Not even climate change will kill off capitalism

[Razmig Keucheyan, 6 March 2014] As long as the conditions for investment and profit remain, the system will adapt. Which is why we need a revolution. The sums spent by governments on catastrophe have risen to unprecedented levels, putting public budgets at risk.

Arguably the single most important mistake the revolutionary movements of the 60s and 70s made was to overlook the resilience of capitalism. The idea – catastrophism, as it is often called – that the system was going to crumble under the pressure of its own contradictions, that the bourgeoisie produces its own “gravediggers” (as Marx and Engels put it in the Communist Manifesto) has been disproved. When the rate of profit started showing signs of decline in the first half of the 70s, the redistributive policies implemented after the second world war were terminated and the neoliberal revolution was launched.

This resilience of capitalism has little to do with the dominant classes being particularly clever or far-sighted. In fact, they can keep on making mistakes – yet capitalism still thrives. Why?

Capitalism has created a world of great complexity since its birth. Yet at its core, it is based on a set of simple mechanisms that can easily adapt to adversity. This is a kind of “generative grammar” in Noam Chomsky’s sense: a finite set of rules can generate an infinity of outcomes.

The context today is very different from that of the 60s and 70s. The global left, however, is in danger of committing the same error of underestimating capitalism all over again. Catastrophism, this time, takes the form of investing faith in a new object: climate change, and more generally the ecological crisis.

There is a worryingly widespread belief in leftwing circles that capitalism will not survive the environmental crisis. The system, so the story goes, has reached its absolute limits: without natural resources – oil among them – it can’t function, and these resources are fast depleting; the growing number of ecological disasters will increase the cost of maintaining infrastructures to unsustainable levels; and the impact of a changing climate on food prices will induce riots that will make societies ungovernable.

The beauty of catastrophism, today as in the past, is that if the system is to crumble under the weight of its own contradictions, the weakness of the left ceases to be a problem. The end of capitalism takes the form of suicide rather than murder. So the absence of a murderer – that is, an organised revolutionary movement – doesn’t really matter any more.

But the left would be better off learning from its past mistakes. Capitalism might well be capable not only of adapting to climate change but of profiting from it. One hears that the capitalist system is confronted with a double crisis: an economic one that started in 2008, and an ecological one, rendering the situation doubly perilous. But one crisis can sometimes serve to solve another.

Capitalism is responding to the challenge of the ecological crisis with two of its favourite weapons: financialisation and militarisation. In times of crisis, for instance, markets will require simultaneously that wages be cut and that people keep consuming. Opening the flow of credit allows the reconciliation of these two contradictory injunctions – at least until the next financial crisis.

As Costas Lapavitsas has recently shown, finance has penetrated every nook and cranny of our everyday lives: housing, health, education, even nature. Carbon markets, weather or biodiversity derivatives, catastrophe bonds, among others, belong to a new variety of “environmental finance” products. Each one has its own specific way of functioning, but their overall purpose is to alleviate or spread the rising costs of climate change and the super-exploitation of the environment.

For instance, catastrophe bonds – or “cat bonds” – are not linked to future investment, as traditional government or private bonds are, but to the possible occurrence of a catastrophe, say, an earthquake in Japan, or the continuing floods in the UK, whose cost to the insurance industry is estimated at about £3bn. A government issues a “cat bond” to gather funds. In return, it pays an attractive interest rate to the investors. If a catastrophe occurs, the government keeps the money to rebuild infrastructures or compensate victims. If it doesn’t, the investors eventually get their money back (and they keep the interest).

With the growing number of natural disasters due to climate change, the sums spent by governments on catastrophe management have risen to unprecedented levels. In some regions, this has put public budgets in jeopardy. The financialisation of catastrophe insurance is supposed to keep budgets balanced. It remains to be seen if this is a sustainable response to the threat. But, from the point of view of the system, it may well be.

With financialisation comes the second capitalist response to the ecological crisis: militarisation. Since the second half of the last decade, all major armies of the world have published detailed reports on the military consequences of climate change. Among the different sectors of the ruling classes, the military is the one that takes the environmental crisis most seriously – the environment is a crucial parameter in war-making. Clausewitz’s On War, the greatest military treatise ever written, explains the importance of the “terrain”. So whether and to what extent environmental parameters start changing matters greatly to the military.

A report published in the US in 2007, titled National Security and the Threat of Climate Change – created by, among others, 11 three- and four-star admirals and generals – defines climate change as a “threat multiplier” that will intensify existing menaces. For instance, by further weakening “failed states” it will make it easier for terrorists to find refuge on their territory. Or by provoking climate migration, it will destabilise the regions where the migrants arrive and exacerbate ethnic conflicts. The US army, the report concludes, should adapt its tactics and equipment to a changing environment.

Like financialisation, militarisation is about reducing risk and creating a physical and social environment favourable to capitalist accumulation. They are a kind of “antibody” that the system secretes when a menace looms. This doesn’t necessarily take the form of shocks of the sort described by Naomi Klein in her book The Shock Doctrine: it is a more gradual process that slowly takes hold of every aspect of social life.

Nothing in the system’s logic will make it go away. A world of environmental desolation and conflict will work for capitalism, as long as the conditions for investment and profit are guaranteed. And, for this, good old finance and the military are ready to serve. Building a revolutionary movement that will put a stop to this insane logic is therefore not optional. Because, if the system can survive, it doesn’t mean that lives worth living will.

Source: The Guardian