Climate Kalecki, capitalist autonomy, and the non-ending of the world
A debate between Richard Seymour and Adam Tooze on the mess we're in illustrates the problems with sovereignty as a solution to climate change.
A debate has opened up in the New Statesman between Adam Tooze and Richard Seymour that I thought started to bring out some of the strategic dilemmas the ecological movement – or, to be honest, humanity in general – now faces. Tooze’s essay argues that we are facing (in his words in a companion piece) a “new kind of crisis - a political crisis of the energy transition.” The push-back against this transition he thinks we should dub the first “climate Kalecki” moment, in reference to the Polish economist, Michal Kalecki, and his identification of the political push-back that government efforts to achieve full employment would produce. Tooze says the parallel is “not exact”, but what struck me about its use was how much it revealed about a specific conception of capitalism, and therefore of the kind of actions necessary. Tooze describes himself as a “self-confessed liberal Keynesian” and his arguments here begin to draw out the limits of this state-centred reformism.
Kalecki was an undoubtedly brilliant Polish economist who foreshadowed Keynes’ most important work, but who never fully got the credit for it from the economics establishment for the cardinal sins of (1) writing in Polish and (2) drawing the correct radical conclusions from it. Much of what Kalecki wrote about, in terms of developing an analysis of what we now call the “macroeconomy”, can be thought of as a direct development of volume 2 of Marx’s Capital, and Kalecki was unabashed in his foregrounding of the conflict between those who work, and those who pay them to work – between workers, and capitalists.
What his economic work demonstrated is that this antagonistic relationship could be reconciled at the level of the macroeconomy, and indeed must be reconciled at the level of macroeconomy if capitalism is to continue functioning at all. The conditions for the successful “reproduction” (in Marx’s terminology) of capitalism, allowing it to continue into the future, are that the different sets of monetary payments made by different actors in the economy balance out. I am paid; I spend the wages I receive; some capitalist therefore gets this money payment back to them, and uses some of it to pay workers and buy machinery; thus the cycle continues.
If workers spend all their earnings, this movement of money forms a complete circuit of monetary flows. And if capitalists invest all of their earnings back from workers, the same applies. But workers will save some part of what they earn, and capitalists will take some part of their earnings as accumulated profits. Kalecki demonstrates, at the level of the whole economy – the macroeconomy – that this implies capitalist profits will be equal to capitalists’ investment, plus capitalists’ own consumption. Or, as Kalecki put it (and he had a way with aphorisms): “workers spend what they earn, and capitalists earn what they spend”.
Now the reason this matters is that having set up a model of an economy that functions like an endless circular flow of income, existing in a pure steady-state with zero growth (what Marx called “simple reproduction”), Kalecki creates the possibility of growth by introducing leaks and breaks from that circuit. When workers’ save, or capitalists spend, they create a pool of funds for investment, out of which profits can be drawn. Since Kalecki (for simplicity, but also matching reality) assumes workers’ savings are basically zero, the primary driver for profits becomes decisions made by capitalists. It is investment by capitalists that drives profits – not, as in the classical Marxist system, profits that drive investment. Capitalists are not, as in the Marxist system, mere “functionaries of capital”, slaves to profit; instead they have an uncanny agency.
What Kalecki’s specification of the conditions for investment in his model of the macroeconomy alert us to is a species of voluntarism. For as long as capitalists believe the conditions for investment are propitious, they will invest, thus creating more profits and more growth. The hinge of the system, as in Keynes’ (somewhat less developed) General Theory account starts to look like the “animal spirits” (Keynes’ phrase) of the capitalists themselves.
This has political implications, which Kalecki develops further in the piece Tooze actually references, his brilliant 1943 essay “Political Aspects of Full Employment”. It is probably Kalecki’s most-cited work, cropping up frequently since the 2008 crash, since it is clearly-argued and appears extraordinarily prescient, describing how full employment under capitalism will end in political crisis. Kalecki argues that, whilst a capitalist economy could achieve full employment – his modelling, like that of Keynes’, demonstrates as much – this will not be sustained because full employment hands too much power to workers, threatening the ability of capitalists to control production. Business interests will therefore seek to undermine full employment, and so it is not sustainable (in the long run) under a capitalist economy. (I’ve leaned on Kalecki’s argument here, in describing the fundamental problems with demands for Job Guarantees, whilst some years ago Aditya Chakrabortty used the same argument to describe the logic of austerity.)
Tooze uses Kalecki’s argument to make the point about the dangers of crisis talk to progressive movements on climate change. Noting that the energy crisis has been used by the fossil fuel lobby to argue for increased investment in high-carbon generation, under the claim that energy prices are spiking due to a premature shift to low-carbon production, he presents an (basically entirely correct) account of why investment in low-carbon energy should continue.
Voluntarism
What interests me here is the voluntarism. By making capitalists’ decisions over investment the lynch-pin of the system, Kalecki sets up a model of capitalism in which the intentions of capitalists themselves become the driver of progress. It is the autonomous decisions of capitalists that ultimately determine the functioning of the system as such. It is why Kalecki makes the move, in his 1943 essay, from describing how the economy functions when left to its own devices, to talking about the politics that the functioning of the economy engenders. Politics is the ultimate zone of autonomous decisionmaking; the state, the ultimate form of sovereign authority.
