Against this background – in addition to that of the climate crisis, resource crisis and the general ecological crisis – one is asking if there is an alternative to capitalism.
Recently, many people have rediscovered the limits to growth. They have realized that the long age of economic growth and rising prosperity is over. They are now propagating the vision of a "solidarity society" with a "post-growth economy". Of course, there are also leftists whose alternative to capitalism is still socialism, but one that also cares about the environment.
As stated above, protagonists of eco-capitalism place their hope on renewable resources, especially on so-called renewable energies. They believe that by 2050 the whole energy need of Germany – in principle, of the whole world – can be met through renewable energies.
Alt also asserted that from biomass we could get raw materials for almost everything: houses, cars, every kind of chemical etc. And such materials could be composted (ibid).
And Hermann Scheer wrote in 1999:
If such visions were realistic, then, of course, sustainable growth would be possible, and then also eco-capitalism. Thomas Steinfeld wrote in 2008:
"If one believes Schumpeter, capitalism does not need particular resources. It only needs resources. It perhaps does not even need oil. It might instead be willing without any problem to switch over to alternative energies – using the money made on the basis of oil – if the profit is satisfactory. In this total indifference that capitalism shows in regard to the material the economy uses lies considerable hope." (Steinfeld 2008)
In connection with the hope placed on solar energy, Barry Commoner wrote in 1976:
"Like sunlight, the energy of falling rain is widely diffused …, and its gentle force would seem to hold no promise of delivering power sufficient to run the energy-hungry tasks of modern society. …
If the EROEI of renewable energy technologies were really 40 to 70, as often claimed by their protagonists, then they would have long ago pushed all the conventional energies out of the market. For, according to Odum, the EROEI of Middle East oil is only 8.4, that of coal from Wyoming only 10.5, and that of onshore natural gas only 10.3. (cf. Heinberg 2003: 153). But they are still demanding subsidies. How can one understand that at all? And why does the German photovoltaic industry panic when the government cuts the subsidies a little? And why did recently – in spite of all subsidies – several solar technology companies in Germany and the USA go bankrupt? These facts indicate that, as Nicholas Georgescu-Roegen (1978) expressed it, they are,of course, feasible but not viable. That is, the net energy gain, if it is not negative, is too little for the energy needed to build the replacements (of the same sort) when the lifespan of the power plants in question expires. Then it is no use saying that such power plants do not emit any CO2 while in operation.
Another question that must be raised here is why India, rich in sunshine and winds, is still building new nuclear and coal-fired power plants. If solar and wind power plants were profitable, i.e. without subsidies, then Indians could easily build a few thousand of them every year. And why do the Chinese prefer to export their photovoltaic modules instead of using them in China for making the construction of new coal-fired power plants unnecessary? And why do they have to subsidise their solar module exports – the EU Commission has ascertained that – although Chinese wages are much lower than, say, in Germany?
They do not take Alt's claim seriously that we could get almost all needed materials from biomass. They rather place their hope on raising resource-productivity (-efficiency) and recycling .
As regards resource productivity, there are, since long, conceptions that claim that technological development makes it possible to reduce resource consumption by factor 4 or factor 10 without curtailing, even while raising, the standard of living (See Schmidt-Bleek 1993 & Weizsäcker et al. 1995). I regard all that as illusions (for details see Sarkar 1999). As Fred Luks (1997) showed, if in the next 50 years resource consumption in the industrial societies is to be reduced by factor 10, and if simultaneously the economy is to grow yearly by 2%, then resource productivity must rise by factor 27. That is not realistic. There are simply also limits to technological development of this kind. Most great technological achievements require enormous expenditure of resources.
Also as to recycling, there exist totally unrealistic hopes. Thus, in the 1970s, André Gorz (1983: 79) hoped that "entire" amounts of raw materials could be recycled or reused. Environmentalists often say, garbage in landfills are resources at the wrong place. The most absurd idea in this regard came from Prof. Jero Kondo, at that time president of the Japanese Science Council, He said we should capture both the surplus CO2 in air and CO2 gushing out of chimneys by using solar energy and convert them into useful chemicals, in order thus to solve the global warming problem (cf. Schmidt-Bleek 1993: 80).
