INNOVATION, INEQUALITY AND THE ENVIRONMENT: IS SUSTAINABLE DEVELOPMENT COMPATIBLE WITH CAPITALISM? COMPLETE DRAFT

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ABSTRACT

In 2015, the United Nations adopted Sustainable Development Goals (SDGs) to end extreme poverty, fight inequality and protect our planet. For many centuries, individuals and small firms had made and distributed basic commodities such as food and clothing.They accumulated profits by keeping whatever remained after they had paid for their expenses. In the nineteenth century, starting with rail transport powered by steam engines, successive new technologies for more rapid and ever cheaper transport and for faster cheaper communication were innovated.This helped to make it profitable for companies to produce, market and distribute ever-increasing ranges of new products and services to ever-widening markets. In contrast, meeting poor people’s basic needs for clean water, nutritious food and health services became relatively less profitable, and accordingly, was neglected. Moreover, in the last fifty years, the influence of large corporations has restricted the willingness of governments to give priority to reduction of environmental damage resulting from industrial activity. Conventional economic analyses are inadequate for understanding these issues because they fail to take sufficient account of implications of continual changes in the nature and availability of new products and services for sustainability. The paper concludes by suggesting that a world economy dominated by capitalism is likely to make slow progress in achieving SDGs.

INTRODUCTION

In 1983, the World Commission on Environment and Development was asked by the General Assembly of the United Nations to produce a report, which was published in 1987. This was largely a consequence of increasing international concern about the damage to the environment caused by economic development, and about the persistence of inequality

The report’s aims were:

  • to propose long-term environmental strategies for achieving sustainable development by the year 2000 and beyond;
  • to recommend ways concern for the environment may be translated into greater co-operation among developing countries and between countries at different stages of economical and social development and lead to the achievement of common and mutually supportive objectives that take account of the interrelationships between people, resources, environment, and development;
  • to consider ways and means by which the international community can deal more effectively with environment concerns;
  • and to help define shared perceptions of long-term environmental issues and the appropriate efforts needed to deal successfully with the problems of protecting and enhancing the environment, a long-term agenda for action during the coming decades, and aspirational goals for the world community (World Commission on Environment and Development, 1987, p5).

This paper suggests that the Report proposed worthy goals but could not propose realistic strategies for their achievement because it did not consider the complex forces which had caused the world economy to develop in unsustainable directions. Understanding these forces is an essential prerequisite for devising realistic strategies for pushing economic development into more sustainable directions. Accordingly,  a preliminary attempt to develop this understanding follows.

In 2002, the Secretary-General of the World Summit on Sustainable Development outlined  progress so far. He suggested that conferences initiated by the United Nations in the 1990s had defined for the world ‘a comprehensive vision of what human progress is all about’. These had focused on:

the challenges facing us in three key areas: eradicating poverty; moving to a pattern of consumption and production that is ecologically more sustainable; and allowing critical ecosystems such as forests and oceans to be treated in more holistic and integrated ways (Desai, 2002, p.158).

He agreed with the Brundtland Report that ‘overall, the record card is very poor. Extreme poverty and avoidable diseases persist, and the deterioration of soil, water, oceans and forests continues’ (Desai. 2002. p.159).

In 2015, a Working Paper made needs assessments which were ‘part of an extended project to assess the quantitative trajectories of investments nationally and globally’ to achieve sustainable development. Preliminary analysis of available sector studies showed that ‘incremental spending needs in low and lower-middle-income countries may amount to at least $20,131.4 trillion per year. On current trends the world will miss the goals by a wide margin unless policies are improved, international cooperation is enhanced, and more public and private resources are brought to bear on financing the investments needed to achieve the SDGs’ (Schmidt-Traub, 2015, pp 1, 4 and 123).

But enormous gaps between the goals of sustainable development and world economic performance cannot have appeared suddenly. These gaps must  have opened up during long periods when the world economy moved away from sustainability. Measuring those gaps however approximately is a valuable first step towards developing strategies for closing them. Studies of the dynamics of the world economy are needed as a basis for understanding why those gaps have grown so large, and for considering how to shrink them.

Human populations have spread to inhabit a large proportion of the earth’s surface. Initially, communications and transport between the communities in which people lived were difficult, expensive, and took a long time to establish. But the time taken for transport of both goods and transport, and the time taken for communication have diminished dramatically, to the point where communication between any two points on the earth’s surface is often now virtually instantaneous. Rich and/or powerful people have always tried individually to maintain and increase their riches and power. But as the time and costs needed for communications and transport have diminished greatly, opportunities for them to communicate and to meet each other have also multiplied. This has led many to  recognition of their common interest in securing profits from the world economy.

The development of capitalism to dominance over the direction of world economic development  is reviewed briefly. Important revolutions in Russia and China in 1917 and 1949 respectively and their influence on sustainability are also reviewed. Short studies are then presented , drawing attention to important barriers to sustainability and how they have arisen in three major sectors of the world economy: automobiles, food and agriculture, and health services in developing countries. The paper concludes with a brief summary of some of these  barriers, and  preliminary indications of  how, with very great difficulty, they may be overcome.

CAPITALISM SINCE 1900

Keynes believed that the capitalist economic system could be adjusted to become a generally fair system, provided that the state deployed central controls to sustain full employment. He considered that authoritarian states ‘seem to solve the problem of unemployment at the expense of efficiency and of freedom’, and contrasted this with unemployment which was then ‘In my opinion, inevitably associated with present-day capitalistic individualism’ (Keynes ,1954, p.381).  He suggested:

The modern classical theory has itself called attention to various conditions in which economic forces may need to be curbed or guided. But there will remain a wide field for the exercise of private initiative and responsibility. Within this field, the traditional advantages of individualism will still hold good (Keynes 1954, pp.379-380).

