Distinguishing Capitalism from Growth

Published by Anonymous (not verified) on Fri, 22/11/2019 - 6:57am in

by James Magnus-Johnston

Capitalism and growth might have similar connotations, but they have important distinctions, too. “Capitalism” has become a clumsy catch-all for any number of value-laden projections—greed, big business, innovation, accumulation, complexity, workaholism. “Growth,” meanwhile, is a landmine of technical and cultural connotations, and I’ll explore just a couple of them here.

No trespassing sign.

Private property: the essence of capitalism. (Public Domain)

Technically speaking, their differences seem straightforward. Growth is a material increase in economic production and consumption. Capitalism is a highly complex term, but for our purposes can be distilled down to an economic system of private property in a competitive market. And to put them together: a capitalist economic system drives growth and wealth accumulation.

Critics articulate how each phenomenon eventually limits its own effectiveness. The economy is subject to the dynamics of any expanding complex system: it cannibalizes its foundation as it expands, leading to disorder and change. 20th century theorists like John Stuart Mill and John Maynard Keynes assumed that growth would eventually reach the limits of its effectiveness; they’re now echoed by a contemporary chorus of ecological economists. Critics of capitalism, embodying Marx, likewise argue that capitalism subverts its own effectiveness with its characteristic crises. The accumulation of wealth fosters social and financial crises. In contemporary parlance, money flows to the top one percent, where it accumulates as “capital” without benefiting society at large. All these trends are part of a complex we might call “uneconomic growth.”

Fundamentally, if capitalism drives growth and accumulation, it would be spurious to claim that a steady state economy could be referred to as “capitalist,” as we understand the term today. Neither growth nor wealth accumulation are synchronous with the idea of a post-growth economy. There are no hard prescriptions, however, for a steady state economy to dispense with all private property or (regulated) trade in a competitive market. Some ecological economists (for example, Peter Victor) have argued for an increase in public investment for socially desirable ends, and there is room for a diversity of views on this.

More importantly, however, capitalism’s cultural considerations don’t suit a steady state economy. Peter Ghosh writes in Aeon that Max Weber used the term capitalism to refer to a “modern Kultur” centered around a code of values for the 20th-century West. In a capitalist Kultur, the ethic includes “cool, reserved, hard and sober” public behavior governed by strict rational and impersonal procedures for the professional life of a market economy. In this new economy, the highest virtue became “the making of money and ever more money, without any limit.” Growth-as-prosperity then became virtuous, but remained distinct from greed, which retained its grotesque connotations. The outputs of mass consumption, technology, and legality, he argues, replaced the inherent virtues of “the human ideal of warmth.”

capitalism pyramid

No one’s vision of a steady state economy. (Public Domain)

A post-growth society may not include a hard shift away from private property or a competitive market, though it most certainly needs a shift away from capitalism’s present ethic. While there isn’t yet a well-established ethical code for such a new Kultur, it is emerging: a reduced emphasis on productivism; greater emphasis on self-reliance; a stronger connection to land and place (including Indigenous knowledge); dispensing with the virtue of growth-as-prosperity; and, a reclamation of warmth and care among people living in community. I’ll argue, too, that we need a new political language for whatever comes next, because whatever it is, it can’t look or sound like what we’ve done to the planet for the last few hundred years.

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Book Review: Falter by Bill McKibben

Published by Anonymous (not verified) on Thu, 14/11/2019 - 2:58am in

By Herman Daly

Thanks to Bill McKibben, not just for his new book but for 30 years of honest, eloquent, and insightful environmental writing and activism.

Thomas Merton Center dinner honoring Bill McKibben, 11/4/2013

Thomas Merton Center dinner honoring Bill McKibben. (Image CC BY 2.0, Credit: Mark Dixon)

He begins Falter by pointing out that the human game we’ve been playing has no rules and no end, but it does come with two logical imperatives. The first is to keep it going, and the second is to keep it human.”

What McKibben calls “the game” that we must keep going and keep human is similar to what C. S. Lewis called the “Tao” in his 1944 classic, The Abolition of Man. The Tao refers to the common morality informed by natural law and spiritual insight—the given yet evolving conscience and wisdom of mankind. The Tao also develops and evolves out of its own past. It is our best understanding of objective value. We cannot logically depart from it in any fundamental way—it transcends both subjectivism and naturalism.

