3.1 The challenge of a moribund economic system

In essence, capitalism is a system based on credit and as such is unsustainable. Credit, as well as its flipside debt, grows at a compound rate of interest. But real, physical wealth (Earth and its resources) does not. Debt is a claim by creditors against future production. Infinite debt (the logically ultimate outcome of compound interest) would equate to the infinite enslavement of the indebted to their creditors and an infinite claim against Earth, a finite source of resources.

A system based on credit, such as capitalism, is therefore in an irreconcilable contradiction with the aim of the conservation of nature and of the people who inhabit nature. Capitalism is an unsustainable economic system. We need to move on. Such is our distillation of the simple, but brilliant argument to be found in the introductory chapters of Philip B. Smith & Manfred Max-Neef's (2011, Green Books) Economics Unmasked: From power and greed to compassion and the common good.

After centuries in which this inherent contradiction at the heart of capitalism has played out, the system has reached what appears to be its ultimate crisis. If we don't move on, we will be taken down by a system that is a human creation and our responsibility to replace. This is our responsibility to future generations. As John Bellamy Foster and Fred Magdoff have warned us (2009, Monthly Review Press, The Great Financial Crisis: Causes and Consequences), "there is no possibility that the enormous surplus capital that has fed the financial explosion can be absorbed by productive investment under the present system at this stage in its history and with the existing structure of inequality. At the same time, the financialization process itself is now in crisis. The most likely prospect is a prolonged, deep stagnation." These authors now believe the deep stagnation to be permanent.

Readers looking for journalistic insight into the nature of contemporary capitalism and the growing struggle against it, can read Naomi Klein's (2008, Vintage Canada) The Shock Doctrine: The Rise of Disaster Capitalism and her more recent (2014, Knopf Canada) This Changes Everything: Capitalism vs. The Climate. In The Shock Doctrine, Klein exposes the use by pro-capitalist politicians of the shock caused by major natural and human-caused disasters as an occasion to promote privatization of everything that is now public, including public utilities, education, parks, roads and even government itself and to eliminate regulatory restraints on predatory capitalist behaviour. Such use by capitalism's most virulent representatives of the shock accompanying disasters needs to be recognized for what it is, resisted and effectively countered with pro-people, pro-environmental policies and political action. In This Changes Everything, Klein reports on the movements of resistance to the disasters of capitalism's making and presents compelling arguments for finding an alternative direction. In the process, she turns the tables by arguing that the shock of environmental disasters attributable to pro-capitalist policy and practice be used as opportunities to put people and the environment before private profits.

Human society, enmeshed in capitalism, has reached the stage of unprecedented economic, social, political and environmental crisis and corresponding opportunities to change course, evident in the rise of democratic popular movements worldwide. Capitalism, now universally characterized by monopolistic private-for-profit corporations, dominated by the cancerous growth of its now megalithic financial sector, has outlived the period of its relative social usefulness. Far from being the efficient engine of production and distribution of goods and services envisioned in utopian capitalist theorizing and far from being a partner in achieving a more democratic society, capitalism has turned into the principal barrier to a sustainable, just system of use and distribution of natural resources and has become the main threat to democracy. Its principal characteristics have become an extreme inequality in income and wealth distribution, a wasteful system for using the resources of a finite planet, a growing supremacy of corporate over popular rule and consequent economic and social instability. It has become the principal cause of a potential collapse of human civilization.

We leave aside for the moment many of the obstacles – ideological and organizational – that stand between contemporary capitalism and a green social democratic alternative. In subsequent chapters we consider the issues of cultural change and strategic actions to achieve a green social democracy, including the role of political organization. In this chapter we focus on the policies and practices that reproduce capitalism as the governing socio-economic system, advancing in their place the logical alternatives that are at the core of both spontaneous and organized oppositional movements. Our assumption is that people working to achieve alternative policies will ultimately find the way to achieve them, that being conscious and deliberate about our policy alternatives hastens their achievement. As the late Yogi Berra might have said, it is easier to get where you are going when you know where that is.

The alternatives are not that hard to find. The taxation system can be used to ensure a more just distribution of income and wealth. The financial sector can be made a public utility. The charters of corporations that define their legal obligations can be changed. These changes can include the primacy over shareholder profits of the corporations' responsibility to the community for the consequences of their actions, including environmental consequences. Their power over the democratic process can be eliminated up to and including the loss of their charters if they break the new laws. The moral hazard of leaving essential economic functions in the hands of corporations that are "too big to fail" can be reduced if not eliminated by breaking them up where feasible or making them public utilities, beginning with the largest, oversized, financial institutions.