This dependency on the decionmaking of capitalists, it can be noted as an aside, is something of a recurring weakness built in to the various version of the circular flow model of capitalism: Joseph Schumpeter, whose baseline model of capitalism is also a circular flow of money between agents, has a strikingly similar account of capitalist growth in which the disruptive entrepreneurs shake the otherwise stable system through, creating new avenues for growth and prosperity. (He does, however, particularly in Capitalism, Socialism, and Democracy, offer a sociological explanation as to why this entrepreneurial drive fails over time – primarily as a result of a growing bureaucracy and its attendant middle class. They fear “creative destruction” and so, over time, capitalism loses its dynamism.)
In the case of Tooze’s reading of Kalecki, there are two weaknesses: first, most directly, is the operation of a faintly conspiratorial view of society in which cunning elites “never let a serious crisis go to waste”, exploiting the opportunities opened by systemic failures to push for their own interests. (There is a parallel here with Naomi Klein’s argument in Shock Doctrine, which suggests neoliberalism itself was the cunning creation of elites prepared to exploit a series of crises to their own ends.) It goes without saying that elites, and fractions of elites, do indeed push what they think are their own interests, as Seymour, in his reply to Tooze, points out; it is less clear that their attempts to do so actually succeed, or that these attempts should be read as the most important feature of the current conjuncture.
Second, and less obviously, is the more fundamental problem that Tooze offers, by way of contrast to bad elites exploiting a crisis for their own ends, the prospect of a good elite, who will carry out the necessary adjustments to capitalism ahead of some final disaster. This is, I suspect, where Tooze the would-be reformist has a surprising affinity with the would-be revolutionary, Andreas Malm, in a broadly sympathetic review of Malm’s prodigious recent writings on the climate and the pandemic. Both focus on the necessity of a sovereign actor who can satisfactorily resolve the situation to the benefit of wider humanity: in Tooze’s case, the existing state; in Malm’s case, some new, future state. In both cases, it is the action of a sovereign power, acting as a sovereign power – that is to say, not merely providing the framework of laws or regulations by which others can act, but actively choosing to attempt to reshape society – that we can choose to reshape society and so begin to resolve the present crisis. Against the demands of the market, in the form of either Tooze’s “liberal Keynesianism” or Malm’s “War Communism”, the state can impose an alternative path for humanity. Politics – good politics – will save us from bad economics, in this view.
Sovereignty
I want to suggest that the crucial problem here may well be not an absence of sovereignty – if only the state was more capable, all this could be solved! – but its presence, and increasingly its presence in the form of a relationship to capital (on one side) and to nature (on the other). I’ve flagged before that one of the reasons I think we should be thinking about the end of neoliberalism is the reappearance of sovereignty – but that this isn’t simply the re-emergence of the state as an autonomous actor, but also the appearance of forms of business organisation that have increasingly quasi-sovereign capacities, in the form of Big Tech. This places the crucial element in the closure of neoliberalism as the dynamic of the emergent relationship between the leading elements of capital, and the existing states: it will be the presence of competitive relationships, on a global scale, that shape this relationship nationally, and also condition the forms of sovereignty that emerge from it.
But what also needs flagging is the relationship of forms of sovereignty to nature, which (quite strikingly) increasingly take the form of negotiations between sovereigns over the terms of their collective relationship – in the form of the climate change negotiations we’ve just seen, most obviously, but also in the related negotiations over biodiversity, say. The crucial problem here is not simply that the sovereigns we have are too clearly attached to national and specific interests of national capitals. This seems undeniably, obviously true, and also opens the space for a kind of “liberal Keynesian” green reformism: a better sovereign, separated from these specific, national interests in promoting accumulation would promote better forms of governance, nationally and globally.
(The search for such an environmentally-minded sovereign may, perhaps, account for Tooze’s surprisingly sympathetic view of Xi Jinping’s announcement, last year, that China would be revising its decarbonisation target to 2060. It is of course true that the announcement matters, and that the shift would be big, if it is delivered: it’s just not so clear that even the Chinese state would have the capacity to deliver it, as events at COP26 tend to confirm.)
The difficulty here is that, very specifically, the increasing instability of the natural world itself is a challenge to any version of sovereignty, at least in the sense that this would be some power with the capacity to act autonomously on the basis of its knowledge about the world. And not only is this instability a challenge for capital – directly imposing costs and risks on the process of production – it is a challenge for the presence of sovereign power. If we can imagine either a capital that encompassed the whole globe, or (which amounts to the same thing) a sovereign power that did the same, that instability would persist.
But since capitalism exists on a global scale, to reframe the point, we cannot assume that here is where Economics ends, and Politics begins: we cannot assume that there is some point at which, because capitalists have a high degree of autonomy, so, too, can a state; instead, under conditions where capitalist relationships of production still prevail – as they do and will do globally, even if some state wants to decree them ended within its own territory, “War Communism” style – it is because capitalist and states do not have autonomy that economics still matters.
