Unsustainability of the Capitalist Socio-Economic Order

Abstract

It is a strange paradox that going back further in time, economic models were not only simpler, but also seem to have been much more logical and at least testified to a much greater sense of reality than is the case with contemporary capitalism.

3.1 Unsustainability of the Economic Growth Model

3.1.1 Genesis of the Economic Growth Model

3.1.1.1 From the Satisfaction of Basic Life Needs to Fledgling Economic Models Relying on Labor Specialization and Increasingly Complex Production

It is a strange paradox that going back further in time, economic models were not only simpler, but also seem to have been much more logical and at least testified to a much greater sense of reality than is the case with contemporary capitalism.

Every human being has several basic life needs, and, in a certain view, one might expect an economic system to help meet, in an equitable manner, these basic needs of everyone.¹

Nor can it be ignored here that modern man (=homo sapiens) is a social rather than a solitary being, which helps explain that already at a fairly early stage in the evolution of the human species—i.e., homo sapiens, besides earlier species of man that (at least for a while), lived together with homo sapiens—the satisfaction of the aforementioned basic life needs became a collective event, whereby everyone within a certain community was expected to contribute their part in exchange for a (more or less) fair share of what was collectively produced or assembled to satisfy the aforementioned basic economic needs of everyone.

In older, Nomadic societies still characterized by little labor specialization, the economic models geared to this end could still be kept correspondingly simple. Focused on the fulfillment of little more, or different, than the fulfillment of the most basic life needs of food and shelter, everyone’s efforts to satisfy these will assumedly have been more or less equal, and the distribution of the resources available in nature and/or acquired through labor to satisfy these needs will also still have been divided in a quite equal (and therefore fair) manner.²

It is furthermore suggested that as agrarian-sedentary lifestyles gradually emerged, a different dynamic began to take shape, amongst others characterized by a greater degree of labor specialization. As time progressed, man also became more skilled in the manufacture of all kinds of tools to help satisfy basic life needs. For instance, the first pots and vases may have been utilitarian, especially as a convenience for preparing and/or storing food. In a similar vein, the first man-made methods of housing will, initially, have served primarily for shelter. Moreover, initially, just about everyone will have been able to bake their own pots or construct their own housing.

But gradually an evolution occurred characterized by increased levels of specialization and barter.

In turn, this trial-and-error evolution toward greater labor specialization and barter should, over time, have led to fledgling economic systems in which, in addition to satisfying the most elementary basic life needs themselves, other production and services will have come into being, because of which the first, so-called ‘artificial’ needs came into existence. For example, an ornamental vase no longer serves any elementary basic needs, furthermore, implying that its possession constitutes a need that will only have arisen in others when they became aware of the existence of such a thing as ornamental vases and of the (by definition, irrational) notion of needing them.³

In other words, within sedentary societies, fantasy or imagination started to become dominant as an engine for feeding new, mostly artificial economic needs, so that, increasingly, work had to done on the production of all kinds of things that were no longer aimed at the mere satisfaction of basic life needs, but for purposes of serving either exclusively or partly other, artificially created needs.

As a result, sedentary societies started relying to an even greater extent on models of labor specialization (among other things, in order to realize production aimed at the satisfaction of artificial needs), whereby individuals gradually began to focus on a specific production or service and, as a result, became dependent for all the rest of their needs on the production or service provided by other members of society.⁴ This was, of course, accompanied by the cranking up of barter, which would eventually culminate in systems of so-called, indirect barter, in other words barter that relies on the use of a third—intrinsically usually not (very) useful—good against which all other goods and services could be exchanged, in other words on the use of money.⁵

In addition, such sedentary(d)e(r) societies became characterized by an increasing need for rules and laws to help manage this evolution and, gradually, also by increasing population pressure.⁶

3.1.1.2 Emergence of the Merchant Profession

Over time, the consequence of the evolutions mentioned in Sect. 3.1.1.1 has been that economic systems progressively focused less and less on the production of goods and services that meet basic life needs and more and more on the production of goods and services that fulfill other, so-called artificial needs.

As we shall explain further, by way of central theme, throughout this chapter, this has further also been accompanied by an evolution in which economic systems have increasingly come to focus on the fulfillment of such artificial needs of a limited elite of humanity, to the detriment of the rest of the world’s population and even the well-being of the planet.

Fueled by the human imagination, more and more types of goods and services thus saw the light of day, while economic systems themselves became increasingly varied and complex.

A further consequence of this evolution has been the emergence of more and more (in contemporary terms) professional groups of people that got increasingly removed from actual production of goods (or services) aimed at fulfilling basic life needs (especially food and shelter). This has ultimately, in modern times, resulted in economies relying on a preponderance of private service providers and civil service.

A first—and early—example of the latter has been the emergence of the sector of merchants themselves, a professional sector that no longer involved itself in the production of goods, but merely ensured that goods produced by others found their way smoothly to potential buyers of these goods.⁷

Indeed, as the models of production became increasingly specialized, it occurred that in a given area a certain type of product was not manufactured, which was even more the case for products that only interested a small part of a given population and/or required a special set of production skills. Thus arose the need for persons engaged in the transportation and marketing of such products, which in turn became a labor specialization in itself.

As such trade became increasingly intensive and started to rely more and more on the use of money, it was also this professional sector that began to play a key role in money-gathering behavior. Thus the insight emerged that with very little effort, very large profits could be made, in particular by buying goods cheaply from a producer (in other words: convincing such producer that their goods, and thus their labor needed to harvest or produce these goods, are not worth that much) and selling them expensively to third buyers (by convincing the latter of the opposite, i.e., that the products offered for sale were worth a lot).

Intrinsically, such a merchant himself changed little to nothing about the goods traded, yet, paradoxically, his efforts, in numerous cases, went on to yield the greatest profits.

Precisely in this working method lies one of the building blocks of what would later evolve into (mercantile) capitalism, specifically the fact that the members of a given people’s household began to accept this way of working, and with it the view that the efforts of merchants intrinsically exhibited such greater value than those of other economic actors, including the makers or producers of goods themselves (i.e., in our times, the working class who performs the labor from which the production of goods emerges).⁸

The importance of this observation can hardly be underestimated. For this reason, it also strongly resonates in the philosophical reflections of leading philosophers who lived at the time when these societal upheavals were occurring to an increasing extent.

One can, for instance, think of Plato who, in a general sense, warned against the use of money and against the rise of the class of merchants, because the latter did not intrinsically contribute to society and/or to economic production, but mainly enriched themselves through other people’s efforts. Rather, Plato would have seen the preservation of agrarian societies that, based on a system of temporary ownership of land, would continue to focus on local production, to meet local needs.⁹

In a similar vein, one can think of the only incident recorded in the Gospels in which Jesus Christ expressed anger towards His fellow human beings, specifically when He expelled the merchants and bankers from the Temple of Jerusalem for having made it a den of robbers (cf. Mt., 21: 12–13).¹⁰

Incidentally, John Kenneth Galbraith’s commentary on this passus from the Gospels speaks volumes:¹¹

The example was that of Jesus, the son of an artisan, who showed that there was no divine right of the privileged; power could be with people who worked with their hands. Accompanied by disciples who were mostly of similar humble background, Jesus challenged the Herodian establishment and therewith the greatly more majestic power of Rome. That one person or one small group from such origins could gain such influence, distinction and authority was an example to be cited, an influence to be felt, for the next two thousand years. Those who in later times entered a protest against the established economic order would be called rabble-rousers, and it would be part of their defense that in His assault on the Jerusalem establishment - in denigrative terms, the moneychangers and usurers from the Temple - Jesus was their ultimate role model. To a far greater extent than many conservative Christians have liked to think, He legitimized revolt against evil or oppressive economic power.

Furthermore, it is no coincidence that for a long time in the history of the West, especially from philosophical and religious quarters, there were huge efforts to keep the mercantile spirit somewhat in check, which has been, for example, a preoccupation that helped determine the outlook of the Christian world for more than a millennium.

These early warnings notwithstanding, subsequent history has been one in which the mercantile spirit, and the model of egoism—including the view that the efforts of merchants are worth so much more than those who employ their labor to produce goods—on which it is inherently based, has become increasingly important, and all the more so as the production of goods and services itself became increasingly specialized, complex and varied.

In all of this, the nature of such a merchant’s services in the strict sense of the word, from a historical point of view, has barely evolved, but their working methods all the more.

In today’s world, it is hard to still envision the functioning of society without this intermediary trade function. It is for instance no coincidence that one of the richest people on earth, Jeff Bezos, belongs to this economic caste and that the activities of his company (Amazon) still involve little more than purchasing goods manufactured by others cheaply and then selling them at the highest possible price—while paying the staff required to do so as little as possible (cf., furthermore, Sect. 7.1.1.4).¹² In a similar vein, one can point to the immense wealth of Bernard Arnault & family—ranked No. 2 in the Forbes top 10 richest people in the world in July 2022¹³—whose businesses focus as good as solely on the manufacture and trade of luxury goods, ergo goods that are intrinsically of little use and whose customer market consists primarily of the top 1% (or the top 10 or 15%) of the world’s population. In this, it is extremely telling about the distribution of wealth on Earth that such production and distribution of mere luxury goods, makes such a fortune for the entrepreneurial family behind it.

3.1.1.3 Administration and Religion (Later: Nobility and Clergy)

In the wake of the emergence of this merchant activity—essentially an intermediary in economic processes—soon a number of other similar functions (intrinsically equally unrelated to the production of goods or services aimed at the fulfillment of basic life needs) saw the light of day.

One such emerging function was administration, initially created to manage the fledgling sedentary forms of society, which came to rely on an ever-increasing barter system.

As has been the case with the merchant function, also this societal function has continued to expand over the centuries, both at a governance level and in private relationships.

In the public dimension, administration soon became intertwined with taxation, whereby the caste of administrators began to collect taxes in order to serve themselves with a share of the wealth generated by the economy and, in this process, increasingly refine their own function of governance (e.g., through the inclusion of a surveillance function, from which modern police forces eventually grew, of a judicial function with the aim of helping to settle (commercial) disputes …).¹⁴

In the private domain, the administration function first evolved primarily into systems of keeping track of (commercial) transactions, with the initial intent of keeping commerce running smoothly. This is where a wide variety of modern professions, including accounting, accountancy, tax consulting and auditing, find their roots.¹⁵

However, perhaps for none of the professional sectors has the power of imagination been as significant in justifying their existence as it has been for the religious sector. It seems here that quite early in antiquity, the invocation of the goodwill of the gods to keep economic processes (ranging from agriculture, to production and trade¹⁶) running smoothly, became a field of specialization in itself, from which gradually grew a priestly caste that no longer participated itself in economic production, but managed to appropriate a portion of the wealth generated by the economy as compensation for their achievements—essentially obtaining the goodwill of the realm of the gods …

It is in this regard noteworthy that these first forms of labor specialization correspond, more or less, to the four castes of the traditional Indian caste system. The following four castes are herein distinguished:

• Brahmins, the priestly and learned class.

• Kshatriyas, the class of warriors and the rulers.

• Vaishyas, the class of farmers and merchants.

• Shudras, the class of (ordinary) citizens and workers.

Thus, in the wake of the specializations that began to emerge in the economic sphere mainly as societies became (increasingly) sedentary, a range of functions and corresponding professional groups arose which, rationally speaking, were/are not aimed at production themselves, but rather fulfilled all kinds of ancillary functions—some of which are even largely superfluous—but all of which, in their own way, have contributed to the fact that economies, on a global scale, became increasingly complex and, in particular, less and less focused on the satisfaction of essential life needs and more and more on both the creation and satisfaction of artificial needs (in contemporary terms, the so-called ‘created wants’) of the top layers of global societies.

By now, the fact that this has led to numerous, extremely serious problems is hereby preferably concealed by the adherents of the economic learning systems that are largely co-responsible for this. It is precisely for this reason that the rest of this chapter will focus on this correlation between capitalism and its working methods and some of the serious (socio-economic) problems of our time.

3.1.1.4 Correlation Between the Rise of Modern Banking and the Economic Growth Model (and Therefore the Rise of the Modern Entrepreneurial Class)

Mindful that the intent of this book is not to provide a precise, historical sketch of economic systems—but rather to derive insights from history to indicate the historical origins of certain socio-economic value choices—we make a great leap forward into history in this Sect. 3.1.1.4.

This brings us to the breakthrough, in the Western world, of so-called (commercial or mercantile) capitalism from the sixteenth century onwards, in the context of which, to the evolutions discussed in the previous Sects. 3.1.1.1–3.1.1.3, an important dimension was added, in particular the unprecedented increase of relying on the use of money that was initiated when money no longer had to be manufactured from precious metals—which until then had managed to keep money creation and use within somewhat limited/reasonable limits—but could, henceforth, be manufactured from paper (and later in time from entries in accounts).

We have already cited the technical characteristics of this so-called private money creation system in the previous Chap. 2 (cf. especially in Sect. 2.2). We also suggested that this opened the door, in the Western world, to a model of unbridled economic growth. Indeed, whereas since ancient times economies had already gradually started to grow, albeit only to a (relatively) limited extent because of the scarcity of money (in the form of coins in precious metals), thanks in part to private paper and later scriptural money creation, the gates of economic growth were henceforth completely lifted.

The above-mentioned era also marked the breakthrough of the private banking profession—although certain of its precursors had existed beforehand¹⁷—that only began to occupy a fundamental societal role from the breakthrough of paper money itself, with a pioneering role for, among others, the House of Fugger mentioned earlier. Partly because wealth creation in Protestant areas no longer encountered the same religious preservation as under Catholicism, the latter managed, during the sixteenth century, to accumulate the greatest wealth on earth through one of the intrinsically least valuable and most effortless soci(et)al activities, namely the granting of credit.

The new money-creation model would subsequently break through quite generally as of the seventeenth century.

What is even worse, if possible, is that the breakthrough of said private (paper) money creation model further leveraged the economic model based on the idea that there must be ever more economic growth.

Indeed, the then-private paper money—and the current scriptural money, which constitutes its contemporary continuation—although created out of thin air, placed heavy leverage on the future. The reason for this is that, on the one hand, the issuance of, initially, such private paper money—and, later in history, scriptural money—happened in the context of lending activities for larger amounts than the cash reserve of the lending institution and, on the other hand, such credit still had to be repaid, with the further observation that the parties having to repay the credit (=the so-called borrowers), unlike bankers themselves, did not have the ability to create their own paper money (or, later in history, scriptural money) out of thin air with which they could have repaid the credit,¹⁸ and therefore had to rely on other sources of income for the repayment of these credits.

An additional factor has been that with the emergence of private money creation—which, as said, initially relied on the issuance of paper money and, later in history, on the issuance of scriptural money—came the demise of the medieval prohibition of interest, which had been in place since the early Middle Ages under the impetus of Christian doctrine.¹⁹ As a result, the (at the time) new forms of lending, based on the issuance of paper money above the cash reserves of the issuing institution, could henceforth earn interest, which naturally made it an easy method of rapid wealth accumulation, at least provided that (1) the borrowers effectively repaid their loans, increased with the agreed upon interest, and (2) the recipients of the paper money continued to place sufficient trust in it (and, in other words, did not proceed to massive exchange requests of the paper money for the underlying coinage).

Today, such lending accompanied by new money creation still implies that all of the borrowers generate income that (should) be at least equal to the amounts of newly created money, increased with the agreed upon interests. Such revenues should still, as a rule, be gained from (new) economic activities (and as far as governments are concerned, from taxes), which explains why the model of private money creation relying on (initially) paper money and (later in history) scriptural money, inherently requires economic growth.

Coupled with the specialization of labor that had already been initiated beforehand and the ever-increasing variety of economic production and services (which had been in progress since ancient times), this meant the final breakthrough of an economic model that was still hardly oriented toward the fulfillment of every human being’s basic life needs, but to an increasing extent, toward the manufacture of a multitude of products and services that we might rather describe as ‘superfluous’ or ‘luxuries’ but which, as we shall see more closely in the sections below, have nevertheless put a great strain on the Earth’s raw materials and other natural resources, and have also begun to require a very great commitment of labor (i.e., of people and their lives).

Presumably, during the early phases of mercantile capitalism, the handicraft industry may still have managed to keep up with the increased demand resulting from the intensification of trade. However, as trade got increasingly large-scale, interregional, and international, new methods of production became necessary, which gradually resulted in the modern enterprise model, that, for its increasing largescale, could rely on financing enhanced by bank credit, besides by an emerging stock market system (i.e., the precursors of today’s, financial markets).

According to Jaap Kruithof, the consequence of all this has been that, from the sixteenth century on, an economic system took shape in which, through the models of private money creation, the steadily growing capital became more and more concentrated in the hands of the class of merchants and financiers. It has even been argued that this emerging capital accumulation itself became one of the means of making profit par excellence. From that period onward, the at first local exchange economies became increasingly subjected to a newly emerging, international money power.²⁰ Needless to say, this process has continued ever since, until the present period in which the so-called financialization of the economy reigns supreme.²¹

3.1.2 Perverse Side Effect 1 of the Capitalist Economic Growth Model: Depletion and Exploitation of the Human Race

3.1.2.1 Correlation Between the Capitalist Economic Growth and Employment Models

3.1.2.1.1 General

Without doubt, capitalism and the economic growth model on which it relies have contributed to a high degree of prosperity in certain parts of the world, especially then in the West.

Still, several questions and reservations immediately arise from this premise.

The first observation is that in parallel with the rise of capitalism, a number of other developments have occurred that have proven equally indispensable to the welfare increase in the western world since the late Middle Ages, raising the question of what part of this increase in wealth has been due to which factors.

Thus, the breakthrough of capitalism has been paralleled by some important technological evolutions and inventions—or at the very least by a greater familiarity, in the Western world, with certain inventions that had been in use in other parts of the world for much longer—that have given a tremendous boost to trade and industry, sectors that have been crucial for the development of capitalism.²² In addition, the breakthrough of capitalism was accompanied by an intensification of mobility, initially mainly shipping, which brought overseas trade much more within the reach of the Western world then it had been before in history.²³

In other words, the breakthrough of capitalism occurred in parallel with various scientific and technological evolutions, which themselves helped create the climate for some of the economic developments that have come to characterize capitalism.

A second reflection is that the economic progress brought about by capitalism has, from its inception, been characterized by several, very fundamental, soci(et)al inequalities, even to the extent that the socio-economic model of capitalism, from its inception, has inherently come to rely on systems of exploitation, a characteristic that capitalism has not been able to leave behind ever since.

In this Sect. 3.1.2.1, we shall take a closer look at which, such systems of exploitation the capitalist employment model has been associated with.

3.1.2.1.2 Early Capitalist Models of Exploitation (Sixteenth to Seventeenth Century)

A first set of inequalities and exploitation on which fledgling (mercantile) capitalism came to rely as of the sixteenth century occurred in the relationship between Europe and the rest of the world.

Indeed, thanks in part to several the inventions mentioned in Sect. 3.1.2.1.1 (including gunpowder²⁴ and the weapons that could be manufactured based on it), the New Times were accompanied by a drastic redrawing of military balances on a global scale. The armies of various European nations, already traditionally formed and trained for the many conflicts that had continued to characterize the European world after the fall of the (Western) Roman Empire, proved in most cases superior to those of the peoples of other regions of Earth, providing a historical breeding ground for a before in history unseen imperialism.

In doing so, some of the European countries soon laid little hesitation in proclaiming the rest of the world as their own victorious regions, ushering in an era that, post factum, can best be described as an unprecedented rampage that these European powers undertook in the rest of the world.

Whereas at first these oversea raids were still very targeted and aimed, for example, at the systematic looting of the stocks of precious metals present in other regions of the Earth (e.g., Middle and South America), the ambition of the European powers in question would gradually grow and turn into the objective of annexing these other regions, including their populations and resources, as part of their own territory.

In early economic writings we find a rationalization for this colonial behavior of the European powers. This created, within the humanities, extremely strange paradoxes, such as, on the one hand, ardent pleas for greater equality and freedom within society, and on the other hand, the condoning of practices of colonialism and imperialism [which would be reflected in even later times in Rudyard Kipling’s famous poem ‘The White Man’s Burden’ (1899)]. What is acknowledged to a lesser extent is that the colonialism and imperialism of said European countries that emerged as early as the sixteenth century helped fuel the rise of capitalism as the dominant economic model.²⁵

Soon, it became deemed only natural that the rest of the world only existed for the benefit of the European world’s own economic interests. Raw materials, crop yields, people and animals, in short, anything that could be found in the colonial world, in this manner, became potentially useful in helping to ensure the growth and prosperity of Europe’s own economies. It was during this era that Europeans even began capturing people in Africa to sell them as slaves elsewhere in the world, which produced one of the formulas for success that helped the fledgling economies of several Southern states of what would later become the United States of America (and which were essentially themselves populated by the descendants of European immigrants) flourish. The other side of the coin, of course, was that this produced one of the greatest tragedies in (recent) human history that until today leaves its mark within American society today.

Indian economist Utsa Patnaik has ventured to calculate the cost of British imperialism to her homeland. Among other things, in an essay published by Columbia University Press,²⁶ Patnaik found that, since the colonial era, Britain has extracted more than USD 45 trillion from India, which to this day has hampered the country’s ability to rise out of poverty. In doing so, Patnaik pointed out that the scars of colonization are still present, even though Britain left India more than 70 years ago. Between 1765 and 1938, the drain of resources amounted to an estimated 9.2 trillion pounds (=USD 45 trillion). In making this calculation, the Indian export surplus was taken as the benchmark and an interest rate of 5% was added. Patnaik, furthermore, pointed out that while during the colonial era people in India were dying massively from malnutrition and various other diseases, the British continued to take hard-earned money from poor Indians. Indian life expectancy at birth, partly as a result of these practices, was still only 22 years in 1911. Patnaik furthermore demonstrated that Britain exported food grains and imposed high taxes, causing famine in India and decreasing purchasing power.²⁷ According to the economist, annual per capita food consumption, which was 200 kg in 1900, fell to 137 kg in 1946. Patnaik thus reached the conclusion that India’s position at the time of independence was dismal on all socio-economic indicators.²⁸

In a November 21, 2018, interview with “mint,” Utsa Patnaik summarized her research findings as follows:²⁹

Between 1765 and 1938, the drain amounted to £9.2 trillion (equal to $45 trillion), taking India’s export surplus earnings as the measure, and compounding it at a 5% rate of interest. Indians were never credited with their own gold and forex earnings. Instead, the local producers here were ‘paid’ the rupee equivalent out of the budget-something you’d never find in any independent country. The ‘drain’ varied between 26–36% of the central government budget. It obviously would have made an enormous difference if India’s huge international earnings had been retained within the country. India would have been far more developed, with much better health and social welfare indicators. There was virtually no increase in per capita income between 1900 and 1946, even though India registered the second largest export surplus earnings in the world for three decades before 1929.