But  the great  power  increasingly deployed by a relatively small number of major corporations cannot properly be regarded as ‘individualism’. The huge financial resources and political power which large multinational corporations have accumulated have allowed them to dominate direction of economic development worldwide (Senker, 2015). Further,  ‘what makes capitalism so powerful is its resilience and adaptability … As a mode of production capitalism is a perfect chameleon; it has no disabling convictions but profit and so can cater to any desire, even those inimical to it’ (Wu, 2017, p.168).

Moreover, starting in the  twentieth century, some governments –  most especially the federal government of the United States – made major contributions to the profitability  of private companies by supporting and often paying for R&D (Mazzucato, 2011, pp.73-86). Few large companies possessed their own R&D Laboratories before about 1920. But especially in the USA, the number and size of laboratories owned and operated by large corporations then rose fast (Landes, 1969, p.482). Rapid growth of several enormous privately-owned industries in the United States and worldwide has been facilitated by government expenditure. For instance, the massive expansion in car manufacture and use was assisted by Government expenditure on road building (Mazzucato, 2011, p.73).

New products and services  have become important themselves as new sources of profits, at the same time, that they have also formed the basis of technologies which are used for profitable  mass marketing and promotion. For example, advertising first by direct mail and newspapers followed by radio, television and social media have been used to promote , fast food, drinks such as Coca-Cola,  and automobiles (Wu, 2017). The growing size of enterprises offers them resources and opportunities with which to improve their profitability by lobbying governments  to persuade them to regulate, legislate,  and make international treaties in their favour. Governments of nation states have become increasingly conscious of the collective and individual powers of large corporations to offer them benefits. From  the 1930s onwards nation states’ governments have become increasingly concerned to offer their citizens the benefits available from economic growth. Companies, and especially large multinational corporations, have increasingly persuaded governments and international organisations to accept the necessity of ceding increasing power over the development of economic policy to them in order to secure those benefits. . Large private corporations have increasingly used lobbying, funding of political think-tanks and the control of mass media, to influence the economic policies of individual states and of international organisations (George, 2015, pp.19-96; Wu,2017, pp.11-18 and 131-213).

Exercising their powers as one of the few buyers of certain products, sometimes on a global scale, companies like Walmart, Amazon, Tesco and Carrefour exercise great – sometimes even defining influence on what gets produced, where, who gets how big a slice of profit and what consumers buy (Chang, 2014, p.40).

The ideas of a new school of economists – neoliberals – were initially formed by a group of intellectuals – including Friedrich Hayek and Milton Friedman – who formed the Mont-Pélérin Society in 1947. But their ideas became influential in supporting the growing power of large corporations from the mid 1970s onwards.(Jones, 2012, pp.4 and 215-272). Neoliberals believe that state governments should confine themselves to safeguarding individual and commercial liberty and strong property rights; that market mechanisms are the best way to organize all transactions involving goods and services; that free markets and free trade liberate the creative, entrepreneurial spirit which exists in human society; and that this freedom can lead to greater well-being and better allocation of resources (Thorsen, 2010, p.204). Neoliberals do not believe that states should intervene even to the extent that Keynes thought that they should – merely to ensure full employment. Moreover, they believe that ‘State decisions on matters of investment and capital accumulation were bound to be wrong because the information available to the state could not rival that contained in market signals’ (Harvey, 2005, p.21).  Neoliberal ideas have gained enormous influence rapidly, practically worldwide:

the greatest ever conglomeration of vested interests – world capitalism – has achieved hegemony over … the world economic system …  A high proportion of policymakers have absorbed neoliberal ideas as a basis for their economic policies, and in consequence offer excessive support for the policies and operations of multinational corporations (Senker, 2015).

Nevertheless, the world dominance of capitalism was challenged seriously by revolutions in two major countries, Russia in 1917 and China in 1949, and the influence of those revolutions on prospects for sustainability must be taken into account.

COMMUNIST REVOLUTIONS IN RUSSIA AND CHINA

The essence of the relationship between the rich and powerful and the poor and powerless up to the mid nineteenth century was summarised in The Communist Manifesto by Karl Marx and Friedrich Engels (1967, pp.79-80). They considered the history of society up to the time they were writing as a history of class struggles – struggles between oppressor and oppressed. The modern bourgeois society which had

sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle of the old ones. ‘Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other: Bourgeoisie and Proletariat.

This was surely a fairly accurate reflection on what had been happening in advanced economies at the time they were writing. They predicted that there would be a revolution by the working class which would initially ‘raise the proletariat to the position of ruling class to win the battle of democracy’ (Marx and Engels,1967, p.104). But so far there has been no such revolution. There were indeed two major revolutions in Russia and China. Although the leaders of both adopted ideologies inspired by Marx, neither was the revolution of an industrial proletariat working class against a capitalist bourgeoisie which he had predicted and recommended.

The models of economic development which Lenin attempted to apply to Russia in 1917, and in 1949 by Mao Tsedong to China, were fundamentally inappropriate to those countries at the stage of economic development during which they were applied. Lenin lacked understanding of fundamental differences between agricultural and manufacturing forms of production: he believed that both peasants themselves and their forms of production were hopelessly backward. They were ‘mere historical vestiges that would undoubtedly be swept away, as the cottage industry weavers had been, by the agrarian equivalent of large-scale machine industry’. But there is a wealth of empirical evidence that agricultural production is fundamentally different from manufacturing, in relation, for example, to the high economic returns available from mechanisation in manufacturing, but not necessarily in agriculture. In 1919, the Bolsheviks passed a Statute which declared that peasant farming was obsolescent in contrast with modern large-scale collective farming. Lenin never abandoned his faith in mechanization as the solution to problems of poor agricultural productivity, despite continuing food crises in the Soviet Union in the early 1920s (Scott, 1998, pp.164-168, Figes,1996, p.729, Nove, 1969, p.374). Indeed, there was a severe famine in 1921 in which millions died (Nove 1969, pp.86 and 93, Figes,1996, p.775).

