File spoon-archives/marxism-international.archive/marxism-international_1998/marxism-international.9802, message 442


Date: Wed, 25 Feb 1998 11:57:07 -0500
From: Louis Proyect <lnp3-AT-columbia.edu>
Subject: M-I: Wallerstein: "Ecology and Capitalist Costs of Production: No


"Ecology and Capitalist Costs of Production: No Exit"

by Immanuel Wallerstein

[Keynote address at PEWS XXI, "The Global Environment and the
World-System," Univ. of California, Santa Cruz, Apr. 3-5. 1997]

Today, virtually everyone agrees that there has been a serious degradation
of the natural environment in which we live, by comparison with 30 years
ago, a fortiori by comparison with 100 years ago, not to speak of 500 years
ago. And this is the case, despite the fact that there have been continuous
significant technological inventions and an expansion of scientific
knowledge that one might have expected would have led to the opposite
consequence. As a result, today, unlike 30 or 100 or 500 years ago, ecology
has become a serious political issue in many parts of the world. There are
even reasonably significant political movements organized centrally around
the theme of defending the environment against further degradation and
reversing the situation to the extent possible.

Of course, the appreciation of the degree of seriousness of the
contemporary problem ranges from those who consider doomsday as imminent to
those who consider that the problem is one well within the possibility of
an early technical solution. I believe the majority of persons hold a
position somewhere in-between. I am in no position to argue the issue from
a scientific viewpoint. I will take this in-between appreciation as
plausible, and will engage in an analysis of the relevance of this issue to
the political economy of the world-system.

The entire process of the universe is of course one of unceasing change, so
the mere fact that things are not what they were previously is so banal
that it merits no notice whatsoever. Furthermore, within this constant
turbulence, there are patterns of structural renewal we call life. Living,
or organic, phenomena have a beginning and an end to their individual
existence, but in the process procreate, so that the species tends to
continue. But this cyclical renewal is never perfect, and the overall
ecology is therefore never static. In addition, all living phenomena ingest
in some way products external to them, including most of the time other
living phenomena, and predator/prey ratios are never perfect, so that the
biological milieu is constantly evolving.

Furthermore, poisons are natural phenomena as well, and were playing a role
in the ecological balance-sheets long before human beings got into the
picture. To be sure, today we know so much more chemistry and biology than
our ancestors did that we are perhaps more conscious of the toxins in our
environment; although perhaps not, since we are also learning these days
how sophisticated the pre-literate peoples were about toxins and
antitoxins. We learn all these things in our primary and secondary school
education, and from the simple observation of everyday living. Yet often we
tend to neglect these obvious constraints when we discuss the politics of
ecological issues.

The only reason it is worth discussing these issues at all is if we believe
that something special or additional has been happening in recent years, a
level of increased danger, and if at the same time we believe that it is
possible to do something about this increased danger. The case that is
generally made by the green and other ecology movements precisely comprises
both these arguments: increased level of danger (for example, holes in the
ozone layer, or greenhouse effects, or atomic meltdowns); and potential
solutions.

As I said, I am willing to start on the assumption that there is a
reasonable case for increased danger, one that requires some urgent
reaction. However, in order to be intelligent about how to react to danger,
we need to ask two questions: for whom does the danger exist? and what
explains the increased danger? The "danger for whom" question has in turn
two components: whom, amongst human beings; and whom, amongst living
beings. The first question raises the comparison of North-South attitudes
on ecological questions; the second is the issue of deep ecology. Both in
fact involve issues about the nature of capitalist civilization and the
functioning of the capitalist world-economy, which means that before we can
address the issue of "for whom," we had better analyze the source of the
increased danger.

The story begins with two elementary features of historical capitalism. One
is well-known: capitalism is a system that has an imperative need to expand
expand in terms of total production, expand geographically in order to
sustain its prime objective, the endless accumulation of capital. The
second feature is less often discussed. An essential element in the
accumulation of capital is for capitalists, especially large capitalists,
not to pay their bills. This is what I call the "dirty secret" of capitalism.

