We have seen throughout the book that the modern capitalist economy is a much more nuanced and complex phenomenon than it gets credit for by either its detractors or defenders. It has many virtues that are ignored, denied, or downplayed by its critics, and it embodies quite a few vices one would not know about if one only listened to the most passionate proponents of capitalism. Perhaps there is no single aspect of the modern economy that demonstrates this polarized tension better than, of course, its environmental aspect.
The topic is so heated that even those who broadly share the same political convictions do not see eye to eye. One recent example is the furore raised by the otherwise left-wing economist Branko Milanovic over the claims and aims of the ‘degrowth’ movement. In a critique of degrowthers posted on his blog Global Inequality, Milanovic was blunt right out of the gate:
The difficulty of discussion with degrowthers comes from the fact that they and the rest of us live in two different ideological worlds. Degrowers live in a world of magic, where merely by listing the names of desirable ends they are supposed to somehow happen. In that world, one does not need to bother with numbers or facts, trade-off, first or second bests; one merely needs to conjure up what he/she desires and it will be there.1
The left-wing economist-blogger Noah Smith also chimed in, sharing Milan-ovic’s misgivings. As he put it contemptuously, ‘The mad schemes degrowthers advocate are a fantasy that distracts us from real efforts to save the planet ... There are crusades out there worth fighting for; this not one of them.’2 Unsurprisingly, proponents of degrowth fired back and dismissed Milanovic’s and Smith’s vitriolic jabs.3
But even leaving this specific intra-left political controversy aside, there is plenty of heat to go around when it comes to the topic of capitalism and the environment. Left-wing magazines, from the fringe Trotskyist Left Voice to the established Guardian, regularly feature articles with bombastic titles such as ‘Capitalism is killing the planet — it’s time to stop buying into our own destruction’ and ‘Capitalism is destroying the planet — let’s destroy capitalism!’4 Naomi Klein’s best-selling book on climate change is succinctly subtitled ‘Capitalism vs. The Climate.’5 The simple, yet radical, point these and many other authors are trying to make is that it is one or the other. Either we stick to capitalism and catastrophically wreck the environment, or we abandon capitalism and save the environment. Anthropogenic climate change is primarily, if not wholly, caused by some inherent feature of the capitalist economy we live in. The solution, then, is to abandon the current mode of production and to move towards a certain — usually quite unspecified — socialist form of production and exchange, which will bring a stop to environmental destruction.
In the concluding chapter of the book, I will demonstrate both empirically and theoretically that this radical position is untenable or at least much too hyperbolic. To be clear, there is absolutely no doubt that climate change is happening and that it is man-made.6 It is also obvious that climate change is an extremely serious social and ecological phenomenon that is already impacting human civilization and will continue to do so in an exacerbated manner in the future, especially if nothing more is done about it. Furthermore, it cannot be doubted that capitalism has something important to do with climate change. Those libertarian defenders of capitalism who downplay, or even deny, these facts are quite misguided. But one cannot be politically serious about mitigating climate change if one is at the same time calling for the destruction of the only practicable economic system the world has right now, and one is not intellectually honest if one thinks capitalism is inherently and solely responsible for the potential environmental crisis we are facing.
How much does capitalism have to do with climate change? In what way exactly are the two related? Is it simply the profit motive, or ‘corporate greed,’ that is to blame? What about the so-called capitalist mantra of endless growth, which critics say is in tension with our resource-limited and spatially finite planet? Moreover, is capitalism really the only, or the single most important, cause of climate change? Did non-capitalist but heavily industrialized alternatives such as the Soviet Union avoid pollution, or at least engage in it to a much lesser extent than today’s capitalist societies do? Is climate change perhaps inherent to the very process of industrial economic development (be it capitalist or socialist), such that only reducing humanity’s material standard of living is the ‘true’ — politically hopelessly unviable — solution, as the proponents of the degrowth movement would have it? Is climate change inherent in capitalism to such an extent that even a post-industrial capitalist economy with a strong regulatory state will inevitably lead to it, or not do enough in fighting against it? These issues have to be navigated carefully.
Take, first, the set of issues that are said to be related specifically to capitalism. Let us start with the profit motive. To some, the fact that in capitalism producers produce not in order to help people (or society more general) but to take home a personal profit is one key reason for pollution and environmental degradation. They claim that capitalism makes people so selfish that they stop caring about the environment and other people around themselves. Remove capitalism, and this selfish profit-seeking orientation is gone, thus the environment is saved.
This charge, as it stands, is quite unconvincing. Within or outside capitalism, people who have produced for the market have always primarily done so in order to help themselves. Market participants today, 500 years ago, or 3,000 years ago have been buying, selling, and producing goods and services in exchange for something that benefits them, not out of the goodness of their hearts. The profit motive — i.e. seeking gains in exchange — has been a staple of markets and trade throughout history; it is not unique to capitalism. Therefore, removing the profit motive does not only get rid of capitalism but of trade in general, which is ostensibly not something we want to do. (As an aside, we have seen in Chapter 5 that high levels of market integration and the presence of market competition seem to make people less selfish and more trusting of others, a point missed by the critics.)
But the problem with the above anti-capitalist argument is deeper than that. If we follow the critics’ advice and get rid either of capitalism or trade more generally, then some other system of production and exchange will have to take over in their stead. What is that system going to look like? It presumably will not be Soviet-style central planning, which both defenders and critics of capitalism despise. But if not that, what then? It is wholly unconvincing to simply state something like ‘Well, people should just produce for the good of society and they should consume with the general welfare in mind.’