By 1917 private enterprise was incapable of seriously moderating the rule of despots – whether Tsars or their  ruthless Communist successors, Lenin, and then Stalin (Nove, 1969, p.375). But the Union of Soviet Socialist Republics (USSR), despite enormous losses in military and civilian people as well as in material terms, survived to play the major role in allied victory in the Second World War (Nove, 1969, pp.375 and 284-286). There were numerous twists and turns of economic policy during the years in which the USSR survived until 1991. But fundamentally, between 1917 and 1991, change towards modernisation in the USSR was directed from above following a long-established Russian historical tradition (Nove,1972, pp.372-374).

Mao Zedong declared the establishment of  The People’s Republic of China (PRC) in October 1949. Long years of warfare had brought misery and poverty to millions. Malnutrition and other health problems were widespread. Infrastructure such as buildings, roads and railways had been destroyed or damaged extensively by war.  There were shortages of the skills needed for effective reconstruction of the economy (Benson, 2002, pp.19-22).

During his rule, Mao was responsible for some progress towards a more egalitarian society. But the new society he promised, built on loyalty to the PRC and its socialist ideal failed to materialise. Nor did Mao’s leadership provide stable economic development. Intense suffering by millions of people was caused by ill-thought out policies implemented during his Great Leap Forward and the Cultural Revolution. China became a society governed by a small bureaucratic, privileged, gerontocratic elite (Benson, 2002, p.87).

Deng Xiaoping took over the leadership in 1978. At that time, 80 per cent of the Chinese population derived their living mainly from agricultural production (Benson, 2002, pp.46 –49). China was poor. It had an average GDP per head lower than half of the Asian average (Eckart, 2016). Modernising agriculture was the new regime’s highest priority. In the 1980s new policies secured rises in agricultural production averaging 9 per cent per annum. During the same period, small enterprises were established, often by rural farming families, producing textiles, small electronic products and components and plastics (Benson, 2002 pp.46-49).

After 1978, China specialised in gradually more complex labour intensive manufacturing. It began to catch up rapidly, moving towards an economy which in terms both of technology and levels of economic development, if continued for a few more decades, will resemble Western developed capitalist economies. China’s average GDP growth was nearly 10 percent per year up to 2014, lifting 800 million people out of poverty, mainly in cities. Poverty was largely eliminated in Eastern coastal urban areas, although development was much slower in rural areas. Prices were gradually liberalised, regional governments were granted greater fiscal autonomy and provided incentives to attract investment and drive growth, and the private sector was also expanding. China was responsible for the great majority of the world’s achievement of the UN millennium development goal of halving extreme poverty between 1990 and 2005: although China contains only about 18 per cent of the world’s population, it accounted for more than three quarters of global poverty reduction during this period. But, so far, China has been far less successful in contributing to the achievement of environmental SDGs. Xi Jinping’s authoritarian central government has produced numerous plans for a top down agenda to counter climate change and to tackle China’s environmental problems. The National Development and Reform Commission (NDRC) published its National Plan for Responding to Climate Change in 2014 which outlined strategies to strengthen laws and regulations on climate change and to limit large-scale industrialisation and urbanisation. It also proposed defined baseline levels of ecological health that should be maintained in key areas including the headwaters of the Yangtze and Yellow rivers, limiting total coal consumption, and proactively promoting cleaner energies. The 13th Five-Year Plan (2016-2020) produced under the leadership of Xi Jinping was formally adopted in March 2016. It stresses sustainable development and intentions to promote a low-carbon energy system. But so far, there have been numerous rules, regulations and plans which have failed to achieve the objectives set for them. Compliance by industry and local governments with central government regulations has mainly been notable for its absence. For example, trucks are checked to verify that they are compliant with emission standards, and should be fined if they fail to comply.  But fines are rarely imposed because vehicles are often carrying food; and local regulations stipulate that such transport should not be disrupted. Chinese fuel standards are set very low. There are regulations specifying that vehicles should be fitted with emission control devices. But it is unclear which organisations should be responsible for enforcing this regulation and as a consequence many vehicles lack emission control devices, and as a consequence many cars produce emissions 500 times the national standards. There is also extensive corruption and confusion in relationships between organisations responsible for supplying energy, electricity and coal. China also plans to increase the urban proportion of the population from fifty-three percent in 2013 to sixty percent in 2020. The detrimental global environmental consequences of hundreds of millions of new urban consumers could be immense, regardless of the extent to which their rising demands are satisfied by China’s domestic production or elsewhere (Eckart, 2016).

The USSR collapsed in 1991, but China continues as a nominally Communist state, although moving fast  in a capitalist direction since 1978. It has made very important progress in inequality reduction, and despite very little progress so far, it is conceivable that China could become a catalyst for worldwide environmental change. Consumers can be persuaded – or compelled by carefully designed legislation – to change their choices. And production technologies and environmental policies can be developed to make the production of all goods and services far less environmentally damaging over time. China’s huge population size, and the enormous environmental damage and pollution from which it suffers at present, give China substantial incentives to reduce the environmental damage it causes and suffers from. To achieve this would require determined, highly effective efforts to resolve numerous extraordinarily difficult and complex problems such as bureaucratic buck-passing and corruption (Golley, 2016). But there is no indication yet that China will be successful in this direction. In terms of sustainability, in most respects – both positive and negative – China can now be considered as comparable to  large modern capitalist economies. A very positive aspect is that in China, as in many large capitalist economies, millions of people have been lifted out of dire poverty.