Let me elaborate these two points. The first, the constant expansion of the
capitalist world-economy, is admitted by everyone. The defenders of
capitalism tout it as one of its great virtues. Persons concerned with
ecological problems point to it as one of its great vices, and in
particular often discuss one of the ideological underpinnings of this
expansion, which is the assertion of the right (indeed duty) of human
beings "to conquer nature." Now, to be sure, neither expansion nor the
conquest of nature was unknown before the onset of the capitalist
world-economy in the sixteenth century. But, like many other things that
were social phenomena prior to this time, neither had existential priority
in previous historical systems. What historical capitalism did was to push
these two themes the actual expansion and its ideological justification to
the forefront, and thus capitalists were able to override social objections
to this terrible duo. This is the real difference between historical
capitalism and previous historical systems. All the values of capitalist
civilization are millennial, but so are other contradictory values. What we
mean by historical capitalism is a system in which the institutions that
were constructed made it possible for capitalist values to take priority,
such that the world-economy was set upon the path of the commodification of
everything in order that there be ceaseless accumulation of capital for its
own sake.

Of course, the effect of this was not felt in a day or even a century. The
expansion had a cumulative effect. It takes time to cut down trees. The
trees of Ireland were all cut down in the seventeenth century. But there
were other trees elsewhere. Today we talk about the Amazon rain forest as
the last real expanse, and it seems to be going fast. It takes time to pour
toxins into rivers or into the atmosphere. A mere fifty years ago, smog was
a newly-invented word to describe the very unusual conditions of Los
Angeles. It was thought to describe life in a locale that showed a
heartless disregard for the quality of life and high culture. Today, smog
is everywhere; it infests Athens and Paris. And the capitalist
world-economy is still expanding at a reckless rate. Even in this
Kondratieff-B downturn, we hear of remarkable growth ratios of east and
southeast Asia. What may we expect in the next Kondratieff-A upturn?

Furthermore, the democratization of the world, and there has been a
democratization, has meant that this expansion remains incredibly popular
in most parts of the world. Indeed, it is probably more popular than ever.
More people are demanding their rights, and this includes quite centrally
their rights to a cut in the pie. But a cut in the pie for a large
percentage of the world's population necessarily means more production, not
to mention the fact that the absolute size of world population is still
expanding as well. So it is not only capitalists but ordinary people who
want this. This does not stop many of these same people from also wanting
to slow down the degradation of the world environment. But that simply
proves that we are involved in one more contradiction of this historical
system. That is, many people want to enjoy both more trees and more
material goods for themselves, and a lot of them simply segregate the two
demands in their minds.

>From the point of view of capitalists, as we know, the point of increasing
production is to make profits. In a distinction that does not seem to me in
the least outmoded, it involves production for exchange and not production
for use. Profits on a single operation are the margin between the sales
price and the total cost of production, that is, the cost of everything it
takes to bring that product to the point of sale. Of course, the actual
profits on the totality of a capitalist's operations are calculated by
multiplying this margin by the amount of total sales. That is to say, the
"market" constrains the sales price, in that, at a certain point, the price
becomes so high that the total sales profits is less than if the sales
price were lower.

But what constrains total costs? The price of labor plays a very large role
in this, and this of course includes the price of the labor that went into
all of the inputs. The market price of labor is not merely, however, the
result of the relationship of supply and demand of labor but also of the
bargaining power of labor. This is a complicated subject, with many factors
entering into the strength of this bargaining power. What can be said is
that, over the history of the capitalist world-economy, this bargaining
power has been increasing as a secular trend, whatever the ups and downs of
its cyclical rhythms. Today, this strength is at the verge of a singular
ratchet upward as we move into the twenty-first century because of the
deruralization of the world.

Deruralization is crucial to the price of labor. Reserve armies of labor
are of different kinds in terms of their bargaining power. The weakest
group has always been those persons resident in rural areas who come to
urban areas for the first time to engage in wage employment. Generally
speaking, for such persons the urban wage, even if extremely low by world,
or even local standards, represents an economic advantage over remaining in
the rural area. It probably takes twenty to thirty years before such
persons shift their economic frame of reference and become fully aware of
their potential power in the urban work place, such that they begin to
engage in syndical action of some kind to seek higher wages. Persons long
resident in urban areas, even if they are unemployed in the formal economy
and living in terrible slum conditions, generally demand higher wage levels
before accepting wage employment. This is because they have learned how to
obtain from alternative sources in the urban center a minimum level of
income higher than that which is being offered to newly-arrived rural
migrants.

