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How Has Capitalism Industrialized Life To Serve Its Model of Infinite Growth?
Captain Forest recently interviewed Victor Cannilla, a Researcher in Political Economy at the University of Lausanne, to explore how capitalism has industrialized life to serve its infinite growth model.
In the current global environmental and socio-economic crisis context, examining the capitalist system in which we actively participate is essential. It is important to question why mass production has become the norm and what drives our excessive consumption. Furthermore, we must consider our economic system’s wide-ranging consequences on society and the planet.
To gain a comprehensive understanding of these issues, in this article, we will delve into the historical, economic, and geopolitical context that has brought humanity to the brink of a major ecological crisis characterized by the looming threat of a sixth mass extinction.
By examining the intricate workings of capitalism and its impact on our world, we can begin to uncover the root causes that have contributed to the current ecological crisis. Through these insights, we can seek potential solutions and alternatives that prioritize sustainability and the well-being of both humanity and the planet.
Q: Can you briefly remind us what capitalism is?
Capital accumulation is a fundamental concept within capitalism, where capital is a production factor. The driving force behind this accumulation is profit, which represents the return on investment. In a capitalist system, individuals and businesses make investment decisions based on the expected returns they can generate.
Consequently, two side effects emerge: the exponential function of production growth and the expansion into new markets. Once individuals and businesses have produced enough goods and accumulated profits, they actively seek new investment opportunities to continue generating lucrative returns.
This pursuit of returns creates a constant demand for new products and markets, even infiltrating areas of life that previously operated outside the realm of commercialization.
At the core of capitalism, three intrinsic concepts are central:
- The relationship to wage labor: capitalist employers, represented by shareholders or managers, hold a position of authority over employees. This hierarchical dynamic allows employers to decide on employee compensation, making payment contingent on their discretion. Even managers themselves are subject to this hierarchical structure to safeguard their positions.
- Competition: in a capitalist environment, players must engage in a race to stay competitive. Failure to keep up with competitors can lead to the erosion of profit margins, potential bankruptcy, or acquisition. Over time, this competition has resulted in significant consolidation, such as reducing major banks from 400 in 1950 to just 10 in 2000, driven by mergers and acquisitions that prove profitable for shareholders.
- Innovation: companies that innovate gain a productive advantage over their competitors. They experience superior productivity gains, while stagnant companies risk becoming obsolete and eventually disappearing from the market.
These concepts lie at the heart of capitalism, shaping its dynamics and driving the pursuit of profit, competition, and innovation.
Q: Can you also explain what the infinite growth model is?
In a capitalist economy, growth is typically defined as the year-on-year increase in GDP (Gross Domestic Product). It is a central objective actively pursued by countries, often used as an electoral argument.
However, any increasing function encounters natural limits that eventually lead to stagnation. This can be observed in various phenomena, such as population growth curves for a particular species, the dynamics of contamination during epidemics, or the growth of living organisms. These patterns exhibit an initial exponential growth followed by a gradual slowing down, known as logistic functions in physics.
The capitalist model, driven by its reliance on finance and the pursuit of compounded returns following an exponential law, perpetually seeks endless growth. However, this abstract construct clashes with the reality that we inhabit a planet with finite resources, rendering infinite growth impossible.
An opposing argument often put forward is the concept of sustainable and global absolute decoupling. It suggests that it is possible to achieve GDP growth and accumulate capital through investment and profit while reducing the associated environmental impacts. Proponents argue that technological innovations could enable this decoupling process.
Nevertheless, environmental scientists, physicists, and organizations such as the IPCC (Intergovernmental Panel on Climate Change) have unanimously agreed that such decoupling is impossible. Despite technological advancements, the ecological footprint has consistently increased over centuries, partly due to mechanisms like the rebound effect, which offset the intended environmental gains.
Q: Can you remind us how countries calculate their GDP (Gross Domestic Product)?
Definition of GDP
There are various methods of calculating GDP, each aiming to achieve equality in their theoretical results:
- The production approach: It involves summing up the value added by private and public economic agents. This approach focuses on capturing the value created at each stage of production.
- The income approach: It examines the distribution of wealth to households, business owners, and the government. According to this method, GDP is calculated as the sum of employees’ compensation, operating surpluses generated by firms, and taxes collected by the government on production and imports (adjusted for subsidies paid out).
