Thursday, 4 April 2013

Is capitalism efficient?

There has been a lot said recently about growth and the need for it!!! At the same time we have heard a lot about the need for the efficient use of resource in an increasingly resource constrained World, where population and expectation are both growing at an unsustainable pace.

The current neo-liberal capitalist mantra requires that growth is an essential aspect of wealth creation and in turn provides a return on investment to continue the cycle. Most people would probably assume because it is so globally adopted, that it would be an efficient model, but if you stop to ask some questions, the case is not proven. And this is a very important concern for us all.

If you were to think of a plant, an animal or even an eco-system, you can see how through evolution, it has developed a great efficiency. In order to function properly a human needs around 1500 calories per day, however we use many times that amount of energy to support our industries, transport and lifestyles.

This lust for energy, more than any other single commodity is starting to expose the lie of efficiency and highlight the divergence between social well being, environment and economy. This is borne out time and again by protests against extraction of gas, oil and coal, where it causes environmental damage to a locality, but is justified as being for the greater good (i.e. growth), Protesters are becoming more frequent and fractious globally, with examples like the Keystone XL tar sands pipeline, coal terminals in Australia and numerous other mines and fracking sites.

Instead of aiming for unsustainable continuous growth, we should instead look at what natural capital we have and how we could use it to support our growing global population. In this way we should aim for sustainable use of natural capital, not exploitation in pursuit of growth (wealth accretion). In turn there would still be trade, as the current distribution of natural capital is very uneven. But by working together in this way, we build stronger ties between communities by replacing competition with exchange and collaboration.

Over time we would come to realise the true value of our natural assets and come to the conclusion that their conservation is tied to maintaining sustainable use as opposed to exploitation and degradation. I would suggest that this is a more efficient economy!