Thus, even though there is still an enormous army of reserve labor
throughout the world-system, the fact that the system is being rapidly
deruralized means that the average price of labor worldwide is going up
steadily. This means in turn that the average rate of profits must
necessarily go down over time. This squeeze on the profits ratio makes all
the more important the reduction of costs other than labor costs. But, of
course, all inputs into production are suffering the same problem of rising
labor costs. While technical innovations may continue to reduce the costs
of some inputs, and governments may continue to institute and defend
monopolistic positions of enterprises permitting higher sales prices, it is
nonetheless absolutely crucial for capitalists to continue to have some
important part of their costs paid by someone else.

This someone else is of course either the state or, if not the state
directly, then the "society." Let us investigate how this is arranged, and
how the bill is paid. The arrangement for states to pay costs can be done
in one of two ways. The governments can accept the role formally, which
means subsidies of some kind. However, subsidies are increasingly visible
and increasingly unpopular. They are met with loud protests by competitor
enterprises and by similar protests by taxpayers. Subsidies pose political
problems. There is another, more important, way, which has been politically
less difficult for governments, because all it requires is non-action.
Throughout the history of historical capitalism, governments have permitted
enterprises not to internalize many of their costs, by failing to require
them to do so. They do this in part by underwriting infrastructure and in
part, probably in larger part, by not insisting that a production operation
include the cost of restoring the environment in such a way that it is
"preserved."

There are two different kinds of operations in preserving the environment.
The first is the cleaning up of the negative effects of a production
exercise (for example, combating chemical toxins that are a by-product of
production, or removing non-biodegradable waste). The second is investment
in the renewal of the natural resources that have been used (for example,
replanting trees). Once again, the ecology movements have put forward a
long series of specific proposals that would address these issues. In
general, these proposals meet with considerable resistance on the part of
the enterprises that would be affected by such proposals, on the grounds
that these measures are far too costly, and would therefore lead to the
curtailment of production.

The truth is that the enterprises are essentially right. These measures are
indeed too costly, by and large, if we define the issue in terms of
maintaining the present average worldwide rate of profit. They are too
costly by far. Given the deruralization of the world and its already
serious effect upon the accumulation of capital, the implementation of
significant ecological measures, seriously carried out, could well serve as
the coup de gr=83ce to the viability of the capitalist world-economy.
Therefore, whatever the public relations stance of individual enterprises
on these questions, we can expect unremitting foot-dragging on the part of
capitalists in general. We are in fact faced with three alternatives. One,
governments can insist that all enterprises internalize all costs, and we
would be faced with an immediate acute profits squeeze. Or, two,
governments can pay the bill for ecological measures (clean-up and
restoration plus prevention), and use taxes to pay for this. But if one
increases taxes, one either increases the taxes on the enterprises, which
would lead to the same profits squeeze, or one raises taxes on everyone
else, which would probably lead to an acute tax revolt. Or, three, we can
do virtually nothing, which will lead to the various ecological
catastrophes of which the ecology movements warn. So far, the third
alternative has been carrying the day. In any case, this is why I say that
there is "no exit," meaning by that that there is no exit within the
framework of the existing historical system.

Of course, if governments refuse the first alternative of requiring the
internalization of costs, they can try to buy time. That is, in fact, what
many have been doing. One of the main ways to buy time is to try to shift
the problem from the politically stronger to the backs of the politically
weaker, that is, from North to South. There are two ways in turn to do
this. One is to dump the waste in the South. While this buys a little time
for the North, it doesn't affect global cumulation and its effects. The
other is to try to impose upon the South a postponement of "development" by
asking them to accept severe constraints on industrial production or the
use of ecologically sounder but more expensive forms of production. This
immediately raises the question of who is paying the price of global
restraints, and whether in any case these partial restraints will work. If
China were to agree, for example, to reduce the use of fossil fuels, what
would this do to the prospects of China as an expanding part of the world
market, and therefore the prospects for capital accumulation? We keep
coming back to the same issue.

Frankly, it is probably fortunate that dumping on the South provides in
fact no real long-term solution to the dilemmas. One might say that such
dumping has been part of the procedure all along, for the past 500 years.
But the expansion of the world-economy has been so great, and the
consequent level of degradation so severe, that we no longer have the space
to adjust significantly the situation by exporting it to the periphery. We
are thus forced back to fundamentals. It is a matter of political economy
first of all, and consequently a matter of moral and political choice.

