Why we can't be green if we're in the red.

• Author: Cato, Molly Scott
• Position: A look at capitalism - Essay

Capitalism always was an economic system at odds with the planet--an organism in inescapable conflict with its own life-support system. For this reason alone we should celebrate its collapse. Despite attempts to obscure the definition of capital by allowing the invented concepts of natural or social capital, we all know why Marx thus labeled the economic system we have labored under for two centuries and more: because in capitalism, money talks.

Green economists call for a reassessment of values and of what we choose to value. The distortion of value has run parallel to the disembedding of the economy from the planet. (1) In previous economic systems money operated as a medium of exchange for goods which were extracted from and derived their value from the environment. But the mechanism for capitalist money creation, as debt and via the money multiplier inherent in the banking system, detaches the monetary economy from its planetary base. This creates the gap between real and nominal economic value which produces the destructive boom-and-bust cycles of capitalist economics; and it creates the divorce between the economy and the environment it relies on for all true wealth which is the cause of the planetary crisis. Thus we find that the two crises we face--financial and environmental--are actually two sides of the same coin.

So much for the diagnosis; what of the prescription? First and most importantly, we need to ground our understanding that capitalism has collapsed and use it to refuse the vastly expensive attempts to provide life-support through the creation of unimaginable sums of public money. Secondly, we need to exploit the obvious failure of money as structured within a capitalist economy as the basis for an argument for a wholesale reform of what should, itself, be a common wealth, i.e., the right to produce and circulate money within a national economy. Thirdly, we need to use our insight into the importance of use value rather than exchange value to inform a discussion of the need to reconsider the allocation of the most fundamental resource: the land.

Can't pay; won't pay

The UK budget for 2009 included a "fiscal stimulus:" [pounds sterling]5bn which was to be invested in the economy, [pounds sterling]1.4bn of which was directed towards "green" sectors, although much of this was of questionable environmental worth. Any consideration of this investment needs to be balanced by the horrifying size of the borrowing that was announced in the same budget: [pounds sterling]175bn in 2009/10 and a massive [pounds sterling]701bn over the next five years. The interest on this will amount to more than [pounds sterling]43bn a year, dwarfing the investment and making severe spending cuts inevitable. (2) Britain has now borrowed so much that its national debt has become more risky than that of Spain, (3) which in itself drives up these interest payments, creating a vicious cycle of debt, interest and borrowing.

The social consequences of this level of borrowing are likely to be devastating, not just in terms of the public-spending cuts that will be demanded, but more importantly in...