I. Capitalism's Twin Crises: Economic & Environmental. (Review of the Month)

By Magdoff, Fred | Monthly Review, September 2002 | Go to article overview

I. Capitalism's Twin Crises: Economic & Environmental. (Review of the Month)


Magdoff, Fred, Monthly Review


History has provided us with numerous examples of economic stagnation and breakdown, as well as environmental degradation caused by human activity, even before capitalism existed. But capitalism's central characteristic--the incessant drive to invest and accumulate wealth--gives birth to never-ending economic and environmental crises.

Capitalism's Tendency to Generate Economic Crises

There are, of course, the normal ups and downs of the business cycle, during which recessions create havoc in many lives as well as unease and uncertainty in many more. In addition, there are occasional exaggerated bubbles of euphoria such as occurred during the second hail of the 1990s, with growth that appeared perpetual to many. There are also sometimes long-term downturns, such as experienced in Japan over the last decade. As pointed out recently in this space, much has changed over the last quarter-century as capitalists have endeavored to adjust to a general slowdown in growth and, therefore, decreased profit-making opportunities. * As traditional goods producing industries have saturated the markets with efficiently produced merchandise, investment has shifted to the retail and service (including financial) sectors of the economy. Although increasing in relative importance to the U.S. economy before 1980, it is after this date that the service sectors grew especially rapidly as capitalists sought out n ew potential profit centers--fast food outlets, computer support for business, processing medical records, etc. There has also been a growing tendency for some companies to produce little or nothing. Some have tried to make profits by creating new markets--such as in the privatized electrical power market created by heavy corporate lobbying--and then purchasing and selling the "product." Like Enron, many financially driven firms even pride themselves on being "asset-light," meaning that there is little physical plant involved in their business. The goal is to conjure profits out of the thin air--by speculation and trade. The drive to accumulate capital in an environment of limited productive opportunities leads to endless gimmicks to induce people to spend money, speculation (just another word for gambling), and outright fraud--need we say more than Enron, Xerox, WorldCom, and Global Crossing?

Capitalism's Ecological Crises

Although the tendency toward economic crises is an intrinsic characteristic of capitalism, there is a second fundamental form of contemporary crisis that is also derived from the relentless pursuit of profits--namely, the rapid growth of ecological degradation. The environment is best viewed as a whole, with interactions and exchanges going on among the living organisms and between organisms and the physical aspects of water, soil, and air. (There is also exchange and interaction between substances in the water, soil, and atmosphere.) Millions of years of evolution have made most natural systems efficient at cycling nutrients and water and allowing energy, generated by green plants using sunlight, to flow as in a gentle stream from one organism to another (that uses the previous one for food), to another, and so on. Most natural systems produce high quality air and water conducive to the continuation of life. Taken together, the vast multitude of organisms large and small fill all available ecological niches (which they partly create) and few resources are wasted.

However, in the mid nineteenth century, Marx pointed to what he called a "metabolic rift" in which the natural cycling of nutrients was broken by developments within capitalism. As food was shipped to cities to provide the needs of the burgeoning populations created by early industrialization, soils became depleted of nutrients at the same time that residues of food wastes--mainly human sewage and garbage--fouled the rivers. The ecological problems flowing from this "metabolic rift," seen in its broadest sense as characterizing all of capitalism's interactions with nature, are very much with us at the present time. …

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