INNOVATION, INEQUALITY AND THE ENVIRONMENT: is sustainable development compatible with capitalism?

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. This note suggests that a world economy dominated by capitalism is likely to make slow progress in achieving SDGs.

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