Ryan Armstrong
Change management. Learning. Maps.

Review - The cure is not doubling down on capitalism

22 June 2019

A recently published review article, titled “The planet has a fever, and the cure is more capitalism, a prominent researcher argues”, reviews an upcoming book by Andrew McAfee that argues that we should “double down” on capitalism as a means of addressing climate change (read: climate disaster). Here are the central points:

This “decoupling” of growth from environmental degradation is showing up in other major economies as well, and even in some developing ones, MIT scientist Andrew McAfee argues in what’s bound to be a controversial new book. He asserts that the phenomenon represents a critical turning point in economic history—and an essential one if we hope to sustain a growing global population without decimating the planet.

It goes on to explain how this would come about:

The book, which MIT Technology Review obtained an early draft of, says there are four main forces—which McAfee calls the “four horsemen of the optimist”—that enable decoupling in mature economies:
  • the efficiencies driven by capitalism
  • technological progress that has allowed us to “dematerialize” our consumption (by, for instance, cramming atlases, compasses, calculators, recorders, cameras, stereos, and other gadgets into a single device in our pocket)
  • public awareness of environmental damage
  • governments that respond to those concerns by putting regulations in place to reduce those harms
  • ... His point, rather, is that the decoupling under way shows we have the tools to address these sorts of problems. ...

    I have not read the book, which is due out in October of this year, but I have some serious doubts as to the soundness of these arguments. It seems to amount to a defense of free-market capitalism. Did capitalism really need defending? I agree that some form of capitalism provides a system in which humans could act to solve the climate crisis. However, there are some pretty serious barriers concerning how it typically operates in the US, and further the argument that “the current system is fine” that McAfee may be supporting will just serve to legitimize inaction at a critical time.

    I will focus on the author’s use of the US agricultural production system as an example, because to me it can be used to refute the four points above.

    The “efficiencies” driven by capitalism:

    The review cites the author using the example of US agricultural production, saying that resource is going down while yields are increasing. It is true that productivity as measured in crop yield per acre has increased1 and that resource use in terms of water needed to produce it has decreased.

    But it doesn’t take a long look under the hood to see that the US agricultural system is not a shining example of the triumphs of capitalism. Its most common and decidedly free-market capitalist from, the industrial variety, is facing serious, substantial threats to its long-term economic, social, and environmental sustainability2.

    Briefly, the yield increases are due to the use of industrial techniques and the use of transgenics, themselves not necessarily bad, but which are being used in ways that threaten the economic well-being of small farm operations and which have a number of undesirable ecological side-effects. One critical way they are harmful is they pay little to no regard to the health of the soil, whose importance in maintaining critical life-sustaining systems is difficult to overstate and which is capable of capturing massive amounts of carbon.

    Technological advances so far have been more the cause of the issue, not the cure.

    And of course, the agricultural system as it exists now is maintained by huge governmental subsidies that have existed since the 1930s, most of which go to wealthy farms. At the same time, many farmers struggle to afford access to the developing technology that allows them to produce enough to stay profitable, but which further drives prices down. Therefore they get stuck in a cycle where they need to produce ever more to compete and have to rely on increasingly on unsustainable high tech solutions and in a market in which prices are artificially low3 (artificially, because the true costs of production are absorbed by society). So, subsidies are not removed and externalities and not taxed, because there is relatively little public awareness of the realities of industrial agricultural production4, and so there is little governmental response. Further, the gains in profitability go to the owners of the technologies, who habitually act counter to public interest5.

    I suspect that the other examples cited in the review would face similar criticisms if exposed to scrutiny.

    However, I agree with the review’s conclusions:

    But McAfee makes a strong case that some long-held assumptions about the inevitable costs of growth are simplistic and frequently wrong. Technological progress and economic growth have certainly inflicted very real environmental and social costs. But they’ve also inarguably delivered massive gains in health, wealth, and standards of living. And while it may clash with some of our deeply ingrained intuitions, it’s clear that technology can play, and perhaps must play, a role in solving some of the same problems it creates.

    But free-market capitalism as it appears to be understood in the article and as it exists in the US is only the solution if efficiency is defined in its terms, i.e. capacity to generate profit. This is not a rant against capitalism, but rather an observation that the technology that has been developed tends to support efficiency gains in terms of profitability and so probably will be of little use for addressing climate change. For efficiency defined in other terms, say, soil health, socioeconomic well-being, or food security, the system either responds too slowly to avert a crisis or it does not respond at all. You could argue that society will choose alternative, less impactful forms of production when they become aware of the environmental damage, or support legislation that would increase taxes so that industrial production properly reflects its true cost. With strong lobbying by big ag, I suspect neither of these will happen or will take too long.

    Hopefully in the book the author will offer a more nuanced view of the issue than was available in the review. As it stands I take it to be a manifesto for the status quo that will only be used to justify a slow march toward climate disaster to benefit the pockets of a few ultra-elite. The critical environmental issues will be solved in spite of and not because of capitalism. A healthy skepticism is in order. To survive with capitalism, we’ll need to take a hard look at how we define efficiency, and the policies that sustain the destructive cycles that drive the climate crisis.


    1. See for example the Wheat Objective Yield Data ↩︎

    2. I also wrote about these in my first master’s thesis which I will shamelessly include here and which is unfortunately only available in what is likely a dismal Spanish. ↩︎

    3. See the wonderful but terrifying article by Philip Howard, 2009, Visualizing consolidation in the global seed industry: 1996-2008 which covers the mechanisms of this cycle in detail ↩︎

    4. For example agricultural policy isn’t even mentioned in this recent piece by the NY Times even though agriculture produces 1/3 of green house gas emissions. Energy production is mentioned 22 times. ↩︎

    5. Here’s a totally not biased account of Monsanto as the “World’s Most Evil Corporation” ↩︎