There are at least three kinds of problems with such a statement. First, we do not know what exactly the ‘good of society’ is. Are cars part of the ‘good society?’ Is full-fat chocolate part of the ‘good society?’ What exactly is — productionwise — a ‘good society,’ apart from the easy to enumerate generalities like having adequate sustenance, basic freedoms, overall happiness, and so on?
Second, if we do not know what exactly a ‘good society’ is, a mechanism will have to exist so that people can decide for themselves and aggregate their decisions on what shall be produced. But, we do not know what the decision mechanism would (or should) be like in a modern non-market economic system. Should people just vote every day on what they would like to see produced? Vote how and where? In the stores themselves, each day? But then how will people’s unlimited desires be rationed and curtailed? Currently, markets, prices, and money are one of the main decision mechanisms that take care both of the voting and of the rationing problem. What is the alternative to such market mechanisms, apart from central planning and state rationing?
Lastly, we do not know how to motivate people to ‘produce for the good of society’ or to ‘consume with the general welfare in mind.’ Even if we knew what the ‘good of society’ is or how people would decide on that important topic, we would still have to provide the incentives that would lead people to behave in the stipulated manner. Absent old-fashioned central planning and state coercion, and absent markets and trade, who or what will provide the necessary incentives? Here, then, if the regress into subsistence farming is avoided, we are back to some kind of profit motive and selfish exchange.
Now, a sophisticated critic of capitalism has a much more plausible argument than the simplistic and misguided profit-motive critique. They would say that it is not so much the profit motive that is to blame but rather the particular way in which profit is currently pursued by capitalist firms. That is, the fact that workers in a firm have no say over how much, what, and where to invest the firm’s capital is the real problem. In a different variety of capitalism (or ‘market socialism’), where workers are just as empowered to make profit-seeking business decisions as the owner of the firm is, climate change could be avoided. That is so, presumably, either because workers are simply more virtuous and responsible than owners (which is a silly stipulation) or because workers typically have to live in the vicinity of the firm, while owners can be far removed from the location. Workers, thus, have a stronger personal stake in what happens to the surrounding environment than owners, and so workers will take that into account when making business decisions. For example, the owner might decide that polluting a nearby river carries no further personal costs for him and so sees such a decision as profitable. The workers, on the other hand, live directly by the river and so — out of their own self-interest — will not see the decision as beneficial for them. If they have voice, they are more likely than the absent owner not to make the polluting decision, even though both are driven in their calculations by the profit motive.
There is important truth to this argument. However, the fundamental problem seems to me to persist. The problem is that oftentimes a single firm’s business decision to pollute or not to pollute has a negligible overall impact on the surrounding environment. In a big city, for example, one worker-owned factory can decide to emit noxious gases (for the sake of profit) without really significantly decreasing the overall quality of air in the city. The city is vast and thus a single firm’s pollution gets dispersed into this vastness quite quickly. In this example, it does not really matter whether the actor making the decision is an individual owner of the firm or a collective of workers employed in the firm. Insofar as they are both driven in their decision by the prospect of personal gain, both will (rationally) ignore the costs of pollution as they are so dispersed among the whole population of the city that each employee simply does not feel them.
In short, air pollution is a collective action problem that can persist whether one owner or a group of workers are making the decision.
Therefore, it is completely fair to say that one aspect of capitalism (markets) fails to spontaneously take into account negative externalities and thus contributes to climate change. However, it also has to be emphasized that this is not likely to be solved merely by reordering the ownership structure of firms, as some critics hope. Moreover, markets are not the only institution that has trouble with negative externalities created by collective action problems. So, too, can a socialist central plan — or individual citizens going about their daily lives outside the market — face the same trouble. If socialist planners — or individual citizens at a large democratic assembly — do not care about the environment (perhaps because they personally do not bear the costs, or because they judge the construction of an enormous army to be more important than pollution, or even because they simply want to industrialize no matter the cost in order to see the people’s material standards of living improve), there will be lots of pollution even without any markets being involved. In this sense, there is nothing particularly special about capitalism, capitalist owners, or the profit motive when it comes to pollution, environmental degradation, and climate change.
Turn, now, to the endless-growth charge. The fact is, the anti-capitalist critics say, that capitalist economies are constantly or at least typically growing (in GDP per capita terms). Moreover, they say, even when that is not happening (due to a recession or a period of stagnation), capitalism’s defenders will anxiously worry about this vanishing of growth, and they will immediately and loudly clamour for business as usual and re-igniting growth. So in one way or another, capitalism embodies the mantra of never-ending growth. The troubles with this, the critics say, are several.
First, our planet is finite, so the mantra of endless growth is simply unsustainable. Either the planet’s valuable resources which are used up in production will dry up at one point, or — if this is somehow solved — we will simply run out of space on the planet because of all the stuff that gets produced as a result of constant growth.
Second, even if these two scenarios (resources drying up and space running out) were somehow averted, endless growth is still going to bump up against the most fundamental problem. That is, if we keep producing more and more, emissions stemming from the production and transportation of goods are going to be increasing more and more. Given that humanity has to significantly and quickly reduce emissions if very dangerous levels of climate change are to be avoided, how can one defend the mantra of endless growth? Endless growth means endless increases in emissions or, barring that, it is at least dangerously delaying the reduction in emission we should have been committing to already years ago.