But there are also limits to recycling. Energy cannot be recycled at all. Materials can be and are being recycled, but not unlimitedly. The problem is a law of nature, namely the entropy law. Take for example a piece of steel that has been used to make 100 products, which have gone to 100 consumers living in different places. After being used up, they land in different landfills. Even if waste separation is practised there, collecting the small pieces of steel and transporting them to a steelworks cost a lot of energy, material and labour. If a part of the original piece of steel has rusted or has been converted into small particles, then it is practically impossible to recycle it. (See Sarkar 2012: chapter X.3)
But is the transition to such an economy possible within the framework of capitalism? Daly and most eco-thinkers and -activists believe it is. I doubt it, for many reasons:
(1) Of course, capitalism has until recently been able to overcome many crises of every sort. But that was possible because, every time, capitalists could realistically hope, indeed they were sure, that the crisis would end and normality would come back. Today, however, the prospects are totally different: a long period of economic contraction with the certainty of a stagnating economy at a very low level at the end.
Capitalists need hope and a felt relative certainty in order to be willing to invest. When the objective situation is as described above, especially if the states, out of consideration for the future generations and the environment, pursue a general policy of economic contraction, then there is little hope of profit. If the contraction proceeds chaotically with many firms going bankrupt, then there is no relative certainty.
(2) A growth compulsion is inherent in capitalism. In an environment of competition, the motto is: expand or perish. Since no firm wants to perish, since all must expand if they want to continue to exist, a general growth compulsion arises, also for the economy as a whole. For only in a growing economy can all individual firms hope to make profit. And they also thirst for growth.
(3) A big problem is the short time horizon of firms. Sustainability requires showing consideration for the interests of future generations. But, as one manager said, "a company cannot work for the next generation. … We must produce now for the market and make money (Der Spiegel, 9.6.1986; 100f). That is logical. The time horizon "cannot … go beyond the amortization time of capital goods. For profitability calculation … is exactly limited to this time" (Altvater 1986:100).
(4) Sustainability also entails care for other peoples and other species of nature. That presupposes a moral stance, which is not a part of the principles of capitalism. Since the days of Adam Smith, the logic of the system says, one should only care for one's own interests. That is still the rule. That is why capitalists cannot care about the social costs of their business. They must reduce their own costs and externalize the social costs as much as possible. The invisible hand, says Smith, will take care of the welfare of society. Smith did not know anything about the limits to growth. But we know today that the welfare of society is to a very large extent a task of the state, and it will be more so in future.
(5) If the economy contracts, then also the real income of the people will fall. With the intended or unintended closure of many enterprises many jobs will be lost. Without an egalitarian distribution of the remaining socially necessary or useful jobs and of the sacrifices that will accompany the process, chaos and social unrest will break out. We have already witnessed in the recent past several bread riots, water riots etc.. But egalitarian distribution is incompatible with capitalism. That must be a task of the state. Moreover, only the state can decide which enterprises must be closed.
(6) In a sustainable economy, also during the transition to it, there must not be any waste of resources. But that cannot be avoided in capitalism. An individual firm can possibly do that, but not the whole economy. Every overproduction, every production of unsaleable goods, every destruction of still useable goods, half empty trains etc. are waste of resources. The entire advertisement industry is a huge waste. All that must be accepted in capitalism because planning the whole economy is out of the question.
Worst of all is the waste of the labour power of unemployed people. But a reserve army of the unemployed is very useful for capitalists. They almost need it. Also strikes are a waste of labour power. But trade unions need this instrument for countering the power of capital. The mass unemployment that we witness today in South Europe is also making the societies there unsustainable. All that calls for an orderly retreat, a consciously planned contraction, not a chaotic one.
(7) Since economic contraction will (have to) take place on a world scale, world trade also will (have to) contract. In order to prevent chaos and breakdowns, there must be international planning and cooperation in this area too.