Climate change,critical theory and economic democracy: ‘Small is Beautiful’ and the challenge to growth

Abstract

This article brings ‘Small is Beautiful’ into dialogue with Frankfurt School critical theory to explore reshaping capitalism considering the climate crisis. Nature’s subjugation to capitalist instrumental reason is discussed in terms of Schumacher’s arguments. The article contends that market-based emission reduction schemes privatise Earth’s life-sustaining capacity and underscores how current lifestyles depend on growth whilst commodifying environmental concerns. Capitalism, it is argued, relies on producing a continued demand for new products, requiring continued growth to sustain the ‘treadmill of production’. Technology disrupts markets but not capitalism, further serving accumulation. Economic democracy, as in Schumacher’s argument, is proposed as a solution which redirects economic activity by combining the worker/producer duality of the individual but notes the challenge of changing the growth-based status quo on which we rely despite the existential threat it presents.

Introduction

Schumacher’s 1973 work Small is Beautiful ¹ presents a puzzle to contemporary theorists of capitalism. On the one hand, Schumacher presents an impressively prescient and cogent work outlining the failings of post-war industrial capitalism in terms of both environmental degradation and the restriction of human flourishing. Schumacher identifies the core contradiction at the heart of capitalism:

The modern economy is propelled by a frenzy of greed and indulges in an orgy of envy, and these are not accidental features but the very causes of its expansionist success. (2011, p. 18)

The work outlines possible alternative solutions including changes in economic reasoning to identify natural resources as capital, rather than income; considering the life-sustaining properties of the world as a capital resource in themselves; philosophical education aimed at re-aligning social values away from economic growth; and the democratisation of property ownership and firm management through systems of co-operative labour.

On the other hand, Schumacher’s work presents a depressing conclusion to the modern reader. His rallying cry – ‘Are there not indeed enough ‘signs of the times’ to indicate a new start is needed?’ (2011, p. 58) appears to have had a very limited impact whilst the ‘signs of the times’ – certainly in terms of environmental destruction and worker alienation – appear at increasingly stronger magnitudes. To paraphrase Elster (1989) – if these ideas are so great, why aren’t we seeing more of them? This question recalls the central mission of the Frankfurt School which sought to uncover the reasons for the continuation of capitalism in the twentieth century despite the promises of socialist revolution or at the very least social democracy. In proposing an answer to this question, the Frankfurt School provided us with the tools to ask the same question of Schumacher’s work. This seems particularly significant for analysis of Small is Beautiful, as the reader will find multiple references to the power of ideas, of discourse and of hegemony. He notes the primacy of economic value as an evaluative criterion (p. 27), the duality of individuals as both producers and consumers and the conflicting rationalities of each persona (p. 84), the commodification of human labour and the natural world (p. 85) and the dominance of supposedly amoral technical rationality (pp. 79, 83). The ‘contradiction-crisis’ diagnosis drawn from critical theory that capitalism cannot reproduce its own conditions of survival in the environmental crisis that it has created and yet can only turn to continued growth as a solution (Gunderson, 2017, pp. 276–278) demonstrates a convergence with Schumacher’s conclusions as to the fate of capitalism.

This article brings Schumacher into constructive dialogue with critical theory. It applies the tools and understandings of critical theory to understand why the world is the way that Schumacher describes and theorises the challenges of changing to an economy that does not depend on the illusion of limitless growth. It also updates Schumacher’s argument through a focus on climate change due to greenhouse gas emissions as a primary existential threat to civilisation (Klein, 2014) and adapts Schumacher’s arguments around natural resource depletion to discuss the depletion of the planet’s ability to regulate global temperatures. The article is arranged into four sections. In the first, the argument revolves around Schumacher’s understanding of natural resources and discusses the subjection of nature to the instrumental reason of capitalism in Schumacher’s terminology of ‘acting economically’ (see Fuchs, 2017, p. 450). It highlights how market-based schemes to reduce emissions effectively continue this line of thought through privatising and commodifying the capacity of the planet to sustain life. It also highlights the dependence of our current way of life on capital and continued accumulation. The second section builds on this dependence, drawing on the ‘treadmill of production’ originally posited by Schnaiberg (1990, as cited in Gould et al., 2004) and describing how ecological and environmental concerns are commodified into products, and how hegemonic modes of thought make anything other than continued growth and accumulation unthinkable; principally due to the dominance in economic and social relations of capital and production. It also discusses the primacy of consumer choice in neoliberalism and the challenges of creating meaningful change. Building on the need for changing lifestyles, the third section examines technology and innovation, highlighting how technological innovations may disrupt markets, but do not disrupt capitalism, and how technology is developed in the context of, and for the purpose of, capitalist accumulation. The fourth section proposes a possible remedy – economic democracy. It is argued that economic democracy will yield different ways of thinking about the firm and the purpose of economic activity by combining the worker/producer duality of the individual into one role but notes the difficulties of building a co-operative economy on a large enough scale to meaningfully challenge the status quo on which we depend but are paradoxically also condemned by.

