Reflections on the meta-practice of capitalism and its capacity for sustaining a low energy transformation

Harold Wilhite et Arve Hansen

p. 35-40


Texte intégral

Introduction

1In this text we set out to question whether a transition to a low-energy, low carbon society is possible in political economies with a capitalistic framing. We aim the discussion at the heart of mainstream energy research policy, which we claim has been far too careful and conservative in designing new policies to meet the urgency of climate change. Aside from a steady stream of critique from marxist and eco-socialist perspectives (e.g. Foster, 2000; Smith, 2010), the usual critique from the mainstream energy world has taken the meta-practice of capitalism for granted and searched for ways to convert and soften its aims from pure profit-generation towards an accounting of ecological and social goals. Eco-modernism (Spaargaren and Mol, 1992) and its close cousin, green economics (Eckersley, 1992 and 2011) are examples of inside-the-system critiques. Due to the failures of these critiques to make any substantive differences over time, at least measured in terms of the global economy’s energy input or carbon output, we contend that more radical critique of the capitalist framing for energy use is overdue. In this text we position ourselves out of the box and question whether it is possible to initiate and to sustain a transformation to a low-energy society within the framework of a capitalist system.

2This radical system-thinking is justified by the energy record of the past 40 years. The rich countries of the world have managed to do no better than to slow growth in energy use over this period. OECD economies are considerably more energy efficient today than they were in the 1970s, but the historical record of energy consumption shows a gradual but steady increase. Despite international and national goal setting; the establishment of carbon markets; the deployment of fiscal instruments such as taxes and fees; and the investment in research on and diffusion of efficient technologies, the effects on energy consumption and carbon emissions have been marginal from a carbon reduction perspective. Projections from the International Energy Agency imply that the replacement of energy production based on fossil fuels with alternative, non-fossil energy sources, will not happen fast enough to take a significant dent out of global carbon emissions over the coming decades (Wilhite, 2012). This means that if severe climate change is to be avoided, energy consumption in OECD countries will have to be significantly reduced.

3For the first few decades of its post-1970 history, the politics and policies of mainstream energy conservation have experimented with variations on market-based, neo-liberal theories of consumption and reduction. Social scientists from a number of academic disciplines and theoretical persuasions began launching critiques of this theoretical framework from the early 1980s. These critiques have not been taken seriously for a number of reasons. One is the argument among the proponents of market-driven solutions is that these experiments have not yet had time to come to fruition-if we just are patient and persist with efforts to batter down market barriers, we will eventually get energy markets to work well enough, energy technologies efficient enough, businesses to act green enough and people well enough informed about energy costs and environmental consequences; then, societal energy use will begin to decline rapidly. There has been a lack of zeal in pursuing alternative policy approaches that will require more than markets for take-off, such as sharing, downsizing and de-materialization. From within the capitalist frame, these are viewed as incompatible with the achievement of socioeconomic goals such as ensuring industrial competitiveness and full employment, and thereby unrealistic subjects for researchers and un-fundable. In short, capitalist framings and market principles have been irrevocable in the development of new theoretical and policy platforms for reducing energy use. In research funding regimes such as that in Norway in which «commercial relevance» has been holy grail, research that aims at radical critique and the exploration of systemic changes to the ways energy is produced, delivered and consumed have been unthinkable.

4We argue that the past half century history of failures of capitalistic-framed sustainable energy policies justify thinking the unthinkable and questioning whether a low energy transformation is possible within this framework. We will discuss and critically examine: (1) the association in capitalist models of «more» with «better» in many types and levels of policies and practices relevant to energy use which form the basis for a culture of capitalism; (2) the overestimation of the power of markets to foster rapid transformations in energy use; (3) the paradox that increasing energy efficiency is seen as an important goal both by the promoters of economic expansion and by the promoters of energy savings. We will follow up our analysis with some reflections on the capacity for new hybrid forms for capitalism and other economic development models to provide policy frames which are more amenable for encouraging the transition to low energy societies.

Conceptualizing Capitalism

5Approaching capitalism at a systemic level, at least outside of a strictly Marxist discourse, requires some clarifications. Currently, three main overarching conceptualizations of capitalism can be discerned from the literature. First, mainstream economic approaches that can be traced back to Adam Smith’s work of three centuries ago make the false claim that capitalism is the natural state of things, drawing on human beings’ natural tendency to truck and barter. If we accept this conceptualization, capitalism would be as old as human interaction. Secondly, more recent approaches, particularly within economic sociology and the influential «varieties of capitalism» literature, use an exchange-based definition of capitalism, locating markets and the drive for profits as the defining aspects of capitalism (e.g. Swedberg, 2005). Thirdly, from Marx and subsequent Marxist analyses, capitalism is defined in the production realm, in the transformation of relations of production and the commodification of labor and production, and this is what leads to the imperative of accumulation through the market. From this perspective, market exchange is a necessary but insufficient explanation of capitalism (e.g. Brenner, 1977; Cheshier, 2010).