It is true that the social structures of capitalism make constant, self-sustaining economic growth very likely, and in this sense capitalism really does embody the mantra of endless growth. However, we should not ignore the fact that most people in capitalism are not forced to engage in, or approve of, growth-enhancing economic behaviour. Instead, most people like and want endless growth, especially if we judge what they want not by what they nobly proclaim but more by what they realistically do, i.e. how they actually behave in their daily lives. And how do they behave? Typically, in ways that indicate that they approve of growth or at least do not want it to end. This should not be surprising. Economic growth typically increases the purchasing power of people (even poor people) through the creation of cheaper goods, increased wages, increased government spending and social transfers, higher stock prices, and so on, so it should come as no shock that people, even ordinary people, want growth.
So, it is not that capitalism deterministically forces people to behave such that endless growth happens. (Likewise, it is not solely the elite 1% or richest 0.01% of people in a society who want year-on-year growth and who force the other 99% of the population against their will to follow the dictates of the rich.) Ordinary people buy stocks, punish politicians who presided over a shrinking economy, are scared of a recession, hope for growth to continue, are angry and sometimes even willing to take to the streets when a period of wage stagnation sets in, and they are satisfied when pensions increase. The dynamic of never-ending growth is behind all of that.
None of this, of course, gets the mantra of endless growth off the hook as far as long-term unsustainability concerned. It could still be the case that the very thing people desire — in our case, economic growth — at the same time leads to undesirable, bad, unsustainable consequences. Desires can have terrible, undesired effects. So, does endless growth lead to bad outcomes?
The worry about natural resources running out is in principle completely justified. If growth is endless but resources that fuel growth are not, this will be a problem. Nevertheless, even here an important caveat is in order. As a matter of logic, economic growth does not necessarily mean growth in material production. Service economies especially can grow without producing more physical stuff and without using up more physical resources. If the whole world soon moved to a post-industrial service economy, this could mean that worries about limited resources and limited space are not necessarily well-founded. And, indeed, some claim there is actual evidence demonstrating that parts of the modern economy are already dematerializing. Dematerialization — or decoupling — of the economy means that continuing economic growth is no longer accompanied by the increased use of resources. This dynamic can either be absolute, meaning that the total quantity of resources used up in production is decreasing (even though GDP is growing), or relative, meaning that the total quantity of resources used up in production is increasing at a slower rate than GDP is increasing.
In More from Less, for instance, Andrew McAfee presents evidence for both absolute and relative dematerialization of the US economy. He shows that the US consumption of certain metals, such as aluminium, copper, and gold, has reached a peak a few decades ago and has since been declining (even though US GDP has increased tremendously during this time).7 This is absolute dematerialization. He also points out that energy consumption has been increasing at a much slower pace than GDP already since the 1970s and 1980s; in recent decades, energy consumption has even flat-lined while the US economy is still rapidly growing.8 This is relative dematerialization.
This is an important and suggestive observation that should somewhat reduce our worries about the inherent limits to endless growth. It shows that the claim that growth inevitably, necessarily bumps up against natural limits does not really hold. Nevertheless, McAfee only deals with the US economy, and he only presents evidence for certain materials. Broader studies looking at the world economy are less optimistic.
One recent study found that the production of eight out of 13 minerals important for industrial production has ‘grown faster than world GDP. Rather than decline, the growth in extrication of most minerals accelerated from the 1990s onwards.’9 This does not mean dematerialization is impossible (to the contrary, the study itself presents evidence for relative dematerialization of several minerals, and even a few pieces of evidence for absolute dematerialization). It does, however, suggest that at least presently — and in world context, outside the most developed countries — significant dematerialization is not yet on the table.
But this is just one narrow study. Much more important in this respect are findings from a systematic review of almost 1,000 individual studies on both absolute and relative decoupling of GDP from resource materials and emissions. The review finds that
relative decoupling is frequent for material use as well as GHG [i.e. greenhouse gases] and CO2 emissions but not for useful exergy, a quality-based measure of energy use. ... Examples of absolute long-term decoupling are rare .. ..10
Therefore, the endless-growth objection seems to be, at least for now, a reasonable objection. We are still producing more output with more (not less) input, although many — even most — of the key inputs are actually increasing at a diminishing rate. This is something, but it is not nearly enough.
The second worry about endless growth I mentioned above has to do with emissions. The idea is that if growth is never-ending, so too will greenhouse emissions never stop accumulating. What should we think about that?
Those who are optimistic that economic development will not necessarily, or even likely, lead to catastrophic climate change usually point to a hypothetical relationship between economic development and environmental degradation called the Environmental Kuznets Curve (EKC). EKC is graphically represented as a simple inverted-U curve.11 EKC hypothesizes that, up to a certain point, economic development clearly and strongly harms the environment, with both development and harm increasing monotonically at first and possibly for a long time. Then, at middling levels of development, environmental degradation is supposed to peak, such that further economic development will ostensibly go hand in hand with a reduction of harm to the environment. If this hypothetical absolute decoupling of emissions from further economic growth is true, capitalism and development will not necessarily (or even likely) destroy the planet, at least not over the long term. Of course, it is also possible that even if the EKC really exists, its actual height and slope are such that the reduction in emissions at higher levels of development is too slow to mitigate dangerous or even catastrophic levels of climate change; I return to this point later on.
