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Why capitalism can’t deliver sustainability

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

Paul Mason
Sep 11 · 6 min read

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.

So the real capitalism we built was based on fossil fuel extraction and the destruction of the biosphere. There is no other form of capitalism than the one that deforested the world, killed species, subordinated non-white human beings to centuries of racism, slavery, bonded labour and violence.

If capitalism were a failing corporation, and you were its interim manager, on the very first day of the job you would look at the structures, the muscle memories, the revenue streams, the skills, the sunk capital and say: this thing is built around fossil fuel extraction and environmental destruction: we can mitigate the damage but to end and reverse the damage we’re going to need a startup, in a different building, with different skills and a different business model.

Let’s be clear: two years ago 700 scientists from 90 countries contributed to a report that says, unless we limit global warming to 1.5 degrees above its pre-industrial norm, we will enter — between 2030 and 2052 a period of unpredictable feedback loops — aka climate chaos — aka climate catastrophe.

The effects of an estimated 1-1.2 degree warming are already clear: the Russian tundra is on fire; the Arctic ice is melting; the sea level is rising; the Australian bush is on fire. In this century, if we do not reduce the world’s carbon emissions to net zero, about a billion people — mainly in the Indian subcontinent — will experience the so-called lightbulb effect, where a combinate of extreme heat and extreme humidity makes it impossible to survive.

The only good news is that man made global warming happens in real time. Every rise in temperature we experience from the moment we get off this call will be caused by carbon emittied now, not by the coal fires of our childhood.

A four billion year old planet, which was changing slowly under the long-term process of entropy has seen its ecosystem disrupted by a 250 year old social system moulded around one form of energy extraction. When we found out about this, we decided that a 25 year old ideology would solve the problem: the market.

Create an artificial market in carbon and the negative externalities can be traded in a way that should make capitalism sustainable. It’s not working.

Because what we need are not simply electric cars instead of diesel cars, bicycle lanes instead instead of car lanes, and a gradual phase out of gas and coal from the energy production system.

We need a re-set of our relatioship with this earth: whereby the patterns of everyday life change rapidly so that we don’t fly in jet-powered planes, we don’t incentivise the burning of the last rainforests, we stop filling the sea with plastic. Where instead we do as the Ocasio-Cortez/Markey bill in America demands: reconfigure our urban, transport and leisure infrastructure to consume no carbon.

Could there be a form of capitalism that does this? Yes — which is why I think it was ill advised for so many people on the US and British left to run around demanding “socialism”. I do want to incentivise the profit motive, and self interest, to enact what’s needed.

The problem is the form of capitalism we have. This capitalism.

There’s no time to go into the debate on secular stagnation but there are strong signs that it is here. According to Bank of England economists Smith and Rachel, global growth in the past 30 years has been driven by expanding the workforce, catchup growth in the emerging world — not primarily by technological change; they predict its average rate will halve over the next 30 years.

With growth dependent on debt and money creation, this is an ill suited form of capitalism to address the climate crisis. QE is creating greater inequalities based on asset wealth, and — in case you haven’t been watching the grotesque dynastic carnival in the White House — money buys power.

Watch what the really future oriented people among the rich are doing: they dream of building undersea cities to escape the flood, or of space travel to escape the burning planet altogether.

In other words: the kind of capitalism we need to escape the climate crisis is thinkable — but mainly not to capitalists. Just as in the 1830s a parallel path is clear, but the socio-economic conditions for taking it are not there.

We would need one major country to decide to socialise — I don’t care how, nationalisation, mutualisation, state aid — its entire energy sytem, rid it of carbon within 10 years, and take the population on a rapid transition to sustainable modes of housing, transport, consumption and energy use.

I’ll end by conceding this to the proposers of the motion, as a challenge: I hope I am wrong. I hope that from within US Republicanism, British conservatism, Canadian liberalism, Modi’s BJP and the Chinese Communist Party, a generation emerges that says: right, capitalism, let’s do this. Let’s write off the four trillion of stranded assets; lets disinvest from all environmentally damaging activities; let’s turn to the state as the co-ordinator of the great human effort in front of us.

We — the left — don’t have the power to make this happen on our own. It’s up to the centre and the right to change. There’s no capitalism on a dead planet; there’s no City in a flooded London; there’s no Land of Hope and Glory on a planet with a billion refugees.

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