(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 environment...as 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 degradation...business 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: http://web.missouri.edu/ikerdj/papers/WI%20Baraboo%20--%20Sustainable%20Capitalism.htm. 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?