Schumacher, natural capital and the reification of nature

Schumacher argues that the natural world is largely made up of capital which is commodified and treated as income. ² This commodification of nature takes two forms. Firstly, there is effectively a finite global stock of natural resources. Schumacher argues that capitalism tends to treat such resources as capital in that their extraction and sale form income streams and they are extracted to maximise their profitability rather than conserved as a scarce resource. Once someone owns land, there are only regulatory impediments on their ability to extract resources from it. The only incentive to preserve the resource lies in its increasing scarcity and, therefore, price. Nature, in capitalism, exists only to be exploited – it has no intrinsic value other than the economic – existing only to be dominated and used for humanity’s purpose, with instrumental reason overtaking all others (Adorno & Horkheimer, 1972). In doing so, the mode of production generates a ‘metabolic rift’ (see Foster, 2000, 2002) which intensifies as increased production outstrips the ability of ecological systems to regenerate themselves.

The second form of natural capital that Schumacher identifies is the planet’s capacity to sustain life. Survivable levels of pollution in air, land and water; the rise in sea levels and loss of coastal land; and the global temperature are all ‘resources’ which are being rapidly consumed. Given the footloose nature of capital, it is difficult to regulate these commons. Each private producer will freely draw from the commons for their own gain with no reason to be concerned about the effect on the commons overall – that is not their concern (they do not own it, so have no reason to preserve it), nor their problem (the impact on them of their own activity is negligible), nor logical (if they do not draw from the commons, others still will). Crucially, these aspects of nature only have value in as much as they can be exploited – their life-giving value is not accounted for (Shiva, 2014, p. 24).

Private ownership of the natural world is seen in classical economic thought to have an almost natural quality to it – it is reified as something that it is not (Gunderson, 2017; see also liberal arguments around land ownership and their critique in Polanyi, 1985), but economics is a ‘derived science’ (Schumacher, 2011, p. 36) in which the ‘rules’ are essentially subject to normative philosophical questions, which Schumacher dubs ‘meta-economics’. This is a political creation – there is no reason why resources could not be treated as a commons. ³ In part, this is because natural resources are in a fixed territory so can be effectively governed by a national state both in terms of the enforcement of property rights and the regulation of their use. The existence of cap-and-trade schemes for dumping waste into the atmosphere also produce a system in which people buy up the natural commons of the atmosphere. This presents two problems. Firstly, as shown in the case of natural resources, this does not stop their exploitation. If it remains profitable to pollute, then there is no reason facing the producer to not do it, even as this steadily depletes the stock of the commons. Secondly, there is a mismatch between the natural world and the world of permits and licenses to exploit it. Whilst eventually in the case of natural resources, there will be nothing left to buy – wells dry up, mines are exhausted – there can be a granting of licenses to pollute regardless of the level of pollution. The rift between capitalism and nature demonstrates a fundamental incompatibility that cannot be regulated away (see Foster, 2000). Whilst the increasing effects of pollution will be felt, these resources cannot be physically exhausted and the collective action problem creating the logic of overuse will continue to apply. Any cap-and-trade system on carbon emissions or ocean dumping is imposing a political compromise rather than a natural limit, especially since carbon credits can be generated for sale without causing net reductions in emissions (Klein, 2014, p. 223). A carbon credit is a synthetic creation (Walters & Martin, 2012), the atmosphere itself reified as commodity to be bought and sold (Biro, 2015, pp. 32–33), at a price which Lohmann (2012, p. 1178) identifies as too cheap to induce real change (see also Klein, 2014, p. 224). As such it is disconnected from its ecological impact and other objectives (Pearse & Böhm, 2014, p. 332; Shiva, 2014, p. 25). Instead, it is priced at a level which creates an artificial scarcity in the market, and carbon traders have a continued interest in carbon emissions (Lohmann, 2012). In essence, there is a ‘basic incommensurability’ (Schumacher, 2011, p. 35) between various ‘goods’ – somehow a chunk of the environment to pollute is ‘worth’ a monetary value equivalent to a certain amount of any other type of good, and the market makes no distinction between the specific types of goods. Schumacher notes the lack of sophistication in markets which view resources only in terms of monetary value rather than in terms of their renewability or natural origin (Akbulut & Adaman, 2020, p. 3; Schumacher, 2011, p. 35). The tools of categorical immanent critique (Gunderson, 2017) show how the commodification of the environment fails to generate meaningful valuation due to the basic incommensurability of the natural world with human-produced commodities.

