An Ecologically Sound and Socially Just Economy
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Sid Shniad
2014-10-12 22:29:42 UTC
Raw Message
Monthly Review Volume 66, Issue 04 September 2014*

*An Ecologically Sound and Socially Just Economy*
*It is my contention that we are not facing the root cause of our problems,
and until we do, there is no hope of solving the social and ecological
problems confronting the world. **The primary problem is the inner moving
force of capitalism—its Achilles heel regarding the environment—the
unending accumulation of capital, which means perpetual “creative
destruction.” Produce and sell more stuff next year and more than that in
the following year
for all of eternity. *

*Capitalism’s growth imperative has nothing to do with philosophies,
models, paradigms, ethics, or which numbers pundits and economists focus
on. Neither can it be “reinvented,” as some think, to be ecologically sound
and socially just. Rather, it is an economic system that has basic internal
forces—especially the profit motive and competition among firms—that
operate in such a way as to promote exponential growth while simultaneously
causing massive negative social and ecological effects. And when growth in
this system fails, what Herman Daly refers to as “a failed growth economy,”
the cruelest forms of austerity prevail—giving rise to more and more
unequal conditions and more ruthless forms of exploitation of both human
beings and the earth.by **Fred Magdoff*

Two weeks ago I returned from my fiftieth class reunion at Oberlin College
in Ohio. The brief discussions I had there with environmental faculty and
students left me feeling a bit dazed. So many good and intelligent people,
so concerned, and doing what they think and hope will help heal the
environment—this college has one of the best environmental education
programs in the country. However, I was left disappointed and profoundly
discouraged by the lack of discussion—or even ifnterest in having a real
continuing discussion and debate—regarding the root causes of our
environmental disasters. Not just climate change, but also pollution of the
air, water, soil, and living organisms, the loss of biodiversity both
aboveground and in the soil, the extinction of species, and the overuse and
misuse of both renewable and nonrenewable natural resources.

It is as though there is a flat tire with perhaps a thousand holes and
people are working on the best way to patch this hole or that one. No one
there seems to consider that the problem might be the tire itself—that the
design and materials utilized are not appropriate to the way it is being
used. And, if that is the case, then no amount of patching can solve the
flat tire problem. It is of the utmost importance to be able to distinguish
between symptoms (that most people call “problems” or “crises”) and
underlying causes.

I ran into this confusion between symptoms and underlying causes time and
time again in agricultural science and farming practices. Soils may be
prone to erosion, store little water, grow crops that are susceptible to
diseases and insect attack, become compacted, or have low fertility.
Farmers (and extension specialists), usually think of and deal with these
as individual problems—using pesticide applications, lots of commercial
fertilizers, irrigating more frequently, using heavier equipment, and so
on. In fact, I spent a significant portion of my career as a soil scientist
helping to deal with the negative side effects of one of these
responses—excess fertilizer use, especially nitrogen and phosphorus.

(As an aside, as I was preparing this talk, an unbelievable thirty-five
tons of nitrogen in the nitrate form, worth approximately $35,000, flowed
down the Raccoon River past Des Moines, Iowa, on the way to the Mississippi
and the “dead zone” in the Gulf of Mexico. This flushing of nitrate out of
the soil by prolonged spring rains, partially the result of nitrate left
over after last year’s drought [2012], was mainly a consequence of an
ecologically damaging, but profitable, emphasis on growing corn and
soybeans without an ecologically sound crop rotation.)

However, what I learned over time was that in reality these are *symptoms*
of an unhealthy soil and a simplified approach to soil and crop management.
The same is true of never-ending unemployment, inequality and poverty, the
systemic necessity of perpetual growth, and pollution of air, water, soil,
and organisms. As harmful as each of these is, they are all only symptoms—*of
an economic system that is essentially unmanaged*. Of course large
corporations and politicians that represent them try to manage national and
international laws, regulations, and markets in such ways that it becomes
easier for them to make more money. But with individual corporations and
other private capital making decisions which consider only their own
interests, the system as a whole alternates between periods of growth (that
nowadays are pretty lackluster) and periods of recession. Addressing
individual symptoms alone is not sufficient for the tasks we need to
undertake—either to create healthy soils or to create an ecologically based
and humane society.

