Eco-Capitalism
Abstract
Our planet faces a systemic threat from climate change, which the world community of nations is ill-prepared to address, and this book argues that a new form of ecologically conscious capitalism is needed in order to tackle this serious and rising threat. While the Paris Climate Agreement of 2015 has finally implemented a global climate policy regime, its modest means belie its ambitious goals. Our institutional financial organizations are not equipped to deal with the problems that any credible commitment to a low-carbon economy will have to confront. We will have to go beyond cap-and-trade schemes and limited carbon taxes to cut greenhouse gas emissions substantially in due time. This book offers a way forward toward that goal, with a conceptual framework that brings environmental preservation back into our macro-economic growth and forecasting models. This framework obliges firms to consider other goals beyond shareholder value maximization, outlining the principal tenets of a climate-friendly finance and introducing a new type of money linked to climate mitigation and adaptation efforts.
The destruction witnessed in Afghanistan and Iraq, coupled with the destabilisation of various Arab, Middle Eastern and African nations, as well as the ongoing war in Yemen, exemplify the enduring presence of imperialism in both its historical and modern incarnations. This pervasive force relentlessly seeks to subjugate people and their nations, aligning them with the dictates of imperialist capitalism (Pradella, Historical Materialism 21:117–147, 2013).
This chapter discusses the absurdity of the climate transition that never happened. After briefly reviewing the history of awareness of climate change and the historical movements that have emerged and raised attention to the necessity of climate action (e.g., Club of Rome), the chapter follows with a more recent overview of the various societal dynamics that underpin the inertia towards climate action. Climate inertia can be understood as another form of absurdity whereby the current status quo is normalized (e.g., that governments and companies are doing enough to address climate change; that climate action should not interfere with economic rationale). By discussing climate inertia as hypernormalized absurdity, new insights are generated into the perpetuation of the status quo. Moreover, new ways out of the hypernormalized situation can be constructed through the process of problematization, resistance, imagining, and transformation.
Changes in the international monetary system do not happen arbitrarily. They occur typically during periods of structural crisis and amidst shifts in the global power structure. One way to put these developments in their proper historical context is by means of a theory of “long waves,” first proposed by Soviet economist Nikolai Kondratiev in the 1920s as recurrent 40-to-60-year cycles. While it is possible to discern technological or financial patterns driving these long waves, it would be better to integrate those dimensions into a more comprehensive approach as put forth by the French “théorie de la régulation.” The Régulationists trace the long-term evolution of capitalism in terms of successive “accumulation regimes” and provide a typology of crises for when such accumulation regimes disintegrate and get transformed. The international monetary system is one of the key institutional features defining specific accumulation regimes. We are arguably in the midst of a transition from one accumulation regime (“finance-led capitalism”) to another (“low-carbon transition”), with the dollar standard giving way to a multi-currency standard being one aspect of this transition.
The aftermath of the pandemic promises to be a period of strong, albeit uneven growth in response to highly stimulative fiscal and monetary policies. It is also a period of major policy reforms in response to structural problems highlighted by the pandemic. Biden’s ambitious “Build Back Better” agenda compares in scope and scale to America’s great reform programs of the 1930s and 1960s. But its success hinges on the United States overcoming its ongoing crisis of democracy which Trump’s presidency has brought to a dangerous point of division and turmoil. In the meantime, China is rebalancing its engines of economic growth and social peace under the autocratic leadership of Xi Jinping and his government’s “dual circulation” strategy while also setting in motion steps to accelerate the country’s global reach, including an acceleration of its currency’s internationalization. The Europeans, too, have used the pandemic for far-reaching reforms bound to strengthen the international role of their single currency, the euro. Reforms in all three power centers move us toward a more regionally focused tri-polar (“triad”) international monetary system, while accelerating efforts toward a carbon–neutral economy provide a global context for the emerging new accumulation regime.
The world is moving toward a tri-polar configuration, with the United States, the European Union, and China dominating regional zones of influence while vying for global power. The pandemic, with its differentiated impact on each, has only accelerated centrifugal tendencies toward such a “triadic” configuration. The three power centers also represent different variants of capitalism which will shape how they set themselves apart. The tension between competing with each other and cooperating in the pursuit of the global common good, especially the zero-carbon transition, depends not least on redefining globalization in a more progressive, equitable, and stabilizing direction that leaves space for “live and let live” strategies of policy-making. Much of that redefinition hinges on how to manage an inherently more complex multi-currency system where the dollar, euro, and yuan represent alternative forms of world money. Different scenarios are possible, including coordination rules based on target zones for the key exchange rates all the way to anchoring the emerging international monetary system eventually on the International Monetary Fund’s Special Drawing Rights as a steadily more important, supranational form of world money.
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