Since all the earnings were taken by Britain, such stagnation is not surprising. Ordinary people died like flies due to under-nutrition and disease. It is shocking that Indian expectation of life at birth was just 22 years in 1911. The most telling index, however, is food grain availability. Because the purchasing power of ordinary Indians was being squeezed by high taxes, the per capita annual consumption of food grains went down from 200 kg in 1900 to 157 kg on the eve of World War II, and further plummeted to 137 kg by 1946. No country in the world today, not even the least developed, is anywhere near the position India was in 1946.

Such centuries of deprivation proved fatal. An estimated 1.8 billion Indians died avoidably under British rule (from 1757 to 1947) because of extreme deprivation. The deadly effects of the British occupation of India, by the way, are still being felt more than 70 years after the country’s independence: four million people die each year from avoidable deprivation in today’s capitalist India, compared to zero (0) in China.³⁰

Moreover, this model of exploitation was not limited to the relationship between Britain and the Indies but was the characteristic model to which much of the Western world succumbed in its relationship with their then colonies.³¹

As again Utsa Patnaik has phrased it:³²

Not only Britain, but the whole of today’s advanced capitalist world flourished on the drain from India and other colonies. Britain was too small to absorb the entire drain from colonial India. So it became the world’s largest capital exporter, which aided the industrial development of Continental Europe, the U.S., and even Russia. The infrastructure boom in these countries would not have been possible otherwise.

Colonial drain helped to create the modern capitalist world, from North America to Australia-all regions where European populations had settled. The advanced capitalist world should set aside a portion of its GDP for unqualified annual transfers to developing countries, especially to the poorest among them. Britain, in particular, morally owes reparations for the 3 million civilians who died in the Bengal famine because it was an engineered famine.

However, such models of exploitation have not only manifested themselves in the international context. Even within the borders of numerous (Western) countries, the breakthrough of capitalism has been accompanied by similar forms of exploitation.

As mentioned earlier, this exploitation phenomenon already started to occur during the sixteenth century, when previous forms of feudal employment (whereby the feudal man could work the land belonging to his feudal lord and the remuneration of his labor consisted in being able to keep for himself a portion of the agricultural proceeds),³³ to an ever-increasing extent, were replaced by employment in return for a financial remuneration. Regretfully, from the breakthrough of this system of employment, the class of those who hired others’ labor aimed to keep the fees they paid in exchange as low as possible (a practice that was rationalized, from the eighteenth century onward, in the writings of certain, early liberal economists, including David Ricardo).

From this has emerged a problematic society, in which especially members of the poor classes are condemned to the constant performance of physically demanding work, the generated capital gains of which accrue quasi-unilaterally to the class of entrepreneurs.³⁴

Monbiot has pointed to a contemporary, additional characteristic of the capitalist model of exploitation. In addition to the geographical swell (which has been particularly pronounced during the colonial era), there has also occurred a temporal swell. In this viewpoint, the apparent health of our current (capitalist) economies—or at least the attempts to keep capitalist economies afloat—depend to an ever-increasing extent on robbing natural resources from future generations. This is what oil companies, for example, are doing when distracting citizens with (individual) MCB and carbon footprints. This is, in a similar sense, also what capitalist money creation—and by extension capitalist finance—does. According to Monbiot, such theft of the future is even to be considered the main engine of the capitalist economic growth model. Capitalism, as reasonable as it may sound when explained by a mainstream economist, in this approach, including in ecological terms and in terms of its financial system, is nothing but a giant pyramid scheme.³⁵

3.1.2.1.3 Relationship Between the Capitalist Profit-Seeking Principle and Capitalist Exploitative Behavior

The foregoing immediately exposes one of the basic features of the so-called economic profit motive (which, within capitalist economies, provides the main raison d’être for enterprises, regardless of their legal form).

Indeed, as we shall explain in more detail in Chap. 7, the motivation for doing business in a capitalist economy is not so much contributing to the creation of an economic system that helps meet the basic life needs of every human being in the fairest possible manner—even though the doctrines of economic liberalism and economic neoliberalism claim to have devised the best systems to help ensure these objectives—but rather the selfish pursuit of wealth accumulation on the part of those who hold the reins of power in the socio-economic sphere, ergo the classes of merchants, later entrepreneurs, and bankers.

In other words, within capitalism, enterprises are conducted with the primary objective of becoming as rich as possible, and not from an intention to contribute to the creation of the fairest possible society (in which everyone’s basic life needs would be equally met).

In addition, the historical evolution towards this capitalist economic model has been accompanied by a caesura (already referred to above) in thinking about socio-economic processes.

Indeed, whereas previously prominent philosophers and leading religious figures had rather advocated societal models characterized by a sufficient degree of wealth distribution (ergo by sharing wealth), because of emerging (pre-)capitalist practices, a turnaround would occur in the realm of ideas as well, with certain currents within Protestantism as the forerunners of this changed way of thinking.

From the eighteenth century onward, the model of conducting an enterprise based on exploitation of both other territories and people that had emerged in the practice of late medieval commercialism, would find an even more far-reaching rationalization in the basic premises of economic liberalism (and, much later in history, of economic neoliberalism), in which it was Adam Smith to whom is attributed the launching of the notion that if we all behave as selfishly as possible in the socio-economic sphere, the most ideal society will result.

Thus, after this had already been underway in practice (cf. Sect. 3.1.2.1.2), also in the realm of ideas an economic model was conceived within which it became the sacred task of everyone to strive, at all costs, for as much wealth accumulation as possible for themselves, without the need to raise questions of conscience as to what this might mean for others, let alone for the environment within which one functions (and, by extension, for the Earth itself).

3.1.2.1.4 Reduction of the Economy to an End Rather Than a Means, and of Man and His Life to a Means, Rather Than the Highest End

As a result of these evolutions, a fundamental inversion of the hierarchy of values on which Western—and later global—societies rely would gradually start to occur.

Whereas initially (i.e., long before any rationalization attempts) economic processes were intended as means to satisfy basic economic needs (so that people could live their lives focused on other goals, particularly in Christian societies the salvation of their immortal soul), within capitalism, economic processes were, increasingly, elevated to ends, with people themselves being, increasingly, reduced to means to make the economy work.³⁶

Indeed, the goal of primitive economies had been to ensure, as much as possible, that the basic life needs—essentially food and shelter—of all members of a given economy were sufficiently satisfied.

As economic systems became more complex, this gradually changed, with the purpose of economic systems being increasingly reduced to the accumulation of wealth on the part of those who took the lead in the fields of trade and industry, which would eventually, from the sixteenth century onwards, culminate in (mercantile) capitalism itself.

As a consequence, in capitalism, wealth accumulation for the benefit of the entrepreneurial classes was eventually elevated to the most central economic objective, while the intention of satisfying everyone’s life needs, in as equal a manner as possible, was gradually relegated to the background (only to be reduced to a mere side effect of the economy in the so-called trickle-down economics approach).

Because of this, in combination with some other socio-economic factors, including in main order descent/origin, and in subordinate order the skills and talents a person displays (cf. furthermore in Sect. 7.1.3.2.1.2), the rise of capitalism has gone hand in hand with the already mentioned fundamental dichotomy between two main classes of people participating in capitalism, with on one side the class of entrepreneurs (in the broad sense of the word) and on the other side the rest of the population whose sole purpose became to provide the labor power needed to help realize the ventures of the former group of people.³⁷ (Cf. already in Sects. 2.3.1 and 2.3.2.)

In the relationship between these two classes, the goal of wealth accumulation obviously should be fulfilled primarily for the benefit of the entrepreneurial classes, while the class of the employed should be satisfied with the proverbial crumbs falling off the table.³⁸

Although the adherents of the doctrinal systems of economic (neo)liberalism do not like this mode of representation, the basic division of the human species within the socio-economic order that has emerged from capitalism constitutes one which distinguishes the caste of entrepreneurs³⁹ from the rest of the population, in which the entire social arrangement increasingly, revolves around prioritizing the interests of the first mentioned group.

3.1.2.1.5 Contemporary Crystallization of the Capitalist Model of Employment as a Rationalized, Universal Model of Exploitation

It needs little further explanation that because of the foregoing evolutions, a fundamental economic inequality (with all sorts of pernicious consequences) has emerged between the two main classes of capitalist societies, specifically the class of merchants/entrepreneurs and the class of employed people, respectively.

In its contemporary context, it is hereby held that the group of people who ‘merely’ hire out their labor serve only to be employed within the enterprises that the first group of people set up (and, by extension, in the lap of governments that help shape the capitalist constellation).

Whereas the capitalist model of employment is presented in the current context, at the legal level, as an application of the doctrine of freedom of contract—with the underlying idea that human beings who wish to do so can, on a voluntarily basis, put their labor at the disposal of the entrepreneurial caste and its projects—the economic reality is rather that, as a rule, there does not exist such freedom of choice.

This is because those who want to survive in a capitalist society must have an income to support themselves.

Within the arrangement of capitalism, there are hereby essentially only two major earning models for acquiring such an income, namely either by starting an enterprise oneself (regardless of the various legal capacities to this end resorted to), or by making one’s labor power, against payment, available to/for the benefit of such an enterprise (again regardless of how such an enterprise is legally organized).⁴⁰

In this, the essential characteristic that keeps determining the relationship between the group of entrepreneurs and the group of people who place their labor at the disposal of these entrepreneurs (and their enterprises) has remained largely the same, all along, and can be captured under the term exploitation.

To properly understand this realization, we must again recall the basic objective of entrepreneurship that is prioritized in contemporary capitalism, specifically the profit-seeking of the entrepreneurial caste (rather than the conception of an economic system aimed at the just satisfaction of the basic life needs of all human beings).

The purpose—and even reason of existence—of any capitalist enterprise, in other words, is to make as much profit as possible, where (capitalist) profit, in a simple approximation, can be referred to as that which is left over from the proceeds of the sale of the goods and/or services resulting from the enterprise project, after deducting all costs that must be incurred to realize the enterprise project in question.

This capitalist revenue model has two further ramifications, namely, on the one hand, trying to maximize the sales revenues of the manufactured goods and/or offered services—taking into account what competing enterprises do in this regard, since only a complete monopolist can unilaterally set the price of the goods and services it offers,⁴¹ but whereby enterprises that are in competition with one another must take into account in their pricing the prices demanded by such competitors—and, on the other hand, the costs incurred by the business project.

However, as we have explained in more detail in our earlier publications,⁴² the compensation paid by an enterprise to those who provide their labor is also part of the cost structure of the enterprise in question, and therefore part of the intent to keep its costs as low as possible.

The earnings model of contemporary capitalism thus maintains the aforementioned inherent conflict of interests, since it is in the interests of capitalist entrepreneurs to keep the remuneration they pay out for hired labor as low as possible,⁴³ while the persons who provide their labor will themselves prefer to generate as high an income as possible because of this provision.⁴⁴

The foregoing implies that, over the centuries, the choice of profit maximization for the benefit of the ruling, entrepreneurial classes as the central economic value of capitalism (instead of the search for just societal models in which the proceeds of the economy are to be distributed, in a fair manner, among all member of society), has implied that capitalism, inherently, had to continue to rely on the exploitation of the employed classes.

3.1.2.1.6 Continued Importance of Corrections and Tempering

For the sake of completeness, it should be added to the foregoing that the essential mechanism of exploitation which, in its various facets, underlies capitalist economies have, over the centuries, undergone various tempering and corrections which have, however, varied greatly from country to country.

Underlying the principal of these tempering and corrections is the concept of the welfare state, already discussed earlier in this book (cf. already in Sect. 1.3), within which the idea arose that the exploitation methods of capitalism should be mitigated, or at least corrected, so that all members of society may build a sufficiently humane existence.

Long experience with unbridled (industrial) capitalism that had preceded the creation of the welfare state model had taught that if we let capitalism and those who feel called to become entrepreneurs go unchecked, the excesses can become very extreme, with as type examples the model of slavery within early American society and the model of exploitation of the working classes—from that period also called ‘the proletariat’—which prevailed, throughout the (Western) world, in the nineteenth century until deep into the twentieth century.

With no corrections to the capitalist model, this has shown, repeatedly, that the entrepreneurial world, driven by its basic design of profit maximization, has little to no qualms about making other people do the most damaging labor, in the most demeaning conditions and at the lowest possible remuneration.

This also explains why the rest of society has every interest in opposing the application of the capitalist working methods as much as possible and, at the very least, would do well to make as many corrections to this as possible (a truth that, under the impetus of neoliberal ideologies, has (unfortunately) been greatly diminished in recent decades).⁴⁵

3.1.2.2 Exploitation Under Economic Neoliberalism

3.1.2.2.1 Alleged Incompatibility of Economic Efficiency with the Welfare State Model

The welfare state model, revisited in the light of the insights gained in the preceding Sect. 3.1.2.1, can be regarded as one of the—so far—historically most successful experiments to somewhat contain and correct unbridled capitalism (including its many forms of exploitation).

Nevertheless, the welfare state model also had drawbacks, the main one being that the model enjoyed a high degree of societal and political acclaim only in a limited number of countries of the world, especially than the Western countries, while it has even been argued that the Western welfare state model has only been possible by maintaining the exploitation of the former colonial territories (which, in the period after the second world war, got reduced to developing countries that themselves barely experienced any benefits from capitalism).

Moreover, starting in the 1980s, the welfare state model got strongly contested by the doctrine of economic neoliberalism.

Indeed—as already mentioned above (cf. Sect. 1.5)—as of the 1980s, economic neoliberalism has been very committed to the elimination or reduction of several of the components of the welfare state model.

As a result, in recent decades, many countries witnessed, on the one hand, the reduction of various forms of public services (which were transferred to the domain of private markets; cf. already in Sect. 2.4.2.2) and, on the other hand, the erosion of their systems of social security (with many of these social getting replaced by systems of private insurance).⁴⁶

The arguments that have been developed for justifying this transfer of various public services and social security components to the private markets—or, put differently, for justifying the (neoliberal) techniques of privatization and marketization (cf. already in Sect. 1.5)—have been diverse, including: (1) the misconception that the private market handles everything in a more performant way than the public sector; (2) the safeguarding of competition (in cases where, often due to early ‘neoliberalization’ efforts, certain activities were performed by public actors as well as private market players at the same time); and (3) the argument that the government should limit itself to so-called core tasks.

However, one of the most cited arguments used to justify the systematic dismantling of public services and social security systems has been (4) that they are simply too costly (=in modern-day terms, this is the so-called ‘austerity’-argument), in addition to the viewpoint that (5) such systems reward laziness (and punish industriousness), which is believed to threaten prosperity.

3.1.2.2.2 The Reality Behind Neoliberal Theorizing

In recent years, it has become increasingly clear that the reasoning developed by economic neoliberalism to justify the increasing privatization and marketization of (former) state activities, on the one hand, and the dismantling of social security apparatuses, on the other, constitute little more than a string of fallacies.

Indeed, reality shows that the transfer of various, former (government) activities to the free market has had, to put it mildly, throughout the Western world, a very problematic outcome, with examples of such sectors including: (1) the nursing home and rest home sector (where the quality of service has suffered severely from increasing privatization); (2) the energy sector (characterized in particular by out-of-control prices for the end consumer in numerous countries); (3) the banking and financial sector (where traditional savings have been largely eroded in numerous Western countries and both the private and public sectors are burdened by ever-increasing debt); (4) the higher education sector, among many others.

A similar remark may be made regarding the erosion of the social security sectors of various, former welfare states. Hence, in the countries in which the transition from the welfare state model to ‘restored, unbridled capitalism’ is most advanced, including the United States of America and the United Kingdom, large areas of social security have already disappeared or been reduced to an absolute minimum, while in various other, former welfare states, this erosion of the social security system follows a more gradual course. In the former group of countries, as a result, access to services, such as health or dental care, has for a growing proportion of the population become extremely problematic.

What is probably even worse is that this erosion of the welfare state model has brought back to the forefront the intrinsic characteristic of capitalism that it creates a dichotomy in society between, on the one hand, a small class of (increasingly) rich entrepreneurs and, on the other hand, the larger group of the rest of the population who depend on income out of labor for their livelihood.

As a result, an evolution of an ever-increasing polarization between rich and poor has taken shape, with the middle classes, which in many Western countries had emerged thanks to the welfare state model in the second half of the twentieth century, gradually disappearing. (Cf., furthermore, in Sect. 3.3.)

A further result of this is that, in several countries, especially the poor strata of the population—in many cases those who must perform the hardest labor under the worst imaginable working conditions—no longer have easy access to services that in a slightly more distant past were still provided by the public sector, but which under neoliberal impetus have been transferred to the private markets.

The sad reality of implementing economic neoliberalism has been that the poorer sections of the population can no longer afford many of the services transferred to the private markets, or at the very least that they have to make choices and deny themselves access to some of the services in question, or be forced to choose lower quality, with access to higher education and health and dental care as striking textbook examples of this evolution.

In other words, the disappearance of the safety nets previously provided by the systems of social security and public services has made especially the poor strata of the population even more vulnerable.⁴⁷

Another combined exploitation effect of, on the one hand, maintaining the economic growth model under neoliberal economic policies and, on the other, reducing the welfare state model, has been that the idea prevails ever more strongly that (ordinary) people have only one reason of existing, namely to be put to work as much and as long in life as possible in order to help fulfill the goals of capitalism, which include continuous economic growth and profit maximization for the benefit of the enterprising classes.

As all of this is not worrisome enough, decades of monetary policy have further created a gigantic mountain of debt, with both countries and private market players, increasingly, weighed down by an ever-growing debt burden. Through this, the economic growth model itself is also further fueled, since the existing debt burden constitutes at the very least a projection of the future economic activities needed to pay off this debt, on the understanding that economic growth, by definition, must be greater than this projection indicates, since the future economy will additionally need to be sufficient at any given time to satisfy mankind and its needs (including ensuring sufficient profit margins for the entrepreneurial sector), as well as to carry the future mountain of debt at that future time.⁴⁸

This constitutes one more illustration of Monbiot’s claim that capitalism has continued to expand not only geographically, but also temporally. (Cf. in Sect. 3.1.2.1.2.)

For the private sector, this goal of continued economic growth translates into an expectation of ever-increasing zeal. Enterprises, as well as individuals, thus live under the expectation of ever-increasing economic activity to sustain this model of economic growth—and the model of private money creation, based on credit, that underlies this expectation.

For the small class of (wealthy) entrepreneurs, at least approached from the scale of values of capitalism itself (as reinforced under neoliberal economic thinking), this is not necessarily unwelcome news, since in such a model, this group of people gets richer and richer (at least provided their enterprise is successful).

For the rest of humanity, and for the Earth itself, the news is less good.

Indeed, for those people who are dependent on income from their labor to support themselves (including repaying their own loans), this model implies an expectation of having to be permanently employed until as late in life as possible.

Not coincidentally, the policy of neoliberal states in recent years has been to systematically raise the average retirement age of the (Western) population so that the working population would continue to participate in the economic growth model for as long in life as possible, but also to keep them as taxpayers so that, through taxes and social security contributions, they would continue to contribute to trying to keep the public debt burden within reasonable limits (even if, in practice, these attempts prove rather unsuccessful).

What this has implied for the wellbeing of the Earth itself will be dealt with in Sect. 3.1.3.

In other words, the ideology of economic neoliberalism has not contributed to a just model of society, quite the contrary.

In fact, it seems that the entire capitalism model, as reinforced under impetus of economic neoliberalism, is aimed at keeping the common man trapped in a system of constant exploitation, whereby anyone who needs to work to earn a living may witness their entire life force sacrificed to serve the interests of the economy, ergo the rich entrepreneurial class.

To the extent that the capitalist economy itself is, in addition, mainly oriented toward meaningless production and consumption (in order to satisfy artificially created needs), it should also come as no surprise that much of the employment within capitalist economies has suffered a similar fate, which has been described in the recent past as the systematic growth of so-called ‘bullshit jobs’, i.e. forms of employment which intrinsically do not contribute to the satisfaction of basic life needs, but which fill the days of the average person with a multitude of meaningless tasks which, under the yoke of the capitalist, legal system, must nevertheless be carried out at the risk of exclusion from the labor market (and, consequently, of no longer having an income to support oneself).⁴⁹

We shall return to the latter aspect of modern-day capitalism further, in Sect. 7.1.

Having endured three to four centuries of capitalism—and certainly having been weighed down for half a century by the yoke of neoliberal ideologies and their intent to make capitalism as unbridled as possible again⁵⁰—it thus seems that humanity is further than ever away from the just model of society advocated in the more distant past by leading philosophers and religious leaders (e.g., Plato’s Ideal Republic), and in the more recent past by certain economists (e.g., Karl Marx and his followers), among many others.

It is therefore not without reason that certain authors have described contemporary societies shaped under the ideology of economic neoliberalism as new, feudal system.

3.1.3 Perverse Side Effect 2 of the Capitalist Economic Growth Model: Depletion of the Natural Habitat

3.1.3.1 General

It is not only most of the human species that is suffering under the yoke of capitalism; the Earth itself is likewise suffering this sad fate, which in modern times has assumed dimensions barely imaginable.

To start, it should be kept in mind that, until further notice, the Earth is the only known planet in the Universe that has produced such a multitude of life—including human life itself—which is the result of a delicate balance between various cosmic, physical, and biochemical factors that have created the conditions for the development—and continued preservation—of life.

In a certain thought experiment, a future evaluator of how homo sapiens has treated the Earth would presumably not come out with a fine evaluation. In fact, the chances are not inconceivable that homo sapiens would be labeled as an extremely evil, parasitic creature that in no time at all has very thoroughly ruined, at least disrupted things for the rest of life on Earth—e.g., by exterminating or otherwise abusing untold numbers of other life forms—and in general caused great harm to the health of the Earth itself.

To this, the prevailing, capitalist socio-economic order is anything but alien, not to say that it is most probably one of the biggest causes of this negative impact of homo sapiens’ behavior on the Earth and its resources.