6Our approach draws on both exchange-based and Marxist perspectives. We focus on the faith in markets and the drive for profits, but at the same time regard the Marxist-systemic approach to capitalism as vital, as well as the attention it gives to social transformations (Marx, 1976). For the purpose of this chapter, the most important point for us is that capitalism constitutes a specific social system, and that this system has specific norms and “laws of motion” (Polanyi, 2001 [1944]) that increasingly, yet to different extents, affect the economic, social and cultural realms of society, in this way setting structural practice frames within which social practices are forged.

7A related question is whether it makes sense at all to discuss capitalism detached from its contextual manifestations. That capitalism looks different in different contexts is quite clear. This difference has been the main focus of the «varieties of capitalism» school in political economy and economic sociology. This field of research represents an important acknowledgement of the different shapes of capitalism, but we agree with the point raised by Pontusson (2005), Peck and Theodore (2007) and Streeck (2011), that in this field there has been a tendency to focus too much on varieties and too little on capitalism. We claim that alongside the varieties there are traits and principles that are at a systemic level similar for all varieties, and that it thus could be fruitful to talk about capitalism as being never the same, but always similar; always context-dependent, but always driven by the same overarching forces and logics. This is what economic geographers Peck and Theodore (2007) call for in their concept of variegated capitalism, «advocating» a shiftaway from the varieties-style reification and classification of economic-geographical difference, in favor of a more expansive concern with the combined and uneven development of «always embedded capitalism, and the polymorphic interdependence of its constitutive regimes». Such systemic approaches to capitalism have been rare since the classical theorists of the likes of Smith, Marx, Schumpeter, Weber and Keynes. In his take on historical theories on and about capitalism, Ingham (2008) reaches the conclusion that «no social scientist over the past half century has added anything that is fundamentally new to our understanding of the capitalist economic system» (Ingham, 2008). This is perhaps particularly critical in relation to the research and policy domains of environmental sustainability and climate change, where the avoidance of discussing capitalism as a system has been especially evident. In the words of Cremin (2011), in debates about energy sustainability and climate response, rather than discussing capitalism as such, criticism is often «deflected from the internal socio-economic relations at the center of the problem to the individuals, businesses and nations charged with not doing enough».

8We find it useful to draw on the work of Wolfgang Streeck (2011), Richard Smith, Geoffrey Ingham and other analysts of capitalist principles in discussing elements that are fundamental to all of the varieties of capitalism, focusing on the three characteristics listed above that we see as relevant to an analysis of the potential for a low-energy transformation under capitalism: expansion, markets and efficiency.

An association in capitalist models of «more» with «better» in many types and levels of consumption-related policies and practices

9Centeno and Cohen (2010:174) write that ‘The environmental challenge is a product of particular characteristics of capitalism’. Schnaiberg (2005) attributes the problem to what he calls “the treadmill of production”, of ever more and ever faster. These dynamic tendencies of capitalism represent one of its greatest strengths, but are also the cause of fundamental tensions and dilemmas. Without growth, any perceivable variety of capitalism stagnates or recesses. The consequence is that companies lose profits, workers lose wages and/or jobs, and politicians lose elections. Any commercial enterprise operating in a capitalist free market is obliged to grow in order to secure profit generation. If not, it has no chance of surviving in a competitive market or of producing dividends for shareholders (Ingham, 2008). This is why capitalism is said to have an embedded «growth imperative» and why it has historically fostered many fixes for expansion in order to sustain growth (Harvey, 2006), be they geographic expansion (colonialism, international trade, transnational corporatism) or temporal expansion (credit-based production and consumption). At the level of corporation, as Smith writes, «Corporations have no choice but to grow. It is not “subjective”. It is not just an “obsession” or a “spell”… shareholders are not looking for “stasis”… so they drive their CEO’s forward… Corporate CEOs do not have the freedom to choose not to grow or to subordinate profit-making to ecological concerns because they don’t own their firms even though they may own substantial shares (2010: 31). »