Proponents of market-based schemes tend to be of the view that these schemes create incentives to cut emissions to avoid paying taxes, fines or costs of credits. This in turn adds an extra cost to production and encourages investment in alternatives. There are two critiques of this idea. The first is in questioning where this incentive to invest comes from. Shareholders are mobile and can relocate their shareholdings to wherever is profitable and the thought of doing ‘less business’ is unlikely to be inviting (Newell & Paterson, 2010, p. 55). Their interest is primarily in short-term income – a failing of economic thought which, according to Schumacher, is guilty of a ‘methodological narrow[ness]’ (2011, p. 29) in part due to its lack of consideration for future consequences for consumers who are not direct parties to transactions (such as unborn future generations). If it remains profitable to pollute, then firms will continue to pay to do so, whether by buying up carbon credits from other firms or countries, or simply exceeding quotas and paying fines, especially at low prices (Lohmann, 2012). Their chief accountability is to their shareholders. As Schumacher (2011, p. 28) states, an economically good activity is what is profitable for those undertaking that activity, not what might be a good solution for society. What is rational for one firm is rational for others, so we might expect these fines to just become part of the cost of doing business, with an associated increase in the cost of the product sold (which might also be the impact of the effect of a less polluting method of production). Costs are generally carried by the consumer, in a regressive system which raises prices of essentials such as energy which make up a large proportion of poorer households’ consumption (Pearse & Böhm, 2014, p. 331). Here we might counter that a well-designed system would impose intolerably large fines, but fines, charges or taxes large enough to dent or destroy corporate profits and force compliance have a substantial social effect, discouraging investment and potentially putting jobs at risk. Governments may be unwilling to pursue such sanctions with many large industrial firms being, in essence, ‘too big to fail’, but such an approach might promote meaningful change in production methods and practices, at the cost of reduced profits. This, in harming corporate profits, also risks jobs and investment in the short term, and new jobs produced might not be adequate replacements. It could equally produce regulation-avoidant behaviours such as offshoring production. In a globalised economy, the autonomy of the state to regulate capital will always be limited by the willingness of that capital to tolerate legislation (Holloway, 1995, p. 127). In essence, market-based schemes are inherently conservative in character, aiming to modify the status quo through compromise and settlement. They do not fundamentally change the rules of the game nor induce the revolutionary changes in production that are likely necessary to address environmental crises (Lohmann, 2012; Newell & Paterson, 2010, p. 139). Ultimately a cap-and-trade system privatises the right to pollute atmosphere and oceans subject to a set of arbitrary limits, making it analogous to exploitation of other natural resources. They are taken from the commons, privatised and exploited.

The purpose of the article is not to propose a technical critique of cap-and-trade, or of any market-based system, but to highlight how the capitalist environment effectively prohibits large scale non-market interventions through its domination of patterns of thought. The legal fiction of corporate responsibility detaches the actions of firms from the actions of individuals, creating an unaccountable leviathan of capital which can only be expected to act in its own interests. It is, by definition, apolitical, as neoliberal capitalism severs economic activity from the sphere of the political (Holloway, 1995, p. 120). Meanwhile, the economic system swallows up the environmental bases of social reproduction, as clearly demonstrated in Karl Polanyi’s (1985) analysis of the ‘fictitious commodities’ of land, labour and capital. The market automaton he describes subjects the natural world to the logic of the market even though it cannot be classed as a commodity in a meaningful sense – it is not created or supplied for exchange. However, this commodification places the natural world firmly within the realms of the economic, and its inherent value as nature (this role being simultaneously aesthetic, moral and life-giving) is subjugated to its role in economic production (Klein, 2014, p. 224). Schumacher observes that the ‘new’ (for the time of writing) economic approaches of cost–benefit analysis which attempt to incorporate non-monetary concerns into economic decision-making are guilty of simply ‘measuring the unmeasurable’ (2011, p. 31). Whilst an environmentally damaging activity might require compensation and clean-up costs, there are simply things that cannot be undone. Animals and plants cannot be brought back to life, ecosystems may take decades to recover and the consequences of excess greenhouse gas emissions are diffuse but enormous in magnitude and cannot be quantified monetarily. Furthermore, there is no reason to separate the economic, social and ecological spheres of activity. Production serves a social purpose and is a social process – but the world becomes separated into the sphere of accumulation, organised via the market, and the sphere of social relations, organised by social and political means. Through the continuing development of capitalism into neoliberalism, the former colonises the latter in a supercharged version of Polanyi’s market society. The environment is separated from social bases of control and management towards economic ones – and to re-embed it into the social seems justifiable only, as Schumacher notes, where it is ‘economic’ to do so (2011, p. 27). Its value continues to be measured in terms of the economic, not the social, sphere, with the latter a mere enabling adjunct to the process of accumulation and growth. The doctrine of corporate social responsibility supposedly incorporates ethics (including environmental principles) into firm behaviours and makes them a part of the valuation of the commodities produced, but this in turn produces high-value niches of expensive and exclusionary ethically produced products and subjects the ethical nature of the product to the logic of exchange-value: it is only worth doing where it is profitable to do so (see Jacobsen & Dulsrud, 2007, p. 474).

