Question

Is capitalism sustainable? Does business need to change the way it is presently conducted to be sustainable and competitive in the future? The above questions are your research topics for this week’s assignment. These are questions that many academics, economists, and policymakers in the United States ask themselves based upon the facts. This week you are asked to fact find (data) and consider how changes in the utilization of resources used by businesses are going to be factored going forward in the coming years. For example, how will humans and businesses deal with the end or near the end of specific resources (i.e. oil, iron, seafood, etcetera)? Keep in mind, as you learned in economics, that all resources are limited. Thus, based on current consumption rates they will run out. Also, within this equation, one must consider the environment and the questions of social responsibility to those who do not have access to such resources but are affected by the current capitalist society. In addition, clean water and air are a necessity for all forms of life. How does one protect these precious resources and continue to strive toward meeting profit objectives each fiscal quarter? Is capitalism as we know it at the end of its life cycle? While this is not an easy assignment or one where there are correct answers, there are answers and they should/must be based on good data and logic. In this assignment, you are asked to conduct your research and report the data while making an argument as it pertains to the original question. Is capitalism sustainable?

Answer 1

Capitalism has been defined by some as the management or direction of a community or nation's resources (Rand et al, 1986).This management could turn the form manipulation however, as has been the case in several industries especially those involving limited natural resources. According to Ayn Rand et al, Mankind along with resources like land, water, oil etc. are all just factors in a production line. The capitalist trend in the last few decades shows this to be true, when you consider the exploitation of natural resources and employees alike on the path to economic success. The un-replenishable depletion of natural resources in the past suggests that Capitalism in its current form is not sustainable. For a business to plan continuity and competitiveness there needs to be a constant supply of raw materials, these raw materials can be physical human factors (availability of labour) or intellectual (skills, intellectual property) and the underlying basic need for natural resources (water, wood, air, natural elements). Reduction in any one of these can affect the economy, and cause friction between competitors/opposing factions that might own what's left of the dwindling resources.

Due to the rise of industrialisation and population growth, freshwater consumption has increased sharply from half a billion cubic metres in 1901 to 4 trillion by 2014 (IGB, 2015). To ensure the continuing supply of freshwater to all, it is imperative that consumption be managed by all businesses by changing their old ways of production to new more sustainable methods. Similarly natural gas, crude oil and coal consumption has gone up drastically from close to 6,000 terawatt hours in 1901 to around 132,000 in 2017 (Smile, 2017; BP 2019). Continuing to overuse resources in this manner will lead to severe shortages in the future and a much greater chance of economies collapsing when they do.

Wherever there are resources there are sure to be people trying to exploit it, and in doing so damaging those and other regions of the planet with dangerous repercussions. The hole in the ozone layer is one such example, excessive production and use of harmful CFC and halon gases (in sprays, refrigeration) without thought of containing damage to the environment have led to a hole developing the ozone layer. Another such example is global warming which was caused by capitalist activities in the pursuit of money with no regard to environmental stability. Excessive deforestation, farming and mining; overuse of natural resources (e.g. fossil fuels) resulting in harmful emissions; irresponsible waste management are all factors that lead to global warming (Solar impulse foundation). The relentless pursuit of resources in the race for capital accumulation has had the further impact of displacing humans residing in the resource rich regions affecting their livelihoods and lives. Those who do not have access or are now facing shortages of necessary resources are further impacted when big businesses that can afford to pay more are acquiring resources to further their profits. This social impact is in dire need of focus to ensure that it is resolved and not deepened.

There are now new solutions emerging to use, share and dispose of resources responsibly, towards ensuring that the majority if not all of the population have a share in the natural resources of our planet. Solutions such as utilising solar/wind energy, switching to electric modes of transport, sustainable farming, plastic waste reduction, fairer utilisation of resources like water/oil, are all designed to enable capitalism to continue while being responsible to ensure that it is sustainable in the long run (Solar impulse foundation). If the changes advocated by experts are not adopted however, then capitalism which is in the 'maturity' phase of its lifecycle, will likely go into the decline stage where resources will be unavailable to allow businesses/economies to continue.

References :

BP (2019) BP Statistical Review of World Energy. June

IGB (2015) Great acceleration. Global International Geosphere-Biosphere Programme press release. 15 Jan

Rand, Ayn., Branden, Nathaniel., Greenspan, Alan., Hessen, Robert. (1986) Capitalism : The unknown deal.   

Solar Impulse Foundation. How to stop Climate Change.

Smil, Vaclav. (2017) Energy Transitions: Global and National Perspectives.