It is also important not to minimise or condone the fact that the Chinese population suffers from living under the yoke of a repressive, totalitarian regime. It is suggested in this paper’s conclusions that both ‘top-down’ and ‘bottom-up’ initiatives will be needed to achieve sustainability. If China’s totalitarian regime persists – as now seems probable –  repression is likely to restrict the Chinese people’s ability to benefit from ‘bottom-up’ initiatives. In the Soviet period, similar negative considerations applied to Russia, and these do not seem to have disappeared entirely since then. But exploring such issues lies outside the scope of this paper.

Brief studies of three major sectors of the world economy follow. They indicate serious problems which will need to be overcome to change the directions in which they are developing to comply with SDGs.

SECTOR STUDIES OF ECONOMIC CHANGE AND INNOVATION

Land transportation- the automobile 1900-2017

The automobile revolution began in the last years of the nineteenth century when car production  and numerous innovative automobile designs were introduced ‘using various types of power: steam, gas electric, and the controversial, and sometimes explosive, petroleum-based internal combustion engine’ (Dennis and Urry, 2009, pp.29-30).

Market forces, in the shape of consumer demand were by no means the principal forces which led to the world dominance of motor-car transportation. Between 1927 and 1955, numerous automobile and truck manufacturers in the United States such as General Motors and Mack Manufacturing, and suppliers of materials utilised in their manufacture and operation – such as oil and tyre manufacturers – engaged in activities to eliminate public transport competitors, especially electric buses and trams. For example, they bought up and destroyed the rails on which the trams travelled. It took until 1955 for these companies to be successfully prosecuted for conspiracy to violate the Sherman Anti-Trust Act but they only had to pay tiny fines (Dennis and Urry, 2009, p.35).

During the twentieth century, automobiles and trucks mainly made of steel and powered at first by petroleum – and  recently also by diesel – came to be the dominant mode of land-based transport for both people and goods. There are now many millions of these vehicles throughout the world – principally cars each capable of seating four people, the vast majority owned by individuals and each driven independently of other people (Dennis and Urry, 2009, p.28). It appears that neoliberal societies encourage private car use and are inclined to engage in large highway construction projects. In 2002, the average car user in the United States conducted 86 per cent of their travel journeys by car and on average, each adult travelled 13,500 miles by car annually. With the exception of Denmark and the Netherlands, private car-ownership and use is increasing rapidly, especially in previously communist states such as Poland. Similarly, car ownership is increasing in countries in Africa and Asia especially where there are population increases and industrial growth.  China is now second to the United States in terms of car ownership (Dennis and Urry, 2009, p.44).

In practice, unlike public transport vehicles such as trains, trams and buses – and also taxis –  most cars spend nearly all the time parked. In the small minority of time that they are travelling, they often cause considerable congestion, mainly in cities, but in some rural areas also. The road space constructed for these vehicles covers an increasing proportion of total land area. Just as important, the availability of this highly flexible individual mode of transport has had important effects on town planning or its neglect. Supermarkets are built in locations only easily accessible by car. Little attention is paid to the desirability of minimising the need to travel by locating residential accommodation, work, shopping and recreational facilities in close proximity. Perhaps worst of all, in the United States – and increasingly in other countries especially highly populated ones such as India and China –  over dependence on automobiles is becoming increasingly destructive of water, air and land (Jacobs, 1972, p.117). Rapid increases in car ownership have also resulted in the spawning of other huge industries, especially the fast food industry. In the United States the Interstate Highway Act was passed in 1956 and led to expenditure of US$130 billion of government money to build 46,000 miles of road. This in turn led to the opening of the first fast food restaurants on the ramps to California’s new freeways and resulted in the rapid expansion of the fast food industry (Schlosser, 2002, pp.21–22). Corporations in these industries then established huge operations in numerous other countries in the world.

The use of automobiles as the principal mode of land transportation of people involves the manufacture of a box made of steel, but also including many other materials such as rubber and plastic, and the incorporation of electronic control equipment. This manufacture involves massive and extensive mineral extraction around the world, with consequent pollution of land, water and air; it also causes disruption to communities previously living and working on the land from which the minerals are extracted. Many major corporations are engaged principally in manufacturing cars, including Ford, General Motors, Toyota, Nissan, Honda, Volkswagen, BMW, Mercedes, Peugeot-Citroen, and Renault. Numerous other major corporations are engaged in the manufacture of components and materials such as tyres and electronic equipment, and materials such as steel, rubber and plastics extensively used in the automobile industry, and other major corporations are engaged in extracting minerals – principally oil – and converting those minerals into fuel to power those vehicles. In both developed countries, and increasingly in developing countries, after housing, cars are second only to housing as the most expensive item of individual consumption (Dennis and Urry, 2009, p.36).

The environmental impact of cars arises from extraction of the raw materials required for its manufacture, from the production process itself, from the operation and maintenance of the vehicle, and from the construction and maintenance of roads. Car use also involves many human deaths and injuries occurring through road accidents, and also health problems arising from air pollution.

The typical car requires 60 kg of steel, 230 kg of iron, 90 kg of plastics, 45 kg of rubber and 45 kg of iron and 45kg of aluminium. And 8,000-28,000 kilowatt hours of energy are needed to produce a single motor vehicle (Dennis and Urry, 2009, p.45).

