Issue Date: January 30, 2012
Three Cheers For Capitalism
In his editorial “Recent Travels,” Rudy Baum weaves simple facts with invalid assertions so tightly that one might be led to believe the resulting quilt is not full of holes (C&EN, Nov. 28, 2011, page 3). But it is. He attempts to disparage capitalism with the statement, “You can’t have a sustainable economic system based on exponential growth on a finite planet.” Actually, you can. But we need to define our terms first.
What exactly is this “growth” that some believe is inherently bad? Quite simply growth = profit = savings = that which is not consumed from one’s own work. Growth (excess) can be consumed in the future for its own sake. (For example, a farmer grows more corn than he can consume, so he stores the excess and cuts back on his work in the future; that is, he retires.) Or the growth may be used to consume things one can’t produce efficiently (the same farmer trades his excess corn for some good books). Or the growth may be used to foster even more growth (the same farmer trades the excess corn for a tractor, so now he can grow more than he could by hand). Without growth, none of these things could occur.
So clearly we must have growth unless we want to live like cavemen. Annualized exponential growth (produce 10 widgets this year, 12 next year, 14 the following, and so on) occurs as a result of population growth and/or productivity increases. Such growth in output is not sustainable over long time frames, but it is also not a necessary condition of successful and sustainable capitalism. To suggest otherwise is simply uninformed. Aggregate exponential growth (produce 10 widgets every year but only consume five so that after three years one has accumulated 15 unused widgets) is sustainable because it relies on the simple fact that individual humans can produce more than is required to sustain them. Aggregate growth is a necessary condition of capitalism.
If Baum wishes “to create an economic system that provides for human needs without endless growth in human population and consumption,” then his waiting is over! Capitalism is the most successful system for providing for human needs. It does not require population growth to be sustainable. It simply requires that the population produce goods and services that they freely trade among themselves. That’s it.
By Gregory Morin
- Chemical & Engineering News
- ISSN 0009-2347
- Copyright © American Chemical Society