In McKibben’s version, the “human game” has to continue and remain human. It is the second part that gets close to Lewis’ idea, who wrote long before the age of genetic engineering with CRISPR technology. Lewis’ “Conditioners,” social engineers in effect, were only educators and psychologists. Lewis granted them the complete power to mold their subjects, the same power that seems to be possessed by the modern genetic Conditioners of today, so his argument remains relevant, indeed becomes more so.

CS Lewis

CS Lewis (Public Domain)

Lewis’ argument is simple: the Conditioners want to create in their subjects a new artificial Tao, a “better” one. They have the power to do so. They may appeal to the traditional Tao for guidance on how to make the artificial Tao better. But then they are still servants of the Tao and not creators of a new Tao. In other words, they are developing the Tao, not replacing it. To replace the Tao, they must step outside of it to find the criteria for how to remake it. But in stepping outside, they step into an ethical void. “I should” or “I ought” comes from the historical Tao and disappears with its absence. What remains to motivate the Conditioners is “I want.”

The personal desires of the Conditioners, uninstructed by the Tao from which they have emancipated themselves, become the motives directing the “I can” of these all-powerful Conditioners. What appeared to be the collective power of mankind over the Tao has turned out to be the arbitrary power of some over many. The future subjects are no longer men but creatures of the Conditioners’ wants, whims, desires, and fantasies. Hence the title, Abolition of Man.

Lewis is not arguing against knowledge or technology. For each step in controlling nature, it may (or may not) be that the benefits outweigh the costs. He is insisting, however, that the last step of treating the Tao as another part of nature to be remade according to human desire is fundamentally different, like dividing by zero instead of by a smaller and smaller number. At this last step, the process does not continue—it blows up in your face.

McKibben’s argument is similar in form but different in its terms. The Tao is “the human game” that must continue and remain human. The continuation of the game is threatened by the fact that we are destroying the physical board (or sphere) on which the game is played. Much of McKibben’s writing and activism has been motivated by saving the biophysical board necessary to keep playing the game, specifically, saving a climate conducive to life. What is new in this book is the emphasis on keeping the game human or “within the Tao” in Lewis’ terms.

McKibben declares, “I am not great with eschatology; I don’t know the final destination. While I don’t know how to change the ‘system,’ the urgent nature of the climate crisis doesn’t let us simply put off action. The biophysics doesn’t allow it.”

One understands his reluctance to “go eschatological” and to stick with the biophysical. Yet McKibben is already neck deep in eschatology, and necessarily so, by emphasizing early on the apocalyptic consequences of the climate crisis. Some technocrats go on to argue that since our civilization is unsustainable anyway, we are justified in taking extreme technical risks to save it, like a dying cancer patient volunteering for any experimental treatment. But where things really get specific is in his reflections on the full-blown and frank eschatology of the Silicon Valley billionaire self-creationists.

As McKibben reports, a number of these folks are planning to live forever, not in the New Jerusalem or in a Platonic spirit world but here on the unredeemed earth. Either survive whole or freeze your severed head until the Singularity (Second Coming?) when science will resurrect you, or at least your consciousness, by uploading it into silicon memory chips. Where, oh Death, is now thy sting? What these Silicon Valley self-creationists ridicule as naive religious belief, a remnant of the old Tao, they recreate as a new technological religion, an eternal digital heaven on earth (or maybe Mars) populated not by mortal men, but by—what? Marxists had something similar (but much less extreme) in mind with their eschatology of the new socialist man and classless society.

McKibben is politely dismissive of the eschatology of these “self-rapturing” techies, noting their extreme individualism (stemming from their common hero, Ayn Rand) that leads them to appropriate a kind of heaven on earth for themselves. McKibben also reminds us that these are the richest people in the world, and what they believe is influential. Modern theologians have prematurely “closed the office of eschatology.” Now it has been reopened, under new management. G.K. Chesterton famously said that when people stop believing in God, the problem is not that they then believe nothing, but that they are likely to believe anything. Could be.

Cryonics Institute

Cryogenics: Abolition of Tao? (Image CC BY-SA 4.0, Credit: Dan)

Keeping the present creation going as long as possible is an ethical judgment in favor of longevity, not a logical imperative. Nothing in logic prevents extinction or death; indeed, evolution requires it for individuals and species. Whether the end is entropic heat death or new creation is the eschatological question—a question of reasoned hope rather than demonstrated knowledge.