One of the neglected issues regarding thinking and acting about the
environment—perhaps the most critical of all—is, to borrow a phrase from
the first President Bush, *the vision thing*. The environmental movement is
lacking any kind of meaningful vision as to what a truly ecologically sound
and socially just society would look like and how it might operate. I am
not talking about a blueprint with all sorts of details, but rather an
agreement on essential characteristics of such a system. Without a
vision—including some conception of the essential parts of such a system,
the chances of actually getting to such a society are essentially zero. Or,
as James Baldwin put it in a commonly cited but still very appropriate
passage, “Not everything that is faced can be changed; but nothing can be
changed until it is faced.” It is my contention that we are not facing the
root cause of our problems, and until we do, there is no hope of solving
the social and ecological problems confronting the world.

Why Not Tinker with Capitalism?

Before going into some suggested characteristics of such a system—one that
is ecologically sound and socially just—it seems as if most
environmentalists think that the answer is to change capitalism. However,
none of the suggested tinkering—with banks, international institutions such
as the IMF or the World Bank, environmental regulations, worker
cooperatives, trying to use markets to reduce pollution, etc.—gets to the
heart of the matter. This, of course, does *not *mean that we should
abandon all attempts to buy more time and help educate others through
involvement in here-and-now activism. However, the primary problem is the
inner moving force of capitalism—its Achilles heel regarding the
environment—the unending accumulation of capital, which means perpetual
“creative destruction.” Produce and sell more stuff next year and more than
that in the following year
for all of eternity.1
In such an economy there can be no concept of “enough.” There cannot be an
endpoint to the production and consumption of ever-greater amounts of
stuff. No-growth capitalism is an oxymoron.

There are severe repercussions for many people when economic expansion
falters—because it is only through growth that capitalism creates jobs for
new workers and for those displaced by automation (nowadays by robots and
software programs). In the period from 1949 to 2012, unemployment increased
in twenty-one years, about one-third of the time. During those twenty-one
years the average annual real GDP growth rate was only 0.8 percent.
Although the business cycle does not neatly correspond to calendar years,
it is apparent that significant real GDP growth, around 2 percent or
greater, is needed to hold down the unemployment rate. The U.S. GDP is
currently growing at about a 2 percent rate, with relatively sluggish job
growth. As of May 2013, there are still 2.3 million fewer people working
than before the start of the Great Recession five-and-a-half years ago. And
there are approximately 5.6 million fewer people working in full-time jobs.

What is the implication for the environment of this growth imperative of
capitalism and the need to have growth in order to create jobs? Almost all
environmentalists understand that we need to have an economy that does not
grow and is still able to function. But if the economy continues growing at
its current anemic rate, the GDP will double in 35 years (see Chart 1). If
it were to grow at a more healthy rate, the GDP would double in less than
twenty-five years. Although a doubling of the GDP will certainly mean more
stuff produced, more resources used and more pollution, it does not mean
that they will necessarily double.

Chart 1. Years to Doubling of GDP at Different GDP Growth Rates

[image: Chart 1. Years to Doubling of GDP at Different GDP Growth Rates]

Source: Calculated by author.

Just to give a small and somewhat humorous example of the problem, here is
a passage from a 2013 *New York Times Magazine *section (in an issue
devoted to inventions):
Booty Pop, padded underwear that makes a person’s backside look bigger and
shapelier, an idea so simple its incredible that it took until 2008 for
someone to perfect it
. Two friends
were struck by the popularity of
bun-lift surgery and thought there had to be a safer, cheaper way for women
to achieve the same effect. So [one of them] glued the padding from her bra
into a pair of underpants, found a manufacturer in Asia to produce a
version of it that met her specifications; and then introduced it to the
world on a cable-television show. They have since sold almost two million
Booty Pops.2

A society that allows (not to mention encourages) such a waste of capital,
and both human and natural resources, will never be ecologically sound and
will never be socially just. It is not an issue, as some have said, of
simply changing from a “growth philosophy,” “growth model,” “growth
paradigm,” “domination ethic,” or the focus on GDP growth by economists and
the media. Capitalism’s growth imperative has nothing to do with
philosophies, models, paradigms, ethics, or which numbers pundits and
economists focus on. Neither can it be “reinvented,” as some think, to be
ecologically sound and socially just. Rather, it is an economic system that
has basic internal forces—especially the profit motive and competition
among firms—that operate in such a way as to promote exponential growth
while simultaneously causing massive negative social and ecological
effects. And when growth in this system fails, what Herman Daly refers to
as “a failed growth economy,” the cruelest forms of austerity
prevail—giving rise to more and more unequal conditions and more ruthless
forms of exploitation of both human beings and the earth.