So is the EKC a reality? There is some suggestive evidence for it. Sulphur dioxide (SO2), for instance, is one important anthropogenic air pollutant, and its annual emissions seem to follow an inverted-U pattern as countries develop economically. In the two currently most economically developed regions of the world, where modern development first originated — Europe and North America — SO2 pollution has been steadily growing between the 19th and late 20th century. But pollution then peaked around 1970—1980 (at tens of millions of tonnes), and every decade since that point, SO2 emissions have been sharply dropping in these regions. Already in 2004, European SO2 emissions have dropped to the level they were at in the 1930s.12
Another measure of pollution that seems to be in line with EKC is the rate of deaths caused by outdoor air pollution. In 2019, most low-income countries had relatively low death rates, around 20—60 per 100,000 individuals. Then, there were many middle-income countries with death rates much higher, exceeding 60—80/100,000. At the same time, the rates for almost all high-income countries were below or well below 20/100,000. Moreover, if we look at how death rates changed over time, it is fairly clear that as the poorer countries have grown richer between 1990 and 2019 their death rates have also increased, while the death rates of middle-income countries have started stabilizing as they were getting wealthier in this same period. In those countries that were already at the upper-middle income level in the 1990s and then moved further ahead to high-income status in the following decades, rates have been notably declining as their wealth grew. The same, of course, is true for countries there already achieved high-income status in the 1990s.
But, we have to be careful in how we deal with these simple data.
First, the presented figures for SO2 emissions do not reflect the fact that an important part of European and North American production has been shifted overseas since the flourishing of globalization in 1990s and early 2000s. One could speculate that emissions did not really decline. They just got shifted around to a different geographical location. We should note, however, that the single most important source of European SO2 emissions reduction was the energy sector, not manufacturing and production.13 And given how severe the drop in emissions was — from more than 70 million tonnes of SO2 in 1980 to less than 20 million tonnes in 2010 — globalization cannot be the main story here.
Second, although both the decline in SO2 pollution and the decline of overall air pollution death rates are, from a certain point onward, correlated with high GDP per capita, economic development itself is not necessarily the cause of the decline. For instance, both North America and Europe have been busy implementing myriad environmental regulations since the 1970s and 1980s. So, it was most likely regulation, not development itself, that was a key proximal cause of environmental improvement.14
Of course, it could plausibly be claimed that richer countries are — because they are richer — more motivated and more capable of implementing such regulations than poorer countries, so development can still be pointed to as a contributing, ultimate cause of emissions reduction; but, this is an important caveat to the optimistic EKC story. Another caveat is that high-income countries can afford, and usually possess, much better healthcare systems and treatments that can mitigate the negative health effects of pollution. This means that they would have driven down pollution death rates, at least to an extent, even if no improvement in air pollution was achieved. In short, simple statistical data and correlations do not allow us to infer what precisely caused the reduction in SO2 pollution, and whether the pollution death rate reduction reflects cleaner air or better healthcare.
Third, SO2 is only one pollutant. What about CO2? Does it show promising signs of following the EKC shape? Looking solely at the raw numbers for Europe and North America, it is again quite clear that annual CO2 emissions have indeed been falling in recent decades both in absolute terms and per capita although much less spectacularly than SO2 emissions.15 Annual CO2 emissions started monotonically climbing since the 18th century in both Europe and North America as the two regions treaded the path of modern economic development. However, Europe then peaked at the end of 1980s, while North America did so in 2007. Since then, both have reduced their annual CO2 emissions. Importantly, this trend holds even if we include outsourced CO2 emissions into the calculation, i.e. if we look at consumption — instead of production-based emissions.16 An EKC pattern can also be seen when consumption-based emissions of individual European countries, Canada, and the US are plotted against their GDP growth since 1990. A large majority of them have been generating less CO2 emissions per year as they have grown more and more developed.17
Overall, however, more sophisticated statistical research (which also includes other regions, not just Europe and North America) has come to quite mixed findings on the existence of a CO2 EKC. Some studies find evidence for it, others against it.18 One 2019 comprehensive literature review thus concluded that, currently, ‘there is no consensus regarding the existence or shape of EKC, i.e. for any geographical context, researchers can come up with different and opposing set of results.’19 Also noteworthy is the fact that the recent decline in annual CO2 emissions in most European countries has not really started happening already at middling levels of development, as is postulated by the classic inverted-U EKC shape. Instead, the peak in emissions seems to have happened further on at quite high levels of economic development, and it then (slowly) started declining only at even higher levels of development.20 This means that, if the EKC exists, it does not seem to look as simple and symmetrical as an inverted U.
Fourth and finally, even if the most developed countries in the world are experiencing the EKC — and most recent evidence suggests this is the case at least in a subset of developed economies —, the decline in emissions is not nearly enough, at least at the current rate, to mitigate dangerous levels of climate change.21 This is so because it is much too slow and also because it is only happening in the most developed countries in the world, i.e. in a tiny sliver of the world. Emissions in Asia are rapidly growing and have not yet peaked. Africa is at such low levels of development that the biggest increase in African emissions is yet to come, while their potential EKC peak seems to be decades away. As one team of researchers puts it, ‘18 [developed] countries ... have reduced CO2 emissions in the last decade . This observed absolute decoupling, however, falls short from the massive decoupling required to achieve agreed climate targets.’22 They rightly add, though, that
rare occurrence of absolute decoupling in the past does not represent proof that it cannot become more common in the future — and perhaps intensifying the policies implemented in 18 peak-and-decline countries could yield sufficient decoupling of GDP and GHG emissions to achieve climate 23
targets.