Schumacher and the treadmill of production

This brings the argument to one of the larger barriers to the meaningful changes that Schumacher’s thesis prescribes – that of the conflict between economic well-being at the individual level in the short term and environmental stability in the long term. In theory, the move to a renewable and sustainable economy might produce material benefits alongside the obvious environmental ones – lower energy and transport costs being the primary driver of this, but potentially offset by more expensive food, housing or consumer goods and potentially the reduced buying power owing to declines in wages and employment as growth is purposefully slowed down or reversed (Foster & Clark, 2020, p. 247). However, as technologies have developed along a path-dependent, high-consumption and high-carbon route (including the information economy which produces significant carbon emissions – see Bridle, 2018), the adjustment costs are likely to be significant. We have the paradox that change needs to avoid economic collapse (Newell & Paterson, 2010, p. 8) yet also produce rapid results. This article will draw attention to the way in which neoliberal consumerist subjectivities create a set of conflicting desires – for meaningful change but also for stability, or perhaps rise, in living standards. The image of ‘the good life’ still revolves around a high-carbon lifestyle, and the prosperity of capitalists and their beneficiaries (i.e. many consumers of the global North – see Mies, 2014) rest on the production of excess emissions (Biro, 2015, p. 25). Flights are perhaps the most obvious culprit in which consumption is usually non-essential, but in which a rise in price would be seen as highly exclusionary. This, of course, is the point – to reduce demand via a price that accounts for negative externalities, but to preserve the right to pollute only for the rich via the price mechanism seems remarkably elitist and unfair, especially since international travel becomes a major signifier of status and individual development. Promoting the ideology of a consumerist ‘good life’ is necessary for the existence of the system, and reforms which affect people’s buying power or ability to buy the specific commodities which are necessary to address alienation and dissatisfaction in capitalism (Harris, 2022, pp. 157–158; Stuart et al., 2020, p. 202) will weaken the ideological hold of consumerism over society. Needs are manufactured (Marcuse, 1964) through beacons of materialist ‘spectacle’ (Debord, 1983, as cited in Stuart et al., 2020, p. 205) such that consumption is idealised and underconsumption appears to almost constitute a failure to live a meaningful life. Marcuse (1964) describes how media ties emotions, messages and attitudes to specific commodities, creating entire lifestyles based around consumption (Harris, 2022, p. 28). Jacobsen and Dulsrud (2007) note the relative rarity of ethical or political consumption, citing as reasons the lack of feasible alternatives, habit and convention, and practicality. Ethics of sustainable and green consumption conflict with other ethics, such as a morality of frugality (and in saving household money for other morally worthy things) as well as more practical budget constraints and the relative distance, both in time and space, of consumers in the global North from the impact of climate change makes the issue potentially less salient than more local moral claims, such as care for household finances. In a neoliberal system, patterns of consumption seem to be left to individual private choices rather than social and public responsibility (Jacobsen and Dulsrud, 2007 , pp. 478–479). Schumacher argues that the ‘First Commandment’ of economics – to behave ‘economically’ (2011, p. 30) means that it is simply irrational to pay more for products which offer no tangible immediate benefit to the consumer, and the wider social impact, already diluted by the sheer size of the economy and relative insignificance of one individual’s behaviour, struggles to enter the economic calculus. The gap between current behaviour and that necessary to avert the worst effects of climate change (the ‘sustainability gap’) is explained in part by discourses of climate change which range from the catastrophic, which makes any action appear insignificant and removes agency from the consumer, through to discourses of easy adaptations being made to mitigate the worst effects, through to optimistic denial. These discourses all serve to legitimise inaction due to the challenge of envisioning the alternative economies and societies necessary for solving the problem (Biro, 2015, pp. 19–20).

It is hard to escape a logic that environmental sustainability must carry with it a decline in consumption for the globally wealthy (including much of the global North). Capitalism has responded to this paradox in an intriguing way, effectively commodifying sustainability to produce consumption-based solutions to problems of overconsumption and creating a renewed ideology of capitalism (Fuchs, 2017, p. 450). Disposable items can be replaced with more durable ones (coffee cups, drinking straws and carrier bags, all of which raise environmental questions ⁴ ), imported produce replaced with locally grown (which can often have a higher environmental footprint), and carbon offsetting of travel, all of which help to create the illusion of sustainability with minimal impact on functionality; whilst cheaper alternatives remain. Acting sustainably becomes a consumer choice reflecting a set of values, with prices largely disconnected via the process of ‘greenwashing’ from their environmental impacts. In so doing, it loses its radical potential as a source of systemic change, becoming integrated with the individualistic values of the neoliberal system. It does, however, help to cure the dissonance between the horror of the existential environmental crises faced, and the individual responsibility one might bear for it by cleansing consumption through ‘offsetting’ and creating space for a fantasy of normality (Watt, 2021). It allows for a symbolic action that, to some extent, alleviates a sense of personal responsibility (Fridell, 2007; Gunderson, 2014, p. 115; see also Kristofferson et al., 2014 on the way in which public token efforts stymie further action). In a world where capitalism is the only game in town, and where the primacy of individual choice and ethical consumption take the place of systemic and structural change, ‘all we have to do is buy the right products’ (Fisher, 2022, p. 15). This becomes a form of repressive desublimation (Marcuse, 1964) in which the energies of resistance are directed through the gratification of consumption rather than into meaningful social protest, disguising the source of the problem (Harris, 2022, pp. 146, 157). Green consumerism, whilst recognising a problem, does not correctly diagnose it (Gunderson, 2017, p. 218). As Gunderson (2014, p. 114) argues, commodities are ‘now further granted mystical powers to create significant progressive changes in the market system itself’ such that the consumption of the correct commodities can somehow be interpreted as a political action against consumerism which ‘negate[s] radical alternatives in favour of market-based reforms’. Climate change is reified as a commodity (Biro, 2015) to be consumed passively as a spectacle but also to be rejected should we choose to, in favour of higher emissions and the immediate material benefits that they might bring.

