Sustainability: Capitalism and ecology

Eve Chiapello, co-creator of the specialised ‘Alternative Management’ programme, has analysed a large body of literature on the criticisms of capitalism dating back over 150 years. Here, she cites the lessons history has taught us in the face of its newest critic—ecology.

The history of capitalism is intimately linked to the history of its criticisms. And periods of crisis have always been privileged times to incorporate the idea of reform movements: usual practices no longer work and new ones must be found. Over the years the market economy has adopted some of the ideas of critical movements, but only those that did not call into question profit-seeking and the pursuit of its objectives. Ecological criticism, which in some ways seems to fundamentally call into question capitalism, has the potential to change all that.

By incorporating criticisms, capitalism ensures its sustainability

Capitalism does not spontaneously rectify the social or environmental problems that it creates. Criticism keeps it in line. By forcing capitalism to justify its practices, criticism allows it to either strengthen its legitimacy, or evolve to address some of the issues it raises. The strength of capitalism therefore lies in its ability to incorporate objections and attacks. Over time, some reformative ideas became management practices because they were sources of profit, they served to motivate employees to accept certain changes sought by companies or because they were the only means to silence a wave of criticism that could shake the economy. On the other hand, if reform proposals are too expensive, companies are reluctant to integrate them. If pressure to change is too high, they will often be tempted to reorganise their means of production to find other sources of profit.

The four types of criticism: conservative, social, artistic and ecological

From its conception, criticisms of capitalism have taken four forms. Conservative criticism denounces the immorality of capitalism, but supports the idea that power should be concentrated in the hands of the most capable, who thus have social responsibility.

Artistic criticism reproaches capitalism’s oppression and inauthenticity. It calls for creative freedom and autonomy.

Social criticism denounces exploitation by the ruling classes, who generate poverty and inequality.

Finally, ecological criticism highlights the interdependence between generations and species as well as the irreversible effects of human activity on the planet. It rejects the idea of unlimited economic growth and questions the ability of the capitalist system to ensure the survival of humanity.

Can ecological criticism change the market economy?

As long as growth in GDP is seen as the only path towards human progress and job creation, ecological criticism will run up against social questions. But a connection between social and ecological criticisms is not impossible—after all they share the rhetoric of exploitation, according to which profits are partially derived from the fact that all contributors are not recognised in company accounts according to their level of contribution. Moreover, ecological criticism gradually wins over its audience because it is based on scientific studies that demonstrate the risks and damage generated by the economic machine.

Three ways to integrate the ideas of ecological criticism into the capitalist model

I see that there are three different scenarios on a global, local and governmental scale that that could help capitalism to incorporate ecological criticism as it has social, conservative and artistic.

1. Green capitalism: corporate social responsibility incorporates ecological criticism by defining principles of sustainable development and justice. It motivates employees by giving them the satisfaction of working for the common good and gives capitalism new-found legitimacy. This scenario changes society the least—it remains to be seen if companies, on their own, will be able to make the necessary investments quickly enough to avoid a deep ecological crisis whilst the objective of short-term profitability still dominates decisions.

2. Development of a solidarity-based, local and sustainable economy—which is concerned with meeting basic needs instead of producing and selling the superfluous. If such initiatives, such as the localisation of production (so that it’s close to consumption), are not favoured in the competitive arena by market regulations, this scenario is unlikely to be a vehicle for major change.

3. Strengthening the state’s ability to force capitalism to respect the environment. Many standards and regulations are in the pipeline but the power of the state in the economic system is weaker now than it has been before. As it stands, this process would take a long time—negotiations on the climate show just how long and difficult the road can be.

Ultimately, we will not overcome the current ecological problems and capitalism will not appease its critics without substantial changes. And the changes will likely occur through a combination of these three channels. It’s not impossible, but it will take time and perhaps test the robustness of capitalism more than ever before.

Eve Chiapello is Professor at the HEC School of Management, Paris, France.