But one prediction caught my eye in particular. Corporations will, says the Forum, begin to question capitalism as we know it:Will Corporations Really Question Capitalism? (Treehugger)
Paul Polman, CEO at Unilever, has publicly said he wants an equitable, sustainable capitalism. Iain Cheshire of Kingfisher is talking about a paradigm shift. Even the Harvard Business Review has called on CEOs to “fix the system”. From our own conversations with business leaders, we know that some are privately questioning the basic model of individualistic consumption. The Occupy movement is the popular version. They have been painted as anti-capitalist but really they are anti-this capitalism. If companies are not careful, they could get stuck as the defenders of a broken status quo. If they are smart, sustainability leaders can show what a better capitalism might look like.
It's a fascinating prospect, and not entirely unrealistic. Very few corporations have an interest in a system set to self-destruct, so as the urge to rethink our basic economic assumptions becomes louder, those who will continue to prosper will be those who adapt to the times. Resilience will become increasingly important as sustainability becomes more about covering your ass than simply doing the right thing.
Among the fascinating questions and discussion, Rob posed a rather interesting question—can we have capitalism without economic growth? Victor's response is illuminating not just in what it tells us about the viability of no growth economics, but the nature of change itself. We get so fixated on what we should replace the current system with, it can be hard to remember that both the status quo and whatever comes next are as much emergent systems as they are deliberately designed creations:Is Capitalism Possible Without Growth? (Treehugger)
These are questions that I and some others are investigating right now and whether we end up with a view of an economy that we’d say doesn’t look anything like capitalism, we don’t really know yet. My own sense at the moment is that if we do effectively come to terms with these limits on how we interact with the biosphere, we’ll be looking back maybe half a century or a century from now and saying well, there was no one time when the economic system was transformed but it has evolved into something which we may or may not chose to call capitalism at that time.
Whether or not what emerges is still known as capitalism seems almost academic at this point. What does matter is that we tool it to reflect that happiness is real, that there is more to economics than money, and that resource extraction has astounding economic and environmental consequences.
Yesterday I posted on George Monbiot's lament that international banking bail outs are agreed in days, while a planetary fix has been decades in the making (and is still nowhere in sight). And I also noted that some pundits predict an increasingly vocal critique of capitalism as we know it from corporations themselves. So as the pressure to fundamentally rethink our monetary economy and how it works grows, it's good to note that Caroline Lucas—Britain's first Green member of the European Parliament—is also adding her voice to redesign our economy as if people and planet mattered:What Would A Sane Economy Look Like? (Treehugger)
Occupy Wall St protesters at St. Paul's are exploring alternatives to this failed system of financial liberalisation. Even the Bank of England, in papers published this week, is considering a transformation away from deregulation towards a rules-based system, that constrains capital mobility and secures stability and "internal balance" for countries like Britain.
Our politicians should be debating these profoundly important issues. They should be leading us out of this global financial morass, towards a more just, stable and sustainable future. But they are not
I do think there are corporations and wealthy individuals who can see the writing on the wall. They can see that what’s going on is not working, and an economic system that makes most people poorer and poorer over time, while a small minority has more money than it can spend in 1000 lifetimes is not one that will command broad public support. It’s also not very effective or efficient.
Then there is the other side – the cubicle-penned Wall Street Journal Readers, the suburban Ayn Rand acolytes, the Republican party reactionaries – who will do anything, and I mean anything, to keep the system going exactly as it is. They are in complete denial. The redistribution of the world’s wealth to a small oligarchy must continue, they believe, for reasons of either malice or ideology. Here’s Mitt Romney on the campaign trail:
"Just a couple of weeks ago in Kansas, President Obama lectured us about Teddy Roosevelt’s philosophy of government. But he failed to mention the important difference between Teddy Roosevelt and Barack Obama. Roosevelt believed that government should level the playing field to create equal opportunities. President Obama believes that government should create equal outcomes."Does it sound like there’s any soul-searching on the current system of capitalism from the wealthy corporate raider running for president? No, I didn’t think so. And it is the reactionary elements that have the power. The article above says something wise. It says: “Very few corporations have an interest in a system set to self-destruct.” Yes, it is hard to believe an economic system would consciously choose to self-destruct. Nonetheless, it’s happened time and time again. From the Long Depression to the Panic of 1909 to the Great Depression, and more recently Argentina, Iceland, and Greece, collapse seems to be more the rule than the exception. Our problems are built into the institutions themselves. Systems of incentives and feedback loops keep the system operating as it is, resistant to any attempts at change or reform, especially from the top down.
"In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort, and willingness to take risk. That which is earned by some is redistributed to the others. And the only people who truly enjoy any real rewards are those who do the redistributing—the government. The truth is that everyone may get the same rewards, but virtually everyone will be worse off."
Let’s pause for a minute and consider some undeniable facts.
1. All capitalist economies are gainfully employing an ever-smaller percentage of their workforce.
2. Youth employment is endemic all over the world. No country on earth is finding enough jobs for its increasingly educated youth.
3. Automation is accelerating at an exponential rate. The market provides every incentive to lay-off workers rather than hire them.
4. Wages and living standards relative to costs-of-living are plummeting in all mature capitalist economies.
5. In the wealthiest country on earth, half of the population is considered low-income. Just 400 Individuals control as much wealth as half the workforce.
6. Many key resources are being exhausted (copper, phosphorous, rare earth metals). Peak Oil occurred in 2006. Cost of fuels is rising, getting fossil fuels is increasingly risky and expensive.
7. The financial system is totally corrupt. The only force that can regulate the market has been captured. There is a revolving door between government and business (and the media) – they are all populated by the same elites. No force exists to undo this.
8. Speculative housing bubbles have inflated and burst, first in Japan, then the United States and Western Europe, and now China. These have undermined interest-lending banking systems in every country.
9. The rate of innovation seems to be slowing down.
10. The number of failed states is increasing every year.
11. Climate change is causing ever more failed harvests, droughts, natural disasters, and destroyed property. It is already impossible to halt this cycle, and it will almost certainly worsen.
Unfortunately, at this time I am forced to concur with this quote from Morris Berman:
"To put it bluntly, the scale of change required cannot happen without a massive implosion of the system. This was true at the end of the Roman Empire, at the end of the Middle Ages, and it is true today."
One thing I am sure of is that this form of capitalism is dying. Whether we call its successor capitalism or not is largely a matter of semantics. And how far society has to fall to make that happen is anybody’s guess.