Collision Course: Endless Growth on a Finite Planet (13 page)

As coal-powered industrialization took hold in the late eighteenth century, however, it began to be argued, famously by Adam Smith, that the individual’s pursuit of self-interest is a boon to society as a whole. Though Smith’s approach was not quite as clear-cut as this might sound,
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he did see the stimulation of demand—of what amounts in the long run to unbridled consumption—as an advantage for nations, since increasing the scale of consumption could elicit production on a scale that would invite the efficiencies of specialization and division of labor, and thus drive economic expansion. In this sense, the industrial capitalist era has harnessed desire, with its complex individual peculiarities, to supplant basic survival needs as the driver of economic growth. This switch was central to Smith’s new theory of the origins of the wealth of nations. Rather than being a matter of balancing the international books, acquiring territory, or building up reserves of gold and silver (as the mercantilists had thought), wealth could now be understood to flow from unleashing desire and setting it loose in the marketplace of material goods. By the late eighteenth century, it was possible to consider the pursuit of luxury as advantageous for society as a whole.
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Even if Smith’s approach was ambiguous, neoclassical economists later emphasized self-interest to the point of equating it with greed, and of valorizing greed as a driver of progress and a progenitor of welfare for all.
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This does not, of course, automatically follow. Capitalist enterprise is run for profit rather than to meet human needs, and even though the two may coincide, there is no intrinsic reason why they should; if there is a conflict, profit will almost always be preferred. Profit can be increased by expanding production to embrace economies of scale, by minimizing costs (including those paid for labor and resources) and maximizing production (often by technological innovation). Efficiency will therefore be pursued to the extent that it achieves these ends.
Efficiency
, a core concept for neoliberalism (see the next chapter), means efficient profit-making. It is not focused on efficient production or the avoidance of waste. There is no motive internal to capitalism that renders the avoidance of environmental degradation a necessary consideration. As the preeminent free marketeer Milton Friedman has argued, “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”
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Corporations function on behalf of their shareholders (and other direct stakeholders to some extent); corporate law in Australia, for example, requires company officials to operate “in good faith in the best interests of the corporation,” and courts construe this to mean the shareholders. Though other so-called stakeholders, such as employees or customers, might occasionally be regarded as relevant by some directors, corporations are not required to take into account the broader society, the natural environment, or the common good.
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Indeed, in some circumstances, profit maximization requires that environmental degradation, and even public health, be ignored, as in the notorious case of the Ford Pinto, where hundreds of drivers burned to death because Ford’s cost–benefit analysis indicated that settling the resultant lawsuits was cheaper than retooling the assembly lines.
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When fishermen and their families died of mercury poisoning on the shores of Japan’s Minamata Bay in the 1950s, the Chisso Corporation polluting the harbor initially denied any connection, and managed to defer official recognition of the cause of the sickness for twelve years, while people died and fishermen lost their livelihoods.
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Whether pouring their waste into the rivers of northern England in the nineteenth century or the Ok Tedi (Papua New Guinea) in the twentieth, or into the Yellow River (China) today, businesses operating on the profit system, whether private or state-owned, have saved costs at whatever ecological or health expense has been permitted—or tolerated—by the state.

Rise of the Consumer Economy

Periods of scarcity were endemic in all early human societies, and with the advent of agriculture, settled people were especially vulnerable to annual weather variations, as well as longer-term shifts in climate. One great achievement of the capitalist economy was the amelioration of the problem of periodic scarcity for Europe and its settler offshoots. The travails of getting to this point through the nineteenth century visited grotesque conditions on generations of the workers who built the industrial wealth as they worked the kinds of hours in the kinds of conditions seen today in the mines and sweatshops of the developing world.
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At the same time, the fantastic expansion of European economies was continuously underpinned by plunder, pillage, and murder throughout overseas empires. For Europe, however, and its settler colonies, such as the United States and Australia, scarcity of daily necessities was greatly reduced by the time of World War I. In these places, the “common man” began to enjoy unprecedented material security.

These material advances were anchored in the first phase of the globalization of industrial capitalism. In his survey of the origins of World War I, Eric Hobsbawm argued that the war had been waged at least in part for the means to continue industrial expansion, to secure access to “world markets and material resources, and … control of regions such as the Near and Middle East where … petro-diplomacy was already a crucial factor.” The advent of a worldwide industrial capitalist economy “inevitably pushed the world in the direction of state rivalry, imperialist expansion, conflict and war.… Competing national industrial economies now confronted each other.” Political power required commensurate economic power. Though Hobsbawm ruled out the notion that individual capitalists or corporations favored war (which usually jeopardized “business as usual”), he argued that the “characteristic feature of capitalist accumulation was precisely that it had no limit. The ‘natural frontiers’ of Standard Oil, the Deutsche Bank, the De Beers Diamond Corporation were at the end of the universe, or rather at the limits of their capacity to expand.”
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People Become Consumers: Beginnings