We tend to dismiss eschatology on the grounds that the sun will last for some billions of years and thoughts about the final end will distract our attention from the immediate crisis. Fair enough, but the scientific materialism underlying Salvation-by-Singularity has given us the power to destroy creation without providing—indeed by undercutting—any reason to keep it going other than chanting the colorless abstract noun “sustainability.” Meanwhile, the Silicon Valley eschatologists are working out their personal salvation independently. They probably already have started marketing it to those who can afford it.

McKibben has explained that the climate threat is so pressing and so intermingled with current economic arrangements, that it provides the best possible lever for making profound change in other aspects of the economy…” I suspect that a serious effort to solve the climate crisis—or the biodiversity crisis, or water crisis, or political crisis for that matter—will soon lead to the recognition of their underlying common cause, namely the continuous growth of the human economy and its consequent displacement and degradation of the rest of our world.

Nevertheless, most discussions of climate change usually fail to make the connection to growth. The focus is on how to accommodate growth within the structure of complex climate models and their predictions. The main accommodation is to advocate a switch from nonrenewable to renewable energy resources but without recognizing that renewables effectively become nonrenewable, once growth leads to exploitation levels beyond sustainable yield.

Maybe, after repeated failures, a steady state economy will begin to seem like a reasonable policy to save whatever is left for however long it can last. That falls far short of a real eschatological vision, but it is better than the cryogenic rapture of the Singularity preached by the technical Gnostics. McKibben does not pursue his initial critique of Silicon Valley eschatology, and one cannot blame him because the topic is daunting. But the eschatological question of ultimate purpose and final end keeps breaking through into policy discussions, however unwelcome to present attitudes. In Falter, McKibben at least identifies this usually repressed issue.

by Bill McKibben
Henry Holt and Co., 2019


Herman DalyHerman Daly is an emeritus professor at the University of Maryland School of Public Affairs and a member of the CASSE executive board. He is co-founder and associate editor of the journal Ecological Economics, and he was a senior economist with the World Bank from 1988 to 1994. His interests in economic development, population, resources, and environment have resulted in more than 100 articles in professional journals and anthologies, as well as numerous books.


The post Book Review: <em>Falter</em> by Bill McKibben appeared first on Center for the Advancement of the Steady State Economy.

Why do we need a theory of value?

Published by Anonymous (not verified) on Mon, 22/07/2019 - 5:22am in



The theory of value and distribution is at the heart of economics. To be clear, when I say that it is at the center, it means that discussions of almost any topic in economics, in one way or another, depend on a certain theoretical position about the theory of value and distribution. However, most economists have no clue about it, about the centrality of value. Not only they don't understand the original and now infamous labor theory of value (LTV), that dominated between Petty and Ricardo (and Adam Smith too, even though that tends to surprise and puzzle most economists),* but also they misunderstand the dominant marginalist paradigm. Some economists actually think that you don't need a theory of value at all, and some don't even understand that they use a conventional (some vulgar form of supply and demand) theory of value. Hence, the reason of this post is to try to help clarify some very basic issues related to the necessity of a theory of value for proper theorizing in economics.

In a sense, this topic was discussed here before, in my post on Sraffa, Marx and the LTV. But it is worth revisiting, and thinking in broader terms, beyond the LTV, to understand why a theory of relative prices is needed in general, to understand almost everything in economics.

Let me start with the authors of the surplus approach. In fact, a bit earlier with the economists that would eventually be known as Mercantilists (if you can talk about a school). If we are allowed to generalize and simplify, the latter believed that the wealth of nations depended essentially on maintaining trade surpluses, and accumulating precious metals. Profits were essentially the result of buying cheap and selling dear, or profits upon alienation, which indicates that, for Mercantilists, profits were generated in the exchange process.

Classical political economy authors, starting with William Petty, emphasize the determination of profits in the process of production, as a residual of output, once the conditions for the reproduction of the productive system were satisfied. So profits are not the result of selling high and buying low, something that could result from the mere fluctuation of market prices, but from the ability to produce beyond what was needed for the simple material reproduction of society. Note that to obtain profits, part of the residual, the surplus over and beyond reproduction requirements, one needs to know the prices of the means of production. That is, one needs to be able to account for the normal prices of the goods that went into the production of all commodities. And these prices would include a normal profit. Again, not the extra gain that might occur from a high market price. So the normal rate of profit is needed to determine prices, and prices are needed to determine the normal rate of profit. This was well understood by both Ricardo and Marx.