Nevertheless, in her pioneering study of American cities, Jane Jacobs (1964) pointed out that when automobiles were originally introduced into cities, they represented an enormous improvement in terms of pollution and noise reduction; and in their potential for improved transport productivity and efficiency in comparison with the horses and buggies which they replaced. Automobiles and lorries could get to places which railways could not get to, and did jobs which trains could not have done. But where it all went wrong was that each horse was replaced by too many automobiles, vans and lorries. In consequence of the resulting traffic and parking congestion, the enormous number of vehicles each moves little faster than the horses they replaced (Jacobs, 1964, pp.356-357). Moreover:

Because of vehicular congestion, a street is widened here, another is straightened there, a wide avenue is converted to one-way flow… as its capacity is reached, an expressway is cut through yonder, and finally whole webs of expressways. More and more land goes into parking to accommodate the ever-increasing numbers of vehicles while they are idle.

… the more space that is provided for cars in cities, the greater becomes the need for use of cars, and hence for still more space for them (Jacobs 1964, p.363 and 365).

This situation has persisted, both in the United States and in most other countries. But both new technology and re-organisation now seem to have potential for improving transport, especially for city transport. Systems for de-privatizing cars such as car-sharing, co-operative car clubs and smart car-hire schemes are being developed and are growing fast in some rich societies, as cities in Europe, America and Asia face increasing car-parking congestion and pollution problems (Dennis and Urry, 2009 p.94). Some cities in Europe and North America have been experimenting with bicycle ride-share schemes (Dennis and Urry, 2009, p.96). Probably a case can be made for considerably smaller numbers of cars to be manufactured and used, especially as taxis in the minority of circumstances in which neither public transport nor other means of personal mobility such as walking or cycling can be used efficiently and safely (Dennis and Urry, 2009 p.102).

The development and marketing of electric cars has proceeded at an astonishing pace in the last few years and it now seems likely that they will be the main means through which substantial increases in fuel efficiency will take place (Vaughan, 2017). Nevertheless, while the environmental and pollution damage caused by each automobile in use is likely to be reduced by the substitution of electric for fossil fuel power, the mass production and use of automobiles is likely to continue to expand, so the net environmental and pollution damage caused by automobiles worldwide will probably not be substantially reduced, and may even continue to increase.

Most automobiles are individually owned and used, each weighs about a ton, and each spends on average something like 95 per cent of its lifetime completely idle, occupying enormous amounts of space for parking. The successful marketing of many millions of automobiles is a prime example of successful marketing for profit which results in enormous quantities of environmental damage and pollution.

The sustainability of modern agricultural and food industries.

United Nations sustainability goals are to end hunger and all forms of malnutrition and to achieve sustainable food production by 2030 so that everyone should have access to sufficient nutritious food.

In 2011, it was estimated that less than 60 per cent of the world’s population consumed a reasonable amount and quality of food to keep them in good health and 15 per cent consumed too much. But about 28 per cent consumed too little food: there are still huge numbers of people suffering from severe deprivation – hunger, starvation and poor health: these include people who possess insufficient land on which to grow sufficient food for themselves and their families, together with the unemployed who cannot afford to buy food. Hunger in terms of lack of access to sufficient of the major macronutrients – carbohydrates, fats and proteins – afflicts nearly a billion people. Perhaps another billion suffer from ‘hidden hunger’, resulting from inadequate micronutrients such as vitamins and minerals. This brings risks of physical and mental impairment. In contrast, about a billion people each consume too much and suffer from chronic conditions such as type 2 diabetes and cardiovascular diseases. A more recent United Nations report confirms this general situation (Foresight 2011, United Nations, 2016, p.4).

The expansion of corporate capitalism

has not only led to the eviction of millions of peasant families from their land, but is also transforming the very way in which countries farm. Many national systems have been converted to export-oriented agriculture, at the same time as the countries have been forced to open their own markets to food imports, including imports dumped on them by US and EU companies at less than the cost of production. As a result, millions of small farmers have seen their livelihoods destroyed’ (Branford, 2011, p.4).

Hundreds of millions of small farmers and peasants throughout the world have been deprived of their livelihoods and of the land they had worked on. The rationale for this is that their food production methods were inefficient and obsolete; and that the land that they had worked on could be better used. Despite widespread declining trends, the number of small farmers and peasants living and working in developing countries is still enormous – perhaps as many as two billion people out of a world population of seven billion. Major changes in dominant patterns of agricultural production and consumption during the last five hundred years appear to have been driven more by politically powerful people and organisations – including large landowners, leaders of nation states and of major multinational corporations – than by responses to consumer demand as conventional economists would have us believe. Substantial changes have often been the result of changes in land ownership.

The history of post-WWII food governance is essentially one of selling out public responsibility to markets and corporations. It is one of progressive disempowerment of the primary food security actors: the small-scale producers and the family units… . Unprotected by state and intergovernmental directives, small scale producers are being driven off their land and out of their markets with the allegation that they are inefficient and archaic, ignoring the fact that they are responsible for producing some 70 percent of the food consumed in the world. Increasingly, not only individual families but even nations have lost control over the aggregate body of factors that determine the food security of their populations … . The food crisis is global, but it is rooted in local and national struggles against dispossession (McKeon, 2015, p.3).

Intensive agriculture is increasingly dominant throughout the world, often focusing on the use of monocultures. Such farms require large inputs of water, fertilizers and pesticides which produce noxious outputs, such as manure and air pollution which damage the environment seriously (McKeon, 2015, p.4). The food they produce is generally not particularly conducive to human health, especially when it is subjected to intensive manufacturing processes before it reaches consumers (Blythman, 2015).

Moreover, WTO rules prevent farmers from reproducing patented seeds (Senker, 2013a, p.117). Efforts by a US company to patent basmati rice caused an outcry and highlighted the dangers involved in patenting. Intellectual property protection to crops has negative consequences for poorer farmers (Commission on Intellectual Property Rights, 2002; Senker and Chataway, 2009).  In the Horn of Africa, governments promote irrigated agriculture as being modern and in the interests of the public good. They portray pastoralism as backwards, outdated and unsustainable, belonging to a past in need of transformation, even though the pastoral areas of the Horn generate annual trade to an annual value exceeding a billion US dollars. In addition, many scholars regard pastoralism as the livelihood best suited to the African drylands (Dirie, 2014).