- The demand side approach: This approach analyzes how wealth is utilized. GDP is calculated as the sum of private and government consumption, investment, and trade balance (import/export).
It is important to note that the GDP formula does not provide information on production management, decision-making processes, income distribution, and other factors.
Consequently, GDP growth can occur even when well-being, social balance, or ecological sustainability are not necessarily improving.
For instance, an increase in the price of life-saving drugs, the sales of arms, or unnecessary public works can contribute to GDP growth, despite potential negative consequences for well-being, social cohesion, or the environment.
The limitations of GDP as an indicator become evident as it needs to consider broader aspects of societal progress, such as well-being, social equity, or ecological sustainability.
Therefore, relying solely on GDP to assess an economy’s overall health and sustainability can be misleading, and complementary measures that capture these broader dimensions are needed.
Historical context of GDP calculation
Referring to the historical context in which the GDP indicator was established is essential for understanding its concept. While countries in the era of Louis XIV did not calculate their GDP, it became a widespread practice during Bill Gates’ time. Exploring the motivations behind the creation and monitoring of this indicator is valuable.
Between the First and Second World Wars, nation-states needed to measure their production, particularly in armaments and other industrial activities. The calculation of GDP initially emerged through collaborations with the first national economic research bureaus, with the United States National Bureau of Economic Research (NBER) being particularly renowned.
These bureaus were responsible for gathering data and generating statistics to monitor the overall production level of the country. Even after the wars, states continued to perform these statistical calculations, although the focus shifted away from explicitly martial matters.
However, it is essential to note that GDP growth preceded states’ official calculation of GDP. The growth of GDP stems from the imperative of capital accumulation, a fundamental concept in the definition of capitalism.
Whether or not GDP is measured, it is expected to grow as long as capital accumulation persists.
Recently, Amsterdam has implemented the Donut economic model, which measures well-being as an alternative indicator. However, establishing and monitoring such indicators do not inherently hinder economic growth.
The cause of growth lies not solely in the calculation of GDP but in the inherent dynamics of the economic cycle driven by the pursuit of profits and returns on investment by capital owners.
GDP growth is a manifestation of these dynamics rather than a determining factor. Even if mainstream economists and politicians were to abandon the measurement of GDP, the drive toward productivism and extractivism would not necessarily cease.
The root causes of growth lie in the owners of capital, the decision-makers in production and investment, and their objectives. These fundamental factors need to be addressed to fully understand and address the challenges associated with economic growth.
Q: To increase GDP, selling and consuming on a large scale was necessary. Can we consider that consumption is at the heart of the capitalist system?
Which one begets the other: consumption or production? Production has spurred and engendered new needs throughout history. People in the early 20th century did not actively aspire to possess all these products to consume them.
In reality, it is primarily the producers who have established efficient methods for large-scale and cost-effective production, thereby prompting people to consume. The producers’ efforts to create and offer their products in the market have driven the onset of consumption.
No one in the 1930s or 1940s organized a mass demonstration to demand a television, yet by the 1950s, they were on the market. The same applies to smartphones, fast fashion, fast food, and Sport Utility Vehicles (SUVs).
Although companies today claim to produce to meet the needs of consumers, in reality, companies have mainly created dependencies on these products by promoting a lifestyle in which people are caught up and using very aggressive means to promote their products and services.
These methods encompass various forms of advertising such as television, radio, cinema, and social networks and the influential role individuals play in “show business” or as influencers. Their earnings often correlate with their capacity to induce consumer purchasing behavior.
It is crucial to recognize that GAFA’s (Google, Apple, Facebook, Amazon) business model relies heavily on advertising. These companies employ top neuroscientists and psychologists worldwide who use state-of-the-art techniques to strategically engage, influence, and entice individuals into addictive behaviors, ultimately driving sales.
Today, for example, young girls from working-class neighborhoods will go out and buy Gucci bags for 500 euros.
Q: Do you have examples of large-scale campaigns to induce consumer needs?
Of course, examples abound; individuals have been conditioned to consume massively.
It is as if the internal wiring of the desires has been reconfigured.
Numerous large-scale campaigns have been implemented to stimulate consumer needs; some have achieved immense success, generating billions of dollars in revenue.