Value (the relative prices of commodities) and distribution (the normal rate of profit) are intertwined. Smith knew that the simple LTV (amounts of labor incorporated) was not correct other than in very rudimentary economic systems, with essentially no produced means of production. His solution was to adopt the idea of labor commanded (more on that on my post on Sraffa, and the one on the standard commodity). Ricardo solved this problem, in his corn essay, by assuming that the surplus and the means of production advanced to produce output where all in physical quantities of corn, hence profits could be determined independently from relative prices, as a physical quantity. And Marx adopted the simple labor theory of value in volume one of Capital. Both believed, for slightly different reasons, that their main arguments would hold even if the LTV was not precisely correct.

I am not concerned with the problems with the LVT in Ricardo and Marx (worth noticing that the mathematical solution was not known in their time, and was essentially developed in the late 19th and early 20th centuries) or Sraffa's solution. It is worth insisting that the LTV does have an analytical solution that is unique, and stable (see my post on the standard commodity for the former, which suggests a Smithian, i.e. labor commanded, version of the LTV is perfectly fine).** That's good, btw. It suggests that the classical political economy notion that there are prices that guarantee the reproduction, and, beyond the the expansion (or accumulation), of the economic system do exist.

Here I want to emphasize the importance of the LTV for the analysis of other aspects of the economy. Ricardo saw the problems of the Smithian adding up theory. That's the notion that prices were composed by the sum of natural wages, profits and rent and that prices would go up if one of its components went up.  In order to determine the rate of profit properly, Ricardo noted the explanation of value was essential. The rate of profit was central because in his view the processes of accumulation depended on the rate of profit. Hence, proper discussion of accumulation and growth depends on a proper theory of value and distribution. Btw, all classical authors assumed that real wages were exogenously determined by institutional and historical circumstances (so there was a role for history and institutions in their theory; also, for accumulation that was seen as too complex to be theorized in the same level of abstraction that value). But even if one is less keen than Ricardo on the role of profits in accumulation, it is undeniable that distribution affects accumulation, and, hence, a proper theory of value and distribution is needed.

Note also, that other things that depend on relative prices are crucially affected by the theory of value and distribution. Classical authors assumed that the process of competition, by which they meant only free entry and not the size or the number of firms in an industry, would lead to a uniform rate of profit. In that sense, the forces of competition were central in forging the structure of production, and, hence, the determination of technological change or to understand the patterns of trade specialization, which cannot be understood without the determination of relative prices. In fact, perhaps the most famous and the most controversial issues coming out of Ricardian economics dealt with international trade and the effects of technical change (the so-called machinery question), and are directly connected to the theory of value.

Even the most crucial macroeconomic problem, the question of output determination (and employment, for a given technique) is affected by the theory of value. Note that classical political economists assumed output as given for the determination of the surplus. And Ricardo accepted Say's Law as a way of determining output and employment (not Marx, btw, so it's NOT a requirement of the surplus approach). But as much as for accumulation understanding of distribution is central for the determination of the level of output, as it is explicit in the Kaleckian effective demand model. the classical long term prices are compatible with levels of output that do not guarantee full employment. And the parametric role of distribution in affecting the size of the multiplier is crucial for output and employment determination. So unemployment is possible in the long run, as a regularity of market economies.

In other words, for a coherent theory of output, accumulation, international trade, technological change and more (taxation, etc.) you need a theory of value and distribution. That is also the case in the mainstream. Marginalism developed in the last quarter of the 19th century, both as a result of the lack of analytical solution in that period for the problems of the LTV and as a reaction to radical revival of the theory (Marxism). The important distinction is that while classical political economy authors dealt only with objective factors, and considered demand as given when determined value and distribution, marginalism incorporated subjective preferences as central for the explanation of long term normal prices, and prices and quantities were determined simultaneously.

Beyond the problems with the marginalist solution for the existence of long term prices (see this on the capital debates) and their switch to the intertemporal approach, which basically only deals with short term prices, their theory is also central for almost everything in economics. In a sense, given that in marginalist analysis distribution is determined by supply and demand, and by the relative scarcity of factors of production, the theory of value and distribution is even more central for other parts of their theory than in the surplus approach. Here the theory of distribution does not affect indirectly the level of output and the process of accumulation. Here the level of employment and, for a given technology, output determination is the same as the theory of distribution. Real wages and the level of employment are determined in the labor market simultaneously. Everything derives from that.

