The Politics of Ecosocialism

Transforming welfare

Kajsa Borgnäs, Teppo Eskelinen, Johanna Perkiö, Rikard Warlenius

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317609254
• Edition: 1
• Topic: Economics
• Subtopic: Sustainable Development
• Index: Economics

As the global economy seeks to recover from the financial crisis and warnings about the consequences of climate change abound, it is clear that we need a fundamentally new approach to tackle these issues. This innovative book offers a unique perspective, stressing the necessity of both ecological and social change as it discusses how to create a "red-green" or "eco-socialist" society.

Examining the current crises of welfare capitalism as well as the challenges and conflicts of an eco-socialist society, the book proposes a new social order that would combine the ideals of egalitarianism and of environmental sustainability. It analyses the key social and ecological issues related to the welfare state, including green Keynesianism, ecological Marxism, the limits of growth and no-growth, capitalist barriers to a renewable energy transition, proposals for a universal basic income and the role of technology. Finally, the book outlines possible paths of transformation towards creating an eco-socialist society, drawing out lessons that can be applied internationally.

This book will be of great interest to students and researchers in economics, environmental studies and political science.

1 The scene

1 Marxist crisis theory and the global environmental challenge

DOI: 10.4324/9781315749471-2

Kajsa Borgnäs

Introduction

What is the relationship between capitalism and environmental crisis? Can economic growth be transformed in such a way that it not only increases economic wealth but ecological sustainability as well? And what are the prospects of actually mitigating global warming and environmental degradation with the help of those analytical and policy tools employed within mainstream environmental policy today?

In wake of the financial breakdown of 2008 and the simultaneous growing acuteness of global environmental degradation, crisis has established itself as a central concept in the description and analysis of our time. Whereas neo-classical and most Keynesian crisis interpretations tend to focus on the extrinsic and accidental causes and features of crisis, Marxist crisis theory emphasizes crisis as stemming from intrinsic and systemic contradictions within capitalism itself. Historically, Marxist crisis theory has been used to analyse both periodical manifestations of economic crisis as well as the mechanisms leading towards the final end-crisis (collapse) of capitalism. More recently, a growing ecological Marxist literature has developed a rich palette of environmental crises analyses with the help of the Marxist political and economic toolbox.

In this chapter, I make use of some aspects of Marxist political economy and crisis theory to examine how the global environmental crisis rather than being understood primarily as yet another manifestation of periodical/sectorial crisis (as is commonly the case within mainstream discourse), is related to how the “normal workings” of capitalism contribute to a growing demand for natural resources, and thereby to a growing environmental crisis of scale. Capitalism is destructive for the environment in a variety of ways (many of which have been examined by other ecological Marxist scholars), but by focusing on some particular micro-mechanisms from Marxist crisis theory we are able to gain a deeper insight into how capitalism contributes to environmental crisis. Obviously, the global environmental crisis is not reducible to any micro-economic mechanisms (laws or “tendencies”) in a strict sense, but still, examining the micro-economic underpinnings of the capitalist process of accumulation helps highlight how and why capitalism seems to be heading straight for ecological collapse.

The chapter is divided into three parts. First, I briefly discuss how the essence of crisis – what crisis is – is interpreted within Marxist political economy and how the “abstract possibility for crisis” inherent in capitalism as a system translates into concrete periodical/sectorial crises. Second, departing from those Marxist crisis theories that emphasize crisis as a result of disruption of accumulation – leading to periodical/sectorial crisis – I argue that the global environmental crisis can better be analysed as a result of sustained accumulation, leading towards an environmental crisis of scale. In this endeavour, a number of micro-mechanisms underpinning the “normal” accumulation process of the capitalist economy and connected to capital’s strategies to try to overcome economic crisis tendencies are spelled out. Together, they contribute to an increase in the material scale of production which places ever larger demands upon nature. Third, I use these micro-mechanisms to discuss why some of the core pillars making up the mainstream “leftist” or social-democratic (Keynesian) policy response to the coinciding economic and environmental crises (summarized in the “green growth” idea or the “Green New Deal” concept) have so far largely failed. By making use of such an ecological Marxist crisis theoretical framework, we can better understand why today’s environmental policies are insufficient and how we are heading not only towards repeated and ever more severe periodical (economic and ecological) crises, but more importantly in the direction of global environmental collapse.