10Smith proposes that steady state economists such as Richard Daly and Tim Jackson are right when they pose that we need a «new macro-economic model that allows us to thrive without endless consumption. » But he contends that they are wrong to think that this can be achieved in a capitalist economic model (2010). In an article entitled «Beyond growth or beyond capitalism», Smith gives a convincing critique of the proponents of «steady-state» or no-growth capitalism. He claims that even the anti-growth economists do not face up to capitalism’s growth imperative and that no-growth capitalism is actually a contradiction in terms. Smith (2010: 33) writes that

« growth is an iron law of capitalist development, that capitalism cannot exist without constant revolutionizing of productive forces, without constantly expanding markets, without ever-growing consumption of resources… For more than 30 years, Herman Daly has chanted his mantra of “development without growth” but he has yet to explain, in any concrete way, how an actual capitalist economy comprised of capitalists, investors, employees and consumers could carry on from day to day in “stasis”. »

11The economy of growth has manifested itself in the practices of all of these (capitalists, investors, employees and consumers). In the words of Amin and Thrift (2004) the social and the economic «are woven together in a single and inseparable fabric».

12People who live out their lives in capitalist or quasi-capitalist political-economic systems are exposed to positive associations of economic and material growth in virtually every domain of life, from work, to home to public spaces. Robbins (2005) refers to this association of better lives with growth in income as well as growth in the numbers and sizes of things possessed and consumed (houses, cars, televisions, travel) as the «culture of capitalism». This culture encompasses politicians, marketing specialists, advertisers, corporate public relations specialists, journalists and families, «all of whom conform to a vision of the world designed to maximize production and consumption of goods» (Robbins, 2005: 14). Robbins relates how this culture developed from the beginning of the 20th century in the USA and Europe, departing significantly from a culture of moderation, thrift and frugality that characterized the 19th century, when having too many things and splurging on consumption were frowned upon. As a result, home interiors were sparsely-decorated, there were few household items and appliances to aid housework, it was common for people to make or repair their own clothes and to have gardens or access to their own farm products (in 1870, 53% of the USA population lived and worked on farms). The culture premiering frugality and durability in the 19th century was transformed in the 20th century into a capitalist growth culture, encouraged by government policy, commercial actors and advertisers. Parenthetically, the efforts to promote a low-energy transformation could benefit from a study of the nature of the formation of this capitalist culture, with its participation of government, business and media.

13While there were significant junctures in Western economies in the 20th century, including discontinuities, reversals and setbacks, these junctures have at most only temporarily detained the upward spiraling consumption cycle, and have not derailed the hegemony of the growth imperative. At the level of home and household, dwelling sizes have steadily increased, as have numbers and sizes of rooms (bathrooms, bedrooms, kitchens and so on), furnishings and household appliances. There has been an increasing demand for more speed, more convenience and more comfort (Shove 2003). Energy provides the heat and/or refrigerated air for bigger houses, provides power for the increasing kinds and uses of appliances and for accelerating transport practices in the expanding geography of everyday lives. In the domain of transport, Urry (2009), citing Buchanan (2002: 131), writes that in 1800 people in the USA travelled 50 meters a day. Schafer and Victor (2000: 171) estimate that in 2000, the average American travelled 50 km a day and that global population moves 23 billion kilometers daily. They project that this will increase by fourfold to 106 billion km by 2050.

14After a several generations of lived experience in the growth culture, «social dispositions» have formed for a never-ending treadmill of expansive consumption practices, whether they be measured in terms of money, goods or resource inputs. From a sustainability perspective, the habits of growth have been largely ignored and will be difficult to break and reform.

An overestimation of the power of markets to foster rapid transformations

15Market exchange represents one of the very basic elements of capitalism, and modern capitalism is the first economic system in history in which market exchange is the main means of economic coordination (Ingham, 2008). This does not mean, however, that markets represent the only defining element of capitalism, nor that markets are necessarily «free» in capitalism. As Ingham (2008) points out, the market is one of several basic parts of the capitalist system, and a range of non-market elements, based on relations of power and authority, have vital influence on the coordination of capitalist economies. The level of reliance on markets has also differed significantly depending on the capitalist variety. The Anglo-American variety of recent decades places markets in a particularly central position, and this has fostered a diffusion of neo-liberal globalization since the late 1970s. The neo-liberal extreme belief in markets, what Stiglitz (2002) has called «market fundamentalism», calls for structuring national economies after abstract economic theories of perfect competition with privatization and marketization as the main tools. Streeck (2011) thus claims that neoliberalism is a «purer» form of capitalism, an ideology strategically aiming to penetrate all aspects of society with capitalist principles. In Streeck’s (2011) own words, neo-liberal expansion is synonymous with «gradual or periodic expansion of the system of contracts – or, in other words, of market relations – as the privileged mode of social and economic intercourse: of competitive contracting at prices that fluctuate with changes in supply and demand». The neo-liberal turn thus fits into capitalism’s continuous and dialectical relationship between market expansion and social response, expressed by Polanyi (2001 [1944]) as a «double movement»; the societal responses to expansion (different forms of social protectionism) get worn out by new attempts to push them aside by market forces. The result of this increasing control of the economic system by the market is that society is run as an adjunct to the market: «Instead of economy being embedded in social relations, social relations are embedded in the economic system» (Polanyi, (2001 [1944]): 60).