3.1.3.2 The Intrinsically Destructive Power of the Agrarian and Industrial Revolutions

In what precedes, it has already pointed out that the misery that would eventually lead to capitalism seems to already have begun when our forefathers gave up their nomadic lifestyle for a sedentary one.

Whereas before in history homo sapiens functioned, at least to a certain extent, in harmony with the Earth and its other life forms,⁵¹ the choice for a sedentary lifestyle brought about a major change. Focusing on the theme of this Sect. 3.1.3, this change has mainly consisted of the fact that, increasingly, the view began to prevail that the whole Earth, with everything on it, is purely utilitarian to provide for all the real and imaginary needs of homo sapiens himself.⁵²

As mentioned above (cf. Sect. 2.1), the development of this sedentary life style gradually created the breeding ground an ever-increasing multitude of economic processes aimed not only at the fulfillment of elementary necessities of life—especially food and shelter—but also, on the one hand, at the creation of ever new needs and, on the other hand, at ever different or new methods of satisfying them, whereby the entire material world within which homo sapiens found himself, ergo the Earth with everything on it, was made subservient to the pursuit of the fulfillment of all these conceivable needs.⁵³

Since then, history has clearly shown that in the fields of the conception of (senseless) needs and of the development of ever new methods for satisfying them,⁵⁴ for homo sapiens, the sky has been the limit,⁵⁵ as a result of which the Earth and everything on it has been gradually turned into a playground of the human race in which this satisfaction of all possible needs is pursued. However, from the very beginning, a basic problem of this way of (economic) thinking and acting has been overlooked, namely that while the imagination of homo sapiens, and consequently his capacity to conceive all kinds of (intrinsically) senseless needs, is unbridled, the Earth itself, including all its riches—and no matter how big it may have seemed to our distant ancestors—is limited.

As long as homo sapiens maintained a primarily agrarian lifestyle (and even up to the period of mercantile capitalism), things were, all in all, not too bad—at least when compared to what has happened afterwards—even though, under the transition towards an agrarian lifestyle, gigantic forests and other natural areas were cut down and numerous animal species were exterminated and several others degenerated into domestic animals.

However, the fences were completely drawn when, in modern times, technological developments occurred with which homo sapiens, increasingly, learned to bend all the forces of nature—ultimately including the weak and strong nuclear forces themselves—to his will, and in this manner initiated what has been described as the industrial revolution.

In one of our earlier books, ‘The unfree market and the law’, this fact has already been described, aptly, as follows:⁵⁶

In this economic model, all the resources available on earth (and as soon as this will be feasible: even beyond earth) need to be discovered and extracted as efficiently as possible in order to make them part of the capitalist production processes. All forests, wherever in the world, must be grubbed-up, in order to produce wood which can serve economic production, and new woods should only be planted if, for the same reason, they can be grubbed-up as soon as possible. Any scientific discovery should, without delay, serve the same capitalist production processes and should consequently translate into the production of goods which are sufficiently “marketable.” As a result, in the contemporary purportedly “free” world, barely any independent scientific research is still taking place, but on the contrary, all scientific research is driven by, or in collaboration with, capitalist industry. Almost every living creature on earth is studied to discover how it can be reduced to a method of entrepreneurial profit, be it as exhibition objects in a zoo (in essence one of the many “beneficent” findings of early capitalism), as pets (also in the case of exotic animals which do absolutely not fit that role), as a testing object, or as an ingredient for potential human consumption in the widest sense of the word.

In what precedes, it has furthermore been shown that in all this, the (still prevailing) capitalist, monetary and financial system has been vital in accelerating the destructive-economic behavior of homo sapiens, with in particular the model of private money creation—relying on anyone gaining access to a banking license being granted the societal power to, through the granting of credit, put new money into circulation and thereby further increase the pressure on future economic production—having become one of the key socio-economic organizational tools that has helped cause this acceleration.

As a result, the entire Earth, with everything on it, has gradually been thrown to the destructive forces of capitalist enterprises.⁵⁷

With this, anno 2023, one the most important questions in socioeconomics is whether a solution is still possible and what such a solution would look like. We have tried to offer our own modest contribution by way of our writings since at least 2015,⁵⁸ including the present book itself.

3.1.3.3 The Proverbial Neoliberal Icing on the Capitalist Cake

Under the impetus of economic neoliberalism, the goal of establishing completely free markets has even been further accentuated over the past half century.

Opposing as a matter of principle any form of planning or regulation, the ideology of economic neoliberalism advocates a model of socio-economic organization in which everything what happens should be left to the free market(s), while state interference should be kept to a minimum. Any form of state interference that could threaten entrepreneurial freedom should be eliminated.

Needless to say that this ideological approach has further reinforced capitalism’s inherent tendency to, above all, pursue economic growth and thereby subordinate all other values to the wealth-gathering aspirations of the class of entrepreneurs.

Two features of economic neoliberalism deserve particular attention in this regard.

There is in the first instance the aversion to any form of government planning and control, based on the view that everything should be left to the operation of the free market(s) and that from this, automatically—as it were by an invisible hand—the most ideal socio-economic and general-societal organization will emerge.

There is secondarily the aversion to any form of regulation to protect other values (such as, for example, the protection of the working classes, public health or the environment), often under the argument that such models of protection cost too much or undermine the competitiveness of the enterprises affected by them.

The combination of these two factors implies that, in terms of the use of natural resources—including other living beings—the free market can do as it pleases, while only limited adjustments are tolerated, especially to keep the most extreme excesses of overly polluting or otherwise harmful, entrepreneurial behavior, within certain boundaries.

Touching on the economic growth model itself—if only from a concern to safeguard the Earth, for the benefit of future generations of people—remains a loaded topic for the (many) adherents of economic neoliberalism, although one can rejoice that at least part of the present-day generations of young people seems to become increasingly aware of the seriousness of the problems created by capitalism.⁵⁹

We have addressed all this ourselves in our earlier work,⁶⁰ while it can be noted that similar far-reaching views can, to a growing extent, be found among other authors as to how capitalism has proven pernicious for the Earth (and for all life that the Earth harbors).⁶¹

One of the main problems created by capitalism concern environmental issues, including climate change, as will be illustrated in more detail in the next Sect. 3.1.4.

3.1.4 Environmental Pollution and Climate Change

3.1.4.1 Problem Statement

3.1.4.1.1 Origins of Environmental Problems

Considering what precedes, it should come as little surprise that in our times, capitalism’s detrimental impact on planet Earth has reached disproportionate dimensions.

In a somewhat more distant past, these issues were addressed under descriptions such as the environmental problem, or the environmental pollution, terms which mainly highlight one dimension of capitalism’s impact on the Earth, namely the pollution of the environment in the broadest sense of the word (including the atmosphere, rivers, seas and oceans, and large parts of the Earth itself).

However, in a given representation, man’s excessive impact on the environment even goes back further in time.

As already mentioned, perhaps one of the important caesura moments in history involved the transition from the nomadic societies of prehistoric times to (more) sedentary forms of society, with humans increasingly engaging in agriculture and barter.

Indeed, the impact of the (first) agrarian revolution (also called: the Neolithic revolution) that began to occur in certain areas roughly in 10–12,000 B.C.⁶² (and in other areas on Earth, much later) on the environment cannot be underestimated. At the very least, in the realm of ideas, it was then that homo sapiens developed the notion that the whole Earth, with everything on it, is subservient to the satisfaction of their own needs.⁶³ In practice, this led to an increasing allocation of territory for purposes of agriculture and permanent habitation (with accompanying infrastructure, such as roads), for which natural habitats had to systematically give way.

Illustrative in that regard is that one of the areas in which homo sapiens began to settle in abundance to adopt, increasingly, a more sedentary lifestyle, in particular the European continent, in addition to parts of Asia, was virtually deforested in no time at all and consequently, for the most part, reduced to a gigantic agricultural and residential zone.

It is therefore no coincidence that precisely Europe and its inhabitants—in addition to certain other areas on Earth, e.g. Southeast Asia (with China and India) and the Middle East—has since then progressively followed this path of remodeling the Earth in accordance with economic needs and interests, this while there remained in parallel other areas in which the Nomadic lifestyle survived longer (and which, consequently, remained characterized by a more frugal and respectful treatment of the environment), for example, at least until the arrival of European colonists, on the North American continent.

In other words, since this agrarian revolution, the fences started to come down and more and more areas of the Earth became exposed to the increasingly sedentary lifestyle of man, with all the adverse consequences for the Earth and other life forms this has entailed. Gradually, this transition also got accompanied by increasing trade and industry, characterized by a growing variety of products and, parallel to this, an increase of all types of (artificial) needs.

An anthropologist who would compare the development of societies on the North American continent and those on the European continent during, say, the period 500 BC to 1500 AD, would probably reach the conclusion how few the needs of man on the North American continent remained during that period, and how growing and increasingly varied the needs of man on the European continent became, with the underlying question being to what extent the transition from a nomadic to a sedentary lifestyle, later accompanied by increasing urbanization, played a decisive role in this development of all kinds of (intrinsically artificial) needs. It even seems that the ever-increasing degree of labor specialization that resulted from the sedentary lifestyle, at the same time, provided an ideal breeding ground for the runaway flow of the human imagination and, consequently, for the resulting stream of ever more needs and of the production of (often intrinsically useless) goods and services geared to them, an evolution which would eventually culminate in today’s capitalist system of production for the sake of production and consumption for the sake of consumption.

3.1.4.1.2 Philosophical and Religious Opposition to an Economy Driven by Artificial Needs

By way of parenthesis, it may be pointed out (again) that meanwhile, throughout the Western (and Asian) world, leading figures in religion and philosophy continued to struggle for a long time with the choice of such a lifestyle characterized by ever more (material) needs and ever more production and trade to meet these needs.

Not coincidentally, these are the same philosophical and religious systems that also opposed (unrestrained) wealth-gathering behavior. (Cf. Sects. 2.2.2 and 2.2.3.)

The examples of these are legion.

For example, within Buddhism it is said that a life aimed at satisfying ever more needs cannot lead to fulfillment.⁶⁴ In practical terms, Buddhism’s advice is that man must learn to keep his desires in check, or even better not desire at all, an attitude to life that is obviously completely at odds with the path that the socio-economic order of the Western world has followed throughout time—and certainly in the past few centuries.

In a comparable vein, similar teachings emerged in Ancient Greece, for example, with Diogenes, of whom it is believed that he renounced all possessions in order to go and live in a barrel. To Plato, in turn, we owe a comprehensive philosophy that was characterized, among other things, by a strong aversion to the use of money and to commerce, and especially to the greed associated with them, which stand in the way of the ideal society this philosopher envisioned. In a similar vein, Aristotle argued for a just distribution of wealth, opposing certain mechanisms that inherently lead to an unequal—and consequently unjust—distribution of wealth within society, but which have nevertheless become commonplace in contemporary societies, e.g., the interest charge on credit.

At its core, the teaching of Jesus Christ was also opposed to a lifestyle aimed at an ever-increasing material satisfaction of needs (cf. the Sermon on the Mount cited above), which of course contrasts sharply with the gigantic treasures that the Catholic Church, in the name of Jesus Christ, has sought to appropriate in the course of the centuries that followed, in many cases through methods of which Jesus Christ Himself would have shuddered.⁶⁵ Be as it may, in the teachings of Jesus Christ Himself, the rich should rather use their wealth as a means to regain their soul, for example by sharing their wealth with (among) the poor.

Nevertheless, it appears that, also in the realm of ideas, the battle was gradually settled in favor of the idea good that wanted to base the socio-economic order on ever more gratification of needs (rather than on the conception of a just society, aimed at the fulfillment of everyone’s essential needs of life), which would eventually, from the seventeenth to eighteenth century onwards, lead to the supposedly rational approach of so-called economic liberalism.

3.1.4.1.3 Magnification of the Environmental Problems Under Capitalism

And so it occurred…

Based in part on this evolving body of ideas, from the sixteenth century onward, the socio-economic order was increasingly shaped in accordance with the working methods and principles underlying trade and industry, which would eventually culminate in capitalism, a socio-economic model that over the past four centuries has become the dominant economic model on Earth.

Henceforth, there was hardly any taboo or reservation to consider the world, with everything in it—including other people—as available for serving one’s (own) economic interests, in other words for the production of goods and for services aimed at the satisfaction of all possible needs, which under capitalism—not counting a limited number of exceptions prohibited by law—should all be fulfillable.

It should come as little surprise that attaching such an ever-increasing importance to the gratification of all possible needs, as well as to the conception of an economic model whose purpose is to enable such a gratification of all conceivable needs, has gone hand in hand with an ever-increasing degradation of the environment.

Where production of (intrinsically useless) goods (or services) began to be regarded as more important than the preservation of the living environment, forests or other natural environments were destroyed without any problem, roads were built, rivers were diverted or even drained, man started digging canals and constructing dams, and so on, all without much reflection on how all of this affected the environment, including, for example, the creation of the first man-made deserts (where there had previously been fertile land).⁶⁶

In addition, as production became increasingly machine-based, new forms of environmental pollution also gained momentum, with the cherry on top of the cake being the rise of chemical and nuclear industries that have further accentuated the issue of environmental pollution in modern times.

All the while, voices calling for a slowing down of the pace were booed off, on the grounds that any slowing down of the pace would impede societal progress. This involved the hooting away of any call for moderation—be it in the area (1) of consumption of raw materials or other natural resources, (2) of the exploitation of labor-providing fellow human beings or other life forms, (3) of the destruction of one’s own habitat, (4) of questioning certain forms of intrinsically useless production or service, (5) of the lifestyles to which capitalism has led in many parts of the world, or even just (6) of the ever-increasing growth of the world’s population—an intent which became one of the main purposes of the liberal (and later neoliberal) theories of rationalization themselves.⁶⁷

In economic liberalism, the credo became unequivocally that planning and economics are incompatible concepts, since all socio-economic practice should be left to the entrepreneurial class, with an invisible hand ensuring that everything will run smoothly and that all problems will be solved by themselves. Calls for addressing environmental pollution have in the past been systematically met by this wall of liberal (and later neoliberal) reluctance.

Under the doctrine of economic neoliberalism, hardly anything would change in this regard, except perhaps the wordings of the socio-economic belief system. Thus, economic neoliberalism generally holds that everything should be left to the domain of the free market and that governments should refrain from any action that might inhibit private (entrepreneurial) initiative.

At present, this neoliberal attitude has even led to views whereby it is suggested that the search for solutions to environmental pollution is best left to private market forces themselves, which essentially implies that the sector (and the ideas that underpin it) from which the problems have arisen will—sooner or later—solve the problems itself, which constitutes, in other words, a variant of the (neo)liberal belief that by leaving everything to the free market, all problems will, in the end, magically disappear.⁶⁸

The fact that this fable, which has been maintained for several centuries already, has still not succeeded in providing even the beginnings of an answer to the environmental problems, obviously raises the question more than ever as to how long humanity will cling to such a delusion.⁶⁹

3.1.4.2 A Selection of Recent Research Findings

3.1.4.2.1 General

By 2022, a particular aspect of the environmental problem, namely the problem of climate change, has been gripping the world for quite some time already,⁷⁰ but still without the policy levels being prepared to tackle (sufficiently drastically) the causes of the environmental problems, including climate change itself.⁷¹

This is clearly also the conclusion that can be drawn from various research reports that have been published, at regular intervals, over the past few years, some of which we shall quote—both in a direct and indirect manner—below.

3.1.4.2.2 The IPCC Report ‘Climate Change 2022. Mitigation of Climate Change’ (April 2022)

The general observation made in Sect. 3.1.4.2.1 is clearly reflected in one of the recent climate change reports by the authoritative Intergovernmental Panel on Climate Change (IPCC), specifically a report dated April 2022 and entitled ‘Climate change 2022. Mitigation of Climate Change’, which laid out how political unwillingness to tackle the problem in a sufficient manner continues to hinder the implementation of available (technological) solutions to adeptly address climate change.⁷²

Indeed, according to this IPCC report, some of the major obstacles to climate action are political, not technological. The report notes, for example, that vested interests in fossil fuels are thwarting policies to reduce emissions (which obviously is not a new phenomenon but has been one of the main obstacles to implementing similar recommendations to combat environmental pollution formulated in the 1970s by the Club of Rome).⁷³

In fact, the political unwillingness to deal with the problems of environmental pollution is so far-reaching that deliberately organized disinformation campaigns by climate change deniers, in some places, keep increasing political polarization on the issue. Moreover, in such cases, politicians tend to shy away from tough decisions, especially when the outcome of their action badly reflects in elections.

An additional factor that complicates a global policy approach concerns the energy gap in developing countries. Indeed, in many of developing countries, governments have yet to expand access to electricity and modern fuels for cooking for hundreds of millions of the poorest people, which in the short term is considered possible only by burning more fossil fuels.⁷⁴ While these countries have benefited from advances in renewable energy technology, efforts to dramatically reduce emissions have encountered two longstanding problems: high costs and overburdened governments.⁷⁵

In fact, the impact of the political unwillingness to prioritize the issue is so great in all of this that, according to Wei Shen, a researcher affiliated with the Institute of Development Studies, a think tank in Britain that collaborated in writing the aforementioned April 2022 IPCC report (cf. Sect. 3.1.4.2.2), the issue could have been solved two or three decades ago if finding solutions depended (or had depended) solely on technological developments.⁷⁶

Still, it has long been clear who is most responsible for the emission of greenhouse gases that are considered the main cause of climate change.

Indeed, according to a June 2022 Oxfam report, rich countries have contributed an estimated 92% of excess historical emissions of harmful gases and were at the beginning of 2022 responsible for 37% of the at that time occurring emissions (even though only 15% of the world’s population was living in these countries). Between 1990 and 1995, carbon emissions from the richest top 1% of the global population represented more than double the emissions of the poorest half of the population, while as much as 71% of emissions since 1988 can be traced to just 100 fossil fuel producers. In contrast, low-income countries have contributed the least to these emissions of harmful emissions but are suffering the most from the effects of ongoing climate change. Africa’s current emissions at the beginning of 2022 were less than 4% of the global total (despite being home to 17% of the world’s population). For example, Kenya, Ethiopia, Somalia and South Sudan together accounted for only 0.1% of global emissions.⁷⁷

What is true on a macro scale for the rich countries is also true on a micro scale in the relationship between rich and poor(er) individuals, which also shows that the Earth’s rich elite are responsible for greenhouse gas emissions to a much greater extent than the average person. This is not only a consequence of the fact that the rich elite are those who own the (most polluting) enterprises but plays out even at the level of individual consumption. In this regard, George Monbiot has pointed out that to avoid more than 1.5 °C of global warming, average human emissions should not exceed two tons of carbon dioxide per person per year. But the richest 1% of the world’s population produces on average more than 70 tons per person per year. Bill Gates alone, according to an estimate dating from the period when Monbiot wrote his contribution (notably in 2021), emitted nearly 7500 tons of CO₂ per year, mostly from flying in his private jets. By the same estimate, Roman Abramovich produced nearly 34,000 tons per year, largely through the operation of his giant yacht. It is furthermore called here that the many homes of the ultra-rich may be equipped with solar panels, that their supercars may be electric, that their private jets may be powered with biokerosene, but that these modifications make little difference to the overall impact of their consumption. In some cases, they even increase it. For example, the switch to biofuels advocated by Bill Gates in the is considered one of the biggest causes of habitat destruction, as forests are cut down to produce wood pellets and liquid fuels and soils are destroyed to make biomethane.⁷⁸

The latter observations of both Oxfam and Monbiot have been confirmed in an opinion piece of Martin Kuebler of November 15, 2022,⁷⁹ the (symbolical) date on which the global population reached the threshold of eight billion people. In this opinion piece, Kuebler refers to findings of the UN in which population growth was, generally, indicated as one of the main sources of increased greenhouse gas emissions and ecological destruction. As Kuebler has phrased this: “Every extra person adds to the strain on the planet’s finite biological resources.”⁸⁰ However, this general statement is immediately nuanced under reference to the fact that the world’s richest countries, where population growth has rather slowed or reversed than increased in recent years, are the ones using the most resources per capita, and in this manner causing the biggest damage to the environment. By contrast, poorer, developing countries, including those in sub-Saharan Africa and parts of Asia, although facing the biggest increase in their population, are at the same time responsible for but a fraction of global emissions and resource use. According to these findings, if everyone on Earth would live like a citizen of the United States of America, the resources of at least five Earths would be needed to meet the demands. By contrast, living like a citizen of a country such as Nigeria, would only amount to a use of 70% of the world’s resources per year. For India, with a population of more than 1.3 billion people, that figure amounts to just 80%.⁸¹

3.1.4.2.3 The UNICEF Report ‘Innocenti Report Card 17. Places and Spaces. Environments and Children’s Well-Being’

A UNICEF report issued on May 23, 2022, entitled ‘Innocenti Report Card 17. Places and Spaces. Environments and children’s well-being’,⁸² in general found that while the world’s group of richest countries—including Finland, Iceland, the Netherlands, and Norway—provide healthier environments for the children living within their borders, at the same time they contribute disproportionately to the destruction of the global environment (with an extremely detrimental effect on children living in the group of poorer countries).⁸³

All the great rhetoric of the past decades notwithstanding, this is one more indication that the Western world keeps continuing its selfish, capitalist lifestyle, regardless of the disadvantages that this has for the rest of the world.