Before getting to the reason why the theory of value and distribution, central for everything, is often ignored, let me note briefly the possibility of a third alternative to value and distribution, beyond the surplus approach and marginalism. That would be the markup theories of pricing. Note that theories of markup pricing essentially describe how firms determine prices. Most of these theories were developed as a result of the imperfect competition literature sparked by Sraffa's famous (1926) critique of Marshallian price theory (see an old post on that here).

First, as it would be known for the readers of this blog (at least the ones that have been reading for a long while), markup pricing is actually dealing with a different set of issues, and Franklin Serrano suggested here that they are different than the classical political economy normal long term prices (the Marxist prices of production or Sraffa's prices), and that Fred Lee and Marc Lavoie were right about that. He argued that some Sraffians (I won't name names), and I would add probably Fred too, thought that Sraffian prices were compatible with the full cost pricing tradition, and I could have included myself in this group.*** Note that what I mean by that is simply that the behavior of firms must be compatible in the real world with the logic of gravitation in classical analysis. In other words, if prices of production imply a normal profit over the full cost for a given technique, then firms somehow must be trying to do that.

But it is clear that the full cost pricing of a particular firm might not be the long run equilibrium price around which market prices gravitate, with free mobility, that is, with competition in the classical sense. In a way, the same circularity suggested above reapers, costs depend on prices (and that involves the profit related to the markup), and prices depend on costs. The firm's individual prices might not be the prices that are required for the reproduction of the economy as a whole. In that sense, markup theories must be grounded on some surplus approach understanding of value and distribution, and they are essentially theories about market prices, meaning short run behavior. In that sense, they run into the same problem than the intertemporal marginalist models, the Arrow-Debreu type, that became more popular after the capital debates, and that led to what Garegnani famously referred to as the change in the notion of equilibrium (that is the abandonment by the mainstream of the notion of long run equilibrium). Some heterodox groups see this as a positive development, but again it implies that they cannot say anything clear about distribution and relative prices, and that has implications for almost any other theory.

I might add here, which is more concerning for some heterodox groups, is that many of these theories are also compatible with marginalist interpretations of the theory of value and distribution. Many imperfect competition theories just suggest simple inverse relations between markups and the price elasticity of demand. This again fall into the type of situation I discussed recently regarding Karl Polanyi, of well-meaning critics of the marginalist mainstream, using marginalist or neoclassical concepts w/o knowing they are doing it (if it's conscious acceptance of the mainstream model, then it's something different).

One last thing in this regard, while markup theories must be grounded on some theory of value and distribution, and my take is that the surplus approach is where it would make sense, the opposite is not true. There is no need for a theory of the firm, of individual behavior, to understand long term prices. Classical political economists certainly discussed behavior, but that essentially entailed some notion related to class, to general social norms, not about what is going on in someone's brain. Even Smith that was certainly concerned with the issue of the role of self-interest in determining the equilibrium outcomes in the market, cannot be assumed to be a precursor of the rational maximizing agents of the mainstream, or of methodological individualism. The same could be said of utilitarian views and Ricardo, who was, to some degree, close to many utilitarians including Bentham. Here too, many heterodox economists think that an alternative theory of behavior is central for economics, and that is why many see behavioral economics as somewhat heterodox.

Finally, getting, even if briefly, to the point of why most economists remain oblivious to the relevance of value and distribution. I would suggest that this is a recent phenomenon. It is the result of what I have discussed here before, the return of vulgar economics (for example, here or here), and that the mainstream has abandoned the long run, and provides only a theory of short run prices. But at the same time the mainstream must revert to the old model in order to promote economic policy. Note that only in that model you can guarantee that markets provide efficient allocation of resources (w/o imperfections), and the price system signals the direction of adjustment. It is often missed by the heterodox groups that resist old classical political economy (often for incorrectly assuming that it is a precursor of marginalism) that their theory of value and their long term prices provide something completely different, an understanding of the conditions for the reproduction of society. That notion, btw, is alive and well in other social sciences (see here or here). Not in economics.

* It survived in the fringes and it was rediscovered by Marx and then much later Sraffa, who actually provided a coherent solution to some of its logical limitations. But after Ricardo, the LTV was never dominant again.

** On the gravitation of market prices towards normal prices see the work by Bellino and Serrano here.

*** My fondness for the subject in part derived from having worked for Wynne Godley at the Levy for two years, who was a disciple of P. S. W. Andrews one of the key authors of the Oxford Economists' Research Group (OERG) behind full cost pricing theories.

