[R-G] [BillTottenWeblog] Manufactured Scarcity

[Bill Totten]

The Profits of Deindustrialisation

Green Capitalism: A new paradigm of sustainable production or a license
to shut down plants and print money? A look at the case of influential
pioneer in increasing profits by cutting

by James Heartfield

Mute magazine - Culture and politics after the net

www.metamute.org (April 10 2008)


Of course companies that sell climate change solutions stand to benefit
as greenhouse gas emissions come to bear a price tag.
-- Daniel Esty Hillhouse, Professor of Environmental Law, Harvard University


The corporate raiders of the 1980s first worked out that you might be
able to make more money downsizing, or even breaking up industry than
building it up. It is a perverse result of the profit motive that
private gain should grow out of public decay. But even the corporate
raiders never dreamt of making deindustrialisation into an avowed policy
goal which the rest of us would pay for.

What some of the cannier Green Capitalists realised is that scarcity
increases price, and manufacturing scarcity can increase returns. What
could be more old hat, they said, than trying to make money by making
things cheaper? Entrepreneurs disdained the 'fast moving consumer goods'
market.

Of course there is a point to all this. If labour gets too efficient the
chances of wringing more profits from industry get less. The more
productive labour is, the lower, in the end, will be the rate of return
on investments. That is because the source of new value is living
labour; but greater investment in new technologies tends to replace
living labour with machines, which produce no additional value of their
own.  Over time the rate of return must fall. Business theory calls this
the diminishing rate of return.  Businessmen know it as the 'race for
the bottom' - the competitive pressure to make goods cheaper and
cheaper, making it that much harder to sell enough to make a profit.
Super efficient labour would make the capitalistic organisation of
industry redundant.

Manufacturing scarcity, restricting output and so driving up prices is
one short-term way to secure profits and maybe even the profit-system.
Of course that would also mean abandoning the historic justification for
capitalism, that it increased output and living standards.
Environmentalism might turn out to be the way to save capitalism, just
at the point when industrial development had shown it to be redundant.