James O'Connor's 2nd Contradiction of Capitalism

James O'Connor is one of the pioneers of ecosocialist thinking, in the modern age anyway. He was the founding editor of the ecosocialist journal Capitalism Nature Socialism in 1988. The magazine is now edited by Joel Kovel. Below is an edited extract from a piece written by Cy Gonick first published here.  

“Capitalism, Nature, Socialism: A Theoretical Introduction,” O’Connor’s title article in the very first issue of CNS, has had an enormous influence in shaping ecosocialism as a system of thought. Sometimes reprinted as “The Second Contradiction of Capitalism,” the argument has put an enduring Marxist imprint on ecosocialism.

The first contradiction refers to capitalism’s tendency towards overproduction with its virtually unlimited capacity to produce compared to consumption, which is constrained by competitive pressures on capital to cut costs by cutting wages and speeding up work (or, in Marx’s terms, increasing the rate of exploitation).

O’Connor argues that capitalism suffers from a second contradiction, arising from capital’s addiction to growth, causing degradation or depletion of what Marx called “the conditions of production.” While O’Connor drew the concept from Marx, he also noted that “he [Marx] never dreamed that the concept would or could be used in the way that I will use it in this chapter and no one could have used the concept in this way until the appearance of Karl Polanyi’s The Great Transformation.”

In this rich passage, talking about how the market treats land and labor as if they were mere commodities, Polanyi wrote:

To allow the market mechanism to be sole director of the fate of human beings and their natural environment … would result in the demolition of society. For the alleged commodity “labor power” cannot be shoved about, used indiscriminately, or even left unused, without affecting also the human individual who happens to be the bearer of this peculiar commodity … Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure … Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, … the power to produce food and raw materials destroyed.

By the “second contradiction of capitalism,” then, O’Connor means that capital accumulation can be jeopardized by so fouling the natural conditions of production that it totally breaks down — the likely effect of climate change; or by raising the cost of production arising from increasingly depleted raw materials and from the need to invent and develop substitutes; or by the state being forced to allocate increasing amounts of resources for improved health and safety provisions, for restoring ruined soil and forests, polluted lakes, rivers and oceans and shore lines.

Capital can’t prevent itself from impairing its own conditions because it arises from capital’s incessant need to grow. This is of course Marx’s first law of capital accumulation: “accumulate, accumulate, that is Moses and the prophets.” Capital has no choice. Only continuous growth allows businesses to survive the competition for market share and profit.

These tendencies have been analyzed in considerable depth beginning in the 1960s. Erich Fromm and Andre Gorz held that consumer satisfaction, which serves as the main ideological justification of economic growth, arises from our alienation from work and community. We may want good work and decent communities, but we learn to need only more consumer goods. As Fromm put it, “under capitalism man is transformed into a homo consumens who tries to compensate for this inner emptiness by continuous and ever-increasing consumption.” Or, in Gorz’s words, the corporation does not simply sell consumer goods. It sells means of distraction, “means of dreaming that one is human — because there is no chance of actually becoming such.”

Gorz further elaborated on how capitalism avoided the saturation of markets by designing products with built-in obsolescence — reducing the durability of appliances to a half dozen years, for example; by introducing throw-away products; by filling our heads with new wants, thereby generating relative scarcities and new dissatisfactions.

In an essay he wrote in 1973 aptly titled “Affluence Dooms Itself,” Gorz presciently described how capital accumulation impairs the natural conditions of production — cutting down the Amazon forest, the regenerative source of a quarter of the oxygen in our planet’s air; how it exhausts the supply of clean drinking water, forcing cities to haul in water from thousands of miles away; how it kills off marine life; and disables a large portion of the workforce through injury (1 in 6 French workers).

Around the same time, the American biologist Barry Commoner described in detail how, in the first years after WWII, capital systematically switched to more profitable — but more polluting — technologies, materials and processes that substituted cheap energy for labor: detergents over soap, truck freight over railroad freight, aluminum, plastics, and cement over lumber and steel. A year or so after it appeared, I wrote this comment on Commoner’s treatment in his The Closing Circle:

The fouling of the air, land or water, the disposal of waste materials, and the disappearance of non-renewable resources are costs that are seldom borne by the enterprises that produce them. They are passed onto consumers in the form of higher prices, passed back to workers in the form of shorter lives lived due to radiation, mercury or DDT exposure; higher laundry bills due to soot; higher costs of recreation due to pollution of nearby lakes, etc. And they are passed onto future generations. They comprise a massive subsidization by society and by nature to private enterprise.

This is what the economist K.William Kapp meant when he wrote in 1972 that “capitalism must be regarded as an economy of unpaid costs.”