General Motors’ influential campaigns and the decline of public transportation in 1930s America
In the 1930s, faced with competing against Ford’s lower-priced cars, General Motors devised highly aggressive marketing campaigns to target family men, associating car ownership with virility and independence.
Furthermore, they launched attacks on the tram and public transport systems in major US cities, promoting using individual cars over public transportation.
The lobbying efforts of General Motors proved to be remarkably successful, resulting in many major American cities having less advanced public transport systems today compared to a century ago.
Selling a thousand cars is far more lucrative than enabling a thousand individuals to utilize trams or subways.
Commercialization of Celebrations: From Traditional Rituals to Consumer-driven Occasions
Companies devised various celebrations to stimulate annual demand, including well-known examples such as Valentine’s Day, where gifts and flowers are exchanged between partners; Christmas, characterized by family gatherings and gift-giving to loved ones; and even marriage proposals, often accompanied by a diamond ring and the traditional act of kneeling.
Before that, Valentine’s Day was not a commercial ritual for couples, Christmas was an ontologically religious holiday, and diamonds were much less prevalent.
Edward Bernays and the dark side of marketing: from war to tobacco propaganda
Getting women to smoke from the 1920s onwards was the work of Edward Bernays, who was in charge of propaganda campaigns during the First World War, to motivate young Americans to go to war in Europe, even though they were not directly involved in that conflict.
After the war, he was sought after by private companies to spearhead influential campaigns, one of which proved highly successful in portraying cigarettes as a symbol of liberation for the modern, emancipated, and alluring blonde housewife. This ingenious marketing strategy effectively doubled the size of the tobacco market.
Therefore, while this may have been a brilliant commercial move, it had devastating social consequences, leading to the loss of millions of lives.
Moreover, from an ecological perspective, the detrimental impacts of monocultures on soil health and the destruction of pristine ecosystems to make way for tobacco cultivation are well-documented.
Q: To sell on a large scale, companies needed to pay wages and banks to grant credits, supporting consumption and money creation. Can you explain how ease access to credit has driven consumption?
Credit facilitates consumption by enabling companies, individuals, or states to consume even without immediate funds. With the rise in incomes and the expansion of credit products offered by banks and credit companies, consumers gained access to a broader range of purchasing options.
This led to increased demand as consumers could acquire goods and services that would have been beyond their means otherwise.
However, credit has also fostered a culture of indebtedness, enabling consumers to accumulate debt for purchases beyond their financial means quickly. This can lead to financial difficulties for individuals and contribute to broader financial instability, exemplified by the subprime crisis in 2008.
Indeed, repaying a loan requires seeking future income or profits, resembling a pact with the Devil for borrowers. If unable to meet the repayment obligations, bankruptcy, and its consequential effects loom at the end of the loan term, reminiscent of Mephistopheles coming for Doctor Faustus.
Furthermore, in previous centuries, Christianity strongly condemned the practice of lending with interest, particularly when it involved agents who earned a living from such transactions. Renowned authors like Marlowe, Shakespeare, and later Goethe wrote plays that criticized usury, aiming to denounce the exploitative nature of interest-based lending.
The entire monetary and banking system rests upon this foundation.
Q: Why and how did we come to industrialize everything we produce?
To answer this question, let’s remember the story of Industrialization, a significant turning point in human history.
From the textile revolution to the technological revolution: the historical stages of Industrialization
It all began in the 18th century with the industrial revolution, specifically with the advancements in the textile industry.
Four integral elements intertwine throughout this process:
1) The Dark Origins of Industrialization: colonization, slavery, and the cotton industry
Firstly, the reliance on slavery in cotton fields and the exploitation of cheap labor. In this period, colonizers devastated Native Americans through warfare or enslavement, creating an almost clean slate for settlers. Initially driven by the quest for gold and silver, businesses thrived locally by employing enslaved individuals from Africa in the cotton fields.
Subsequently, the harvested cotton was processed in the northeastern United States or Great Britain, developing and proliferating textile mills and industrial production methods.
2) Enclosures and urban poverty: the plight of the proletariat in Europe’s textile factories
The second element concerns the proletarian workforce in the United Kingdom’s textile factories. Peasants were displaced from their lands, forced into a rural exodus, and compelled to become textile workers, a phenomenon known as enclosures.
