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Excerpt From “De-Growth in the Suburbs, A Radical Urban Imaginary.” Part 3
EXCERPT FROM “DE-GROWTH IN THE SUBURBS, A RADICAL URBAN IMAGINARY. “ PART 3
The Limits to Capital
Are we at the threshold of the apocalyptic ‘next world’ that scientist James Lovelock (2009) speaks of? Put differently, is the human species now at the precipice of natural default and the massive societal change it must surely trigger? These are not new questions. The end of carbon-intensive capitalism has been long predicted: As Beck (2012: 90) reminded us, already, more than a century ago, Max Weber anticipated the end of oil-based capitalism when he spoke of a time when ‘the last hundredweight of fossil fuel is built up’.
The contemporary problem of overshoot has two faces: one of over accumulation and thus depletion of natural capital; the other a simul- taneous overabundance of financial capital and critical deprivation of social capital (‘planet of slums’ etc.). The built environment is now central to these twin crises of the age. Urbanisation is at the heart of overproduction and ecological default, but also central to the absorption of excess capital. The real estate sector has its own dynamics, and investment in housing is vital for capital accumulation, as Harvey has explained, yet all this takes place within a paradigm of growth capitalism that shapes and seems to impel these destructive and often exclusive modes of development. The massive contemporary infrastructure development push in world cities reflects both realities—absorption and depletion. The ricocheting spiral of these modalities defines the urban age. This indicates a convulsive instability at the heart of human prospect that contradicts the predictive confidence of popular urban commentary. As debt fuels what seem to be property bubbles in various urban centres—with the Australian capital cities of Sydney and Melbourne being particularly worrying examples—renegade economist Steve Keen (2017) warns that it would be prudent to prepare for the closing of the casino before these bubbles burst. The convulsion suggests a bad ending.
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Warming means unfair share for poor
Warming means unfair share for poor
A bumper catch off the coast of northern Norway may be bad news for fishermen in southern waters. Image: Bo Eide via Flickr
Use and Abuse of the “Natural Capital” Concept « Center for the Advancement of the Steady State Economy
Some people object to the concept of “natural capital” because they say it reduces nature to the status of a commodity to be marketed at its exchange value. This indeed is a danger, well discussed by George Monbiot. Monbiot’s criticism rightly focuses on the monetary pricing of natural capital. But it is worth clarifying that the word “capital” in its original non-monetary sense means “a stock or fund that yields a flow of useful goods or services into the future.” The word “capital” derives from “capita” meaning “heads,” referring to heads of cattle in a herd. The herd is the capital stock; the sustainable annual increase in the herd is the flow of useful goods or “income” yielded by the capital stock–all in physical, not monetary, terms. The same physical definition of natural capital applies to a forest that gives a sustainable yield of cut timber, or a fish population that yields a sustainable catch. This use of the term “natural capital” is based on the relations of physical stocks and flows, and is independent of prices and monetary valuation. Its main use has been to call attention to and oppose the unsustainable drawdown of natural capital that is falsely counted as income.
Big problems certainly arise when we consider natural capital as expressible as a sum of money (financial capital), and then take money in the bank growing at the interest rate as the standard by which to judge whether the value of natural capital is growing fast enough, and then, following the rules of present value maximization, liquidate populations growing slower than the interest rate and replace them with faster growing ones. This is not how the ecosystem works. Money is fungible, natural stocks are not; money has no physical dimension, natural populations do. Exchanges of matter and energy among parts of the ecosystem have an objective ecological basis. They are not governed by prices based on subjective human preferences in the market.
Furthermore, money in the bank is a stock that yields a flow of new money (interest) all by itself without diminishing itself, and without the aid of other flows. Can a herd of cattle yield a flow of additional cattle all by itself, and without diminishing itself? Certainly not. The existing stock of cattle transforms a resource flow of grass and water into new cattle faster than old cattle die. And the grass requires sunlight, soil, air, and more water. Like cattle, capital transforms resource flows into products and wastes, obeying the laws of thermodynamics. Capital is not a magic substance that grows by creating something out of nothing.
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