The Connection Between Population, Income, and Health

Published by Anonymous (not verified) on Thu, 04/07/2019 - 6:38am in

By Max Kummerow

For hundreds of years, economists have debated whether population growth is good or bad. Malthus said exponential population growth increases labor supply, so wages fall until starvation, war, or plague stops growth in numbers. Marx said capitalism causes poverty and hunger, so population growth is good, because “every stomach is born with a pair of hands”, bringing revolution and justice closer.

Nearly 200 years later, Garrett Hardin and Julian Simon were still debating the same question.1 Hardin insisted that individuals’ decisions whether to have children without considering the tragedy of the commons could add up collectively to overpopulation and environmental catastrophe. Simon responded that human ingenuity is “the ultimate resource”. Shortages lead to new inventions that benefit the collective whole. Simon cited 300 years of falling commodity prices, indicating less scarcity, not more, despite population growth from 500 million to 5 billion.

The debate is ongoing, with most mainstream economists supporting population growth, while ecological economists warn about “overshoot” and collapse as the earth’s resources are used up.

One reason this debate has taken so long to settle is that both sides are right. Economies of scale and technological progress mean bigger cities, businesses, machines, and farms can often be more efficient, raising economic output. But with too many people, there are negative externalities—pollution, traffic congestion, crowding, and resource shortages. Above optimum size, cities, businesses, machines, and farms get less efficient.

Graph showing that optimum population maximizes incomes.

Optimum population size maximizes incomes.

The ideal level of population depends on preferences. How rich do you want to be, and what lifestyle do you wish to lead? Do you want to live in a McMansion (or even a “regular” mansion)? How much space should be reserved for other species? How much space should be reserved for the functioning of ecosystem services such as water purification, carbon sequestration, and nutrient recycling? Do future generations count in these calculations? How much traffic congestion can you tolerate? These questions aren’t asked often enough by sufficient numbers of people.

However, data already exists to settle the long-running economists’ debate about population growth’s effects on incomes and health. Countries that achieved “demographic transitions” to less than 2.1 children per woman enjoy dramatically better economic and health outcomes. The table below compares the most relevant figures associated with four levels of fertility.


Table 1 Better outcomes with lower fertility rates (TFR, children/woman)

In 2015, the low-fertility countries (<2.1) had average incomes nine times higher than those of high-fertility countries (>4.1). Infant mortality was 47 per 1,000 births lower, and life expectancy was 18 years greater. Of course, many other factors determine incomes and health outcomes: education, natural resources, health care systems, rule of law, improved status of women, and other factors. But the constellation of factors that helps countries prosper strongly correlates with low birth rates. Persistent high fertility rates leave countries treading water, while lower fertility rates make improving the other variables easier. The graph below shows falling global fertility but the substantial discrepancy in fertility between low- and high-income countries..

Fertility rates for world, high and low income countries, 1960-2015

Fertility rates for world, high and low income countries, 1960-2015

When birthrates fall, a country faces less tax burden because there is less need to expand infrastructure, education, and health care. A “demographic dividend” comes from increased labor force participation by women, more educational expenditure per child, and freeing of capital for investment. Slower growth in population moderates demand and prices of scarce commodities such as land, housing, food, energy, and other commodities.

These effects can also be seen at an individual family level. USDA estimates the cost to raise a child to age 17 at $233,000.3 Women who delay childbearing to get more education have higher lifetime earnings. If parents choose to have fewer children, they can have significantly improved standards of living and higher retirement savings. An only child will probably inherit more than four times as much as a child in a family with four children. In a subsistence farming community, a four-child family-size as the norm halves land per capita every generation. One child doubles per capita family land.

These recent data should end the long-running economists’ debate. In our present world, having fewer children improves economic and health outcomes for individual families and for countries. As the world moves toward steady state economies, reversing population growth improves lives for everyone.

In summary:

  • World population still grows by 80 million per year, headed from 1 billion in 1800 to 10 billion by mid-century.
  • Nearly half of the world’s countries have accomplished “fertility transitions” to birthrates that, if continued, would begin to decrease populations after the fifty years of further growth that results from “population momentum”.
  • Increased efforts to promote family planning in countries with persistent high birthrates will be required to complete the transition to a steady-state population.