The environmental dilemmas we face today are directly the result of the
fact that we live in a capitalist world-economy. While all prior historical
systems transformed the ecology, and some prior historical systems even
destroyed the possibility of maintaining a viable balance in given areas
that would have assured the survival of the locally-existing historical
system, only historical capitalism, by the fact that it has been the first
such system to englobe the earth and by the fact that it has expanded
production (and population) at a previously unimaginable rate, has
threatened the possibility of a viable future existence for mankind. It has
done this essentially because capitalists in this system succeeded in
rendering ineffective the ability of all other forces to impose constraints
on their activity in the name of values other than that of the endless
accumulation of capital. It is precisely Prometheus unbound that has been
the problem.

But Prometheus unbound is not inherent in human society. The unbounding, of
which the defenders of the present system boast, was itself a difficult
achievement, whose middle-term advantages are now being overwhelmed by its
long-term disadvantages. The political economy of the current situation is
that historical capitalism is in fact in crisis precisely because it cannot
find reasonable solutions to its current dilemmas, of which the inability
to contain ecological destruction is a major one, if not the only one.

I draw from this analysis several conclusions. The first is that reformist
legislation has built-in limits. If the measure of success is the degree to
which such legislation is likely to diminish considerably the rate of
global environmental degradation in say the next 10-20 years, I would
predict that the answer is, very little. This is because the political
opposition can be expected to be ferocious, given the impact of such
legislation of capital accumulation. It doesn't follow, however, that it is
therefore pointless to pursue such efforts. Quite the contrary, probably.
Political pressure in favor of such legislation can add to the dilemmas of
the capitalist system. It can crystallize the real political issues that
are at stake, provided, however, that these issues are posed correctly.

The entrepreneurs have argues essentially that the issue is one of jobs
versus romanticism, or humans versus nature. To a large degree, many of
those concerned with ecological issues have fallen into the trap, by
responding in two different ways, both of which are, in my view, incorrect.
The first is to argue that "a stitch in time saves nine." That is to say,
some persons have suggested that, within the framework of the present
system, it is formally rational for governments to expend x-amounts now in
order not to spend greater amounts later. This is a line of argument that
does make sense within the framework of a given system. But I have just
argued that, from the point of view of capitalist strata, such "stitches in
time," if they are sufficient to stem the damage, are not at all rational,
in that they threaten in a fundamental way the possibility of continuing
capital accumulation.

There is a second, quite different argument that is made, which I find
equally politically impractical. It is the argument on the virtues of
nature and the evils of science. This translates in practice into the
defense of some obscure fauna of whom most people have never heard, and
about which most people are indifferent, and thereby puts the onus of job
destruction on flaky middle-class urban intellectuals. The issue becomes
entirely displaced from the underlying ones, which are, and must remain,
two. The first is that capitalists are not paying their bills. And the
second is that the endless accumulation of capital is a substantively
irrational objective, and that there does exist a basic alternative which
is to weigh various benefits (including those of production) against each
other in terms of collective substantive rationality.

There has been an unfortunate tendency to make science the enemy and
technology the enemy whereas it is in fact capitalism that is the generic
root of the problem. To be sure, capitalism has utilized the splendors of
unending technological advance as one of its justifications. And it has
endorsed a version of science - Newtonian, determinist science - as a
cultural shroud, which permitted the political argument that humans could
indeed "conquer" nature, should indeed do so, and that thereupon all
negative effects of economic expansion would eventually be countered by
inevitable scientific progress.

We know today that this vision of science and this version of science is of
limited and universal applicability. This version of science is today under
fundamental challenge from within the community of natural scientists
themselves, from the now very large group who pursue what they call
"complexity studies." The sciences of complexity are very different from
Newtonian science in various important ways: the rejection of the intrinsic
possibility of predictability; the normality of systems moving far from
equilibrium, with their inevitable bifurcations; the centrality of the
arrow of time. But what is perhaps most relevant for our present discussion
is the emphasis on the self-constituting creativity of natural processes,
and the non-distinguishability of humans and nature, with a consequence
assertion that science is of course an integral part of culture. Gone is
the concept of the rootless intellectual activity, aspiring to an
underlying eternal truth. In its place we have the vision of a discoverable
world of reality, but one whose discoveries of the future cannot be made
now because the future is yet to be created. The future is not inscribed in
the present, even if it is circumscribed by the past.