Scott (1998) suggested that ‘certain kinds of states, driven by utopian plans and an authoritarian disregard for the values, desires and objections of their subjects’ were the main initiators and drivers of what he calls social engineering schemes. But after 1989, Scott began to realise that in several cases large scale capitalism is just as much an agency of social engineering schemes as the state, with the difference that capitalists require it to pay (pp.7-8). The rationalisation of farming on huge, even national scales was part of a faith shared by agricultural planners in the United States between about 1910 and the end of the 1930s (Scott, 1998, pp. 196 and 197). The Americans were enthused by the example of the Soviet Union’s centralised industrial farming on a massive scale, and convinced of the obsolescence of the small farmer (Scott, 198 p. 99).

Rationalisation and intensification of farming and food production has occurred on a massive scale in relation to animal food as well as arable agriculture. They have resulted in extensive air, water and land pollution and environmental degradation, food poverty especially in poorer countries, and poor conditions and low pay for workers in slaughterhouses and factory farms (Cudworth, 2013).

Small farmers and peasants have combined into organisations to promote their interests. In particular, they have created La Via Campesina, with more than 200 million members in seventy countries, which claims to be the largest movement of peasant farmers and artisanal food producers in the world (Gomez 2011). La Via Campesina advocates policies of Food Sovereignty:

  1. Everyone must have access to safe, nutritious and culturally appropriate food in sufficient quantity and quality to sustain a healthy life with full dignity.
  2. Agrarian reform to give landless and farming people ownership and control of the land they work and returning territories to indigenous people.
  3. The sustainable care and use of natural resources, especially land, water, seeds and lifestock breeds.
  4. National agricultural policies must prioritise production for domestic consumption and food self-sufficiency.
  5. The control by multinational corporations is harmful to food sovereignty and should be curtailed.
  6. Food must not be used as a weapon.
  7. Smallholder farmers must have a direct input into formulating agricultural policies at all levels (Branford, 2011, p.29).

McKeon (2015,p.198) has developed a hypothesis that the food sovereignty movement constitutes a counter-force that has the potential of substantially altering the basis of food regime organization by helping to fragment global hegemony and reconstitute a territorially rooted and governed approach to food provision. … [Food sovereignty] is attentive to ecology, the environment and biodiversity. It fights climate change and builds resilience. It is territorially rooted, bridges the distance between producer and consumer and furnishes healthy food for all. It binds agro-ecological modes of small-scale production with modes of processing and distribution that are appropriate to them and that creates employment and stimulates local economies. It operates against inequalities

The barriers to the achievement of food sovereignty are huge. For example, La Via Campesina proposes reasonably that, to achieve food sovereignty, ‘genuine agrarian reform is necessary which gives landless and farming people ownership and control of the land they work and returns territories to indigenous people’ (Branford 2011 p.29). But Governments throughout the world are lobbied extensively and successfully by powerful multi-national corporations to resist  programmes of agrarian reform. The displacement of peasant populations to make room for the expansion of corporate agriculture is a dominant world trend. As a consequence of the political power of multinational corporations in contrast to the  weakness of the food sovereignty movement, it is unlikely that its principles will be applied in a significant part of the world in the foreseeable future.

Accordingly, several million  people are deprived of opportunities for gainful employment in the production of wide ranges of nutritious food by the control of a high proportion of food production by a small number of enormous corporations. They concentrate on a very restricted range of crop varieties, produced using capital and input intensive large-scale production methods. This accelerates rural unemployment and stimulates the movement of huge numbers of people from the countryside into already overcrowded huge cities in which there is already massive unemployment. As soil conditions and climate in developing countries are very different from those in developed countries, more local agricultural R&D is needed which works with subsistence farmers, peasants, and pastoralists to develop diverse technologies which could meet the needs of the world’s many millions of subsistence farmers (Senker, 2013a).

Neglect of health services in developing countries

Health systems cannot be considered in isolation. The infrastructure –  including availability of clean water, sanitation and an electricity supply, together with adequate nutrition – are crucial contributors to health. In developed regions, infrastructure, essential for storage and delivery of some vital health supplies such as drugs and medication for injections, exists. But in many areas of developing countries, this infrastructure is fragmentary. Between 1945 and 1990, many governments of developing countries used state-owned monopolies to provide infrastructure. But these organisations made heavy losses which governments found very difficult to finance: they failed to expand services and particularly neglected provision of services to poor rural households. Between 1990 and 1997, there was very rapid growth in privately financed infrastructure projects. But after 1997, private investment dropped sharply as consequences both of macroeconomic crises and the disappointment of private investors with the returns they had received from their investments. At the same time, critics of privately financed infrastructure suggested that access to services by poor people had become less affordable (Harris, 2003 pp.vii and 1-15). In 2003, it was estimated that about 2 billion people did not have an electricity connection, about 1.1 billion lacked a safe water supply, and 2.4 billion did not have access to improved sanitation. Average annual private investment in developing countries’ basic infrastructure projects in the 1990s was about $60 billion per year. This was during a period in which private investment for infrastructure projects in developing countries was higher than it has ever been before or since: but this was less than 0.1 percent of annual global savings estimated at about $7 trillion in 1999,  and this demonstrated that resources for investment are available. This led to the question whether governments could ‘put in place and maintain the regulatory and policy frameworks that will bring in these resources on a sustained basis? (Harris, 2003, p.41). Sadly, so far the answer to this question has been negative.

