James Gustav Speth
In the first part of this series, we described the current turn toward ecological consciousness by the Catholic Church. We began to examine the weaknesses of the Catholic position as enunciated by Pope Benedict XVI, focusing particularly on the lack of awareness of the depth of the crisis and an analysis of the cause of the crisis in the current economic system. The fundamental weakness of the Pope’s position is his inability to make the connection between the current economic system’s fundamental premises and its ecological effects. My principle thesis in this series is that the current global economic system is fundamentally hostile to the maintenance of ecological balance and that efforts to avert the rapidly mounting crisis that disregard this fact are delusional at best and counterproductive at worst. My purpose is to construct arguments and approaches to the climate crisis that can allow activists to create a fruitful dialog and action agenda with Church organizations which contain many willing and influential members.
Looking for Solutions within the Current Economic Structure
James Gustav Speth’s new book, Bridge at the Edge of the World: Capitalism, the Environment, Crossing from Crisis to Sustainability (2008) identifies the agent behind climate change with great perceptiveness and courage. “Capitalism as we know it today is incapable of sustaining the environment.” - James Gustav Speth, Bridge at the Edge of the World: Capitalism, the Environment, Crossing from Crisis to Sustainability. The driving element of the global economic system, without which it cannot survive, is expansive economic growth. He effectively deals with one of the major arguments offered by proponents of market solutions, that the advanced countries are becoming increasingly “dematerialized”, which means that technological efficiencies continually decrease the required materials and energy per unit of output as economic growth relies more upon services than traditional industrial sectors. In this way, we can sustain high enough growth levels to maintain the current economic system while lessening its destruction of the environment.
The Jevons Paradox, named for the 19th century economist William Stanley Jevons, was the result of Jevons wondering why the price of coal soared after James Watt introduced a much more efficient way of using coal with his new steam engine design. Common sense would seem to dictate that the more efficient use of a resource would lead to less need for that resource, therefore less consumption and a more eco-friendly coal industry. In fact, the exact opposite occurred. The reason, and it is as compelling today as it was a hundred and fifty years ago, is that improved efficiency lowers the relative cost of using a resource and thereby increases demand. And this is precisely what we observe in today’s economy. More use of information and other technologies has led to much higher levels of throughput for materials and energy, as well as greater output. Thus hope for a technological solution to the need for a reduction in materials and energy consumption would be self-defeating in the current context.
Another of Speth’s crucial points about the current economic system is that, “…there are fundamental biases in capitalism that favor the present over the future and the private over the public.” - James Gustav Speth, Bridge at the Edge of the World: Capitalism, the Environment, Crossing from Crisis to Sustainability. Note the word “fundamental” – this bias toward short term profits and private gain over the public good is inherent to the system, as those who work within it today are quite aware, whether they approve of the facts or not. Short term profit always trumps long-term planning, not because of moral flaws in those who run corporations, but because of the inherent dynamics of the free market.
Externalities: Transferring Costs to the Innocent
In order to render this idea more transparent, let’s consider a key factor in improving profitability rates. In the previous part, we briefly covered the idea of “externalities”, which were described as “hidden costs” not reflected in the price of a commodity such as gasoline. One of the primary ways profits are increased today is by finding situations where the costs of producing goods can be transferred to others, such as taxpayers, while keeping the benefits internal to the company. Though this may sound like an abuse, it is actually inherent to the way capital has operated for hundreds of years.
One of the prime examples is Wal-Mart’s policy on employee health care. Health care costs are a huge burden on corporate profits, so those companies that can minimize these costs will tend to thrive in today’s markets. Wal-Mart severely limits these benefits and trains workers to take full advantage of government programs such as Medicare and Medicaid. Thus Wal-Mart has “externalized” a cost that would negatively impact its profit margin by transferring the cost to the American taxpayer.
The same principle works in the same way when the external costs are widespread ecological damage. When car manufacturers fail to take into account the damage their carbon dioxide emissions inflict on our fragile climate, they are externalizing the cost of climatic damage to future citizens, as well as to plant and animal species that will be exterminated. These social costs are not factored into the cost of cars or gasoline because they are “external” to exchange relationship between the buyer and seller. Both buyer and seller in this instance participate in a kind of “conspiracy” against the real payers of the cost of the product. The buyer gets a cheap and valuable product and the seller gets the profits, but the social costs are left to the innocent ones who gain no benefit from either half of the transaction, but who will most definitely be forced to pay the real price for it. In our current economic and political system, these parties are without representation.
The fundamental issue is that markets do not and cannot afford to care about the positive social impacts of their transactions. In order to survive and thrive, they need to focus all attention on maximizing profit. This is not a moral choice, as so many on the liberal side of the political spectrum seem to believe. It is not a matter of laissez-faire buccaneers leveraging loopholes in a system that is basically neutral. It is simply a matter of obeying the rules as given by the nature of the system. Nor is it a matter of merely not caring whether or not the social effects of a transaction are beneficial. There is an inherent bias toward negative social impacts. According to Robin Hahnel, “In general, it is well known that markets will underprice and overproduce goods and services when there are negative external effects associated with either their production or consumption, and overprice and underproduce goods and services when there are positive external effects associated with either their production or consumption.” – Robin Hahnel, “Against the Market Economy Advice to Venezuelan Friends” This could be stated as a law: Markets tend to favor transactions in which the true cost of the goods and services are transferred to an external victim because this is an easier way to maximize profits than increasing the value and decreasing the true costs of goods and services.
