Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top

2012 | Book

Introduction Read chapter Read first chapter

Capitalism and Climate Change

Theoretical Discussion, Historical Development and Policy Responses

Author: Max Koch

Publisher: Palgrave Macmillan UK

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

Login to get access
insite
SEARCH

About this book

This book discusses climate change as a social issue, examining the incompatibility of capitalist development and Earth's physical limits and how these have been regulated in different ways. It addresses the links between modes of consumption, energy regimes and climate change during Fordism and finance-driven capitalism.

Table of Contents

Frontmatter

Introduction

Introduction
Abstract
James Hansen (2008, pp. 7–8), a climate scientist of global renown and director of the National Aeronautics and Space Administration’s (NASA) Goddard Institute for Space Studies, is unambiguous in his diagnosis of climate change and its profound implications: ‘Our home planet is dangerously near a tipping point at which human-made greenhouse gases reach a level where major climate changes can proceed mostly under their own momentum.’ Hansen is also outspoken on what should be done about the issue. The ‘only resolution’ he sees for the future of the human species is ‘to move to a fundamentally different energy pathway within a decade’. Yet Hansen also identifies a ‘huge gap between what is understood about global warming — by the scientific community — and what is known about global warming — by those who need to know: the public and policymakers’ (Hansen, 2008, p. 11). And he is also very aware that preserving our planet as we know it ‘will not be easy: special interests are resistant to change and have inordinate power in our governments […]’ (p. 8). Social scientists can help with illuminating what the United Nations Development Programme (UNDP) calls the ‘gap between scientific evidence and political response’ (UNDP, 2007, p. 4) and with understanding and questioning the power asymmetries that undermine the political reactions to climate change that climate scientists deem necessary.
Max Koch

Capitalist Development and the Regulation of Society and Nature

Frontmatter
1. Nature and the Work Process
Abstract
Much of modern economic theory proposes a circular flow of exchange. Economics is seen as a repetitive cycle linking money and commodities with households and companies. It is understood as being circular and reversible: a ‘return to capital’ basically means that the original capital spent, augmented by a surplus, returns to its owner and the process of capital valorisation starts all over again, on a greater scale. Yet the circular monetary value aspect of economics is coupled with a physical flow and throughput of matter and energy, which is ultimately linear. And, although it is ‘the linear throughput, not the circular flow of value, that impinges on the environment in the forms of depletion and pollution’, it is the circular flow that ‘has the spotlight [in economic theory], while the concept of throughput is only dimly visible in the shadows’ (Daly, 1985, p. 280). In neoclassical theory especially, the production of goods and services is analysed from the standpoint of the growth of monetary value, which is seen as indefinite, while the roles played by energy and natural resources in this production are usually not mentioned. Hence this type of economic analysis tends to finish at the point where the flows of money stop: ‘the goods and the services produced by human activity only appear in the economic system insofar as they exist in the form of commodities, and they drop out of sight as soon as they lose this quality’ (Deléage, 1994, p. 38).
Max Koch
2. Capitalism, Nature and Climate Change: A Structural Analysis
Abstract
In a letter to Ludwig Kugelmann (11 July, 1868), Marx clarifies his viewpoint that the work process is both the point and the form of the interaction (or the ‘metabolic’ relation) between humans and nature. First, he maintains that the performance of labour is necessary for and central to human existence and, second, he makes clear that no social form of production can escape natural laws. In relation to the first proposal, he suggests that ‘every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish’ (Marx, 1988, p. 67). And, as ‘every child knows, too’, social labour needs to be distributed ‘in specific proportions’ in order to match the ‘differing amounts of needs’. Labour is the form in which humans interact with nature through the exchange and transformation of organic matter. As economic agents, humans ‘both confront the nature-imposed conditions of the processes found in the material world and affect these processes through labour’ (Clark and York, 2005, p. 398). The ways in which social production are organised change, but these social transformations ‘can only change’ the ‘form of manifestation’ of natural laws in the work processes. ‘Natural laws cannot be abolished at all’. Hence, the ‘only thing that can change […] is the form in which those laws assert themselves’.
Max Koch
3. The Regulation of Nature and Society in Different Capitalist Growth Strategies
Abstract
Authors such as Burkett, Foster, O’Connor or Altvater have great merit for establishing that capitalist development is structurally bound up with tensions between the logics and the needs of the economic and of the ecological system. Elaborating on Marx’s original critique of political economy they all highlight the economic system’s orientation towards unlimited and short-term valorisation, quantitative and geographic expansion, circularity and reversibility, while the principles that guide the ecological system involve stable and sustainable matter and energy transformations and throughputs — as well as irreversibility. Any long-term economic strategy that pays respects to the ecological system’s guiding principles would further need to take seriously the fact that the earth’s stocks of natural resources and their ability to serve as sources and sinks for waste from human production and consumption processes are limited. Though capitalist development cannot and does not get rid of the use-value element and of the material and energy side altogether, it nevertheless tends to negate and dispel them as much as possible. From the standpoint of individual capital, costs arising from the degradation of the environment are faux frais of production, which are, whenever possible, carried over to the general public — the taxpayer. The focus of the above-mentioned authors has, therefore, been on the paradox that capitalist production relations and productive forces tend to undermine and sometimes destroy their own social and ecological conditions of reproduction and, with them, the conditions for human life as such.
Max Koch

