. What will that be? Well, my bet is that degradation of the global environment (destruction of forests, rapacious extraction of minerals and other raw materials, etc.), which has been a problem for a long time, mainly because we don’t place a cash value on that environment, and which has accelerated rapidly in recent years, is going to start to have a massive effect on people’s lives fairly soon. You can’t expect finite resources to last for ever, but we behave as if we do. And the environmental crunch, when it does come, will make the recent credit crunch seem like a genteel tea party by comparison.

And what about the population crunch, when that comes? It is an iron law of ecology that the population of a species cannot exceed the carrying capacity of the environment it finds itself in. We as a species are clever enough to be able to postpone the inevitability of an ultimate population crash, but not clever enough to see that we cannot do so indefinitely. Drastic action is needed now on all fronts. The human race is in deep shit, and those of us at the top of the tree need to dramatically downsize our lifestyles, not encourage others to climb to our level. Unfortunately, I don’t expect anyone to follow this advice until we can actually see the precipice ahead, by which time it will be much too late to find out that the brakes don’t work.