What Is Capitalism
Capitalism is an economic system where individuals, businesses and companies own all capital goods. At the same time, businesses and companies employ labourers to produce goods and pay them a small wage.
The capitalist system first developed in the United Kingdom in the 16th century. The capitalist system now sweeps across the globe, with even the poorest countries following this system.
For capitalism to thrive, it requires two main ingredients—continuous growth and innovation. Capitalism uses the resources it has to grow and innovate in the most efficient manner possible.
The Problems With Capitalism
Many labourers in poor, developing countries suffer at the hands of capitalism. They often pay unfair wages and are made to work long hours. Business owners know they can get cheap labour in poorer countries, so they exploit workers' rights.
Capitalism relies on a pyramid system whereby the rich remain at the top. The largest group of people are at the bottom of the pyramid. The poor rely on the rich for their wages.
Furthermore, the current capitalist system does not consider the implications of not having a circular economy. Goods and services are in continuous production, and with this comes many environmental implications. Our current capitalist system has exploited both people and the planet.
Earthrise studios recently interviewed climate leaders about capitalism and climate change. A quote from environmental journalist and political activists George Monbiot stated, “The infinite growth of a finite planet cannot be sustained”. Capitalism requires us to grow better and innovate in new ways. Our planet cannot sustain this level of consumerism, so we have no choice but to change.
Reimagining Capitalism
Our current society lives and breathes capitalism. Changing the system requires a change in mindset, which, for most individuals, poses a challenge. However, humans have no choice but to adapt as climate change becomes a more imminent threat.
Economists, scientists and politicians are discussing new types of capitalism—a reformed capitalist economy. The contemporary, reimagined capitalist society can be broken down into different sections.
- Circular Economy
Current capitalism means we extract materials from the earth, make products, and eventually throw them away as waste. In a circular economy, we stop waste from being produced in the first place.
A circular economy involves a system whereby consumer goods are shared, reused, repaired, and refurbished. The main goal of a circular economy is to reduce waste to a minimum and provide a second life to consumer goods.
Moving towards a circular economy could deliver benefits such as reducing pressure on the environment, stimulating innovation, and boosting economic growth. It also relieves stress off labourers as consumer goods would not be in such high demand.
Implementing a circular economy would also mean citizens, in general, would save more money as the quality of life of the products would increase, meaning they consume less and spend less.
- Private Sufficiency, Public Luxury
“The expansion of public wealth creates more space for everyone; the expansion of private wealth reduces it, eventually damaging most people's quality of life.” The quote is a recent quote from George Monbiot, the man behind the theory of private sufficiency and public luxury.
The theory goes that if we want to enjoy many luxuries, we go outside the private domain. We use the public spaces surrounding us, such as public swimming pools, nature reserves, and buildings designed to help communities connect rather than separate. The private domain would be sufficient, but the public space would be filled with things everyone can enjoy.
This theory by George Monbiot views wealth holistically. Instead of making the rich richer and letting them get away with tax aviation, Monbiot suggests that taxpayers' money should be invested in public and community spaces.
- Regenerative Cultures
Our production systems are built to be as efficient and profitable as they can be. However, when reimagining capitalism, we need to change these standards. Instead of focusing on profit and efficiency, why not focus on creating restorative and regenerative systems?
Regenerative systems are beneficial for the planet, providing long-term solutions. For example, the current agriculture sector is falling apart due to soil degradation and scarcity. We will reverse soil degradation and reduce land usage if we adopt regenerative agricultural farming methods. Regenerative agriculture reintroduces biodiversity and keeps the soil healthy.
It is true; regenerative culture provides less high yield than unsustainable farming methods do. However, regenerative agriculture is the best solution as it is a long-term solution, ensuring healthy soil and less land usage. It also sequesters vast amounts of carbon-reducing our GHG emissions.
So to go back to our original questions, “is capitalism a solution to climate change?”. Under our current capitalist system, the answer is a firm no. However, a reimagined capitalist society has the potential to reverse the effects of climate change.
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