16The neo-liberal view of a market economy can be traced back to Hayek’s work (1945) on imperfect information and governmental inefficiency, and has at its core the belief that markets will always deliver more efficient results than state-driven policies. The hegemonic position of neo-liberal economic reasoning and its «performative» text-book theories (Ingham, 2008; MacKenzie, 2006) has proved very powerful in shaping national and global economies. In time, this increasing marketization reached hegemonic status in both delivery of energy and policies geared towards more sustainable energy production and consumption. We are expected to put our faith in markets to deliver the necessary sustainable low-energy transformation of our economic system. This raises the question: How do markets lead to transformations? The simplest explanation can be found in Schumpeter’s theories. Schumpeter (2008 [1942]) placed the entrepreneur at the center of capitalist development through a process he called «industrial mutation». This mutation lies at the heart of his conception of «creative destruction», the process through which capitalism «incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one» (Schumpeter, 2008 [1942]: 83, italics in original). In a competitive market, the drive for profits and economic survival leads to the development of new and more efficient technology and solutions. But this happens for the sake of maintaining profitability, not for any larger societal or environmental concerns. The aim in contemporary energy policy is thus to let economic actors’ self-interested drive for profits lead to more efficient use of energy (decrease in costly energy use can lead to increased profits), leading in turn to creative destruction of older energy intensive solutions. This process should also lead to the development of renewable energy systems, since these are seen as profitable future markets. But this encounters a range of problems, such as the immense power and profitability of both state-capitalism and private corporations involved in non-renewable energy production.

17Given what we know about the rebound effect (discussed in the next section), it is difficult to fathom how a drive for profit and expansion can simultaneously drive the needed low-energy transformation. Still, the assumption that this is possible seems to be at the core of the recent emphasis on «green economy» – the new buzzword in mainstream environmental discourses. The idea is that it is possible to transform markets through internalizing the environmental costs of production and consumption, essentially putting a price tag on environmental degradation. This is supposed to contribute to the amelioration of what is seen as a global triple crisis of economy (recession), environment (degradation) and society (increasing stratification), mainly through the commodification of the environment and the creation of new opportunities for greener economic growth. This is of course not very new, but seems to rather represent a continuation of the logics behind the carbon trading system that so far may have contributed marginally to economic growth, but has not achieved its main purpose of environmental gains. The most seductive side of these market-based solutions is, however that they create a distraction from much-needed changes in human practices, infrastructures, and institutions (Spash, 2010), creating an illusion that slight modifications of business-as-usual practices are sufficient to resolve global environmental crises.

The efficiency paradox

18One of the principle conditions for economic growth is an increase in the efficiency of production and consumption. Stimulating energy efficiency makes economic sense in a capitalistic, growth-oriented economic system because it provides fodder for continued growth. Paradoxically, energy savings policies over the past 40 years have also been dominated by policies the aim of which is to stimulate increased energy efficiency. This double and conflicting role of efficiency demands attention. In this section we explore this conflict and its implications for sustainable energy policy.

19For commercial companies involved in production, cutting the cost of inputs, seeking cheaper sources of raw materials and labor and acquiring energy-efficient technologies are all strategies used to increase profits and to expand the scale of production (Foster et al., 2010). From companies producing energy-efficient products for retail markets, the goal is to promote growth in the volume of sales. There are in fact profitable markets for the more environmentally concerned consumers, even though these are niche markets, as the vast majority of consumers presumably aim for the cheapest alternatives (at least if we believe economic theory). Increasing the size of these markets for energy efficient products has been one of the principle goals of energy savings policies, relying mainly on information, efficiency standards and regulations. There are examples of successful energy regulatory schemes that have resulted in the development of «energy efficiency services» with documented results of generating energy savings in certain sectors such as residential and commercial buildings. If the commodity sold is a «green» product which saves energy, it is feasible that product efficiency might offset the growth in the number and size of these green products that are sold and taken into use. But experience has shown that in the majority of cases the ever expanding sizes and numbers of energy efficient products taken into use has offset the amounts of energy saved through efficiency gains.

