tl,dr: Sustainability and capitalism have complex interactions. While capitalism emphasizes accumulation and expansion, sustainability requires long-term dynamic balance for all life.
Can sustainability can be reconciled with the logic of capitalism? I’ll try to sort both terms and will also talk about post-growth and degrowth. And if we’re at it, we just might want to also talk about post-capitalism and if such a thing exists.
Sustainability. A huge word, a non-word, both under- and over-complex. Let’s try to keep it simple: sustainability is what is sustainable in the long term, for everyone and everything. For everyone and everything is important to me, because it’s about our human AND non-human environment. Keeping the lights on in the long term in such a way that something (e.g. the open and liberal society) can also adapt to new circumstances. Sustainability as the ability of the network of life to evolve, including the human economy, is very much in the spirit of Aristotle’s oikonomia, where the “house” (oikos) stands for the community of living things.
Capitalism. The next monster. On the one hand, capitalism is a historical period beginning sometime in the 18th century in England and reaching its heyday in the mid-19th century. The First World War, at the latest, put an end to it. After that we started to live in different times. On the other hand, capitalism is an economic order: the means of production are in private hands, in the hands of citizens – and not in the hands of princes and courts. However, capitalism as an economic system is primarily about one factor of production: capital.
Capital, in contrast to land and labor, is a produced factor of production. With the help of land and labor, capital can always produce more capital. While land and labor are subject to natural renewal rates that can only be changed to a very limited extent, the renewal rate of capital is only linked to capital itself and the respective economic environment (which in turn is influenced by the presence of capital). Capital can therefore operate quite differently from land or labor, whose finiteness is now of no concern anymore. Capital can continue to accumulate indefinitely and with the accumulated capital the economic process can transform more and more input into output, i.e. it expands (also indefinitely).
Accumulation and expansion are hallmarks of capitalism, perhaps even more so than private ownership of the means of production. State capitalism in the GDR or the Soviet Union was also accumulative and expansive.
In principle, the accumulation of capital and the expansion of inputs and outputs generates an increase in the ecological footprint of economic activity. And there we have the salad, as we say in German. If we want to answer the ecological question in capitalist terms, then issues of resource and energy efficiency come to the foreground: how can capital itself be produced with less effort, how can fewer inputs be used, how can outputs be more environmentally friendly? The prize question is of course: is capitalism possible without accumulation and expansion, can there be some kind of steady-state capitalism? Or would such an economic order already be post-capitalist?
Before I go into this, I’d like to give a third perspective on capitalism, if only in passing: capitalism is also a way of life and a way of thinking; not just an economic order, but also a social and mental order. Accumulation of experiences, expansion of one’s own personality in terms of maturity, knowledge, perhaps even wisdom and life satisfaction, are central aspects of our personal lives. The accumulation of rights (to participate in political, economic and social life) and the expansion of these rights to more and more groups (from white, male, property-owning citizens to all citizens, from humans to non-humans) are central aspects of enlightenment and emancipation. Expelling capitalism also means expelling this way of living and thinking, and that’s where it gets difficult: this smells of reaction and regression.
Back to the economy and its order. What we also have to acknowledge today, in 2024, is that “capitalism” (capital-C, singular) no longer exists. In the 19th century, see my previous comments, it was clear what was meant by this; there was only one form of capitalism. Today, there is a variety of capitalisms, all of which are more or less based on accumulation and expansion, but which are very different when it comes to their legal frameworks and how their respective societies understands them. Just think of the libertarian capitalism in the USA, the authoritarian-dirigist capitalism in China, or the Rhenish-European capitalism which mainly comes in various forms of the social market economy.
Similarly, the government share, i.e. all government spending as a percentage of GDP, which focuses on non-market services, is currently a good 50% in the EU. This is a very different kind of capitalism than in the 19th century.
But now to the initial question of whether sustainability can be reconciled with the logic of capitalism. The answer to this would be: yes, if the reduction game of capitalism in terms of resource use can work. In purely mathematical terms, the real growth rate (of GDP) < the rate of increase in resource efficiency would then have to apply, for example. Of course, this is a little vague, as it is based on real influences on ecosystems and their long-term health. But in principle, it would be conceivable. The fact is, however, that even after a good 50 years of global environmental discourse, we only have efficiency increases in materials of perhaps one to two percent per year and in CO2 emissions of less than one percent. At the same time, we have global growth rates in the past decade of about 3.5 percent p.a. – and the target for the LDCs, for example, is 7 percent p.a. according to the UN SDGs. You can use any other ecological indicators you like, but empirically, the compatibility of capitalism and sustainability looks poor.
The problem is, to paraphrase Fredric Jameson, that it is easier for us to imagine the end of the world, e.g. the climate catastrophe, than the end of capitalism. But perhaps we can give the imagination a helping hand.
Post-growth. Or décroissance, as Serge Latouche called it in 2004, referring to André Gorz. In other words, shrinkage or contraction. This entails the idea of a society and economy that is no longer expansion-oriented, but can carry out targeted contraction in order to create more ecological justice, but also more social and economic justice. After all, capitalism is not only a social success story, but also leads to concentrations of capital and therefore power in the hands of a few if the state does not intervene in a strongly redistributive way. It is precisely these concentrations of power – which, incidentally, are also a problem for the economy itself and for fair competition, which is what makes an efficient and optimal allocation of production factors and goods possible in the first place – that work against redistribution and regulation. The post-growth movement, also known as degrowth, identified this at an early stage. It is not just an ecology-focused movement, but a socially critical one that is always concerned with the dual development of ecological AND social justice.
