Mason Justin 860265264 Econ 116 March 14, 2008
The inevitable transition to an MSS
Of the numerous topics discussed in class this quarter I found the Spaceman economics section to be the most interesting. It raises many questions about the effect our actions have on society while keeping in mind the need for social improvements and consistent modes of production and consumption. The question I am attempting to gain better understanding on is, will a shift towards spaceman economics be a viable replacement to correct the inefficiency of the current capitalist system. By applying lecture notes and drawing information from the two essays written by Boulding and Wheisskopf I will expand on the idea of the earth moving from an open economy to a closed one. This paper will also look to break down the current capitalist system and whether its overall social and environmental costs are enough to outweigh the benefits of the system and also enough to cause system to collapse. Boulding refers to the old economy of the past as Cowboy economics. It is indicative of the open frontier culture, the idea that we can continue to push for new resources in this abundant land when the current level is no longer sustaining life. He associates this type of economics with the words reckless, exploitative, romantic and violent as descriptions of the behavior found in most open societies. As we transition away from the mentality of the cowboy and move to a conservationist stance, certain assumptions will change about our world's limitations. Under spaceship economics we are focused not on a never ending supply of new resources but instead we focus on
maintaining a steady level even if we an increase the level of inputs. We are essentially trying to have inputs but without them producing the corresponding level of output. Production and consumption have been viewed as positives under the current capitalism system. The more production the better because it increases the number of inputs and outputs in the society, capitalists are working to maximize these transactions for profit. Success is measured by the total number of transactions taking place. The system is setup in way that rewards the creation of new throughput. The more people involved with production and consumption the better the entire community will prove to be. It is the sum of all individual efforts to produce/consume large amounts of resources. There are key assumptions that are in place to maintain these high levels of resource use. Under the cowboy mindset there are infinite resources but they must be found and extracted and ultimately put into production . There have been numerous advancements in both the industrial and technological world yet they have both also caused serious environmental damage for their introduction into the market. This becomes an increasingly serious problem because earth, and more importantly how man sees himself in the earth has shifted. This is the transition mentioned quite often by Boulding regarding going from an open system to a closed system. The earth is moving from being viewed as open frontier However the spaceman economy differs because they feel it is good to limit the amount of throughputs, meaning reducing the number of input to output transactions. Analytical focus is instead on the general state of the total capital stock, capital stock meaning humans mostly and their overall well being. Production and consumption are viewed as negative exponents, so changes made in a society like inventions are valued for their ability to reduce the throughput of an action. Boulding
uses basic conditions of human life to make an argument against the typical views of capitalism and capital accumulation. Boulding uses the example of an enjoyable feeling associated with going to a concert. It is a value that will depreciate over time and a person will do so based on how low the value drops. He makes the same argument for eating or drinking, or for clothes or for new homes. We only eat more food or buy more clothes to maintain a certain level of pleasure that we derive from such products. You must eat every so often to maintain a general feeling of being full or fed. However we should be moving towards a state which enables us to maintain that positive feeling or condition while using less resources in the process. By cutting down this process to its minimum we are in theory better off than if we have to keep buying new homes and clothes that is in terms of living on a fixed plane. It is clear in our society we have certain natural consequences associated with our actions. The argument whether burning fossil fuels will affect our environment should be a focus. The combined effect of burning fuels, and cutting down trees and water pollution and a few other examples of environmental damage coever in class all help facilitate this impending idea of climate change. A lot of these actions are the direct result of actions taken by capitalist expansion. We believe we can cut down more trees and drill for more oil primarily because we operate under the assumption that there is more frontier with more resources not yet discovered. Boulding also mentions the most common argument that states the future should be responsible for the future and that the living generation should have the right to maximize the resources available to them. Thomas Weisskopf has also written about the shortcomings realized through capitalism, and it gives more credit to the Marxian idea that capitalism has too many
contradictions and as a result it is inefficient system of economy. Before further expanding on Weisskopf, let us look at two major crisis theories. The first idea raised by Marx is that the rate of profit under capitalism has a tendency to fall past a certain point. Meaning a firm will have a profit curve and at a certain point it will become less and less profitable to produce a good or service in the market. Falling rates of profit will cause less investment and the system itself will come to a halt. Another theory stated that capitalist accumulation would restrict mass purchasing power resulting in under consumption. We may see examples of this where workers in a company can not afford to buy the product even thought it is produced by their labor. This limit on buying power is a restriction in the purchasing power as a whole and could lead to huge social tension if left unchecked, and those are just a few of the problems found in capitalism. Weisskopf, as also stated by Boulding, believes that environmental concerns give a good basis for eventual problems associated with capitalism. The problem as stated before is that our earth is a finite place, that has natural capacity restraints. Once the capacity restraint is reached, continued production of the good will become too costly for profit or will become obsolete altogether, for example if oil ran out. Weisskopf uses examples about land no longer being able to sustain crops or lecture notes stating humans possibly working during the night to cope with intensified sun rays. The second major contradiction Weisskopf found was in having a system that creates waste and then using the profits to clean up the waste. Capitalist should be using all available income to reinvest in their own product either making it less costly or improving functionality. He argues that true economic output is slowed as a result and therefore capitalism leads you to undesirable results in the long-run view. Also going back to the impending