To conclude, even though economic development — and capitalism as the key source of development today — are not to necessarily monotonically related to environmental harm, one should most certainly not pin one’s hopes with regards to climate change mitigation simply on development doing its thing. Much more has to be done, and much more can be done through environmental regulations that strive to fix market failures and the more general collective action problems stemming from negative environmental externalities. These should be, as they already have been to an extent, internalized with the help of carbon taxes. Through targeted research and development, investments, and regulation, governments should help the economy and society as a whole transition away from using fossil fuels for energy towards renewables and nuclear. However, capitalism and economic development need not, and should not, be destroyed in the process.
How plausible is it that the world would actually mitigate catastrophic climate change by 2100 if more deliberate action is taken? A recent Nature analysis claims that if all conditional and unconditional pledges that countries have made in the past are fully implemented as per their schedule, then global warming can be kept ‘just below 2 degrees Celsius’ by 2100 compared to pre-industrial times.24 In such a future, the frequency and severity of extreme weather would certainly both increase. Sea levels would rise as well. However, catastrophic and even just severe consequences of warming would be avoided.25 Projections show that, under this scenario, living standards in 2100 would be much higher — not lower — than today.26
The new Nature analysis underscores that the below -2°C scenario is only likely if the pledges are kept. This is not a given, but at the same time it is in principle possible. It is true, though, that for warming to be limited to an even lower, more optimal 1.5°C, existing pledges are not nearly enough. For such a future scenario much more aggressive action has to be taken, and it has to be taken within the present decade. As the analysis puts it,
Our results provide a reason to be optimistic: warming could be limited to 2°C or just below, if the pledges on the table are implemented in full and on time. Peaking of global GHG emissions could be achieved this decade. But our results also provide a sobering assessment of how far current pledges are from limiting warming to 1.5°C.27
The future is uncertain. But neither of the mentioned two scenarios is impossible, and neither of them requires the destruction of capitalism. With deliberate policies and measures, severe and catastrophic climate change can still be averted.
As this concluding chapter and all the preceding chapters in the book have hopefully shown, capitalism and its various social correlates are incredibly complex and nuanced phenomena not tailored for polarized, partisan political discussion. It should not be surprising, then, that Karl Marx — capitalism’s most illustrious and rhetorically vociferous critic — overemphasized the faults borne by the capitalist mode of production and at the same time dramatically underemphasized its contribution to the material well-being of humanity (especially the part of humanity outside the ruling class). To this day, many of his anti-capitalist followers have at least to an extent been repeating the same mistake. So, too, have of course defenders of capitalism tended to commit the reverse mistake of overemphasizing capitalism’s virtues and downplaying its vices. But, there have also been invaluable intellectual voices and theoretical resources on both sides that have enabled us to break through the polarized noise and assess capitalism in all its real-life complexity as realists.
Jon Elster, once the leading light of analytical Marxism, begins his magisterial 1985 book Making Sense of Marx with one of Marx’s most beautiful, yet not all that well-known, quotes that still lingers in my mind today. The quote goes as follows:
In our day, everything seems pregnant with its contrary. Machinery gifted with the wonderful power of shortening and fructifying human labour, we behold starving and overworking it. The new-fangled sources of wealth, by some weird spell, are turned into sources of want. The victories of art seem bought by the loss of character. At the same pace that mankind masters nature, man seems to become enslaved to other men or to his own infamy. Even the pure light of science seems unable to shine but on the dark background of ignorance. All our invention and progress seem to result in endowing material forces with intellectual life, and in stultifying human life into a material force. This antagonism between modern industry and science on the one hand, modern misery and dissolution on the other hand; this antagonism between the productive powers and the social relations of our epoch is a fact, palpable, overwhelming, and not to be controverted.28
As a good Hegelian, Marx could not help himself but to say that capitalism at virtually every turn inherently generates immense ‘contradictions,’ i.e. states of affairs that are at the same time opposite to themselves. This might sound interesting and seductive even, but in reality it is much too hyperbolic and ungrounded if taken literally. Real ‘contradictions’ do not exist, and even Marx himself regularly broke from Hegel on this point, instead claiming only that — for instance — certain states of social affairs can unintendedly backfire and undermine themselves (in the sense of game-theoretic social dilemmas, wherein individual rationality leads to collective irrationality).29 It was the main intention of my book to show that, Hegelian mysticism aside, Marx was plainly correct that capitalism carries with it both virtues and vices, both tendencies and countertendencies, both intended actions and unintended social outcomes — capitalism presents us with certain ‘contradictions,’ as it were.
We have seen that capitalism reduces exploitation experienced by workers but also at the same time keeps a degree of exploitation in place and is unable to remove it completely. Capitalism most definitely helps reduce poverty, but at the same time it can also contribute to increases in inequality. It unleashes a massive dynamic of job-creation but also pulls the employment rug from underneath some workers. The modern economy overall strongly promotes human pro-sociality but in certain aspects does nothing for it or even reduces it somewhat. Capitalism contributes to environmental degradation, especially through industrial production, but it also presents us at least with the possibility of having a highly economically developed society that harms the environment less and less the more it develops. All this is, to put it in Marx’s words, an epochal ‘fact, palpable, overwhelming, and not to be controverted.’