With those measures already taken in the first stage of green social democratic governance, the next steps can feature the addition of new economic institutions. Competition can be introduced into the public service sector of the economy wherever needed to ensure diversity, efficiency and autonomy from bureaucratic micro-management. Local community, state and federal public banks can be established to support the initiation and development of non-profit enterprises. Competition in the public interest can be encouraged and supported on a scale that oligarchic capitalism today inhibits, but this time with the benefits shared by the public and the working people who initiate, manage and operate these non-profits. The opportunities for individual initiative and enterprise - so necessary to society - can be expanded in both the public service sector and in the private non-profit sectors of the economy. With these changes, there can be an unprecedented attack in earnest on the environmental problems that challenge our very future and even existence as a species.

The principal assumption in setting such a high benchmark for green social democracy is our capacity, when motivated by both our hopes for the future and our fears of the consequences of continuing to follow the path that our pro-capitalist politicians are taking us along, to finally realize the long held dream of government of the people, by the people, for the people. Achieving such a "radical" democracy is our primary challenge. If we are up to it, nothing can stop us. Working people and their families today constitute the overwhelming majority in most countries on Earth. No system - even one whose political and social subsystems are now effectively controlled by a powerful ruling political and economic elite - can function without our compliance. Our choice is either allow the destruction of nature and society by runaway "disaster" capitalism or take collective action to finally achieve the goals that have long inspired the progressive social movements within capitalism.

Welcome!

This website was launched September 1, 2010 in support of a green social democratic alternative to neoliberal capitalist policy and practice. The primary result is a work by Charles and Karen McFadden of seven chapters, grouped under the title, Towards a Green Social Democratic Alternative to Capitalism available here in pdf and html formats.

Below under the heading What’s New can be found the most recent materials posted on this website, including opinion pieces, book reviews, articles and selections from the 2017 edition of the main work.  For the interest of new and returning visitors, new materials will be included quarterly.

What's New

NEW & REVISED

Authors' Preface

1.6 The epochal nature of the period we are entering

6.0 The socialism we need against the "socialism" of the 20th century

6.8 Additional concerns about 20th century variants of "socialism"

6.9 The people united!

7.1 Policy alternatives and political movements to advance them

OPINION

Charles and Karen McFadden, Is revolutionary transformation on the agenda

Charles and Karen McFaddenHumanity on the Brink

Charles and Karen McFaddenMovements of Resistance to Movements for System Change

Charles McFaddenTranslating Green Principles into Education Policy and Practice

Charles and Karen McFadden, The Role of Revolutionaries in the Labor Movement

REVIEWS

Charles McFadden, The People United for a More Just Sustainable Future

Karen and Charles McFaddenCan emergent early 21st century neo-fascism be defeated without coming to grips with late 20th century restructuring of capitalism into a global system

Karen and Charles McFaddenA Dominant Capitalism or a Sustainable Environment? Why we can't have both.

US CORNER

William I. RobinsonThe Crisis of Global Capitalism and Trump's March to War

William I. RobinsonTrumpism, 21st Century Fascism, and the Dictatorship of the Transnational Capitalist Class

CANADA CORNER

George HewisonWINNIPEG 1919 & THE COLD WAR

George HewisonArt Manuel - "Unsettling Canada

George HewisonThe NDP and LEAP

RECOMMENDED

Albert Einstein, David Swanson, Jill Stein, Chris Hedges, William I. Robinson, and others Selected articles for Winter 2018

FEATURED WORK

ECONOMICS

1.7 The dynamics of capitalism as a system and the limits of single issue reforms

2.11 The economy in transition towards a new deal for labor and the community

3.1 The challenge of a moribund economic system

3.7 Public banking: A cornerstone of a green social democracy

4.7 Economics and culture

6.5 Using the non-market economy as an opportunity to begin moving beyond capitalism

HISTORY

1.6 The epochal nature of the period we are entering

2.0 Theoretical Perspective: Defining Green Social Democracy

2.5. Socialism and green social democracy in historical materialist theory

4.3 Culture in historical perspective

5.1 Contrasting a green social democratic world with the currently prevailing, but challenged neo-liberal one

6.2 Socialism and capitalism as coexisting social systems

LABOR

2.11 The economy in transition towards a new deal for labor and the community

5.7 Defeating neo-liberal capitalism: The role of social movements

7.3 Justice: Creating a just society, based on the right of all to a dignified, secure existence

Creative Commons License

Creative Commons License: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) applies to all work posted on this website except that which appears with authors whose last name is other than McFadden, in which case standard copyright should be assumed to apply.