In preparing the Innocenti Report Card 17: Places and Spaces, UNICEF has compared the extent to which 43 countries belonging to the Organization for Economic Cooperation and Development (OECD) and the European Union (EU) are succeeding in establishing healthy environments for children.⁸⁴ A general conclusion reached by this report is that environmental changes taking place all over the world find their way into children’s bodies and minds. A notable finding is that due to polluted air, water and food, the average world citizen unintentionally consumes a quarter of a kilo of plastic per year—equivalent to consuming a credit card per week. As a result, in nine of the world’s richest countries, more than 1 in 20 children has elevated blood lead levels.⁸⁵

According to this report, the environmental problem is no longer an abstract concept about a distant future: it affects children (and adults) in very concrete ways here and now.⁸⁶

The report, furthermore, points to the fact that also the effects of climate change itself are already evident: rising temperatures, higher sea levels, air and soil pollution, and extraordinary weather events are affecting not only the world we leave behind for future generations, but also the brains, lungs and hearts of all who live today, including children in particular.⁸⁷

The UNICEF report Innocenti Report Card 17: Places and Spaces, in addition, examined the impact of indicators such as: exposure to harmful pollutants, including toxic air, pesticides, moisture and lead; access to light, green spaces and safe roads; as well as countries’ contributions to the climate crisis, resource consumption and e-waste dumping. Similar to the findings of Martin Kuebler (cf. Sect. 3.1.4.2.3), also the UNICEF findings point out that if all countries in the world would consume the same number of resources as the OECD and EU countries that were examined in the report, the equivalent of 3.3 Earths would be needed to keep up with consumption levels. Moreover, if each country consumed resources at the rate that people in Canada, Luxembourg and the United States of America do, at least five earths would be needed.⁸⁸

Although countries such as Spain, Ireland, and Portugal generally top the rankings, for all indicators, the UNICEF report showed that all examined OECD and EU countries failed to help create a healthy environment for all of the world’s children. Some of the wealthiest countries, including Australia, Belgium, Canada, and the United States of America, have serious and widespread impacts on the global environment—based on CO₂ emissions, electronic waste and total per capita resource consumption—and also score low when it comes to creating a healthy environment for children within their own borders. In contrast, the least prosperous OECD and EU countries in both Latin America and Europe have a much lower impact on the rest of the world.⁸⁹

Thus, one of the report’s findings is that most rich—ergo the most capitalist—countries not only fail to provide a healthy environment for children within their borders, but also contribute to the destruction of children’s environments in other parts of the world. In contrast, a group of other countries provide a relatively healthy environment for their children domestically, while in their relationship to foreign countries, they are among the largest contributors of pollutants that destroy children’s environments.⁹⁰

Further remarkable findings of the report include the following:⁹¹

• More than 20 million children in the group of countries that were examined have elevated levels of lead in their blood. This even makes lead one of the most dangerous toxins in the environment.⁹²

• Finland, Iceland, and Norway are in the top three in terms of caring for a healthy environment for their own children, but with respect to the world, they are the bottom three, with high rates of emissions, e-waste and consumption.

• In Iceland, Latvia, Portugal, and the United Kingdom, one in five children are exposed to moisture and mold at home, while in Cyprus, Hungary and Turkey, more than one in four are exposed.

• Many children all over the world breathe toxic air both outdoors and indoors. E.g., Mexico has one of the highest numbers of children dying from air pollution at 3.7 years per thousand children, while Finland and Japan have the lowest numbers at 0.2 years.⁹³

• In Belgium, the Czech Republic, Israel, the Netherlands, Poland, and Switzerland, more than 1 in 12 children is exposed to elevated levels of pesticide pollution. Pesticide pollution is associated with cancer, including childhood leukemia, and can affect the nervous, cardiovascular, digestive, reproductive, endocrine, blood and immune systems.

Figure 3.1 presents an overview of air-related morbidity in children under 15 years of age, in 2019.

Fig. 3.1

Air-related morbidity in children under 15 years of age (2019) [Source: UNICEF (2022b) Innocenti Report Card 17: Places and Spaces, p. 20, Figure 5]

3.1.4.2.4 Data Provided by the WHO (of 2018 and 2022, Respectively)

A slightly older, albeit more comprehensive, 2018 World Health Organization study had already shown in a similar vein that 9 out of 10 people on Earth breathe air with high levels of pollutants. Estimates in this study even showed an alarming death toll of seven million people per year due to air pollution (outdoors) and household pollution.⁹⁴

In said 2018 study, the WHO estimated that about seven million people die annually from exposure to fine particles in polluted air that penetrate deep into the lungs and cardiovascular system and cause diseases such as stroke, heart disease, lung cancer, chronic obstructive pulmonary disease, and respiratory infections, including pneumonia. According to this study, air pollution caused about 4.2 million deaths in 2016 alone, while air pollution from cooking with polluting fuels and technologies in households, during the same period, caused an estimated 3.8 million deaths.⁹⁵ According to the WHO, in 2018, more than 90% of deaths from air pollution occurred in low- and middle-income countries, mainly in Asia and Africa, followed by low- and middle-income countries in the Eastern Mediterranean, Europe, and the Americas. This research has in addition revealed that about three billion people—more than 40% of the world’s population—at the time, still lacked access to clean fuels and technologies for cooking at home, the main source of household air pollution.⁹⁶

Similar empirical data from 2022 show that the situation has gotten even worse. Indeed, 2022 data show that almost the entire world population (99%) is breathing air that exceeds WHO air quality limits, threatening their health. According to these data, a record 6000-plus cities in 117 countries monitored air quality in 2022, but people living there continue to breathe unhealthy levels of fine particulate matter and nitrogen dioxide, with people in low- and middle-income countries experiencing the highest exposures. The 2022 findings prompted WHO to emphasize the importance of curbing fossil fuel use and taking other concrete steps to reduce air pollution.⁹⁷

3.1.4.2.5 Observations from The Guardian (June 2022)

How alarming the situation has become in the past years, is further evidenced by an assessment of the IPCC 2022 report⁹⁸ (cf. Sect. 3.1.4.2.2) in an article that appeared in The Guardian of June 1, 2022,⁹⁹ which summarized its findings as follows:

(…) the world’s leading climate scientists, the Intergovernmental Panel on Climate Change, warned earlier this year that continued global heating, beyond 1.5 C above pre-industrial levels, would wreak devastation across the globe, in the form of floods, droughts, heatwaves and other extreme weather, with swathes of the planet becoming unsuitable for agriculture and effectively uninhabitable, causing extreme harm to human society in many places.

The same June 1, 2022, article from The Guardian, in addition, quoted Katharine Hayhoe, chief scientist at the Nature Conservancy in the United States of America and professor at Texas Tech University.

In said article, Hayhoe stated that, because of climate change, the world is heading toward dangers unseen in the ±10,000 years of human civilization, and that while efforts to make the world more resilient are necessary, on their own they will not be able to sufficiently mitigate the effects of climate change. According to Hayhoe, people still underestimate the magnitude of what is going on. According to this researcher, the scale of the climate problem will be far greater than anything humanity has ever seen in the past and will affect every living thing. Hayhoe in addition warns that although countries can begin to adapt to some of the consequences, for example through sea walls and flood defenses, and/or by making their infrastructure more resilient to extreme weather, if global warming continues, the world will soon reach a point where no such adaptation will still be possible.¹⁰⁰

The article from The Guardian also refers, in reverse, to another statement, made at a Financial Times event on May 19, 2022, by a certain Stuart Kirk, (at the time) Head of responsible investments at the international bank HSBC, in which, after first comparing the climate change problem to the Y2K issue, he noted that financial institutions should discount the risks of the climate crisis because the world will be perfectly capable of adapting to its consequences. Kirk noted that Amsterdam is built on land that is below sea level, and further suggested that areas that climate scientists believe are vulnerable to flooding, such as Miami, could be similarly adapted to cope with the risk in a similar manner as the Dutch have done for a long time already. “What difference does it make if Miami is six feet under water in 100 years?”, Kirk had added in conclusion. ¹⁰¹

3.1.4.2.6 Observations of Oxfam (June 2022)

In recent years, more and more figures on the cost of ongoing climate change have been made public.

For example, a research report by Oxfam¹⁰² (dated June 7, 2022)¹⁰³ found that the amount of money needed to help communities in emergencies due to extreme weather events has increased by more than 800% over the past two decades, the time frame in which the climate crisis itself also accelerated. This report, furthermore, shows not only that the need for UN humanitarian funding for emergencies related to extreme weather events is currently much greater than roughly 20 years ago, but also that UN donor countries are no longer able to keep up with the staggering costs of the climate crisis. In 2021, for example, the economic toll from extreme weather events, worldwide, amounted roughly to USD 329 billion—the third-highest, yearly amount ever and nearly double the total aid donated by rich countries to poorer countries in that same year. It is furthermore mentioned that, between 2000 and 2002, the UN required an average of USD 1.6 billion annually for humanitarian aid due to extreme weather events. From 2019 through 2021, that amount averaged USD 15.5 billion annually, an increase of more than 800%. The report, in addition, shows that rich donor countries provide only half of every USD 2 needed to address disasters caused by climate change. According to the report, UN humanitarian interventions themselves cover only a small portion—roughly good for ±7.5% of the population, or 474 million of the estimated 3.9 billion inhabitants—of the low- and middle-income countries that have been ravaged by climate change disasters since the beginning of the twenty-first century.¹⁰⁴

One of the Oxfam report’s conclusions is that, from addressing wars to food scarcity around the world, the climate change crisis is putting increasing pressure on the UN’s already financially strained humanitarian system. The impact of climate change-induced disasters, moreover, exacerbates the inequalities already ingrained in the physical and social infrastructures of countries—i.e., by capitalism—to the extent that climate change hits low-income countries (and people) especially hard.¹⁰⁵ In addition, such countries typically lack the proper infrastructure and money themselves to recover from the related disasters.¹⁰⁶ Meanwhile, rich countries, such as the United States of America, continue to emit the lion’s share of the emissions that fuel these extreme weather events.¹⁰⁷

3.1.4.2.7 The WMO Report ‘United in Science’ (September 2022)

After the summer period of 2022, forecasts became, if anything, even more pessimistic.

A joint report entitled ‘United in Science’ by several, international agencies, dated September 13, 2022, and coordinated by the World Meteorological Organization (WMO),¹⁰⁸ reveals not only a huge gap between (political) aspirations and reality, but also that the evolution of climate change is heading entirely in the wrong direction. The report’s warning, therefore, is that without more ambitious measures to combat climate change, both the physical and socio-economic impacts of climate change will become increasingly devastating in the coming years.¹⁰⁹

A central finding of the United in Science-report is that greenhouse gas emissions continue to rise to record highs. By the date of the report’s conclusion, fossil fuel emissions themselves were back above pre-COVID-19 pandemic levels, following a temporary decline due to energy supply blockages in the aftermath of the COVID-19 pandemic crisis. According to the report, to be consistent with the 1.5 °C target of the Paris Climate Change Agreement, the ambition of emission reduction commitments for 2030 would need to be seven times higher than was the case as of the report’s release date¹¹⁰ (making it increasingly improbable that keeping the global temperature rise below the 1.5 °C target would remain in reach).

Moreover, the 2015–2022 period was the warmest on record. According to the report, there was even a 48% chance that the average annual temperature for at least 1 year of the 2022–2026 period, would be 1.5 °C higher than the 1850–1900 average.¹¹¹

This is not without consequences: as global warming continues to increase, the passing of so-called tipping points in the climate system may no longer be ruled out. As a result, cities that are home to billions of people and are responsible for up to 70% of man-made emissions will face increasing socio-economic consequences of this climate change. Within these, the most vulnerable populations will suffer the most.¹¹²

Among the examples of extreme weather in various parts of the world that occurred in 2022, the report lists: (1) In general, worsening floods, droughts, heat waves, extreme storms and forest fires that break records with alarming regularity; (2) Heat waves in Europe;¹¹³ (3) Colossal floods in Pakistan, and (4) Prolonged and severe droughts in China, the Horn of Africa, and the United States of America.¹¹⁴

The report also explicitly points out that there is nothing natural (anymore) about the new magnitude of the occurring weather disasters. On the contrary, they represent the price for humanity’s addiction to fossil fuels, according to UN Secretary General António Guterres, who furthermore stated in a video message related to the report that climate impacts are headed for unprecedented destruction.¹¹⁵

The main messages of the United in Science-report may be summarized as follows:¹¹⁶

• 1. Regarding concentrations of greenhouse gases in the atmosphere (findings of WMO Global Atmosphere Watch (GAW)):

  According to the report, levels of carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O) in the atmosphere continue to rise. The temporary reduction in CO₂ emissions in 2020 due to the COVID-19 pandemic appears to have had little (long-term) effect on the growth of atmospheric concentrations (=what remains in the atmosphere after CO₂ is absorbed by the ocean and biosphere).

• 2. Global greenhouse gas emissions and budgets (findings from Global Carbon Project):

  According to the report, global fossil CO₂ emissions evolved back to 2019 pre-pandemic levels in 2021, following a 5.4% decline in 2020 due to widespread COVID-19 lockdowns. This showed that global CO₂ emissions in 2022 (from January to May 2022) were 1.2% higher than the levels recorded in the same period of 2019, mainly due to increases in the United States of America, India and most European countries.

• 3. State of the Global Climate: 2018–2022 (findings of World Meteorological Organization (WMO)):

  The period 2015–2021 was the warmest on record. The 2018–2022 global average temperature (based on data through May/June 2022) amounted to an estimated 1.17 °C above the 1850–1900 average. While about 90% of the accumulated heat in the Earth system is stored in the ocean, the Ocean Heat Content for the 2018–2022 period was higher than in any other 5-year period, with ocean warming having increased particularly sharply since the beginning of the millennium.

• 4. Global climate projections for 2022–2026 (findings from Met Office, UK/WMO/World Climate Research Programme):

  According to the report, the annual average global surface temperature, during the period 2022–2026, was expected to be between 1.1 °C and 1.7 °C above pre-industrial levels for each year. Moreover, the report mentions the projection that the probability that the annual mean global surface temperature, for at least one of the years from 2022–2026, will temporarily exceed the pre-industrial level by more than 1.5 °C, is 48% and increases with time. There is even a small probability (of 10%) that this 5-year average will itself exceed this threshold. There is, furthermore, a 93% probability that at least 1 year in the 2022–2026 period will be warmer than the warmest year on record, 2016, and that the 2022–2026 average temperature will be higher than that of the preceding 5-year period.

• 5. Emissions gap (findings from UN Environment Programme (UNEP)):

  Assuming a continuation of current climate related policies, global warming in the twenty-first century is estimated (with 66% probability) to be 2.8 °C (or between 2.3 °C and 3.3 °C). This could be reduced to 2.5 °C (or between 2.1 °C and 3.0 °C) if the most new or updated commitments made by countries as of the date of the report, would be fully implemented. However, it appears that, collectively, countries are not meeting their new or updated commitments with their current policies.

• 6. Tipping points in the climate system (findings from World Climate Research Program/WMO):

  The report indicates that further research on so-called tipping points is crucial to provide society with a better understanding of the costs, benefits and potential limitations of climate mitigation and adaptation in the future.

  A major driver of the distribution of heat, salt, and water in the climate system, both regionally and globally, is the Atlantic Meridional Overturning Circulation (AMOC). Research findings cited in the report show that this AMOC was weaker at the time of the report than at any other time in the past millennium.

  Another important tipping point is the melting of the Greenland and Antarctic ice sheets; this could have global consequences through significant additional sea level rise for hundreds to thousands of years to come.

  According to the report, so-called regional tipping points, such as the desiccation of the Amazon Forest, may also have serious local impacts, with global implications. Other examples involve regional droughts that may affect the global carbon cycle and disrupt key weather systems, such as monsoons.

  Also, the combined effects of higher temperatures and humidity could reach dangerous levels in some regions, in the coming decades, with physiological tipping points or thresholds beyond which outdoor human labor will no longer be possible without technical aids.

• 7. Climate Change and Cities (findings from the Urban Climate Change Research Network):

  According to the report, cities—home to 55% of the world’s population, or 4.2 billion people, by 2022—are responsible for up to 70% of man-made emissions. In addition, cities are highly vulnerable to the impacts of climate change, such as increased heavy precipitation, accelerated sea level rise, acute and chronic coastal flooding, and extreme heat, among other significant risks. All these impacts exacerbate the socio-economic situation in cities and the socio-economic problems and inequalities that characterize them.

  According to the report, worldwide, by 2050, more than 1.6 billion people in more than 970 cities will be regularly exposed to quarterly average temperatures of at least 35 °C (or 95 °F).¹¹⁷

• 8. Extreme weather and socio-economic impacts (findings from WMO World Weather Research Program (WWRP)):

  According to the report, weather, climate, and water-related disasters have increased by a factor of five over the past 50 years and, daily, cause USD 202 million in losses. Such extreme weather events have long-lasting socio-economic consequences, especially among the most vulnerable communities, which are also often the least equipped to respond, recover and adapt.

  In recent years, for example, successive tropical cyclones have hit southeastern Africa and caused devastation in Madagascar. The World Weather Attribution initiative found that climate change, in all likelihood, has increased the intensity of rainfall from these storms. As the atmosphere warms, it holds more water, making wet seasons and events wetter on average. With further emissions and rising temperatures, such heavy rainstorms will continue to occur in the future.

  The report also points out that, in June and July 2022, Europe was hit by two extreme heat waves and drought. Portugal set a new national temperature record of 47.0 °C in July 2022, and in the United Kingdom, temperatures exceeded 40 °C for the first time in history.¹¹⁸ Such summer heat waves pose a significant risk to human health, especially for the elderly and sick, albeit that other factors—such as socio-economic conditions, urbanization (the so-called urban heat island) and the level of preparedness—can also increase the vulnerability of populations. According to initial reports, these heat waves have resulted in several thousand excessive deaths.

3.1.4.2.8 Memorandum Dated September 14, 2022, from the Committee on Oversight and Reform of the Congress of the U.S. House of Representatives

In September 2022, a classic (and traditionally voiced by environmentalists) claim that, over the past few decades, the fossil fuel industry has willfully covered up its negative effects on the environment found an exceptionally large (and official) confirmation.¹¹⁹

Particularly in the United States of America, criticism of the oil industry’s obfuscation of the climate crisis had increased after internal documents revealed that enterprises had tried to distance themselves from agreed-upon climate goals and admitted to misleading the public about purported, green efforts.¹²⁰

All this came to light as part of a US Congressional hearing in Washington DC, where an investigation into the role of fossil fuels in driving the climate crisis yielded documents from, among others, oil giants ExxonMobil, Chevron, Shell, and BP, and in the context of which environmental activists accused Shell of a “legacy of violence and of ignoring the welfare of communities around the world.” Moreover, the released, internal documents from the hands of these oil companies¹²¹ revealed that the oil industry had long known about the devastating effects of climate change but had chosen to downplay and even vehemently deny these findings to maintain its business models.¹²²

In a preparatory memorandum prepared by the U.S. Committee on Oversight and Reform, among other things, the following was stated:¹²³

Fossil fuel companies have known since the late 1970s that their products contribute to climate change. From 1979 to 1983, fossil fuel companies and the American Petroleum Institute (API) participated in a task force that privately shared climate science research and discussed possible ways to reduce emissions. Despite knowing the truth about climate change, fossil fuel companies continued to contradict prevailing scientific knowledge and inject confusion into the public debate over climate change. During the 1990s, ExxonMobil, Chevron, BP, Shell, API, and the U.S. Chamber of Commerce joined the Global Climate Coalition, which vigorously fought potential climate change regulations and lobbied the U.S. government to derail international climate action to reduce carbon pollution emissions.

At the Committee’s historic hearing in October 2021, fossil fuel executives finally admitted under oath that climate change is real, that burning fossil fuels contributes to it, and that this is an existential threat to the planet. Yet none of them would pledge to end their financial support for efforts to block meaningful action on climate change.

The Committee’s investigation has shown that, rather than outright deny global warming, the fossil fuel industry has “greenwashed” its record through deceptive advertising and climate pledges-without meaningfully reducing emissions. Documents obtained by the Committee show:

• Contrary to what their pledges imply, fossil fuel companies have not organized their businesses around becoming low-emissions, renewable energy companies. They are devoted to a long-term fossil fuel future. (…)

• Big Oil’s climate pledges and green advertising focus on unproven technologies the companies have privately admitted are decades away from implementation. (…)

• Oil and gas companies have tried to create the impression that they are taking ambitious steps to reduce emissions-without actually doing so. (…)

• Big Oil relies on accounting gimmicks, tricky language, and delay tactics to claim the mantle of climate leadership while continuing to be a primary cause of an ongoing climate catastrophe.

• (…)

This makes the oil industry part of the growing list of (large) industries with a very harmful impact on either people and society, or the environment, or both, which have been known to the enterprises operating in these industries for a long time (sometimes even decades), but which the enterprises in question have deliberately concealed from the rest of humanity, and in the meantime have simply continued their harmful behavior as if nothing was wrong.¹²⁴

These findings have largely been confirmed in an article from the hand of Fiona Harvey that appeared in The Guardian on November 9, 2022.¹²⁵ According to this article, it has appeared from recent research data that greenhouse gas emissions from oil and gas facilities around the world have been about three times higher than their producers have been claiming in the past years. Based upon information made available on the website https://climatetrace.org/downloads, Harvey even reached the conclusion that “half of the 50 largest sources of greenhouse gases in the world were oil and gas fields and production facilities”.¹²⁶

In said article, Hailey furthermore quoted Al Gore who stated that the shocking under-reporting of greenhouse gas emissions is a huge problem in trying to tackle the climate change crisis, as one can only manage what can be measured.¹²⁷ According to Gore, “For the oil and gas sector it is consistent with their public relations strategy and their lobbying strategy. All of their efforts are designed to buy themselves more time before they stop destroying the future of humanity.” Gore also made explicit reference to the example of ExxonMobil (explicitly mentioned in the above quoted Memorandum of the U.S. Committee on Oversight and Reform), which was discovered to have deliberately hidden what it knew about global warming: “They engaged in industrial scale lying to publics around the world, even though they had information of their own notifying them that they were being dishonest. I do think that they have committed the moral equivalent of war crimes”.¹²⁸

3.1.4.2.9 The Emissions Gap Report 2022

In the run-up to the so-called Cop27 conference of November 2022 (cf. Sect. 3.1.4.2.10), the UN Emissions Gap Report 2022¹²⁹ was published, confirming the (pessimistic) projections of the earlier quoted reports and observations (cf. Sects. 3.1.4.2.1–3.1.4.2.8).

