The Capitalist Solution to ‘Save’ the Planet: Make It an Asset Class & Sell it

Yves here. Producer Lynn Fries speaks to John Bellamy Foster on a critically important and underreported topic: how investors are trying to use rapidly moving climate crisis as an opportunity to loot even more of the commons.

By Lynn Fries. Originally published at GPENewsdocs

LYNN FRIES: Hello and welcome. I’m Lynn Fries producer of Global Political Economy or GPEnewsdocs. Today’s guest is John Bellamy Foster.

He’ll be talking about the financialization of the earth as a new ecological regime. A regime where the rapid financialization of nature is promoting a Great Expropriation of the global commons and the dispossession of humanity on a scale that exceeds all previous human history. And which is accelerating the destruction of planetary ecosystems and of the earth as a safe home for humanity. All in the name of saving nature by turning it into a market.

Our guest’s Monthly Review articles: The Defense of Nature: Resisting the Financialization of the Earth and Nature as a Mode of Accumulation: Capitalism and the Financialization of the Earth detail this argument.

Joining us from Oregon, John Bellamy Foster is Professor of Sociology at the University of Oregon and Editor of Monthly Review. He has written widely on political economy and is a major scholar on environmental issues. He is author of numerous books including Marx’s Ecology: Materialism and Nature, The Great Financial Crisis: Causes and Consequences, The Ecological Rift: Capitalism’s War on the Earth. A forthcoming book, Capitalism in the Anthropocene: Ecological Ruin or Ecological Revolution, is coming soon from Monthly Review Press. Welcome, John.

LYNN FRIES: Hello and welcome. I’m Lynn Fries producer of Global Political Economy or GPEnewsdocs. Today’s guest is John Bellamy Foster.

He’ll be talking about the financialization of the earth as a new ecological regime. A regime where the rapid financialization of natureis promoting a Great Expropriation of the global commons and the dispossession of humanity on a scale that exceeds all previous human history. And which is accelerating the destruction of planetary ecosystems and of the earth as a safe home for humanity. All in the name of saving nature by turning it into a market.

Our guest’s Monthly Review articles: The Defense of Nature: Resisting the Financialization of the Earth and Nature as a Mode of Accumulation: Capitalism and the Financialization of the Earth detail this argument.

Joining us from Oregon, John Bellamy Foster is Professor of Sociology at the University of Oregon and Editor of Monthly Review. He has written widely on political economy and is a major scholar on environmental issues. He is author of numerous books including Marx’s Ecology: Materialism and Nature, The Great Financial Crisis: Causes and Consequences, The Ecological Rift: Capitalism’s War on the Earth. A forthcoming book, Capitalism in the Anthropocene: Ecological Ruin or Ecological Revolution, is coming soon from Monthly Review Press. Welcome, John.

JOHN BELLAMY FOSTER: Glad to be here.

FRIES: We will be talking about your thoughts on how the financialization of nature is capitalism’s most catastrophic regime to date, a new ecological regime. And I take it; you think this was at the heart of what came out of the 2021 UN Climate Change Conference negotiations in Glasgow.

FOSTER: Yeah. Ironically, during COP 26 in Glasgow everybody was watching that to sort of see, well, would governments and the powers that be take action to protect the earth. And the main thing that came out of Glasgow was actually these plans for the financial takeover of the earth, in the name of saving nature. The entire conservation sector globally has now bought into these policies of financialization.

This was really the main product of the Glasgow meetings all being done by capital with support of governments. But there is no public discussion anywhere of this. There is no country where this has been subjected to democratic processes or even conversations. There’s no dialogue on this.

Capital is just proceeding to buy up ecosystems services. To create structured financial vehicles where they’ll be able to control natural capital to accumulate on the basis of it. And to run natural services on this basis with the idea of accumulating wealth.

FRIES: Connect the dots from capital’s need for a new asset class around 2009, around the peak of the Great Financial Crisis, to the current trajectory of the financialization of nature as a new ecological regime.

FOSTER: The world went through a global financial crisis in 2007 to 2010. One of the problems in terms of financial instability, obviously, is that there are not enough underlying assets to support the financial expansion of the system, which is going on at extreme levels. So we’re piling up debt in relation to the world economy. But the debt doesn’t really have sufficient material foundations, revenue streams underlying it.

So capital is searching for new revenue streams. And after the 2007 to 2010 financial crisis, they started looking increasingly at ecosystem services (what we could call nature and nature’s services) as a basis, as a material basis for financialization.

So there’s this very rapid ongoing financialization of nature that is now occurring. Where natural services, ecosystem services, are being turned into forms of exchange value that can be the basis of financialization. All in the name of saving the global environment.

There was a big change that occurred in the fall of 2021, between September and November in the context of the UN climate negotiations, where three new initiatives were introduced or brought to the forefront.

One is the Glasgow Financial Alliance for Net Zero, which brings together all the big financial corporations. All the big banks and hedge funds and so on all came together combining let’s say $130 trillion in assets. These are all basically the Western banks and hedge funds. And they claimed that they were going to organize, to financialize nature in order to produce a net zero carbon economy globally.

The month before, the New York Stock Exchange together with the Intrinsic Exchange Group introduced a new asset class on the New York Stock Exchange called Natural Capital Assets. That really had to do with this process of creating structured financial vehicles to create revenue streams from ecosystem services. That could then be financialized and debt built upon them and so on. All in the name of again, saving nature.

And finally in the climate negotiations itself, they basically agreed on a plan for a world carbon trading mechanism that had been introduced in 2015 Paris Agreement but all the details hadn’t been worked out. So this established at least the basis for a global carbon trading mechanism, which would again, financialize nature.

This has resulted in a huge expansion just in the last few months of attempts to financialize the earth. To turn ecosystem services, really basic ecosystem services like photosynthesis and the production of oxygen in the environment and things like that into monetary asset exchange value that capital can own. Or at least maybe nation states will own and capital will essentially manage and this can turn into financial assets.

Essentially, corporations would own what nature does, not just owning land. The governments would still probably own the land but capital would own the services that nature provides. And would manage it for enormous amounts of money. This is big accumulation as the Intrinsic Exchange Group (IEG) said, in their view: if discounted over the century, ecosystem services are worth four quadrillion (or $4,000 trillion) dollars all for the taking.

FRIES: And we should also note these initiatives target the Global South. As you say basically because financial gains from the expropriation of the earth in the name of management of natural capital and offsets are the greatest in the Global South.

Your articles detail ways this targeting is done. For example, the 2021 Glasgow Alliance for Net Zero initiative declared up front that carbon-mitigation financing to be made available for developing countries comes with strings attached. So financing will depend on a developing country willingness to fully open their economies to global capital.

In the case of the agreed plan for carbon trading and in the designs to promote a world market in offsets, the $100 billion developed countries promised to direct to the Global South is subject to debt leverage by multinational monopoly-finance capital

So John, just to clarify what we are talking about here with the financialization of nature and accumulation of nature are you saying that, in general, this involves the creation of financial claims so titles over natural assets and ecosystems, environmental services of various kinds that can then be traded and leveraged? Is that basically what you mean by the financialization and accumulation of nature?