In relation to health, many techniques for diagnosis and treatment currently in use in developing countries are cumbersome and unsuitable. For example, vaccines are critical to disease management in many such areas. Most vaccines and many drugs are administered by injection, and many new cases of blood-borne diseases, such as hepatitis B, are caused each year by insanitary injections (Senker, 2013b, pp.77 and 87).

The World Bank and the Wharton School have advocated voluntary health insurance as the best way of coping with developing countries’ problems of health provision, as have the World Health Organization, Pan American Health Organization, and the U.S. National Institutes of Health (Waitzkin et al, 2007). But the majority of people in low- and middle-income countries do not have access to insurance coverage when they become ill. Over 80 percent of the population in developing countries rely on out-of-pocket payments to providers when they need medical care. This exposes them to impoverishment when they suffer catastrophic illness. Although some health system privatisation has occurred in Europe, more has taken place in Latin America than in other regions. The most notable case of a system based on the profit motive is the USA, which has unfair, expensive and relatively inefficient health services (Senker, 2013b, pp. 82-83).

The growth of private sector health care provision in developing countries has largely been a consequence of ‘passive privatization’. The collapse of the public sector has led to the emergence of disorganized, unregulated and even chaotic provider markets in many developing countries, particularly in primary level health care. The incapacity of public services has also resulted in governments and donors relying upon NGOs, UN agencies, charities, religious groups and humanitarian organizations to plug the gaps in public provision not only in primary care but also in essential hospital services and in response to humanitarian emergencies. Particularly in developing countries, issues relating to health are inextricably intertwined with issues relating to poverty. Moreover, largely as a consequence of inequality, Latin American countries are still at a stage of economic development, where increases in prosperity might benefit the health of their population.  Their failure to develop their economies as rapidly as the leading European countries has been attributed to extreme income inequalities (Wilkinson & Pickett, 2009, p.7; Arocena and Senker, 2003). The poorest billion people are living in ‘development traps’ (Collier, 2008, p.6). The conditions in countries locked in development traps have severe consequences for health. In particular, civil war involving mass rape and mass migration was probably a significant factor in the spread of HIV/AIDS in Africa (Global Health Watch, 2005, pp.5 and 31).

Billions of dollars are spent annually on medical R&D, but only a small fraction is devoted to diseases such as tuberculosis and malaria.  According to the World Health Organisation (WHO), 30 percent of the world’s population lacks access to life-saving medicines. In some countries in Asia and Africa, this proportion may be as high as 50 percent. The international community has been encouraging generic competition in the attempt to drive prices down and the adoption of tiered pricing to create situations in which higher prices in developed countries subsidise drugs for the world’s poor. But some generic manufacturers have made and distributed substandard drugs that have threatened public health and encouraged drug-resistant strains of pathogens. Even when manufacturers have lowered their prices, patients pay far too much as a consequence of taxes, mark-ups by middlemen and corruption (Senker, 2013b, pp.86-87).

IMPLICATIONS FOR SUSTAINABILITY

The difference between the current state of the world and a reasonably sustainable world is immense. Governments  have become increasingly concerned to restrain global warming and environmental pollution. But their efforts to move in such directions have been restricted by the power of  large companies to offer benefits which government leaders value in return for governments not interfering in their operations.

It has been suggested that for sustainability to be achieved, ‘companies need to change their focus from increasing shareholder value to a broader focus on all stakeholders … our future lies in building sustainable enterprises and an economic reality that connects industry, society and the environment’ (Foley et al, 2016).

If companies were to change their focus as Foley et al suggest they should, this would indeed facilitate more rapid progress towards the achievement of sustainability. But the vast majority of company owners are strongly committed to increasing their own wealth and income  i.e. shareholder value. Unfortunate as this is for sustainability, it is difficult to see how, why and by whom many companies are going to be persuaded to change to a broader focus on all stakeholders in the foreseeable future. As Streeck (2017, p.235) asks, ‘would it not be more constructive to cease looking for better varieties of capitalism and instead to begin seriously to think about alternatives to it’.

The world economy is making very little progress towards the achievement of sustainability principally because major corporations in pursuit of profits play huge roles in determining which products and services are developed, made and marketed worldwide. From their beginnings as merchant adventurers, capitalists have used innovation and technological change effectively to secure their principal overarching aim of increasing their profits. Capitalist entrepreneurs have continually changed the directions in which they deploy technological change. Before around 1830 it was reasonable to encapsulate most of the changes so far as the ultimate consumer was concerned as increases in the provision and productivity of both products and services. But, as time went on, both the fundamental nature of the products and services offered to consumers, and how the availabilities of these products and services were notified and promoted to their prospective consumers were changed fundamentally.

The individual automobile represents immense  improvements in environmental terms on the horses and carts which it replaced. But the continuing huge expansion in the quantity of automobiles manufactured and used in the world which has occurred, and is likely to continue to occur, owes much to the drive for profits of huge corporations. Expansion of the number of automobiles in use is driven largely by large corporations’ efforts to sell many more  increasingly elaborate automobiles to individuals. The fact that each large individually owned box is used for a tiny proportion of the time in which it is in existence is of  no concern to those corporations. The manufacture of electric automobiles instead of petrol or diesel fuelled cars may well reduce considerably the detrimental environmental effects of automobiles in terms particularly of air pollution. But the absence of a commensurate drive to increase the intensity of use of each automobile has, and will continue to reduce possibilities of restraining the detrimental impact on the environment of the rapidly increasing quantity of automobiles manufactured and sold to individuals.