In general, the UN Emissions Gap Report 2022 has been indicated as the 13th edition in an annual series that aims to provide “an overview of the difference between where greenhouse emissions are predicted to be in 2030 and where they should be to avert the worst impacts of climate change”.¹³⁰

From the UN Emissions Gap Report 2022, it appears that updated national pledges since COP26—i.e., the Climate conference held in 2021 in Glasgow, UK—only made a negligible difference to predicted 2030 emissions, and that humanity is still far from the Paris Agreement goal of limiting global warming to well below 2 °C, preferably 1.5 °C.¹³¹

Rather, the UN Emissions Gap Report 2022 showed that policies in place in 2021–2022 pointed to a 2.8 °C global temperature rise by the end of the twenty-first century. At best, implementation of the at the time made pledges—especially those of Cop26—was expected to only reduce this number to a 2.4–2.6 °C global temperature rise by the end of the twenty-first century.¹³²

One of the further conclusions of the UN Emissions Gap Report 2022 is that only an urgent system-wide transformation would still be able to deliver the enormous cuts needed to diminish greenhouse gas emissions by 2030. The report, furthermore, warns that the window to take adequate measures was closing, as the world was by no means on track to reach the Paris Agreement goals and as global temperatures may reach 2.8 °C by the end of the twenty-first century. More specifically, the UN Emissions Gap Report 2022 finds that the world should cut greenhouse gas emissions by at least 45% to avoid global catastrophe. The report also points to the fact that while technological solutions to transform societies exist, there appears not be a huge urge to start using them in collective, multilateral action.¹³³

In light of the findings of this UN Emissions Gap Report 2022, it was not surprising that expectations set at Cop27—the climate conference scheduled to take place in November 2022 in Sharm El-Sheikh, Egypt—were very high. The extent to which these expectations were or were not met will be the subject of the following Sect. 3.1.4.2.10.

3.1.4.2.10 (The Failure of) the UN Cop27 Climate Conference (November 2022)

From 6 until 18 November 2022, the government of the Arab Republic of Egypt hosted the 27th session of the 2022 climate conference—in full: the Conference of the Parties of the UNFCCC (COP 27)—with a view to “effectively tackle the global challenge of climate change”.¹³⁴

On November 17, 2022, the UN Climate Agency published a first draft of what could become the overarching agreement from the Cop27 climate summit, however with much of the text likely to be still reworked in the days to follow.¹³⁵ The document was immediately criticized for not containing a phase-down schedule of all fossil fuels, as India and the EU had requested. The document was similarly criticized for not (yet) including details for launching a fund for loss and damage, which had been a key demand from the part of the most climate vulnerable countries, such as island nations already facing disastrous consequences of climate change (cf. Sect. 3.1.4.3). Rather, the document welcomed that parties had agreed for the first time to include “matters related to funding arrangements responding to loss and damage” on the agenda of the conference.¹³⁶ Throughout the conference, the establishment of such a fund had indeed been among the main core demands of developing countries most hit by climate change, resulting in much debate about the matter.¹³⁷

Yeb Saño, Greenpeace International’s Cop27 head of delegation, summarized the general frustration about the draft-document as follows: “The Cop27 presidency pushes the pedal to the metal on the highway to climate hell. After initially failing to even mention fossil fuels, the draft text is an abdication of responsibility to capture the urgency expressed by many countries to see all oil and gas added to coal for at least a phase down. It is time to end the denial, the fossil fuel age must be brought to a rapid end.”¹³⁸

By November 18, 2022—i.e., the planned date on which the conference was supposed to end—there were not yet clear conclusions reached, because of which the Cop27 climate conference had to be prolonged, with climate talks dragging on past their intended deadline on crucial points. The participating governments, in particular, continued to wrangle over how to establish and/or pay for the fund intended for the rebuilding of the group of poor countries mostly ravaged by climate breakdown.¹³⁹

One of the main discussion points was who was supposed to contribute to such a fund, with the United States of America suggesting that they would not support the creation of a new loss and damage fund,¹⁴⁰ and with EU member states stating that they would only provide financial means if the donor base of the fund were to be broadened (to include emerging economies). In practice, the latter implied that both payments and tougher targets on cutting greenhouse gases would be expected from countries such as China—that had, at the time, evolved into the world’s biggest greenhouse gas emitter and the second-biggest economy—as well as other high emitters with vast oil revenues, including Saudi Arabia and Russia, and potentially from other rapidly industrialising nations, such as South Korea and Singapore.¹⁴¹

In the meantime, it was more and more feared that countries would attempt to backslide on the Glasgow climate agreement target of limiting global temperature rises to 1.5 °C above pre-industrial levels. Indeed, some language used in the draft text that was circulating, suggested an intent to rekindle the upper limit of 2 °C from the Paris agreement.¹⁴²

Already before the start of the conference, the feasibility of the 1.5 °C target was in serious doubt. The reason for this was that the Earth has already warmed substantially since 2015, and that global greenhouse emissions have not been reduced, but rather increased since then. Hence, United Nations climate scientists had written ahead of COP27 that there was no longer a credible pathway to the 1.5 °C mark.¹⁴³ (Cf. Sect. 3.1.4.2.9.) Abandoning the 1.5 °C target would however imply that the upper limit target would most likely again be brought to the level of 2 °C, about which scientists had already long before reached a quasi-consensus that it would bring dangerous levels of extreme weather and inundate small islands (cf., furthermore, in Sect. 3.1.4.3).¹⁴⁴

Finally, the Cop27 conference reached its outcome on November 20, 2022, with a compromise text¹⁴⁵ in which there were agreements on the operation of the loss and damage fund, but under which no new, binding agreements were reached to keep greenhouse gas emissions within reasonable limits. The main reason for the latter has been that oil-producing countries and high emitters managed to weaken and remove key commitments on the emission of greenhouse gases and on the phasing out of fossil fuels.¹⁴⁶ The latter, amongst others, implies that the Cop27 parties “did not put phasing down fossil fuels in the final text. Instead, the final agreement encourages” efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies.¹⁴⁷

In an article that appeared in the Guardian on November 20, 2022, Fiona Harvey has summarized the outcome reached at the Cop27 conference as follows:¹⁴⁸

• 1. Loss and damage fund

  Cop27 (finally) achieved an agreement on a fund for losses and damages (to the benefit of developing countries mostly hit by climate change), which Harvey has indicated as ‘a major milestone’. However, no agreement was reached on how the financial contributions to the fund are to be provided and where these should come from.¹⁴⁹

• 2. 1.5 °C target

  During the Cop27 talks, some countries tried to renege on the abovementioned (Glasgow) 1.5 °C goal, as well as to abolish the commitment to renew efforts to reach this target. Although these countries ultimately failed, a resolution to cause greenhouse gas emissions to peak by 2025 was abandoned, implying that there is not a clear time path for the diminishment of such emissions.

• 3. Gas

  The final text of Cop27 contains a provision to boost low-emissions energy, which could imply a variety of things, ranging from wind and solar farms to nuclear reactors, but also coal-fired power stations fitted with carbon capture and storage. However, it could also be interpreted to imply gas, which creates lower emissions than, for instance, coal, although is still considered a major fossil fuel.

• 4. Other fossil fuels

  At Cop26 (Glasgow), a commitment had been reached to phase down the use of coal. At Cop27, a group of countries—led by India—wanted to go further and reach a commitment to phase down all fossil fuels. In the end, these efforts failed, with the end resolution reached being the same as the one of Glasgow 2021.

Other parts of the Cop27 final agreement include a World Bank reform (to make The World Bank provide more assistance to the developing world), an agreement on adaptation works (mainly reaffirming the commitments reached at Cop26), and an agreement on tipping points and health.¹⁵⁰

George Monbiot has indicated the Cop27 conference as a failure, and that this is mainly due to the fact that many of the participating countries had no intention of making the conference a success to begin with.¹⁵¹ The main reason for the failure is that no commitment to phase down all categories of fossil fuels could be reached.¹⁵²

As Monbiot has phrased his main concerns:¹⁵³

We know how way leads on to way, how the power amassed through corrupt decisions in previous generations drives the corrupt decisions of our time. We know that the licence granted to fossil fuel companies by 50 years of failure has enabled them to make stupendous profits – $2.8 bn a day on average across that entire period – and that they need invest only a fraction of this money in politics to buy every politician and every political decision they need.

We know that the easiest way for a politician to secure power is to appease those who already possess it, those whose power transcends elections: the oil barons, the media barons, the corporations and financial markets. We know that this power appoints the worst possible people at the worst possible time. We know how, as elderly billionaires seek to grab ever more of the life that slips from them, they create a death cult.

According to Monbiot, this intention to avoid any serious environmental policy that would harm the interests of oil companies, among others, goes back at least as far as 1972, when the first Copenhagen climate conference took place. Even then there had been secret agendas by participating countries, including the United States of America and the United Kingdom, to thwart the environmental talks lest they achieve concrete results that would be against the interests of big industries. According to Monbiot, it is since then that a tradition has begun of environmental talks in the context of which the representatives of the participating countries, in front of the cameras, smilingly pretend to have the best interests of the environment at heart, only to then do everything in their power behind the closed doors of the actual talks to thwart them. This recurring pattern since then has played out again in the context of the Cop27 talks, according to Monbiot: “When they arrived at Cop27 this year, they had no intention even of paying the money they had promised to poorer nations to help them adapt—if such a thing is possible—to climate breakdown, let alone seeking to prevent that breakdown from happening.” Monbiot therefore speaks of “50 years of deliberately engineered failure”, pointing out that none of the 40 countries with the greatest impact on climate change are on track to meet historically agreed targets to do something about it. According to Monbiot, “There are no longer any feasible means of preventing more than 1.5 C of global heating if new oil and gas fields are developed.” Yet, in the meantime, fossil-fuel companies, with the support of governments that either own or license them, are still going ahead with major investments in new facilities planned between 2023 and 2025, with the biggest of these planned expansions, being located in the United States of America.¹⁵⁴

As Monbiot concluded:¹⁵⁵

We no longer need to speculate about where this path might lead: we have stepped through the gates. (…)

The rich world’s governments arrived at the conference in Egypt saying “it’s now or never”. They left saying “how about never?”. We sail through every target and objective, red line and promised restraint towards a future in which the possibility of anyone’s existence starts to dwindle towards zero. Every life is a madly improbable gift. For how much longer will we sit and watch while our governments throw it all away?

Bill McGuire has, in a comparable manner, questioned the whole concept of these climate conferences.¹⁵⁶

Without questioning the sincerity of the UN Framework Convention on Climate Change (UNFCCC), as established in 1992, McGuire seriously wonders whether what he describes as “an annual extravaganza in the full glare of the world’s media” constitutes the right approach for dealing with environmental issues, including climate changes. For McGuire, “it is becoming increasingly difficult to view these events as anything other than photo opportunities for presidents and prime ministers who turn up simply to make the world think they care.” Rather, the sad reality is that climate conferences produce little in the way of concrete results, raising the question of whether they provide the right approach to dealing with environmental protection issues. This author even questions whether the climate conferences are not having the opposite effect, to the extent that they provide a forum for representatives and lobbyists of the polluting industries to pressure state and government leaders not to bring about solutions that might compromise their interests. According to McGuire, “it does seem that the whole idea of annual climate carnivals was probably not the best means of promoting serious action on global heating, but their hijacking by the fossil fuel sector, and failure, year on year, to do the job they were set up to do, surely means that Cop is no longer fit for purpose”.¹⁵⁷

A further, similar concern relates to the ever-growing impact of oil industry representatives and lobbyists on climate talks, with especially key Gulf petrostates gearing up to assume control of (future) negotiations. Reference can in this regard be made to the fact that the United Arab Emirates, one of the world’s biggest oil exporting countries, was announced to hold the presidency of Cop28, the round of UN climate talks that will take place in November 2023. Another example concerns the fact that decisions taken at the Cop27 climate summit itself showed a clear influence of the fossil fuel industry, for instance by Saudi Arabia having played a key role in preventing that parties would have reached an agreement on limiting temperature increases to 1.5 °C above pre-industrial levels. At Cop27, other countries that have played such a role of stymieing attempts to include a resolution to phase down fossil fuels in the final outcome of the conference, included various other Gulf states, besides Brazil and China.¹⁵⁸

As an alternative, therefore, McGuire advocates the establishment of a permanent and independent, international body, which would be constituted in a representative manner to bring about the interests of the environment and the fight against climate change, in a serene and decisive manner.¹⁵⁹

3.1.4.3 Why the Stakes Are Getting Increasingly Higher

3.1.4.3.1 General

The failure of the policy world, after decades of (mostly pointless) palaver, to address the problem in a sufficiently drastic manner contrasts sharply with the ever worsening impact of climate change.¹⁶⁰

Among the numerous, possible examples, we shall briefly discuss three examples below, specifically:

• 1. The rising global average temperature.

• 2. The rising sea levels.

• 3. The loss of biodiversity.

3.1.4.3.2 Rising Temperatures

One of the most disturbing consequences of environmental degradation in general and of the increasing emissions of greenhouse gases that have been sustained for centuries since the breakthrough of (industrial) capitalism in particular concerns the rise in the average global temperature.

Not coincidentally, the climate accords measure this rise in relation to the average global temperature in the pre-industrial era.

Although the reports on this subject are undoubtedly innumerable, we shall limit ourselves below to citing some very recent ones, including a report by the U.K. Met Office dated late 2022, besides a recent 2022 report of the World Meteorological Organization.

In the U.K. Met Office report, 2023 was forecast to be one of the hottest years on record, with global average temperatures expected to be about 1.2 °C above what global temperatures were before the breakthrough of industrial capitalism, i.e., before “humans started to drive climate change”. If this forecast were to prove correct, this would imply the 10th year in a row of global average temperatures reaching at least 1 °C above what average temperatures were assumed to be in pre-industrial times (usually measured as the period 1850–1900).¹⁶¹

The U.K. Met Office report, moreover, mentions that the current hottest year in records since 1850 has been 2016.¹⁶²

With specific regard to Europe, temperatures there were reported to have increased at more than twice the global average during the last 30 years.¹⁶³ According to Horton, “there are a number of reasons why Europe has warmed more quickly than other parts of the world. It has a high percentage of land mass, which warms faster than sea. The Arctic and generally the high northern latitudes are also the fastest warming regions globally and a relatively large part of Europe is in the northern latitudes.”¹⁶⁴

Figure 3.2 provides an overview of global average temperatures over the period 1860–2022.¹⁶⁵

Fig. 3.2

Global annual mean temperature difference from pre-industrial conditions (1850–1900) for six global temperature data sets (1850–2022, 2022 based on an average to September) [Source: World Meteorological Organization (2022b) WMO Provisional State of the Global Climate 2022, p. 7]

3.1.4.3.3 Rising Sea Levels: The Example of Fiji

According to the above quoted report of the World Meteorological Organization, titled ‘WMO Provisional State of the Global Climate 2022’, “in 2022, global mean sea level (GMSL) has continued to rise (***). The GMSL rise is estimated to be 3.4 ± 0.3 mm yr^–1 over the 30 years (1993–2022) of the satellite altimeter record, but the rate has doubled between the first decade of the record (1993–2002) and the last (2013–2022) during which the rate has exceeded 4.4 mm yr^–1. The GMSL acceleration is estimated to be 0.12 ± 0.05 mm yr^–2 over the 30-year period. GMSL increased by about 5 mm between January 2021 and August 2022. Since January 2020, the increase in GMSL amounts to around 10 mm, a substantial fraction of the GMSL rise since 1993 (around 100 mm), despite the ongoing La Niña.”¹⁶⁶

Under reference to the examples cited earlier in Sect. 3.1.4.2.7, there are already countries on Earth—especially countries whose territories consist entirely or mostly of islands—that are facing the consequences of rising sea levels, in a very distressing manner.

As a result, measures of population displacement already have to be put into effect in some of these countries.

A notorious example of this involves the Fiji Islands, as has been addressed, in a detailed manner, in an article from the hand of Kate Lyons that appeared in The Guardian of November 8, 2022, under the self-explanatory title ‘How to move a country: Fiji’s radical plan to escape rising sea levels’.¹⁶⁷

In general, five of the 15 countries most at risk from weather-related events due to climate changes are located in the Pacific, with Fiji itself being number 14.¹⁶⁸

According to the article, in the 4 years leading up to 2022, a specially formed government taskforce has literally been trying to come up with a plan how to move the country. According to Lyons, “the plan it has come up with runs to 130 pages of dense text, interspersed with intricate spider graphs and detailed timelines. The document has an uninspiring title – Standard Operating Procedures for Planned Relocations – but it is the most thorough plan ever devised to tackle one of the most urgent consequences of the climate crisis: how to relocate communities whose homes will soon be, or already are, underwater.”¹⁶⁹

In the article, the immensity of the task is pointed out, under reference to various factual data. It is explained that Fiji, lying in the south Pacific, 1800 miles east of Australia, consists of more than 300 islands with an estimated population of just under one million. Like most parts of the Pacific, Fiji has in recent years become highly susceptible to the impact of climate change. Under reference to data provided by the World Meteorological Organization, ¹⁷⁰ the article, for instance, mentions that “both surface temperatures and ocean heat in parts of the south-west Pacific have been increasing three times faster than the global average rate”. Lyons, furthermore, mentions that severe cyclones routinely batter the region. For instance, in 2016, Cyclone Winston that hit Fiji, killed 44 people and caused USD 1.4 billion of damage, good for a third of Fiji’s then GDP. Since then, Fiji has been hit by an additional six cyclones.¹⁷¹

As a result, in Fiji, as in many other regions of the Pacific, migration because of climate changes had to be initiated already. In these parts of the word, the question is no longer if people will have to move because of climate change, but how exactly to accomplish such a task. Early November 2022, 42 Fijian villages were thus identified for potential relocation in the 5–10 years to follow. At that time, six had already been relocated, while every new cyclone or similar weather disaster brings along the risk of yet more villages having to be added to the list.¹⁷²

3.1.4.3.4 Declining Biodiversity

In 2020, the UN published the Global Diversity Outlook 5 report.¹⁷³ According to the executive summary of the report, “Biodiversity is declining at an unprecedented rate, and the pressures driving this decline are intensifying. None of the Aichi Biodiversity Targets will be fully met, in turn threatening the achievement of the Sustainable Development Goals and undermining efforts to address climate change.”¹⁷⁴

By December 6, 2022—at the opening of the UN Biodiversity Conference—COP15, scheduled between December 6, 2022, and December 19, 2022,¹⁷⁵—it was pointed out that “the planet is experiencing its largest loss of life since the dinosaur era ended: one million plant and animal species are now threatened with extinction.”¹⁷⁶

Among the key causes of this large-scale extinction are factors ranging from deforestation and desertification to the poisoning of the environment by chemicals and pesticides. The latter elements are indicated as the main causes of the degradation of land, which makes it harder to feed the growing global population. Another factor concerns the degradation of the Ocean, which is accelerating the destruction of life-sustaining coral reefs and other marine ecosystems,¹⁷⁷ in turn directly affecting communities that depend on the Ocean for their livelihoods.¹⁷⁸

During his opening speech of COP15, UN Secretary-General Guterres, furthermore, indicated as causes of this decline in biodiversity that “our addiction to fossil fuels has thrown our climate into chaos — from heatwaves and forest fires, to communities parched by heat and drought, or inundated and destroyed by terrifying floods. Unsustainable production and consumption are sending emissions skyrocketing, and degrading our land, sea and air.” And, furthermore, that “Multinational corporations are filling their bank accounts while emptying our world of its natural gifts. Ecosystems have become playthings of profit. With our bottomless appetite for unchecked and unequal economic growth, humanity has become a weapon of mass extinction. We are treating nature like a toilet. And ultimately, we are committing suicide by proxy.”¹⁷⁹

In short, the loss of biodiversity also finds its cause in the capitalist systems of production for production’s sake, the maximization of (corporate) profits ideal, and of the focus on economic growth, to which all other values have been sacrificed.

Meanwhile, the results of the biodiversity conference Cop15 were announced on December 19, 2022. While, at first glance, these appeared to be more positive than those of the preceding climate conference Cop27,¹⁸⁰ a criticism stemming from Dr. Imma Oliveras Menor of the Environmental Change Institute at the University of Oxford sounded that “there are no binding commitments making the whole mechanism quite weak”. And further that “the goals and targets adopted are a great step forward, but many fail at being too broad therefore their implementation will be complex.”¹⁸¹

3.1.4.4 Provisional Conclusions

It is clear from the foregoing that if capitalism¹⁸²—or in more modern terminology, the free market model—remains adhered to, it is hard to see how real solutions to the problems of environmental pollution in general, and climate change in particular, will ever be accomplished.¹⁸³

Indeed, throughout the past century, all possible warnings that matters of concern, including the environment, consumption of natural resources, and pollution, needed to be handled much more prudently, were blatantly ignored.¹⁸⁴

In order to tackle the environmental problems, including climate change, at the very least, some of the central basic beliefs of capitalism should be abandoned, especially (1) the idea of the need for continuous economic growth,¹⁸⁵ which is incompatible with the transition to a more sustainable economy, (2) the unbridled profit maximization behavior of the rich classes (to which all other values have been systematically sacrificed),¹⁸⁶ in addition to (3) the idea that all problems should be left to and will be solved by the operation of the free market, and that there is no need whatsoever for any form of economic planning.

Even if humanity were to succeed in accomplishing a transition, for example, to an economy based entirely on green energy, numerous forms of production will continue to require the consumption of raw and other natural materials, which implies that a large degree of environmental pollution will be occurring at all times (which is not to say, of course, that efforts should not continue to be made to develop methods of generating green energy as much as possible).

As a result, it is highly questionable whether a mere transition towards an economy based upon green energy in itself will be enough to turn the tide and whether there is not rather a need for an ideological conversion, in which humanity would finally abandon the madness of capitalism for a model of socio-economic organization that does willingly strive for elementary planning, more just societies and sustainable(r) economies.¹⁸⁷

Incidentally, also in the UNICEF report of May 23, 2022 (cf. Sect. 3.1.4.2.3), it is stated that, globally, governments, at all conceivable levels of authority—national, regional, and local—should begin to take the lead in improving the living environment, at the very least by reducing waste, air and water pollution and ensuring quality housing and residential neighborhoods.¹⁸⁸

In the short term, this will require a particular focus on the unequal impact of poor environments. Indeed, it appears that poor families (and their children)—as is the case for most of the disadvantages of capitalism—are often much more exposed to environmental damage than richer families (and their children), further entrenching and reinforcing existing disadvantages and inequalities affecting the poor. According to UNICEF, much greater attention needs hence to be paid to these issues at a policy level as well.¹⁸⁹ UNICEF goes on to say that governments and enterprises should at least begin work on effective measures to meet the commitments they have made to reduce greenhouse gas emissions by 2050. In doing so, absolute priority should be given to the issue of climate change in all actions by both governments and the global community, and across sectors from education to infrastructure.¹⁹⁰

In the Oxfam report already cited above, one of the similar conclusions is that the cost of climate impacts will continue to rise with every fraction of a degree of warming of the planet. Meanwhile, harmful emissions continue to rise, and the temperature rise compared to the pre-industrial era is on its way to 2.4 °C, if not more. Even with ambitious measures to reduce emissions and make the necessary adjustments, further climate change impacts can no longer be avoided—and if humanity fails to reduce greenhouse gas emissions, it means that much worse things are bound follow.¹⁹¹

In the meantime, the past period has shown especially a willingness at the EU level to counter certain causes of climate change, especially CO₂ emissions, through the mechanism of taxation, with, among other things, on December 18, 2022, the announcement that, from 2027, the so-called “emissions trading system” will be extended to the heating of buildings and transport, for both consumers and businesses. This will imply that citizens and businesses will have to start paying for CO₂ they emit, either as exhaust from cars or as residue from burning fossil fuels for heating or other purposes. This payment obligation will take the form of yet another special, tax levy that will pass through energy companies and gas stations. The tax will, otherwise put, be based on the ‘polluter pays principle’, whereby the seller of fuels will have to charge emission rights to the customer who comes to refuel their car tank or who purchases fossil fuel for heating purposes.¹⁹² For the already overburdened members of the lower social classes, this means yet another threshold on certain essential expenditures, in this case for transport or heating, whereby it is highly doubtful whether the support fund set up to deal with the worst social consequences of this will be sufficient to compensate for the increasing impoverishment that this type of measure entails, especially for the lower social classes, and whether this is at all the concern of neoliberal European policy-makers.