Why capitalism can’t solve the problem

We know that capitalism has shown itself to be enormously resilient, adaptable and flexible. It has already introduced countervailing measures to blunt the degradation of the conditions of production. Capital is producing so-called green commodities like fuel-efficient cars, and it has invented all manner of anti-pollution devices. The state has brought in measures to recycle and conserve resources and to subsidize the development of renewable energy resources, to regulate the use of certain toxic products like pesticides, to increase emission standards for automobiles, to impose a tax on carbon and to create a market for carbon offsets.

Some of these measures will no doubt have effect, even if only in the short term. Capital will not permit reform measures that unduly impair its profit. This is why the emphasis is on technological and market-based solutions. Technological solutions include carbon capture and sequestration and geo-engineering schemes (injecting huge quantities of sulfur dioxide into the stratosphere to block a portion of the incoming sunlight). Market-based solutions aim to nudge business and consumer behavior in an environmentally friendly direction, convincing individuals to change their bad habits and promoting devices like carbon offsets that allow corporations to make money out of reducing emissions.

To elaborate, capitalism treats nature as a free resource. But since resources are limited, continuous growth eventually results in depletion, species extinction, toxic radioactive waste, contamination of water resources, destruction of forests, climate change. Finally acknowledged by mainstream economists, their solution, now widely accepted by most environmentalists and policy makers, is to put a price on pollution, to further commodify nature.

But consider. A recent United Nations study found that the world’s 3,000 largest corporations cause $2.2 trillion in environmental damage every year, more than half attributed to greenhouse gas emissions. What would happen if full eco-prices were superimposed by way, say, of carbon taxes, i.e. taxes sufficient to cover the cost of cleaning up pollution produced by each commodity; putting the recyclable parts of each of them back into circulation; developing substitute sources for depleted materials; restoring the ecosystems damaged by each commodity, including health and injuries to humans — think automobiles? Wherever possible, firms would, of course, pass the cost onto consumers or back onto workers in the form of lower wages and salaries. Taxes of this order, likely doubling or more the prices of most commodities, would clearly impact unevenly on the population, further widening disparities. Some firms would go bankrupt. So compatibility with the requirements of the capitalist system obviously imposes strict limits on the results that market-based measures can produce.

The new environmental proletariat

O’Connor believes that just as labor exploitation threw up working class movements that fought to constrain capital’s werewolf tendency to consume workers in its quest for profits, capital’s recklessness with nature leads to a “rebellion of nature” as “powerful social movements demand an end to ecological exploitation.”

Following O’Connor’s thinking, the outcome of the second contradiction will depend a great deal on the strength of these movements to force capital to fully confront the impairment of production conditions and then block it from shifting its costs onto the working class, farmers and indigenous peoples.

Further, the outcome of capital failing to stop world temperatures from reaching the tipping point beyond which all manner of natural disasters would befall the planet also depends on the strength of the social movements. This of course is the starting off point to create a global ecosocial movement.

In 1998, in what is likely one of the last things he wrote on the subject, James O’Connor raised the question: Is it possible to organize an international red-green movement — a coordinated response to global capital — to institute new democratic, ecologically rational ways of life?

Ten years later, as if to answer, Joel Kovel declared “global warming puts the entire history and the pre-history as well, of industrial capital, into the dock. In a word: a moment for the global realization of ecosocialism has arrived.”

More recently still, Victor Wallis, editor of the publication Socialism and Democracy, has argued that it is among the peasants and indigenous peoples of the global South that “the most radical expressions of environmental awareness” have arisen. “For these populations capitalist plunder of the environment … is a direct assault on their homes and livelihoods.” Moreover, their occupation of the land and direct ties to its long-term sustainability place them in a strong strategic position. “Their own ‘parochial needs,’” writes Wallis, “embody the collective needs of the entire human species — not to mention other endangered life forms — to stop the relentless destruction of the ecosphere…. Although such peoples are among the world’s poorest, they have been thrust into a vanguard position.”

In a similar vein, John Bellamy Foster, the most prolific of contemporary ecologists, writes: “Today, the ecological frontline is arguably to be found in the inhabitants of the Ganges-Brahmaputa Delta and of the low-lying fertile coast area of the Indian Ocean and China Seas — the state of Kerala in India, Thailand, Vietnam, Indonesia. They too, as in the case of Marx’s proletariat, have nothing to lose from the radical changes necessary to avert (or adapt to) disaster…. This, then, potentially constitutes the global epicenter of the new environmental proletariat.” 

Cy Gonick founded Canadian Dimension magazine and was in the NDP government in Manitoba from 1969–1971. This article was originally published in part in Canadian Dimension.