The resulting urban poverty is poignantly depicted in the works of authors like Victor Hugo, Émile Zola, and Charles Dickens, offering glimpses into the harsh realities faced by the working classes in Europe, despite countries like England and France being colonial powers.
3) Fueling the industrial revolution: the rise of coal and textile mills in 19th century England
The third element emerged in the 19th century with the introduction of fossil fuels, particularly coal, which replaced hydropower. This shift granted greater production flexibility by liberating factories from the constraints imposed by previous energy sources like wind or hydropower for mills located near water bodies.
Consequently, coal-powered textile mills proliferated in the United Kingdom, particularly in and around Manchester.
4) Excess of domestic production: expansion to new markets
The fourth factor involved the expansion into external markets to accommodate the surplus textile production. England possessed a textile production capacity that exceeded domestic consumption levels.
Therefore, venturing into new markets became essential, including colonies and, notably, India, a vast market for the colonizers.
This later led Mahatma Gandhi to place resistance against English industrial textile products at the core of his struggle, resulting in the development of an anti-Western dress code in India. Adopting the traditional spinning wheel on the Indian flag during independence in 1947 symbolizes the fight against British domination.
A cascade of other revolutions unfolded after the textile revolution, including the steel, metallurgical, and technological revolutions. These advancements paved the way for remarkable progress in telecommunications and transportation.
One of the primary catalysts behind this fervent pursuit of industrial development was the intense competition between major powers vying for global dominance, often entailing the quest for imperial control.
The exigencies of the two World Wars compelled societies to toil relentlessly to meet the soaring demands for essential products such as ships, airplanes, weapons, food, textiles, and more.
Achieving such monumental production levels would have been nearly inconceivable without the availability of abundant and efficient fossil energy sources. Notably, oil played a pivotal role in powering the tremendous industrial machinery and meeting the escalating energy needs of the time.
Industrialization of life after the Second World War in a context of a race for hegemony
After the Second World War, in the backdrop of the Cold War and the ideological clash between communism and capitalism, the relentless pursuit of Industrialization, development, and market dominance persisted.
Both systems sought to outpace one another, driving a race characterized by fierce competition for resources, influence, and control.
An intriguing example of this post-war era is the revival and repurposing of chemical technologies employed during the war, including poison gases. Companies such as Dupont, Bayer, and Dow Chemicals harnessed these technologies to produce pesticides and other agricultural chemicals. These products have since become integral to conventional agriculture, facilitating the mass production of various crops and asserting dominance over food production.
The pursuit of Industrialization and economic growth also hinged upon advantageous access to natural resources, fossil energy sources, and inexpensive labor. These factors conferred a competitive edge, enabling faster and more efficient production processes.
Q: How has the international division of labor accelerated the capitalist model?
Low-cost labor: one of the pillars of the international division of labor
Since the era of mercantilism and the advent of the silver and gold rushes, the major powers and colonial entities have consistently relied on low-cost labor and even slavery to extract resources and cultivate crops such as sugar cane, beet, and cocoa.
With the “discovery” of the Americas, the global economy witnessed a starkly asymmetrical form of the international division of labor.
Economic and political centers of power dictated terms, while the rest of the world became a reservoir of resources and labor.
Following the First World War and the 1950s, Western Europe grappled with the perceived “communist threat” as socialist, communist, and revolutionary anarchist ideologies and workers’ movements gained prominence.
Strong trade unions could negotiate improved working conditions and secure legislative protections, redistributing a portion of the profits generated by multinational corporations and colonial empires to the people of Western Europe.
Various terms such as Social-Democratic Compromise, State Capitalism, Keynesianism, the Glorious Thirties, and the Fordist Regime emerged to describe this phenomenon, each with its nuances yet sharing certain similarities.
The Western world’s population, to varying degrees, reaped the benefits of this asymmetric international division of labor. However, many countries in Asia, Africa, and the Americas paid the price, experiencing the adverse consequences of this arrangement.
Subsequently, companies in Western Europe and the United States relocated their factories and agricultural production to regions where labor was more abundant and cost-effective. This was prompted by unfavorable conditions from a capitalist standpoint, including higher taxes, minimum wages, and shorter working hours resulting from the gains achieved by workers’ movements. The objective was to enhance profit margins by circumventing these social gains.
