Socialism v capitalism

[Eine Alpensinfonie]

No it doesn't. Since the drive to economic growth leads necessarily to reckless exploitation of finite natural resources, not to mention the kind of rapacious exploitation of the third world which involves grabbing those resources and then selling them back to people who can't afford them (to give one particularly egregious example), it can only ultimately lead to rendering the planet uninhabitable. That is the logic of "perpetual growth".

[PhilipT]

No it doesn't. Since the drive to economic growth leads necessarily to reckless exploitation of finite natural resources, not to mention the kind of rapacious exploitation of the third world which involves grabbing those resources and then selling them back to people who can't afford them (to give one particularly egregious example), it can only ultimately lead to rendering the planet uninhabitable. That is the logic of "perpetual growth".

So where do you draw the line? Was the first proto-human who stole meat from a carcass left in a tree by a sabre-toothed tiger, thereby feeding his family, fuelling the brain development of his children, setting the sabre-toothed tigers on the road to extinction etc. etc. in the wrong? And would you really look a third-world person in the eye and tell him that being materially better off, with things like better nutrition, better health care and the rest would be bad for him and his children in the long run and it shouldn't happen?

[heliocentric]

it shouldn't happen?

It cannot happen under the logic of global capitalism. The standard of living we now have in the developed world was achieved on the back of massive exploitation of other parts of the world, which of course is still going on, as is ever more environmentally-damaging fossil-fuel extraction (and the climatic effect of using it). The widespread use of renewable energy sources is not taken seriously because it doesn't offer short-term profit, even though it would ensure long-term sustainability. This short-termism is built fundamentally into the way capitalism works, and particularly into the drive to economic growth. Ultimately the survival of the planet is going to depend on finding a different way to organise things, it's as simple as that. Or that different way will be forced on whoever is left behind by the violent upheavals that will result from an acceleration of climate change and the aforementioned exploitation of the poor.

[An_Inspector_Calls]

Since the drive to economic growth leads necessarily to reckless exploitation of finite natural resources, not to mention the kind of rapacious exploitation of the third world which involves grabbing those resources and then selling them back to people who can't afford them (to give one particularly egregious example), it can only ultimately lead to rendering the planet uninhabitable. That is the logic of "perpetual growth".

That's your vision of growth, not mine. Growth could also be seen as merely rearranging finite natural resources rather than exploiting them. And exploiting the third world is not inextricably linked to growth either.

[heliocentric]

Growth could also be seen as merely rearranging finite natural resources

Really, how?

[An_Inspector_Calls]

Only entropy is changed. All other materials remain in existence.

[heliocentric]

Only entropy is changed. All other materials remain in existence.

Is that your answer? What does it have to do with economic growth?

[An_Inspector_Calls]

It counters your statement "the drive to economic growth leads necessarily to reckless exploitation of finite natural resources". It doesn't, all growth does is move them around.

[heliocentric]

It counters your statement "the drive to economic growth leads necessarily to reckless exploitation of finite natural resources". It doesn't, all growth does is move them around.

If you understand the concept of entropy you'll know that it's a measure of the amount of disorder in a system. When fossil fuels are extracted and burned, the "cost" of the energy derived from the process is a net increase in entropy. The fuel can't be reused; it's "moved", to use your word, from a state where it can be used as an energy source to a state where it can't. Plus, as economies grow, their need for resources grows too, so even if there's a fixed amount which is only being "moved around" this won't be enough in the long term. Your response is somewhat illiterate in terms both of thermodynamics and of economics, unless there are hidden depths to it that you can explain further.

[PhilipT]

Really, how?

Oh dear. You really are invincibly ignorant, as the philosophers say, of economics.

Please consult the back of a £20 note, one with Adam Smith on it. There's a quote from him there about the division of labour. In his best-known work he takes the example of a pin factory and shows how by dividing the tasks between individuals, rather than each individual making pins on his own, the overall productivity of the factory is increased. Labour (i.e. people) is a finite natural resource. The amount of economic output is strongly dependent on how the labourers are deployed; the cost of the labourers (what it takes to keep them, feed them etc.) is not.

To take another example: By rearranging a finite (although largely renewable) natural resource, namely wood, a violin maker produces an instrument much more valuable than the original wood. This is called "adding value". (VAT is a tax on added value, but I digress.) GDP is a measure of the rate an economy generates aggregate net added value. (Which is why it is wrong to compare the revenue of a large company against the GDP of a country, because GDP is a measure of the added value, not the output value, but again, I digress.)

Economic growth is an increase in rate at which an economy adds value. It is strongly determined by how efficiently resources (wood, people etc.) are arranged.

[scottycelt]

What is wrong with exploiting natural resources?

We eat natural resources and natural resources keep us warm in the winter ... the alternative, plainly, is death.

As for 'economic growth' some African countries are now enjoying hefty rises in GDP and hopefully in the not-too-distant future these countries will be self-sufficient and not dependent on aid from the outside world.

I'm astonished that comfortably-off social and political theorists in the outside world might wish to deny Africans (and others) the opportunity to become less poor and maybe even ultimately become comfy armchair-theorists like themselves ... ?

[An_Inspector_Calls]

The only elements in short supply (compared to possible 'consumption') in the earth's crust are lead, tin, zinc and copper. Shortage (and thus high price) of these would constrain growth (and encourage recycling, as is already happening) but not stop it. The only molecules in short supply in the earth's crust are hydrocarbons. And alternatives are usually available. We've replaced the bulk of our silver use with sodium, and copper use is being displaced by aluminium (abundant).

Fossil fuels (hydrocarbons) can be displaced by renewables (in the tropics, perhaps not at high latitudes) and by nuclear power. There's sufficient fissile material at shallow levels in the earth's crust or the sea to deliver energy to the entire world population at western levels (125 kWh/day) for the entire useful life of the planet.

Please feel free to teach me all you know about entropy.

[heliocentric]

Economic growth is an increase in rate at which an economy adds value.

Indeed. And in order for that value to be added (at a compound rate) more value needs to be added as time goes on, that is to say more sources of profit need to be found, which historically has meant "opening up new markets". David Harvey writes in 2010:

If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030. This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted). Real problems of finding adequate outlets for surplus capital began to emerge after 1980, even with the opening up of China and the collapse of the Soviet Bloc. The difficulties were in part resolved by creation of fictitious markets where speculation in asset values could take off unhindered. Where will all this investment go now?

Your answer?

[Simon]

Good to see some blunt facts, from PhilipT, on this thread.

[Simon]

Real problems of finding adequate outlets for surplus capital began to emerge after 1980...



There have always been problems (for some) in finding investment areas.

But Harvey doesn't always make every point - nobody can. In fact, there were plenty of "outlets" - and still are. However, if one wants massive increases in profitability, many of these (sustainable and realistic steady growth areas) were (and are) not enough.

Profitability and growth are indeed economic drivers and it's not wrong to want to see a return for one's sacrifices, whether of invested money or labour - that's life. But the banking system militates against reasoned, steady investment and instead, almost since its inception, has encouraged wild speculation and bubbles. It's not the first time this pendulum has swung and probably won't be the last. But it need not be thus.