The Economics of Sustainability

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This will be a semi-organized rant that loosely ties together history, economics, philosophy, ethics, and environmentalism. We’ll look at the rise of capitalism alongside industrialization and its unparalleled economic growth, but then analyze its cost on our hopes for a healthy, sustainable society.

# Economic Development

The Industrial Revolution, fueled by capitalism, has undoubtedly made a subset of humanity better off in the short-term. Even the simplest products are luxuries no one before us has ever even come close to seeing:

We take it for granted today, but a single Dorito has more extreme nacho flavor than a peasant in the 1400s would get in his whole lifetime.

There’s a corollary to this tweet: a bag of Doritos has more extreme nacho flavor than the wealthiest king in the 1400s would get in a single meal.

## Growth & Prosperity

In the early 1900s, the average salary in the United States was around \$750/year,1 working out to \$21,500/year today after adjusting for inflation. The average salary today, though, is more than double that at \$53,400/year. Even if you use the median salary, its still$34,600/year, a 61% increase.2 Whether or not this is an appropriate rise given the productivity increases in that same period (a measly 115% compensation growth vs. a contrasting 253% productivity growth since 1950)3 is a separate issue: there’s still a strong argument to be made that things are better now than they’ve ever been.

We have an encyclopedia of human knowledge available in our pockets; the flavors and cuisines of the entire world are ever-present in our grocery stores; we can communicate over thousands of miles in seconds and travel there ourselves in hours; etc. We can write and print books, take stunning photographs, record high-quality videos, and consume media created around the world without moving anything but our thumbs.

Undoubtedly, capitalism and industrialization brought us a lot of luxury.

It’s not only the First World that’s benefitted, either. The amount of people living below the poverty line has dropped ~75% since 1990,4 and the people there generally live better than they did last century:

Compared with 50 years ago, the average human now earns nearly three times as much money, eats one-third more calories, buries two-thirds fewer children and can expect to live one-third longer.

Poverty is nose-diving. Between 1980 and 2000, the poor doubled their consumption. The Chinese are 10 times richer and live about 25 years longer than they did 50 years ago. Nigerians are twice as rich and live nine more years. The percentage of the world’s people living in absolute poverty has dropped by more than half.

— Matt Ridley, The Rational Optimist: How Prosperity Evolves

To put it succinctly, the numbers appear good, regardless of location.

And yet, there’s no way it can be all sunshine and roses. This kind of hedonism and excess is obviously delightful in the moment, but what does it mean for humanity beyond instant gratification? Specifically, what does it mean for the portion of humanity that continues to enjoy more excess rather than newfound excess?

There must be a cost.

# Economic Costs

How long can we kick the can of indulgence down the road until the sustainability chickens come home to roost?

## Statistical Sleight-of-Hand

First, let’s analyze the underlying truth of these feel-good statistics: we should be extremely skeptical of feel-good justifications for a system that are the product of said system. It’s like when pharmaceutical companies fund research about the benefits of… pharmaceuticals. So let’s analyze the “developments” we just talked about.

There are lies, damned lies, and statistics.

First, notice Matt’s particular choice of words: “the poor doubled their consumption.” Well, why is that necessarily a good thing? Where are the measures of, say, happiness and life satisfaction, ecological diversity, or light pollution?

Second, notice the generality of these claims: “the average human,” “the Chinese,” and “the average salary” are all on a scale that makes manipulating numbers far too easy. While it appears that nations are better off as a whole, this notion often breaks down if you look deeper.

There’s even a contradiction (or, rather, a deep mislead) within the quote itself.

How do you compute the average human lifespan? Do you do it naively with the arithmetic mean? For example, $$\frac{1 + 70 + 67 + 20 + 82 + 0 + 1}{7} \approx 34.4$$

The average here is 34 years, but obviously that’s not representative of what actually happens in this society: most people either die really young or reach old age. The median isn’t much better: “20” doesn’t give you the full picture.

Following this logic, then, if the average human buries two-thirds fewer children, the average lifespan must increase by definition: $$\frac{1 + 70 + 67 + 20 + 82 + 68 + 55}{7} \approx 51.9$$

As you can see, turning the child deaths to normal lifespans leads to a nearly 20-year increase to the average lifespan.

So this follow-up claim that the Chinese “live about 25 years longer,” does not necessarily mean that lifespans increased. It implies that humans used to live to 50 and die, and now they live to 75. The statistics are presented as independent benefits: we live longer AND less babies die. However, this is misleading: when less children die in childbirth, the average lifespan naturally goes up massively.

