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Max Koch, Lund University
Capitalism, Sustainability and Social Policy
1. Is green capitalism possible?
2. Is environmental sustainability compatible
with economic and social sustainability?
3. What kind of transformation is required to
make society environmentally sustainable?
Ad 1: Theoretical approaches
• Neoclassical economists see economy as cycle linking
money and commodities with households and companies.
‘Return of capital’: original capital, plus a surplus, comes
back to the owner. In focus is the frowth of monetary
value, while the roles of energy and natural resources are
sidelined or not mentioned at all
• Physiocrats, Smith, Ricardo, Mill and Keynes did not
regard economics as largely synonymous with a science of
prices and growth of monetary value
• Thermodynamic economists stress the role of matter and
energy in production and consumption
Marx: Distinction of use value and exchange value as the
‘pivot on which a clear comprehension of political economy
(and ecology!) turns’
• Exchange value: Reduces concrete works and matter and energy to
repositories of abstract labour; regards land, raw materials, fuels as
‘free gifts’ from nature and sources of rents; tends towards an infinite
expansion of scale to produce more exchange value / capital
• Use value: Bound up with rearranging matter/energy; expansion of
scale translates into increasing throughput of finite raw materials,
auxiliaries etc; accompanied by degradation of environment and
increase in greenhouse gas emissions
• These structural tensions take different shapes in different institutional
accumulation regimes (Fordism, finance-driven capitalism) and
correspond with energy regimes and modes of environmental
governance (e.g. Pigouvian taxes vs. carbon markets)
• Theoretically, a capitalist growth economy based on solar and
renewable fuels is imaginable
Empirical answer: No socially just scenario of continually
growing incomes for 9 billion peope and the UN climate
targets to meet (Jackson)
• With 0.7% population growth and 1.4% income growth
the average carbon content of economic output would
need to improve 21-fold by 2050, relative to 2007
• If 9 billion people are to have an income of EU citizens
today, the world economy would need to grow 6 times by
2050. Achieving the IPCC targets by 2050 would mean
pushing down the global carbon intensity of economic
output by 9% every year
• Empirically, let alone in the very short time frames
climate scientists mention, there is no indication for a
‘green capitalism’ to arise
Ad 2) Green growth vs nogrowth: Welfare regimes and
sustainability
- Gough and Meadowcroft see social-democratic welfare
states as better placed to manage the intersection of social
and environmental policies than liberal welfare regimes
(ecological modernisation discourse, green growth)
- Socio-economic and ecological values are seen as
mutually reinforcing: ‘synergy’ hypothesis
- Theoretical alternative is to regard the green dimension of
the state in competition and conflict with its welfare
dimension
Operationalising the welfare and ecology
dimensions for 28 European countries (1995
and 2010)
1. Welfare: Decommodification: Overall expenditure for
social protection as % of GDP; stratification: Income
Inequality, GINI Index
2. Ecology: Performance:Electricity generated from
renewable sources as % of gross electricity consumption;
CO2 emissions per capita, National Ecological Footprints
Regulation: Environmental taxes as % of GDP, public
expenditures for environmental protection as % of GDP
• Sources: EUROSTAT, OECD, Worldbank, Global
Footprint Network
Koch, M & Fritz, M, Building the EcoSocial State: Do Welfare Regimes
Matter? Forthcoming in Journal of
Social Policy 43 (4)
Correspondence analysis: Positional Changes of Countries in the
λ =0.077
Eco-social Field
(21.5%)
2
ECOLOGY +
SE95
SE10
WELFARE +
DK10
AT10
NO95
FR95
AT95
FI95
DK95
NO10
CH95 PT10
0.5
SI95
PT95
TR10
FI10
SI10
IT10
DE95
NL10
ES10
FR10
ES95
BG95
DE10
IT95
EL10
UK95
TR95
CH10
EL95
SK95
RO95
LV95
LV10
0.5 SK10
λ 1 =0.148
(41.6%)
RO10
HU10
IE10
BG10
BE10
NL95
HU95
BE95
LT95
UK10
IE95
CZ10
EE10
PL10
LT10
CZ95
LU95
PL95
ECOLOGY -
WELFARE -
LU10
EE95
State environmental performance compared
Progressive
development
since 1995
Stagnation
Regressive
development
since 1995
Relatively
good
environmental
performance
in 2010
Portugal,
Spain, Austria,
Slowak
Republic
Sweden,
Switzerland,
Romania
Turkey, Latvia
Medium
environmental
performance
in 2010
Relatively bad
environmental
performance
in 2010
Denmark,
Germany,
Poland,
Hungary,
Estland
Norway, Italy,
UK, Finland,
Ireland
France,
Slowenia,
Lithuania,
Bulgaria,
Greece
Belgium
Netherlands,
Luxembourg,
Czech Rep.
-
Results
- No quasi-automatic development of the green state on top
of already existing welfare institutions: representatives of
social-democratic welfare regimes are spread across
established, emerging, failing and deadlocked eco-states
- This does not exclude that social-democratic and market
coordinating institutions indeed facilitate the building of
the green state. In this case, this potential would need to
be actualised much more
- Social welfare and sustainability has nowhere been
sufficiently decoupled from GDP growth
- Dialectics of welfare state: to enable the ‘masses’ to lead
ecologically harmful lifestyles
Ad 3: De-prioritising GDP growth in policy
making:Towards a stable state economy (SSE)
• An SSE aims at the lowest feasible matter and energy
throughput in production and consumption and a relatively
stable population (Daly)
• Growth would not be abandoned in all sectors of the
economy but viewed as a process that is consciously and
politically monitored and regulated (Barry)
• Nogrowth scenarios are backed up by other disciplines
that are in need of theoretical integration: happiness
research, sociology of consumption, psychology of wellbeing as well as economic and philosophical approaches
of the living standard and capabilities
Challenges for research and policy making
• ‘Eco-social’ policies are necessary to bring about a ‘radically different
environmental/welfare policy regime’ and a ‘redistribution of carbon,
work/time and income/wealth’ (Gough) at international (where a new
global deal not unlikely the Bretton Woods agreements would be
necessary including a new mix of property forms), national and
local/individual levels
• Research should identify conflicts and the potential for synergy
between economic, social and environmental policies in areas such as
wealth and income, working time, taxation, housing, transport and
community development as well as policies encountering shifts in
producer and consumer behaviour
Developing eco-social policies (at national and
European levels)
Environmental
goals and policies
Distributional
dilemmas
Countervailing
social policies
ECO-SOCIAL
POLICIES
Examples for (as yet) fragmented countervailing social policies:
- identification of minimum and maximum income limits;
- carbon rationing including personal allowances and trading schemes;
- alternative uses of revenues from mitigation policies;
- state education strategies to limit conspicuous consumption
Conclusions and discussion
• Empirical evidence for a ‘green capitalism’ is very weak
• Policy priorities would need to shift from maximising
GDP (or exchange value) towards physical parameters
such as material throughput and resource use (or use
value). The role of markets in economic governance
would need to shrink in a new mix of property forms
• More interdisciplinary research is needed to understand
welfare in sustainable terms and on the as yet not
integrated policy tools en route to a SSE