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Gus Speth '64 on "The Problem With Capitalism"

Gus Speth, our classmate and dean of Yale's School of Forestry and Environmental Studies, wrote the following essay published in the Yale Alumni Magazine of March/April 2008. This essay is excerpted from his forthcoming book, The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability (Yale University Press).

The problem with capitalism

The principal approaches to date for controlling the economy's impacts on the natural world can be thought of as today's environmentalism. This arena is where I have worked throughout my professional career. Now, near the end of my career, I find it impossible to be happy with the results. Important gains have been made, of course, including progress on local environmental problems like air and water pollution. But, all in all, today's environmentalism has not been succeeding. We have been winning battles, including some critical ones, but losing the planet.

The escalating processes of climate disruption, biotic impoverishment, and toxification that continue despite decades of warnings and earnest effort constitute a severe indictment, but an indictment of what exactly? If we want to reverse today's destructive trends, to forestall further and greater losses, and leave a bountiful world for our children and grandchildren, we must go back to fundamentals and seek to understand both the underlying forces driving such destructive trends and also the economic and political system that gives these forces such free rein. Then we can ask what can be done to change the system.

The sources of today's environmental deterioration have been clearly identified. They range from immediate forces like the enormous growth in human populations and the dominant technologies deployed in the economy, to deeper ones like the values that shape our behavior and determine what we consider important in life. Most basically, we know that environmental deterioration is driven by the economic activity of human beings. About half of today's world population lives in abject poverty or close to it, with per capita incomes of less than $2 per day. The struggle of the poor to survive creates a range of environmental impacts where the poor themselves are often the primary victims — for example, the deterioration of arid and semi-arid lands due to the press of increasing numbers of people who have no other option.

But the much larger and more threatening impacts stem from the economic activity of those of us participating in the modern, increasingly prosperous world economy. This activity is consuming vast quantities of resources from the environment and returning to the environment vast quantities of waste products. The damages are already huge and are on a path to be ruinous in the future. So, a fundamental question facing societies today — perhaps the fundamental question — is: how can the operating instructions for the modern world economy be changed so that economic activity both protects and restores the natural world?

With increasingly few exceptions, modern capitalism is the operating system of the world economy. I use "modern capitalism" here in a very broad sense as an actual, existing system of political economy, not as an idealized model. Capitalism as we know it today encompasses the core economic concept of private employers hiring workers to produce products and services that the employers own and then sell with the intention of making a profit. But it also includes competitive markets, the price mechanism, the modern corporation as its principal institution, the consumer society and the materialistic values that sustain it, and the administrative state actively promoting economic strength and growth for a wide variety of reasons.

Inherent in the dynamics of capitalism is a powerful drive to earn profits, invest them, innovate and thus grow the economy, typically at exponential rates, with the result that the capitalist era has in fact been characterized by a remarkable exponential expansion of the world economy. The capitalist operating system, whatever its shortcomings, is very good at generating growth.

These features of capitalism, as they are constituted today, work together to produce an economic and political reality that is highly destructive of the environment. An unquestioning society-wide commitment to economic growth at almost any cost; enormous investment in technologies designed with little regard for the environment; powerful corporate interests whose overriding objective is to grow by generating profit, including profit from avoiding the environmental costs they create; markets that systematically fail to recognize environmental costs unless corrected by government; government that is subservient to corporate interests and the growth imperative; rampant consumerism spurred by a worshipping of novelty and by sophisticated advertising; economic activity so large in scale that its impacts alter the fundamental biophysical operations of the planet — all combine to deliver an ever-growing world economy that is undermining the ability of the planet to sustain life.

In short, my conclusion, after much searching and considerable reluctance, is that most environmental deterioration is a result of systemic failures of the capitalism we have today and that long-term solutions must seek transformative change in the key features of this contemporary capitalism.