Capitalism, the environment, and sustainable development: replies to Jonathon Porritt

Camilla Toulmin John Whitelegg Tom Burke John Ashton Tim Worstall Andrew Simms
6 December 2005

A new book by the pioneering green campaigner Jonathon Porritt, “Capitalism As If the World Matters”, calls on environmentalists to create a politics of sustainability that accepts the reality of capitalism. Environmental thinkers and activists from a variety of perspectives respond.

Tim Worstall, writer

The market solution

Those of us who have, over the years, made our beer money by mocking the pretensions of the great man are now duty bound to welcome his conversion to a rational version of economics. More joy in heaven over one sinner that repenteth…But it is a slightly half-hearted welcome, for in identifying capitalism as the only game in town Jonathon Porritt is also missing a point. People like myself and Iain Murray do not call ourselves “capitalist environmentalists” after all, rather “free-market” ones. We’re even willing to drop the “free” part as soon as everyone understands that markets are created rather than existing ab initio.

Tim Worstall is responding to Jonathon Porritt’s openDemocracy article, “’As if the world matters’: reconciling sustainable development and capitalism” (November 2005)

The minor argument against the way Porritt has identified capitalism is that since around 80% of a modern economy is services, the parallel passing of the value of physical capital and the concentration on the human variety makes it possible to construct a reasonable argument that traditional corporate capitalism is passé. The major one however is that we shouldn’t be concentrating on the ownership of the means of production, but on what markets can do for us.

Markets perform two tasks that we’ve not found any other way to do half-way as efficiently: process the flood of information about the desires and wants of our 6 billion fellows, then move scare resources to those of that number who value them most.

Most environmental problems we face (and do not think for a moment that free-market environmentalists would not agree with you that there are such) are a combination of three things:

  • malfunctioning markets (or even their absence)
  • the “tragedy of the commons”
  • externalities not being properly priced into the cost of an action.

Rather than give an economics seminar here, trust me when I say that these are all well-known problems and ones that all have well-known solutions. The task before us – the game, if you wish – is therefore to take these solutions and apply them to the real world. This will be quite as much of a shock to some capitalists as it will be to some of the cherished notions of certain parts of the environmental movement. The market-pricing of water, most especially for farmers, will be one of these, quite possibly its provision by private profit-making companies, just as an example.

It might be worth noting that this sort of thinking is not restricted to right-wing cranks (which is, of course, what I myself am). The Millennium Ecosystem Assessment from July 2005 – involving 1,300 scientists working under the aegis of the United Nations – noted as follows:

“More specifically, in Global Orchestration trade barriers are eliminated, distorting subsidies are removed, and a major emphasis is placed on eliminating poverty and hunger.”

That is, we want to have more growth, more trade and more wealth creation. The authors go on to discuss the ways in which we need to create markets for ecosystem services; make sure that externalities are properly dealt with; and, once we have set the boundaries within which such markets will work, allow them to get on with what they do best – processing all of the available information and distributing the scarce resources.

The most basic tenet in all of economics is that incentives matter. There isn’t a practitioner of the science on the planet who would not agree that currently they are misaligned for the protection of the environment. We therefore need to construct the legal and regulatory frames, the limits if you wish, within which incentives are correctly aligned and markets can be allowed to help save the planet.

If Jonathon Porritt had come out with that, rather than his slightly grudging acceptance about capitalism, then it wouldn’t be a half-hearted welcome he was getting from this quarter, rather a full-throated cheer with mass tossing of headgear and marching bands.

Forget the slightly Marxist concentration on who owns the machines and understand that markets, properly designed, contain the cures for most of our environmental ills.

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Tom Burke, Third Generation Environmentalism (E3G)

Conserving capitalists

Capitalism is the process of liberating capital to pursue opportunity. From about the middle of the 18th century there was a debate about how to make the economy grow. As the industrial revolution gathered pace under the stimulus of the Napoleonic wars and the subsequent prolonged period of peace the answer became clear. If individuals are freed to pursue their own self-interest, the interests of all would be enhanced as the economy grew. As this liberal doctrine gained hold, economies did indeed grow rapidly.

