2. Political Economy Environment and Society Lecture 4

3. Population (Malthusian) Argument: Problem lies in the exponential growth of population Market Argument: Population growth is good. Problem lies in making sure that market failures (e.g. externalities and information issues) are corrected

4. Political Economy Argument: Problem lies inherently in systemic problems, such as capitalism, modernization and globalization

5. The Capitalist Economy: The Dominant Economic System

11. Adam Smith (1723 – 1790) A moral philosopher; Pioneer of political economy; Studied the moral philosophy of capitalism;

12. The “Invisible Hand” It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

13. The Foreseen Inequality Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions.

14. A Critique of Capitalism Karl Marx (1818 – 1883)

15. Labor and Accumulation Commodities = human labor + means of production + conditions of production; Means of Production = infrastructure, equipment, machinery, etc., required to make things, goods, and commodities; Conditions of Production = the materials or environmental conditions required for a specific economy to function (e.g. resources and health of workers); The Concept of Labor:

16. Labor and Accumulation Some people (workers/proletariat) sell their labor power to other people (capitalist/bourgeoisie) who put it to use however they please; Surplus value = the value produced by underpaying labor or over-extracting from the environment, which is accumulated by owners and investors; The Concept of Labor:

17. Labor and Accumulation Before, goods were exchanged for their value as useful things. People controlled their own means of production; However, later on, a few people were able to control the means and conditions of production; How did this happen? The Concept of Accumulation:

18. Labor and Accumulation Control was done through primitive accumulation. What is it? Privatization of communal areas and forests pushed independent smallholders off of the land. A few people then controlled the land, and independent smallholders were forced to sell their labor power, as this is the only thing left for them; The Concept of Accumulation:

20. Labor and Accumulation The Concept of Accumulation: WorkersCapitalist Sells Labor Power Provides Wages Buys Commodities (Creation of Capital) Sells Commodities Relations of Production

21. Labor and Accumulation The Concept of Accumulation: Competition among capitalists drive down surpluses over time. Therefore, capitalists: 1)Innovate production techniques to squeeze more surplus out of the same labor; 2)Accelerate process of buying and selling to maximize profitable transactions; and 3)Cuts back some of the value put back into workers and the environment.

22. Labor and Accumulation The Concept of Accumulation: This then leads to overaccumulation or the concentration of capital in very few hands (i.e. wealthy individuals)

23. Leading to exploitation of workers …

24. … and exploitation of the environment.

25. The Production of Nature Production of Nature: Nature is made and remade through economic processes and that people have come to consume it as a commodity.

26. The Production of Nature Karl Polanyi’s Argument: Scarcity is produced by capitalism (not just passively inherent), which extracts resources necessary to make commodities.

27. The Production of Nature Commodification of Nature: Transformation of an object or resource from something valued in and for itself, to something valued generically for exchange (i.e. rise of exchange value of something over its use value)

28. The Crisis The Contradictions of Capitalism The First Contradiction: Tendency for capitalism to eventually undermine the economic conditions for its own perpetuation, through overproduction of commodities, reduction of wages for would-be consumers, and exploitation of workers, leading to responses of workers to resist capitalism.

29. The Contradictions of Capitalism The Second Contradiction: Tendency for capitalism to eventually undermine the environmental conditions for its own perpetuation, through degradation of natural resources or damages to the health of workers, predicted to lead to civil society and workers’ movements to resist capitalism. The Crisis

32. Globalization and Uneven Development Globalization: Increasing intensity and extensity of the flow of capital, materials, people, ideas, etc. across economies, societies, and cultures that spans a global network of exchange.

33. Globalization and Uneven Development How is this a problem? David Harvey’s Spatial Fix: Tendency of capitalism to temporarily solve its inevitable periodic crises by establishing new markets, new resources, and new sites of production in other places.

34. Globalization and Uneven Development

36. Will capitalism thrive amidst its own contradictions?

37. Some say YES because it is too creative in its exploitation …

38. Some say YES because it will transform itself for the better …

39. Some say NO, because a revolution will eventually replace capitalism with another form of economic system …