Occasionally even a major capitalist sees the weaknesses of the system.
After mentioning what he thinks are the strong points of capitalism (some
of which I would take issue with), Jeremy Grantham, the environmental
philanthropist and legendary fund manager, goes on the explain the
following: “However, it [capitalism] is totally ill-equipped to deal with a
small handful of issues. Unfortunately, today, they are the issues that are
absolutely central to our long-term wellbeing and even survival.”3

There are some who think that capitalism should be saved because they are
under the mistaken notion that capitalism equals democracy. There are, of
course, plenty of examples of dictatorships that were capitalist (in many
countries of the South, as well as Spain, Greece, Germany, and Italy). For
those under the illusion the United States is a democracy because you can
vote every four years for a president (or for members of the House of
Representatives every two years and the Senate every six)—choosing between
candidates of two parties that are both owned lock, stock, and barrel by
corporate interest—I urge you to read a short article by Joseph Stiglitz,
“Of the 1%, by the 1%, and for the 1%,” as well as many other sources on
the U.S. plutocracy.4
The nationally coordinated shutting down of one of the most promising
modern exercises of democratic rights in the United States—the Occupy
movement—by simultaneous police raids on the Occupy sites, indicates how
little tolerance there is for mass expressions of dissenting views. And now
with the scandal accompanying Edward Snowden’s release of National Security
Agency documents we can see the extent of U.S. government spying on
citizens as well as many abroad—in clear violation of the Fourth Amendment
to the Constitution: “The right of the people to be secure in their
persons, houses, papers, and effects, against unreasonable searches and
seizures, shall not be violated, and no warrants shall issue, but upon
probable cause, supported by oath or affirmation, and particularly
describing the place to be searched, and the persons or things to be

I have not heard another argument regarding just what it is about the
capitalist system that is so good that it should be preserved. It is true
that as part of its growth imperative there is constant innovation to find
new products to sell or new processes of production. But there is no reason
why there can’t be innovation in a non-capitalist system—if not the
churning, continual, “creative destruction” type. Why won’t there be people
in an ecologically sound and socially just society who think of better—more
environmentally sound ways—of doing something or those engaged in
scientific research not for profit but for the love of science, the
profound need of some to understand at a deeper level, or just for the
benefit of humanity (for example, in the health sciences)? Even today, many
people are engaged in innovation for reasons other than the potential
monetary payoff.

An ecologically sound and socially just economy can be defined as one that
encourages all people to develop their full human potential in such ways
that the environment—with all its complexity, essential cycles, and
relationships—remains intact, functioning, and healthy. In other words, *an
economy designed to be at the service of humanity, which includes the
environment on which we and other species depend.* This is an economy that
can stop growing and can function well during a steady state, while meeting
the needs of people and the rest of the natural world.

The ideas and suggested characteristics, principles, and procedures below
are not a grab bag of possibilities from which one can choose. Rather, the
various parts need each other in order for the economy and social system to
function in an ecologically sound and socially just way. Each fits into one
or more of the five attributes or pillars of strong natural systems:
self-regulation; self-sufficiency; diversity and interdependence;
efficiency (of cycling of energy and nutrients by closely linked metabolic
relations); and resilience through self-renewal.

