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Market Economy: Deep Roots of Dysfunction
by Joan Roelofs, Monadnock Greens
There is nothing new in the disaster anticipated from NAFTA. The market economy hasn't "broken down," or suddenly reached environmental limits. Its inherent faults are simply more clearly manifest in an age of mass communication and heightened consciousness. Here I will focus on the conflict between the market—the backbone of capitalism—and Green values.
Many people, even some socialists, believe that both trade and commodification are beneficial. These processes, essential to the creation of a market economy, are considered progressive because they offer both more choice and a larger amount of stuff. While these effects cannot be disputed, their hidden costs in human and environmental terms must be taken into account. In contrast to conventional economics, Green economics does not measure progress in terms of expanded production and consumption. A further supposed benefit of markets, saving of labor and increased leisure, is highly questionable. Even consumption becomes "work": e.g., driving to a shopping mall to purchase an exercise bicycle to compensate for a sedentary lifestyle.
International markets intensify the dysfunctions, although these effects may occur whenever there is trade. We are less aware of the conditions abroad, and we feel little responsibility for the labor and environmental policies (or lack of them) of other countries. However, the practices of the developed countries, and UN agencies controlled by them (e.g., the World Bank) are often directly responsible for production conditions in other countries. An obvious example is the foreign-trained "death squad" which targets labor organizers in Third World countries. Even without outside prodding, countries anxious for export growth will intensify exploitation of workers and destruction of the environment. The Quayle-headed "Council on Competitiveness" was an instance of this operating in a "developed" nation.
International trade, and the consequent competition for markets and raw materials, has historically been the occasion for militarism and war. This remains true today, and now includes covert actions and counter-insurgency warfare.
Commodification was a long process in the Western industrial countries, so we have come to take it for granted. The other side of production for market is the destruction of a self-sufficient lifestyle. Social fabric and community are torn apart. The increasing dependence on money for all essentials of life results in a frenzied pace of work (for those who can obtain paid jobs), idleness for others, great inequities in life chances, endemic starvation even in the absence of famine, and resort to prostitution for sheer survival.
The current processes are not different in kind from those that occurred in the early Western period of industrialization. The myth of capitalism has it that the industrial revolution was made possible because middle-class businessmen postponed gratification, thus providing a surplus for investment. In actuality, the source of the surplus was more diverse, including plunder from the East and the New World, cheap raw materials extracted or produced by slave labor, profits from wool which were coeval with the social costs of the British enclosure movement, and so forth. Thus, cotton for the mills of England (and later, Lowell, Mass) was supplied by slave labor. Increasing monoculture plantations took their toll on the soil and required control of the boll. The social conditions of early international shipping, (notwithstanding wind power) are romanticized, but the normal brutal life of sailors, along with piracy and shipwreck, must be reckoned as costs of trade. Armies and navies swelled to defend the shipping lanes and to penetrate and exploit the entire earth.
In the manufacturing centers of Britain, child and female labor were used in the factories and mines, while skilled weavers became obsolete (hence the Luddite rebellion). Coal extraction undermined the soil, and coal-fired machinery blackened the lungs of workers and whole communities. All for the production of T-shirts without charm, which were the grandfathers of the worldwide T-shirt plague which strikes even Greens. These processes created a dependence on the cash economy for all involved. The men could have stayed home to knit and brew and stew and whittle, but they too were drawn into the mills and mines. With the enclosures, raw materials became scarce; with the need to buy everything, time also became scarce.
Increasingly, all needs had to be supplied by commodities: processed food; distilled liquor; imported coffee, tea, cane sugar, tobacco, chocolate—all drugs to facilitate the wearying pace of life. Did the consumer gain, even if at the expense of the producer? Hardly, for among the costs were attention to relationships communal and domestic, including childrearing. The aesthetics of daily life, both social forms and useful objects, suffered. Especially for the working class, but to some extent for all, the pollution of air, water, and soil was health-destroying and nerve-shattering. The destruction of entire communities and creation of ghost towns (e.g., as water power was replaced with coal, and ultimately, electricity) must also be counted. Diet deteriorated. The British case was extreme, but not atypical. With the repeal of the Corn Laws and the decline of local food production, chemicalized and processed food became customary, and today the British diet is regarded as the most unhealthy in the world. Ironically, World War II led to a temporary improvement because of curtailment of trade, rationing, reduced meat and fat, and widespread reliance on allotment gardens. More significantly, it showed the possibility for sustainable food production even in one of the least self-sufficient countries and under wartime conditions of labor scarcity.
Some might argue that despite the decline of the Western diet, increased longevity resulted, which must be the result of capitalism. However, cause and effect are not proven; it could well be that advances are the result of anti-capitalist movements and measures—public health and education and other non-market interventions such as restrictions on working hours, child labor, and coal-burning. To those who would argue that current population densities require commodities, one might respond that there is no particular virtue (aside from profits and cannon-fodder) in dense populations. Traditional societies had a vast array of devices for limiting births to accord with the carrying capacity of the land.
The adverse consequences of capitalism followed logically from Adam Smith's theory. It did not malfunction but was absurd to begin with. Among other premises, it assumes that the only values worth counting are those resulting from turning everything into commodities: land (i.e., resources and the environment), labor and capital. The more commodities consumed the better off all are assumed to be. Yet aside from all the exploitation and environmental destruction, the very dependence on commodities has profound social and political consequences. Even the partial introduction of commodities makes handicraft nearly obsolete. The rhythm of daily life, often quite leisurely in medieval peasant or primitive economies, cannot survive the urgent need for money.