And even despite all of this anyway, the decrease in childhood mortality can’t even be attributed to capitalism or prosperity, but simply to hygiene.5

The misdirect goes well beyond this specific example. In general, statistics of economic prosperity sound like a promising attestation to the “side effects” of capitalism: industrializing a nation benefits everyone within it as well as the nations that provide the materials and labor it needs.

Unfortunately, it continues to be a simple manipulatation:6

[We] openly discussed the deceptive nature of [Gross National Product]. For instance, GNP may show growth even when it profits only one person, such as an individual who owns a utility company, and even if the majority of the population is burdened with debt. The rich get richer and the poor get poorer. Yet, from a statistical standpoint, this is recorded as economic progress.

— John Perkins, Confessions of an Economic Hitman

The subtle lies run even deeper than that, usually perpetuated by the very people that benefit from them. Perkins continues:

My staff of economists, financial experts, […] proved that that such investments — in electric power systems, highways, ports, airports, and industrial parks — would spur economic growth.

[…]

The statistics were highly biased; they were skewed to the fortunes of the families that owned the industries, banks, shopping malls, supermarkets, hotels, and a variety of other businesses that prospered from the infrastructure we built.

They prospered.

Everyone else suffered.

Money that had been budgeted for health care, education, and other social services was diverted to pay interest on the loans.

The development, prosperity, and growth; the feel-good indicators of success; and the endless supply of trinkets and goodies are just a masqueraded product of economic imperialism. The developed nations (well, mostly just the U.S.) put economic shackles on developing nations and hide the chains under a statically-backed façade of progress.

## Workers’ Rights

Even throughout the growth, for those lucky enough to experience it, there were still steep costs. The working class in developed nations had to fight tooth and nail for every safety law (there were 35,000 factory deaths/year in 19007), labor regulation (remember child labor, the lack of minimum wage, or the fact that women couldn’t work?), and benefit (pensions took hold in 1920, and employer-provided health insurance didn’t exist before the 1940s) relinquished by the industrialists.

People forget that the 40-hour work week and minimum wage are both less than 100 years old and are the product of strong unions and collective bargaining by the working class.

Their struggle still continues: it doesn’t take long to find tons of supporting evidence that the economic power of a single job or single dollar is dwindling relative to what it used to be, and the fight for workers’ rights is as relevant as ever today as ever before: Hyundai got caught using child labor last month, and Pinkertons are back to union-busting.8,9,10

In reality, all we did was outsource the unregulated exploitation of the working class to developing nations that can’t fight back, but that’s beside the point: economic progress neither painless nor free.

## Duplication of Labor

Under capitalism’s necessity of hyperspecialization, we see an excess of waste and repetition in regards to human labor.

How many tire manufacturers are making the same rubber donuts with tiny variations in design and quality?

How many car manufacturers have production lines for steering wheels that have tiny, superficial, aesthetic variations among each other?

How many phone manufacturers are repackaging the same chipsets with their own minor form factor tweaks to the hardware and spamware tweaks to the software? How much of the e-waste generated by getting a new phone every few years11 could be eliminated by putting fragmented minds together to create something truly great?

How many software engineers have spent their time creating sign-up forms and date pickers whose collective variations could be replicated by a single engineer tweaking an open source project? How many different word processors, image viewers, login forms, streaming platforms, video players, or social networks do we need?

How many factories out there are dedicated just to making plastic bags? You know, the ones that tear on your way to the car, that saturate the sky on a windy day in any city, that kill 100,000 marine animals every year?12

There’s an entire book dedicated to the idea that there are people out there completely wasting away doing work that is meaningless and superfluous. And planned obsolescence is a known (and probably encouraged) phenomenon that makes this worse.

What the fsck are we doing? Participating in collective insanity, apparently: we’ve applied Einstein’s definition13 on a global scale. Millions of man-hours and an immeasurable amount of natural resources spent doing the same thing over and over again.

WHY?

I can’t stress enough how absurd this concept is. At any given moment, there are probably thousands of people out designing the exact same thing for corporations that are in competition with each other. If you put them all in the same room, there’s absolutely no doubt in my mind that you’d get a better product by simple virtue of the fact that you wouldn’t be wasting labor on the same task.

This duplication of labor and resources segues cleanly into the next cost of economic prosperity: climate change.

