Is capitalism sustainable?

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Subject classification: this is an economics resource.

Capitalism is the predominant economic system of our time. But can it remain so? Systems like mercantilism and serfdom lasted for centuries before the establishment of the Bretton Woods system. Have we reached what political theorist Francis Fukuyama has called the "end of history" where liberal democracy matched with free markets are the last viable option for organizing society? If capitalism is to be overthrown, what could replace it and would it be a step forward or back? Sustainable here does not only mean ecologically, but over time.

Capitalism is sustainable

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Arguments for

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  • Argument for Throughout recent history, there has not been a better and viable alternative system to capitalism.
    • Objection This doesn't imply that capitalism is sustainable.
    • Objection An alternative will surface as soon as it becomes necessary. Unenvisioned alternatives have greater plausibility of surfacing with the access to technologies, scientific abilities, tools and processes which didn't exist in former eras.
      • Objection Relying on as-yet unenvisioned alternatives is pure speculation.
    • Objection Feudalism is a viable alternative, viable in the sense of capable of sustained existence. That does not make it the preferable or sustainable alternative, merely viable. Ditto North Korean Communism.
  • Argument for Although Marx predicted that capitalism is a necessary stage for an eventual worker's revolution, capitalists after Marx have been able to slowly adjust capitalism so that it can sustain itself indefinitely. The shifts from the Industrial Revolution to globalized financial capitalism have made it impossible for workers to ever overthrow the upper class.
    • Objection This argument assumes what must be proven. The fact that capitalism has been slowly adjusting to sustain itself doesn't mean that it will continue to be able to do so. Economists will try, no doubt.
  • Argument for Economic growth under capitalism can be separated from unsustainable resource consumption. There is not a fixed supply of resources that is used up, because new resources can be discovered or developed. In other words, advancing technology enables us to access resources which were formerly unreachable.
    • Objection There is a fixed supply of natural resources to be used up, such as rare minerals and fossil fuels. Discovery of new resources does not create them, merely discovers them, and the total available amount is fixed. What is used up is gone. As far as we know, the current rate of resource exhaustion cannot be sustained for the next 500 years, whether under capitalism or socialism.
    • Objection While new resources can be used, existing market forces can downplay innovation due to the risk of investing in new products. For example, if an innovation results in reduced demand (although specific to markets), those whose business depends on selling said product have an incentive to control the impacts of such innovation. This could result in the adoption or suppression of such innovation, as we've seen with the fossil fuels industry. This also applies to overconsumption (if, say, Americans reduced their car use by half without seriously affecting their happiness (maybe increasing it), it'd probably be great for the the environment and sustainability, but terrible for fossil-fuel and automobile companies).

Arguments against

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  • Argument against Capitalism requires constant growth,[citation needed] and constant growth is impossible in a limited planet.
    • Objection The Earth is not the limit. Other planets are relatively benign compared to Earth, with no ecosystems to protect, and there are also space habitats.
      • Objection Massive space colonization is unfeasible in the near future. We need a solution sooner.
      • Objection If we cannot manage in this planet, how can we even hope to manage others much more hostile?
      • Objection Feasible planets to live in, whether hostile or not, are merely fictional, as the ones we may find, will require energy to make habitable for humans, and quite probably, as our knowledge of existing planets suggests, unimaginable amounts of energy. This argument reduces to a low probability high risk endeavor with many ifs, if we find a planet, if we we are technologically developed enough, etc. which proves the point of capitalism not being sustainable in the first place.
    • Objection Even assuming constant growth is required to sustain capitalism, this is constant economic growth, which is not equivalent to a constant increase in resource consumption. Economic growth based on intellectual property and more efficient use of existing resources (asymptotically approaching perfect efficiency) can be maintained in a finite system.
      • Objection Economic growth based on intellectual property still requires resources: people eating, using computers, servers running, etc. Capitalism prioritizes growth of only capital, it establishes an asymmetric relation that benefits a few, immensely more than the remaining majority. In it's "pure" ideological form capitalism completely disregards the natural environment, even paints it as an obstacle or enemy, in the name of individual or market "freedom".
      • Objection "intellectual property" is arguably an impediment to innovation.
  • Argument against Capitalism breaks the second law of thermodynamics. Disregards energy and the natural environment over capital growth. The universe does not care though, it just reflects back, therefore becoming a recipe for destruction to the ones using it as their ultimate rule.
    • Objection Under such a naive analysis, living things break the second law of thermodynamics. Unless you truly understand what that law is about and to what kind of systems and physical models it applies, better stay away from that argument.
      • Objection Temporarily, yes, but in the long term, thermodynamics wins in the end. Also, the observable universe is finite, and exponential/continuous growth is infinite.

See also

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Notes and references

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