Tom Burke is responding to the article by Jonathon Porritt, “’As if the world matters’: reconciling sustainable development and capitalism” (November 2005)

Also by Tom Burke in openDemocracy:

“Climate change and global security” (with John Ashton) (May 2005)

“The G8 and climate change: a campaigners’ scorecard” (July 2005)

If you find this material valuable please consider supporting openDemocracy by sending us a donation so that we can continue our work for democratic dialogue

But economic growth corrodes social ligatures. The complex, multi-dimensional relationships of relatively stable communities are replaced in the creative destruction of capitalism by the simpler, transactional relationships of the cash economy. Cultural bonds, with their complex patterns of mutual rights and obligations, are replaced by economic bonds based simply on the ability to pay.

Margaret Thatcher never understood that you cannot have both increasing economic opportunity and a return to Victorian values because of the corrosive effect of rapid economic growth on culturally rooted rules systems. In the 19th century, rapid economic growth led then in Europe, as it does now globally, to very rapid social change. This social change, unmediated by any amelioration of its impacts on the welfare of large numbers of people, led to growing political instability. This threatened to undermine the economic growth driving the social changes. By 1848 Marx had already written the Communist Manifesto.

By the middle of the 19th century, as the dynamics of what we would now call a negative feedback loop became apparent, a new argument began. This was about how to maintain the social conditions for the economy to continue growing. The answer that emerged over the next century was that some of the proceeds of that economic growth must be invested in maintaining the social conditions for it to continue.

In the 1880s, the German chancellor Otto von Bismarck had already laid the foundations of what we would now call the welfare state in Germany. By the middle of the 20th century, the argument was over. All of the largest and fastest growing economies invested a significant amount of the proceeds of that growth in health, education and social security in order to maintain the social conditions for its continuation. Economic development became the primary focus of public policy.

This occurred just as the population of the planet was about to explode, tripling from about 2 billion to more than 6 billion in a single lifetime. By the beginning of the last quarter of the 20th century, a new debate had begun. Rapid economic development was precipitating environmental changes that threatened to undermine the ecological foundations of the economy – the oceans, atmosphere, freshwaters, forestlands, croplands and rangelands that supply everything in our economy not supplied by fossil fuels and non-fossil minerals.

If the productivity of those foundations is undermined, the eventual result is a malign and self-defeating cycle: the economy is weakened, creating political instability that further blocks the ability of the economy to grow – and economies which do not grow cannot support capitalism.

Making the transition to sustainable development means learning to invest some of the proceeds of our accelerating economic development in maintaining the environmental conditions for its continuation. We have barely begun. This year Britain will spend some £250 billion on maintaining the social conditions for economic growth, about five times what we will spend on internal and external security. Alongside, we will spend about £7.5 billion on the environment – 3% of what we are spending on maintaining the social conditions for growth.

Unless we can rapidly redress this imbalance, the landscape of opportunity for capital to pursue will diminish rapidly as the 21st century progresses. Delivering sustainable development – that is, economic growth that maintains both the social and environmental conditions for its continuation – is a necessary condition for the survival of capitalism. It is time that both environmentalists and capitalists discovered their mutual interest in accelerating the transition.

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Camilla Toulmin, International Institute for Environment & Development (IIED)

Buy a book for Christmas, save the world for Easter

Jonathon Porritt’s article, like the book it draws on – Capitalism As If The World Matters – is excellent. As the climate-change negotiations in Montreal conclude with a deal that looks forward to the implementation of the Kyoto targets and beyond, we need powerful voices like Jonathon’s restating how we can move forward to make a fairer, more sustainable planet.

Jonathon rightly argues that we environmentalists must sacrifice a few sacred cows in the interests of understanding and being effective – such as that business is in league with the devil, and that markets can do nothing for sustainable development. Living within a market-based paradigm means engaging with a range of issues and methods that might have been anathema to the greens of the 1970s and 1980s – but if we welcome reality and look for pragmatic solutions to some of the many problems we face, we may get some clever answers.

Camilla Toulmin is the director of the International Institute for Environment & Development (IIED), a policy-research NGO based in London.

She is responding to the article by Jonathon Porritt, “’As if the world matters’: reconciling sustainable development and capitalism” (November 2005)

Also by Camilla Toulmin in openDemocracy:

“Africa: why climate change matters” (May 2005)

“The G8 and climate change: a campaigners’ scorecard” (July 2005) – with Saleemul Huq

“Why Montreal matters” (December 2005)

Institutions – businesses, NGOs, governments – tend to get trapped by the categories we use. But as soon as we look a bit closer, we see the diverse pattern of people and possibilities which lie behind the stereotype. Amartya Sen gave an eloquent lecture on 30 November at the British Museum in which he argued the urgent need to escape the simple categories we use to describe other people, which often become a means to vilify the, as the “other” – those with different ethnic, gender or faith. Identifying our common interest and humanity is vital if we are to tackle collective problems, of which global climate change is far the most challenging.

