Wednesday, 2 September 2009

(Socially) sustainable Capitalism

I've been musing for some time now over how to make this into as big a buzzword as environmental sustainability.

It's the idea that, for the mutual benefit of business and individual, capitalism needs to nurture, or at least not continue to endanger, social fabric. Just as destroying the environment will have a detrimental effect on business as well as the dog-walker, accelerating social decline will too. An anarchistic and mentally ill social environment is bad for business (hence the concentration of business in socially stable places and flight from countries that break down politically into excess violence).

The model does exist in embryonic form: for some years there's been a 'Corporate Social Responsibility' CSR agenda (companies should have a policy and brag about it in networking circles and brochures), which wierdly tended to concentrate more on the if it was a proxy for society. These days it is more being called simply Corporate Responsibility. But it is a niche scene, and is overwhelmed with bad press provided by over-simplistic 'protestors' who unfortunately don't have much to offer by way of better ideas, more just blowing hot air about the things they don't like...and hence they can comfortably be ignored by those in the know and in the driving seat.

I'd like to see it argued through in economic terms by economists, to add some credibility - if there is any to be had.

There is a grim socially-disconnected angle to all this: if capitalism kills the environment, the next big growth area simply becomes environmental repair, or protection from the consequences of environmental moves on by morphing into industries designed to repair the damage done by its previous incarnation. Similarly in a more anarchic environment, 'security' becomes a lucrative trade. In this model society suffers while business thrives. I don't think a well-oiled economy would actually get that far (reference the explosive growth of the green sector in recent years... i.e. the world considers itself close enough to a horizon-level environmental disaster to invest big-time in reversing the trend before we get there), but then this is probably because people (esp the credible FoE) got it on the agenda.. which is why I want social impact on the agenda.

Let me be clear: I see no better mechanism for general social stability, and matching population growth, than the free market (succinctly argued in para6, p4 of web link below). However it is fundamentally based on a social/financial hierarchy, with disproportionately more people earning disproportionally less in order to secure profit for the few. This is not heresy, just how it works. I just think we need to keep one eye on the bottom rungs to be sure that the disenfranchised (for whatever reason) do not get to the point of revolting or doing so much lasting damage to themselves and those around them that our country / world becomes a grotesque place in which to live... or becomes an unattractive base for business which could contribute to serious economic decline (with associated social disaster). As much as anti-capitalists don't want to hear this, in this case I think it is better to improve a predictable, workable system rather than cause even greater upheaval by attempting to overthrow it. Like Aikido martial art: use the energy of your attacker to control him.

The true free-marketeers will probably inform me that a truly free market would take care of this all by itself. Maybe we haven't got one that is free enough, or maybe this isn't the case. In any case I think the debate should be on an agenda somewhere, just as protection of the environment has become pretty embedded in the corporate mindset of today. This will be a huge challenge though, because environmental damage is clear cut and objectively measurable... but social damage is tricky to quantify, and can be argued as self-inflicted (the environment rarely hurts itself by drinking too much high-strength effluent). Is this why we shy away from thinking about it - because it is so complex and politically fraught?

A really good paper on the subject is here: There will be a later blog that discusses the topic in its entirety, concentrating on illustrating the mechanisms whereby Capitalism is on the causative side of social ailments and ultimately violence - and making clumsy attempts (as a non-economist) at proffering ideas for the future, but this latter activity I prefer to give to the professionals to debate and act upon. But never forget that capitalism is absolutely fundamental to *preventing* violence as well (I will explain myself on this too). So it's a fascinating case.

If any of you happen across related literature, be sure to let me know!

There is a connection to youth violence here. Most of the violent youth are the offspring of the underclass, most of whom fell off the legal capitalist ladder a long time ago (or never got on - except for on the buy side via credit cards) but are well embedded in the black market side of capitalism. I think that it is in large part because they have *so little to lose* that their behaviour deregulates (My Dad always said it is crucial for every citizen to have 'skin in the game'), which empowers my call for keeping them in the legal Capitalist foodchain somehow.

PS May I point out advertising of products such as anti-wrinkle cream, which only exists because the industry-led media channels have successfully sold wrinkles as being undesireable. In this way a socially negative effect of Capitalism (self-loathing) is in fact the driving force for an entire industry sector. I could even argue that a great many forms of disliking one's current status are driven by capitalist forces to the financial benefit of capitalists... But this is the exact battleground of the debate: those same 'nasty' industries employ armies of people who are socially benefited by having an income... but could there have been another industry instead of that one?

1 comment:

  1. I'm not able to do this thought-provoking blog entry justice. My few thoughts, so far, are that the parallels with the eco-agenda may only take you so far. For instance, a couple of important differences are:

    - it takes people a lot longer to identify that there is an environmental problem; but once they realise it, they also realise that they can only do very limited things to isolate themselves / their descendents from it (e.g. changes in climate don't discriminate between whether you live in Brixton or Chelsea);
    - with crime, including anti-social behaviour among youths, arising from the gross inequalities of wealth that are inherent in the capitalist model, people can spot the issue sooner; and those that have the means can realistically try to isolate themselves / their descendents - by imprisoning themselves (in gated mews / using ever more sophisticated security devices / etc.), and/or by imprisoning others (in jail / youth offender institutes / etc.).

    I guess this serves to amplify the difficulties in a number of the issues you highlight. But that's not to say that all is lost:

    - intellectuals have identified the problem (your point about capitalism's next big growth area being environmental repair, following environmental destruction, reminded me of Naomi Klein's Shock Doctrine - which, I assume you're familiar with, though I have to confess I've only found time to read reviews of it);
    - I actually have some admiration for many of the "oversimplistic" protestors (at least, the peaceful ones); there is something powerful about large numbers of people being motivated to put themselves in a position where they are challenging authority, even if some of them are not entirely clear of the end-rationale; I was reminded, in this week's Big Issue, of the human chain that formed itself in the Baltic states 20 years ago, as a prelude to breaking away from the Soviet Union;
    - I think some of this has encouraged alternative business models onto the political agenda: the Labour Government have set up an Office of the Third Sector, which champions social enterprises, as well as the charity and volunteering sector; and Cameron's Conservatives have been singing from the same hymn sheet for several years.

    I look forward to further instalments of yours on this topic!