Is capitalism really in a grow-or-die situation?It appears that the limits to growth will REQUIRE the world to adopt economic systems that can function without growth in consumption. Which systems can adapt to reduced consumption? Many people believe capitalism will not be able to end consumption growth.Assuming competition among giants will define capitalism in the near future, just what makes growth a necessity for the survival of that kind of capitalism? Investors do not need ever increasing profit. Investors can save a growing fortune with a constant income from their profits. A business generating a profit at the going rate of return for its investors is making enough profit to survive. The nearly universal desire for greater profits will not support the claim that capitalism is a grow-or-die system. Investors desire high profits. From their personal point of view profits are never high enough, but business can operate very well with just adequate profits. There's nothing grow-or-die in their desire for more and more. Even if we suppose the rate of profit must go up that still doesn't mean that capitalism needs its productive output to go up and up as well. When many small businesses are replaced by a few big ones, there is a growth in the size of businesses, but that doesn't mean that total output must go up. The list of possible reasons why capitalism may be in a grow-or-die situation has only one outstanding member: On the micro-economic level there is no general reason why business must grow or die, however on the macro level the capitalist economy needs growth in per-capita consumption to offset increasing labor productivity. To end capitalism's need for growth its population must be stabilized. Population growth adds to the need for growth in total consumption, but its effect on employment is largely canceled since each additional person is both a worker and a consumer. Capitalism needs to cope with both growth in increasing population and growth in labor productivity to survive. Assuming that population is stabilized, then how can capitalism deal with the coming of robots and the unemployment caused by high productivity? The answer is waiting nearby. Capitalism could hope to become sustainable because it has unearned income, that old invisible gorilla. Capitalists could end the system's need for full employment by allowing welfare for the unemployed. Welfare is undeserved unearned income, similar to a dividend. Why is welfare so bad, while dividends are so good? Saved wages have not been the source of many big fortunes. Capitalism could regulate itself so that the parasitic idle rich had to share their loot with the redundant lazy poor. The welfare state doesn't need growth to keep people busy. Welfare will not solve the population problem. Aside from poverty and war, looking for kinder methods, I propose that investors lend support to planned parenthood just to cover their asses. Odd they haven't tried that yet. Their minions in the media could easily fend off the "every sperm is sacred" crowd with a video of a helpless egg being raped by terrible sperm. Everyone can be proud of the machines we built do our work, for a while. Productivity may fall. Perhaps the end of free energy, rising system incompetence, weather, and war will create full employment for workers as soldiers or manual labors without any growth in output at all being needed. Barry Brooks Confronting the inevitable: Population reduction, voluntary and otherwise back to Mr. Peak Oil |