20This brings us to the heart of the efficiency paradox, formulated by Wilhite and Norgard (2004) as the «efficiency delusion». The delusion was first proposed as a paradox by Jevons 150 years ago (1866). He wrote that in a capitalist growth economy, money saved as a result of reducing the direct energy costs of energy-using technologies and equipment would be invested by the consumer in other energy using products or practices, the net result of which is a decline in anticipated savings. This is no longer a hypothetical contention but has been confirmed in numerous empirical studies (Brannlund et al., 2007; Frondell et al., 2008; Sorrell et al., 2008; Turner, 2009). In residential consumption, money freed up by an investment in an energy efficiency project or technology is used by householders to increase comfort or convenience in ways that leads to investments in other forms for energy using activities. The historical record of the past decades leads to the conclusion that there seems to be no bounds on the expansion of house size, numbers of automobiles, sizes and numbers of household appliances, increases in heating and cooling thermostat settings, number and length of showers, and number and length of air trips, at least when the economy is performing as it should, i.e., expanding.

From cart to horse: a radical reduction in energy use demands a radically new socio-economic framing

21To summarize our argument, it is not in the nature of capitalism to promote the reduction of production or consumption of energy or climate emissions. Could it be possible for a moral commitment to environmental amelioration to counteract or compensate for this conundrum? Not according to Streeck (2011) who argues that morality will never override expansive economic incentives when nature is capital, and the environment is regarded as an externality. This is because the effect of discounting nature and internalizing environmental costs is reduced profits. In his words (2011: 147): «Indeed the fact that capitalist actors may be willing to destroy the commons on which they depend and deplete moral resources without which they cannot exist even though they cannot restore them, is a point that has often been made, from Karl Marx to Fred Hirsch». This ontological irony has its epistemological counterpart, formulated in the now famous words of Kenneth Boulding (quoted in Smith, 2010: 30): «Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist».

22There are indeed many varieties of capitalism, but none that escape the overriding principles we have outlined. The hybrid capitalist varieties, or «market socialism», of countries such as China and Vietnam have the potential for greater long-term strategic energy planning than more market-liberal counterparts in Europe and North America. This is behind China’s big investments in renewable energy, seen by the Chinese as a vital future market. This Chinese initiative could interest Western capitalists in renewable energies, since China’s investments in green energy could make significant impacts in global energy markets. But again China is at least as geared towards growth as any of the capitalist economies, and as a developing country will naturally not be interested in discussing reduction of energy use. Rather, China is investing in order to ensure sufficient access to energy and capital to continue its growth trajectory. This development makes it more crucial than ever for the affluent countries to take energy seriously and stand out as role models, as the potential impact of 1.3 billion Chinese consuming at the per-capita level of the OECD-countries would be nothing short of devastating for the global environment.

23In spite of an abundance of new experiments with quasi-capitalist political economies, the fundamental problem from the perspective of achieving a political economy of low energy is the lack of viable alternatives, capitalistic or otherwise. The capacity of capitalism to deliver higher living standards, along with the negative track-record of state-socialism in terms of both human and environmental impacts, has led to the total discredit of any non-capitalist approaches to development. A range of different visions exist, both with and without overriding capitalist principles, but none that have risen to represent realistic sustainable alternatives. Climate change and other approaching environmental crises demand that we question our conceptualizations of progress, of the good life, of modernity, and of nature. At the same time, however, there is a dire need to come up with more pragmatic alternatives to current practices.

24The complexities of a transformation to societies that need significantly lower amounts of energy yet retain the potential for full-employment, promote social equality and resolve issues of material wellbeing are enormous. However, it is imperative that these questions on the broader economic framing of energy transformations be brought to the arena of energy research and policy. We must raise questions about fundamental concepts such as growth, markets, profit and shareholder ownership and we must give greater attention to the potential of collective ownership of production (profit sharing), sharing initiatives in consumption (i.e. car sharing, leasing), and innovative regulatory frameworks that encourage both. Shifts such as these could be steps towards a metamorphosis from high energy to low energy societies. The inevitable restructuring of production and consumption will be painful for some but will create opportunities for others. We call for interdisciplinary research aimed at raising these uncomfortable questions and sketching out a new vision for a political economy based on declining energy demand.


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