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I. Capitalism’s Twin Crises: Economic and Environmental

Economic & Environmental

Fred Magdoff is professor of plant and soil science at the University of Vermont. He is the author of numerous scientific articles and coauthor (with Harold van Es) of Building Soils for Better Crops (Beltsville, MD: Sustainable Agricultural Network, 2000). He is also coeditor (with John Bellamy Foster and Frederick Buttel) of Hungry for Profit: The Agribusiness Threat to Food, Farmers and the Environment (New York: Monthly Review Press, 2000).

History has provided us with numerous examples of economic stagnation and breakdown, as well as environmental degradation caused by human activity, even before capitalism existed. But capitalism’s central characteristic—the incessant drive to invest and accumulate wealth—gives birth to never-ending economic and environmental crises.

Capitalism’s Tendency to Generate Economic Crises

There are, of course, the normal ups and downs of the business cycle, during which recessions create havoc in many lives as well as unease and uncertainty in many more. In addition, there are occasional exaggerated bubbles of euphoria such as occurred during the second half of the 1990s, with growth that appeared perpetual to many. There are also sometimes long-term downturns, such as experienced in Japan over the last decade. As pointed out recently in this space, much has changed over the last quarter-century as capitalists have endeavored to adjust to a general slowdown in growth and, therefore, decreased profit-making opportunities.* As traditional goods producing industries have saturated the markets with efficiently produced merchandise, investment has shifted to the retail and service (including financial) sectors of the economy. Although increasing in relative importance to the U.S. economy before 1980, it is after this date that the service sectors grew especially rapidly as capitalists sought out new potential profit centers—fast food outlets, computer support for business, processing medical records, etc. There has also been a growing tendency for some companies to produce little or nothing. Some have tried to make profits by creating new markets—such as in the privatized electrical power market created by heavy corporate lobbying—and then purchasing and selling the “product.” Like Enron, many financially driven firms even pride themselves on being “asset-light,” meaning that there is little physical plant involved in their business. The goal is to conjure profits out of the thin air—by speculation and trade. The drive to accumulate capital in an environment of limited productive opportunities leads to endless gimmicks to induce people to spend money, speculation (just another word for gambling), and outright fraud—need we say more than Enron, Xerox, WorldCom, and Global Crossing?

Capitalism’s Ecological Crises

Although the tendency toward economic crises is an intrinsic characteristic of capitalism, there is a second fundamental form of contemporary crisis that is also derived from the relentless pursuit of profits—namely, the rapid growth of ecological degradation. The environment is best viewed as a whole, with interactions and exchanges going on among the living organisms and between organisms and the physical aspects of water, soil, and air. (There is also exchange and interaction between substances in the water, soil, and atmosphere.) Millions of years of evolution have made most natural systems efficient at cycling nutrients and water and allowing energy, generated by green plants using sunlight, to flow as in a gentle stream from one organism to another (that uses the previous one for food), to another, and so on. Most natural systems produce high quality air and water conducive to the continuation of life. Taken together, the vast multitude of organisms large and small fill all available ecological niches (which they partly create) and few resources are wasted.

However, in the mid nineteenth century, Marx pointed to what he called a “metabolic rift” in which the natural cycling of nutrients was broken by developments within capitalism. As food was shipped to cities to provide the needs of the burgeoning populations created by early industrialization, soils became depleted of nutrients at the same time that residues of food wastes—mainly human sewage and garbage—fouled the rivers. The ecological problems flowing from this “metabolic rift,” seen in its broadest sense as characterizing all of capitalism’s interactions with nature, are very much with us at the present time.*

With the search for profits as the goal that overrides all others, adverse effects on the environment are inevitable. Pollution of water, air, and soil are natural byproducts of production systems organized for the single goal of making profits. Under the logic of capitalist production and exchange, there is no inherent mechanism to encourage or force industry to find methods that have minimal impact on the environment. For example, new chemicals that are found useful to produce manufactured goods are routinely introduced into the environment without the slightest assessment of whether or not they cause harm to humans or other species. Another example is the routine misuse of antibiotics, added to the feeds of animals that are being maintained in overcrowded and unhealthy conditions on factory farms. This has caused the development of antibiotic resistant strains of disease organisms. In addition, the way an automobile-centered society developed in the United States and elsewhere has had huge environmental consequences. Vast areas of suburbs sometimes merge into a “megatropolis,” partially erasing the boundaries between communities. The waste of fuel by commuting to work by car is only part of the story of suburbanization, as some people work in the city while others work in different suburbs. Shopping in malls reachable only by cars and taking children to school and play require transportation over significant distances. While this drains nonrenewable fossil fuels and metals, the emissions of harmful gasses cause ecological damage.

Will Either Crisis Result in the Collapse of Capitalism?