FOSTER: Finance is really based on the promotion of debt. And from one perspective, money itself is a debt. But finance is based on the promotion of debt. And that means liens on the future revenue streams from underlying assets. What the debts represent or what the creditors get is revenue streams into the future.

So essentially, it means you’re selling whatever nature provides or revenue streams well into the future. In a lot of these proposals, it’s selling off what nature would produce or the revenue that it would generate if it’s reduced to exchange value over the next century or two.

And it is very dangerous. If you look back to 2007- 2010, the Great Financial Crisis, the whole financial system was really in danger of collapsing. And the structural changes that occurred at that time, and this is related to economic stagnation, are really still there.

The financialization, the growth of the debt economy, is in many ways at a much more extreme level then it was in 2007. And we’re looking at other financial crises that could occur, another conceivable Great Financial Crisis. This is because we create these debt bubbles, which expand the economy, but eventually the bubble bursts. The consequences are there.

Our economies are growing slowly but we are also expanding the debt bubble at the same time. So we’re in this sort of stagnation/financialization trap.

Well then if you try to financialize the whole of nature and try to run ecosystem services under capitalist principles regulated by structured investment vehicles, you’re basically bringing nature into this financial bubble.

But it’s absurd. Because the laws of nature (and we can talk about the laws of nature as the scientific world does meaning the biogeochemical processes of the Earth System) do not operate like capitalist markets. And actually attempts to monetize nature and treat it as a financial asset, as an economic asset, a stream of income in which we can impose debts and this will create revenue according to the innate power of capital and at the same time save nature, it’s really a fairy tale.

I mean, it’s worse than a fairy tale. It’s a complete fetish of capital and nature.

John Maynard Keynes once said that we’re in trouble when the underlying productive economy becomes a bubble on the financial system. But we’re now creating a situation where the earth itself is going to be turned into a bubble on the financial system which itself is a speculative enterprise.

There’s a famous statement by a 19th century chartist, Dunning, in his book on the trade unions that Marx quotes in Volume One of Capital. Where Dunning says: that capital we’ll do such and such for a 12% rate of return. And it’ll do even more; it will transgress laws for say a 50% rate of return. But for a 300% rate of return, it will lie and destroy and it’s willing to sell off humanity and the earth itself. And he points to the slave trade.

And I think that’s what we’re in the situation of. The returns are so great that capital is really mesmerized by this notion that ecosystem services discounted and projected over this whole century are worth four quadrillion dollars [$4000 trillion]. And then they can go in and have a piece of this. The fact that this is so destructive is ignored.

Also what they’re doing is taking ecosystem services not from the population of the earth as whole even, but more immediately they’re taking nature away from indigenous populations. In Africa, for example, it’s claimed that 90% of the land is essentially untitled, which capital can take over and reap the natural capital and ecosystem services.

The reason for this is it’s a legacy of colonialism. So that, after the colonial period and the post-colonial period, it was sort of recognized that indigenous communities had common rights to the land that they lived on throughout history. But they didn’t have any actual title. They just had sort of vague common rights.

While the governments were given, like every government was seen as actually having the final right to all of the land in a country. And what’s happening is that the indigenous claims to the land are being kind of removed. They are not treated as having the same basis as private property. And so these lands can be expropriated in land grabs.

A lot of this is now in order to gain hold of natural capital and ecosystem services. And it is ripe for corruption. My article starts out with a massive case of corruption in Malaysia’s state of Borneo, Sabah. So we’re seeing struggles of indigenous people over this financialization of the earth as well.

FRIES: John, I’ll quickly round off for viewers on points you just made about the struggle of indigenous peoples and the innate power of capital. First, on the fairy tale of the innate power of capital and so liens on the future production of the economy, as the ecological economist Herman Daly has put it to cite a few lines from your Defense of Nature article <quote>: “…the capitalist growth economy, while continuing to profit in the course of its creative destruction, is ultimately faced with physical limits of an Earth System, which does not, like compound interest, increase exponentially. Real physical wealth emanating from nature and ultimately derived from solar energy is subject to the entropy law and cannot generate endless rapid growth as in the case of ‘symbolic monetary debt!’The conflict between finance-based economic expansion and the ecological basis of society is thus inevitable.”

In the context of struggles of indigenous peoples to cite the same article <quote>: “This struggle is occurring on all three continents of the Global South and in regions of the Global North an indication of how close the ties are between neocolonialism and the natural capital juggernaut.”

As you say in these articles, the financialization of the earth is promoting a Great Expropriation of the global commons and the dispossession of humanity on an unprecedented scale. Give us now some big picture context and also historical context on your ecological critique of how financialization is also an expropriation.

FOSTER: Well, Karl Marx once said and this is a paraphrase but it’s very close to what he said. He said: Nobody owns the earth. Not even all the people on the planet, own the earth. We hold it in trust as good heads of the household for future generations, for the entire chain of human generations. You know, in terms of humanity, if anyone has a right to the earth, to the planet, it’s all of us together. Or certainly, we hold it in trust for the future. To sell it off to private services is another matter altogether.

Karl Polanyi, the great economic anthropologist, once said that: converting nature into real estate was the most extreme invention of our ancestors. But now we’re going a step further. It’s not about ownership of land, but it’s the selling off and integration into the financial world of all that nature does, all of its ecosystem services across the planet. And parceled out and turned into debts and derivatives and revenue streams which will be owned by capital.

Things that were previously considered the free gifts of nature will now be owned by financial interests and private financial interests. That means a few will own ecosystem services and the rest of the population of the earth will be dispossessed.

FRIES: Speaking now in the context of a system of production, explain more about the term expropriate. So, what exactly does that mean?

FOSTER: Expropriate basically means taking without return. We have to take from nature in our production. And there’s nothing wrong with the free appropriation of nature on behalf of humanity as a whole. There is a problem when nature is treated as a free gift to capital as nothing but a means to capital accumulation.

There’s a problem when the appropriation of nature doesn’t occur in a sustainable way. That is, there’s no reciprocity. There’s no giving back in any way. So that it becomes a form of robbery. You’re taking without replacing and that always results in destruction. And our system basically, does that.

Now, there are resources that are irreplaceable. That can’t be replaced. Herman Daly set out how we can use all resources sustainably. And we have to conform to those rules or we’re really destroying the ecological basis of our own existence.

Ecologists talk about the tap and the sink. The tap refers to what we extract from nature. We also have the problem of the sink. That is where do we dispose of the waste from production. And carbon dioxide emissions are basically a waste from production.

Which on a small scale wouldn’t really be very important there. I mean carbon dioxide is part of our own respiratory system. But on the scale in which emissions are occurring today and concentrating carbon in the atmosphere, we’re producing climate change, which is threatening civilization and the very systems of humanity.