1 Milanovic (2021).
2 Smith (2021).
3 Dedic (2021); Parrique (2021a; 2021b).
4 Monbiot (2021); Trotskyist Fraction - Fourth International (2019).
5 Klein (2015).
6 IPCC (2022).
7 McAfee (2019), Chapter 5.
8 Ibid.
9 Hannesson (2021).
10 Haberl et al. (2020). Emphases added.
11 Stern (1998).
12 Vestreng et al. (2007).
13 Ibid., 3670.
14 See Stern (2017).
15 Ritchie and Roser (2020).
16 Ritchie (2019).
17 Ritchie and Roser (2020).
18 Stern (2017); Shahbaz and Sinha (2019).
19 Shahbaz and Sinha (2019).
20 Ritchie and Roser (2020).
21 For evidence of CO2 peak-and-decline see Le Quere et al. (2019).
22 Ibid.
23 Ibid.
24 Meinshausen et al. (2022, 304).
25 Stone (2021).
26 Ibid.
27 Meinshausen et al. (2022, 308).
28 Elster (1985).
29 For more on this, see Elster (1985, 43-48).
Dedic, Jasminka. 2021. ‘A Response to Branko Milanovic: “Degrowth: Solving the Impasse by Magical Thinking”,’ Global Policy, March 4. Accessible via: https:// www.globalpolicyjournal.com/blog/04/03/2021/response-branko-milanovics-degrowth-solving-impasse-magical-thinking/.
Elster, Jon. 1985. Making Sense of Marx. Cambridge: Cambridge University Press.
Haberl, Helmut, Wiedenhofer, Dominik, Virag, Doris, Kalt, Gerald, Plank, Barbara, Brockway, Paul, Fishman, Tomer, Hausknost, Daniel, Krausmann, Fridolin, and Bartholomaus Leon-Gruchalski. 2020. ‘A Systematic Review of the Evidence on Decoupling of GDP, Resource Use and GHG Emissions, Part II: Synthesizing the Insights.’ Environmental Research Letters 15, no. 6. Accessible via: https://iopscience.iop. org/article/10.1088/1748-9326/ab842a/.
Hannesson, Rognvaldur. 2021. ‘Are We Seeing Dematerialization of World GDP?’ Biophysical Economics and Sustainability 6, no. 4. Accessible via: https://link.springer. com/article/10.1007/s41247-021-00086-7/.
IPCC 2022. Climate Change 2022. Impacts, Adaptation and Vulnerability. Summary for Policymakers. Accessible via: https://report.ipcc.ch/ar6wg2/pdf/IPCC_AR6_WGII_ FinalDraft_FullReport.pdf/.
Klein, Naomi. 2015. This Changes Everything: Capitalism vs. The Climate. London: Simon & Schuster.
Le Quere, Corinne, Korsbakken, Jan Ivar, Wilson, Charlie, Tosun, Jale, Andrew, Robbie, Andres, Robert J., Canadell Josep G., Jordan, Andrew, Peters, Glen P., and Detlef P. van Vuuren. 2019. ‘Drivers of Declining CO2 in 18 Developed Economies,’ Nature Climate Change 9, no. 3, 213-217.
McAfee, Andrew. 2019. More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources — and What Happens Next. London: Scribner.
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Note: Italic page numbers refer to figures and page numbers followed by “n” denote endnotes.
American Revolutionary Wars 41
Anderson, E. 66; Private Government 66 anti-capitalism 2—4, 6, 129, 132, 134, 136, 147, 149, 155, 163, 165, 171
Arkwright, Richard 32
Autor, D.H. 88
‘BreadTube’ 3
A Brief History of Neoliberalism (Harvey) 105
Campbell, B.M. S. 39
capitalism: analytical Marxism 4—8; axioms of rational choice 14; and economic development 13, 115—121; economic freedom 92—101; evidence-based 13; impact on society 13; incredible productivity 8; industrial policy 107—115; institutional context 14;
macrosocial patterns of development 14—15; Marxism’s 8—11; methodological individualism and game theory 14;
neoliberalism 101-104; public choice theory 11-13; rational, strategizing, selfinterested actions 14; for realists 13-15;
research on Washington consensus
104-107; social actors 14; ‘social property relations, rules for reproduction, social laws of motion’ 14; theoretical analysis 13; visible costs and hidden benefits of globalization 87-89; youth rebels 1-4
Capitalism and Freedom (Friedman) 117
capitalist mantra of endless growth 162 Chibber, V. 4, 6, 61-63; Understanding
Capitalism 4
China: China shock 88; economic growth 57-58, 72-74; outsourcing and cheap imports 65; poverty reduction 54, 56-57; pre-capitalist 38
Christianity and Church 15, 40
Clinton, Bill 89
Clinton, Hillary 89
Cohen, G.A. 4; Karl Marx’s Theory of History:
A Defence 4
Cold War 119
Communist Manifesto 43
Condition of the Working Class in England
(Engels) 1
cooperation 27, 129-130, 139-141
Council of Economic Advisers (CEA) 68-69
Crimean War 43
critical social sciences 89
De Loecker, J. 69
Democracy Against Capitalism (Wood) 117
Democratic Socialists of America 3
discrimination: and business failure
143; increased discrimination 142;
official policies 141-142; racial 143;
reduced discrimination 142; sustained discrimination 142; and tolerance 141-145
disposable income 70