There are fortunetellers among the left who believe that either the economic crisis or the environmental crisis, or both, will become so pronounced and severe that the system will collapse upon itself. It is always dangerous to predict future developments. However, capitalism has proven resilient in the face of recurring crises. When a serious challenge to the system occurs and normal means of control do not seem to work, a version of fascism is always a possibility. But this has rarely been necessary within those countries at the center of the system, given that most information sources used by “first world” workers are little more than propaganda outlets for capitalism. Workers all too often come to accept their existing positions in the system, the gross disparities of wealth, and the recurrent economic downturns as “normal.” Still, there is an ebb and flow to the class struggle, with the working class in the United States and other rich countries sometimes gaining significant victories such as higher wages and benefits, social security, unemployment insurance, etc., only to be eroded during subsequent periods.

The last quarter-century has been marked by capital—in response to the problems of slow growth and lower profits than desired—waging class war, with largely successful attempts to reverse many working- and middle-class gains while inhibiting new increases in wages and benefits for workers. When major financial crises appear—the savings and loan bankruptcies, the Asian crisis of 1997–1998, the near-perpetual third world debt crisis, etc.—the representatives of capital do their best to ensure that capital suffers least, while the pain is spread to the masses.

The struggle over environmental problems—the land, air, and water degraded with poisons and other harmful chemicals, the destruction of large areas of forests, the depletion of nonrenewable resources, and the loss of many species—goes through an ebb and flow similar to the class struggle. When enough people, sometimes even including representatives of capital, are concerned and mobilized over threats to their own health or the long-term well-being of the planet, real progress can occur in cleaning up the environmental mess that is one of the twin crises of capitalist production. Of course, every effort is made by capital to socialize the costs of such cleanups, by using general tax revenues whenever possible.

We are currently witnessing a period in the United States in which capital is attempting to slow down or reverse the restoration of the environment. The recent announcement that there will be no federal monies to clean up about half of the thirty-three ” sites is a prime example of such a counterattack. Although some efforts to address environmental damage—such as building municipal sewage treatment plants—are paid by general local, state, or federal taxes, the huge Superfund was created by taxes on the chemical and oil industries. The purpose of the Superfund was to clean up the most polluted sites in the United States. It was created in 1980 in reaction to the nationwide outrage following the discovery of the full extent of the health disaster at Love Canal near Buffalo, New York, where the land was filled-in with toxic wastes, on top of which a community had been built. As then Senator John Heinz from Pennsylvania put it, “People at Love Canal were driven from their homes. In Pittston, Pennsylvania, people lived for days with the fear of breathing cyanide gas. In Youngsville, Pennsylvania, PCB contaminants have infiltrated the soil about 100 yards from that town’s water supply. There are thousands of Love Canals, Pittstons and Youngsvilles all over America.” However, in 1995, the corporate counterattack was successful in eliminating the Superfund tax on industry. Funding has been maintained for a few more years out of general tax revenue, but the Superfund is now close to exhaustion. The struggle over the cleanup of the contaminated sites is continuing. Congress is currently debating whether to reimpose the industry tax or to provide general revenues for the Superfund, and the U.S. Environmental Protection Agency—in a partial reversalsaid that it will provide limited funding for some of the thirty-three sites.

Will the toxic residues of industries continue to kill many people? Will toxic dumps continue to be placed near poor communities? Will new antibiotic resistant strains of disease organisms develop? Will the impoverishment of the soil make it more costly to grow food? Will global warming lead to changes in weather patterns and flooding of low-lying land? Will the release of some genetically modified organism or a new chemical used in manufacturing cause unanticipated and severe ecological damage? Will depletion of the ozone layer in the upper atmosphere result in many more cases of skin cancer? The answer to all these questions is yes. However, there is little reason to believe that even the cumulative effects of these and other ecological devastations will result in a crisis of the kind that will cause capitalism to collapse upon itself. A more probable future is one in which a lot more people suffer adverse health effects and the whole environmental problem worsens without this turning into an immediate crisis for capitalism itself, which will continue to socialize the costs and externalize the problem as a whole. Indeed, it is conceivable that the biosphere as we know it will be irreparably damaged (massive and extremely rapid species extinction, the mounting effects of global warming, etc.) while capitalism will continue to profit for a considerable time in the midst of—and in some cases as a product of—this destruction.

The illusion that the economic and/or environmental crises will cause the capitalist system to fall all by itself obscures the need for critical evaluation and education on how these twin phenomena are intimately tied to the very heart of the system. It also ignores the resiliency demonstrated by capitalism in the face of these crises. The truth is that we can’t wait for capitalism to fall apart and die due to its own internal contradictions. It will take a mass movement encompassing a large proportion of the population to replace capitalism with a humane, democratic, and environmentally sound socialism.


Editors (with Fred Magdoff), “The New Face of Capitalism: Slow Growth, Excess Capital, and a Mountain of Debt,” Monthly Review, April 2002.

For a discussion of this issue see John Bellamy Foster and Fred Magdoff, “Liebig, Marx, and the Depletion of Soil Fertility: Relevance for Today’s Agriculture,” in Fred Magdoff, John Bellamy Foster and Frederick Buttel, ed., Hungry for Profit (New York: Monthly Review Press, 2000).

2002, Volume 54, Issue 04 (September)
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