Fordism

Frontmatter
4. The Origins of a New Accumulation Regime
Abstract
Most economic historians agree that an extensive accumulation regime predominated in the second half of the nineteenth century. This regime was based on what Marx called the ‘formal subsumption’ of wage labourers and remained largely dependent on the subjective knowledge and skills of the workers. Only every fifth American worker was employed in a factory in 1900 (Robinson and Briggs, 1991, p. 622). The subsequent rise of factory production had little to do with its technological superiority over artisanal production (Gordon et al., 1982, p. 81); much more, it resulted from the strategy of augmenting output by increasing the overall number of workers. Rather than qualitatively transforming the work process, the basic business philosophy of the time indeed followed the motto ‘so many hands, so much money’ (Dawley, 1976, p. 28). Robinson and Briggs (1991, p. 652) demonstrate that this strategy was reaching the point of diminishing returns in 1880, ‘as skilled workers in large factories were able to press for higher wages than their counterparts in small artisan shops’. Another factor that intensified competition between the largest factories was the increasingly closer link between product markets, from markets on a local scale to ones on a regional and eventually national scale, as a result of the quickly expanding railway system.
Max Koch
5. The Geographic Extension of Fordism
Abstract
From a regulation theoretical perspective, the Great Depression can be understood as the result of a lack of compatibility between the new production methods and an inadequate mode of regulation, which did not enable wage-earners to increase their consumption sufficiently to match rapidly growing industrial output. It was the regulation aspect of the growth strategy that had to change. During capitalism’s greatest crisis to that point, President Roosevelt, in power from 1933 to 1945, initiated a ‘New Deal’ of socio-economic regulation. The cornerstone of the new strategy was the provision of a minimum standard of welfare through economic stabilisation and social policies. This implied a reinterpretation of the role of the state in socio-economic affairs. Once the state was no longer exclusively regarded as an impartial ‘watchdog’ agency, more and more areas were influenced by the New Deal — even once sacrosanct domains, such as prices and the valuation of money. According to Agnew, the New Deal did not end the Great Depression but made ‘life bearable or even possible for large numbers of people’, and ‘it certainly headed off dissent’. But the probably most lasting effect was that ‘it legitimized the idea of a strong federal government usually in partnership with, rather than opposed to, big business’ (Agnew, 198 7, p. 69). A new corporate coalition between American government and business evolved and became the structural basis for US strategies in the domestic and global economy over the following decades.
Max Koch
6. Mode of Societalisation and Consumption Norm
Abstract
The productivity growth associated with the achievement of economies of scale was a prerequisite for the simultaneous and proportionate development of the two departments of social production, namely production and consumption goods. The percentage of wages to total employers’ costs decreased (or, in Marx’s terms, the ‘organic composition’ of capital grew), but the real wages of workers also increased. Employment was able to grow since the total volume of capital rose by a greater proportion than the increase in the number of workers made redundant due to productivity gains in the work process. The cheapening of industrial products raised the purchasing power of wage labourers, so that both the employers’ profits and the employees’ real wages increased. The state benefited from this favourable situation and used its growing income from taxation for the expansion of a welfare state system, which, in turn, guaranteed a minimum standard of living for those who did not participate in the labour market. Not only was the working class actively integrated into the growth project of Fordism, but also, for the first time, the unemployed and the recipients of welfare entitlements, the pensioners and the students (in some countries) received independent incomes, which the state raised via taxation and subsequently redistributed to these groups (Koch, 2001).
Max Koch
7. A Fossil Energy Regime
Abstract
The material and energy aspect of the Fordist production and consumption model has not hitherto been in the focus of research. However, in the 1970s, Aglietta (1987, p. 118) had already proposed that a necessary condition for the success of the Fordist growth strategy was a
revolution in energy which generalized the industrial use of energy and made possible the construction of high capacity motors which enormously increased the power available in industry. In this way, the labour process could be converted from a dense network of relationships between jobs, with intermediate products passing back and forth, and trial and error in the case of assembly, into a straightforward linear flow of the material under transformation.
Max Koch

