Ecoblogi – A Blog by Daniel Elkama

Where did capitalism start? It is often said that Watt invented the steam engine in 1769 and the first factories were built that required labor and capital. However, the steam engine was developed already in the 17th century, and capitalism did not start like this. Capitalism was born when, as a result of colonialism in the 16th century, plantations cultivated and produced valuable luxury products of the time, such as coffee, tobacco, cocoa, etc., and other valuable goods were acquired, such as ivory. Large merchant ships, capital and companies were needed to transport these and the slaves on the plantations. The Dutch and British East India Trading Companies were the first joint-stock companies. The British East India Company was founded in 1601 and the Dutch in 1602 and they were the world’s first megacorporations, which even commanded kings and ruled colonies. The plantations themselves also required large capitals and numerous joint-stock companies were created. World trade and capitalism therefore began with luxury goods, plantations and the slave trade.

It is true that factories and mass production of goods also required large capitals and this was the next stage of capitalism. These capitals would not have been possible without the first stage of capitalism with its plantations, slaves and trading companies. Slaves were replaced by workers, whose lives resembled slavery. Workers had almost no rights and their life expectancy fell to about 40 years. Industrialized cities were polluted pigpens. Slavery itself also continued, for example In the USA until 1865. The Confederacy, or the southern states of the USA, was prosperous and its economy was based on the work of slaves brought from Africa in the cotton and corn fields. Slavery was abolished in French West Africa in 1905. The Belgian Congo, which belonged to King Leopold as a private property, manufactured rubber for the increasingly common car tires at the turn of the 1800s and 1900s. Up to a million people died. Over 11 million slaves were shipped from Africa to the Americas over a 400-year period.

Slaves, land, raw materials and workers were seen as resources in order to obtain commodities to be sold at high prices to consumers. This is one of the root causes of the destructive problems of capitalism, everything is seen as resources, and not, for example, land as an ecosystem, trees as valuable natural objects and slaves as people with the right to live free. Capitalism is therefore based on a delusion that does not see the value of things and individuals, but rather sees them as things that have economic benefits: nature is just a storehouse of raw materials, trees are cubes and land is acres. People are labor and consumers. Another delusion is how capitalism creates economic value for things. A product is branded or so-called “luxury” is sold to people at an inflated price. Often people do not even need these products for anything or to feel good. Useless trinkets are sold to people at a clearly too big price. Advertisements program people to buy and consume. A Gucci bag that costs €1,000 is in no way better than an ordinary bag made by a craftsman for €40. The price is full of air. It is all about brand value.

Next, I will present three fundamental problems why current capitalism does not work, and what is needed in its place is a new economic system that seeks to create happiness and well-being for all, that respects human rights and the intrinsic value of nature, and that adapts itself to the limits of nature and the carrying capacity of ecosystems.

1) Capitalism is based on continuous growth even though nature is limited. Ecosystems have limits. The Club of Rome already proposed in the 60s that nature has limits and that natural resources will run out if they are overused. In 2009, the Stockholm Resilience Center presented its doughnut model of the Earth’s ecological limits, which are measured by 9 different indicators. Six of them have already been exceeded. Divided into 13 smaller categories, 10 limits have been exceeded. For example: Climate change is already at an alarming level and extreme weather events are destroying and killing: droughts, water shortages, forest fires, deadly heat waves and floods have become much more common, their number has even doubled, and tropical hurricanes have become much stronger. There is so much air pollution that 7 million people die from it every year.

Capitalism is fundamentally about the idea that profit must be pursued, often by any means necessary. Companies strive to maximize their profits. Profit means that there must always be more. This means more consumption. The biggest reason for environmental destruction and harmful environmental changes is that raw materials are taken from nature: mines, agriculture, the forest industry… However, land use cannot expand indefinitely. The land will eventually run out. When the so-called New World, America, was discovered, humanity imagined that there would be enough land forever. Destruction with serious consequences.