When we think about production, we have to think about not only the tap that is the extraction; we also have to think about the sink where the wastes go. And there are rules in terms of sustainability and how we can live on the planet with these limitations. But capitalism is not geared to anything like that. It has one goal and that’s the profit motive or accumulation of capital or the increase in stockholders’ equity however you want to look at it.

That’s what drives capital. It really doesn’t see anything else. And in the process of growing, even as our economy grows, we’re destroying the natural system around us which the very basis of our existence.

FRIES: You point out that in Marx’s view it was necessary in any critique of capitalism to understand not only the enormous productive forces generated by capital but also the negative destructive side of capitalism’s interaction with the environment. And for this, Marx placed an emphasis on natural science.

This emphasis can be seen in his treatment of capitalist agriculture where Marx was the first major economist, as you say, to incorporate concepts like metabolism and the science of thermodynamics into the analysis of production.

Your argument being ecological thought has deep roots in the 19th century and the influence of Karl Marx. Talk about those deep roots of present day ecological thinking.

FOSTER: In the beginning of 19th century around 1815, I think, the natural scientists working mainly in physiology started to develop analyses of cell metabolism. And so this was very important in the development of biology, physiology and so on. And Marx had a friend, Roland Daniels, who was a physician, physician scientist.

Many of the scientists in those days came out of being physicians. And Daniels wrote a book called the Mikrokosmos which had only one reader and that was Karl Marx. It wasn’t actually published until the 1980s in Germany, I think, but Marx read it.

Daniels had used the concept of metabolism in a broader ecological sense to look at the systemic relations between plants and animals and the earth. So he was using metabolism as a systems ecology concept; beginning to do that.

At the same time, the concept of metabolism was also being used in the development of thermodynamics. Especially the first law of thermodynamics on the conservation of energy. So metabolism was being used in that sense.

Justus von Liebig, who was the leading German chemist and very influential agricultural chemist, introduced the notion of metabolism in looking at the disruptions that were occurring in agriculture at the time, as a result of industrialized agriculture.

At any rate in the 1850s, really under the influence of Daniels, Marx began to use the concept of metabolism as a systemic concept. And he introduced the notion of social metabolism. And he developed this analysis in his Critique of Political Economy and in Capital. So he was the one who introduced the notion of social metabolism.

Social metabolism was really related to the labor and production process. So that in engaging in the labor process and in production, human beings were transforming their relation to the earth. They were taking what nature provided and transforming it. And in the production, of course, transforming themselves and society.

But Marx made this powerful socio-ecological connection unlike any other thinker in his time or maybe even in our own. Where the understanding of production with his whole class analysis and so on, his whole social analysis was unified with ecological analysis through the concept of social metabolism.

And not only that, he introduced the concept called the universal metabolism of nature. Marx didn’t talk just about nature. He talked about natural processes in terms of metabolism. And he talked about the universal metabolism of nature. Basically, what we would call earth system processes today.

Under capitalism, he argued that the social metabolism was alienated. So we had a destructive relation to nature. The social metabolism came in conflict with the universal metabolism of nature. And in those cases, what happened was a rift between human beings and nature.

Marx wrote of the irreparable rift in the interdependent social metabolism between humanity and nature. And we call this the metabolic rift. And his theory of ecological crisis, which was very pronounced and connected to his whole critique of the social system, is really defined by this analysis of the metabolic rift.

Marx’s usage of metabolism actually influenced other thinkers in his time and afterwards. For example, the leading British natural scientist, the leading British biologist really a zoologist E. Ray Lancaster (Darwin and Huxley’s protégé) was also a close friend of Marx. Lancaster was the leading developer of an ecological crisis analysis in the late 19th and early 20th century.

This same ecological systems approach, which was rooted in metabolism, gave rise to the concept of ecosystems, which is our main ecological concept. And that was developed by Lancaster’s student, the botanist, Arthur Tansley. And working in conjunction with systems theory developed by the Marxist mathematician, Hyman Levy, but building on this conception of metabolism.

This all goes forward from there. So that we now speak of the earth system metabolism. So Marx’s approach is completely integrated with science. Ecological science down to the present day operates with these same conceptions.

FRIES: I’ll have another stab at some of your essential argument on how financialization is also an expropriation and relate it to the robbing of natureyou referred to earlier. So take us through the 19th century concept of robbing the soil into the present where as you write in the Defense of Nature article that <quote>: “The Original Expropriation has metamorphosed into a planetary juggernaut, a robbery system encompassing the entire earth, leading to a more universal dispossession and destruction.”

And with respect to the Original Expropriation to cite the Nature as a Mode of Accumulation article <quote>: “The expropriation of the commons, its simplification, division, violent seizure and transformation into private property constituted the fundamental precondition for the historical origin of capitalism. What Karl Marx referred to as the original expropriation of the commons in England and in much of the world (often involving the expropriation of laborers in various forms of slavery and forced labor) generated the concentrations of wealth and power that propelled the late 18th and early 19th century’s Industrial Revolution.”

So in a nutshell, from the Original Expropriation to the Great Expropriation, explain this reference to the robbery of nature.

FOSTER: In the book The Robbery of Nature that Brett Clark and I wrote together, we connected the issue of the rift, the metabolic rift to the issue of the robbery of nature. Going back to Marx and his discussions in Capital and elsewhere and to Justus von Liebig and others we argued that the rift, the metabolic rift, or the rift in the metabolism between human beings and nature was a product of the robbery of nature. Not addressing the need for reciprocity and sustainability in the relation to nature.

So, taking from nature and not giving back is a form of theft or robbery, expropriation in fact. So expropriation is a form of robbery, stealing. But not just nature, it is expropriation of human bodies in many cases. We look at slavery. We look at the oppression of women, problems of social reproduction.

These kinds of issues, the oppression of women, slavery, the super-exploitation of people in the Global South are all issues of robbery. And the seizure, of course, the financialization of nature, land grabs, these are all forms of expropriation that then create the basis of private property and capital accumulation.

Capitalism constantly seeks to expropriate people, resources, land, and nature in order to expand its system. So the robbery of nature is integral to the problem of the metabolic rift.

Metabolic rift Marx explained originally in terms of the soil crisis in England and elsewhere in the 19th century. Where industrial capitalist agriculture was intensively removing nutrients (such as nitrogen, phosphorus and potassium) from the soil in the food and fiber that was being exported to the urban center with a concentrated industrial population.

The nutrients, which were being, shipped hundreds, maybe thousands of miles to the cities did not return to the soil again. So they had to try and get bones from the Napoleonic battlefields and the catacombs of Europe to have natural fertilizer for the soil. And guano from Peru establishing the whole massive guano trade where they used Chinese labor, basically expropriating their bodies and killing them off very rapidly. In order to get the guano (the bird droppings) to fertilize the soil in England which was being depleted by industrial agriculture.

This kind of robbery of the soil is a model of how capitalism robs resources and land everywhere. Taking without putting back. Not following ecological principles, ignoring permaculture, building monocultures and basically destroying the earth.

