Posted by: Annabel Ascher | June 30, 2011

Reclaiming the Commons Part VI-The Logic of the Market

American Junkyard

The Logic of the Market

The logic of the market is built on the twin pillars of profit and growth. As Schnaiberg and Gould write:

“The logic of the modern economic firm and the larger treadmill system represent the very antithesis of the Buddhist economics noted earlier: they require maximal consumption in order to sustain firms, so that the economy can generate modest levels of human satisfaction.”[i]

Nothing about the logic of the treadmill or the discipline of modern economics squares with the physical realities on planet Earth. As Bruce Macpherson, Professor of Social Science writes:

“Learn not to be intimidated by economics or economists. Yes, it is a challenging discipline and economists are knowledgeable and expert, but only within ‘the box’ (paradigm) of their own creation. Outside of it they know not whereof they speak. Remember: their ‘map’ does not reflect the territory. Nature’s economy is much greater, fuller, richer than that”

Macpherson than quotes a former student who said “Economics is like a video game: internally logical, cleverly and seductively contrived, fun to play…BUT not to be confused with reality.”[ii] I would like to point out two of the most destructive aspects of the game of economics as it is played in the modern world. The first involves competition. Schnaiberg and Gould discuss the negative effect of corporate competition on the environment in some depth.[iii]Competition is nevertheless constantly being invoked as necessary to produce the best results for the consumer. But is this even true? In the natural world, competition is the only species interaction which insures a negative result for both parties. Even parasitism at least has a good outcome for one party. While one party to a competition may emerge the eventual ‘winner’ they do not do so with out a price. And, there must be a winner. Ecologist Robert E. Ricklefs defines the ‘Competitive Exclusion Principle’ as follows: [iv]“The hypothesis that two or more species cannot co-exist on a single resource that is scarce relative to demand for it.” The outcome in species interactions is that the stronger species extirpates the weaker. In like manner, when competition is the main interaction in the economy, eventually the result will be monopoly. In the global economy of trans-national corporations, this has indeed been the result. There has been unprecedented building of monopolies under this supposed free market regime, both in horizontal and vertical integration. This has led to fewer choices for consumers, a validation of the ‘race for the bottom’ in labor management practices, and the largest consolidation of private power in the history of our species. Adam Smith may have written of competition, but I believe if he had had the language for it he would have used the word diversity instead. For the monopolistic result of competition is contrary to his theory.

The second large danger I would like to discuss is the idea of a “socially optimal level of pollution.” The theory is as follows: If pollution and environmental degradation get ‘bad enough’ affluent consumers will be willing to pay x to restore the system from y2 back to y1.In reality, ecosystems operate within a narrow range of tolerances. The point at which humans might be willing to push their destructive economic activities back to a more acceptable (for themselves) level could be too little to late for massive numbers of less resilient species. Schnaiberg and Gould go in to great detail regarding the shift from ecological disruption to irreversible ecosystem disorganization.[v] The trouble is, nobody knows exactly where the line of demarcation lies, especially not the CEOs of large corporations with a vested financial interest in the answer and at least a temporary ability to protect themselves from the consequences.

The masters of the free market have the zeal of evangelists partly because the ideology of the market can be likened unto a modern secular religion. Arlie Russell Hochschild, professor of sociology at UC Berkeley writes of Harvey Cox’s thesis that capitalism has become a religion. “Capitalism has, Cox suggests, its myths of origin, its legends of the fall, its doctrine of sin and redemption, its notion of sacrifice (state belt-tightening) and its hope of salvation through the free market system.” Hochschild continues:

Indeed, if in the Middle Ages the church provided people with a basic orientation to life, the multinational corporation’s workplace, with its  “mission statements” its urgent deadlines, its demands for peak performance and total quality, does so today. Paradoxically, what would seem like the most secular of systems (capitalism) organized around the most profane of activities (making a living, shopping) provides a sense of the sacred. So, what began as a means to an end –capitalism the means, good living the end, has become an end in itself. It’s a case of mission drift writ large. The cathedrals of capitalism dominate our cities. Its ideology dominates our airwaves. It calls for sacrifice through long hours of work, and offers its blessing through commodities. When the terrorists struck the twin towers on 9/11, they were, perhaps aiming at what they conceived of as a more powerful rival temple, another religion. Heartless as they were, they were correct to see capitalism and the twin towers as its symbol, as a serious rival religion.[vi]

 

If capitalism is a religion for some, its lifeblood, petrochemicals, takes the form of an addiction for all of us in the industrialized world, companies and worker/consumers alike. Psychologist Chellis Glendinning writes “What is addiction? We all certainly know what it looks like.” She goes on to describe a laundry list of unsavory self destructive behaviors. “Addiction looks like a person unable to express appropriate feelings. It looks like a perpetrator of abuse who constructs elaborate excuses for not acknowledging the hurt he has caused.” Glendinning goes on to describe how the process of addiction ends in total breakdown and possibly death.[vii] Writers Winin Pereira and Jeremy Seabrook concur, stating “”When we look at the list of noxious and damaging substances to which the people of the West are addicted, it is clear that the theme of addiction lies at the heart of consumer society.”[viii] What should be striking fear into the hearts of the addicted, and would, if they/we were not so deep in denial, is that the oil is running out rather quickly, and the pace of depletion will surely quicken if the free-market fundamentalists have their way and succeed in spreading the gospel in hitherto “under-developed” states. Schnaiberg and Gould have this to say:

Reliance on non-renewable energy resources insures that these resources will eventually be completely depleted. Increasing the demand depletes these resources at an ever increasing pace. Economic growth necessitates greater levels of consumption by greater numbers of people. Energy conservation efforts can only buy us a little more time. Therefore, the ideology of growth moves us closer and closer to the day when no fossil fuels will remain. When that day comes, if we have not developed alternative technologies for energy supplies, the entire socio-economic and industrial-technological complex of global society will collapse.  (Frahm and Buttel, 1982) Such a collapse will be the single most cataclysmic event in all of human history. Very few in the North will survive.[ix]

 

The clear observation of the behavior of industrial societies as religious ideology in support of an addiction helps to explain the fierce unwillingness to change even in the face of on-rushing disaster.


[i] Schnaiberg and Gould, Page 45

[ii] Macpherson, The Five Fatal Flaws, preface, Page 17

[iii] Schnaiberg and Gould Pages 51-54

[iv] Robert E. Ricklefs ,The Economy of Nature, Page 522,Glossary

[v] Schnaiberg and Gould, 1st chapter

[vi] Arlie Russell Hochschild, The Commercialization of Intimate Life, Page 144

[vii] Chellis Glendinning ,My Name is Chellis and I’m in Recovery from Western Civilization ,Page 97.98

[viii] Pereira and Seabrook ,Global Parasites ,Page 191

[ix] Schnaiberg and Gould, Page 203

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