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"No matter how hard life is, just think positive and you will succeed!" -Aliakamal-

Monday, March 11, 2013

Post-Capitalist Ecological Economy OR Ecological Socialist Economic Democracy

To share something academic on my blog is something that I have always wanted to do.  

So, I'm doing it now :)

This complicated topic was actually assigned to us by Dr Ellisha Nasruddin for our group project for Sustainability Concept and Issues (SCI) course.  Pursuing Master of Business Administration with a focus on Sustainable Development, SCI is one of our specialization courses.  Although SCI is undoubtedly a tough course, I love it so much as it has brought me to explore on exciting issues that I have never thought of concerning us, the economy and most importantly, the environment we are living in.  

Actually, post-capitalist ecological economy or also known as ecological socialist economic democracy is an economic system proposed by the transformist environmental lovers to replace current economic system.  Capitalism in current economy is viewed as a threat to the environment sustainability.  The world should therefore be prepared to embrace on this new green economic system.. ‘a practical, workable post capitalist ecological economy, an economy by the people, for the people, that is geared to production for need, not for profit’.   

Interested to learn more about this new economic system? Do enjoy reading below explanation that I have taken from the group termpaper submitted at the end of last semester entitle: 


What is Capitalist Economy?
Today, the world largely operates under a global economic system based on the capitalist mode of production (Conklin, 1991).  Being the most efficient and profitable economy, production in capitalist economy is carried out to maximize corporations’ profit.  In capitalist economy, decisions regarding investment and the use of the means of production are determined by competing business owners in the marketplace.  Therefore, production takes place within the process of capital accumulation.  Being a strong supporter of socialism, Karl Marx, has heavily critiqued capitalism as “dictatorship of the bourgeoisie” with the belief that this economy is run by the wealthy class purely for their own benefit (Peavler, 2012).  


Why is Capitalist Economy a Threat to Ecological Sustainability?
 In his study, Smith (2010) argues that irresistible and relentless pressures for growth are needed for day-to-day requirements of capitalist reproduction in a competitive market.  Growth is an iron law of capitalist development and it can only exist with constant revolutionizing of productive forces, with constantly expanding markets, and with ever-growing consumption of resources.  In ensuring ecological sustainability, socialism and eco-socialists generally believe that capitalist economy system is irrelevant due to its bad impacts.  

Capitalist economy violates the law of sustainability in which it enriches the economy and a small part of the society (the wealthy group) while deteriorating the environment and bottom billion’s wellbeing.  Besides, capitalist is the cause of social exclusion, inequality (Kovel & Lowy, 2001). 


Thus, Herman Daly proposed for a steady state economy in order to replace current system.  A steady state capitalist economy is an economy of relatively stable size. It features stable population and stable consumption that remain at or below carrying capacity.  However, Smith (2010) argues that steady state economy is based on weak assumption, as it assumes that growth is optional rather than built-into capitalism.  He concludes that capitalist growth cannot be stopped, or even slowed and market-driven growth is driving us towards collapse.  Therefore, ecological economist should abandon the fantasy of a steady-state capitalism and work on post-capitalist economic democracy. 

What is Ecosystem Resilience All About?
The amazing characteristic of ecosystem is it has the natural ability to recover or return to its original stage after being disturbed.  However, due to human activities, most of them involving extensive natural resources usage and environmental pollution to serve the capitalist needs of production, this ability have declined globally in the last half century (Chapin, 2009).  Chapin (2009) has also reviewed that in the collapse of many advanced human societies, including Babylon, the Roman Empire, and the Mayan Civilization was contributed by environmental degradation.  Therefore, it is of vital importance that human play their role in ecosystem management starting by establishing resilience-based ecosystem stewardship.  Nevertheless, by considering ecosystem interest in the heart of every activity, capitalist economy may not be able to function at its best.     

Is Socialist Economy Good?
Socialist economy is defined as an economic system based on state an economic system based on state ownership of capital.  It is a system in which the means of production, such as money and other form of capital, are owned by the state or public (Peavler, 2012).  Everyone works for wealth that will be distributed to everyone under socialist system which is contradicting with capitalist system.  Also, in socialist economy, the government will decide how wealth would be distributed among the people.  Socialist oriented economy focuses more on qualitative development instead of quantitative development.          
Karl Marx, a strong supporter of socialism, argued that society would be governed by the working class or workers’ democracy.  Eventually, socialism would be replaced by stateless, classless society called communism.  However, socialism as an ideology or as a political concept has been in declined for a number of years and it is now replaced with liberal ‘democracy’ and market economics (Sarkar, 2000).