The relevance of the brief exploration of the development, marketing, widespread diffusion and ramifications of the effects of automobiles on the world economy is also to draw attention to some significant generic consequences of the drive for profitability of major multinational corporations. These consequences emerge because profit seeking capitalist firms perceive correctly that the needs of the majority of the world’s population for clean water, nourishing food, shelter from the weather, health and security offer far less profit potential than making and selling as many automobiles and other consumer goods to as many individuals as possible. So fulfilling the basic needs of the mass of the world population is accorded low priority by multinational corporations. Increases in pollution and other forms of environmental degradation are of little concern to them. They are happy to take over land previously used by large sections of the population on which to grow food, and to divert this land for numerous purposes such as producing flowers ,mineral extraction, tourism, and  energy production. In summary, the priorities of sustainable development are not high priorities for the organisations and people who drive the directions in which economic development proceeds.

But individualisation and personalisation of consumption is a phenomenon increasingly pervasive in the world capitalist economy, for example in relation to ICT (Information and Communications Technology) with devices such as mobile phones, and extremely profitable services such as social media. Moreover, the continuing highly profitable mass consumption of ICT products and services relies on the low pay and appalling working conditions of 100 million artisanal miners who dig up the minerals which are essential to the performance of expensive ICT products (Sharpe, 2013).

Many governments have invested very heavily in scientific research and in the development of technology (especially but not exclusively in science and technology anticipated to have military applications). The basic infrastructure needs of people living in developing countries –  for example for clean water, nutritious food and for electricity supplies – have been relatively neglected.

The global food system is manipulated by corporations, financial and powerful political actors serving their own interests. Despite overwhelming evidence to the contrary, it is generally assumed that markets provide neutral and efficient arbitration in relation to the numerous contentious interest which arise from the interaction between these interests. The present global food system is both unsustainable and inequitable. McKeon suggests that decision making on food policies could be influenced more decisively by an inclusive, informed political process. Food sovereignty offers the possibility of drawing on agro-ecological approached to production, concentrating on local, national and regional markets, and emphasizing access to and control of natural resources by local populations (McKeon, 2015, pp.3-8). It is probable that extensive application of these principles could result in a far more effective system of agricultural and food production system than the present thoroughly dysfunctional system from every point of view, except that of the profitability of multinational corporations.

But governments of developed countries have been very important in terms of creating the infrastructure necessary to support the wider use of products developed and marketed by companies to increase their profitability. A prime example of this has been government investment in roads throughout the world, which has facilitated the enormous worldwide growth of the automobile industry, and of industries which were stimulated by the growth of automobile use, in particular the fast food industry. In contrast, there is still an inbuilt tendency arising from market forces that ensures that pharmaceutical development continues to concentrate on treating the diseases of the relatively affluent (Senker, 2000, p.210). Worldwide scientific research and technological development have been substantial, but resulting improvements in the health of the world’s population have been far less than could have been achieved with better direction and distribution of the world’s scientific and technological resources (Senker 2013b, p.86).

While the growth-driven paradigm of corporate globalisation continues to reap huge profits for the few, we are already transgressing multiple planetary boundaries and rapidly destroying the natural world. Rather than taking urgent coordinated action to avert this unfolding human and environmental catastrophe, our governments remain fixated on returning to former days of consumer-led growth and competitive free markets (Sharing As Our Common Cause, 2014).

Achieving a reasonable degree of sustainability will be very difficult, and could take a very long time to achieve . The need for health infrastructure reviewed briefly above makes it clear that the infrastructure needed to secure sustainability in terms of the health of populations in developing countries can only attract a tiny proportion of the finance required because financiers are not offered sufficiently large or secure returns.

Accordingly, successful approaches to sustainability have to be financed largely from taxation and international charity. But rich people and the huge corporations they own are highly and effectively resistant to paying taxes because they believe that this involves taxing the people who have created the wealth and transferring it ‘to people –  or to institutions serving them –  who do not deserve it. The poor – even the working poor –  are not partners in creating value, but spongers. The rich owe them nothing’ (George 2015, p.14).

Conventional economic analysis – whether neoclassical,Keynesian,  neoliberal or Marxist, can make little contribution to understanding of sustainability primarily because these modes of analysis fail to take sufficient account of the immense significance of major changes in the world economy brought about over time by fundamental changes in the nature of the products and services developed, produced, marketed, distributed and consumed.

Nevertheless, two approaches are being attempted which seem promising and  deserve encouragement, together with more research to help to define more precisely directions which they should be encouraged to take.  These are the bottom-up approach advocated both by George (2015) and by McKeon (2015); and the top-down approach being facilitated by Margrethe Vestager, an EU commissioner. The five largest corporations making the most profits now are high technology firms providing IT products and services: Apple, Alphabet (Google’s parent company), Microsoft, Amazon and Facebook. Vestager is contributing to possibilities of financing sustainability by increasing substantially the extent to which large corporations pay taxes which are more related to the profits they earn, in place of the derisory amounts of taxation they often succeed in getting away with paying now, in addition to fines she is seeking to impose on them (Rice, 2018).

The bottom-up approach involves building

‘myriad local peoples’ practices … to the point where they could effectively call governments to account and take on the Goliath of corporate power… important contributions to a winning strategy can come from capacity building, linking small-scale producers with other sectors of their societies, transnational networking – both horizontal and vertical – alliance building, and interacting with governance spaces at different levels’ (McKeon, 2015, p.141).

Wainwright (2018, pp.74-83) emphasises the importance of both ‘top-down’ and ‘bottom-up’ approaches. Government power is needed to redistribute income and wealth through taxation, to provide public goods for all, and to protect workers’ and citizens’ rights. Powerful social movements are needed to contest global corporate power in almost every sector  of  the world economy – from transport, environmental protection and prevention of pollution, to provision of clean water, electricity and health and social care.

Acknowledgment

I am most grateful to Jacqueline Senker for her numerous extremely helpful comments, criticisms and suggestions for improving the draft of this paper. All remaining errors, omissions and misinterpretations are entirely my responsibility.

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