We conclude this Sect. 3.1.4.3 with a quote from a nomination by UN Secretary General Guterres to the United Nations General Assembly on September 20, 2022, in which the Secretary General axed, in very clear terms, the call to address climate change more seriously, as follows:¹⁹³

There is another battle we must end - our suicidal war against nature.

The climate crisis is the defining issue of our time.

It must be the first priority of every government and multilateral organization.

And yet climate action is being put on the back burner - despite overwhelming public support around the world.

Global greenhouse gas emissions need to be slashed by 45 percent by 2030 to have any hope of reaching net zero emissions by 2050.

And yet emissions are going up at record levels - on course to a 14 percent increase this decade.

We have a rendezvous with climate disaster.

I recently saw it with my own eyes in Pakistan - where one-third of the country is submerged by a monsoon on steroids.

We see it everywhere.

Planet earth is a victim of scorched earth policies.

The past year has brought us Europe’s worst heatwave since the Middle Ages.

Megadrought in China, the United States and beyond.

Famine stalking the Horn of Africa.

One million species at risk of extinction.

No region is untouched.

And we ain’t seen nothing yet.

The hottest summers of today may be the coolest summers of tomorrow.

Once-in-a-lifetime climate shocks may soon become once-a-year events.

And with every climate disaster, we know that women and girls are the most affected.

The climate crisis is a case study in moral and economic injustice.

The G20 emits 80 percent of all greenhouse gas emissions.

But the poorest and most vulnerable - those who contributed least to this crisis - are bearing its most brutal impacts.

Meanwhile, the fossil fuel industry is feasting on hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns.

Excellencies,

Let’s tell it like it is.

Our world is addicted to fossil fuels. It’s time for an intervention.

We shall explore possible solution models in more detail in the following Chaps. 4–7, albeit that in the Sect. 3.2 we shall first take a closer look at how capitalism, on top of all the above, has also led to a totally unjust living world and why this, in our opinion, is no longer tenable.

3.2 Untenability of an Unjust Lifeworld

3.2.1 Why Inequality and Unfreedom Are Ingrained Ingredients of Capitalism

3.2.1.1 The Liberal/Neoliberal Side of the Coin: Once More Revisiting the Trickle-Down Economics Approach

After four centuries of capitalism, it should be clear that unfreedom and inequality are among its most basic ingredients, a fact that is contrary to the basic premises on which the liberal societies that began to take shape from the end of the eighteenth century, were initially based.

To understand this properly, it is useful to first recapitulate briefly in this Sect. 3.2.1.1 what have been the thrusts of economic-liberal thinking (and later in history, of economic-neoliberal thinking), on which the unfolding of industrial capitalism during the nineteenth century was based.

It will become clear from this recapitulation to what extent unfreedom and inequality were woven into the fabric of capitalist societies, albeit that in the political sphere—i.e., in the design of the bourgeois-liberal state model—it was asserted in complete opposition to this that liberal societies aimed precisely at achieving greater freedom and equality for all people.

Precisely this paradox between ideological intent and its implementation in socio-economic reality will be the subject of this Sect. 3.2.1, while in the Sect. 3.2.2 a further weighing of this ideological intent against the legal principles of freedom and equality will take place.

In the foregoing it has already been made clear that since Adam Smith’s work ‘An Inquiry into the Nature and Causes of the Wealth of Nations’, the organization of the (capitalist) economy has, increasingly, begun to rely on the myth that all societal progress is due to private initiative in general, and that of a select group of people who, in contemporary terms, are usually referred to as the class of entrepreneurs, in particular, and that the rest of society shares the fruits of this (and should therefore be very grateful for this).

This mythical worldview relies on an approach that suggests that, within society, a select proportion of people would be gifted with the gift of entrepreneurship and that this constitutes one of the greatest blessings that has befallen on mankind since the early dawn of ages.

In this viewpoint, which goes back to Adam Smith himself, society—and, by extension, the state structure that shapes society—should allow such exceptional people every latitude to conduct their entrepreneurial projects. This will then feed the economy with impulses of progress, the fruits of which will be shared with the rest of society. More particularly, by making use of the refined and varied arsenal of legal forms that the law has made available for this purpose over the past centuries (and of which we have discussed the most important ones, in more detail, in Chap. 2), the class of entrepreneurs will benevolently employ other people who are not as gifted of being entrepreneurs themselves. Thanks to this employment, ordinary people will then enjoy an income by way of remuneration for the labor they put at the disposal of the enterprise(s) established by the class of entrepreneurs, in this manner basically freeriding in the fruits of the efforts of the entrepreneurial sector.

This approach to economics is, as explained before, generally known as trickle-down economics.

In an extreme version of this approach, it is even said that all prosperity and progress of the past centuries is due to said select group of entrepreneurs who, consequently, should be put as little in the way as possible, at the risk of society’s decline.¹⁹⁴

And on this starting premise, the economic policies of the past four centuries have been based, with in the past four to five decades, the contemporary variant of economic neoliberalism of which just about all components—including monetary policy, fiscal policy, employment policy, the dismantling of public services and social security, etc.—have been particularly inspired by this premise.

3.2.1.2 Further Background of the Liberal Philosophy from Which the Trickle-Down Economics Approach Emerged

From the eighteenth century on, the view on entrepreneurship—and therefore on the economy itself—discussed in Sect. 3.2.1.1 has been gaining more and more traction. Especially under the impetus of the schools of economic neoliberalism, this way of reasoning very much determines the outlook of present-day societies around the world.

Hence, the contemporary success of figures such as Jeff Bezos, Elon Musk, and Bill Gates, among many others, is largely due to the dominant, societal influence of that way of thinking.

There is, of course, much to be said about this manner of thinking, but we ourselves shall below focus on some of the ethical questions it raises.

The aforementioned ideas of Adam Smith must (as has already been mentioned in Sect. 2.3) be situated against the background of rationalism, a tendency in philosophy that wanted to make a caesura with models of society dominated by traditional religious views, including Catholicism, and instead put forward the new (as religious) view that society is determined by natural laws, solely to be identified by the at the time emerging discipline of economics.

In the field of the exact sciences, it was this approach that helped establish their great breakthrough. Indeed, as people became willing to abandon religious creation and similar myths in favor of a method of approaching reality that in contemporary terms is called ‘scientific’, an ever-increasing understanding of what were then labeled ‘laws of nature’—i.e., the processes that determine how things function and can hence be explained—emerged.¹⁹⁵ It should come as little surprise that as this method of looking at reality increasingly came to define (and even determine) the exact sciences, in its wake, the understanding of the workings of things resulted in new inventions, which in its own turn helps explain that, from the eighteenth century onward, the progress of science led to the development of increasingly specialized tools and machines that could assist man in accomplishing various tasks.

However, probably one of the biggest tragedies of history has been that the methods of rationalism, in a very one-sided manner, also started to be applied to the study of societies themselves, with the recognition of how economic processes work being granted the (dubious) honor of becoming one of the first areas in which such a one-sided application of the doctrines of rationalism began to take hold.

One should in all this keep in mind the fact that the search for the laws that govern processes in nature, must ultimately lead to the insight into basic laws of physics, for example how the question of why an apple falls from a tree to the ground provides insight into the operation of gravity. This implies that, to explain the falling of an apple, there are no dozens of possible approaches, but that, in the state of the (natural) sciences prevailing at the time of the recognition of such a natural law, no other explanation could be established.

However, this is not the way people and societies work, while the rational schools within the human sciences nevertheless started to base the development of their disciplines upon this premise.

As a result, within the first treatises that dealt with economic issues, this approach led to a search for basic (natural) laws governing economic processes. Soon the mistake was made that mere opinions of individual researchers and authors, to an increasing extent, began to give substance to what such underlying economic laws were supposed to be, whereby such individual opinions, in other words, became themselves identified with economic laws of nature (which, in contemporary societies, has culminated in the view that no alternatives to the resulting, common economic models are stills conceivable).¹⁹⁶

This may seem somewhat abstract, but if we illustrate this search for basic economic laws with the example of two completely opposite schools that both emerged in the eighteenth century under the cover of rationalism, things will immediately become much clearer.

One of the first schools within rationalism to study economic processes was the school that would gradually come to be called the school of economic liberalism. From this school, with Adam Smith himself as one of its figureheads, came not only the viewpoint that society is best served if the entrepreneurial class is left completely undisturbed, but also an even more general, underlying viewpoint that man is basically a selfish being and that society is best served if everyone is confirmed in the pursuit of his own selfish goals.

Within this school of economic liberalism, it got furthermore argued that societal progress is best served by a socio-economic order in which everyone is invited, in the most selfish way possible, to do his or her own thing, since this will provide the best impulses of zeal and progress, and thus society itself will best flourish.

In the same period, however, there was another rational school that, also based on rationalist methodology, studied socio-economic processes, namely the so-called (French) social school, which, however, reached totally opposite insights and viewpoints. Indeed, in the approach of this social school, the basic viewpoint was established that society is best served by relying on systems of mutual solidarity to counteract, as much as possible, inequalities that may result from economic processes (such as trade and industry).

The approaches of these two schools of thought could hardly have been more opposed, yet both emerged under the guise of rationalism, which immediately illustrates how dubious it has been to present the viewpoints of individual authors, or even groups of authors, as basic economic laws. However, it is precisely the latter that has happened from the eighteenth century onward, with—regretfully—the viewpoints of economic liberalism becoming the ones most resonating at a policy level, while those of the social school have, to a much smaller extent, only provided a breeding ground for certain models of correction to capitalism.

3.2.1.3 Lasting Impact of Liberal Thought

It has been made clear in Sect. 3.2.1.2 that the way in which economic processes started to be studied from the eighteenth century onwards helps to explain why views of certain individual authors, gradually, became regarded as economic laws around which an economic doctrine could be built, which, in turn, came to define, increasingly, the outlook of the world economics.

In this manner, an economic model started to take shape (which would soon come to definitively replace that what remained of the feudal system that had before in history prevailed in the Western world) in which, in theory, everyone was invited to engage in business, albeit only a few felt apt to do so.

One of the reasons for this is that entrepreneurship inherently involves a factor of uncertainty, in particular whether such entrepreneurship will succeed, with, the rewards—or fruits—of such entrepreneurship, however, potentially being very big.¹⁹⁷ Secondly, a second set of factors that stand in the way of starting a business are related to issues such as descent (being born in a wealthy family or not), access to sufficient start-up capital and network, and meeting the profile of entrepreneur (which, in a certain way of representation, involves exhibiting psychopathic personality traits). We shall discuss all of these factors in more detail throughout the following sections, as well as in Chap. 7.

As aforementioned, under the economic doctrines themselves, the viewpoint began to dominate that those who accept this challenge of conducting an enterprise should be placed in as little harm’s way as possible, with the entire planet Earth and the rest of humanity (i.e., the non-entrepreneurs) being considered but a means of making entrepreneurial projects successful.

As said, the rise of this school of economic liberalism went hand in hand with the breakthrough of political liberalism, with both movements sharing large parts of their respective worldviews and views.

3.2.1.4 Effects of Liberal Thought on the Organization of Societies

It comes as little surprise that the approach outlined in previous Sects. 3.2.1.1–3.2.1.3, from its very inception, started to determine the relationship between entrepreneurs and their non-entrepreneurial fellow beings, or otherwise put, between as good as all human beings.

Supported in theory by a supposed equality between people—since liberal societies wanted to do away with the inequalities that had prevailed in the feudal era—in reality, this approach of organizing societies around the activities and interests of the entrepreneurial class quickly created a new, razor-sharp hierarchy within the fledgling bourgeois-liberal societies, in which the interests of the entrepreneurial class invariably started to take precedence over all other interests, including those of the labor-supplying fellow human beings and, by extension, the Earth itself.

Indeed, since the arising model of society got based on the idea that those who conduct (or want to start conducting) an enterprise should be left as free as possible to make their entrepreneurial project succeed, everything else got, at least de facto, subordinated to this. As has already been explained throughout Sect. 3.1, such a model of society got, by definition, based on a far-reaching degree of inequality, and therefore also unfreedom, for members belonging to the low(er), social classes.

The ideal society for the most convinced adherents of this line of thought is the one in which society consists of only two groups of people, namely the entrepreneurs and the non-entrepreneurs, with the latter group of people having no other function than to put their labor, in return for a remuneration, at the disposal of the enterprises belonging to (or conducted by) the former group.¹⁹⁸ As mentioned, this dichotomy within societies is condoned by the doctrine of trickle-down economics (cf., Sect. 3.2.1.2) which proposes that everyone, ultimately including society itself, benefits best from such an approach.

It soon also became evident that, in such a model of socio-economic organization, the entrepreneurial group should be entitled exclusively to the proceeds resulting from the entrepreneurial projects, while the group of people who ‘only’ make their labor available, must be content with the crumbs that fall (or trickle) down, but should at the same time be very happy with this, to the extent that without the efforts of the entrepreneurial sector, there would be nothing.

It is obvious that this approach essentially amounts to a system of self-perpetuating lies, which is the consequence of the chosen starting premises themselves (which have nevertheless been elevated to economic laws).

More in particular, the economy that has emerged from this approach, generally known as capitalism—or, in modern-day terms, the free market economy—is built around the premise that economics is a system designed to ensure that people should, either—and preferably—start a business, or if they cannot or do not want to so, should be employed in such a business (belonging to another person).

Such an economy, on the other hand is not built around the basic premise that economics is a system that should meet everyone’s basic life needs in a just way, without causing harm to other people and, by extension, other living beings and the Earth itself.

Not surprisingly, the choice of this starting premise, which essentially considers the economy as a playground for enterprising man to become as rich as possible through some project—and where all the rest of what the Earth has to offer constitutes playthings available to help achieve this objective—also explains the present-day (disastrous) appearance in which the Earth and mankind find themselves.

3.2.1.5 How the Premises of Liberal Thinking on Doing Business Have Further Given Shape to the Capitalist Economy

If we consider two matters little more contemplatively, namely, on the one hand, at the production of what goods and services the capitalist economies devote themselves, and, on the other hand, what is the nature of the employment required for that purpose—and which, therefore, determines what the majority of people have to occupy themselves with every day of their lives—then only the complete pointlessness of the whole thing, in addition to the great cost to the Earth itself (with everything in it), stands out.

An economy that is not based on the starting premise that an optimal system should be sought to fulfill everyone’s basic life needs in a just way, while respecting all other living beings and the Earth itself, but on the premise that whoever has an idea to undertake something—no matter what this amounts to—should have full freedom to realize his aspirations, could, of course, only lead to the production-for-the-sake-of-production (and consumption-for-the-sake-of-consumption) economic system that prevails today.

Indeed, by not making the fulfillment of everyone’s basic life needs in a just manner and with respect for all other life and for the Earth itself the basic premise of the economy, capitalism soon degenerated into a system whose main objective is to create all kinds of artificial needs, and then fulfilling them, through a multitude of equally intrinsically meaningless goods and services, all at the expense of the efforts of those employed in the enterprises that participate in them, as well as the resources of the Earth itself.

From the perspective of the people employed within such enterprises, this kind of economy has degenerated into one in which, as aforementioned, such people are left with only one function, specifically the one of making their labor available for a fixed remuneration that, when they are among the fortunate ones residing in the Western world (±15% of the world’s population), enables them to participate to some extent in the orgy of senseless consumption that such an economy has spawned, and when they reside in poorer countries, rather at a remuneration that, as a rule, offers no prospect of a dignified existence.

That this involves a great multiplicity of labor tasks that must be performed, in many cases in a very repetitive manner, by people who derive no intrinsic satisfaction from this (other than having an income to participate in the patterns of consumption generated by such a capitalist economy), is a fact that is not taken into account at all within the ideologies most in support of such an economic system—in particular, originally, economic liberalism and, currently, economic neoliberalism.

Within such an economic system, there is also no rationality whatsoever in terms of the use of the resources that make production possible—in particular, on the one hand, other human beings and, on the other, whatever else the Earth has to offer in terms of raw materials or other natural resources, possible other forms of life included—which helps to explain some of the severe crises humanity is currently experiencing.

3.2.1.6 How (Because of the Foregoing) Inequality and Unfreedom (Continue to) Prevail in Capitalism

In combination with the capitalist, private money creation model that determines ever-increasing economic growth, the basic premise of trickle-down economics has caused capitalism to degenerate into a self-perpetuating system that has sucked everyone into its processes and, on top of that, is in no way willing to look for solutions for the many problems it keeps creating.

The latter is itself, presumably, the result of the fact that possible solutions to the many problems capitalism causes can only be found in changing the basic premises on which capitalism rests—in other words, in abandoning capitalism (for the most part) in favor of an alternative system that does aim at the just satisfaction of the basic life needs of all human beings and that does show a willingness to respect the wellbeing of other living beings (other human beings included) and of the Earth itself.¹⁹⁹

However, to this day, the elite (of businessmen, bankers, and the politicians these put in power) who run the world by the grace of capitalism have shown no—or hardly any—willingness to do so.

Of course, all this raises the question of whether better alternatives than the currently prevailing capitalism itself have prevailed in the past.

It is fair to point out that an elementary understanding of human history, especially since homo sapiens began to adopt a (predominantly) sedentary lifestyle, does not give cause to much optimism.²⁰⁰

Rather, it appears that since humans increasingly adapted a sedentary lifestyle—initially resulting in agrarian models of society and, later in history, in society models based on trade and industry—the economies within such sedentary societies, likewise, quickly came to rely on inequitable forms of labor.

For example, the prosperous Greek and Roman societies of Classical Antiquity owed much of their prosperity to slave labor, where, in other words, the bulk of the population were slaves. Medieval feudalism that replaced the Roman model in European territories may have sounded slightly nobler in theory—with the underlying idea being this of protection in exchange for servitude²⁰¹—but in practice was often little better than the previously prevailing society models based on slavery.²⁰²

Not coincidentally, it was these features of feudalism against which the political liberalism of the eighteenth to nineteenth century opposed itself, in a pursuit of free and equal societies.

However, because of the manner in which these ideals were given substance within the socio-economic sphere, the capitalist society that resulted from this would soon itself degenerate into a new feudal system of its own accord—in which feudal man was no longer the serf of his feudal lord (in exchange for protection afforded by the latter), but a wage slave—albeit one in which the conflict of interest characterizing the relationship between entrepreneurs and wage slaves soon gave rise to a new class division.²⁰³

Regarding the latter, economic liberalism has been among the first to rationalize this societal model of conflicting interests, which would lead to a learning system that determines labor relations within capitalist societies to this very day.

By the adherents of this frame of thinking (which is reflected unchanged in contemporary economic neoliberalism), it is argued that establishing labor relations should, as much as possible (and preferably totally), be left to the realm of private contracting, ergo to the free market. In other words, it is up to the enterprise that wants to hire someone else’s labor on one hand, and the person who makes their labor available on the other, to freely agree upon the conditions under which such provision of labor will take place. It is thereby in the interest of the (profit-oriented) enterprise to keep said remuneration as low as possible, which has found its rationalization in an (additional) alleged economic law, known as the Iron Law of the Wages, which has since then come to determine labor relations throughout the capitalist world.

This insight provides an explanation for one of the most fundamental injustices of the model of capitalism: as already outlined before (cf. Sect. 2.3), capitalism inherently creates a dichotomy between the class of entrepreneurs and the class of those employed by enterprises, ergo a fundamental inequality between people.

The former class, through all the economic laws and legal instruments that together shape capitalism, receives most of the capital gains generated by the economy (especially in the form of corporate profits that are ultimately intended for the real people behind the enterprises, such as capital providers and others). In the same logic, the latter (larger) group of people only obtain a fixed wage, preferably to be kept as low as possible (which in large parts of the world leads to distressing situations that, at least de facto, amount to systems of perpetuated slavery, all (neo)liberal grandstanding notwithstanding).

Since the dawn of the nineteenth century, it is this dichotomy that determines capitalist societies. Until the present day—especially after roughly half a century of neoliberal policies in numerous countries around the world—this approach of organizing the economy explains situations in which, for example, American entrepreneurs have rapidly worked their way up to become the richest people on Earth, having amassed fortunes that defy all imagination, (comparable to the wealth that the house of Fugger was able to amass back in the sixteenth century), while in most cases granting the staff of their enterprises only the most basic minimum allowances.

What is worse is that such dire situations continue to be condoned under the dictates of economic doctrines (including, earlier in the past, economic liberalism and, at present, economic neoliberalism).

3.2.1.7 Neoliberal Toleration of a Continuing Government Role

3.2.1.7.1 Liberal and Neoliberal Views on the Role of the State

What the doctrinal systems of economic liberalism and economic neoliberalism remain most bored with in all this is the role of states.

A constant here is that, under (neo)liberal doctrinal reasoning, states are in any case to be treated second class, which helps explain that after half a century of neoliberal policies, the public finances and indebtedness of numerous countries have ended in a small drama.

For the most ardent adherents of economic liberalism and economic neoliberalism, there should preferably be no states, but only a large, unregulated free market where (large) enterprises determine service undisturbed and where the rest of humanity only plays their role as employees and consumers.

However, the reality is that the establishment of societies without levels of government has shown to be unfeasible, which is largely due to the numerous forms of inequality and unfreedom brought about by capitalism itself (a reality which is barely considered in the concept of society created by the learning systems of economic liberalism and economic neoliberalism).