## Climate Change

“Capitalism encourages innovation through competition.” Let’s take this as truth for the sake of argument. Then there’s a follow-up nobody seems to ask: at what point should we stop encouraging innovation? When we will decide that we have enough?

When the last tree is cut down, the last fish eaten, and the last stream poisoned, you will realize that you cannot eat money.

— Native American saying (allegedly)

Global temperatures are higher now than they’ve been throughout all of human history.14 That’s just fact. Critics can argue about whether or not that’s caused by humanity, but I won’t waste my breath on that here. One thing is definitely caused by humanity: the destruction of nature. Whether that be:

• nearly hunting buffalo to extinction,15
• feeding 40kg of plastic to a sperm whale,11
• killing turtles and birds with our trash,16
• fishing our oceans completely devoid of fish,17
• creating an “island” of garbage in the Pacific Ocean twice the size of Texas,18
• making ourselves dumber with air pollution,19 or
• literally engineering our own extinction from microplastics.20

Tires pollute 1000 times more than the car itself;21 how much could we improve that if we just focused everyone’s efforts on making the best possible tire rather than the most profitable one?

What if every car manufacturer invested in electric vehicles instead of releasing a new paint color onto it and calling it the 2022 model? What if they collaborated on the best possible EV rather than independently reinventing the wheel battery?

What if we stopped releasing a new iPhone every year? Maybe that would incentivize people to stop throwing away 150 million old smartphones every year.22

Capitalism has driven the very foods we eat to a different extreme, one full of artificial scarcity, profit maximization, fake competition, and nutritional bankruptcy.

Somehow, the “chip shortage” caused by supply chain issues gets manipulated into a fear of Hot Cheetos never coming back to store shelves.23 “Special editions” or “seasonal releases” of products create artificial demand by exploiting our primal fear of food scarcity. Sierra Mist “competes” with 7-Up (yet they’re both owned by PepsiCo), Dasani “competes” with SmartWater (both owned by Coca Cola), and DiGiorno “competes” with Tombstone (both owned by Nestlé). There are just ten corporations dominating our shelves,24 and each one is pretending to be in competition with itself.

This centralized entire industry is doing whatever it takes to make people eat more crap:

[There is] a conscious effort—taking place in labs and marketing meetings and grocery-store aisles—to get people hooked on foods that are convenient and inexpensive.25

There’s even a term for a food tweaked perfectly to maximize craving: its “bliss point”. Companies will tweak their formulas to maximize “bliss”, addiction, and cravings while also maximizing profits with disgusting imitations of real food:

Natural Cheddar, which they started off with, crumbled and didn’t slice very well, so they moved on to processed varieties, which could bend and be sliced and would last forever, or they could knock another two cents off per unit by using an even lesser product called “cheese food,” which had lower scores than processed cheese in taste tests.

Let me once again reiterate this absurdity: food companies intentionally make their foods unhealthier, tastier, and more addicting exclusively in the name of profit. And they have the audacity to blame the consumer:

Well, that’s what the consumer wants, and we’re not putting a gun to their head to eat it. That’s what they want.

knowing full well that they’re exploiting biology and psychology to become the direct cause of the meteoric rise in obesity, diabetes, and other health problems.

Yes, one can point to “individual responsibility” to wash their hands clean like Pontius Pilate, but it’s disingenuous to ignore the individual’s uphill battle against an army of researchers and profiteers using best-in-class methodologies to make it as difficult to say “no” as possible. The deck is heavily stacked against the consumer to “want” exactly what the producers want them to want.

What kind of snacks could we invent if we focused the \$1.5 trillion industry on creating healthy and sustainable ones? With that investment, I bet we could make them just as addicting.

# Stopping the Wheel

It seems capitalism is both a blessing and a curse: on one hand, we get unforeseen technological advancement and social mobility for the lucky ones; on the other hand, we get moral, nutritional, and environmental degeneracy at the behest of the profit motive, not to mention the spread of poverty, starvation, and suffering for the fuel powering the capitalism regime: the unlucky ones.

To borrow from Lenin (with a bit of tongue-in-cheek), we need to ask ourselves: “What is to be done?”

Given the existential risks, this might be the only thing worth pondering.

1. John Perkins’ book (and its next edition) is one of my favorite non-fiction works ever. If you think the U.S. truly is a “good guy” on the world stage, this book is the wake-up call you need. ↩︎

2. “Insanity is doing the same thing over and over again and expecting different results.” ~ Albert Einstein ↩︎