Astra blog by research fellow Dr. Jef Peeters: An economic system change is key for a sustainability transition

Dr. Jef Peeters is a research fellow in Social Policy and Social Work in KU Leuven, Belgium.

We are used to speak about the ecological, social and economic dimensions of sustainability. But this may be problematic when we do this too easily without an idea of their profoundly different position in the currently dominant societal system. After all, capitalism shapes those dimensions based on its profit- and growth-oriented objective, which is not aimed at the well-being of people and nature. Instead, it is over-exploiting the resources of the Earth, ignoring consequences of climate change and the chances of future human generations for a decent life. In particular the period after the 1950s marks a unique period of unprecedented and accelerating human-induced global socio-economic and environmental change, which has become known as the ‘Great Acceleration’ (Steffen et al., 2015). The data show that earth system trends, as loss of biodiversity, climate change, pollution, or loss of natural capital in general, are tightly coupled to economic activities and economic growth.

Further, the social costs for sustained economic growth, such as cuttings in public expenditure, are no more compensated by economic re-distribution. In opposite, the last decades we saw policies of public austerity, and increasing precariousness of labour with increasing numbers of working poor, while the economic wins at the market are accumulated in the hands of the few, even globally. Consequently, economic growth has not contributed to decreasing inequality, either between or within countries (Donnelly, 2019; Hickel, 2020).

This are not side effects to be adjusted, but inherent system effects, ingrained by an economic discourse focusing on the proper functioning of the (capitalist) market. The mainstream economic narrative considers environment and society to be external to the market (Raworth, 2017). Thus, measures taken for environmental or social benefit represent costs to economic profit, leading to competing policy choices – mostly giving priority to shareholders’ profits which must be guaranteed by economic growth, at the expense of environmental health, social equality and well-being. This also shows how a focus on GDP as an economic measure is a problem of a systemic nature. ‘GDP is not an arbitrary metric of economic performance. […] It was devised specifically in order to measure the welfare of capitalism. It externalizes social and ecological costs because capitalism externalises social and ecological costs.’ (Hickel, 2020: 202)

Capitalism not only externalizes costs as much as possible, it also tries to ‘internalize’ everything that can contribute to production (e.g. raw materials or labor) as cheaply as possible. This double movement is made possible by the creation of an inside and an outside by drawing boundaries. An example is colonialism, which creates a division between the capitalist center and the periphery, or between ‘developed’ and ‘underdeveloped’ countries. And today neocolonialism continues that dichotomy through conditions of unequal exchange. But even at the center, racism and the treatment of migrants as second-class citizens continue to reinforce the distinction between who is 'in' and who is 'out'. An institutional example is the non-recognition of undocumented migrants, although many of them do work in their country of arrival. Or, marginalization is an inherent feature of capitalism.

According to Nancy Fraser, such constitutive divisions more generally determine the institutional design of capitalist society, such as between society and non-human nature, between economy and state administration, and between production and reproduction (Fraser & Jaeggi, 2018). The latter division, for example, places care and domestic labor outside the economy, so that capital can make use of hired labor without directly having to worry about the costs of its reproduction. Those costs are mainly borne by women, while they are not reimbursed for the significant value they create. But the integrity of society and ecology is also more generally threatened by this built-in irresponsibility: ‘My claim is that every form of capitalist society harbours a deep-seated social-reproductive ‘crisis tendency’ or contradiction: on the one hand, social reproduction is a condition of possibility for sustained capital accumulation; on the other, capitalism’s orientation to unlimited accumulation tends to destabilize the very processes of social reproduction on which it relies.’ (Fraser, 2016: 100)

In short, all this makes some authors call capitalism as a profit-oriented economy ‘extractive’: it extracts value from nature and society to the benefit of the few (e.g. Kelly 2012; Raworth, 2017). However, following Fraser’s analysis of constitutive divisions, it is important to distinguish the different ways in which value extraction takes place, depending on whether it is internal or external. Fraser respectively uses the terms ‘eǾٲپDz’ and ‘expropriation’, a distinction which is particularly relevant for social work. Classical Marxism emphasizes the exploitation of labor and the class struggle that results from it. However, the struggle between labor and capital takes place within the core of the system. It is the focus of the trade union movement that was mainly able to enforce better working conditions for those who work under a formal employment contract.

However, the institutional boundaries of which Fraser speaks make it possible for capital to appropriate value from outside - expropriation - without fair compensation. This gives rise to all sorts of ‘boundary struggles’ of which classical Marxism takes too little account, with the exception of what it called 'primitive accumulation'. Consider, for example, the enclosure of the commons. However, expropriation is a daily capitalist strategy to lower the costs, illustrated by the expropriation of the value of reproduction and of natural resources. For capital it is therefore functional to keep people out of the regulated system or to push them out, so that, for example, their labor can be appropriated – or ‘expropriated’ - without great costs. Seen from a social work perspective, this means that we are constantly confronted with (new) forms of marginalization. Surely, the struggle for human rights is part of the boundary struggles. But as a struggle for inclusion, the question immediately arises: in which social system? In any case, fighting for access for all to a flourishing life requires that the objectives of the economy adopt a justice perspective, implying an end to 'shareholder value' as a driving force.

References

Donnelly, S. (2019). The Lie of Global Prosperity. How Neoliberals Distort Data to Mask Poverty and Exploitation. New York: Monthly Review Press.

Fraser, N. (2016). Contradictions of capital and care. New Left Review, 100, 99-117.

Fraser, N. & Jaeggi, R. (2018). Capitalism. A Conversation in Critical Theory. Cambridge: Polity.

Hickel, J. (2020). Less is More. How degrowth will save the world. London: William Heinemann.

Kelly, M. (2012) Owning Our Future: The Emerging Ownership Revolution. Oakland, CA: Berrett-Koehler.

Raworth, K. (2017). Doughnut Economics. Seven ways to think like a 21st-Century Economist. London: Random House.

Steffen, W., et al., (2015). The trajectory of the Anthropocene: the great acceleration. The Anthropocene Review, 2(1), 81-98.