How to make capitalism part of the solution 1

Capitalism is not inevitably part of the environmental problem. It is wholly indifferent to the problem it is true, so if it is not managed and the world is allowed to continue on its current way, then it will be as happy to wreck it as to save it. In fact neither outcome would even register on its radar, except insofar as it hit the bottom line.

Yet capitalism must either be made apart of the solution or abolished. On the assumption that the latter is unlikely to be on anyone’s real agenda until it is probably too late, it is crucial that it be made to be part of the solution.

In particular, it must be forced into a position in which the only way to achieve the constant increase in profits on which it relies consists of making the world a cleaner place. We cannot even afford to continue the level of physical damage to the environment at the present level, let alone allow it to grow, so in the absence of specific policies and mechanisms to shrink that damage even while allowing capitalism to increase its profits (without which it will fall into recession and the world’s economy will grind to a halt), we are simply to going to be able to prevent environmental collapse.

So what can be done? Here are some ideas.

  1. We must introduce regulations that steer industry away from the most gross forms of environmental damage. We have done this often enough, and we can do it again. Business has always protested that unleaded petrol or abandoning the use of CFCs is impossible – and yet with sufficiently robust handling, they have always managed to extract a profit from solving the problem. This kind of regulation should include the requirement that any new product is less environmentally damaging than any other product of that type available anywhere in the world, taking into account its entire lifecycle environmental cost – development, production, use and disposal.
  2. We must introduce taxes that correctly reflect the real environmental costs – including the costs of clearing up the mess. This should apply to the use of such products too, to make sure that demand also reflects real environmental costs. And it is crucial that such a policy is couched in such terms – not as a tax on industry or consumers, but as a simple accounting procedure to bring out the real environmental costs of our lifestyle.
  3. We must subsidise environmentally responsible behaviour and so make cleaning up profitable. It is equally essential to recognise that most of the technology that is needed to clean up industry is not currently profitable. And it won’t be profitable for a long time, perhaps in some cases ever. Yet this is not a difficult problem: after all, there are many aspects of our current world that we routinely subsidise without any expectation that capitalist companies will ever be able to turn a profit at them (even if we were foolish enough to let them try). Long-term mental health care, for example. Indeed, most aspects of the welfare state are state-run primarily because they cannot be provided at a profit. At the moment we are trying to prove the opposite, and the collapse of many aspects of the welfare state as a consequence is proof enough that the experiment is not working.
  4. We must recognise the other side of cleaning up industry evne though it is not currently profitable, and may never be. That is, we must subsidise innovation and development in clean technology that capitalist industry cannot yet profit from. A huge amount of contemporary research is publicly funded, so why not apply the same logic on a literally industrial scale? At the moment when we do this, it is by allowing businesses lead academic institutions by the nose, so met their short-term profit targets; but there is not reason why this logic should not be reversed.
  5. We absolutely must extend our reach into the developing world. If just China were to ‘catch up’ with the standard of living of industrial countries without a radical reduction in environmental impact, we would double the world’s current environmental burden – an impossible problem to solve. Yet we cannot expect the Third World to refrain from developing. So we must make that development as environmentally painless as possible. This will have to include both taking a disproportionate share of the responsibility for the world’s environment problems on ourselves, and directly supporting environmentally friendly development elsewhere.
  6. Even more importantly, we must restore the fundamental idea that capitalism is the servant of society, not vice versa. We must flatly contradict the idea that the function of government is to contribute to business’s ‘competitiveness’, that business is a credible model of how society as a whole should work, and that its organisations and its leaders are in any way free of social responsibilities. This may be the hardest of all, given the way public policy is increasingly dominated by the idea that business and markets are the answer to every problem. But business itself is helpless to solve any problem that cannot be profited from, and the environment is absolutely one such problem.
  7. But most importantly of all, governments must re-learn to do something they seem to have abandoned, which is to make sure that they don’t just wring their hands as social problems follow from such economic changes. For example, the British government did practically nothing even to palliate the disasters caused by Thatcher’s obsession with market economics, let alone actively move society to a position that positively reflected the new economic reality. If they do as little management of society in the face of environmental change as they have in the face of economic change since the Second World War, we can expect an even more bumpy ride than is necessary.

The alternative, of course, is that we leave capitalism as part – and the biggest part – of the problem. And then, given its strange, autistic logic, it will only make the problem much, much worse.

More of RJ Robinson at

One comment on “How to make capitalism part of the solution

  1. Reply JBR Aug 26,2008 2:22 pm


    Anyway, I applaud this post and would endorse your path.

Leave a Reply