Radical uncertainty and limited autonomy
Nor, to make the really fundamental point, would the actions of any supremely powerful agent – a well-behaved capital, or a Good Sovereign – necessarily do much to restrain ecological decay. It is the nature of climate change that actions taken now will scarcely have an impact relative to the accumulated damage over the last two centuries or so. More than this: rising environmental instability in general creates the risk that any actions taken now will become increasingly likely to develop blowback in the decades hence.
This strikes me as the best single argument against geoengineering: that we do not know what the other consequences of, for example, continually spraying sulphur into the upper atmosphere would be – but that when the environment we inhabit is already changing, our estimates for what these might be start to become increasingly uncertain. The number of stable parameters we can rely on for future modelling is reduced: everything we do starts to become subject to a haze of radical uncertainty. Far from being “overdetermined”, in the metaphor Seymour employs – presumably, as Tooze notes, following Althusser – the situation is underdetermined: we have too little evidence to be able to draw any reliable conclusions and, as instability worsens, this underdetermination will worsen.
This uncertainty is a primary reason why the metaphor of “crisis” is unhelpful, since it denotes something that is a deviation from the norm, and one which has a definite beginning, middle, and an end. Likewise the references to some time-delimited point by which action must be taken: “the carbon clock is ticking”, as Tooze put it. This idea of limited time is a continual reference for the environmental movement in general: that we have seven years to save the planet, or four years – the last is from 2009, illustrating the point that not only are these predictions likely to be as demobilising as they are mobilising, they are also likely to be just plain wrong.
The world has not ended yet, and it probably won’t. There is not some time-delimited crisis against which a concerted set of actions now, by some concerned sovereign, will be able to ward off the worst of what is to come. There is simply our existence as it now is, probably getting worse and more unpleasant, and the primary question we face is how we deal with it. Of course, it is certainly plausible that one of the many and varied ecological tipping points is actually reached some time soon, and we plunge into a really radically catastrophic new situation. But it is more likely, on the central forecasts that we have, that things will get worse in a less-than-cataclysmic fashion, from now until forever.
This isn’t a counsel of despair: it should act as spur to action immediately, since whatever we do today has long-term consequences. It does, however, suggest that the framing of the ecological collapse we are living through as akin to a war, or some other event with a determinate end and conditions for winning or losing, is quite wrong. It suggests that adaptations and changes made now should take priority over One Big Push-type reasoning.
This should suggest that constrained versions of sovereignty might be the most useful to us. We need some large-scale investments, and we can say this with a high degree of certainty: the conversion of energy systems to a low-carbon setting will require investment on a grand scale. But beyond the more obviously technical questions – how to produce electricity at lowest possible greenhouse gas emissions? – we run rapidly into other, further sets of issues: how to minimise resource use in making the conversion – those batteries require lithium, after all; how to minimise biodiversity loss, with its uncertain future consequences; how far we might need to alter how we live and work to do the same thing.
So in conditions of increasing uncertainty, the “real challenge, the truly political question” is not, as Tooze says elsewhere, “to agree what we wanted to do and to figure out how to do it.” It is to agree what we do not want, and work on ways to avoid that. It is to minimise future impacts, against the radical (and increasing) uncertainty as to the future. This is not, to repeat, an argument for inaction: far from it. It is an argument that the scale of action should be further-reaching in terms of our social relationships – disrupting, for example, the standard working week in favour of reductions in working time – whilst, as far as possible, minimising the further disruptions in our collective relationship to nature – for example, in prioritising low-impact care work over variants of high-impact technological investments. It would mean, for instance, developing the circular economy – encouraging and supporting the reuse, recycling, and reprogramming of our existing material output. Or it would mean devoting our research efforts not only to (relatively long-shot) breakthrough technologies like cold fusion, but to the immediate, practical changes that can be made to existing technologies that minimise resource use.
Back to Kalecki. If our view of capitalism is that it is investment that produces the dynamism, then of course we can frame the current moment as being primarily one of the “energy transition”: that is, a problem primarily of delivering investment of the right kind and at the right scale. If in the place of capitalist “animal spirits”, we can substitute the Good State, capitalism as such can continue on its path. But if we identify that the ecological moment today is far bigger than the question of energy, and that the continuing presence of capitalist relations of production and exchange are themselves a source of further ecological damage, we cannot only substitute a Good State for the Bad Capitalists. We need a more fundamental change in the relationship of people to each other, and to the natural world we inhabit.
I saw The Green Knight earlier in the week, and I really can’t recommend it highly enough: a superb parable on the relationship between our autonomy as individuals to the implacable forces of nature. Which is, you know, appropriate. (If you’ve seen the film, this interview with director David Lowery is worth a read, but littered with spoilers.) Meanwhile, Politics Theory Other continues to be essential listening with this interview with AI researcher Kate Crawford: “Neither Artificial, Nor Intelligent”. Finally, Peter Thiel was profiled by the New Yorker, noting (unbeknownst to me) his enthusiasm for Rene Girard.