False Moral Choices
Since the purpose of this study is to aid communications with religious groups, it might be helpful to expand on the point made above about moral choices in this economic system. The typical Christian framing of the issue is depicted in this passage from Pope Benedict XVI in his “World Day of Peace Message” for 2008: “Respecting the environment … means not selfishly considering nature to be at the complete disposal of our own interests, for future generations also have the right to reap its benefits and to exhibit towards nature the same responsible freedom that we claim for ourselves.” World Day of Peace Message, January 1, 2008, section 7. Laying behind the commitment to future generations is the Catholic concept of the “universal destination of goods”, the idea that God created the earth for all human beings, not just the privileged few who own most of the property in this time and place. Later in this study, we will offer a detailed examination of this traditional teaching. But what lies behind the dictum “Respecting the environment… means not selfishly considering nature to be at the complete disposal of our own interests”?
One implicit assumption is that we are capable of making moral choices in the globalized marketplace, that CEOs of energy corporations can choose to selfishly exploit nature with no regard to the consequences for future generations, or they can quiet their greed and anxiety for a quick profit and make the correct moral choice to respect the rights of other species and the future human race. The Pope seems further to assume that if only large numbers of CEOs would do this in concert, then the climate crisis could be reversed. In fact, most CEOs are genuinely decent people quite capable of good moral choices, but the choices they face are not portrayed in these terms. Their choices are centered on their obligations to the stockholders of their companies. If they make a decision that results in significantly lowering the value of their company’s stock, many dire consequences will ensue. Among these consequences is the possible end of their relationship to the company and the appointment of new leadership more willing to disregard the rights of future generations to increase today’s profit. The underlying system is far from neutral regarding such choices.
Moreover, portraying the problems of the system as the fault of greed-driven personalities serves many useful purposes. First, it makes our current problems appear to be the result of bad personal choices with the implication that if only we can summon the moral courage to turn away from our consumerist lifestyle then ecological degradation can be reversed. The Pope ignores the fact that we are embedded in an economic system that would come crashing down if the consumerist wheel did not keep turning at a frantic pace. Thus the illusion is fostered that our personal moral rectitude should be the focus of our efforts rather than attempting to combat the ideology that controls most economic decisions today. This attitude engenders the sense of weakness toward social formations outside the immediate orbit of Church, school, and local community. Attempting to understand the social system as a whole is variously characterized as hubristic, outside the domain of our expertise, and probably futile. We are encouraged to believe that society is in the hands of experts whose advanced training enables them to understand and administer the larger social dynamics. Focusing on the personal keeps most people’s attention on the self and improving the position of the self vis a vis the neighbor. What the system most fears is the possibility of politically conscious organizations that value solidarity over personal advancement.
The Death of Empathy
The Catholic Church has yet to grapple with the fundamental antipathy between the market and the teachings of Jesus. Despite a mountain of social teachings, she usually prefers to sidestep basic economic issues in order to preserve the source of her funding. These evasive maneuverings usually center on the distinction of planes, “Give to Caesar the things that are Caesar’s and to God the things that are God’s”. The Church is portrayed as a purely spiritual institution which can have no direct voice on economic or political matters, but can only act as a source of moral values. Yet the creation of empathy is fundamental to both faith in the Gospel and the solution to the ecological crisis. The crisis can only be addressed if we care so much about our fellow human beings that we begin to make serious sacrifices for their good.
But the reign of global capital is based on alienation. “Markets reward those who are the most efficient at taking advantage of his or her fellow man or woman, and penalize those who insist, illogically, on pursuing the golden rule—do unto others, as you would have them do unto you. Of course, we are told we can personally benefit in a market system by being of service to others. But we also know we can often benefit more easily by taking advantage of others. Mutual concern, empathy, and solidarity are the appendices of human capacities and emotions in market economies—and like the appendix, they continue to atrophy.” – Robin Hahnel, “Against the Market Economy Advice to Venezuelan Friends”
This atrophy is not the result of bad moral decisions, though such decisions certainly reinforce it, rather the market openly rewards behavior that lacks empathy with economic success. By creating an exchange system that doesn’t require trust or solidarity, markets contribute to the erosion and eventual disappearance of those values. While most Christians treat these effects as simply fallen human nature writ large, they are the products of a consciously enforced ideology which requires a certain type of human being in order for the system to flourish.
By abstracting moral decisions from the economic context in which they must take place, the Pope fails to engage the social mechanisms which must be challenged if humanity is to survive the coming catastrophes. What we have so far established is a number of incompatibilities between the current economic system and ecological sustainability. The tendency to privilege immediate profit over long term social good is not an abuse of a morally neutral economic model, but an inherent part of capitalist operation. This tendency works directly against environmental preservation by favoring immediate exploitation of natural resources without regard for long-term consequences. We have also seen how those who make these decisions do not make them as free moral agents as the Pope conceives, but as agents of monetary forces outside of their control. Thus changes in individual behavior cannot be sufficient to impact to the crisis as long as the market system continues. Finally, we saw how human empathy, one of the core Gospel values, and critical to the solution of the ecological crisis, is constantly eroded by a system that rewards most richly those who lack this quality most completely.
Now that we have established the outlines of the relationship of the current economic system to the ecological crisis along with the strengths and weaknesses of the Pope’s presentation of these issues, we will turn in the third part to the Christian basis for a reordered world, also known as the Kingdom of God, in which the earth receives its just treatment, not according to the values bound up with human aggrandizement, but according to the wisdom of God.
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