Capitalism sees that products are used and when they are used, they are useless and can be dumped somewhere. Throw them away. There is no such place on Earth as “Away”. Fortunately, capitalism today also sees waste as raw materials more and more often. The circular economy has taken its first steps. Capitalism rarely cares about so-called externalities, such as what happens to nature or how the rights of the local population are protected, for example, near mines or forestry sites. Capitalism sees that there is only the production and trade of a commodity for consumers. Smith’s “invisible hand” does not protect and preserve forests and seas. There are, however, many companies that act differently and practice a so-called ethical market economy, such as companies that sell Fair Trade bananas, coffee, etc., many cooperatives and Fairphone, which manufactures more ethical phones. In Finland, S Group has made many ethical choices in its business. So I am not condemning all market economies, but so-called mainstream market economy, which is based on greed and is dominated by megacorporations. However, everything can be done differently, ethically. The only problem is that comprehensive corporate responsibility is often voluntary. Fortunately, for example, the EU has at least got some kind of corporate responsibility law binding on companies. The key is the obligation to pay compensation and the fact that a company can be sued if it acts unethically, such as using child labor or destroying rainforests.

2) Another big reason why capitalism does not work is that an individual person or small company can no longer own information and large companies own almost all information. Information technology and the transition to the digital age led to the fact that information technology giants own almost all of people’s information and sell it on to other large companies. If you come up with a good idea, it can be stolen immediately by large companies. When you go to patent something, a large company has already patented it. Large companies own almost all patents and e.g. Pharmaceutical companies cheat and charge outrageous prices for their patented drugs. When a pharmaceutical company has a patent, the price of the drug can be dozens of times higher than when the patent has expired and other pharmaceutical companies can manufacture and sell the drug. Monsanto is a company that owns the patents for almost all genetically modified plant varieties. This has caused huge problems for farmers. Monsanto can ask for anything from the seeds, and the seeds cannot be collected for later use. Monsanto has bred the varieties so that only their herbicides can be used with them, and as much of the herbicide is needed as possible.

When an individual can hardly own information anymore, I recommend that you give your good ideas to the common good for free to serve humanity, and not to greedy big companies. Wikipedia is a great community project. I have written hundreds of Wikipedia articles myself. Wikipedia represents the collective knowledge of humanity and everything it offers is free. Wikipedia has revolutionized human learning and access to information. I have enthusiastically recommended Wikipedia as a learning tool in development projects in Africa. Linus Torvalds’ Ubuntu and Linux operating systems are also great community projects. Linux is the most common operating system on servers and Torvalds would be a billionaire if he had patented Linux for himself. Instead, he decided to give it away for the benefit of humanity. He was later awarded the Millennium Prize. Ubuntu means community in African languages: “I am because you are”.

3) The third big problem is a phenomenon that I call “tokenism”. By tokenism I mean that you have to pay for everything, that you have to pay an entrance fee for everything. When I was in Africa, you couldn’t do anything without money and an entrance fee. There was an entrance fee for the swimming pool, the forest, the highway and even the park. Imagine being in New York or Las Vegas – without money. What could you do there then? Hardly anything… You would be sitting on the street with the men of the street, doing absolutely nothing. In Finland and the Nordic countries, many things have traditionally been free: school, library, walking in the forest, swimming on the beach, sports on the sports field…before, even healthcare was free. This made Nordic society a safe, stable, peaceful, innovative welfare state, where every citizen was seen as valuable and important to society and producing the common good. The Nordic countries are among the richest and happiest countries in the world year after year..

When capitalism turns into tokenism, where everything has to be paid for, society loses community, security, stability and the potential of citizens. Crime is at its peak, for example, in the USA – the promised land of tokenism. When there are no free schools and libraries, many ”Einsteins” and the potential of citizens to create something new and good are lost. Tokenism is something very dark and dystopian.

Things should be free as a rule. The Earth should be common and everyone should get their share of society’s output as a social dividend, basic income or a national salary. We are here together and everyone has the right to a good life. The earth is common and this should be written into law. Redefining property rights. The air is common, and no one has the right to spoil and heat it. The seas are common, and they must not be filled with plastic and pollution. Get to know Elinor Ostrom’s thoughts.

Daniel Elkama