So the robbery is the source of really the metabolic rift itself. And that rift between human beings and nature is how we can understand ecological crisis. It’s all rooted in the system of production, the capitalist system of production which has now been globalized and financialized and is really driving the world to the wall.

FRIES: The capitalist system of production, as we all know, is based on commodity production for exchange value and endless capital accumulation. So a treadmill of exchange, profit and accumulation.

Your Monthly Review articles clarify how the concept of natural capital originally arose as a defense against the capitalist system of production for exchange value. Briefly explain that then the related concept of the Lauderdale Paradox.

FOSTER: You have to go back really to the 19th century and the concept of natural capital was introduced by socialists and radicals in opposition to the expropriation of nature in their time, the turning of nature into exchange value. Which in our terms was at a fairly crude level. But land was being taken over and turned into exchange value, being turned into capital.

The concept of natural capital was opposed to the turning of all of nature (and in those days they were thinking simply of land and raw materials) into cash, into exchange value, into the cash nexus. They argued that we had a natural capital stock that we had to protect that. And they saw it in use value terms. That is natural material use value terms. We had to protect this stock of nature.

They argued that if nature which was the essential basis of human existence (material nature and the land and the resources and the forests and so on) were brought into the system of exchange value under capital (which they were seeing happening in their day and land turned into real estate markets and so on private real estate markets) that this would destroy the basis of a natural existence on which we depend.

You see figures like Ebenezer Jones in his famous book on the land in England. And figures like Karl Marx arguing for a conception of natural capital that’s based on use value and not exchange value. Marx later abandoned the notion of natural capitalbecause he thought that it led to a notion of the naturalization of capitalism. And so he adopted a different vocabulary distinguishing between earth matter for nature and earth capital that is when capital takes over nature and turns it into exchange value.

And there’s a notion known as the Lauderdale Paradox named after the Earl of Lauderdale in the early 19th century. He developed this notion that capitalism, he didn’t use the term capitalism but it was implicit. I mean the term did not really exist at that time. He was talking about natural material use values constituting public wealth like the water, the forests, crops.

He argued that capitalism or the system of private exchange, since it depended on exchange it depended on scarcity. That things only really had value or could be marketed if they had a price. And price depended on scarcity.

So that water that was freely available and abundant did not have a price, had no exchange value. And the air had no exchange value because it was abundant, freely available. And you could apply this to other aspects of nature and they were actually kind of free gifts.

Capitalism came in and one of the things that it does in order to make an exchange value economy and profit off it is they want to make these resources scarce. And one way you make them scarce is just by creating private ownership and private monopolies, which then can restrict the access of others to the resources. If there are wells for water, if somebody comes in and takes it over and it becomes a private monopoly, they can charge money for water.

So the private economy works at destroying public wealth in various ways. And systematically works at that in order to create private markets. And Ebenezer Jones in The Land Monopoly talked about: what would happen if the air in the vicinity of London were turned into a private market? He was writing in the early 19th century, so this wasn’t really the case but we can understand it now.

All of these thinkers argued that nature had to be seen as a natural material use value, the basis of our existence. And it could not be reduced to exchange value, to the cash nexus of the market, without destroying the basis of our existence. And that was how the concept of natural capital arose. The emphasis was on natural. That this was a stock within nature and a permanent stock on which we depended.

FRIES: As you write in your Nature as a Mode of Accumulation article this concept of natural capital rooted in use value <quote>: “Was reintroduced into the economic discussion in the 1970s and 1980s beginning with Schumacher’s Small is Beautiful, to highlight the‘liquidation’of ‘natural capital’ stock as a failure of the first order of the modern economic system, representing the view of ecological economics.”

You also explain, in a thermodynamic based tradition, ecological economists initially inspired by Nicholas Georgescu-Roegen’s 1971 publication, The Entropy Law and the Economic Process also embraced this notion of natural capital. And wedded it, as you say, to the notion of “critical natural capital” in conformity with what’s known as the strong sustainability postulate.

An approach which established limits to growth and determined sustainability in biophysical, so use value terms. And critical to this were the three principles of sustainability introduced by Herman Daly, that you referred to earlier. The first principle was for renewable sources, the second for a non-renewable source and third for a pollutant.

You go on to write in this same article that <quote>: “The basic elements of Nicholas Georgescu-Roegen’s thermodynamic critique of neoclassical economics were accepted from the start by Marxists economists and viewed as consistent with Marxian tradition, though lacking a social critique.

So talk now about the neoclassical response to all this and other approaches inspired by other prominent like-minded figures like Howard Odum, for example. In other words, talk now about the neoclassical response to an ecological economics tradition in which the concept of natural capital was rooted in use value terms.

FOSTER: Neoclassical economists worked on turning this into an exchange value concept. In the beginning of this century, neoclassical economics sort of took over ecological economics to a large extent, which had been a dissident tradition. And reduced the natural capital concept to a concept of exchange value that is to be measured as capital, in monetary terms, to be a monetized asset.

The notion of use value, of nature as constituting use value, really isn’t present at all in neoclassical economics, which doesn’t use the concept of use value. So basically, there was this switch.

Part of the switch was associated with the calculations they made of ecosystem services and of natural wealth. And once those calculations were made on largely bogus grounds, because they were turning into hypothetical markets things that weren’t markets at all, but once they put a price tag on it then capital started to see, well, how can we actually make these into markets that we can then capitalize on.

FRIES: Talk about how these calculations that put a price tag on nature were arrived at.

FOSTER: If you look at how this happened, there was actually a big debate about this in ecological economics. But those who wanted to reduce nature to exchange value or at least to calculate this won out. And the primary figure in this was Costanza who was also Editor of Ecological Economics.

In 1997, they came out with the first calculation of what the world ecosystem services we’re worth in monetary value. Now you have to understand that these are not actual markets. So they did all sorts of fancy maneuvering to convert what nature does into markets.

So they divided what nature does globally into 17 ecosystem services occurring all over the planet. And they came up with values for each of these ecosystem services based on methods like hedonic pricing, which is basically a way of just attributing a value to nature based on comparisons with current practices.

So they use these kinds of techniques and they use what they call contingent valuation where they draw up hypothetical markets and then survey consumers on what they’re willing to pay. They use these kinds of techniques to value some particular ecosystem. And then they extrapolate the studies to that ecosystem globally and come up with values. They did this for like 17 different ecosystem services globally and that becomes then the value of ecosystem services throughout the planet.

They ostensibly did this in order to put a value on nature so that that people would protect it. But the moment this started to happen, and it was predictable, capital began to see that these ecosystem services could be turned into markets. Valued and turned into markets and financed through debt, that ends up purchased and a basis for financial accumulation.

This same group under Costanza came out with another estimate of the world ecosystem services, which was even higher. And you had all of these massive meetings of corporations and the establishment of natural capital protocols and various ways of organizing and studying and figuring out how to create markets out of these ecosystem services that emerged in which all of the giant corporations were directly involved.

