Capitalism and resource exploitation
Background (Encyclopedia of Global Resources)
Capitalism has a number of characteristics that differentiate it from traditional economies and command economies. First, as Karl Polanyi observes in The Great Transformation (1964), capitalism is characterized by a market economy. A market economy means subjecting human beings, means of production, and nature to “market forces.” A market economy allocates labor, capital, and resources to their most profitable uses. While markets do exist in traditional economies, they play a limited role, serving as a means of disposing of surplus products. In command economies, markets are subordinated to the authority of the state. Second, capitalism is characterized by the production of commodities. Commodities are anything produced for sale. As Vandana Shiva points out in Staying Alive: Women, Ecology, and Development (1989), the transformation of natural resources into commodities requires separating resources from their natural environment. From a market perspective forests, wildlife, and other natural resources have value only as commodities.
Third, capitalism is characterized by private property. Private property conveys to the owners of capital and resources the right to use their property regardless of the impact on society or nature. More recently, property refers not to the use of the property but rather to its value. Fourth, capitalism is characterized by the accumulation of capital. Accumulation begins with...
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Mercantilism: 1600-1800 (Encyclopedia of Global Resources)
Mercantilism is the first stage of capitalism, representing a symbiotic relationship between government and business. Business provided governments with a source of tax revenue; governments provided business opportunities for profit. Governments offered business protection, established monopolies, obtained colonies, and created national markets.
Creating a national market required reducing transportation costs. Clearing waterways and digging canals reduced the costs of the two most important resources in transporting goods: wind and water. Industries spread along the rivers and into the forests. In many places the spread of industry led to widespread deforestation. European countries established colonies to provide resources, especially gold and silver, in order to fuel the expansion. In general, this meant seizing the land and labor of the traditional peoples of the world.
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Laissez-faire or Market Capitalism: 1800-1930’s (Encyclopedia of Global Resources)
Market capitalism is the second stage of capitalism, ushered in by the innovations introduced by the Industrial Revolution. Beginning in the last decade of the eighteenth century and the first decades of the nineteenth century in England, the Industrial Revolution introduced machines into the workplace.
The Industrial Revolution had a number of profound implications for society. First, machines (epitomized by the steam engine) freed industry from its dependence on water and wind; industries could locate anywhere. Second, the introduction of railroads reduced the price of coal relative to wood. Coal freed society from its dependence on renewable resources, enabling individuals to tap into the energy accumulated over eons. The result was an explosion in economic growth. As Jean-Claude Debeir, Jean-Paul Deléage, and Daniel Hémery state in In the Servitude of Power (1991, originally published in French in 1986), coal enabled “the European economies to by-pass the natural limitations of organic energy, [and] this new system set them on the path to mass production.” In the United States, the railroad aided the descendants of Europeans in subjugating American Indians and taking their lands.
Third, the Industrial Revolution altered the institutions of capitalism. The Industrial Revolution introduced the factory system, depersonalizing relations between capitalists and workers....
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The Corporate Welfare State (Encyclopedia of Global Resources)
The corporate welfare state is the third stage of capitalism, associated with the development of new technologies. First, new technologies in railroads, steel production, oil, and so on enabled businesses to reduce their unit costs by expanding output. Corporations emerged as a means of reducing competition by controlling output. Second, many of the new technologies proved expensive. Few businesses could raise the necessary financing. Corporations provided a new means of financing, namely stocks.
Third, the new technologies expanded the resource base. Oil, for example, became increasingly important. Standard Oil Company’s effort to monopolize the sources, production, and refinement of oil in the late nineteenth century fueled the public’s mistrust of corporations. In response, the U.S. government passed the Sherman Antitrust Act in 1890 specifically preventing monopolies.
Fourth, the severe economic depressions of the nineteenth and early twentieth centuries became politically unacceptable. People demanded that governments provide a degree of economic security, a demand that manifested itself in the social legislation of the 1930’s and the 1960’s. Further threats to economic security stemmed from the West’s dependence on fossil fuels. Some of the events surrounding the oil embargo of the 1970’s, the Gulf War of 1990, and the War in Afghanistan beginning in 2001 show the willingness on the part...
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Resource Consumption and the Future of Capitalism (Encyclopedia of Global Resources)
The question of whether or not humankind can continue to consume the resources of the world at present rates has evoked two different perspectives regarding the future of capitalism. A tradition within British political economy since the work of economist David Ricardo in the early nineteenth century contends that the exploitation of limited resources will in time cause economic growth to decline.
Ricardo asserted that economic growth confronted with limited land would eventually raise rents, thereby squeezing profits. Eventually the rate of profit falls to zero, resulting in the stationary state. William Stanley Jevons, writing in the late nineteenth century, agreed with Ricardo except that Jevons believed that declining growth would result from limited coal deposits. More recently, NicholasGeorgescu-Roegen expressed a similar view in The Entropy Law and the Economic Process (1971). Georgescu-Roegen asserted that growth is ultimately limited by the finite supply of low-entropic resources.
In 1972, the Club of Rome, a group of distinguished scientists, published >The Limits to Growth, predicting the depletion of many resources within forty years. Their time predictions proved incorrect, but their central point, concerning limitations on the rate of growth could, and can, continue, remains.
The alternative viewpoint asserts that resources are sufficiently...
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Further Reading (Encyclopedia of Global Resources)
Daly, Herman E., and John B. Cobb, Jr. For the Common Good: Redirecting the Economy Toward Community, the Environment, and a Sustainable Future. 2d ed., updated and expanded. Boston: Beacon Press, 1994.
Debeir, Jean-Claude, Jean-Paul Deléage, and Daniel Hémery. In the Servitude of Power: Energy and Civilisation Through the Ages. Translated by John Barzman. London: Zed Books, 1991.
Georgescu-Roegen, Nicholas. The Entropy Law and the Economic Process. Cambridge, Mass.: Harvard University Press, 1971.
Hawken, Paul, Amory Lovins, and L. Hunter Lovins. Natural Capitalism: Creating the Next Industrial Revolution. London: Earthscan, 1999.
Heilbroner, Robert L. The Nature and Logic of Capitalism. New York: Norton, 1985.
Kovel, Joel. The Enemy of Nature: The End of Capitalism or the End of the World? 2d ed. London: Zed Books, 2007.
McPherson, Natalie. Machines and Economic Growth: The Implications for Growth Theory of the History of the Industrial Revolution. Westport, Conn.: Greenwood Press, 1994.
Porritt, Jonathon. Capitalism: As If the World Matters. Updated and rev. ed. London: Earthscan, 2007.
Schumpeter, Joseph A. Capitalism, Socialism, and Democracy. 5th ed. London: Allen and Unwin, 1976.
Speth, James Gustave. The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing...
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