It is every politicians nightmare: economic stagnation, or worse, economic contraction. An anemic economy where voters lose their jobs and feel that very human need to blame someone with an apparent power to do something about it.
After a century of growth unparalleled in world history, it has become an automatic assumption in America and around the capitalist world that the economy, while having its ups and downs, will inevitably grow on ad infinitum. It is what wins and loses elections, the perceivable growth of the GDP and how the government leaders have contributed to its growth. Economic intervention, free market deregulation, spending and austerity, tax increases and tax cuts, deficits and surpluses: it has all become a crucial part of the political world today.
It seems, however, that future shifts in economic and ecological conditions will challenge all of the pre-conceived notions that have become basic talking points in contemporary political discussion. This is because past and current growth is looking more and more unsustainable. According to data compiled by Thomas Piketty’s team, the projected growth rate for world output is expected to drop from 3.5 percent in 2012 to under 1.5 percent by 2100. The last time world economic growth was under 1.5 percent was in the early nineteenth century.
Just to put this into historical perspective, before the western world became industrialized, from year zero up until the eighteenth century, the estimated annual growth of world output was just 0.1 percent. Since 1700, the average annual growth rate has been about one percent, which over the long run is quite rapid. Only since the dawn of World War One, the true beginning of modernity, has the average world output grown at an annual rate of three percent. The growth of world population has also rapidly increased since industrialization took hold of the world, growing at an average of 1.4 percent since 1913, compared to the same 0.1 percent before the eighteenth century.
These numbers show how beneficial capitalism has been to civilization; increasing the standard of living and mortality rate for so many. As Karl Marx’s historical materialism posited, capitalism is a progressive system that has created endless technological innovation and material growth.
However, like past social structures, it has also brought many negative realities that are revealing themselves more than ever today; mainly wealth inequality and environmental destruction. Modern capitalism is like a ship that has helped civilization sail into modernity, but it is looking more and more like this ship is full of holes and is in need of extreme modification, or complete replacement.
Capitalism’s Effects On Inequality And Environmental Degradation...
“Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth - the soil and the laborer.” - Karl Marx
Two landmark books of 2014, Thomas Piketty’s
Capital in the Twenty-first Century and Naomi Klein’s
This Changes Everything reveal the cold reality of civilization’s future if we continue down the free-wheeling route of modern globalized capitalism. These books describe the truly horrific results of neoliberalism over the past few decades and show, fifteen years into the new millennium, how Marx’s ominous predictions are more accurate than ever.
About a year ago, a report that the wealthiest 85 people in the world own as much as the poorest 3.5 billion people spread through social media and the blogosphere, shocking many readers unaware of the extreme disparity in the modern world.
But to anyone who follows what has gone on economically since the 1980’s, this statistic was hardly surprising. In the eighties, free-market philosophy made an astonishing comeback after nearly a half-century of Keynesian policies. Under the leadership of conservatives like Ronald Reagan and Margaret Thatcher, union-busting and tax cutting somehow became stylish again. Though mostly everything that seemed stylish back in the 1980’s looks completely batshit crazy today, somehow, for many people, these reactionary free market beliefs are still widely regarded as true.
Of course, they are not true. Deregulation and tax cutting have not created great economic growth or increased social mobility, they have done the opposite. Economic inequality is at its greatest height since the onset of the Great Depression, and we are, by all means currently in a new and improved Gilded Age.
The first Gilded Age did not last forever. World Wars destroyed capital and social movements reacted to the vast inequalities that existed. Socialism threatened Capitalist states around the world, making it necessary for governments to compromise, especially following the Great Depression, which for many seemed to be a confirmation of Marx’s prediction of capitalism’s collapse.
Today, years after another massive economic collapse, the wealthy elites do not seem at all nervous. Communism has been dead for more than two decades and multinational corporations are stronger than ever, laughing at calls to invest in sustainable energies to reduce their carbon footprint. Globalization has also challenged workers movements, giving corporations the option of finding cheap labor elsewhere on the globe if it becomes too expensive. So, is the Gilded Age 2.0 here to stay?
One thing that is most certainly here to stay is climate change, which, unlike wealth inequality, is not simply a social issue, but a survival issue.
While forecasts predict that global economic growth will be decreasing, the global temperature is expected to increase rapidly over the next century. The Intergovernmental Panel on Climate Change (IPCC) predicts a rise of 2.5 to 10 degrees Fahrenheit over the next century, which would be catastrophic for much of humanity.
The twentieth century’s rapid economic growth is a direct cause of what will be this century’s temperature growth. In 1910, the United States emitted 1,269 million tons of carbon, and this has steadily increased since then to 5,472 million tons by 2010. Without this increase in burning fossil fuels, the economic growth and standard of living increase that we achieved would not have been possible.
China’s emission's have grown at an even more astonishing rate; from 780 million tons in 1960 to 8,189 million tons in 2010. This makes sense. China’s economy has grown much more rapidly than Americas in recent decades, resulting in an even higher growth of carbon emissions.