Jonathon Porritt’s path has led him over the last decade from Green Party politics to much greater engagement with business leaders who want to combine giving good shareholder value with achieving long-term sustainability. It means exploring the space between operating at the bare minimum allowed by regulation and going so visionary that returns are put at risk. For many companies this approach means thinking, planning and investing ten-twenty years ahead. By contrast, our political classes have abandoned any semblance of vision and responsibility.

Looking at problems and opportunities anew helps to see how regulation, instead of being a burden on industry, might spur great innovation of long-term benefit to jobs and growth. Targets for cutting greenhouse gases can help us shift towards a low-carbon economy and secure substantial benefits for early innovators.

Capitalism As If The World Matters sets out the evidence and arguments for why we environmentalists urgently need to change the way we engage with the real world. It paints a vision of what a more sustainable planet and society could look like, and presents the case for a greater focus on wellbeing rather than stacking up the consumer goods. It emphasises the core values underpinning a more sustainable world – interdependence, empathy, equity, responsibility and intergenerational justice.

If you believe the world matters, then read Jonathon Porritt’s book and give it to your friends and relations.

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John Whitelegg, Stockholm Environment Institute

Beyond capitalism

Jonathon Porritt has given us some very mixed messages in his book Capitalism As If The World Matters. His basic thesis seems to be:

  • capitalism is the only game in town

  • capitalism can deliver on sustainability

  • environmentalists have failed to engage with the opportunities offered by capitalism

From my perspective – as an academic, capitalist and green party politician – this is a confusing series of points that attacks “straw men” rather than harnessing whatever energies exist in society at large to deliver the much needed shift in the direction of sustainable development.

John Whitelegg is professor at the Stockholm Environment Institute, University of York. He is also a Green Party councillor on Lancaster City Council and managing director of Eco-Logica Ltd.

He is responding to the article by Jonathon Porritt, “’As if the world matters’: reconciling sustainable development and capitalism” (November 2005)

Jonathon’s first point – that capitalism is the only option – is irrelevant. Many of our economic agents do work within a profit-driven, shareholding, globalised entrepreneurial system. The problem we all face is to reform that system in a way that delivers real progress and real sustainable development. Jonathon offers very little evidence that this shift is possible or achievable. In the meantime many social enterprises and community groups and local authorities are operating to a different set of imperatives and visions, and are showing that we can re-engineer the economy, goods, services and trade without getting hung up on capitalism.

The second argument – that capitalism can deliver on sustainability – is intuitively attractive but considerably at variance with the evidence. The scale of ecological damage across the planet and the destruction and pollution from Brazil to China is part and parcel of what we know as “capitalism”. More importantly this kind of capitalism does not exist in a political vacuum. It is incredibly busy and intervenes at every level of government globally to make sure that taxation works in favour of business and not the environment and that international trade can take place regardless of the ecological madness association with long-distance sourcing. The oil and gas industry is deeply involved in global geopolitics that destroys environments and communities and human rights and supports repressive and non-democratic governments.

Capitalism has had the benefit of two or three decades of clear analysis and guidance on energy, resources, land, pollution and water to enable it to deliver on sustainability if it wished. It simply chooses not to do so and Jonathan has not adequately explained why this should be any different in the future.

The third point – that environmentalists have failed to engage with the opportunities offered by capitalism – is just silly. We can have this debate without taking a sideswipe at environmentalists. Whether or not they eat lentils or return to their bird boxes is trivial and Jonathan knows better.

At the core of this debate I am sure that Jonathon and I share a vision of what a sustainable community, town, city, region or world could look like. I don’t think we will get there by putting all our eggs in the basket of capitalism. Capitalism, after all, has given us slavery, small children working down coal mines, death and disease from pollution, and appalling disregard for people and communities – including my own family and community when cotton mills shut down in Oldham, Lancashire, in the early 1960s. Such depredations continue around the world today, often invisible to the eye even of the most informed or sensitive of observers.