Efforts towards sustainable consumption often tend towards an appeal to naturalism, highlighting nature as an aesthetic construct – things that are vaguely seen as ‘good for the environment’ may be harmful in terms of climate change-causing emissions or deflect attention away from more significantly harmful activities. The trend for replacement of plastics with products made from ‘natural’ materials, for example, masks the higher environmental costs of such products unless they are used in the most frugal way. Commodification of sustainability via greenwashing subjects the actual sustainability of any product to the arbitration of exchange-value, rather than use-value. This means that sustainable products not only need to have market appeal but their appeal to sustainability must rest on an aesthetic appeal to nature which may not reflect meaningful sustainability. The campaign to reduce plastic in the oceans, for example, might distract from the larger challenge of fighting climate change (Stafford & Jones, 2019) or even contribute to it. It is important to note that general reductions in consumption probably help to solve both problems. This is not to say that plastic waste is not a problem, and we should not let perfection become the enemy of the good, but that efforts to reduce it might not only lead to less sustainable alternatives being produced but also lead people to feel they have ‘done their bit’ – especially in terms of public observability – whilst not tackling the central issue (Kristofferson et al., 2014). Alternatives might look ‘greener’ through this appeal, contributing to the exchange value role of the sustainable commodity, but not its use-value measured as sustainability. Furthermore, we can also argue that such items do not reduce consumption and in some cases encourage it – if products are replaced before their obsolescence with ‘green’ alternatives, or if the greenwashing effectively removes all concerns about overconsumption (Newell & Paterson, 2010, p. 137). Sustainability is fetishised as the perceived environmental impact (an unfeasibly broad term) is reified in the exchange relation. Horkheimer (1946) notes that many in the affluent West do not feel major effects from environmental crises and degradation. This might go some way to mask the need for structural change and create a belief that the same processes that deliver that affluence can also be used to deliver meaningful change; whilst those more exposed to the ravages of climate change might see a need for more radical reforms and structural changes. In such a way, consumption is justified with a sustainability narrative, rather than commodification being truly demystified and the true costs revealed (Clarke, 2008, p. 1874). Moreover, for ethical consumption to change producer behaviour through changing demand patterns in the market, consumption must be at least sustained or perhaps even increased to produce this pressure. Gunderson (2014) notes the absurdity of trying to consume our way out of overconsumption through ethical choices, but under neoliberalism it is only influence within markets which can form legitimate political action since states cannot intervene in markets for social purposes. The only way to vote is to vote with your spending power – individual choices above all else. The oft-cited mantra that it is large companies that account for the bulk of emissions, therefore, demands on consumer behaviour are unnecessary, rather misses the point that they do so as an essential part of the process of delivering cheap consumer goods; and in a system driven by the market demand of the consumer, it is by both austere non-consumption and paying a premium for truly sustainable goods that this is likely to be changed. Many will also benefit from the growth of these companies through savings and pensions investments, so also need to consider the financial costs of ethical investment as well as ethical consumption. ⁵ It bears repeating that the accountability of the company, within reason, is chiefly to its shareholders, and its purpose is to generate profit. It would be unreasonable to expect it to act in another way and begs the wider question about what the firm is for and what the purpose of production is, beckoning towards alternatives to the current economic system rather than changes within it which are not compatible with its systemic logic, as discussed below.

The intention here is not to caricature consumers as short-sighted, selfish and unwilling or unable to comprehend the consequences of overconsumption. It is instead to argue that the agency of the consumer is not the absolute sovereign that liberal economics might assume it to be (Smart, 2012). Consumption cannot be separated from the system of production (Stuart et al., 2020). Above it was stated that pollution from firms was the response to the need to produce cheap goods to satisfy demands. However, this ‘treadmill of production’ (Gould et al., 2004) is not one driven by the agency of the consumer but by the structures and ideologies of capitalism itself (Gunderson, 2017). The ‘treadmill’ theory describes how as capital accumulates, the rate of profit falls such that increased production is necessary to maintain profits. For a given level of social welfare increased dependence on natural resources is required, each worker requires more capital to sustain employment, and increasing investment is required in an intensifying cycle of increased production (Gould et al., 2004, pp. 296–297). The basic logic of capitalism is that accumulation must be sustained (Gunderson, 2014) and barriers to accumulation circumvented, broken or transformed. Crises of low demand were overcome by innovations in personal credit; the crisis of organised labour overcome by state power, and the crisis of ecological barriers to consumption can be overcome in other ways. The survival of the capitalist system depends on continuing and increasing production (Smart, 2012, p. 43) and a dependence on debt-based consumerism (Barry, 2021). Critical theory allows us to locate the treadmill within the culture and ideologies of capitalism (Gunderson, 2017), seeing how the ‘gospel of mass consumption’ (Gould et al., 2004, p. 301) was created to induce demand for the supply that the treadmill produced, as ‘false needs’ are imposed by those in power to meet their interests (Barry, 2021, p. 736; Kellner, 1983, p. 68; Marcuse, 1964; Smart, 2012, p. 44). The firm is not the benign servant of consumer choice, but a powerful actor in capitalist systems (see Weber, 1978, as cited in Stuart et al., 2020, p. 200). As Gould et al. (2004, p. 302) point out, often it is the same company producing both an original product and the ‘green’ alternative with consumers having very minimal influence over how goods are produced. This is masked by the neoliberal system which ‘promoted a consumerist vision of the good life, within which ‘consumer choice’ constituted the supreme value’ (Smart, 2012, p. 36). The modern ‘culture industry’, drawing on Adorno’s (1989) critique, is one in which consumerism, materialism and newness and innovation are the markers of the good life. Commodities are consumed not for their use value but for the sake of consumption itself and therefore the consolidation of identities as consumers (Biro, 2015, p. 26). Advertising, for example, is not just about showing a specific product to be superior to that of the competition but about promoting demand in general (Galbraith, 1999; Stuart et al., 2020, p. 200). Demand is created and the options for consumers fixed in advance of exchange as production itself shapes consumption behaviours (Adorno, 1989, p. 128; Barry, 2021, p. 736; Jameson, 2000; Smart, 2012). Consumer choice exists only within a structure of accumulation and consumption which constrains meaningful agency (Smart, 2012). As Schumacher (2011, p. 28) notes, the only measure of whether something is ‘economic’ is whether it generates a profit, regardless of the other impacts that it might have. The economic claim trumps other claims. Growth must continue and new ideas that could prevent environmental catastrophe must be economical to even be considered viable – regardless of the environmental unviability of not doing them at all (Barry, 2021). Capitalism, as Newell and Paterson (2010, p. 8) observe, never knows when it has had enough.