This shift marked the foundation of neoliberalism or the international manifestation of neoliberal tendencies.
The working class, including service workers, has emerged as the primary losers in the Western world. Their real wages and net wealth have remained stagnant since the events of the 1970s. A similar trend is unfolding in China, where some production is being relocated to countries like Vietnam due to escalating wage disputes.
Southern countries: a reservoir of low-cost labor for Northern countries
International division is closely intertwined with the geopolitical dynamics and the functioning of capitalist production. The exploitation of Southern countries can be attributed to the establishment of authoritarian states that ensured the availability of cheap labor and the exploitation of resources.
These states employ systems to maintain control and order in the face of potential rebellion from local populations, often with the support of external powers that continue to exert influence over these countries.
During the dismantling of colonial empires between 1945 and 1975, a strategy of post-colonial influence was employed to sustain the overall economic system. Weakened by war, European powers struggled to maintain direct control over their former colonies.
Hence, while it may be easy for Europeans to criticize African or South American dictators, these regimes provide cheap labor, raw materials, and inexpensive products for Western consumers.
Furthermore, alternatives to these dictators had often faced assassination or intervention by major European or American powers when their protectionist or nationalist policies did not align with Western interests.
Countless examples exist, from Sankara to Guevara, Lumumba, Mossadegh, Allende, and Cabral. Conversely, powerful actors have provided support to brutal dictatorial regimes, as evidenced by their involvement with figures such as Mobutu, Pinochet, and Suharto.
By acknowledging the violent nature of the economic system currently impacting life on our planet, one can understand that it disproportionately affects many vulnerable individuals, particularly those from lower social classes and peripheral countries.
Criticizing the prevailing system does not entail praising authoritarianism or disregarding the virtues of the market but instead recognizing the systemic violence it perpetuates against marginalized communities.
Patents: a tool for controlling the fragmentation of value chains
Finally, since the 1990s, the granting of patents has enabled affluent countries to concentrate the majority of the added value in a system that perpetuates the control of this fragmentation of value chains.
Despite the relocation of production, rich countries maintain a monopoly on intellectual property. Thereby they develop an economy based on services (such as R&D, marketing, finance, etc.) and continuing the concentration of added value.
In contrast, the countries of the South only capture tiny margins in global production.
To illustrate this point, let’s consider two simple examples.
When you purchase a €2 coffee, only a few cents are typically received by the Colombian producer who grew the coffee beans.
In contrast, if you buy a €1000 iPhone, how much would be allocated to the Chinese worker involved in the production process? And how much will be allocated to the Californian designer?
The question arises: why is there such a stark difference in the value distribution?
Q: Can we say that capitalism caused the current environmental crisis? If so, to what extent has it contributed?
The answer to the question is nuanced, with elements of both agreement and divergence. Within the capitalist framework, which prioritizes capital accumulation, the consequences on the environment are undeniable.
Loss of biodiversity, pollution, desertification, global warming, and the overall degradation of ecosystems can all be attributed to the historical role of capitalist modes of production. Capitalism has played a significant part in the current environmental crisis.
However, framing the issue in this manner implies that transcending capitalism alone would resolve the ecological crisis.
There are four interrelated factors, often referred to as the “four horsemen of the apocalypse,” that contribute to the predicament.
The four horsemen of the apocalypse
- Firstly, the pursuit of infinite profit is emblematic of capitalist principles.
- Secondly, the nation-state’s pursuit of dominance through military competition, driven by growth and productivity motives, inevitably results in aggression against the natural world.
- Thirdly, technology and manufacturing processes provide states and corporations with immense capabilities to increase production, intensifying their potential for destruction.
- Lastly, modernist ideology – originated in the West – perpetuated a separation between humans and nature. It is worth noting that previous European societies, rooted in Christian traditions, held a deep reverence for living things. However, humanism’s rise placed humans at the center of the universe, glorifying materialism. Consequently, society’s purpose shifted, relegating nature to a collection of inanimate objects devoid of inherent value.
This shift in perspective made it possible and even acceptable to commodify natural resources, such as cutting off rhino horns for sale, disregarding the intrinsic worth of living beings.
