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What Every Environmentalist Needs to Know about Capitalism reviewed on

What Every Environmentalist Needs To Know about Capitalism

What Every Environmentalist Needs To Know about Capitalism

6 Things Every Environmentalist Needs to Know About Capitalism

August 12th, 2013

by Eugene

You have that friend. You know, the well-intentioned liberal who thinks that by recycling your Coca Cola cans and composting your GMO fruits and vegetables, all of the sudden, everything will be okay. Capitalism? “Well, we can’t escape that,” they say “So I’m just going to keep drinking Naked Juice and wearing an obscene amount of patchouli.”

Fred Magdoff and John Bellamy Foster’s “What Every Environmentalist Needs to Know About Capitalism,” is a remedy for this quixotic crusader. A “Citizen’s Guide to Capitalism and the Environment,” Magdoff and Foster write with great lucidity the case against a “green capitalism.”

So what do they teach us?

#1 The Population Can’t Stop Growing Under Capitalism

Over-population is a huge concern for any environmentalist. As global populations expand, new housing developments replace the biosphere and more non-renewable natural resources are consumed. Many propose simply curbing population growth to quell the the rapid expansion of resource extraction and natural destruction.

But capitalism can’t function without a growing population. As Magdoff and Foster point out:

What is not always realized is that population growth cannot be examined apart from the economic system in which it is embedded. Negative or zero population growth can pose serious problems for a capitalist society always in search of new markets for its goods and requiring a continual expansion of the labor force and of the relative surplus population of the unemployed in order to meet the needs of production and profits.

There are, of course many other examples. Shrinking or stagnate populations would greatly harm the construction industry. And, as a shrinking population ages -as it did in Japan – there is a severe shortage of workers to maintain basic services for the aging population. In the case of Japan, they had to import large amount of workers, but this is clearly not a globally viable strategy.

#2 The Economy Can’t Stop Growing Under Capitalism

In addition to zero population growth, many advocate a “freezing” of the economy to sustain current levels of prosperity. But this is antithetical to the basic laws of capitalism.

The basic drive of capitalism – profit – is not just about how much money one makes, but how quickly that money makes more money. Put simply, an investor doesn’t want to earn $1,000 a week for the rest of their lives, they want to invest that $1,000 dollars to turn into $2,000, which then may turn into $4,000, and so on. That is done when companies and stock become more valuable, my making more profit than they had before.

But without an increase in economic activity, there is no increase of consumption, and there is no available markets to expand into. Thus it becomes impossible to expand, and profits fall flat. The impetus to invest disappears.

Even mainstream economists understands that unemployment rates are tied directly to growth rates. According to the former chair of President Obama’s Council of Economics Advisers, “we need 2.5 percent growth just to keep unemployment where it is.” Magdoff and Foster note that only in the 13 years of GDP growth exceeding 5% from 1949-2008 did unemployment not increase.

With the need for growth becomes the need for more resources, expanding into new markets, and more environmental destruction…

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