Innovation, technology and choice

To overcome ecological barriers to accumulation, capitalism turns to innovation to save itself, as it has always done (see Schumpeter, 1976). The electric car represents not only a high-status commodity which showcases environmental credentials but accommodates dependence on cars and individual transportation and crucially, the car industry. Retaining this model of personal transportation is economic in Schumacher’s sense in that it provides profits for those involved, and this calculus of individual benefit for the firm is independent of its wider social benefit (2011, pp. 28–29). The intensive industrial production of batteries, steel, tyres and the continuing need for roadbuilding can be overlooked since this green technology promises to preserve our comforts and way of life. Technology, in the words of Foster and Clark (2020, p. 249), is a ‘deus ex machina’ that saves us from the negative consequences of consumption behaviour without requiring a change in that behaviour. This casts climate change as being apolitical and technological, rather than sociogenic. Arguing from Marcuse (1964), Feenberg (2005, p. 49) states that ‘the choice of a technical rather than a political or moral solution to a social problem is politically and morally significant’. In a world in which identity and consumption are closely linked and constitutive (Marcuse, 1964; Smart, 2012, pp. 44, 148), reducing consumer choice and consumption chips away at the building blocks of the neoliberal subject and the legitimisation of the consumerist system. The ideology of consumerism requires the myth of the consumer who makes the market in their image, and restrictions on this ability undercut the neoliberal logic that the market can internalise negative social externalities through consumer preferences. If we valued the planet, we would be willing to pay more and consume radically differently, and yet we do not, therefore consumption is favoured by the consumer. However, as the critique above has demonstrated, this is not necessarily the case owing to the instrumental rationality of the consumer being shaped by the structures of production and accumulation that they find themselves trapped within (Harris, 2022, p. 151).

The resistance to forcing changes in individual consumer behaviour is clearly shown in the case of the car – a potent symbol of individual freedom – and in terms of food sustainability and diets. The UK’s Climate Minister, Claire Perry, went as far as to argue that the government advising on diets – despite livestock farming being a leading contributor of global emissions – would represent ‘the worst kind of nanny state’ (Harrabin, 2018). Addressing the climate crisis requires engagement with the paradox that significant changes in individual consumption behaviours are necessary, but freedom of choice must be maintained. Policymakers are placed in the challenging position of either making environmentally friendly products and production cheaper or making damaging consumption more expensive (politically challenging since it politicises the price mechanism by punishing and rewarding certain groups, imposing a new constraint on perceived freedoms to choose – for example, the opposition to tax increases on fuel to discourage consumption and the clash with keeping energy prices low). In the meantime, their success in managing the economy is communicated to voters via a range of measures such as Gross Domestic Product (GDP) growth and inflation (Barry, 2021; Stuart et al., 2020). To see a reduction in GDP would undoubtedly be seen as a failure of economic management by governments but it is precisely the requirement of sustainability in the affluent West that production be reduced significantly (Klein, 2014; Mies, 2014, p. 254; Stuart et al., 2020, pp. 210–211). Nonetheless, governments seeking re-election must keep inflation low and GDP growth high. As in Marcuse (1964, p. 55) forcefully states, ‘the insanity of the whole absolves the particular insanities and turns the crimes against humanity into a rational enterprise’ – we see instrumental rationalities of voters as consumers, firms and governments collectively creating an outcome that the term ‘irrationality’ seems too benign to describe.