Achieving Ecological Socialist Economic Democracy and Its Issues
Sarkar (2000) in his book argues that the socialist project is not dead but to flourish, it must be incorporated with the lessons of ecology.  The incorporation would be able to offer a fresh, exciting and relevant vision of an ecologically sustainable and socially just way of living.  Sarkar’s view was also supported by Smith (2010) which stated that the best way to run the economy and maintaining ecological sustainability is by having ‘a practical, workable post capitalist ecological economy, an economy by the people, for the people, that is geared to production for need, not for profit’.  

Smith (2010) also suggested that in order to achieve eco-socialist economic democracy there are at least seven issues that have to be discussed and considered.  The first issue is to find way to put the brakes on out-of-control growth, even if it involves drastically retrenching or shutting down relevant organisations.  The second issue is to have radical production restructuring to enforce sharp limits on the production and to physically ration the use and consumption of all sorts of natural resources.  The third issue is to sharply increase investments in things that society really need, like renewable energy, organic farming, health, quality schools for our children, and many other currently underfunded social and environmental needs.

Forth issue is discard production that is geared to mindless consumerism and needless repetitive consumption and the industries that support them. Too many choices and too short a lifespan for products have socially and environmentally unbearable costs.  The fifth issue is invent a rational approach to waste which means to minimize all waste, forbid the disposal of toxics of any sort, eliminate most if not all single-use products and enforce mandatory and systematic reuse of containers and packaging. Lastly, Smith if we have to shut down polluting or wasteful industries then society is going to have to provide equivalent jobs because if we do not, more problems will emerge.

The biggest concern about implementing this new macro-economic model is to destroy the freedom that society currently has through capitalist economic model, to buy and produce as they wish.  The market would also be very limited.  However, planning and executing this new system is imperative as we are now very efficiently liquidating every resource on the planet and if we want to save ourselves and many citizens of the ecology, we have to live without the freedom of capitalist.


Eco-socialist Efficiency vs. Capitalist Efficiency
The concept of efficiency in eco-socialist economy is very different from capitalist economy.  There is room for labour and natural resources efficiency in an ecological economy but in capitalist economy, it is the opposite.  Capitalist economy suggests that efficiency in usage of resources means using the saved resources to produce even more commodities.  In capitalist system, efficiency happens when the conversion of even more natural resources into the products is accelerated (Smith, 2010).  Gains in technological efficiency and economies of scale have observed increased overall consumption of natural resources rather than saving them.
Contradicting with capitalist economy, eco-socialist economy does not really have profit as main goal of production.  Such gains in efficiency could actually save these natural resources for the benefit of society and future generation.  From a social ecological perspective, it would be ridiculously inefficient to waste resources by producing unnecessary products and services.  It would be highly efficient if car and electrical appliances are built to be durable and long lasting and have them in the way that they can be upgraded and improved without having the needs to replace them.  As suggested by Smith (2010), it would be far less costly to society and environment.  However, in the capitalist world that we are living in there would only one business goal, increasing profit.  Thus, corporations would produce at a large scale, sell products at lower prices to more customers and push sales and profit higher (Smith, 2010)          


In his article, Smith defines post-capitalist economic democracy as a new macro-economic model, a practical workable post capitalist ecological economy, an economy by the people, for the people, that is geared to production for need, not for profit (Smith, 2010)

On the same note, Sarkar (2000) argues that the Socialist project is not dead but in order to flourish, it must be incorporated with lessons of ecology.  A fresh, exciting, and relevant mission of ecological sustainable and socially just way of living could be achieved through this incorporation.  


Reformist and Transformist’s Ideal Economy Model for Sustainable Development
A reformist approach sees the current dominant capitalist model and its supporting political structures, and noting its various forms around the world, as fundamentally sound and well able to deliver the key reformist sustainability goal of continued human development or, more commonly, sustainable development.

Transformational approach sees the current dominant economic, political and institutional system as the root cause of current unsustainable behavior, and to progress a sustainable world agenda fundamental transformational change to this system is needed (Clifton, 2011). The key features of socio-economic system change suggested by the transformist are:

1.   Human wellbeing as best progressed through consumptive sufficiency and a focus on wellbeing through life experiences
2.   Continued consumptive growth as unsustainable and a primary cause of ecological problems and poverty
3.   Poverty as best resolved through resource allocation not more global-level resource-through-put growth
4.   Quantitative constraints place on natural resource use and waste discharged into the
earth’s ecosystem  

These stated features also consist in eco-socialist economic democracy.  Thus, ecological socialist economic democracy is seen as the best approach in satisfying not only transformists’ but also other eco-socialists’ requirement of an ideal economy.

Kindly email me (aliakamal69@gmail.com) for more details and full reference list.  Hope you have gained something beneficial by reading our work and please, do not plagiarise! 

Nobody can do everything, but everybody can do something for environmental sustainability.

thanks for reading! :)

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