Marxist crisis theories: periodical crises

Crisis and capital

Among crisis theories, what makes Marxist crisis theories distinctive is their emphasis upon crisis as an essential and necessary intrinsic feature of any capitalist system. Crisis is viewed as an unavoidable phase in the transition from one technological level, one mode of production or one period or “regime” of certain social and productive relations to another. In this regard, periodical crisis takes the role of a “clearing mechanism” of contradictions (economic and social) which have been built up within the economy. Crisis is neither avoidable, nor is periodical crisis necessarily destructive for the system as such. Instead, crisis can help capitalism survive ever longer periods of time, by regularly letting its internal contradictions burst, reducing tensions via creative-destructive ruptures paving the way for new opportunities for accumulation.

In Marx’s own writings, the specific mechanisms of crisis were not very coherently spelled out. At various times in the works, crisis is associated with overproduction, under-consumption, disproportionality or with the law of the tendency of the rate of profit to fall (for a discussion, see Clarke, 1994). Already in the Communist Manifesto, periodical economic crisis was mentioned as a fundamental aspect of bourgeois society (Wendling, 2012: 103). Hence, as Marx nowhere presented a systematic exposition of a theory of crisis, it has been up to later Marxist theorists to derive a number of different theories of crisis.

At a most fundamental level, however, crisis seems to be associated with the essence of capital itself. Related to the different value forms of capitalist production of commodities (use value and exchange-value), capital carries with it internal tensions and contradictions in terms of what should be produced and for whom. Because production within capitalism is oriented towards the production of exchange value and not the production of use value, there is no necessary relation between supply and demand of a commodity (Marx, 1969 [1867]: 98; Clarke, 1994: 127). The general possibility for crisis is attached to exactly this subordination of production of commodities (use-values) to the circulation of money (exchange-value). Concretely, this means that as supply is not necessarily guided by demand, and if (and when) supply exceeds demand, the commodity cannot be sold at the price corresponding to its value. Hence, the producer can never be certain that profits are realized. Crisis, in the most general sense in Marx, is therefore no anomaly to be explained by extrinsic factors affecting the system from outside or by institutions external to the market, but are manifestations of this underlying logic which is built into the very functioning of capital as such: the production of commodities for sale, based on the separation of exchange value from use value.

But as Marx also pointed out, these general properties of capital only provide the abstract possibility for crisis and not its concrete manifestations (Marx, 1969 [1867]: 98). Therefore, it is not only important to examine the abstract contradictions, but also to demonstrate how the contradictions turn into concrete crises, with different manifestations at different geographical places and at different specific points in time. Analysing how periodical crisis occurs within capitalism, Marxist scholars have mostly focused on the interrelated mechanisms of overproduction, under-consumption, and problems of realization as potential manifestations of crisis.

Overproduction crisis

Related to the conflicting value forms within capitalist production is the conflict between the forces and relations of production. Marx argued that there is a tendency within capitalism to push forth the development of the forces of production (technology, organization) as a result of the constant competition among capitalists, without regard to the potential limits of the market (resulting from the relations of production) (Marx, 1973 [1939]: 415). This means that each capitalist has incentives to try to increase his profits by introducing new and more efficient methods of production, which leads to the forces of production being continuously revolutionized and ever more output being produced with less use of labour. At the same time, the relations of production between labour and capital ensure workers only get a small share of the value produced (equivalent to the costs of its reproduction: necessary labour). Aggregate consumption in the economy can therefore not keep up with the tremendous productive forces and as a result, the economy regularly runs into overproduction crisis. In terms of the economic business cycle, as the massive forces of production produce massive quantities of commodities in the booming period, but relations of production ensure labour is not rewarded enough to keep consuming these massive quantities (and the capitalist class cannot consume all the goods on its own), an overproduction mechanism is inherent in the system itself. Periodical depression and economic crisis is a natural result when the market must clear itself from old technologies, piled-up stocks of goods and non-competitive firms.

