“The climate challenge is an opportunity for capitalism”

Cap­i­tal­ism has been the sub­ject of severe crit­i­cism, from its ori­gins and through­out its his­to­ry. What is the secret to its survival?

To under­stand the his­to­ry of cap­i­tal­ism, we must aban­don the idea that it is a sin­gu­lar term; it can­not be locked into a sin­gle descrip­tion. There are sev­er­al dif­fer­ent ways of see­ing it, and this is the secret of its resilience. Look at Chi­na, where we observe a very dif­fer­ent ver­sion of cap­i­tal­ism than that which we know in Europe or America. 

If you define it as an eco­nom­ic sys­tem based on free­dom of ideas, a mar­ket, pri­vate prop­er­ty, you miss much of the point. Rather, cap­i­tal­ist sys­tems are marked by the very strong pres­ence of a reg­u­la­to­ry, inter­ven­tion­ist and even author­i­tar­i­an state.

In the same way, a Marx­i­an def­i­n­i­tion, insist­ing on the rela­tion­ship between pro­duc­tion and the “wage-earn­er”, only cap­tures some of the pos­si­bil­i­ties (i.e., the first and sec­ond indus­tri­al rev­o­lu­tions). Some forms of cap­i­tal­ism devel­oped using slaves or enslaved pop­u­la­tions, while oth­ers, yes­ter­day or today, mobilise semi-depen­dent workers.

A Schum­peter-like def­i­n­i­tion, empha­sis­ing the ‘enter­prise’ and the fig­ure of the entre­pre­neur, also miss­es part of the point. That only appeared at a late stage.

The uni­ty and his­tor­i­cal coher­ence of cap­i­tal­ism is the dom­i­na­tion of mon­ey and of the class of hold­ers with finan­cial means – in brief, the bour­geoisie. When it emerged in the 16^th cen­tu­ry, this new mod­el was at first mar­gin­al with­in an econ­o­my still not very mon­e­tarised and dom­i­nat­ed by agri­cul­tur­al pro­duc­tion. What ensured its suc­cess and led it to con­trol, and then absorb, a grow­ing share of pro­duc­tion and trade was its capac­i­ty for inno­va­tion or, bet­ter still: ‘cre­ative destruc­tion’, as Schum­peter put it, but which had already been hailed in the Com­mu­nist Manifesto.

So, the inno­v­a­tive pow­er of cap­i­tal­ism has enabled it to respond to the chal­lenges it has faced? 

Yes, and it is not lim­it­ed to tech­nol­o­gy. In the 19^th cen­tu­ry, the indus­tri­al rev­o­lu­tion gave rise to the “social ques­tion” because of the increase in the num­ber of work­ers and the dra­mat­ic liv­ing con­di­tions that the free labour mar­ket imposed on them. As ear­ly as the 1880s, Bis­mar­ck cre­at­ed the first social insur­ance schemes. In the 1930s and post-1945, dri­ven by social and polit­i­cal protest, a “great trans­for­ma­tion” (in the sense of Karl Polanyi) took place in response to this chal­lenge, regen­er­at­ing capitalism.

State inter­ven­tion, the fight against inequal­i­ty and trans­fers con­sti­tutes a return of polit­i­cal con­trol over the econ­o­my (the ‘re-inte­gra­tion’ of which Polanyi speaks) that cor­rects the destruc­tive con­se­quences of self-reg­u­lat­ing mar­kets. And what is remark­able is the way cap­i­tal­ism has trans­formed these con­straints into a pow­er­ful engine.

Fordism is one form of this meta­mor­pho­sis. It was not to sell cars that Hen­ry Ford paid his work­ers more, rather it was to solve the prob­lem of turnover asso­ci­at­ed with low wages. This response to an inter­nal com­pa­ny prob­lem became, under the lead­er­ship of the state, the paragon of a new age of cap­i­tal­ism. Mass con­sump­tion and pro­duc­tion, the explo­sion of pro­duc­tiv­i­ty, the rise of the urban mid­dle class­es, the leisure econ­o­my, the devel­op­ment of ser­vices, etc., cor­re­spond­ed to the excep­tion­al growth of the Glo­ri­ous Thirty. 

The his­to­ry of cap­i­tal­ism  can be char­ac­terised by its rhythms, major crises – eco­nom­ic, social, polit­i­cal – and its rebound phases.

Chal­lenges and upheavals thus mark the his­to­ry of cap­i­tal­ism, a his­to­ry that can be char­ac­terised by its rhythms, major crises – eco­nom­ic, social, polit­i­cal – and its rebound phas­es: the some­times-vio­lent emer­gence of a prob­lem (wars play a major role), response and trans­for­ma­tion of the sys­tem, new prob­lem (some­times result­ing from the response), new response… And it goes on! 