The political implication of such a view of science seems to me quite
clear. The present is always a matter of choice, but as someone once said,
although we make our own history, we do not make it as we choose. Still, we
do make it. The present if a matter of choice, but the range of choice is
considerably expanded in the period immediately preceding a bifurcation,
when the system is furthest from equilibrium, because at that point small
inputs have large outputs (as opposed to moments of near equilibrium when
large inputs have small outputs).

Let us return therefore to the issue of ecology. I placed the issue within
the framework of the political economy of the world-system. I explained
that the source of ecological destruction was the necessity of
entrepreneurs to externalize costs, and the lack of incentive therefore to
make ecologically-sensitive decisions. I explained also, however, that this
problem is more serious than ever because of the systemic crisis into which
we have entered. For this systemic crisis has narrowed in various ways the
possibilities of capital accumulation, leaving as the one major crutch
readily available the externalization of costs. Hence, I have argued it is
less likely today than ever before in the history of this system to obtain
the serious assent of entrepreneurial strata to measures fighting
ecological degradation.

All this can be translated into the language of complexity quite readily.
We are in the period immediately preceding a bifurcation. The present
historical system is in fact in terminal crisis. The issue before us is
what will replace it. This is the central political debate of the next
25-50 years. The issue of ecological degradation, but not of course only
this issue, is a central locus of this debate. I think what we all have to
say is that the debate is about substantive rationality, and that we are
struggling for a solution or for a system that is substantively rational.

The concept of substantive rationality presumes that in all social
decisions there are conflicts between different values as well as between
different groups, often speaking in the name of opposing values. It
presumes that there is never any system that can realize fully all these
sets of values simultaneously, even if we were to feel that each set of
values is meritorious. To be substantively rational is to make choices that
will provide an optimal mix. But what does optimal mean? In part, we could
define it by using the old slogan of Jeremy Bentham, the greatest good for
the greatest number. The problem is that this slogan, while it puts us on
the right track (the outcome), has many loose strings.

Who, for example, are the greatest number? The ecological issue makes us
very sensitive to this issue. For it is clear that, when we talk of
ecological degradation, we cannot limit the issue to a single country. We
cannot even limit it top the entire globe. There is also a generational
issue. What may be the greatest good for the present generation may be very
harmful to the interests of future generations. On the other hand, the
present generation also has its rights. We are already in the midst of this
debate concerning living persons: percentage of total social expenditures
on children, working adults, and the aged. If we now add the unborn, it is
not at all easy to arrive at a just allocation.

But this is precisely the kind of alternative social system we must aim at
building, one that debates, weighs, and collectively decides on such
fundamental issues. Production is important. We need to use trees as wood
and as fuel, but we also need to use trees as shade and as esthetic beauty.
And we need to continue to have trees available in the future for all these
uses. The traditional argument of entrepreneurs is that such social
decisions are best arrived at by the cumulation of individual decisions, on
the grounds that there is no better mechanism by which to arrive at a
collective judgment. However plausible such a line of reasoning may be, it
does not justify a situation in which one person makes a decision that is
profitable to him at the price of imposing costs on others, without any
possibility for the others to intrude their views, preferences, or
interests into the decision. But this is what the externalization of costs
precisely does.

No exit? No exit within the framework of the existing historical system?
But we are in the process of exit from this system. The real question
before us is where we shall be going as a result. It is here and now that
we must raise the banner of substantive rationality, around which we must
rally. We need to be aware that once we accept the importance of going down
the road of substantive rationality, this is a long and arduous road. It
involves not only a new social system, but new structures of knowledge, in
which philosophy and sciences will no longer be divorced, and we shall
return to the singular epistemology within which knowledge was pursued
everywhere prior to the creation of the capitalist world-economy. If we
start down this road, in terms of both the social system in which we live
and the structures of knowledge we use to interpret it, we need to be very
aware that we are at a beginning, and not at all at an end. Beginnings are
uncertain and adventurous and difficult, but they offer promise, which is
the most we can ever expect.




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