The most ardent adherents of said economic doctrines would still prefer to ignore all this and, to the extent that this has not proved (entirely) possible, they have argued that the role of states²⁰⁴ in the realm of socio-economic organization should be kept as limited as possible. In contrast, certain tasks of providing security can even for the most ardent neoliberal adepts still be left in the hands of said states.

The latter partly explains why states may continue to raise armies, organize police forces, and set up a judiciary system, all with the main purpose of curbing behavior that would deviate too much from the outlines drawn by capitalism and/or the logic of bourgeois-liberal societies. Consequently, these domains continue to rely on a minimum of state organization that economic (neo)liberalism continues to tolerate, partly in the knowledge that these functions are primarily aimed at protecting the interests of the rich within society from undesirable behavior by the poor, be they poor stemming from their own country or coming from elsewhere.

Nevertheless, even in these domains, a certain degree of erosion of the state level in favor of private initiative can be observed, with certain tasks of militia, police or justice being outsourced to the free markets (such as, for example, certain specialized forms of justice, prison monitoring, production of army equipment, collection of traffic fines, among several others), while the government agencies performing other tasks in the public domain, are themselves increasingly exposed to neoliberal austerity policies (cf. Sect. 1.5).

Moving further away from what economic neoliberalism considers as such basic tasks of government, the tolerance of a large state role is ever smaller, which can once more be illustrated by the impact that economic neoliberalism has asserted on the welfare state model.

3.2.1.7.2 The Demise of the Welfare State Model

Thus, the discussion of the previous Sect. 3.2.1.7.1, once again, brings us back to one of the main battlefields of contemporary capitalism, specifically the zeal, especially since the 1980s, to dismantle the welfare state model. (Cf. already in Sect. 1.5.)

To understand this properly, one must look back to the period after World War II when (part of) the Western world had to be rebuilt after a devastating world war. Thanks to the insights of economists such as Keynes—who had worked out a much more moderate alternative to a solidarity economy than Karl Marx and Friedrich Engels²⁰⁵ had proposed—and of political movements, such as socialism, in addition to the role of trade unions, in that period, in various Western countries, a model of society was envisioned, which, although its economic dimension remaining largely capitalist in nature, would be subject to numerous social correctives, for example in the form of public services financed out of public funds, as well as social security systems. (Cf. already in Sect. 1.3.)

As a result, part of the Western world would succeed in building a state model that was not limited to the areas of the military, police, and justice, but which also offered its population many other forms of public services and social security protection. This was aimed at ensuring a much greater spread of wealth in these countries than before, under the experience of an unbridled capitalism.²⁰⁶

Unfortunately, the celebration of the welfare state model did not last long, with economic neoliberalism, starting in the late 1970s, pushing for its gradual dismantling (in some countries faster than in others).

The rationale for this dismantling of the welfare state model brings us back to another theme that has already been discussed earlier in this book, namely the methods of public financing. Indeed, to the extent that under the logic of capitalism, states depend for their financing on, on the one hand, revenues from taxes (and similar charges) and, on the other hand, credits taken in the financial markets, a new neoliberal credo quickly reared its head, namely, that most systems of public services and/or social security are, put simply, too expensive and for that reason should be phased out.²⁰⁷

As a result, under the impulse of economic neoliberalism, a (gradual) restoration of classical capitalism has been underway. As a result, neoliberal-based societies have become increasingly removed from the ideological goals of political liberalism, especially the establishment of free and equal societies, a subject matter which we shall address more in detail in the next Sect. 3.2.2.

3.2.2 Balancing the (Legal) Ideas of Freedom and Equality Against the Capitalist Recipes of Exploitation

3.2.2.1 General

From what has been discussed in Sect. 3.2.1, it appears that capitalism has by no means fulfilled the promise of free and on-equal terms functioning societies formulated by political liberalism in a more distant past, quite the contrary.

It should be borne in mind that the breakthrough of (industrial) capitalism as a globally dominant economic system was already well under way at the beginning of the nineteenth century, when political-liberal ideas began to shape the model of the bourgeois-liberal state. This bourgeois-liberal state model promised its citizens, among other things, freedom and equality, but would in reality become the political backdrop against which capitalism could break through once and for all as an all-dominant economic system, including all its classic methods of exploitation.

Consequently, when one sets the ideals of political liberalism (which had formed the breeding ground for the bourgeois revolutions that began to occur at the end of the eighteenth century and the first half of the nineteenth century) against a number of essential characteristics of capitalism, one can only have a wry feeling about the extent to which the actual-economic and historical-political (neo)liberal ideas have, in reality, grown apart.

How the concepts of freedom and equality are thus given form and substance in liberal-capitalist societies will be the subject of the next Sects. 3.2.2.2 and 3.2.2.3, respectively.

3.2.2.2 Freedom

3.2.2.2.1 The Liberal Concept of Freedom in Theory

Already from what precedes, it can be deduced that a first ideal under which bourgeois-liberal (Western) states took shape during the nineteenth century was that of freedom for all its citizens. From the Latin word for freedom, ‘liber’, incidentally, the liberal—and later neoliberal—movements owe their name.

This (liberal) freedom—and especially the striving for freedom that preceded it—had to be set against the unfreedom that had prevailed, for a large part of the population of European countries, under the so-called ‘Ancien Régime’, the latter itself going back to the system of serfdom that had characterized the feudal period.

From there, (liberal) freedom took hold primarily in the legal dimension of state organization, with each inhabitant of a bourgeois-liberal state becoming their own being (and thus no longer belonging to something, or someone, else). This got rid of the formerly prevailing serfdom, which translated into the granting of several civil and—gradually also—political rights and freedoms, including the (civil) right to own property and the likewise (civil) right to contract (and, more generally, to express one’s will to commit themselves), in addition to, at the political level, the right to vote.

Armed with these political and civil rights and freedoms, each citizen of such a bourgeois-liberal state could see their life come true, with, in the private sphere, as the most obvious tools, the possibility of acquiring property (land and others) and entering into contracts.

3.2.2.2.2 Perception of the Liberal Freedom Idea in the Nineteenth Century

Already at the very beginning of the nineteenth century, it would become clear that, in the socio-economic dimension of Western societies, not much would come of the liberal ideal of freedom.

This applied both at the internal level, particularly regarding relations among the citizens of a given country, and at the external level, particularly in relations with the inhabitants of certain other territories (later: countries).

Throughout the nineteenth century, capitalism would cause most of the inhabitants of a given bourgeois-liberal country to enter into service of the rapidly emerging and growing enterprises, so that the idea of freedom in these countries gradually became, for the majority of the population, in reality, a new kind of slavery. As discussed in more detail in the foregoing sections, the mechanisms shaping capitalism soon created a complete imbalance in this regard, so that those who were employed by such an enterprise generally had to settle for the most degrading working conditions (including, for example, low wages).

The free societies promised by bourgeois liberalism thus in reality amounted to societies in which an entrepreneurial elite was given free rein to exploit the majority of the rest of the population in order to get richer themselves.²⁰⁸

If we consider the fulfillment of bourgeois-liberal ideals in an international context, the situation appears to have been, if possible, even more dire. Indeed, in this international dimension, the breakthrough of industrial capitalism in Western countries from the eighteenth and throughout the nineteenth century, was accompanied by the most far-reaching aberrations, including slavery and colonialism, with a number of European countries in particular excelling in the conquest and subsequent exploitation of numerous overseas territories, while several American states of the time, without much glancing, embraced slavery to ensure the accretion of the wealth of their own entrepreneurial elites.

In other words, whereas in the political spheres the liberal ideology held freedom in high esteem, in the socio-economic spheres it brought about the opposite without much hesitation, plunging a large part of humanity into shameless systems of exploitation, within the framework of which everything and everyone, except the entrepreneurial elite itself—which, increasingly, came to identify with the political system—only got much worse.

All rhetoric notwithstanding, capitalism—referred to in a later phase of history as the free-market economy—has since then always carried with it (and finding this no more than normal) this essential characteristic of relying on the exploitation of everything and everyone by a (limited) entrepreneurial elite—and therefore also on a fundamental unfreedom of a large part of the world’s population.

3.2.2.2.3 Freedom During the Short Break of the Welfare State Model

As already mentioned (cf. Sect. 1.3), during a short period in history, but largely confined to the Western world itself, some improvement occurred because, under the impulse of diverse political, economic and trade union thinking, in the period after World War II until roughly the 1970s, efforts were made to implement various corrections to capitalism itself, especially in the form of social security systems and a growing range of public services.

In North-South relations, similar models of correction have remained absent, or at least limited to the development of aid and charity with which the Western world hoped to somewhat assuage its conscience gnawing because of the systematic exploitation of numerous other areas of the Earth.

In Western countries, because of these evolutions, the model of the so-called welfare state took shape (cf. Sects. 1.3 and 3.2.1.7.2), with as result that a large part of the population gradually got better materially than their ancestors, albeit without really regaining their freedom. On the contrary, the welfare state also continued to rely on the capitalist premise that the bulk of the population serves to be employed by the enterprise system and, gradually, also as outlets for capitalism’s mass production and as payers of taxes to the bourgeois-liberal states.

3.2.2.2.4 Freedom Since the Implementation of Economic Neoliberalism

The (in Sect. 3.2.2.2.3 referred to) shaky balance between the interests of the entrepreneurial elite and the rest of the population of Western countries employed by them that the welfare state model offered, came to a (gradual) end when the Western world, starting in the 1970s, began to work on implementing the economic-neoliberal ideology, which would gradually lead to the dismantling of the welfare states. (On the economic background of this set-up, cf. Sect. 3.2.1.7.2.)

It should be borne in mind that there have been major differences between the various Western countries, both in terms of the (prior) development of welfare states and in terms of the implementation of economic neoliberalism itself. Thus, there are countries that fully embraced economic neoliberalism and worked extremely quickly to implement it, such as, for example, the United States of America and the United Kingdom, while in other countries this implementation took place much more gradually (for example: in most Western European countries, other than the United Kingdom itself). This also explains why in the former group of countries little, or nothing remains of the welfare state model, while in the latter group, there are both countries where the dismantling of the welfare state model is quite advanced, next to countries where the model has remained much more intact. To the latter category of countries belong, as mentioned above, the Scandinavian countries, not coincidentally also the countries that in the past had embraced the welfare state model the most and which, since then, have consistently scored best on the international welfare and happiness indexes.

Thus, economic neoliberalism initiated an evolution as a result of which many Western countries increasingly started to regain the characteristics they had in the nineteenth century itself, in particular relying on an economic model in the framework of which the exploitation of the employed population is ever increasing and where the polarization between the rich (i.e., especially those belonging to the entrepreneurial elite class) and the poor (i.e., the rest of the population who depend on income earned out of their labor) also started to increase again. Not coincidentally, it is mainly the United States of America and the United Kingdom that have again taken the lead in this evolution.²⁰⁹

As a result, both political liberalism and economic (neo)liberalism have essentially failed in their intention to create free societies.

Anno 2022, as a result of capitalist working methods, far too large a part of the world’s population still lives in abject poverty, while a small entrepreneurial elite manages to accumulate unimaginable wealth (cf., furthermore, in Sect. 3.3) and, in Western countries, another part of the population has been able to build a relative prosperity, but at a price, namely the price of having to participate more and more in the radar work of capitalist enterprises.

However, after a number of severe crisis periods that have largely been the result of capitalist working methods—including the financial crisis of 2007–2008, and the COVID crisis of 2020–2022²¹⁰—even this relative prosperity that had been achieved in Western countries has for a large part of the population become increasingly challenged.

3.2.2.3 Equality

3.2.2.3.1 The Liberal Equality Concept in Theory

The last observation of Sect. 3.2.2.2.4 brings us to the evaluation of the second credo under which bourgeois-liberal societies, from the end of the eighteenth and the beginning of the nineteenth century onward, began to take shape, specifically the idea of societies based on equality.

Once again, it appears that in its political dimension, the liberal idea of equality was initially realized primarily in the legal sphere, where the idea started to prevail that the citizens of a given bourgeois-liberal country would henceforth deal with each other on an equal footing (as opposed to the legal inequalities that had prevailed in the feudal era/the Ancien Régime). This idea translated, among other things, into the viewpoint that when citizens—and, by extension, also private legal persons—contract with each other, they do so on an equal footing.

Thus, increasingly, within bourgeois-liberal societies, the idea started to prevail that everyone could organize their life freely through contracting on a purportedly equal basis, with all others (i.e., both other people, and other private legal entities), as the main tool of establishing both freedom and equality.

3.2.2.3.2 Perception of the Equality Idea in Practice

Again, in socio-economic reality, the perception of liberal equality would diverge greatly from the preconceived, theoretical ideal of equality.

This was primarily because the legal approach paid too little attention to real inequalities between people. Thus, in drawing out the legal chalk lines of bourgeois-liberal societies, existing inequalities were hardly taken into consideration, let alone erased.

The main of these inequalities concern those due to descent (from a rich, or poor family), albeit that various other situation of inequality, for example because of race, gender, sexual orientation, appearance, et cetera, may all leave their own mark in the socio-economic sphere.²¹¹

Secondly, also the socio-economic inequalities created by capitalism itself have not been taken into consideration, in particular the inequality between the class of (rich) entrepreneurs and the rest of the population (with numerous sub-ranks within it). As a result, it soon became clear that behind the façade of legal equality, a mixing bowl of real inequalities was hidden, all of which had—and still have—their repercussions within the socio-economic sphere.

It will not come as a surprise that the most glaring aspect of these real inequalities concerns employment itself, which, within the logic of bourgeois-liberal societies, constitutes one of the queen pieces for organizing societies and which, to this day, is still (largely) left to the domain of (supposedly) free contracting.

The main consequence of the latter observation is that each prospective employee must negotiate their own terms and conditions of employment, including their wages, with a prospective employer, in many cases a corporate legal entity. However, in practice, little remains of this alleged legal equality on which the bourgeois-liberal model of society rests in the relationship between an individual and a (large) enterprise, forcing most people to agree to employment under unattractive, to abominable terms and conditions of employment.²¹²

Here too, of course, there remain major differences between countries and between population groups within countries. Thus, in poor or developing countries, average working conditions tend to be much worse than in countries that have continued, to a greater or lesser extent, to conform to the profile of the welfare state (particularly to the extent that, in the latter category of countries, labor protection legislation has remained in place). In this context, it is therefore telling that among Western countries, in those where economic neoliberalism has taken hold the most—cf. again in the United States of America and the United Kingdom—labor protection legislation, in addition to the soci(et)al impact of trade unions, has been phased out the most, making it increasingly difficult in these countries for prospective employees, especially in positions that do not require a high degree of specialization or training, to still negotiate decent working conditions.²¹³

However, the real inequalities that characterize capitalist societies by no means only assert themselves in the sphere of labor relations. On the contrary, in many other (especially consumer) relationships, the individual who depends on income from work for their livelihood finds themselves pitted against a much more powerful co-contractor, in many cases an enterprise, which often leads to contracts that are disadvantageous to the first mentioned individual and highly profitable to the latter. The examples of this observation being numerous, one can for instance think of contracts of supply of energy, telephony, internet and, increasingly, even water, among various other types of similar consumer contracts.

3.2.2.4 Societal Problems Created by the (Neo)liberal Impact on Equality and Freedom

All this is by no means of a (purely) academic nature.

On the contrary, it appears that as capitalism—or, in more contemporary terms, the free-market economy—is increasingly allowed to run its course undisturbed again, soci(et)al and other problems also started to pile up.²¹⁴

It should be clear here that the erosion of the ideals of freedom and equality in the socio-economic sphere has contributed to all these problems and is thus partly responsible for creating a fundamentally unjust society, especially when considered from a global perspective.

This (partly) explains why, in 2022, there are still many people on Earth living in poverty, while in the so-called richer countries, under the impulse of economic neoliberalism, there is also an ever-increasing polarization between rich(er) and poor(er), and under neoliberal monetary and fiscal policies, countries themselves are increasingly burdened with a growing debt burden, which results in an additional factor of impoverishment of the global population, except for the rich entrepreneurial elite itself. (Cf. Sect. 3.3.)

3.2.2.5 And the Idea of Solidarity…?

There was a third slogan under which the revolutionary forces of the eighteenth century sought to shape bourgeois-liberal societies, notably ‘fraternity’ (or, in more contemporary terms, ‘solidarity’).

It however appears that the economic counterparts of the liberal (and later neoliberal) ideology would come to terms with this fraternity idea even faster than the other two slogans of the revolutionary period, by shaping an “every man for himself model of society (which gets worse with every further economic-neoliberal intervention).

As a rule, there is little evidence of solidarity on a global level (yet), worse still, the misery of the inhabitants of poor or developing countries especially arouses more and more annoyance among the right-wing milieus of Western countries.

But even within the national borders of Western countries themselves, solidarity is increasingly abandoned as a guiding principle of organizing the socio-economic order, for which the finger can again be pointed at the ideas of economic neoliberalism and its efforts to consign the welfare state model, as far as possible, to oblivion.²¹⁵

3.2.2.6 Conclusions

And in this way, we have ended up today in a world where there is little evidence of the ideal state that was once envisioned by the revolutionary forces of the eighteenth to nineteenth centuries, or even by classical philosophers, such as Plato, for example.

Rather, it seems that humanity has endeavored to deviate from this ideal as much as possible, creating a global society where only money and those who have it still matter, and where the salvation of all the rest—the Earth, with everything on it, including its non-rich population—has been sacrificed to it.

As a result, the society models that have grown out of capitalism, with the contemporary (Western) states (and their relationship with developing countries) as provisional endpoint, are characterized by fundamental inequalities and unfreedom.

Even though the pool of academics (other than economists themselves) and others who have reached similar conclusions about the course of capitalism is growing steadily, their impact remains virtually nonexistent.

As to why the bulk of humanity continues to show little to no interest in this topic, we ourselves have since given up guessing.²¹⁶

Above all, let us hope that one day the tide of capitalism will turn and there will be a return to fighting for the construction of just models of society that respect the Earth and all life, including and especially in the operation of the economy, something capitalism has never shown any interest in doing.

3.2.3 Quid at Further Depletion of Free Markets and Contraction of the Domain of Public Interest?

3.2.3.1 Question

After reaching the realization outlined in Sects. 3.2.1 and 3.2.2, the question arises as to how societies will continue to evolve when humanity allows free markets to expand even further and, correspondingly, the public domain will have to lose even more importance.

In our view, the projections are anything but rosy.

Leaving aside the generic consequences of economic-neoliberal policies—including not least the extreme degree of pollution of the Earth and the threat this poses to the future of human societies—it can already be witnessed that both in the sectors that were ‘neoliberalized’ in the near past, as well as in those in which this process is still underway, the average person is worse off rather than better off, while at the same time neoliberalization measures did create extreme, additional wealth for the class of entrepreneurs (including the financial sector).²¹⁷

In the following, we shall first look at several sectors in which neoliberalization has already been achieved to a very far degree, for example, the energy and financial sectors. (Cf. Sects. 3.2.3.2 and 3.2.3.3.) In Sect. 3.2.3.4, we shall then consider the situation of several sectors in which this neoliberalization is still in full swing.

3.2.3.2 How the Energy Sector Was Endangered

From the 1980s, in the United States of America, and the 1990s, in Europe, as first examples, great efforts were made to ‘neoliberalize’ the energy sector.

This intention to ‘neoliberalize’ the (various) energy markets occurred in the context of a global transition in which more and more sectors were brought into free market operation. For energy markets in particular, the justification for this was that liberalizing energy markets would greatly benefit consumers: increasing competition in such (neo)liberalized energy markets would, for example, have a beneficial effect on price formation, with the free choice of energy supplier allowing consumers to opt for the cheapest energy contracts.²¹⁸

However, practice has proven otherwise, leading to a mostly gradual increase in energy prices (for consumers) over the past few decades, only to escalate completely into a real energy price crisis in recent years (2021–2022).

For example, in the United States of America, the neoliberalization measures concerning the energy sectors, already at an early moment in recent history, led to numerous misdeeds, including artifices in the field of electricity supply in order to artificially drive up prices—and thus corporate profits—a phenomenon that would around the turn of the century even culminate in the bankruptcy of the world’s market leader at that time, namely the energy giant ENRON (a bankruptcy that would bear witness of the greatest possible abuses that characterize the functioning of the free market).²¹⁹

In Europe, one of the main consequences of this neoliberalization of energy markets has been that, year after year, energy prices have continued to rise for consumers, making it increasingly difficult for larger and larger parts of the population to pay these high energy bills (and leaving the (neoliberal) governments of these countries at a loss as to what to do about it). Another worrying factor is that private energy producers and distributors in certain Western countries have not wanted to invest further in the privatized distribution networks, especially then in lightly populated areas, which, as the years go by, can no longer guarantee supply to parts of their populations.²²⁰

We shall return to the issue of these energy price increases, which, in the wake of the COVID-19 pandemic, have become increasingly prevalent worldwide, in the Sect. 3.3.

3.2.3.3 How the Financial Sector Was Endangered

A similar evolution has occurred in the financial sector.

Again, in the not-too-distant past, notions of deregulation, liberalization and privatization constituted the magic keywords that would make the financial sector more performant and reliable, which was supposed to benefit the entire population.

Again, first in the United States of America from the 1980s, and then in Europe in the 1990s, this involved major efforts to submit the financial sector entirely to the logic of free market forces, amongst others, by developing a multitude of innovative financial techniques—such as, for example, the securitization of bank receivables, in addition to a host of new investment formulas—to optimize the profitability of the sector.

In its wake followed a raft of cost-cutting measures aimed (initially) at bringing down personnel costs in the sector (cf. the Iron Law of the Wages), as a result of which physical bank branches in many countries had to give way, increasingly, to electronic services.

In a similar vein, the neoliberalization policies of the 1980s and 1990s created an unprecedented economy of scale throughout the sector, leading to a multitude of large-scale merger and acquisition operations and a resulting emergence of financial (and even mixed) mega-imperia.

However, even for this sector, the results of these neoliberalization efforts have been anything but rosy, resulting in some severe financial crises, beginning in the 1990s.

Perhaps the most severe of these crises has been the financial crisis of 2007–2008, when at one point it was even feared—even by industry insiders—that the house of cards of the financial system would entirely collapse. However, by the grace of a combined (entirely non-market) protection provided by, on the one hand, the monetary system and, on the other, state aid, the disaster of systemic collapse of the financial system in 2008 was avoided, albeit not without great soci(et)al cost.