Social, Economic, and Ecological Principles

1. Economic decisions—what to invest in, and what, how, and where to
build/produce—are made democratically and for the purpose of fulfilling the
basic needs of people. One of the basic needs, of course, is a healthy
local, regional, and global environment. Such a society will be oriented to
encourage everyone to strive to reach their full human potential. All
people can live a culturally and socially rich life, though with a modest
amount of stuff—below what is considered necessary for a “middle-class
western standard of living.” Note the contrast—production to fulfill human
needs versus capitalist production for the purpose of sale in a market in
order to generate a profit.
2. Workplaces (including farms) will be controlled and managed by the
workers and communities in which they are based. There will be no economic
exploitation by one person of another and community members will have input
into production in their own backyards.
3. Once socially determined basic human needs (material and
non-material) are met—and after defining how much is enough—the economy
stops growing with only neutral or positive side effects for society.
4. All people who can work will have a role in the economy. It is
important for individuals to feel a part of the community and society and
work provides one of those links. If everything is provided for a decent
and full existence there is a responsibility for all who are able to
participate in providing goods and services.
5. Leadership positions (in the economy, community, region, etc.) rotate
among the people and there is a system for easy recall of elected
6. Substantive equality among people. This is essential because all will
be living at a modest standard in terms of goods and services. In that
situation people living at a much higher standard becomes socially
unacceptable and unsustainable. People will have richer lives with less
stuff because they will have time, assistance, and encouragement to develop
and follow their passions—in sports, science, music, dance, writing,
painting, handicrafts, or growing flowers—and to more fully engage with
family, friends, and community. In a no-growth economy sharing and equality
become means to eliminate the remnants of poverty and make sure it does not
7. Interactions between and among communities, regions, and nations will
be based on principles of reciprocity, solidarity, and mutual assistance.
8. An economy that has a social purpose must involve considerable active
management. Planning for short- and longer-term needs begins at the
community level (as with the over 30,000 Community Councils of Venezuela)
and is intertwined and coordinated with other communities in a regional
plan.Once there is social purpose for an economy—as opposed to individuals
making decisions that are aimed almost exclusively at obtaining the largest
profits possible—there is no way to rationally operate without planning.
For example, the production needs for both the First and Second World Wars
were accomplished only through planning—and the use of rationing for the
public. These plans were essential. After all, given the competition among
the military services and with civilian needs as well, how else could you
ensure that a particular part, say, a set of ball bearings, got to the
right factory at the right time in order to produce an airplane needed for
the war effort? It is not possible for markets to do this. In the absence
of a planning system for production and distribution, how can we ensure
that all people have adequate housing, clean water, sanitation, health
services, clothing, and enough food?There may be markets in a
post-capitalist society (as there have been since long before the existence
of capitalism); in an economy of substantive equality, where basic needs
are met, markets may provide some information to planners. When items are
scarce, for whatever reason, rationing will ensure that everyone has a fair
share—as was done in the United States during the Second World War.(Mostly
unacknowledged by economists and pundits, “the market” in capitalist
economies is actually a powerful rationing system—rationing according to
individual/family resources. Commodities are theoretically available for
anyone to purchase—for example, a good new car—but these are out of the
reach of people with modest means. And sometimes even basic needs such as
food are also beyond the reach of the poor, even in wealthy countries.
Close to 50 million people in the United States are considered “food
insecure.” This is clearly the result of food rationing occurring in a
country that produces bountiful amounts of food.)