Thus, it was from the cri­sis of Fordism, which could no longer raise its pro­duc­tiv­i­ty, that the rev­o­lu­tion of the 1970s and 1980s was born, embod­ied by Thatch­er and Rea­gan. A new ‘great trans­for­ma­tion’, this time neo-lib­er­al, in which finance is omnipresent, based on the third indus­tri­al rev­o­lu­tion, revived the inno­va­tion machine, hence the growth of 1994–2006 (the fab­u­lous decade). But it has again gen­er­at­ed the con­di­tions for the great finan­cial cri­sis that broke out in 2008, and the exhaus­tion of pro­duc­tiv­i­ty gains.

In your book on Cap­i­tal­ism and its rhythms (Gar­nier, two vol­umes, 2017 and 2019), you insist on the endoge­nous char­ac­ter of these crises, and on the fact that cap­i­tal­ism always push­es its lim­its. This is a mark of its dynamism, but isn’t it also its weakness?

Cap­i­tal­ism is marked by an accu­mu­la­tive log­ic, which rad­i­cal­ly dis­tin­guish­es it from pre­vi­ous eco­nom­ic sys­tems (ancient, feu­dal etc.). “Accu­mu­late, accu­mu­late,” said Marx in Book I of Cap­i­tal, “this is the law and the prophets. This unlim­it­ed accu­mu­la­tion leads cap­i­tal­ism to deep contradictions.”

It is in this that crises are endoge­nous, and I am not just talk­ing about finan­cial crises. It cre­at­ed the social ques­tion, but also, at the turn of the 20^th cen­tu­ry, the ques­tion of monop­o­lies, hence the response of antitrust in the Unit­ed States, of Ger­man decarteli­sa­tion after 1945, etc. In the same way, this regime of pre­da­tion on nature has cre­at­ed the envi­ron­men­tal issue that is today a major challenge.

The cli­mate and envi­ron­men­tal chal­lenge is throw­ing the com­pass­es out of kil­ter. With col­lap­sol­o­gy, we are see­ing the reap­pear­ance of apoc­a­lyp­tic think­ing: we will be pun­ished for our sins against nature, as we were yes­ter­day against God! But it has helped to make peo­ple under­stand the impor­tance of the chal­lenge, for politi­cians and for eco­nom­ic agents, house­holds and busi­ness­es, who are now play­ing a lead­ing role in devel­op­ing a response.

Like its pre­de­ces­sors, this new chal­lenge will have its answer. Changes in men­tal­i­ties and behav­iours, and the reg­u­la­to­ry push will pro­duce tech­no­log­i­cal and social inno­va­tions in which cap­i­tal­ism, once again reg­u­lat­ed by the state and its indus­tri­al poli­cies, will be a stake­hold­er. The new alliance between cap­i­tal and the state will active­ly par­tic­i­pate in the devel­op­ment of the next world, a world of clean ener­gy where the envi­ron­men­tal foot­print of each addi­tion­al point of GDP will be ever small­er, an evo­lu­tion that has already begun.

I will go fur­ther: the cli­mate chal­lenge is per­haps an oppor­tu­ni­ty for cap­i­tal­ism. It is an oppor­tu­ni­ty to respond to anoth­er chal­lenge: that of “sec­u­lar stag­na­tion”, an old con­cern that was revived in 2013 by Lar­ry Sum­mers, for­mer chair­man of Barack Oba­ma’s Nation­al Eco­nom­ic Council. 

Sum­mers, along with oth­ers such as Robert Gor­don, has observed the decline in pro­duc­tiv­i­ty gains over the past thir­ty years. He explains it by a grow­ing deficit of invest­ment oppor­tu­ni­ties. A cri­sis of lan­guish­ing demand, a cri­sis of matu­ri­ty: the hap­py days of easy growth are behind us.

It is per­fect­ly pos­si­ble that the envi­ron­men­tal chal­lenge will pro­vide an answer to this lan­guish­ing demand. The envi­ron­men­tal tran­si­tion is a huge under­tak­ing. With the end of coal and oil, the rise in ener­gy prices promis­es prof­itable invest­ments. It also offers a wel­come return of infla­tion, which has desert­ed the goods mar­kets to con­cen­trate on real estate and finan­cial assets alone. It is also an oppor­tu­ni­ty to elim­i­nate waste and unnec­es­sary production.

Of course, one can dis­cuss the neg­a­tive effects of high­er ener­gy prices, espe­cial­ly for areas like Europe that will be lead­ers in this tran­si­tion. There is a price to pay in terms of com­pet­i­tive­ness, and unless we want to be the butt of the joke, we will need a car­bon tax at the bor­ders. There is a prob­lem of inter­na­tion­al coor­di­na­tion here, which is no small mat­ter since the eco­log­i­cal tran­si­tion must be glob­al. But the new con­straints also promise a rebound. The “cap­i­tal­ist machine”, sup­port­ed by the old, but inter­mit­tent, accom­plice, the state, may find in the cli­mate chal­lenge an oppor­tu­ni­ty to bounce back again.

Interview by Richard Robert