[1] They were literally debating. I attended one of their debates, moderated by a history professor in Madison, Wisconsin in 1983.

[2] World Bank’s World Development Indicators. Income is a “purchasing power parity” comparison.



Max Kummerow, Ph.D., is a retired business school professor and population activist who researches demography, ecology, and economic development. He has presented papers at ESA, PJSA, NCSE, PAA and EAERE meetings showing the benefits of accelerating the world’s stalled demographic transition toward lower fertility rates.



The post The Connection Between Population, Income, and Health appeared first on Center for the Advancement of the Steady State Economy.

We actually read Capital!

Published by Anonymous (not verified) on Thu, 07/04/2016 - 8:30pm in



“So, what did you do over the summer”? Most students respond to this ubiquitous question with the familiar answers: “caught up with family”, “earned some money” or (perhaps more commonly) “lots of daytime drinking”.   For a small group of political economy students from the University of Sydney, however, they might respond: “I read Marx’s Capital, volume 1”.

Between November, 2015 and March, 2016 a small, dedicated group of students – undergraduate, postgraduate, or between degrees – met weekly to discuss that text which too-few Marxists have actually read: Capital. Meeting largely at the University of Sydney, the group persevered through the entire 682 pages, despite the oppressive heat of a Sydney summer (intensified by the contradiction of capitalism that is climate change).

Running through the weekly discussions were themes including the specificity of capitalism, the continued relevance of this historical text, and questions of Marxist strategy moving forward into the 21st century. Below are some of the thoughts and impressions of just some of these students.

Matthew Ryan – Postgraduate student

It’s quite a broad brief, “say something about your experience reading Capital”. Do I focus on a particular concept, something I never understood but now grasp a little better? Do I talk about the relevance of the text in the twenty-first century? Perhaps I can comment on an ongoing debate within Marxism, and offer my personal resolution through reference to the text? All valid options and it would be easy to write too many words on any of these topics. But instead, I’m going to talk about reading Capital.

David Harvey has taught a class on Capital every year for decades. Well, maybe he’s missed a few on leave and what not, but the point is he has read it many times! I always used to wonder why he read it again each year. Having now read it myself, I can understand why – different groups and different approaches to reading the text all result in a unique, contingent experience of the text. This can be seen even through our own short encounter with the text.

Some people would watch Harvey’s lectures on Capital before each week’s meeting, as well as the chapter. Some would watch the video then read the chapter, while others would do the opposite. Some read companions to Capital in parallel, whilst others supplemented their reading with online resources – glossaries of concepts, and the like. Some people read earnestly, taking notes, and bringing these as discussion points. Others had a more organic reading process, and a discussion style to match. The point is there are a lot of ways to read it. And if I’m honest, my own approach was a mix of almost all of these, resulting in different experiences with different chapters.

A further variable producing different, yet equally stimulating, readings were the backgrounds and interests of those in the group. Some came to the group with a wealth of knowledge of Marx and Marxism, while others (myself included) did not know their absolute from their relative surplus-values. Personal research interests varied from the role of technology in capitalism, to issues relating to profit rate, to colonisation and class formation, through to the historical specificity of capitalism and the agency of class actors in capitalist development. Each brought a different perspective, leading the conversation in suggestive and distinct directions. I’m sure no reading group would have the same experience.

Reading Capital was a wholly social experience – or, I should say, a socially contingent experience – and I’m sure I’ll be telling friends, family, and students about my reading of Capital in the summer of 2015-16 for many years to come.

Rhys Cohen – Tutor and Honours graduate

For me there were two really significant things that I got from the reading group – the first was to do with the content of the book and its modern context, and the second was to do with the social experience and practice of the exercise.

First, something that Llewelyn in particular was keen to draw our attention to, was the extent to which our engagement with more contemporary Marxian literature tended to cloud our reading of Capital. I know personally that many times I assumed Marx was making an argument that was much more sensitive, nuanced and, for want of a better word, acceptable for modern theorists than was actually the case.

It took conscious effort to read the book on its own terms and it was confronting to see some of the limitations that Marx is so often criticised for. But in many ways this was heartening because it reaffirmed to me the huge contributions that theorists since Marx have made to the understanding and critique of capitalism, and also the necessity for this project to continue.

Second, as young, Left students I think we had all become very familiar with the standard lamentations of the Left more broadly: how can we stop this constant infighting, factionalism etc. The absurdity of these divisions was something we had all discussed at length in the past. And going into the reading group, although we all respected each other as friends and colleagues, I felt some anxiety as to whether this would remain the case, or if we might find some fundamental rift emerging between us.