Technological innovations as responses to climate change are inadequate without systemic change. Capitalist innovation stems from the desire to continue, or accelerate, accumulation, and as such represent new means of domination (Adorno & Horkheimer, 1972; Marcuse, 1964). Innovations that improve efficiently might save energy but also make goods cheaper, and this merely encourages more consumption (Foster & Clark, 2020, p. 247). The basic logic of production and consumption remains unchanged, particular since the development of technologies is inseparable from the economic system in which it stems (Delanty & Harris, 2021; Gunderson et al., 2019; Marcuse, 1964). The role of new technology can only be understood in the context of the society in which it exists (Horkheimer, 1946). As Malm and Carton (2021, pp. 21–22) note, the sustainability of human life is not something that can be bought and sold, and technologies become valuable only where they produce commodities for sale. In essence there is no money in saving the world, but significant profit to be made in the current conditions (Klein, 2014, pp. 251–252). Technological fixes for climate change allow for continued control and domination of the environment (Gunderson, 2016), using existing systems to reproduce ‘business as usual’ rather than meaningful engagement with humanity’s relationship with nature, allowing continuation of polluting activities with a promise that the new technology will save tomorrow from the harms caused today (Malm & Carton, 2021). A dependence on geoengineering technological fixes as a last-resort saviour reduces the urgency and scope of mitigation (Klein, 2014, p. 283; Malm & Carton, 2021, p. 13) and does not engage with the wider political and social questions that new technologies raise – how they should be governed, and the impact they might have on ways of life (Bridle, 2018; Delanty & Harris, 2021, p. 91; Gunderson et al., 2019; Harris, 2022, p. 154; Marcuse, 1964). Innovation does, however, present new opportunities for accumulation through privatisation of provision. This is not only true for geoengineering projects – many proposed technologies for the reduction of emissions imply a monopolistic control of intellectual property or overall provision, such as futuristic models of mass transit systems, new cities, energy generation and storage or colonisation of other planets (Gunderson et al., 2021) – this complexity seems to require inequality (Bridle, 2018). Horkheimer perhaps puts it most succinctly – ‘the more devices we invent for dominating nature, the more we must serve them’ (1946, p. 97). There is only a technological rationality given for innovation as a means of escape from the consequences of climate change – it presents a ‘problem to be solved’ in a one-dimensional manner without asking meaningful questions about the origins, nature and significance of the issue owing to the embeddedness of technological innovation in a capitalist system (Gunderson et al., 2019). We see a path-dependency as increasingly complex technological solutions are brought to increasingly complex problems whilst overlooking systemic context (Bridle, 2018), reproducing that same system of mastery and domination through an ‘all-encompassing instrumentality’ (Cooke, 2020, p. 1169).

Economic democracy to the rescue?

Schumacher devotes several chapters at the end of Small is Beautiful to questions of co-operative ownership. He notes that shareholders are not ‘functionally necessary’ for work, the injustice of profits being appropriated by shareholders alone, questions of ‘autocratic’ management, and the need for what he terms ‘socialisation’ of the firm – the need for the firm to recognise, respect and enrich its social environment (2011, pp. 223–224). He describes a system whereby large firms undergo a process of mutualisation on the argument that large enterprises are extractive enterprises, taking resources from society to make profit, without giving anything commensurate back to society. Conditions of social reproduction are key to their continued operation, but they continue to chip away at these conditions. Within the confines of the overriding drive for consumption-driven accumulation of capital, there can be no other way. Economic democracy, and new models of ownership, seek to break up these overriding incentives materially and culturally, offering a material basis for change (White, 2019). The scheme Schumacher proposes (2011, pp. 239–247) is a radical one, proposing that all firms over a certain size become publicly owned, in the sense that the shareholding is doubled with the new free shares being held by a local public body, integrating the firm with the community. He does not propose that the public body actively co-manages the firm, but that it acts in an oversight role which can observe and raise concerns.

We can ask if this change in ownership structures would really change the economic logics that Schumacher describes. Would profit continue to be the key motivator despite Schumacher’s claims of the incommensurability of the various goods with which people are concerned? These are ultimately empirical questions. Furthermore, in the context of climate change, the affected interests are global, not local, so whilst the local public body might put a stop to locally harmful practices it would potentially have less interest in climate change and more interest in larger corporate profits that can be spent locally on public services and community projects. Moreover, the argument remains – why would any company carry out its operations in a state which required profits to be redirected in this way, and why would states adopt such legislation rather than compete for capital (see Holloway, 1995)? One possible response is Schumacher’s claim that there will be an incentive for firms to remain small, under the threshold required for public shares. A multiplicity of small firms would lack the coordinated power and monopoly control of larger firms, limiting their political power. Their social embeddedness, especially if they were co-operatives owned and run by their workers and communities, could also discourage the mobility of capital (Mies, 2014, p. 257).