doux commerce or ‘gentle commerce’
East Asian Tigers 107
economic freedom 123n28; capitalism 92-101, 135; economic development and democratization 96, 149, 151-152; Fraser Institute’s index 16, 58, 91, 92, 96, 98;
and homicide 146; hyper-globalization 148; impact of 146; and poverty 93, 94, 95, 95, 99, 100; subjective life satisfaction 96-97, 123n28; tolerance and 144; of world 92-101
economic growth: capitalism-democracy connection 15, 17, 33, 115, 116-119; in China 57; democratizing effects of 115116; development 107, 109, 166-167; economic freedom of world 92-101;
empirical evidence on modernization thesis 119-121; impact of Protestantism 25; and income inequality 76; Marxist and anti-Marxist theoretical perspectives 116-119; modern 31; on politics 120;
reduction of 75-76
Economic Policy Institute (EPI) 51;
worker compensation 51; worker productivity 51
Eeckhout, J. 69
Elster, J. 4, 5, 171; Making Sense of Marx 171
Engels, F. 2, 12, 130; Condition of the Working Class in England 1
England: agricultural labour productivity 30, 30-31; bishopric exposure 29;
geographical location and access to Atlantic 40; Industrial Revolution 1;
Peasants’ Revolt, 1381 36-38; process of ‘primitive accumulation’ 39; Protestant
England 25; rich peasants (called yeomen) 38; tenant farmers 38-39
Enlightenment 31-33, 40, 129-130, 132, 145
Enlightenment Now (Pinker) 23, 31
environment: capitalism in green future 162-167; degradation 162, 163, 165, 167-168, 172; economic development and pollution, relationship between 8, 167-171; endless-growth objection 165-167; externalities 170; improvement 169; post-1980s international 121; profitmotive objection 163-165; regulations 170; social 8, 27, 33, 78; virtues and vices of modern economy 171-172
Environmental Kuznets Curve (EKC) 167-168
Envisioning Real Utopias (Wright) 2
Europe: agricultural labour productivity
30, 30; Black Death 36; CO2 emissions 169; GDP per capita 29, 29; Gini index 70; inequality 72, 74; military threat 43; peasants in 54-55; populations 15, 24, 27-29, 29; rise of 29; share of income 73; SO2 emissions 168; trade unions 103; transition to capitalism 15, 25-26, 44
exploitation: in capitalist markets 8, 63, 70; employer 62-64; imperfect competition and monopsony 66-69; inequality 71; on labour markets 10; Marxism 8, 61, 64; minimum wage research and market concentration 66-69; modern economy 52; monopsony 66; and oppression 6; for personal gain 138; political 34; workers 63-65, 69, 118, 172
First Opium Wars 43
Franco-Prussian War 42
Freeman, C. 29
free-market 3, 58, 60, 64, 90-92, 97,
108-110, 117-118, 131, 148, 152
Friedman, M. 10, 17, 91, 105, 115-119, 121;
Capitalism and Freedom 117
Gates, Bill 53
Gintis, H. 64
Glorious Revolution of 1688 39
Google Scholar 89
Gutierrez, G. 69
Harvey, D. 105; A Brief History of Neoliberalism 105
Hayek, F. A. 91
Hickel, J. 15, 16, 52, 53, 55, 56, 58, 61
historical origins, capitalism: across Europe and beyond 40-44; ‘beloved myth’ of Protestantism and capitalism 23-26;
capitalism as creature of culture 23-33; Church, Western psychology and modernity 26—31; contra Marx 23, 40; in English countryside 36—40; materialist explanation of transition 33—35;
Protestantism nor Christianity 31—33; stickiness and change in social orders 35-36; understanding ‘hockey-stick’ graph 22-23
Hofstadter, Richard 11
homicide 17, 77, 145-147, 157n57
How to Be an Anti-capitalist in the Twenty-first Century (Wright) 2
hyper-globalization 148
‘import substitution industrialization’ (ISI) 113
income inequality 7, 16, 52, 70-73, 77, 96, 97, 133-134, 151
industrial policy (IP) 107-108; empirical record 112-115; government failure rebuttal 111-112; infant industry protection argument 108-111
Industrial Revolution 1, 24-25, 31-32, 40-41, 51
inequalities: between-country 16, 72; consequences of 75; effect on growth 76; existence of 70; exploitation 71; and health problems 76-77; income 7, 16, 52, 70-73, 77, 96, 97, 133-134, 151;
increased rent-seeking and corruption 75; market-generated 70; political 7;
political instability 75; poverty 71; rising 8, 69-71, 74-76, 77; wealth 7, 16, 70, 73-74; within-country 16, 72-73; world 16, 71-72, 73
infant industry protection argument 109-110
International Monetary Fund (IMF) 76, 105, 114, 147-148
interstate war 152-154
Joon-Chang, Ha 114
Karl Marx’s Theory of History: A Defence
(Cohen) 4
Kenworthy, L. 60
Klein, N. 105, 115, 147, 149, 162; The Shock Doctrine 105, 115, 147
MacLean, Nancy 11
Making Sense of Marx (Elster) 171