Finance-Driven Capitalism

Frontmatter
8. The Rise of a Finance-Driven Accumulation Regime
Abstract
During the course of the 1970s the Fordist gross domestic product (GDP) and productivity growth model weakened. Aglietta (1987, p. 119) describes this as a consequence of the Taylorist logic itself: ‘the further the fragmentation of individual tasks and integration of jobs by the machine system have already been taken, the more costly in means of production is subsequent intensification of the output norm’. The reason was the great technical rigidity of the mechanised system. Further increases in labour productivity were contingent upon additional investments in fixed capital on an ever greater scale. At the same time, the associated search for increases in productivity via work intensification led to growing alienation on the shop floor. Workers’ protests began to undermine companies’ profitability from the late 1960s on, when the almost total capacity utilisation of fixed capital concentrated great numbers of workers on the same shop floor, carrying out very similar tasks. Hence a numerically growing and relatively homogenous working class emerged as a result of the Taylorist organisation of the work process, which then became the most effective obstacle to Fordist growth (Jessop, 2002, pp. 81–2). This is reflected in Tables 8.1 and 8.2. Labour productivity growth fell in all countries of the Atlantic space, when compared to the levels of the 1960s.
Max Koch
9. The Recomposition of the International Division of Labour
Abstract
The trend towards the financialisation of investment was accompanied by its transnationalisation. Strikingly, between the 1980s and 2007, all Foreign Direct Investment (FDI) indicators selected for Table 9.1 demonstrate much greater growth rates than those of the world gross domestic product (GDP). It was only in the crisis year 2007/2008 that the world GDP continued to grow while all other indicators were reduced. More particularly, the annual growth rates of FDI inflows oscillated between 20 and 50 per cent between the 1980s and 2007. The FDI-inward stock expanded from $790 billion in 1982 to $15,660 billion in 2007, by factor 20. The sales of foreign affiliates rose by factor 12 from $2,530 billion in 1982 to $31,763 billion in 2007. During the same period, the sales, gross product and total assets of foreign affiliates increased constantly. Employment by foreign affiliates also grew by factor 4. However, the employment growth rate in transnational corporations was slower than that of the FDI stock and than that of the gross product of foreign affiliates. This indicates a transition from employment-extensive towards capital- and knowledge-intensive work processes. The increase in FDI up to 2007, according to UNCTAD (2007, p. 4), was a reflection of the increase in corporate profits and stock prices, which increased the value of cross-border Mergers and Acquisitions (M&As).
Max Koch
10. A Worldwide Consumption Norm (Based on Debt) and the Financial Crisis
Abstract
The steady advancement of real wages formed the structural background for mass consumption, which itself paralleled the rise in profits, and thus constituted a fundamental pillar of the Fordist growth model. Like gross domestic product (GDP) growth (Table 8.2) and the wage share (Table 8.4), the growth of real wages diminished greatly throughout the entire Atlantic space beginning with the 1980s (Table 10.1). This development culminated in the 2000s, when real wage growth almost stagnated. It was well below 1 per cent in EU 27, the US and Japan. It was only in the Republic of Ireland, Hungary and the Czech Republic that growth rates of real wages of over 2 per cent were recorded during this decade.
Max Koch
11. The Globalisation of the Fossil Energy Regime
Abstract
Part II has demonstrated that Fordism’s industrial paradigm made use of methods of material throughput that would undermine economy and society for the future generations. The energy regime was dependent on the consumption of vast amounts of fossil-fuel resources; this was accompanied by the emission of enormous and growing amounts of CO2 into the atmosphere, triggering the greenhouse effect. The question is whether the transition towards a finance-driven accumulation regime and the transnational relocation of production sites moderated or even overcame the fossil energy regime. The different policy strategies for a ‘Green Deal’ raise great hopes that a new growth period, where gross domestic product (GDP) growth is ‘decoupled’ from the emission of CO2 and other environmentally harmful substances, could come about. In ‘post-industrial’ societies economic output becomes progressively less dependent on material throughput; thus the economy can continue to grow without facing any ecological limits. In short, Western production and consumption patterns as such would not need to change — only their energy base would. In order to test empirically the feasibility of a ‘decoupling’ of output and throughput, it is important to distinguish between absolute and relative decoupling. Jackson (2009, p. 48) defines relative decoupling as a ‘decline in the ecological intensity per unit of economic output’.
Max Koch

The International Regulation of Climate Change or the Commodification of the Atmosphere