Capitalism and economic growth, simply put, have been built on environmental degradation. As the world achieved an astonishing three percent annual output growth and the United States became the wealthiest country on the planet, we have emitted so much carbon as to almost guarantee climate change.
This threat on humanity’s future is the biggest opportunity we have to fight for change. Current economic systems must either be updated with radical regulations, or completely reorganized to meet the ecological needs of our future.
Growth And Sustainability
The rapid economic growth that America and other countries achieved during the previous century has ingrained itself into the minds of most Americans. As recent as the nineties we were achieving almost five percent GDP growth. From a historical perspective, however, 1-1.5 percent annual growth is considered very rapid. The average American growth rate during 1913-2013 was 1.5 percent, and during 1950-1980 it was 2 percent.
Northwestern economist Robert Gordon has predicted that annual growth may drop to under 0.5 percent per year in United States between 2050-2100. Of course this is a prediction and anything could happen between then and now. But one thing is for sure, the accelerated economic growth that so many have gotten used to during the twentieth century is unsustainable in the long run.
Many Americans seem to be unconsciously aware of this, even though we still somehow believe that our growth should always be in the 3-4 percent range. According to a study done by Brookings , the millennial generation is increasingly pessimistic about their economic future, and 58 percent say they are worse off then their parents were; higher than the last three generations. Another telling poll revealed that 34 percent believe capitalism is not working well because of greed, 28 percent because it does not provide equal opportunity for all, 14 percent because it creates lasting poverties, and only a small 4 percent because of too much government regulation.
This all around pessimism of our future creates an opening for serious change. The first thing that must be pounded into the minds of many is that the ad infinitum economic growth that we have gotten used to (at least at the high rates achieved during the twentieth century) is not sustainable, especially if we want to combat the very real and dangerous effects of climate change. The fossil fuels that helped our world output grow at such amazing rates are also unsustainable, but there is plenty more for us to dig our climate change grave even deeper in the next century.
If we continue down the current free-market-growth-obsessed path, trying to combat carbon pollution with market friendly policies like carbon trading, and relying on capitalist billionaires like Richard Branson and Bill Gates to come up with some geo-engineering miracle to block the Sun, we will run out of time. Governments around the world need to take direct action, no matter what oil lobbyists say, and this starts with a bottom up movement. The people need to go out and make them do it, as FDR once said, and current environmental movements seem to be picking up steam. No longer can we compromise with big oil and free market capitalists. It is not hyperbole to say that humanity’s future depends on what we do or do not do in the next few decades.
Real Solutions...
With the increasing public awareness of climate change, extreme measures must be demanded by the people, and it starts with renewable energy. A sustainable future is entirely possible and we have the technology for it, it is simply a matter of political will.
Stanford University Professor Mark Z. Jacobson and UC Davis Professor Mark A. Delucchi have written extensively about what it would take for not only the United States, but the world to switch to renewables. There is an abundant supply of renewable energy, and in their article, A Path To Sustainable Energy By 2030, they explain the engineering possibilities.
Studies have estimated that there is 40-85 terawatts of wind energy and 580 terawatts of solar energy available in readily accessible locations around the world. This dwarfs the 15 terawatts we use today and the estimated 30 terawatts we will use by 2050. In order to tap into this ample supply, massive government investment around the world will be required. For 100 percent renewable energy, an estimated 3.8 million large wind turbines, 490,000 tidal turbines, and 89,000 photovoltaic and concentrated solar power plants, and 720,000 wave converters would be required. This sounds a like massive endeavor, and it is, but it is technically possible.
The true challenge is not in the engineering, but in the politics. There is no doubt that a great many people in this country live in constant denial. Denial of climate change and denial that our economy is inevitably slowing after a century of unprecedented growth. Fossil fuel industries will continue to spend billions of dollars influencing capital hill to do nothing and to fund the climate change denial myth. They have a lot of money, but they lack two crucial things: facts and people.
Everyone who has read about the science behind climate change already know the facts, but back in September, the People’s Climate March in New York revealed the strength of the climate movement. Environmentalism is no longer a party of “tree-huggers.” It is diverse and full of young people, old people, urban and rural. Communities that have experienced the horrors of hydraulic fracking or oil spills are fighting back, and the movement against the Keystone pipeline reveals the strength in numbers.
After the New Deal and WW2, our society changed. Massive government investments and increased regulation not only created a more stable society, but a more equal society. These things did not just happen, they were fought for through strong social movements. Socialism and radicalism forced big government and big business to compromise and create a mixed economy, and the middle class flourished.
Since the late 1970’s, the “New Deal” society has been wiped out with neoliberal policies. It is time to demand what many call the “Green New Deal.” Climate change is today’s world war, and we must utilize it accordingly. In a sense, green is the new red, and environmentalists and activists should wear that as a badge of honor. Through this fight for sustainability and clean energy, the world can become safer, more habitable, and more equal.