And some conflicts did emerge: we argued about determinism, structuralism and agency; the nature of class and intersectionality; technology, morality and communism. At times these arguments got quite heated. But what struck me was our capacity to stick with the project, to work through the arguments. And in the end I felt that not only were many of these divisions revealed to be largely semantic miscommunications, but that we had moved closer to each other’s understandings in a way that felt constructive as opposed to coercive.

Llewellyn Williams-Brooks – Honours student

Returning to the New Left critique of Australian History

It certainly is a strange to read Capital in the context of Australia: a country straddling the contradictions of core and peripheral development within global capitalism. This precariousness, in terms of the world market, has always made Australia something of a strange case in the scheme of things. After all, Australia in the 19th century was producing a third of the British gold-standard’s reserve while it was championing the 8-hour work day and birthing a major union movement and Labor party. There seems something of an uncertainty, perhaps, a contradiction, at the very heart of Australianess. This economic uncertainty was best expressed, in the language of political office, through Paul Keating’s ‘Banana Republic’. Conversely, the nationalist writers were quick to convert this ambiguity into a mythical treatment of egalitarianism, most famously addressed in Ward’s Australian Legend, and necessarily critiqued by McQueen in A New Britannia and Irving and Connell’s Class Structure in Australian History. This was the project of the old and the new left, but this is not our project.

Wakefield is seen to observe, in the final section of Capital, that social relations of production are not reducible to simply a cloned relocation of the economic and political apparatus in Britain.

As Marx comments: “[Wakefield] discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things”. Australian colonialism required the re-establishment of the old relationships within a complex set of new social relations.

This reading substantiates that by understanding the economic relations of capitalism, we have, in the most optimistic reading, only half the picture. We should also observe the necessity of positioning the agency of resistance in the centre of human social history. We must neither fall into the trap of accepting Australia as a ‘peripheral’ banana republic, or a mythical space of elite nationalism. Instead we should understand that resistance in Australia is a fact of our history: Indigenous resistance in the frontier-wars, the militant organising of the great strikes, and the women’s suffrage movement are all evidence of this fact. Marx’s Capital only gets us part of the way, we must take hold of our own social history in order to change it.

Joel Griggs – Honours student

Reading Capital in its entirety is like reading Marx for the first time. For a self-professed Marxist, the experience is both one of vindication and sobriety. On the one hand I feel the hubris that Marx inspired in me from the very outset. On the other, a deep trepidation begging an answer to the question: What if Marx was right?

Incidentally, as an undergraduate embarking upon my honours year, I am repeatedly reminded that Marxism is experiencing a kind of academic renaissance. What is driving this resurgence is anyone’s guess but as my comrades and I wade through the murky waters from commodity fetishism to Marx’s own theory of colonisation I am struck by the powerful clarity of a man whose perspicacity eclipses the moral dilemma evident on every page. Less than two years after a young American Union formally abolished slavery, Marx is alone in revealing a new kind of slavery emerging in the Old World. Waged-labour with its ‘freedom in the double sense’ replaced the stability of the indentured peasant with the precariousness of the proletariat; a class at once pitted against one another and unified in their wretched struggle.

It is this constant dialectical relationship present throughout Capital that exposes the structure and the structural weaknesses of our predicament. While the conditions have undeniably improved, the structural realities of the working class remain largely unchanged today. Likewise, even though the capitalism that so consumed Marx in the nineteenth-century may have traded in its ostentatious top hat for a less-assuming tie, it is nonetheless the same vampiric fiend that dogs every step of our collective existence.

Capital’s strength lies in its piercing internal critique of what defines capitalism. Twenty-first century capitalism is adaptable, mobile, and has a thousand faces. To assign capitalism homogeneity is to lose before we have even begun to unravel its web. The uneven development of capitalism, too, makes it equally difficult to analyse. There must be, however, an underlying logic that serves as a motor for capitalism. To this end, Marx’s unfinished project is no less mistaken today than it was one and a half centuries ago – though like most things in life, questions of right and wrong are seldom black and white. The answer for me lies within the explanatory scope of the theory. For an exploration into the insights of an exceptional dialectician, then, my hubris and trepidation seem entirely fitting. More relevant today than ever, reading Capital has been a wonderful and enlightening experience.