Among the many fallacies of Smith is the utopian dream of the invisible hand, and the idea that self-interest and competition would keep the producers honest. Especially as markets become distant or international, economic, social, and legal sanctions for fraud, adulteration, monopolization, etc. are eviscerated.
Today's dysfunctions are similar to the earlier ones. Extractive industries in the Third World slice up the earth, redistribute wealth to the First world, and operate under semi-slave labor conditions. Export agriculture, promoted by the United Nations, the US, and Western Europe, has destroyed subsistence farming, increased erosion and pollution from chemicals (including the "Green Revolution"), and led to widespread starvation throughout the Third World.
The displaced rural population creates shantytowns around major urban centers and lives as it can. The age-old trade in guns and drugs (sugar, coffee, tea, cocaine, tobacco, alcohol, etc.) is now joined by prostitution as an important commodity in world trade. Some countries export prostitutes as "guest workers," and some have major sex tourism industries; in both cases their remissions are important in balancing the international trade accounts. This would be bad enough without the increasing participation of children and rapid spread of AIDS. Poor nations are also augmenting their earnings by hosting the toxic wastes of the rich ("prostitoxion").
International cutthroat competition in manufacturing industries insures that "cost advantage" accrues to those areas which most exploit workers and pay least attention to environmental and health and safety concerns. Products are "cheap" only if their human and environmental costs are discounted, including military costs which maintains the system.
If we look at what needs to be done to sustain human existence, instead of what we can sell or export, nurturing of children and communities looms large.
Under decent conditions, production costs would eventually be nearly equal everywhere, and then the transportation costs would become salient. These include the pesticides and fungicides incorporated into agricultural products (food and fibers), the millions of gallons of oil required, and pollution produced by air and sea freight. Ships pollute the oceans even when there is no mishap, but piracy and shipwreck are still common, the latter with heavy risk of oil and other toxic spill. The transport of oil itself has been a disaster.
Some might argue that trade in luxury products is benign, but a careful examination shows this not to be the case. First of all, there are the high-value crops: coffee, cocaine, ganja, etc., as well as tropical fruits and exotic vegetables. Their higher prices tend to draw all resources, labor and capital away from food production. Another luxury category is art and archeological treasures; perhaps these should stay where they lay. Diamonds are collected through massive strip-mining operations; other precious minerals may be obtained through arduous work. Handicrafts seem innocuous, but handmade lace, embroidery, etc., is often produced by child labor and results in eyesight deterioration. Tourism as an item in international trade must also be carefully considered. Even where sex tourism is not the central focus, tourism tends to skew the labor force towards jobs as waitpersons, maids, cab drivers, and hustlers. Many wonders, natural or artificial, cannot be seen without being gradually destroyed. Perhaps benign forms of tourism can be devised, along with trade emphasizing exchange of skills and barter of surplus. Then we can learn to make our own lace, and decide whether it is worth it.
Since most of the time we don't even know about conditions of production elsewhere, we are hardly able to enforce human and environmental standards. Even with controls, the market is a poor allocator of resources, which tend to be drawn to those products which are heavily advertised instead of those which satisfy urgent human needs. The market is likewise inept when it comes to provision of collective goods, such as a clean environment and a satisfactory social order. Today there is considerable agreement among environmental economists on what are basic needs. Public provision of many of these has been traditional even in capitalist nations, but this has slowed down under the influence of "privatization," not because social provision has been undemocratic or ineffective.
While directing resources to basic needs, bioregional production should be encouraged. The imposition of international standards will raise prices and make local products more desirable; researching of overseas conditions will impose moral "tariffs" on cheap goods. Furthermore, we must calculate as costs to us the tax-supported military which maintains the system of "cheap" raw materials and labor. Instead, we can direct subsidies to local producers. One historic example of this is the community market hall; public institutions could also purchase local products.
Finally, a process of decommodification might be encouraged. For example, reduction of hours spent in paid work would permit communal childcare and elder care. Home manufacture of clothing might reduce the wastefulness of inflexibly-sized styles, style changes, shoddy goods and workmanship, as you would not readily alienate that which embodies your labor. The current world clothing trade, exactly like its 19th century predecessors, is polluting, wasteful, and exploitative. Furthermore, charities often reject discarded clothing which ends up in the solid waste stream. While recycling (e.g., into paper) is theoretically possible, it is rarely economically so. Yet the T-shirt has replaced beautiful and durable native clothing because paid workers no longer have time to produce it.
Decommodification would affect men as well as women, and would begin to restore the greater gender equality of pre-capitalist societies. If we look at what needs to be done to sustain human existence, instead of what we can sell or export, nurturing of children and communities looms large. It is the curse of the First World and the Third World that "what can we export?" determines all else, and it was the curse of the Former Second World that they did not use planning for human and environmental rationality. Fortunately, the voices in the wilderness have become a chorus, and the movements for "sustainable economics" should gain ground.
Further reading:
Bernstein, H., B. Crow, M. MacIntosh, & C. Martine. The Food Question, Monthly Review, 1990
Daly, H & J. Cobb, For the Common Good, Beacon, 1989
Ekins, P. & M. Max-Neef, Real-Life Economics, Routledge, 1992
George, S. Ill Fares the Land, Penguin, 1990
Norberg-Hodge, H. Ancient Futures: Learning from Ladakh, Sierra, 1992