This destructive, unsustainable dynamic has to stop. The process of stopping it will involve all those things that capitalist do not like (including regulation and taxation); changes in local government to give local communities and local people more power over what happens on their “patch”; and the kind of social change that ended slavery and brought down the Berlin wall. I have absolutely no doubt that this social change will take place and if I have my way it will be sooner rather than later.

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John Ashton, Third Generation Environmentalism (E3G)

Three identity battles

The belated acknowledgement by the environmental movement of the role of markets and private capital in the transition to sustainable development is the least of our worries.

The battle over ownership of the means of production ended with the cold war. There is no coherent challenge to the mixed economy, based on freedom of choice regulated by the rule of law, as a means of aligning private interests and the public good.

The transition to sustainable development will turn on the outcome not of yesterday’s struggles but today’s. The frontline has moved, from the economy to a bigger question: the question of who we are and how we can construct a meaningful sense of identity in relation to each other and the environment, and in a globalising world where our ability to achieve the outcomes we want will depend on whether we can come to terms with the consequences of interdependence on an unprecedented scale.

John Ashton, is chief executive of Third Generation Environmentalism (E3G)

Also by John Ashton in openDemocracy:

“Climate change and global security” (with Tom Burke) (May 2005)

He is responding to the article by Jonathon Porritt, “’As if the world matters’: reconciling sustainable development and capitalism” (November 2005)

Three battles of identity are now in progress. Environmentalists should pay them close attention.

The first is the battle between exceptionalism and universalism (see Fred Halliday on “The crisis of universalism: America and radical Islam after 9/11”, September 2004). Jonathon Porritt is right to enlist Thomas Jefferson to the cause of sustainable development. Nobody will live the lives to which they aspire in a world of 9 billion people unless the ecological foundations for security and prosperity remain intact. In the face of this challenge, we truly are all equal. We must learn to define ourselves by what we have in common with each other, not by what divides us.

Secondly, there is the battle between faith and reason for control of the temporal realm. Fundamentalism is on the march, subjugating reality to myth, science to dogma. Sustainable development requires an empirical understanding of the link between the choices we make and the real-world outcomes to which they lead. Only science can tell us how natural systems work, how the economy depends on them, the effect upon them of our actions, and what we must do to maintain their integrity.

Thirdly, there is the battle for the globalisation of responsibility. Sustainable development makes us accountable for the social and environmental consequences of our actions. Globalisation means that those consequences are as likely to be felt on the other side of the world as across the road. As Tom Burke says, if we want to continue enjoying the fruits of globalised opportunity, we must invest in the environmental and social conditions on which it depends. We must globalise responsibility.

To achieve sustainable development is the biggest challenge humanity has ever faced. No political party anywhere is offering a way across this threshold. The real failure of the environmental movement has been its inability to convert the path to sustainable development into a set of political choices compelling enough to mobilise people and resources on the scale and with the urgency necessary for the task.

Smarter capitalism will certainly be part of the journey. But as a political banner, its power to inspire is questionable. The manifesto we need is yet to be written, but when it is, it will tell us who we can be – who we need to become – not merely as homo economicus but as homo sapiens.

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Andrew Simms, New Economics Foundation (nef)

The debt to pay

As Jonathon Porritt calls on environmentalists to take capitalism seriously, it seems appropriate to assess his arguments in that spirit – as a play in the market of ideas. How successful are they? Through the tried and tested method of confrontation (or perhaps contrarianism) they quickly captured a reasonable share of the market for eco-debate. But will his points be like the must-have Christmas toy, essential for a few frenetic days, before being abandoned in favour of old favourites?

We must first be clear what those points are, because they can, at times, appear complex or even self-contradictory. Hence we are told that “(change) will not come by threatening people with yet more ecological doom and gloom”, only a few sentences after being threatened with “an accelerating descent into resource wars, collapsing eco-systems and traumatic social and economic decline”. Although, as Porritt’s is a pitch to environmentalists, it could be that the intention is a shrewd matching of message to a segmented market of opinion-makers.

Andrew Simms is policy director and head of the climate-change forum at the New Economics Foundation (nef). He is the author of Ecological debt: the health of the planet and the wealth of nations (Pluto, 2005).

