Errors of Ecological Anti-capitalism
The eco-socialists fail to recognize that limits to growth are inherent to capitalism.
The political ideology of eco-socialism combines elements of socialism with environmental protection. The original idea of eco-socialism was that the working class and the environment had a common interest and that a socialist economic system was necessary to ensure the sustainable and equitable use of natural resources. The environmental disaster in the areas where the Communists had taken power after 1945 has completely refuted this claim. Nevertheless, eco-socialists continue to demand a transformation of the economy and society in their interest. After the collapse of "actually existing socialism", it is no longer possible to offer central economic planning as a model. Instead, the eco-socialists are now concerned with making the market economy "ecologically sustainable". This is to be achieved primarily by switching to renewable energies.
The green message is that capitalism is not viable, because capitalism means growth. But because ever more growth is impossible in a finite world, the capitalist growth economy must be replaced by an ecological circular economy. The way to achieve this is through a forced shrinking economy. The aim is to drastically reduce production and consumption to bring consumption into line with the ecological standards of this worldview. In concrete terms, this means, among other things, the cessation of air traffic, the abolition of private transport, and the reduction of the menu, especially meat consumption.
Since, in the opinion of the eco-socialists, capitalism is not capable of surviving, deindustrialization must be pushed forward accordingly. But that's not all. The services associated with capitalist growth, such as banking and insurance, the advertising industry, and trade fair logistics, would also have to disappear. A systemic change is necessary so that production will no longer be determined by the profit maximization of companies, but must be based on "ecological" criteria. In order to achieve this transformation, a transfer of decision-making power from companies to state technocracy must be carried out. The Commission of the European Union is the prime example of this process. Like under fascism, private property can be "formally" retained under such a regime, but technocracy will use state power to set strict guidelines for consumption and production. The market is suspended, prices are controlled and a system of quantity rationing is installed. The production of ecologically favored goods will be subsidized, while the production of goods designated as ecologically harmful is prohibited or subject to high taxes. Investments and consumption must be aligned with government requirements. The aim is to align all economic activity with the goal of reducing "CO2 emissions". As a result, wages and salaries will fall drastically, and that's a good thing according to the eco-socialists because it means less consumption.
The eco-socialists believe that capitalism is not viable because it is a system designed for permanent growth and growth is limited in a finite world. With this argumentation of the limits to growth, however, the eco-socialists fundamentally misjudge the essence of capitalism. The market economy process is inherent in a correction against excessive growth. The law of diminishing marginal returns prevents over-expansion of production. If there is a threat of loss, the entrepreneur will stop the expansion of the business. The profit motive prevents production from continuing if marginal costs exceed marginal revenues. At the same time, a decreasing marginal return on the production goods used drives companies to look for new uses of capital that bring higher returns. The "more and more" of the old production is being replaced by a new use of the factors of production. This so-called "technical progress" applies not only to technology but to all operational measures that increase total factor productivity. It is not always more growth that is the hallmark of modern capitalism, but rather Innovation. Not more and more production of the same goods with the same means of production takes place, but there are new goods and new production techniques.
Following the limited horizon of their intellectual mentors, the Greens claim that the lifespan of capitalism is limited. Here they follow Marx's thesis of the tendency of the rate of profit to fall. According to this thesis, competition drives capitalists to over-accumulate capital, which leads to decreasing yields. The rate of profit falls all the more as the concentration of capital increases. Capitalism is thus creating its own grave. Karl Marx (1818-1883) believed in the law of increasing economic concentration through ever-larger production facilities. He thought that his "law of the tendency of falling profit rates" was unstoppable because he did not recognize the principle of technical progress. Yet here, too, the automatic limitation of the growth of capitalism appears. In a market economy, there are very different sizes of firms and businesses depending on the marginal productivity of the types of production. In addition to large companies, there are numerous small and medium-sized enterprises.
Karl Marx also considered it a foregone conclusion that the wage rate of the workers would fall to their subsistence level since the capitalists would have to exploit the workers more and more because the productivity of capital would fall. Marx thus completely misjudged how capitalism would develop. Contrary to the Marxist prognosis of the impoverishment of the proletariat, it turned out that capitalism not only produces increasing mass prosperity but that the increase in productivity also serves to demand more leisure time instead of more goods. What distinguishes modern capitalism is the ongoing progress in productivity and not, as the eco-socialists would have you believe, only more production. Technological progress reduces resource consumption and higher productivity allows more time off work. The offer of a diverse kind of goods of high quality, in addition to increasing leisure time, is the outstanding achievement of modern capitalism since the beginning of the Industrial Revolution.
The eco-socialists talk about the scarcity of raw materials and ignore the fact that scarcity is universal and represents the essence of economic activity. If there were no shortages, there would be no need for economic activity. In the market economy, prices serve as indicators of scarcity and at the same time act as an incentive to deal with scarcity economically. If, according to the theses of the eco-socialists, there is a threat of an increased shortage of raw materials, one should not rationally rely on a less market economy but rather advocate market pricing all the more and by no means preach the "abolition" of capitalism.
For the eco-socialists, the belief in the coming of a man-made climate catastrophe, "caused by capitalism", is held as a certainty. It is undisputed that the climate on Earth has always been in constant change, as it is determined by countless forces that act on the Earth as a planet orbiting the sun and racing through space. The climate is a dynamic-complex system and as such cannot be predicted exactly. Since we do not know whether there will be global overheating or a new ice age, or whether the climate will change little for a long time, it is reasonable not to adjust to just one scenario, as most eco-socialists do with the premise of global warming.
Deindustrialization is the wrong way to go. Consistently practiced deindustrialization will be accompanied by poverty, hunger, and death. The better way to be prepared for climate change of any kind is to have an efficient economy. High productivity is the basis for mastering future challenges, be it warming or cooling. This is the specific achievement of capitalism as a system of voluntary exchange of goods and services using productive capital, in contrast to all other economic systems. Whether the announced climate catastrophe becomes reality or not, the more market-oriented the economic system is, the better it will be dealt with. Conversely, eco-socialism leads to an economic and human catastrophe in any case – whether the climatic catastrophe comes or not.
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