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Capitalism’s failures arise from two of its defining elements. The first is perpetual growth. Economic growth is the aggregate effect of the quest to accumulate capital and extract profit. Capitalism collapses without growth, yet perpetual growth on a finite planet leads inexorably to environmental calamity.
Those who defend capitalism argue that, as consumption switches from goods to services, economic growth can be decoupled from the use of material resources. Last week, [ a paper in the journal New Political Economy] by Jason Hickel and Giorgos Kallis examined this premise. They found that while some relative decoupling took place in the 20th century (material resource consumption grew, but not as quickly as economic growth), in the 21st there has been a re-coupling: rising resource consumption has so far matched or exceeded the rate of economic growth. The absolute decoupling needed to avert environmental catastrophe (a reduction in material resource use) has never been achieved, and appears impossible while economic growth continues. Green growth is an illusion.
A system based on perpetual growth cannot function without peripheries and externalities. There must always be an extraction zone, from which materials are taken without full payment, and a disposal zone, where costs are dumped in the form of waste and pollution. As the scale of economic activity increases, until capitalism affects everything from the atmosphere to the deep ocean floor, the entire planet becomes a sacrifice zone: we all inhabit the periphery of the profit-making machine.