White at al. (2017, p. 36) note the importance of democratising production and subjecting economic power to social control, and democratic firms are critical to this strategy. Schumacher highlights the role of co-operative ownership ⁶ in encouraging social and economic responsibility. Co-operatives call into question the purpose of a firm and whether it is simply a profit-making machine or something that exists to meet a social need for a product, for employment or for a service (Johanisova & Wolf, 2012). If it meets this need but in doing so harms society, such as through environmental degradation, it cannot be meeting this purpose effectively. The co-operative principles (ICA, 2016) include a broad ‘concern for community’. White (2019, p. 50) notes the potential, often not discussed, possibilities of worker knowledge and participation for better production and supply chain practices. Furthermore, co-operatives are less likely to pursue growth as a sole objective, instead being more inclined to workplace policies which may be less profitable but deliver social benefits for workers, community and the environment, such as reducing working hours (Akbulut & Adaman, 2020, p. 4; Gunderson, 2019; Stuart et al., 2020; Trainer, 2012). Schumacher begins to address this in his identification of the consumer/producer duality of the individual (2011, p. 84). In the capitalist firm, the worker may be a ‘producer’ but lacks agency due to the hierarchical nature of the firm. The firm acts according to the logic of the producer in which profitability (via efficiency) is all that matters. If the producer acted like a consumer – for example, making demands for more environmentally sustainable production or even for less production – they would be acting ‘uneconomically’. However, consumers are free to make any demand, and it is on this point that liberal economics rests, despite the critique made above that it in fact the forces of production which govern the choices that consumers make. Nonetheless, the co-operative plays an interesting role here in that it unites these two roles to some extent. The producer and consumer are the same person playing two totally divided roles owing to their alienation and disempowerment in the process of production. In the co-operative, they are far less disempowered and are therefore responsible for the decisions that the firm makes. Whilst this is also true of managers in any firm, who are also consumers, they ultimately hold a responsibility to shareholders or owners of the firm, which they will believe to be based on profit maximisation. For the co-operators, there is no ultimate responsibility than themselves and their interpretation of community interest. This autonomy and member control is also a key part of co-operative principles (Akbulut & Adaman, 2020, p. 4; ICA, 2016). Therefore, there might be a sense in which co-operative membership would introduce new a different management ethic by bringing consumer principles into production. As Gunderson (2014, p. 115) states in arguments in favour of democratic control of food production, ‘direct deliberation forces once purely instrumental sub-systems…to confront more substantive forms of reason and be structured to meet collective, substantive ends’. It is possible that new economic institutions could fundamentally alter neoliberal subjectivities to produce individuals who are willing to engage in co-operative and reciprocal forms of production and exchange (Akbulut & Adaman, 2020, p. 7). In terms of the utilisation of technology, new forms of political economic organisation could allow technologies such as carbon capture to be used not for the advancement of business as usual but for a truly social purpose and shape their development and deployment accordingly (Delanty & Harris, 2021, p. 91; Feenberg, 2017; Malm & Carton, 2021; Marcuse, 1964). Feenberg’s (2017) conception of ‘democratic interventions’ highlights how technology exists in a specific material and ideational context. New technologies are systems composed of many entities, containing within them tools of emancipation as well as domination. The same technologies creating the opportunities for domination by capital can be captured and harnessed collectively by new networks concerned with questions of production, inspired by what Feenberg terms ‘participant interests’ rather than wholesale resistance (2017, p. 8) in which democratic needs can confront and resist instrumental rationalities (see also Feenberg, 2005, pp. 55–56).

However, this might be the case for existing co-operatives, which could attract those with a strong personal sense of social and political responsibility who actively seek alternatives and are willing to pay the costs of them. The niche of sustainable practices that co-operatives might currently occupy exists as a counter to that of the rest of the economy, and in an economy in which co-ops represented the mainstream their countercultural appeal would be lost. This could result in goal degeneration (Jervis, 2022; Cornforth, 1995) in which the social purpose of the co-operative is lost. Furthermore, without co-operative common ownership of natural resources (Johanisova & Wolf, 2012), many of the arguments around overuse of resources made earlier in this article could still apply – they remain commodified, and whilst co-operatives might be better stewards of the natural world than conventional firms owing to their social purpose and embeddedness, they might ameliorate rather than totally solve the problems raised.

Finally, the ‘treadmill of production’ is kept running by conventional capitalist firms, not co-operatives. In a capitalist society, standards of living are paradoxically dependent on that cycle of overproduction and overconsumption whilst also being destroyed by it. The needs may be ‘false’ in Marcuse’s (1964) sense, but this does not mean they are not felt and valued. The system could theoretically change, but with considerable shock and changes to people’s modes, standards and means of living. The dominant hegemonic forces that govern our culture and economy are those of capital and its logics of accumulation and our society is built around growth (Trainer, 2012). A society living under capitalist culture has a dependency on and subjectivity to that system. Those with existing interests seek to protect themselves, and in the ‘imperial mode of living’ (Brand & Wissen, 2021), it is not simply a cartoon villain capitalist who has an interest in the continuation of exploitation, environmental degradation and overconsumption. To summarise this line of argument – the medicine of economic democracy may well be an effective one, but the shock of taking it and the power of the status quo might prevent meaningful change (Stuart et al., 2020, p. 213). On the other hand, perhaps it is not a single systemic change that is necessary. Co-operative economies would encounter a range of their own problems, but perhaps offer a symbol of hope, a pedagogy of alternative organisation, and a workable mode of resistance (see inter alia Jervis, 2022; Danner, 2016; Gunderson, 2019).

Conclusion

Schumacher’s vision of a radically transformed economy, less growth focussed, owned and run by the people it is designed to serve, and treating nature not as an endless resource to be exploited but as a key part of our own species’ existence, is an inviting and perhaps necessary one. This article has explored the relationship and similarities between Schumacher’s work and the insights of the Frankfurt school of critical theory. The logics of capital are logics of dominance over nature and accumulation for its own sake. The instrumental reason locked into this system allows for little other thought. Both state and consumer options to try to change the system via the market will consistently run up against this instrumental reason, reinforced by cultures of consumption in which the very will to act differently is commodified and subject to a neoliberal myth of the consumer as sovereign despite the power of capital to keep producing, selling and accumulating. Technologies, far from offering a solution, simply offer new commodities, perhaps buying time but not fundamentally reforming the system. The argument rests on a paradox – Schumacher’s vision is necessary but perhaps impossible in this context. Economic democracy is posited as a possible solution, extending Schumacher’s own arguments, with co-operation as a mode of economic organisation seeking to re-embed, in Polanyi’s (1985) terms, production with the ultimate goals of economic activity – to provide for wants and needs. Whilst this faces its own challenges, explored elsewhere (see inter alia Jervis, 2022; Elster, 1989), it potentially provides a means by which the ‘logic of production [which] is neither the logic of life nor that of society’ can ‘brought under control’ to take its rightful place as ‘a small and subservient part of both’ (Schumacher, 2011, p. 249).