interest he has to pay for the credit. Each enterprise owner therefore operates under
constrained conditions when it comes to making production processes more sustainable, equitable or simply constant in output. Thanks especially to quarterly
reporting and very short returns on investment expectations, they work with
additional drivers toward the already high incentive to externalize environmental
and social costs in weakly regulated competitive economies.
Regarding natural exploitation, Trucost, a green accounting specialist, has
estimated that the world’s 3000 largest corporations caused $2.15 trillion in environmental damage in 2008 alone—and this did not register on their balance sheets
(Trucost 2012). Imagine what internalizing these costs would mean for their profit
warnings and thus stock values. So neither monetization nor market prices are
neutral indicators or just allocation mechanisms, but are instead defined through
highly political and power-laden processes.
Understanding the world by tracking accumulation of monetized values therefore keeps us from seeing where more productivity becomes void of productiveness
and utility or where growth is causing irreversible damage in our ecosystems.
Sociologist Harald Welzer describes the ‘degrading’ effect for humans:
This is the exact form in which work is understood in national economic theory: as an
unlimited, endless activity that does not have a specific, limited, product-related objective,
but is dedicated to the ceaseless creation of value—consequently the never-ending production of ‘growth.’ Marx referred to this process as the disappearance of concrete labor
into exchange value (Welzer 2011: 22).
In affluent countries, as Jorgen Norgaard, professor at the Technical University
of Denmark, has written, “much of the growth in GDP over the last years can be
ascribed to pulling activities like child care, health care, cooking, entertainment,
maintaining houses, etc. from the non-paid amateur economy into the professional
economy” (Nørgård 2013: 63). All of these effects are part of what the decoupling
agenda will measure: the economy ‘immaterializes’ itself. But nothing new has
necessarily been created. Only the way it is done has changed.
The same things happen when corporations run by CEOs rather than owners
gear their business toward increasing shareholder value, for example, through
tactical issuance, sales and buying back of stocks. Big corporations now have huge
internal financial departments whose only purpose is to increase the firm’s market
value and top executive pay is usually coupled directly to the firm’s stock market
value. For societies, however, exploding prices for stocks, houses, raw materials
and land cannot count as a sign of real wealth generation, particularly if lower strata
of society lose access to them. Instead, this type of ‘growth’ is a sign of too much
liquidity and at the same time perpetuates its concentration even further. The
by-catch are economic bubbles and instability.
Understanding the world by comparing and ranking all of the monetized price
indicators instead of the underlying items does, however, mean that fictitious wealth
can continue to grow for a long time. Capital substitutability thinking allows for
Tobin’s social myth to be stretched so far that consultancy firms like the Boston
Consulting Group really issue forecasts like the following: “for Chinese children
114
3 Why the Mainstream Economic Paradigm Cannot Inform …
constrained conditions when it comes to making production processes more sustainable, equitable or simply constant in output. Thanks especially to quarterly
reporting and very short returns on investment expectations, they work with
additional drivers toward the already high incentive to externalize environmental
and social costs in weakly regulated competitive economies.
Regarding natural exploitation, Trucost, a green accounting specialist, has
estimated that the world’s 3000 largest corporations caused $2.15 trillion in environmental damage in 2008 alone—and this did not register on their balance sheets
(Trucost 2012). Imagine what internalizing these costs would mean for their profit
warnings and thus stock values. So neither monetization nor market prices are
neutral indicators or just allocation mechanisms, but are instead defined through
highly political and power-laden processes.
Understanding the world by tracking accumulation of monetized values therefore keeps us from seeing where more productivity becomes void of productiveness
and utility or where growth is causing irreversible damage in our ecosystems.
Sociologist Harald Welzer describes the ‘degrading’ effect for humans:
This is the exact form in which work is understood in national economic theory: as an
unlimited, endless activity that does not have a specific, limited, product-related objective,
but is dedicated to the ceaseless creation of value—consequently the never-ending production of ‘growth.’ Marx referred to this process as the disappearance of concrete labor
into exchange value (Welzer 2011: 22).
In affluent countries, as Jorgen Norgaard, professor at the Technical University
of Denmark, has written, “much of the growth in GDP over the last years can be
ascribed to pulling activities like child care, health care, cooking, entertainment,
maintaining houses, etc. from the non-paid amateur economy into the professional
economy” (Nørgård 2013: 63). All of these effects are part of what the decoupling
agenda will measure: the economy ‘immaterializes’ itself. But nothing new has
necessarily been created. Only the way it is done has changed.
The same things happen when corporations run by CEOs rather than owners
gear their business toward increasing shareholder value, for example, through
tactical issuance, sales and buying back of stocks. Big corporations now have huge
internal financial departments whose only purpose is to increase the firm’s market
value and top executive pay is usually coupled directly to the firm’s stock market
value. For societies, however, exploding prices for stocks, houses, raw materials
and land cannot count as a sign of real wealth generation, particularly if lower strata
of society lose access to them. Instead, this type of ‘growth’ is a sign of too much
liquidity and at the same time perpetuates its concentration even further. The
by-catch are economic bubbles and instability.
Understanding the world by comparing and ranking all of the monetized price
indicators instead of the underlying items does, however, mean that fictitious wealth
can continue to grow for a long time. Capital substitutability thinking allows for
Tobin’s social myth to be stretched so far that consultancy firms like the Boston
Consulting Group really issue forecasts like the following: “for Chinese children
114
3 Why the Mainstream Economic Paradigm Cannot Inform …