FRIES: Give us more of an idea of the ramifications of this switch in ecological economics.

FOSTER: In the 21st century, nature is now treated as capital, as exchange value, as a source of exchange value. And if you look at the concept of natural capital that is seen in this new kind of neoclassical…the dominant economic perspective, natural capital is used for the underlying natural asset, which is now seen as ecological capital.

But all of the estimates and projections and all the financialization is based on the concept of ecosystem services, which is seen as the revenue stream provided by nature. When nature does things like photosynthesis, it’s providing a service supposedly to the world economy.

Nature doesn’t know it’s doing that, as you know, we might say. But in their theory, nature is providing an ecosystem service to the world economy, which like any revenue stream can be capitalized on.

Basically once they figure that there is a revenue stream here from ecosystem services derived from the underlying asset of natural capital, they can then take that revenue stream and divide it by the discount rate and multiply it by a hundred percent to get an expected stream of revenue way into the future. Say into a century in the future and then they can impose debt on the basis of that revenue stream and financialize nature and make huge profits.

FRIES: Talk more specifically on how natural capital defined in exchange value terms came to stand for and represent the view of ecological economics.

FOSTER: If you look at Ecological Economics, the journal, which was associated with the International Association for Ecological Economics, they actually had a battle between Howard Odum, one of the chief developers of systems ecology in the world, and Robert Costanza over whether the journal was going to go the route of seeing nature as exchange value or whether ecological economics was going to have a deep conception of ecology based on use value.

Howard Odum and the other scientists that he was associated with that had been in part of the founding of Ecological Economics, the journal, were basically thrown out. That is sort of the beginning of ecological economics becoming something different, captured by or recaptured by neoclassical economics.

You have people like Robert Solow, the most prestigious neoclassical growth theorist said that if natural resources could be substituted for, then effectively they don’t matter and can be left out altogether.

That actually is what was done with the neoclassical production function. Labor and capital are the only factors of production and nature and land is excluded altogether. The whole notion of use value in nature is excluded altogether. Everything, absolutely everything is reduced to exchange value.

Then that provided the kind of theoretical basis for weak substitutability, which is the notion that nature doesn’t really matter. That markets can substitute for natural resources and whatever in nature does. And that connected up with the development of the estimates like Costanza’s and others of world ecosystem services.

Pretty soon we have these notions of the financialization of the earth. Not simply in an academic sense, now transferred from the academic world into the world of capital where corporations and governments began to put into plans the policies, calculations, methods, structures for actually turning ecosystem services everywhere on the planet into economic markets which capital can finance and accumulate on the basis of.

FRIES: So, John, we have been talking about the argument you put forward that this financialization of the earth as a new ecological regime is accelerating the destruction of planetary ecosystems and of the earth as a safe home for humanity. Talk for a moment about how even before this new ecological regime, you warned of an accelerating pace of devastation compared to earlier periods of capitalism.

Among examples of this, you write about how Darwin in his time had been struck by how European colonization turned the ecology of the island of Saint Helena into a desert in just three centuries. The island of Saint Helena having been made famous by the voyage of the Beagle. Yet in the current stage of capitalism, the biogeochemical processes of the entire Earth System were altered in just two generations.

FOSTER: I wrote about this in my book The Vulnerable Planet in 1994 where I was explaining how we were crossing the thresholds of the biogeochemical processes of the planet and threatening the whole earth system. But what struck me, and what I wrote about then, is the speed with which it’s occurring. The speed was in terms of climate change.

We’ve seen massive geological changes in the history of the earth. But we haven’t seen anything that occurs with this speed. This is one of the reasons why we can point to the anthropogenic causes and the anthropogenic rift in the earth system, which is how we define the coming of the Anthropocene Epoch in earth system history. And it’s really the speed of the change.

The scientific reports although the IPCC have tried to keep up with this, but all of their reports I think all the way along have underestimated the speed with which we are transforming nature. And this is under the pressure of a system of capital accumulation geared to exponential growth.

At this point, we generate vast, vast amounts of economic and ecological waste. Things that people neither need nor really want. We have a marketing system, a massive multi-trillion dollar marketing system, geared to getting people to buy more and more. And our system is geared to the fastest growth possible. And in order to compound that even in periods of economic expansion, we draw more and more on extracting from natural systems.

This is a high-energy intensive system. It doesn’t take care of people’s needs. The wealth created is not going to the populations. And in the dominant ideology, they don’t even talk about trickle-down anymore, which they talked about in my youth, because everyone knows that that’s false.

So we are creating a system that doesn’t benefit the human population economically, while we’re actually destroying the entire earth. And the motor of this is a capital accumulation process. That is now highly financially and globalized and has become the enemy of humanity and the planet. We put profits before people and the planet in all cases in this society. You can’t solve things that way.

Capital wants to say: well, technology will solve the problem because they don’t want social transformation. They want to say: well, we can do it with technology. And the population falls for that because they have cell phones in their pockets and they think: oh, technology is absolutely wonderful.

But no matter how wonderful cell phones are that communication technology and other technologies we have do not allow us to transcend the laws of physics. And we’re right up against that today. And, it spells an unimaginable crisis really for the population of the earth.

FRIES: The Anthropocene Epoch you referred to is of course a reference to geological time. To cite the flyer from your forthcoming book the Anthropocene Epoch marks “a changed reality in which human activities are now the main geological force impacting the earth as a whole, generating at the same time an existential crisis for the world’s population. ”

Talk more about the issue of the capitalist argument that technology can save humanity from ecological ruin. So things like geoengineering.

FOSTER: Well, it’s not just geoengineering but things like carbon sequestration methods and direct air capture. But it’s interesting in the Sixth Assessment Report, AR6 of the IPCC, the mitigation part of the report, Part III by Working Group Three was published in April of this year. But the actual scientific consensus report, the report as written by the scientists themselves, was completed in August 2021.

Governments in the IPCC process have the right to come in and rewrite the scientific report, the Summary for Policy Makers (SPM). They rewrote the science report entirely. Practically every line in the scientific consensus report was censored by governments. And in some places turned into the direct opposite.

We know this because Scientist Rebellion in August 2021 leaked the scientific consensus report on mitigation which we posted on the Monthly Review website. So you can compare what the scientists decided, to the published Summary for Policy Makers (SPM) from governments.

We find that in the scientific consensus report they said: these technologies are not available. Won’t work, cannot play a major role in keeping us below 1.5 degrees Celsius, or even below 2.0 degrees Celsius. And they said other things like coal-fired plants had to be eliminated globally this decade. And what we need is basically, low energy solutions, which can improve societies’ conditions. As that report said: improve the conditions of everybody on earth but also using less energy in the process.

FRIES: Back in 2019 in writing on how capitalism has failed and asking what’s next you argued that <quote>:“Once sustainable human development, rooted not in exchange values, but in use values and genuine human needs, comes to define historical advance, the future, which now seems closed, will open up in a myriad ways, allowing for entirely new, more qualitative, and collective forms of development.”