Rivers can be disrespected, and forests are considered mere obstacles that can be cleared to make way for roads, cities, and supermarkets.
Western thought has deeply rooted and permeated every corner of the world, resulting in a lack of respect and appreciation for the intrinsic value of living things. Unfortunately, this mindset can persist within capitalism.
Furthermore, the example of the USSR, often described as state capitalism, demonstrates that simply transcending capitalism is insufficient to address the environmental crisis.
The extensive destruction during the USSR’s record highlights the need for comprehensive solutions beyond the framework of capitalism.
Therefore, capitalism has undoubtedly contributed to the environmental crisis. Addressing this crisis requires tackling capitalism’s flaws and confronting the intertwined issues of profit-driven motives, aggressive nation-state competition, technology’s impact, and the modernist separation of humans from nature.
Q: Finally, do you know of any alternative economic systems to the capitalist system?
Indigenous peoples’ alternatives
Humans have inhabited the Earth for over 200,000 years, providing us with a rich tapestry of history to explore alternative models.
We can discover viable alternatives by delving into anthropological research and studying the functioning of societies that have either vanished or endured despite centuries of challenges.
Some communities still exist outside the confines of the capitalist system, often labeled as “primitive” due to ideological biases. However, it is crucial to recognize these societies’ immense value and complexity. In fact, it would be an injustice to suggest that no alternatives exist when these communities prove otherwise.
Interestingly, many of these people lead happier and more fulfilling lives than the average office worker in bustling cities like New York, Paris, or Shanghai. Anthropologists such as Marshall Sahlins and David Graeber have extensively demonstrated this reality.
There is a growing trend toward homogenization, where those mentioned above, the “four horsemen of the apocalypse,” marginalize or eradicate alternative communities.
However, it is of utmost urgency that we consider these societies and learn from their unique approaches. The alternatives already exist—they are well-documented and visible to those willing to explore them. By embracing the wisdom of these communities, we can discover pathways toward more sustainable and fulfilling ways of living.
Triple democracy, a powerful catalyst for the development of a fairer and more respectful society for all living beings
Promoting the model of self-production and indigenous lifestyles in today’s world may be challenging. Nonetheless, we can actively emphasize the concept of triple democracy, encompassing political, economic, and financial dimensions.
Our current crisis is partly a result of limitations within our democratic model. Representative democracy often falls short as elected officials can become entrenched in power, leading to a renunciation of true democratic principles.
To address this, it is essential to (re)invent models of direct democracy. Initiatives such as the fight for citizens’ initiative referendums, as seen in France, are steps in the right direction.
Rather than allowing external shareholders to dictate the course of a company solely based on net present value considerations, we should strive for a system where employees have a meaningful voice in shaping the organization’s strategy.
This could involve decisions about production methods, profit distribution, and other crucial aspects of the company’s operations.
The allocation of capital, money creation, and capital flows should not remain the exclusive domain of private individuals and organizations focused solely on personal accumulation and returns.
Instead, citizens and employees should have a say in these matters. It is imperative to overcome the absurd logic that prioritizes individual profit-seeking and establish a system that considers broader societal needs and values.
Victor Cannilla is a researcher in political ecology at the University of Lausanne in Switzerland, currently working on a thesis on the links between geopolitics and degrowth. He is an EPFL physicist by training. Before starting his academic research, he worked for three years at the Boston Consulting Group and one year as an algorithmic trader specializing in government bond derivatives. Since 2022, he has hosted a YouTube channel, Kraken Debrief, where he discusses topics such as multinationals, the history of capitalism, and the ecological impacts of the economic-political system.
- Amitav Ghosh, The Nutmeg’s Curse
- Noam Chomsky, Understanding Power
- Jason Hickel, Less is More
- Elizabeth Kolbert, The 6th Extinction
- James C Scott, Homo Domesticus
- Fernand Braudel, The Dynamics of Capitalism
- Eduardo Galeano, The open veins of Latin America
- Howard Zinn, A Popular History of the United States
- Raj Patel & Jason W. Moore, A History of the World in Seven Cheap Things
- David Stannard, American Holocaust
- Some documentaries :
- Exterminate all these brutes
- Labor, wages, profits
- The encirclement
- The time of the workers
- Neither god nor master