markets: capitalist 6-9, 16, 43, 58, 60, 63, 64, 69, 90, 129-131, 154; competition 6-8, 24, 33-35, 41-42, 44, 64, 66-70, 72, 129, 131, 136-137, 143, 155,
163; concentration 16, 63, 68-70, 78; consumer 143; deregulations 135; exchange 131, 134, 142; failure 8, 10, 12, 64, 70, 106, 109-112, 170; free-market 3, 58, 60, 64, 90-92, 97, 108-110, 117-118, 131, 148, 152; as gentle 129-132;
integration 17, 140, 163; labor 68; as monstrous 129-132; for poverty 58-61; power 63, 66, 69, 78; pro-market 147149; reforms 57, 60, 147-149; societies 3, 17, 129-130, 154-155
Marxism: analytical 4-8; and anti-Marxist theoretical perspectives 116-119;
bourgeois revolutions 5; capitalism 8-11, 116-119; conflictual theory of history 9; contemporary vindications of 51-53; contra Marx 23, 40; direct subordination of state 9; distinctively Marxist 8-11;
elite self-interestedness 9; exploitation 8; formal separation of economic from political 9; indirect subordination of state 8-9; labour theory of value 5;
market failure 8; mass liberal democracy 5; public choice theory 11-13; rising inequality 8; structure and agency 8; theory of history 5; workers and capitalists, antagonism
between 8
Marx, K. 4-5, 10-13, 15, 22-24, 39, 40, 43, 52, 61, 130, 171, 172; Capital 52; Communist Manifesto 52
modernization thesis 119 Mokyr, Joel 23, 31, 32 Musk, Elon 52
Napoleonic Wars 41-42
neoliberalism: all-encompassing ideology or worldview 90; austerity 90;
conversational currency 89; defined 16, 91, 97, 121; economic development 115-116; economic system 90, 91;
economic theory or paradigm 90, 91; for free markets 90-91; globalized capitalism 89, 149; industrial policy 108, 114-115; liberalized trade 87, 108; set of economic reforms policies 90, 91; social power 89-90, 95-96; strength of trade unions 103; synonym for capitalism 90; tax rates and revenue 104; total government spending 102-103; with Washington consensus 16, 90, 104-105, 107; welfare state 101-102
neoliberal revolution 92, 101-104
Newcomen, Thomas 32
Ocasio-Cortez, Alexandria 2
Olson, Mancur 13
Organisation for Economic
Co-operation and Development
(OECD) 105
Our World in Data (OWID) 51, 53, 54
Oxfam 52
peace 132; capitalist market 43, 154; civil
152; cooperation 129; democratic 152-154; internal 151; international 154; interstate 153-154
peasants (yeomen) 38
Philippon, T. 69
Pinker, S. 23, 31, 141, 142; Enlightenment Now 23, 31
poverty: absolute 69, 93; and capitalism 7, 15-16; in China 56-57, 57; ‘cost of basic needs’ 55; data on 53-54; and disease 1;
dispute over poverty 53-58; extreme 2, 51-59, 93, 93, 94, 98, 99, 100; market for 58-61; reduction 53-54, 56-58, 60, 96, 97, 105, 107, 115, 172
‘prestige bias’ 27
Private Government (Anderson) 66
pro-market 147-149
Przeworski, A. 4
public choice theory 10, 11-13
rational choice theory 10-11, 13
‘Rights Revolutions’ 142
Roberts, R. 78
Robinson, Nathan J. 2, 25; Why You Should Be a Socialist 2
Rodrik, D. 114
Roser, M. 15, 53; Our World in Data 51
Saez, E. 10
‘safety-first’ production strategy 34
Scientific Revolution 31-32, 40
Seven Years’ War 41
The Shock Doctrine (Klein) 105, 115, 147
Smith, N. 161
The Socialist Manifesto (Sunkara) 2
Speaking Frankly: Socialism (CBSN) 2
Sunkara: The Socialist Manifesto 2
Sunkara, B. 2
Tarko,V. 44
Thatcher, Margaret 92
Tlaib, Rashida 2
tolerance 129, 131-132; and capitalism
142; democratic societies 142; and discrimination 141-145; and economic freedom 144
trust: capitalist institutions 134-136;
generalized 7, 77, 132-137; increased 133-137, 139, 141; and market
competition, evidence on 136-139; sheer trust 131; social 28, 76, 133; trustors and trustees 138-139; wealth 132-134
Turgot, Robert Jacques 41
Understanding Capitalism (Chibber) 4
violence 15; coups 149-151; homicide
145-147; human rights abuses 147-149;
interstate war 152-154; lethal 146-147
Wade, Robert 114
Wall Street Journal 77
Warren, Elizabeth 13
Washington Consensus (WC): free-market capitalist economy 58; neoliberal 16, 54, 90, 113, 121; policies 107-108; waves of research on 104-107
Watt, James 32
wealth inequality 7, 16, 70, 73-74
Weber, M. 15, 22-26, 28, 31, 44
‘WEIRD (Western, Educated, Industrialized, Rich, and Democratic) hypothesis’ 26-28
Why Democratic Socialism Is Gaining
Popularity in The United States (CNBC) 2
Why You Should Be a Socialist (Robinson) 2
Wood, E.M. 10, 14, 117-119, 121;
Democracy Against Capitalism 117
Wright, E.O. 2-4, 6, 7, 9, 61, 63; Envisioning
Real Utopias 2; How to Be an Anti-capitalist in the Twenty-first Century 2
Wright, Walker 132