Frontmatter
12. Multinational Governance in an Unequal World: The Kyoto Process and the Actors Involved
Abstract
The term ‘governance’ is often used to identify and theorise about evolving mixes of formally legal agreements between states and non-formal types of indirect governing, often via ‘steering’ and networking. Although governance approaches are increasingly deployed in transnational contexts, they began at the national level. During the crisis of Fordism at the latest, it became evident that a state’s capacity to act was limited in domains such as economic, employment and social policies as well as in environmental protection. The influence of non-state actors in socio-economic regulation became greater in the situation of globalisation, and the idea of cooperation between public and non-public actors, for example in the form of ‘public-private partnerships’, gained both in importance and popularity. At the national level, this was accompanied by the concept of the ‘cooperative state’, which ‘steers’ the various actors who participate in governance networks via negotiations, cooperative conflict resolution and agreement. According to Renate Mayntz (2009, p. 164), the point of departure for governance theorists is not the description of a problem or a policy target but the analysis of existing institutions and the issue of their functions and of how well they fulfil them. Problems are seen as ‘challenges’ in relation to a theoretically constructed optimum situation, which at the same time serves as benchmark for institutional change.
Max Koch
13. Theory and Practice of Carbon Emission Trading: The Case of the EU ETS
Abstract
This chapter deals with the procedural aspects by which the — rather modest — goals of the Kyoto protocol are to be achieved. Generally the choice of one certain policy path from a range of options is not independent of wider political and societal debates and dominant ideologies. The spread of neoliberal ideas and solutions from a tiny circle of economists in the Mont Pelerin Society to a largely undisputed worldview is a good example (see Chapter 8). Trading systems were integrated worldwide, property rights systems were restructured and socio-economic regulation facilitated transnational corporate activity weakening the regulatory power of national corporate actors. Developed in well-funded think tanks and business schools across the world, the neoliberal perspective proposed the transformation of a range of public goods into privately held commodities. These served as investment opportunities for the liquid capital that was accumulated at an unprecedented extent in finance-driven capitalism. At the height of this transition, neoliberalism indeed took the character of a new pensée unique (Bourdieu) and was not only applied to economic regulation, but also to other fields, including housing and pension policies. Environmental policies, and the Kyoto procedures in particular, constitute no exception to this rule, as they followed arguments first developed by Ronald Coase in the 1960s.1
Max Koch
14. The Flaws of Free-Market Solutions for Climate Change Prevention and Their Homology to Finance-Driven Capitalism
Abstract
After the previous discussion of the neoclassical proponents of carbon trading, this final chapter is dedicated to the problematic and counterproductive aspects of this trading. The experience generated to date by available empirical data on actual carbon-trading schemes has already questioned the contribution of these schemes to climate change mitigation. Furthermore, we have noted some of the flaws in carbon trading using the EU ETS — for instance, the over-allocation of certificates and windfall profits for energy companies (see Chapter 13). Against this backdrop, some observers have even dismissed, ironically, the Kyoto Protocol’s ‘flexible mechanisms’ as ‘hot air’, while apologists argue that both Kyoto and the EU ETS are to be understood as ‘learning processes’ on the road towards ‘more universal and rigorous formulae’ (Giddens, 2009, p. 189). We will now discuss whether the flaws and problems of carbon trading systems should be viewed as the ‘teething troubles’ of an emerging policy instrument or whether they are endemic and likely to persist. I will comment on issues such as the over-allocation of certificates and windfalls for greenhouse gas emitting companies, self-reporting of CO2 emissions, carbon price volatility, offsetting or CO2 reduction duties, the problem of ‘additionality’, geographic distribution, size and content of clean development mechanism (CDM) projects, the bureaucracy and the cost element of carbon-trading schemes and their possibly innovative effect.
Max Koch

Concluding Remarks

Concluding Remarks
Abstract
The scientific consensus on climate change is clear-cut. To avoid its worst effects, atmospheric CO2 concentrations need to stabilise around or below 450 ppm (parts per million). Though greenhouse gas emissions need to peak before 2020 and then rapidly to decrease in order to meet this benchmark, no substantial steps are being taken to deal with this issue. Each year that goes by without transition to a qualitatively different energy pathway makes the 450 ppm goal less likely to be achieved. Hence, there is a real possibility that the present generation will put the planet on course for uncontrollable climate change and for a temperature rise of 5°C or more. In this case, future generations are likely to regard the present one as selfish at best. Yet it cannot be excluded that what is today called the ‘Western way of life’ will earn our generation a place in history books on a par with mass murderers: people who committed a crime against future generations of humanity. I wrote this book in order to illustrate the gap between the scientific knowledge of climate change and the lack of adequate action on the part of political, economic and environmental decision-makers. To achieve this aim, I have interpreted climate change as a social issue, with particular emphasis on its parallels to capitalism as a powerful social structure in contemporary society.
Max Koch
Backmatter
Metadata
Title
Capitalism and Climate Change
Author
Max Koch
Copyright Year
2012
Publisher
Palgrave Macmillan UK
Electronic ISBN
978-0-230-35508-8
Print ISBN
978-1-349-32328-9
DOI
https://doi.org/10.1057/9780230355088