So, what’s coming across loud and clear in all this is how, the way you see it, the underlying structure of capital accumulation itself is what’s standing in the way of real solutions to the ecological crisis.

FOSTER: The irony is that capitalism has created this ecological crisis and is generating it. And the answer of capital (and this is typical of the system) is that we just need a more intensive, a more extreme form of capital accumulation. The answer to the ecological crisis created by capital is to turn all of the world ecology into capital. To make the entirety of nature conform to economic laws essentially. And the economists and the capitalists say this is the answer.

The reason why that sells, despite the illogical nature of it, is that for capital that’s always the answer. If there is a crisis, the crisis is because there’s too little capital, not too much. From capital’s standpoint, the answer to every crisis, let’s say an economic crisis is to redistribute income from the poor to the rich, that is increase the power of capital. If there’s a problem, an ecological crisis, the answer is to increase the power of capital markets and expand it into nature.

Paul Hawken argues and others with him in his book Natural Capitalism argues we don’t really have capitalism until all of nature is part of capital, is part of capitalism. But that’s absurd.

We live within a planet. Capitalism exists within the planet. Human society exists within the planet. Human beings live within the planet. We can’t turn the entire planet earth into some kind of attribute of the capitalist market system without destroying the world. But that’s exactly what we’re doing.

The solution to the ecological crisis that they’re advocating doesn’t involve taking energy efficiency and turning it into conservation like you see in Cuba. They take energy efficiency and turn it into a greater expansion of the economic system. And that doesn’t help. That’s what we call the Jevons Paradox. That the more efficient we are in the use of resources, the more resources we use. Because the object is not to conserve but it’s to expand the economy and the accumulation of capital. Well in such a system, you’re headed towards destruction.

Now the destruction is very close upon us. We’re very close now to the 1.5 degree increase in global average temperature. And the latest IPCC report (AR 6, the physical science basis) in their most optimistic scenario we will hit 1.5 degrees Celsius in 2040. That would require a kind of revolutionary scale social transformation to accomplish.

More likely we’re going to hit 1.5 degrees Celsius this decade, in this decade, in just a few years. We’re headed over the edge of the cliff in terms of the tipping point for the climate where we will reach irreversible climate change.

Even in the most optimistic scenario, we’re facing major catastrophes in the next few decades. But if we don’t take the action that prevents irreversible change, we will be threatening civilization itself in the broadest sense and the human species and billions of people on earth.

We have to have a different method. Sixty years we’ve known about climate change (accelerated climate change or accelerated global warming) and all we’ve done is promote capitalist solutions that have gotten us closer to the edge of the cliff. And we’re now on a runaway train. It’s time to pull the emergency brake.

FRIES: There is a lot more behind this and a lot more to come in your forthcoming book on Capitalism in the Anthropocene: Ecological Ruin or Ecological Revolution but for today we are going to have to leave it there. John Bellamy Foster, thank you.

FOSTER: Thank you.

FRIES: And from GPEnewsdocs in Geneva, Switzerland thank you for joining us.

John Bellamy Foster is editor of Monthly Review and professor of sociology at the University of Oregon. He has written widely on political economy and has established a reputation as a major environmental sociologist. He is author of Capitalism in the Anthropocene: Ecological Ruin or Ecological Revolution a forthcoming book (2022) to be published by Monthly Review Press. Among numerous other publications, earlier books include Marx’s Ecology: Materialism and Nature (2000), The Great Financial Crisis: Causes and Consequences (with Fred Magdoff, 2009), The Ecological Rift: Capitalism’s War on the Earth (with Brett Clark and Richard York, 2010), The Theory of Monopoly Capitalism: An Elaboration of Marxian Political Economy (New Edition, 2014), and The Return of Nature: Socialism and Ecology (2020).

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  1. Hayek's Heelbiter

    As a Cherokee Grandmother Elder once remarked, “After you have chopped down the last tree; after you have drained the last river; after you have killed the last animal, how are are you going to eat all that money you’ve got saved up in the bank?”

  2. Arizona Slim

    Key point from this post: Finance is really based on the promotion of debt.

    Plan your own lives accordingly.

    1. Paul

      Key point …
      is that debt will become the equivalent of ‘Original Sin ‘ , everyone will have debt as a birth right .

      Not much room to plan in that scenario.

    2. anon y'mouse

      your debt is their income stream, even if you don’t class it as “debt” on your ledger. unless you have zero actual expenses period, which seems highly improbable. even Ted Kaczynski had some expenses living in a mountain shack.

      they already know how much you will consume and produce on average over your lifespan, and you’d best believe that they intend to benefit from the difference.

      the benefit of not having what you consider “debt” on your ledger is the illusion of freedom of action, and some actual freedom of action because you’re not automatically beholden to anything. if most people in this society want to go to school, own and operate a vehicle to get to work, or own a home they are already afoul of your rules.

      live accordingly, or not.

  3. paul

    I do love the term; global south, obviously ‘developing countries’ is something of an anachronism.

    1. Polar Socialist

      With the situation slowly turning out to be NATO and Five Eyes vs. the rest of the world, they can soon drop the “south” from the term.

  4. flora

    The urge to save humanity is almost always a false front for the urge to rule.
    – H. L. Mencken

  5. mistah charley, ph.d.

    Karl Marx once said and this is a paraphrase but it’s very close to what he said. He said: Nobody owns the earth. Not even all the people on the planet, own the earth. We hold it in trust as good heads of the household for future generations, for the entire chain of human generations. You know, in terms of humanity, if anyone has a right to the earth, to the planet, it’s all of us together. Or certainly, we hold it in trust for the future.

    Pope Francis’s 2015 encyclical said this; indigenous peoples have said this for generations; a child can understand this. And yet smart but greedy people work hard NOT to understand this.

  6. DorothyT

    These kinds of issues, the oppression of women, slavery, the super-exploitation of people in the Global South are all issues of robbery. And the seizure, of course, the financialization of nature, land grabs, these are all forms of expropriation that then create the basis of private property and capital accumulation.

    Capitalism constantly seeks to expropriate people, resources, land, and nature in order to expand its system. So the robbery of nature is integral to the problem of the metabolic rift.

    I’ve been reading some of the research released fairly recently by the Howard T. Odum Florida Springs Institute. This is mind blowing when you consider that the Florida governor may become a leading presidential nominee in 2024. And it’s all the more important when you realize how politicians in cooperation with capitalism enterprises have allowed this to become a critical problem to millions of Americans: the contaminated and deadly Floridan aquifer and the groundwater, springs, rivers, wells, and municipal water supply emanating from the FAS (Floridan Aquifer System).

  7. Sue inSoCal

    Pillage the earth and jump on a rocket to Mars. Sounds like a reasonable strategy to me, a peasant. I always nod and smile when folks tell me they live in areas that have “plenty of water”. Wait till the bottlers get there.