Procedures: Ecologically Sound Metabolic Interactions with
9. Each community and region should strive, within reason, to be as self
sufficient as possible with respect to basic needs such as water, energy,
food, and housing. This is not a call for absolute self-sufficiency but
rather for an attempt to build resilient communities and lessen the need
for long-distance transport. Clearly not everything is going to be produced
in every community, or even every city. But trying to be as self-sufficient
as reasonably possible can still be a goal. Redundancy is an important part
of both self-sufficiency and resilience. People with similar skills are
needed in a community (there cannot just be one electrician) and redundancy
in production facilities means that if something happens to one (say a
fire), that others can pick up the slack.
10. Energy used comes from current (or very recently past) renewable
energy sources and used near where it is produced.
11. Methods and aims of industrial production and building construction
are such that goods have a long life and are easily repaired, repurposed,
and/or recycled.
12. Non-renewable resources will be conserved and used sparingly and in
such ways that they can be recycled efficiently as efforts continue to
replace them with renewable ones. Let me give just two examples: one is
very well known, and one very new. The first is that legumes can be grown
in rotation to supply nitrogen to grain crops (instead of using nitrogen
fertilizer produced by using natural gas). The second is a relatively new
process in which fungal hyphae replaces Styrofoam as packing or insulating
13. Agricultural production will be carried out based on soil and
above-ground habitat management that produces healthy plants better able to
defend themselves from diseases and insects and to enhance habitat for
beneficial organisms. Integrated animal-crop farms will be
encouraged—providing a mosaic of habitats—including relatively undisturbed
ones. Farm animals will be treated humanely and allowed to do what they
would normally want to do and eat what they would normally eat—instead of
being confined under cruel conditions and fed corn and soybeans laced with
hormones and antibiotics. Farms will rely on legumes for nitrogen for
non-legume crops, as well as efficient nutrient cycling for most nutrient
needs. Integrated animal-crop farms make this easier to accomplish.7
14. Nutrients from human waste (and farm animal waste, as mentioned
above), including bodily waste and unused or spoiled food waste, will be
cycled back to farmland as efficiently and safely as possible.
15. Renewable resources will be used in ways that preserve the resource
base and do not create problems for other species/resources. Local
communities will cooperatively manage natural resources such as nearby
forests and fisheries to perpetuate them for future generations.
16. Labor efficiency will not be an important goal (as it is in an
economy in which using less labor is a way to enhance profits). For
example, ecologically sound and productive agriculture—which will become
essential when oil and phosphorus fertilizer run out or become unaffordable
to use for agricultural purposes—will take more people working smaller
farms with more human and animal labor. These farmers should be able to
produce high yields per hectare and per input of energy, but will have
lower yields per hour of labor.
17. People will be encouraged to live near where they work and use
multifaceted and efficient public transportation when needed. Bicycling
will be encouraged and private automobiles will play a very small role, if
any, in transportation.
18. The precautionary principle will be used to evaluate and make
decisions on new procedures, production systems, and materials as well as
to evaluate any chemicals used by society—to prove safety for humans and
the rest of the environment before introduction.

Living in an Ecologically Sound and Socially Just Society
19. Communities and regions will develop open and democratic processes
to make decisions for infrastructure needs as well other investments. Ways
need to be developed for communities and regions to work together in
solving problems and sharing resources.
20. Education and interactions among people within communities and
between communities will strive to encourage those human characteristics
and ethics that best fit an ecological and just society.
21. People will have sufficient time to develop their various interests.
People will work for significantly less than the “eight hour” working day,
because so much of what is done now is not socially useful for society at
large and would be considered waste in a more rational system. These
include luxury cars or yachts, most of the financial system, the
intelligence­-military-industrial complex (the U.S. military is one of the
great destroyers of the environment), the prison-industrial complex, the
constant efforts to change fashions and products to induce buying, the
sales effort in all its ramifications, and so on. Socially useless, even
harmful, products and programs constitute a very large portion of the U.S.
economy and utilize as large a share of workers—perhaps as great as half of
the labor force and at least as much of the raw materials used.We are all
capable of exhibiting a large range of characteristics, from the most
brutal to the most altruistic. There is no such thing as an abstract “human
nature” divorced from the society in which people are living. It is the
society at large, the way the economy works, and one’s family that
encourages or even requires (to be successful) some of these
characteristics/behaviors while discouraging others. In capitalism, some of
the basest characteristics—such as competitiveness, individualism,
greed—are encouraged and rewarded. This leads to putting the individual’s
(and a corporation’s) best interests ahead of those of society.
22. In order for a socially just and ecological society to function,
educational efforts need to be taken to encourage compassion (instead of
naked individualism), cooperation (instead of competitiveness), reciprocity
and sharing (instead of greed and consumerism), an awe of nature in all its
complexity and beauty (instead of thinking of nature mainly for its
potential usefulness in producing commodities), and egalitarianism (instead
of striving to get ahead of others). This means actively working to create
a new ethic towards the land, the environment in general, toward our fellow
human beings, our communities, and the other species with which we share
this planet. The significantly greater time that people will have for
purposes other than work will allow for more community activities,
interactions with others outside the family and work, and to appreciate the
natural world in all its complexity.

