Why capitalism can’t deliver sustainability

Speech at the City Debate 2020, held in the “virtual” Mansion House

On 8 September 2020 I opposed the motion in the annual City Debate, sponsored by the CSFI and CISI. Details here.

If we date the start of the factory system to 1771 with Arkwright’s mill at Cromford, then for nearly the first 50 years things went swimmingly. From 1819 onwards there was mass social unrest and in 1825 the first slump. Though cotton prices and some banks collapsed in 1825, wages did not, especially for the adult male operators of spinning machines, known as the mule.

In despair a group of manufacturers begged an inventor called Richard Roberts to invent a completely automatic spinning machine. Get rid of the need for an adult male arm and we can staff the factories with women and children: no more unions, no more strikes, end of real wage inflation. And it worked.

The self acting mule was first produced in 1830 and transformed the industry. Because it needed steam, and not water, or a combination of the two, it triggered the diffusion of the steam engine and automation throughout the factory system. This was the takeoff point for a industrial capitalism based on carbon.

In his book Fossil Capital the Swedish economist Andreas Malm asks the question: what if they’d done it with water? What if, instead of committing ourselves to a form of capitalism based on fossil fuel extraction, the pollution of the atmosphere and — as we now know — the triggering of potentially chaotic global warming, we had built massive dams, reservoirs and tidal lagoons and powered the factories that way?

It would be an interesting scenario for an alternative reality or a science fiction series. In fact it was tried.

Both in Scotland and on the River IRwell extensive plans were laid to power mills from a massive water infrastructure, and in 1833 an Act of Parliament was drawn up to make it happen.

But it didn’t happen — because the levels of co-operation, governance and collaborative investment would have needed a state-backed form of capitalism that, at this point, nobody could imagine.