  8. digi_owl

    Because in the end most economist thinking assumes a natural balance. Meaning that if left alone by politicians and such, the economy will find the optimum balance point. This even after seeing that line of thinking blow up in their face with the likes of the 2008 crash (that they dismiss as a “black swan” event).

    That balance idea was massive all over science well into the 70s, but has now been thrown out of physics, biology and meteorology alike. But economics still stick with it, like a preacher clutching the bible in a hurricane.

  9. David in Santa Cruz

    That’s what we call the Jevons Paradox. That the more efficient we are in the use of resources, the more resources we use.

    Today’s beautifully interrelated posts are absolutely chilling. The capitalist solution to Global Warming of “More Teslas! More GROWF!” is absolutely accelerating the climate crisis.

    Meanwhile, our political class continues unabated the grant of concessions of the commons in order to facilitate the extraction of ever more rents from ever more miserable people.

  10. rhodium

    It’s the circle of life, everything flowing back into another. If it becomes significantly unbalanced sooner or later it will collapse. These jerk financiers keep trying to create economies and now ecologies that work more like eel traps. They want to accumulate and own everything until it collapses in stagnation. Literally just insane. It should be viewed as neurotic impulsive behavior, addiction to put it lightly, or maybe just call it “black void syndrome” because they suck so much.

    1. digi_owl

      Effectively they are parasites. Leeching off some amount of “energy” from the host system, fattening themselves while slowly killing the host.

  11. anon in so cal

    What is JB Foster proposing?

    Foster states, “there’s nothing wrong with the free appropriation of nature on behalf of humanity as a whole.” What does that mean? What are Daly’s “rules” he is referring to?

    It is not just capitalism. It is also demographic growth. The human population is approaching 8 billion.

    Massive habitat destruction and species extinction is underway as forests, fisheries, mangroves, oceans, and so on, are decimated. Demographic growth is a taboo topic Humans will survive but other species are imperiled. Would some alternative economic system address this?

    Should there be equity for other species?

    1. anon y'mouse

      in my conception of how at least some of what this post is talking about will play out, here’s how they will “make money” off “preservation”.

      suddenly that pristine lake the tribe has been living on is owned by a consortium of stockholders who are being paid by the government to “preserve” it. it is no longer being used for subsistence by the tribe, and all activities that are not approved by the stockholders are disallowed. the government may or may not hand something to the tribe to find “substitutes” somewhere, if available.

      the stockholders will find out what the critical resources are and do environmental studies on the “sustainable” (under their rubric) development of said resources. grants, public private partnerships, tax dodges, and income streams will be generated. they will collect money from governments based upon the “natural services” it is already providing (air, water, mineral cycling and “carbon sinks”).

      essentially this is privatization by another scheme. they want that deal that some land owners are currently getting to hold land out of production for “preservation of wetlands” but will also find some loophole to develop and use the resources, claiming money on both ends and trading the derivatives for money on the financialization aspect as well.

      with whatever is developed from the land “sustainably” they will then sell this back to the natives who used to use that land for subsistence. or not. they don’t care who they sell that to, as long as the right studies have been done, the right “carbon balance” has been totted up in the ledger and the thing is making money on all sides.

      at least, that’s what my dim bulb brain can work out about what may go down with this scheme. another way to charge people to use things they would already use, pretend to “save” the environment and collect money all around.

    2. Grebo

      “humanity as a whole” is the key phrase here, as opposed to a few greedy people.

      I found a brief summary of Daly’s ideas here.

      Alternative economic systems need to address our reliance on nature. If we are sawing off the branch we are sitting on for any reason we need to stop. If we want to have 10 billion people we need to size their ecological footprint accordingly.

      Equity for other species? I guess you don’t mean we should give them a cut of the profits. In nature small things are eaten by bigger things. Then the big things die and the small things get to eat them back. That’s a kind of equity. There has to be a cycle, we have built a ratchet instead.

      1. flora

        It’s the “new asset class” don’t ya know. The billionaires made it up and propose to cash in on their idea.

        Conservation or Land Grab? The Financialization of Nature
        by Ellen Brown / November 5th, 2021

        The much longer Whitney Webb article referenced in the above is here:

        Wall Street’s Takeover of Nature Advances with Launch of New Asset Class

        1. Grebo

          I don’t really see how it can be made to work. “Ecological services” by their nature are diffuse and hard to quantify. They don’t flow through a valve that Wall Street can control. How do they expect to extract rent? If they send me a bill for breathing I will just ignore it. Prove it was your air I breathed.

          1. Starry Gordon

            There could be ways of doing that. For instance, certain air is used as a dump for waste products. The poor get to breathe that air, the rich get to breathe other air. The differentiation is accomplished through the Real Estate business.

        2. Telee

          I suppose I am posting to late to get a reply. I read the links and while I see how money can be made by ecotourism, I am wondering how you sell biodiversity, carbon sequestration, pollination, clean air, water, food etc. by owning these lands. How does it work in practice? The article above doesn’t go into details. Is it when all these things become so scarce in the world that these things listed above become scarce and can only be obtained from the owners of these lands? Would their lands become the only source of air, water, pollination, food etc. Without more information I can only guess how it happens.

          1. Telee

            I have seen where companies are buying aquifers so they eventually will be the only place where clean water will be available. Are these investors interested in hastening the destruction of the environment so scarcity will create value to there holdings?

            1. DorothyT

              Telee: re aquifers
              This is probably too late to reach you. The Florida Springs Institute mentioned in my comment above has tested all the bottled waters from that area served by the Floridan Aquifer System (serves millions in FL and neighboring states). The bottled waters are more contaminated than municipal waters. More nitrates, higher rates of bladder, ovarian and other cancers.

  12. anon y'mouse

    too bad i didn’t go to U of O!!

    that’s where the well-to-do went who weren’t going to Reed, at least from what i could grok of it. kind of like the agricultural college of old. the UC Davis to Portland State’s Cal Hayward.

  13. Susan the other

    Thank you. That was very interesting. Not sure where to begin. COP26 is construing a neocapitalism. Whether or not it is viable hinges on what it exploits. It really sounds like it does not “exploit” nature but creates a financial role for nature – a role that gold used to play. The ultimate value. To be conserved at all costs. So we are dealing with not profits but a store of value. And this as collateral allows the natural world to function like its own enterprise in support of itself, of its own ecosystem services and with the help of lucrative support services from us humans. And the support services provided by humans, backed by nature as the collateral, will create a virtuous circle of sustainability. Maybe. It’s worth a try. I don’t think the human world will be any more dispossessed by this endeavor than some scatterbrained free-market basket of crazy-assed solutions. I admit, I really like this idea. Foster is justifiably skeptical because experience dictates what we anticipate and he anticipates that the accumulation of a cleaned up environment (think ocean for starters because that’s a huge project, and probably harder to exploit) will be translated into profits in the form of money which will serve to defeat itself in good old-fashioned capitalist antics. But it doesn’t have to be that way. It could succeed because creating the underlying value is imperative. Is it the financialization of nature or the naturalization of finance?