The notion of human beings as consumers first took shape before World War I, but became commonplace in America in the 1920s. Consumption is now frequently seen as our principal role in the world.
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People, of course, have always “consumed” the necessities of life—food, shelter, clothing—and have always had to work to get them or have others work for them, but there was little economic motive for increased consumption among the mass of people before the twentieth century. Quite the reverse: frugality and thrift were more appropriate to situations where survival rations were not guaranteed. Attempts to promote new fashions, harness the “propulsive power of envy,” and boost sales multiplied in Britain in the late eighteenth century; here began the “slow unleashing of the acquisitive instincts,” when the pursuit of opulence and display first extended beyond the very rich.
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But, while poorer people might have acquired a very few useful household items, a skillet, perhaps, or an iron pot, the sumptuous clothing, furniture, and pottery of the era were still confined to a very small population. In late nineteenth-century Britain a variety of foods became accessible to the average person, who would previously have lived on bread and potatoes—consumption beyond mere subsistence. This improvement in food variety did not extend durable items to the mass of people, however. The proliferating shops and department stores of that period served only a restricted population of urban middle-class people in Europe, but the display of tempting products in shops in daily public view was greatly extended—and display was a key element in the fostering of fashion and envy.
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Although the period after World War II is often identified as the beginning of the immense eruption of consumption across the industrialized world, the historian William Leach locates its roots in the United States around the turn of the century. In the United States, existing shops were rapidly extended through the 1890s, mail-order shopping surged, and the new century saw massive multistory department stores “covering millions of acres of selling space.” Retailing was already passing decisively from small shopkeepers to corporate giants who had access to investment bankers and drew on assembly-line production of commodities, powered by fossil fuels; the traditional objective of making products for their self-evident usefulness was displaced by the goal of profit and the need for a machinery of enticement. According to Leach, “The cardinal features of this culture were acquisition and consumption as the means of achieving happiness; the cult of the new; the democratization of desire; and money value as the predominant measure of all value in society.”
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Significantly, it was individual desire that was democratized, rather than wealth or political and economic power.

The 1920s: “The New Economic Gospel of Consumption”

Release from the perils of famine and premature starvation was in place for most people in the industrialized world soon after the Great War ended.
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US production was more than twelve times greater in 1920 than in 1860, while the population over the same period had increased by only a factor of three,
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suggesting just how much additional wealth was theoretically available. The labor struggles of the nineteenth century had, without jeopardizing the burgeoning productivity, gradually eroded the seven-day week of fourteen- and sixteen-hour days that was worked at the beginning of the Industrial Revolution in England. In the United States in particular, economic growth had succeeded in providing basic security to the great majority of an entire population.

In these circumstances, there was a social choice to be made. A steady-state economy capable of meeting the basic needs of all, foreshadowed by John Stuart Mill as the
stationary state
, seemed well within reach and, in Mill’s words, likely to be an improvement on “the trampling, crushing, elbowing and treading on each other’s heels … the disagreeable symptoms of one of the phases of industrial progress.”
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It would be feasible to reduce hours of work further and release workers for the spiritual and pleasurable activities of free time with families and communities, and creative or educational pursuits. But business did not support such a trajectory, and it was not until the Great Depression that hours were reduced, in response to overwhelming levels of unemployment.

In 1930 the US cereal manufacturer Kellogg adopted a six-hour shift to help accommodate unemployed workers, and other forms of work-sharing became more widespread. Although the shorter workweek appealed to Kellogg’s workers, the company, after reverting to longer hours during World War II, was reluctant to renew the six-hour shift in 1945. Workers voted for it by three-to-one in both 1945 and 1946, suggesting that, at the time, they still found life in their communities more attractive than consumer goods. This was particularly true of women. Kellogg, however, gradually overcame the resistance of its workers and whittled away at the short shifts until the last of them were abolished in 1985.
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Even if a shorter working day became an acceptable strategy during the Great Depression, the economic system’s orientation toward profit and its bias toward growth made such a trajectory unpalatable to most captains of industry and the economists who theorized their successes. If profit and growth were lagging, the system needed new impetus. The short depression of 1921–1922 led businessmen and economists in the United States to fear that the immense productive powers created over the previous century had grown sufficiently to meet the basic needs of the entire population and had probably triggered a permanent crisis of overproduction; prospects for further economic expansion were thought to look bleak. The historian Benjamin Hunnicutt, who examined the mainstream press of the 1920s, along with the publications of corporations, business organizations, and government inquiries, found extensive evidence that such fears were widespread in business circles during the 1920s.
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Victor Cutter, president of the United Fruit Company, exemplified the concern when he wrote in 1927 that the greatest economic problem of the day was the lack of “consuming power” in relation to the prodigious powers of production.
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Notwithstanding the panic and pessimism, a consumer solution was simultaneously emerging. As the popular historian of the time Frederick Allen wrote, “Business had learned as never before the importance of the ultimate consumer. Unless he could be persuaded to buy and buy lavishly, the whole stream of six-cylinder cars, super heterodynes, cigarettes, rouge compacts and electric ice boxes would be dammed up at its outlets.”
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Edward Bernays, one of the pioneers of the public relations industry, put it this way:

Mass production is profitable only if its rhythm can be maintained—that is if it can continue to sell its product in steady or increasing quantity.… Today supply must actively seek to create its corresponding demand … [and] cannot afford to wait until the public asks for its product; it must maintain constant touch, through advertising and propaganda … to assure itself the continuous demand which alone will make its costly plant profitable.
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Edward Cowdrick, an economist who advised corporations on their management and industrial relations policies, called it “the new economic gospel of consumption,” in which workers (people for whom durable possessions had rarely been a possibility) could be educated in the new “skills of consumption.”
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It was an idea also put forward by the new “consumption economists” such as Hazel Kyrk and Theresa McMahon, and eagerly embraced by many business leaders. New needs would be created, with advertising brought into play to “augment and accelerate” the process. People would be encouraged to give up thrift and husbandry, to value goods over free time. Kyrk argued for ever-increasing aspirations: “a high standard of living must be dynamic, a progressive standard,” where envy of those just above oneself in the social order incited consumption and fueled economic growth.
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President Herbert Hoover’s 1929 Committee on Recent Economic Changes welcomed the demonstration “on a grand scale [of] the expansibility of human wants and desires,” hailed an “almost insatiable appetite for goods and services,” and envisaged “a boundless field before us … new wants that make way endlessly for newer wants, as fast as they are satisfied.”
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In this paradigm, people are encouraged to board an escalator of desires (a stairway to heaven, perhaps) and progressively ascend to what were once the luxuries of the affluent.