Cooking the Books 1

Carney rethinks capitalism

‘Rethink capitalism to solve the climate crisis’ was the title New Scientist (20 March) gave to an interview with Mark Carney, who until last year was the Governor of the Bank of England. Carney didn’t actually use the word ‘capitalism’, though he had done in a previous interview in 2019 with Jon Snow on Channel 4 which the Guardian (31 July 2019) reported under the headline ‘Capitalism is part of solution to climate change, says Mark Carney’.

Capitalism is a system of production for profit under which capital, in pursuit of profit, tends to flow into those lines of production that promise the most. Carney has no objection to this and wants to harness it by pointing to the opportunities for capital to make a profit from investing in alternative energy sources to fossil fuels:

‘… people recognise that if they can crack, say, green hydrogen as a fuel for trucks or direct air capture of carbon, there will be an enormous use for those and they or their company will make a lot of money.’

Or, as he told Jon Snow, ‘the most important thing is to move capital from where it is today to where it needs to be tomorrow… there will be great fortunes made along this path aligned with what society wants.’

The same as Boris Johnson blurted out to Tory MPs in March: ‘The reason we have the vaccine success is because of capitalism, because of greed’ (Guardian, 24 March).

For Carney, however, the profit motive is only ‘part of the solution’; the state needs to play a role too by using taxes and other measures to make investment unprofitable in fossil fuels and industries that burn a lot of them. He is no free marketeer and has criticised this ideology for turning capitalism from a market economy into a market society where, as he told New Scientist, market value ‘applies not only to material goods, but increasingly to the whole of life’. He wants ‘to get market value and societal values back into an equilibrium’.

But, to return to reality, could capitalism solve the climate problem? One thing is obvious – if it is going to move in that direction it will only be because it is profitable to do so and unprofitable not to. Carney is right to say that the state would have to intervene. Despite what the free-market ideologists say, capitalism could not exist without the state and never has. In fact, one of the state’s roles, as executive committee of the capitalist class, has been to intervene to impose the longer-term general capitalist interest against, if need be, the short-term interest of some capitalists.

This was the situation in Britain in the first half of the nineteenth century. The capitalist factory owners so over-worked their workers that they threatened the future supply of fit workers. The state had to intervene to limit the working day to ten hours. As Marx commented:

‘The immoderate lengthening of the working-day, produced by machinery in the hands of capital, leads to a reaction on the part of society, the very sources of whose life are menaced; and, thence, to a normal working-day whose length is fixed by law’ (Capital, Vol. 1, ch. 15, section 3c).

We are in a similar situation today with the ‘immoderate’ burning of fossil fuels. We can expect, as happened in 1850, the capitalist state to intervene. So attempts will be made, and are being made, under capitalism to do something about the climate crisis. But what sort of society is it that requires intervention to try to stop its economic system from menacing the very sources of life on which society depends?