    1. Susan the other

      And curiously – I like the idea of a natural store of value. I’ve never been able to understand money as a store of value. I always thought it was a huge leap of faith. But nature? That’s a no brainer. I really do like this whole idea.

    2. Cristobal

      And how would one collect a bad debt? What could go wrong? Using nature as a ¨store of value¨ for collateral puts it on the block.

      1. Susan the other

        But if this is done right, nature is protected. I keep thinking gold. When sovereign debts were collected and everyone kept to the gold standard the debts were paid in gold – but the gold was not squandered, it was conserved and protected. Kept under lock and key.

  14. Jeremy Grimm

    This post is a little too abstract for me to make sense of. “Financialization of the earth” is a really scary idea, after all financialization is evil, financialization lead to the disasters of 2008, it serves the greedy interests of private equity villains dismantling companies, and financialization of housing is pushing up the cost of living in the u.s. … but what exactly does the financialization of the earth mean? What does it mean beyond efforts to make a buck off the bogus carbon trading schemes and comical net zero initiatives, things like selling CO2 absorption offsets for maintaining forest land? This post obscures what I believe are the real issues related to the “financialization of the earth” — if I as am suggesting, it is an inexact scare phrase to paint carbon trading schemes as bad and evil, which they are, and to pillory Neoliberalism which this post confuses with some late version of a neoclassical Capitalism.

    I believe the chief issue of concern related to “financialization of the earth”/carbon trading/net zero is that it will not and indeed has not worked to reduce CO2 emissions, and it is not really intended to. The purpose for these schemes is to create and opportunity to make a buck, and more importantly to assure that CO2 emissions will continue at their present rate, even increase, and no fossil fuel resources will be become stranded assets.

    Confusing Neoliberalism with a neoclassical Capitalism obscures a clear understanding of the full scope of the Neoliberal program. The Neoliberal program for the environment intends to use “financialization of the earth”/carbon trading/net zero as a means to buy time for creating the ‘science’ needed to support various schemes of geoengineering and assure a dire need for geoengineering as the final stage of that program. Confusing Neoliberalism with a neoclassical Capitalism obscures the full scope of the societal impacts of the Neoliberal concepts of the Market.

  15. Cristobal

    All this munbo jumbo about economic schools, terms, theories does nothing but confuse the hoi poloi, which is the intent. The problem with capitalism (stealing from Michael Hudson, Thorstein Veblen and others) is that compound interest on debt increases at a rate faster than economic (measured in money of course) production. This means that the amount of money flowing to the investing – or lending – class increases faster than the amount of money flowing to those who pay the debt. Over time this increases. What we are encountering today is a situation in which there is an unheard amount of money – the Giant Pool of Money – whose managers are looking for profitable investments. There are less and less. Investing in industry – actually making useful things – has gone out of favor. This explains the fervor with which the FMI, the European Union, and others who attempt to manage Western economic afffairs insist on the privatization of public enterprisees. Private schools replacing public, private health care replacing what was in most of Euope public health care, ¨deregulation¨ of the electric utilities and water supplies, water, selling the right to operaate parking meters, private toll roads, selling off the rail network, it goes on and on. There used to be a joke about people charging us for the air we breathe. Well, it´s no joke any more!

    1. Susan the other

      But you cannot “spend” nature – so it cannot be privatized. We can keep it and conserve it or we can destroy it, but we cannot spend it. It is not and will never be “money.” This will work only in the best of good faith. And good science. But it’s better than MMT in the sense that nature is invaluable and everywhere. And as such can only be used as collateral for positive action – exploitation makes its own investment worthless. It all depends on how the system is designed and controlled. It will need to be monitored and verified constantly – but that’s the whole point, no? An entirely new economy.

  16. Lambert Strether

    In most of the world, one cannot buy a human; that would be slavery. We can only rent humans. Hence, humans cannot make up an asset class (though the products of their labor can, and no doubt their employment contracts could be).

    I would argue that the only way to monetize a human being is to kill them, and sell the corpse for parts.* I suspect that “Financializing Nature” will have a similar endpoint.

    NOTE * Modulo edges like organ donation.

    1. Susan the other

      I’m thinking real estate. You can buy rights to the land and the resources, but you cannot “own” the land. And those rights come with obligations. Etc/

  17. Mikel

    Basically, this is a long-winded way of saying an ideology has masses of people deluded into believing that civilization and/or society can only exist if it serves an abstract notion – “the econony”.

    Now the delusion is to the point where the banks and corporations are going to promote the idea that nature exists to serve an abstract notion – “the ecoonmy.”
    It’s worse than this because the banks and corporations want people to believe any universe exists to serve this abstract notion.

    It’s really describing more of the same of what capitalism has always done.

    Beware the people that say, “You can help save the environment if you buy this product.”

    The financialization aspect is just more scam derivatives about to be created – not based in reality and as pointless as an NFT. Also, just another way to make money from scarcity – manufactured and not. I’m now more wary of any reason given for a scarcity…

    Since waste and disposal has been brought up in the article: has anybody discovered what the plan is to dispose of nearly a billion ICE vehicles while the world is being mined to death to make all the EVs?

    Recycling capacity and capabilities have been overhyped as is already seen with growing piles of waste on land and in the air, lakes, rivers, and oceans.

    BTW: something is really nagging me about the 19th Century and the confines and preconceptions of the thinking…all around.
    Will have to try to remember…

  18. Starry Gordon

    There was certainly a great deal of orthodox sanctifying and damning in all this. The answer to the question of how someone can create an asset class out of what is freely available to all is given by many examples, such as the pharmaceutical industry patenting, copyrighting, or otherwise sequestering drugs from wild plants and indigenes who know about them, or the propertization of the radio spectrum which has turned into an enormous business in spite of the universality and ubiquity of the energy which it uses. What is basically necessary is simply state force, the power of the ruling class, the government, and its subject institutions. As with the example of the air above, the ruling class can discover a choke point (aptly named) connected to the target resource and apply force to it to create a kind of property and then make that property scarce and thus valuable in exchange. Currently, water seems to be on the chopping block.

    I suppose it would be delusional of me to think that, were these processes exposed to public view, many people would resist them. They are already exposed to public view and everyone who cares to know, knows about them.

    Still, it might be useful to know something specific about particular fronts of action and resistance, if only out of gallows humor as we climb the steps. I wish the discussion contained more of that. The damnable have been damned enough, to little effect.

    1. Susan the other

      I can’t get this off my mind. If it succeeds it will change everything. Because the “commons” belongs to all and everything; it belongs to itself. So far it has been unbelievably generous to life. But we haven’t given back nearly enough to compensate for the rate of our taking. So to my thinking, if this succeeds, it will end capitalist competition – and replace it with a global cooperation. We can’t pretend that competition is a positive force if it is killing the planet – unless it is competition of a different sort, maybe scientific competition. “Creating an asset class out of what is freely available to all” cannot survive capitalist competition. That’s just same old same old.

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