Closing Thoughts

I have outlined some of the main characteristics that I think are essential
for an ecologically and socially humane and just economy and society. These
are incompatible—in almost every way—with a capitalist economy. Doing away
step by step with capitalism in a necessary long revolution will not
automatically bring positive social or ecological change. That change will
happen only if a large portion of the population believe in, and fight for,
an environmentally sound and socially just society. And it will take a huge
shift in almost all of human activities, ways of thinking and behaving,
including how we relate to each other and interact with the environment.
New ethics will be needed for this new society to function. This is not an
easy task, but what is the alternative? A system that, as it functions
normally, destroys the very foundations of life through exploitation,
waste, and greed is by definition an antiquated system. This is not an
argument in favor of doing nothing in the here-and-now. We should be
helping to stop the Keystone XL pipeline and encourage universities and
other organizations to divest of holdings in fossil-fuel companies and
fight for the environmental rights of poor communities. We can use these
struggles in order to help educate others that, to solve the overall
ecological crisis in all its ramifications, another system is necessary.

Is this an unattainable “utopia”? I think that, if it ever comes into
being, an economy and society that is ecologically sound and socially just
will have to embody most of the characteristics I have described above.
There is no doubt that it will not happen in the near future. But I contend
that it is no more utopian than to think that the financial and other
strong business powers and their governmental representatives will allow
you to make major changes to the financial system or the way international
trade operates. What are the chances of, as some ecological economists have
suggested, forcing banks to have very high (some have said 100 percent)
reserves so they cannot create significant amount of debt or making major
modifications in the workings of the World Bank and rules of the World
Trade Organization so that they encourage equality and environmental
justice? I think that those ideas are perhaps even more utopian than the
possible creation of a new society. As the economist Joan Robinson once
explained, “Any government which had both the power and the will to remedy
the major defects of the capitalist system would have the will and the
power to abolish it altogether.”8

It has been said, accurately in my opinion, that most people in this
society can more easily imagine the end of the world than the end of
capitalism. I fear that barbarism may be the fate that awaits our
grandchildren and their children unless we can change that way of thinking
and start to envision, and begin to work towards, an economy and society
under truly democratic social control with the very purpose being to
satisfy basic human needs, which as I have stressed many times, includes a
healthy and thriving environment.


1. ↩
On the growth imperative of capitalism see Chapter Three in Fred Magdoff
and John Bellamy Foster, What Every Environmentalist Needs to Know About
Capitalism (New York: Monthly Review Press, 2011).
2. ↩
Hugo Lindgren, “If you were trying to name the greatest invention in
human history it would be
New York Times Magazine, June 7, 2013, http://nytimes.com.
3. ↩
Leo Hickman, “Jeremy Grantham On How to Feed the World and Why He
Invests in Oil
Guardian Environment Blog, April 16, 2013, http://guardian.co.uk.
4. ↩
Joseph E. Stiglitz, “Of the 1%, by the 1%, for the 1%
Vanity Fair, May 2011, http://vanityfair.com.
5. ↩
“Fourth Amendment,” http://law.cornell.edu.
6. ↩
Laura Shin, “Using Fungi to Replace Styrofoam,” New York Times “Green”
blog, April 13, 2009, http://green.blogs.nytimes.com.
7. ↩
For information about ecological soil and crop management practices, see
Fred Magdoff and Harold van Es, Building Soils for Better Crops, 3rd
edition (Waldorf, MD: Sustainable Agriculture Research and Education
Program, 2010). This book and others from the SARE program are free at
8. ↩
Joan Robinson, “Review of R.F. Harrod, The Trade Cycle,” Economic
Journal 46, no. 184 (December 1936): 691–93.

Fred Magdoff is professor emeritus of plant and soil science at the
University of Vermont and a long-time commentator on political-economic
topics. He is coauthor, with John Bellamy Foster, of *The Great Financial
Crisis* (2009) and *What Every Environmentalist Needs to Know About
Capitalism* (2011)—both published by Monthly Review Press. This article is
based on notes from a presentation to the biannual meeting of the United
States Society for Ecological Economics, Burlington, Vermont on June 11,
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