Policy proposals are often aimed at the organization, remuneration and valuation of work in society. The post-growth movement, around which a broad field of academic research has developed over the last decade and a half, focuses primarily on the non-market areas of society, i.e. those areas that are initially excluded from the direct reach of capitalism. Home work, personal work, family work, community work, civic engagement. All of these activities are of a reproductive nature; they maintain the foundations of a society without which it would be impossible to do business. At the same time, there are certainly economic interactions in these non-market, non-commercialized areas, it is just that no market prices are paid (usually no money flows at all, but services in return for services or services provided based on altruistic motives). This means that these activities are in the blind spot of politics, especially economic policy and the public discourse on prosperity. In terms of their environmental impact in terms of resource consumption, however, these activities are far less intensive than activities on markets, i.e. “in” capitalism.
In terms of scope, there have been studies on economic added value for many years and over 15 years ago Carsten Stahmer calculated a “gender GDP” because these activities are mainly carried out by women and came to the conclusion that if a minimum wage were paid for them, reproductive activities would reach around 80% of the GDP in Germany at the time.
This is important because it means that we already have a second non-market and non-capitalist economy that we just cannot see and evaluate properly. An economy that also consumes fewer resources. Post-growth now aims to strengthen this “second economy” – to use a better word: the civil economy – through policy proposals such as a radical reduction in working hours (to 20 hours or less) in the capitalist-oriented economy and the cushioning of any social hardship through a basic income – and the revaluation of the non-capitalist reproductive economy as a different form of work that is no longer performed in a Taylorist manner in profit-oriented organizations under efficiency aspects.
Depending on the coleur of the post-growth perspective, of which there are also a whole variety, we would then continue with either system reforms (ecological tax reform, resource- and asset-financed social security systems, alternative welfare measures) or with system disruptions (solidarity-based economic activity based on needs instead of competition and profit, maximum income, state investment restrictions, economic democracy).
It seems central to me that expansion (of input resources and outputs) is generally no longer the aim of a post-growth economy and society. And accumulation then only takes place in the sense of improving the capital stock (i.e. increasing its environmental efficiency). That would then definitely be post-capitalist, at least at first glance.
Post-capitalism. The latest buzzword. Of course, it is also some form of capitalism, one could now heretically remark, just as postmodernism is not the negation or abolition of modernity, but its consequence. And staying with postmodernism for a second, in it modern values and discourses continue to exist, we reflect on the consequences of modernity with its own means – and remain individual and unique, even if we seek more community (among like-minded people!); remain rational and skeptical, even if we give more space to feelings and perspectives; remain universally emancipative, even if this means that there are more and more individual groups in society that are now defining what emancipation means for them. In other words, it is becoming more confusing, but there are strong structural moments that are stable over time. And it is likely to be the same with post-capitalism.
What might they be? Don’t be alarmed, but these time-stable structural moments will probably be accumulation and expansion. However, in a different way. Accumulation in the sense of an accumulation of new knowledge and a change in the capital stock (including physical capital) in the direction of less environmental burden and more ecosystem health. In other words, less accumulation-as-addition but accumulation-for-regeneration. Expansion, as such a time-stable structural moment, would then be an expansion of our ideas of what makes up “us”: the entire human and non-human environment, a true holistic ecocentrist perspective.
Just a few words on different shades of post-capitalism. Peter Drucker has already written about post-capitalism, completely unsuspicious of socialist fantasies of overthrowing society. He meant two things by post-capitalism firstly, the replacement of the “capitalist class” (the old captains of industry of the 19th and early 20th centuries) by a fragmentation and heterogeneity of investors who often simply want a secure retirement provision. The image of the enemy suddenly no longer looks so “fat cat”-like. Secondly, the replacement of capital by labor as the dominant factor of production. To be more precise: the replacement of monetary and physical capital by knowledge. According to Drucker, the “knowledge workers” are the new class of the 21st century. And they are extremely heterogeneous and diverse, including university professors and investment bankers, but also educators and carers. Post-capitalism according to Drucker therefore means that the old power relations have become completely confused, there are more and more “capitalists” without a unified political and economic interest or ideology.
However, post-capitalism can also be interpreted in technological terms. Paul Mason does this and argues that information and new small-scale production technologies will reduce the marginal costs of production towards zero; that the famous “batch size 1”, i.e. a radically customized solution without large fixed cost blocks and thus without large capital expenditure, is possible. This would mean that value creation can be completely rethought and reorganized, that production resources are so cheap and, in combination with knowledge and creativity, most needs can be satisfied beyond the market or the necessity of markets. To put it crudely: we no longer need so many classic capitalist companies in classically capitalist organized markets to produce the things we need.
Mason sees two development paths for this post-capitalism: the self-empowerment of workers and consumers, the development of a non-capitalistically organized economy and the shrinking of the capitalist part of the economy. This would certainly be a post-growth-compatible idea. However, the other development path is that of a further monopolization of the economy through platform economy mechanisms, the rise of dominant capitalist companies or the concentration of power in the hands of the current “big players” (Google, Amazon, Apple, Facebook, Microsoft, etc.) and a far-reaching disenfranchisement and “bullshitting” of labour.
What does this mean for the initial question of whether sustainability can be reconciled with the logic of capitalism? On the one hand, that singular, clear-defined capitalism no longer exists; but that its basic logics are still very much active and have profoundly changed society and our thinking; that capitalism has already moved in the direction of post-capitalism and will continue to change; but without a reconstruction of the central structural moments of accumulation and expansion it will not work; where the journey will ultimately take us is open: with the idea of post-growth, there exists vision of a non-exploitative, non-self-destructive economy and society. And only this kind of economy and society is sustainable; only a post-growth society ensures the long-term viability of everything and everyone.