Under-consumption crisis

Because of the specific relations of production (labour selling work to the capitalist in order to gain some of the surplus produced to be able to reproduce – consume), overproduction crisis is at the same time equal to a lack of sufficient demand on behalf of labour (Marx, 1973 [1939]: 421). Marx emphasized that the tendency of any individual capitalist is to pressure wages to a minimum and hence decrease the ability for labour to consume the products produced. This tendency is not voluntary on behalf of capitalists and cannot be remedied simply by paying higher wages to the workers (as popularly assumed in Keynesian theory). This is because the payment for labour (and the resulting “purchasing power” of labour) corresponds to the necessary labour for production, which is assumed to decrease with the increasing forces of production (Marx, 1969 [1867]: 277). This also means that if more labour were to be employed in order to create a higher aggregate demand for the surplus value produced, even more surplus value would be produced as a result and the problem of under-consumption (and overproduction) would arise again. Because of the particular capitalist relations of production, production necessarily runs ahead of consumer demand and a combined overproduction/under-consumption crisis results.

This state of under-consumption, or lack of demand, is also sometimes connected with a state of over-accumulation. Over-accumulation occurs when excess capital and excess labour exist side by side (i.e. insufficient demand), without any way of profitably bringing them together (in specific branches or in the economy as a whole). In this process, capital tries to increase demand for itself by either moving to new branches, creating new markets for its output or is devalued until the remaining capital can be profitably employed again (for an analysis of over-accumulation and today’s financial crisis, see e.g. McNally 2009).

Realization crisis

Viewing the process from yet another angle: as labour is unable to consume the goods produced in the production process, capital is simultaneously unable to make investments profitable out of the growing (unsold) mass of surplus value. The insufficient consumption of the working class not only leads to diminished investments, but is also itself derived from the lower expenditures of the capitalists who employ these labourers as the means to produce further surplus value. Thereby, the emphasis moves towards the capitalists striving for profits as the ultimate limit to workers’ consumption (Clarke, 1994). At the core of the overproduction/under-consumption argument therefore seems to lie an argument of profit, meaning that the investment and production decisions of the capitalists are actually the final limit to capitalist production itself (Marx, 1973 [1939]: 422). Particular crises can arise from all sorts of causes, but the ultimate cause of all crises lies in the tendency for capital constantly to expand the forces of production beyond the limits of profitability, which is equal to the inability for realization of the surplus. As the purpose of capitalist production is not to satisfy consumer demand (that is, sovereignly existing demand for use-values), but to accumulate capital via realization of the output, the actual crisis therefore, in the final stage, is a realization crisis on behalf of producers, rather than an underconsumption crisis on behalf of consumers (Ibid.: 422). As such, realization crisis seems to be the most basic concrete manifestation of the general conflict between the different value forms of commodity production.

***

How the crisis tendencies of overproduction, under-consumption, over-accumulation and realization are actually interlinked and which of them best explains some particular historical crisis, has been much debated but is not the focus of this chapter. For our purpose, it is most important to note that they all in some way or another point towards the disruption of accumulation (in the aggregate economy or in some specific sector) as the point in time when crisis occurs. As such, they indeed help us understand the fundamentals of periodical/sectorial crises, but they seem more limited when we are to understand the specific mechanisms underpinning the global environmental crisis. In fact, economic crisis might or might not be connected with environmental degradation. It might well be the case that more efficient and eco-friendly technologies are able to survive a specific economic crisis better than less sustainable ones, and an economic crisis could in principle lead to an overall greening of the economy rather than further environmental degradation. Hence, periodical/sectorial crisis theories increase our understanding of important aspects of more delimited economic and environmental crises, but if we are to understand the steadily growing global environmental crisis, we need an analysis pointing towards how the normal workings of the capitalist economy – sustained accumulation rather than its disruption – contribute to ecological degradation.

Ecological Marxist crises theories

A second contradiction of capitalism?

Departing from the above theories, and with the attempt to shift the focus towards environmental crisis, Marxist economist James O’Connor in one of his seminal articles spelling out the foundations of an ecological Marxist theoretical framework, developed the idea of a “second contradiction of capitalism” (O’Connor, 1988). O’Connor argued that the “classical” crisis theories do not sufficiently take natural limits to accumulation into account and therefore provide no viable explanation for how and why environmental crises occur. Instead, the contradiction between the forces and relations of production (leading to periodical economic crisis) must be complemented with a second contradiction: that between the forces and relations of production on the one hand, ...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Table of Contents
• Notes on contributors
• Acknowledgements
• Editors’ introduction
• Part I The scene
• Part II The challenge
• Part III Strategy and agency
• Afterword
• Index