Also by Andrew Simms in openDemocracy:

“The accidental internationalists” (December 2001)

“Ecological debt and climate change” (May 2005)

He is responding to the article by Jonathon Porritt, “’As if the world matters’: reconciling sustainable development and capitalism” (November 2005)

“The vast majority of people (in both the rich and poor world)”, he writes, slightly glibly, are content for capitalism to remain the “only game in town”. This is, of course, a largely redundant observation as the “vast majority” are neither offered, nor aware, of any alternative and are content for capitalism to remain in much the same way that they would be content for the weather to remain. But perhaps, the very failure to regulate in order to ensure the presence of real competition in systems could, then, also allow us to rule that the true market test of the market has been failed.

More seriously, though, Porritt offers several deep, unresolved conundrums. Negatively, in attempting to drag the green movement toward grappling with actually existing capitalism, he seems to have internalised some of its self-justifying and hollow rhetoric. He can do better than producing a sentence that exhorts all to work “with the grain of markets and free choice”.

Markets can exist in many guises – under command, control or the circumstances of gangster capitalism. Trying to follow such general advice would leave us without compass like dogs in traffic. Moreover, “free choice” is slightly constrained both by ability to pay and by the fact that under current market systems there is a vast and accelerating trend toward concentration of ownership, leading to de facto monopoly control in several sectors by a handful of large players.

In this sense, an essential component of any campaign for sustainable development will be unnatural territory for many greens – a reinvigoration and redesign of competition law to prevent distorting levels of power accumulating in any one area of the market.

But Porritt is on safer ground when he accuses much of the green movement – presumably he intends to refer to the network of larger, funded organisations rather than the highly diverse and energetic grassroots activist scene – of being an ideology-free zone. A vague, social-democratic mush characterises the political analysis of many green organisations where, as he says, “contemporary capitalism is some sort of ‘given’. But whereas, Porritt adds, it is something they felt “they can do nothing about”, most green groups could rightly argue that they spend most of their time strenuously pursuing a largely (often futile) reformist agenda within the current system. However, even the air of ultimate defeat that seems to hang over such a project feels preferable to the alternative identified on the left – a “techno-cornucopianism” in thrall to economic growth.

In Porritt’s attack on the failing of the greens, the accusation of picking on a straw opponent (see John Whitelegg's response) seems accurate. And it is also where Porritt, after over a decade of struggling with “positive engagement” in the private sector, finds himself trapped in the same boat as most other environmentalists.

All, at various levels, feel powerless to achieve fundamental change and are stuck working with the current economic model – although, given certain limiting parameters, it is quite a varied model. Yet, like Porritt, most see that the capitalism we have is “clearly incapable of delivering”. Inevitable frustration leads to speculation about an alternative capitalist model, “that allows for the sustainable management of all the different capital assets we rely on”. The danger here is that a highly strategic (even defeatist) analysis may lead to a solution that merely multiplies the problem: replacing a metaphorical hand-grenade (in the form of the current system) with a nuclear warhead of markets run riot.

At the moment the free-market utopia devoid of restraining regulation is held in check by the reality of the mixed economy. Things are changing in Britain's public services, but still the public sector accounts for around one third of the economy. Elsewhere, mixtures of customary and common rights prevent full-blown commodification of the world under an atavistic and individualistic Anglo-Saxon model of private ownership. With the best of intentions, giving capitalism free reign over all the “capital assets we rely on” is terrifying. Porritt may trust that we can find a benign management system that incorporates guarantees of sustainability. But it would be reckless to underestimate the full life-force of capitalism, with its beating heart of capital accumulation which in turn depends on the cycle of commodification and monetisation.

In essence, Jonathon Porritt seems to want to have his confrontation with other environmentalists, and to eat it. As he invokes John Muir in the effort to pick out the “serious flaws” of capitalism, he finds them attached to everything else. Which leads to the final conundrum. The scale of the changes he calls for are enormous. They include: imposing limits on natural-resource exploitation and the reorientation of policies away from the pursuit of growth and ever increasing levels of individual consumption toward maximising well-being.

But when capitalism has been redesigned to the degree to which he believes – and I thoroughly agree – is necessary, will it still be capitalism? In other words, if it no longer walks like a duck, or quacks like a duck – is it still a duck? Is, in fact, Jonathon's argument merely a clever rebranding of old-school environmentalism, and therefore a perfect example of market-friendly opportunism? If it is, on its own terms, it succeeds.

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