class struggles is what to do when the burden of improving our environment must be distributed amongst the people. A possible way to measure the effect of the burden would be to look at impending tax programs and to study who is most affected by those taxes, wealthy capitalists or the less profitable working class. While capitalism can lead to transportation improvements such as the building of roads as a mechanism to boost economic growth, this same road will give way to increased traffic, need continued repair and the new congestion can have adverse affects on air quality and the level of atmospheric pollution. Another key distinction found was that it is not important whether theoretical the point of no return in ever reached, because the focus is more important on the long-term effects of waste and pollution on the society as a whole. Continuing our system of bringing new life into our society will increasingly be more expensive if we adjusted for increased health care, transportation, and food costs alone coupled with the loss of the ability to expand into a new frontier. Weisskopf takes his argument further than boulding because he also examines the social environment that suffers under a capitalist system. Weisskopf examines the ability of a society to maintain its current level of social tension versus a society that has increased social tension with every generation as having been more effective or efficient as a society. If we measure the health of a social environment by how safe people feel or how secure their jobs are, we come up with concrete variables for measuring a person's general state of well being within a society. The main issue I associated was that similar to the natural environment problem, the social environment deterioration will eventually lead you to a state of spending to correct problems caused by the social breakdown. Weisskopf uses the example of increases in crime leading to an increased need for more police. As you build more jails
and create more laws to improve the social well being you are also adding to the social breakdown and spending money for both sides of the issue. We again are not using resources to further create and advance our society we are using resources to counteract the destruction caused by our normal functions. This leaves us with growth in our economy but it is slowed down because you have to account for money spent to repair damage to the environments. While Weisskopf does not see social breakdown leading to collapse of capitalist economy, I do see a scenario under which that would occur. The natural environment is easier to measure because we can see the effect of the damage in our physical world. The social environment deals much more on an emotional and purely human level. Once we reach a level of insecurity and people become afraid to conduct themselves in these actions necessary for society we have a problem. The combination of social problems is what will lead under consumption which as Marx stated was part of symptoms of crisis. Not to mention that if you are willing to let society continue to deteriorate it makes the issue that much more expensive to fix down the road as it becomes an epidemic race issue or out of control disease. What if there is such a grand increase in crime that people become afraid to conduct daily business and live their lives. Weiskopf examines that both social and natural causes would need direct impact on capital accumulation if it is to be capable of disabling capitalism. Going back to my question, do these type of economic setbacks push us towards the modified state. Having looked deeply at both Boulding and Weisskopf stance on this issue we must analyze if these contradictions will lead to the eventual breakdown necessary for breakdown of nations and the homogenization of the worlds population. There are definite signs that can help answer this question. The world s population will increase by another 30 percent
over the course of the next fifty years. With this many new people we will be closer to approaching constraints of our economy but will also be faced with even more people inhabiting this closed sphere. There is no abundant source of resources left to discover on this planet that could match our increasing levels of throughputs. So the only possible solution seem to be the modified stationary state. Where we view earth as a spaceship and value all accomplishments in terms of how they reduce social throughputs. As discussed in class we see the transition to spaceship economy also means a transition to one stationary state. They would need to tax negative externalities while providy tax credits for those who use renewable technology. This will help establish incentives to recycle and cut back on unrestrained waste. In lecture the point was made that in order to prepare for a stationary state the income distribution would need to be much more equal both nationally and internationally. Secondly poverty would have to be eliminated so that people would agree to a freezing of assets at current levels. No one would agree to be locked into an economic system that keeps them locked at a low level of income and no incentive for improvement. The willingness of the people will help open more to the idea of forgoing some personal preferences to truly benefit the earth as a whole entity. If we begin to understand the world as a fixed solitary ecosystem we have a new set of assumptions to address the use of natural resources and the spending of surplus. Certain things about our society will not change and that is the need to have these throughputs at least on some level. There is no way to totally erase the relationship of inputs creating output but it may be possible to shift the ratio of the two. If we being studying an economy by its ability to limit throughputs and not to expand them we can effectively see the earth as a spaceship as it relates to the economy.
There is more to look at when we talk about moving towards the Modified State, the main argument being that capitalism will not address the basic human needs. Capitalist theory puts a lot of faith in the rpice game and if people have the freedom to choose various options, then the market will dictate their most beneficial price options. Furthering this idea, capitalist supporters believe that if the price of a good gets too expensive, that a substitute will appear within the market. The substitute will spark investment and more research into finding alternative ways to get same goods. In the book titled Capitalism on page 135 an excellent point is made that no one can guarantee that the substitute derived from the price game will be any better for the environment and may still cost the society negative externalitites. There is also the problem of accessing environmental damage and its affect to the future generation. I have already mentioned that there are some who believe the present world is theirs to push the limit of resources. We can not accurately gauge our affect on the future nor can we properly take into account the preferences of future people regarding the market and environment. This all leads us to make key observations, capitalism will not ensure basic human rights nor will it provide proper environmental protection, due to the negative relationship capital has with the environment. In the book Capitalism there is an example given regarding grazing amongst herdsmen. There is a spot for drinking and eating for cattle, and every herdsmen will bring all of his own cattle, the area can sustain more and more cattle until it reaches its capacity constraint. The level is avoided by natural processes such as war famine or death but eventually enough will enter the system and break down the natural laws. Our own economy is almost identical in that it is beneficial to have more firms enter the
market yet once we no longer have an open frontier system and our grazing hole becomes noticeably smaller in relation to the number of people using it. Going back to the herdsmen example, if the cattle have no where else to graze they will at some point be forced to change the way they use the resource. Rather than overfill capacity they would have to devise way to get more use of the resource out of the cattle. Our MSS would function much to the same degree it would force people to decrease the amount of necessary throughputs by channeling inventions and social consciousness into that direction. If you can effectively eliminate poverty and can have the less industrial countries give up aspirations to do so then the MSS is the desirable outcome. It seems the only real solution to ensure continued economic stability while setting aside the proper reverence to the environment. The main challenges also include proving to skeptics that man-made action has enough of an effect that the whole system should be reworked.