If the scientists are right, humanity is facing a climate emergency. There has been much hand-wringing at the many COP-out meetings, but little protection has been afforded to the environment. In fact, the damage seems to be increasing. This should come as no surprise, as socialists have long argued that the capitalist system of production prevents rational stewardship of the planet. The five features of the system set out here show why this is so.
1. The economic status quo
The ownership/control of the world’s productive resources is in the hands of a small minority – via ‘legal title’, as with private capital, or via membership of a clique that controls a state. Yet this ownership/control is fragmented, creating a host of competing interests among that minority.
To consider the implications of this fragmentation, let’s imagine there’s an individual capitalist, Bill, the sole owner of a factory where copper pipe is produced, a standard product sold to industrial customers. All of Bill’s money is tied up in the factory, and the business provides him with an income that means he has no need to do any work himself.
This also means that, if he is to maintain his status as part of the minority, he is absolutely reliant on the continuing success of the business (and who can blame him for wanting to maintain his status? Who would willingly swap the relative freedom of the capitalist for the life of a worker?). However, Bill has no monopoly over copper pipe. His factory is competing in a market and, as any capitalist knows, competition means ‘expand or die’. So what does Bill have to do to avoid economic death?
Experience shows that competition constantly forces businesses to adopt new technologies to increase productivity, that is, to reduce the amount of labour used in their production processes, and produce more in the same amount of time. So Bill will be obliged to use much of the income generated by his company to bring in modern equipment.
One of the facts of new technology is that it won’t be new forever. Sooner or later, there’s no telling when, it will be overtaken by even newer tech that will tend to depress market prices. This means that Bill will have to ensure his new tech runs as fast as it will go to get as much of his product out of the door before prices drop, before his now outdated technology becomes relatively less productive or even economically unusable. This of course means an increase in the use of raw materials and in output – more pipe will be thrown onto the market.
And remember, competitors will be trying to match or better what Bill is doing, so demand for raw materials and output will be multiplied across the pipe-making sector.
A minor detail of new technology is that ‘early adopters’ expect to undercut their competitors for a while and gain market share. But this advantage will only persist until the new technology becomes the norm. This gives an additional impetus to increase production in the meantime, and of course, increase the use of raw materials.
The increased production in Bill’s sector cannot continue ad infinitum. Sooner or later, an imbalance, where supply exceeds demand, will occur. This will usually result in smaller, less productive companies being forced out of business. Supply will align more with demand, until competition creates a new imbalance. (The slump phase of the general business cycle would have a similar effect on Bill’s sector, but that is beyond the scope of the present analysis.)
2. Production for profit
Nothing is produced under the capitalist system unless there is an expectation of profit. In general, although rates of profit will vary, profits are made most of the time (even in a time of economic crisis when lots of businesses go to the wall, there is money capital around to pick up industrial assets at ‘fire sale’ prices which can then be exploited profitably). This increases the amount of money capital that, in light of the competition discussed above, has to be re-invested in some sort of productive process. Hence the staggering amount of wealth in the form of industrial assets that has accumulated under the capitalist system. And it is the very same competition that ensures that these assets can never be left idle for any extended period of time. They must always be put to use, putting new demands on natural resources.
3. The scramble for sales
What has been said above applies to every type of company, be it private, a PLC or workers’ cooperative. It applies too to every sector of capitalist production, be it ship-building, production of industrial robots or the garment trade. But there is an additional factor that operates when we consider the production of personal consumption goods – furniture, clothing, cars and the like.
As we saw above, capital is always on the look-out for profits. In the personal consumption goods sector, this results in the use of cheap materials, planned obsolescence and rapid turnover of fashions, anything in fact that will result in more sales. And on a more general level, it leads to the promotion of individual ownership when public provision would be a far more efficient use of resources (think public transport and laundries, tool libraries, even clothes libraries – why not, it works for wedding suits, doesn’t it?)
4. Anarchic production
The conflict of interests within the owning class makes the rational planning of production (and hence rational use of resources) impossible under the capitalist system. So at the time of writing, (August 2025) there is world overcapacity in, for example, steel, cars, and chemicals.
5. A ‘political’ dimension
Even though capital has now created a world market, individual nation-states, a hangover from capital’s early days, still have a role in protecting the common interests of ‘their’ owning class. So as we are seeing at present, the overcapacity that tends to arise from the economics of capitalist production can also be created or exacerbated by national industrial policies (eg the Chips Act in the US and the ‘Made in China 2025’ policy in China). Although this feature appears to be political, it derives directly from the underlying economic structure.
Budgie.
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