For example, the state aid granted at the time—also known under the English term bailouts—had major repercussions on the public finances of countries that granted such massive state aid, for which ultimately the taxpayer had to pay. What is even more surprising is that, to make this support possible, the states in question had to draw credit themselves from the very financial markets that had caused the problems from which they had to be rescued (a scenario, incidentally, that would be repeated in the context of the 2020–2022 COVID-19 crisis).²²¹

At the monetary level, shocks were absorbed, among other things, by the extrapolation of the model of abundant money creation (which had been partly responsible for creating the financial crisis itself).

In a general sense, this demonstrates that within neoliberal societies, the severe problems created by neoliberalization efforts are usually fought with the methods that create the severe problems to begin with, thus, of course, making the creeping problems worse and worse (an insight that is already present in, for example, the writings of the renowned economist John Kenneth Galbraith).

Today, the world’s collective debt burden—which is the mirror image of abundant money creation—amounts to no less than more than USD 300 trillion,²²² an amount that defies all imagination, while one can only wonder how this amount can ever be repaid from the proceeds of (future) economic endeavors.

Moreover, in the COVID-19 era, the scenario of 2007–2008 has largely repeated itself, with the understanding that the monetary authorities of numerous countries, have become (even) much more dexterous in applying the monetary procedures to mask a crisis and which amount to massively pumping new money into the economy, without anyone being very concerned about how the corresponding gigantic debt will ever be repaid (or what will happen when groups of debtors—as in the run-up to the 2007–2008 crisis, the U.S. mortgage debtors—will no longer be able to repay their debts to financial institutions).

All the while, deposits and savings of individuals²²³ generated virtually no interest in the recent past, which of course is partly explained by the persistent monetary policy of making cheap new money available for the benefit of the banking sector (and thereby also, indirectly, of the entrepreneurial sector). All this implies that the average citizen of a country under neoliberal rule has hardly been able to accumulate any additional wealth from their savings over the period 1980–2022.²²⁴

It is true that, from the second half of 2022, higher interest rates came into play again, albeit as a reaction to the biggest global inflation wave of the past four decades. As a result, the small man has again been the main loser, since, after four decades of neoliberal policies, he himself hardly had any savings left, so that the rising interest rates from mid-2022 onwards would hardly benefit him, while dependence on credit continued to expose him to the adverse effects of such rising interest rates.

3.2.3.4 Evolutions in Certain Other Public Sectors

3.2.3.4.1 Introduction

As early as 1964—long before economic neoliberalism began to assert its reinforcing impact on capitalism—Herbert Marcuse wrote the following²²⁵ about capitalism:

And yet this society is irrational as a whole. Its productivity is destructive of the free development of human needs and faculties, its peace maintained by the constant threat of war, its growth dependent on the repression of the real possibilities for pacifying the struggle for existence - individual, national and international.

In further reasoning, the foregoing implies that first economic liberalism and then economic neoliberalism have achieved the opposite of their promises of rational economies and ‘free and equal’ societies, notably by forcing everyone to function in irrational socio-economic structures and, in the process, to provide ever more, and ever longer in life, labor to earn a living.

For the aging population, this translates, among other things, in many countries, into an ever-increasing retirement age.²²⁶ For the younger population, in many countries, this translates into various new forms of intergenerational injustice, which, for example, takes the form of an inability to accumulate any private wealth (e.g., a house of one’s own, a car of one’s own, …), which helps to explain why the average age at which young people can finally leave the parental home is increasing in many of these countries.

These characteristics of neoliberal policies have been aptly expressed by Zoe Williams, in an opinion piece published in The Guardian on September 9, 2022, in which she expressed her concerns about the (at the time recently installed) government of Prime Minister Liz Truss:²²⁷

This is modern Conservatism - it works flat out in the interests of a class to which only a handful of its key players belong. The party’s main donors now are hedge-funders and property developers (…).

I meet the thinktankers periodically on current affairs shows, mainly from the Institute of Economic Affairs, and sometimes think their worldview has a religious quality: “Those rich people are simply better than us; they exist in a state of grace. Why question it, when it’s so obvious?” It would be easier to counter if they said it out loud but they never talk about “rich people,” only “markets.”

And when they say “state,” of course, they mean us. They plan to shrink us, our opportunities, our lives. Don’t underestimate them. You don’t have to be competent, still less logical, to make a hell of a mess.

When considering certain ongoing evolutions in a number of other public sectors (cf. already in Sect. 2.4.2.2.2), the picture does not look very rosy. Let us hereafter have a closer look at (1) the education sector and (2) the health sector.

3.2.3.4.2 Education

3.2.3.4.2.1 Background

A first sector of soci(et)al life where neoliberalization is increasingly making itself felt is the sector of education. (Cf. already in Sect. 2.4.2.2.2.4.)

The provision of (all levels of) education had in the more distant past—at least in the welfare state model—been approached as a public service. This model implied that all levels of education are supported by public funding, so that every citizen of a country where such a model is applied, is guaranteed (legal) access to free education.²²⁸ In such a model, while the establishment of private education may be tolerated (for those who want it), there are no levels of education that rely (or should rely) exclusively on such private initiative.

As has been the case with several other categories of public services, this traditional model of educational organization in a welfare state is increasingly challenged from neoliberal quarters, where it is argued that at least certain levels of education do lend themselves to (exclusively) private organization, and where it is no longer considered the government’s task to organize or finance such levels of education itself. Examples of countries where this evolution is already far advanced at the level of higher and university education are the United States of America and the United Kingdom, where, incidentally, there are also voices calling for the transfer of other levels of education (in whole or in part) to the private market.

Other countries have followed these examples, to a lesser or greater extent.

In practical terms, this means that education subjected to these influences of economic neoliberal ideology is increasingly no longer for free and universally accessible, as the costs of organizing education (with a profit margin on top) must be borne by the users of such privately organized education.

In concrete terms, this translates into astronomical tuition fees (which must make it possible to bear the entire cost of organizing the private educational institutions in question), possibly supplemented by private donations. A side effect of this is that the more expensive such education becomes, the more difficult access to it becomes for those who are not rich enough to bear this cost, which of course further jeopardizes earlier democratization efforts in the field of education.

A solution developed for this problem in the United States of America (besides in the United Kingdom) relies heavily on free market forces themselves, whereby members of the lower classes who wish to pursue higher or university education are increasingly driven toward debt financing. The fact that a large proportion of people from the lower classes also have to combine their higher education with a job—which in many cases is poorly paid—provides an additional competitive disadvantage, in addition to the fact that many young graduates are weighed down by a heavy burden of debt which often continues to haunt them for years—or even decades—afterwards.²²⁹ It moreover took until 2022 for the American political world to be willing to make (some) change to this.²³⁰

Thus, it appears that the neoliberalization of education has at the same time become a class problem, with the worst to fear in case this trend continues. Equally disturbing is that, on the part of the younger generation of academics, the perception has emerged that education is a consumer service and that students are—and are allowed to behave as—customers.²³¹

The latter brings us to the next Sect. 3.2.3.4.2.2, in which we shall take a closer look at several pain points of the lamentable state of education in Belgium anno 2022.

3.2.3.4.2.2 Situation in Belgium

(At least) from 2019, the Belgian education sector has been very poignantly facing the consequences of a neoliberalization policy sustained for decades.²³²

Thus, the website “wereldmorgen.be” reported, back in December 2021, that as many as 44% of Belgian schools were facing a shortage of teachers. At the beginning of the 2021–2022 school year, it was even reported that a certain school in Mechelen was having vacancies for more than 20 teachers.²³³

As a result, in the 2021–2022 academic year, schools, across the country, could no longer teach certain subject areas and/or fields of study.²³⁴

Although there are several causes behind this problem, one of them, without a doubt, is the fact that because of decades of neoliberal policies, the teaching profession in Belgium has been made completely unattractive, so that a career in teaching no longer appeals to young people, and it is mainly older teachers who keep education afloat.²³⁵

Anyone who keeps in mind one of the objectives of the Washington Consensus model already mentioned above—namely objective (2): the reorientation of public spending priorities in the field of education, among others (cf. Sect. 1.5.2)—can hardly be surprised by this. Indeed, the aforementioned objective can, more simply, be described with the term ‘austerity’, which has indeed been the leitmotif of Belgian education policy over the past few decades.²³⁶ Moreover, this has been accompanied by an extreme degree of brainwashing (aimed at justifying said neoliberal austerity policy, that has been pursued for years, to the general public²³⁷), relying on a multitude of witticisms, such as the idea that, as in all public sectors, education personnel employed in the public education sector are hardly performing any labor (which is one of the most persistent witticisms of economic neoliberalism that still stands in a (large) part of public opinion).

In the Belgian context, it was for instance often argued that a full-time teacher barely works 20 h per week and then also spends 1/3rd of the year at home on vacation. What is (of course) ignored in this witticism is that the job of a teacher includes much more than 20 h teaching classes per week, but also includes lesson preparation, in-service training, improvement work of homework, tasks, tests and exams, meetings, administration, etc. Even the so-called vacation periods must be spent, to a large extent, on such tasks, which is all the truer in the context of higher and academic education (where so-called vacation periods are heavily filled with research and publishing, which is hardly possible during normal teaching periods, due to the multitude of other tasks, amongst which, increasingly, senseless administrative tasks).²³⁸

Incidentally, from a large-scale—and by worldmorning.be further cited—time survey of 2018, it appeared that, in reality, teachers work very hard, on average much harder than those employed in most other sectors. Even taking into account vacation periods, according to this survey, a teacher’s average work week averages 4 h more than the normal 38-h week, peaking at close to 50 h per week during regular teaching weeks. In addition, half of the teachers often, or always, work after 8 p.m., and 45% of teachers even on Sundays.²³⁹

According to “dewereldmorgen.be”, this high workload has taken a very high toll in recent years. Of all sectors, those employed in education in Belgium are most at risk of burnout. In fact, as many as one in three teachers are exposed to that risk. Four out of ten over-50s in education were even forced to opt for some form of work interruption or work reduction.²⁴⁰

Other factors that make a teaching job in Belgium unattractive are, according to “dewereldmorgen.be”: (1) The fact that teachers are, from a human resources point of view, treated in a very disturbing matter. For example, teachers have flat careers and are very much patronized by administration and supervisors. As noted on this website: “Teachers have to account for and cover themselves administratively for all sorts of things. They have hardly any autonomy and have to dance to the rhythm of the craziest pedagogical hypes and fashions.” (own free translation); (2) Especially for starters, working conditions are very unattractive. Despite high diploma requirements, it requires sometimes years of waiting for a permanent position and/or decent remuneration. In addition, the retirement age was recently raised by 7 years and there are no longer any early retirement options. (3) Over the past decades, there has also been a strong push to systematically reduce the prestige and attractiveness of a job in education (e.g. through lower pay for equal diplomas; no fringe benefits, such as a company car, hospitalization insurance or supplementary pension; no pay allowance for evening or weekend work …). Even a laptop and smartphone a teaching employee must, as a rule, pay for out of their own salary.²⁴¹

Nearly all these factors that make teaching jobs highly unattractive can be traced, to a very large extent, to the implementation of economic neoliberal ideas since the 1990s. Because of the austerity frenzy sustained in education for many years, combined with other neoliberal measures that have further increased the workload of teaching staff (such as, for example, the systematic elimination of all forms of administrative support, requiring teaching staff to handle all forms of administration themselves, partly on the pretext that they otherwise only work 20 h a week²⁴²), the teaching profession has become less and less attractive, so that only highly motivated young people are still convinced to consider a career in teaching, with many of them dropping out after a short time already.²⁴³

The fact that in the meantime, in the Belgian context, increasingly important parallel educational circuits have been established—in which private instructors (who want to teach, but want to have nothing to do with the official educational channels anymore), in return for payment by the parents, give tutoring to individual or small groups of pupils—does not seem to worry neoliberal administrators fundamentally, at least not to move them to a fundamental reorientation of their neoliberal austerity policy. If, as is to be feared, this evolution continues, education will increasingly become a two-speed education, in which pupils from the lower classes will hardly learn anything at all, while pupils from the richer classes, via private education and/or private tutoring, will still be able to ensure themselves of a sufficiently high-quality education.²⁴⁴

It should be borne in mind that the organization of such tutoring is not limited to initiatives by individuals who, in addition to their other activities (including that of teaching staff in the regular educational circuits), provide some tutoring, but even takes the form of very large-scale enterprises that operate in several countries at the same time and employ very large numbers of staff.

This is yet another illustration of the fact that, as neoliberal austerity leads to fewer and fewer resources and energy being devoted to public services, the private market responds to the resulting gaps, with the major caveat, however, that as a result, equal access to the services thus provided is increasingly compromised and only those who are sufficiently wealthy can afford the service in question—in this case education. As a result, there is a real tutoring industry taking on ever greater proportions, an evolution that is already very advanced in Southeast Asia and in the Anglo-Saxon world, although continental Europe is catching up.²⁴⁵

The problem has become so serious that, in 2022, Belgium’s Federal Planning Bureau (in Dutch: ‘Federaal Planbureau’) has warned that the average level of Belgian students is sinking deeper and deeper. It is hereby held that students are leaving school with increasingly less knowledge and skills in various domains. The Planning Bureau also pointed out that the drop in the level of education in Belgium threatens economic prosperity, since the generation of less well-educated pupils will later enter the labor market with fewer skills.²⁴⁶

As the Planning Bureau itself has put it:²⁴⁷

The results of the 123 international surveys TIMSS, PIRLS and PISA all point in the same direction: a decline in scores for reading (inadequate reading skills), mathematics and science over the past decade in Belgium.

The PISA surveys conducted on 15-year-old students show that in 2018, about 20% of Belgian students did not have a basic level in one of the three domains (OECD, 2019). Since 2003, the decline for mathematics has been constant. This decline is also relatively more pronounced than for the other two domains (…).

Beyond averages, these results also show significant inequalities. Students have better results when, for example, they come from more advantaged socio-economic backgrounds or if their parents have higher education degrees.”—(Own free translation.)

3.2.3.4.2.3 Situation at a Global Level

The wretched situation of teachers is not unique to Belgium itself but is of a global nature and has even recently been referred to as “a serious social problem”—albeit one that is, at the same time, only one of the symptoms of how decades of neoliberal policies have eroded the (public) education sector.²⁴⁸

The dramatic state of education, after more than four decades of neoliberal policies, worldwide, is perhaps most aptly illustrated by a cry of alarm from the part of UN Secretary-General António Guterres, during his opening speech at a September 19, 2022 UN Transforming Education Summit.²⁴⁹

In this talk, Guterres pointed out that instead of being the great stimulus for development and progress, education is fast becoming a great divider, noting that about 70% of 10-year-olds in poor countries cannot read and barely learn anything.²⁵⁰

Guterres, furthermore, pointed out in general terms that, with access to the best resources, schools and universities, Earth’s rich obtain the best jobs, while the poor—especially girls, displaced persons, and students with disabilities—continue to face enormous obstacles on their life paths. In doing so, the COVID-19 pandemic has, still in Guterres’ words, struck a hammer blow to the progress of SDG4 (the Sustainable Development Goal focused on equitable quality education).²⁵¹

However, according to Guterres, the global education crisis started much earlier and goes much deeper, referring to the work of the International Commission on the Future of Education, which has clearly stated: “Education systems are failing.” Depending on outdated and too small curricula, underqualified and underpaid teachers, and rote learning, the conclusion of this work is that current education is failing students and societies on a global scale. At the same time, the digital divide is disadvantaging poor students, while the funding gap in education has also grown wider than ever.²⁵²

In Guterres’ own words, this concern sounded as follows:²⁵³

Because education is in a deep crisis.

Instead of being the great enabler, education is fast becoming a great divider.

Some 70 percent of 10-year-olds in poor countries are unable to read a basic text.

Either they are out of school, or in school but barely learning.

Even in developed countries, education systems often entrench rather than reduce inequality, reproducing it across generations.

The rich have access to the best resources, schools and universities, leading to the best jobs, while the poor - especially girls - face huge obstacles to getting the qualifications that could change their lives.

Displaced people and students with disabilities face the highest obstacles of all.

The COVID-19 pandemic has had a devastating impact on learning worldwide, and dealt a hammer blow to progress on SDG4.

But the education crisis began long before - and runs much deeper.

The report card from the International Commission on the Future of Education put it clearly: education systems don’t make the grade.

They are failing students and societies, by favoring rote learning and competition for grades.

Too often, curricula are outdated and narrow.

Education systems take little account of lifelong learning.

Teachers are under-trained, undervalued and underpaid.

The digital divide penalizes poor students.

And the education financing gap yawns wider than ever.

We shall not end this crisis by simply doing more of the same, faster or better.

3.2.3.4.3 Health and Care Sectors

Besides education, a second sector in which neoliberalization is still raging—as amply demonstrated in the COVID-19 crisis²⁵⁴—is the health and care sector. (Cf. already in Sect. 2.4.2.2.2.2.)

During the past decades, the segment of elderly care had already, to a large extent, been neoliberalized in numerous (Western) countries.

In the United States of America, this sector was already, traditionally, to a large extent in private hands, with the neoliberalization wave of the 1980s mainly having brought economies of scale and streamlining (cf., for example, the phenomenon of—even listed—chains of retirement homes for the elderly).

In the 1990s, similar neoliberalization efforts across Europe—first having started in the United Kingdom—resulted, in a similar vein, in the transfer of numerous retirement homes into private hands.

Although the results of this privatization of the nursing home sector are not entirely uniform for all countries, the contemporary, private nursing home sector in several (Western) countries is characterized by numerous problems, not least a personnel problem. The latter is because one of the tried-and-true neoliberal recipes when taking over/transferring an entity into private hands is to save on personnel. The reason for this is the neoliberal credo that, with fewer and fewer people, more and more must be accomplished, which—of course—sooner or later must translate into problems. When the COVID-19 pandemic broke out, the (privatized) nursing home sector in the Western world thus experienced havoc quickly, largely due to the lack of qualified personnel.²⁵⁵

Meanwhile, the price tag for the elderly person who is admitted to such a rest home is also getting increasingly expensive, with the average person who is admitted to a rest home seeing their savings melt away to pay for increasingly expensive services.²⁵⁶

In the wake of what has befallen the nursing home sector, the hospital sector follows. Although the privatization of this sector is less advanced, it too has, increasingly, fallen victim to similar neoliberalization measures (which have rather taken the form of systems of marketization and austerity).

For some time already, care for the sick no longer takes precedence, but rather financial interests. Any form of medical intervention or treatment has become the subject of a meticulous cost-benefit analysis, in which attention for the sick patient has long been pushed into the background in favor of the profitability of the institutions. Also in this sector, on top of that, there is the classic staff deficit caused by neoliberal austerity measures.

The fact that at the outbreak of the COVID-19 pandemic, throughout the Western world, hospitals were soon faced with a shortage of ICU beds—which essentially amounts to a shortage of qualified nursing staff—has not been of a nature, throughout Europe, to unduly alarm neoliberal administrators, with the solution to this problem being found, in many cases, in the suspension of other medical interventions (e.g., surgical procedures and cancer treatment), of which the elderly population in particular has borne the brunt.²⁵⁷

How far this affects the provision of medical care to patients—now more commonly referred to as ‘medical services’—can be nicely illustrated by an opinion piece written by Aditya Chakrabortty and published in The Guardian on October 13, 2022. In it, the author of the opinion piece lays out the repercussions that the neoliberalization of the medical sector in the United Kingdom has had on both the price tag, and access to certain forms of medical care for the average patient.²⁵⁸

As Chakrabortty has phrased it:²⁵⁹

(T)his fits a pattern that keeps repeating in these years of austerity.

Something vital in the public sector is squeezed almost out of existence – and then its ad hoc, improvised, inadequate replacement becomes the new norm. (…)

One answer is to follow the example of poor Americans or Indians, and beg strangers on the internet. (…)

At the root of all this misery is an irony. All those extra thousands of pounds people are now having to spend are only to jump the queue, because private hospitals train no doctors and employ barely any consultants of their own. (…)

Here in miniature is the story of the UK since 1979: the public sector hacked back while private firms are handed taxpayers’ money to replace it. Pensioners and ordinary working people are forced to pay for their own care even while incomes shrink and their costs soar. And so the social contract that holds together the NHS and so much else is shredded.

Meanwhile, the health sector in Europe similarly appears to be in increasingly dire shape.

Indeed, in an article that appeared in The Guardian of December 14, 2022, under the title ‘A ticking time bomb’: healthcare under threat across western Europe’, reporters Jon Henley, Kate Connollyin, Sam Jones and Angela Giuffrida painted a grim picture of the situation of the health care sector in a number of EU member states.²⁶⁰

Under reference to a 2022 report of the World Health Organization’s Europe region,²⁶¹ these reporters mentioned that all countries of the European region were, especially in the aftermath of the COVID-10 crisis, starting to face extremely severe problems related to their health and care workforce and warned of potentially severe consequences.²⁶²

For instance, regarding France, there were in 2022 fewer physicians than a decade before, in 2012. As a result, more than six million inhabitants of France, amongst which 600,000 having chronic illnesses, do not have sufficient access to GP on a regular basis, with 30% of the population not having adequate access to any health care.²⁶³

Regarding Germany, there were in 2021 35,000 care sector posts vacant, which was 40% more than a decade before. There was, moreover, a firm warning that, by 2035, over a third of all health jobs would remain unfilled.²⁶⁴

Also regarding Finland, there was mention of an unprecedented hospital overcrowding because of a severe shortage of nurses. As a result, Finland was reported to be in need of 200,000 new health and social care workers by 2030.²⁶⁵

Regarding Spain, it was mentioned that more than 700,000 people were waiting for surgery. Moreover 5000 frontline GPs and paediatricians located in Madrid were reported to be on strike for almost a month because of protest against years of being underpaid and overworked.²⁶⁶

One of the main problems mentioned in the WHO Europe report concerned improving retention of people employed in the health care sector, besides tackling increases of younger people leaving the health care workforce because of burnouts, ill health, and general dissatisfaction with their job.²⁶⁷

The report, furthermore, mentioned that in a third of the countries of the European region, 40% of doctors were aged 55 or older. Among the younger practitioners and health care workers willing to stay despite increasing stress, ever longer working hours and often low pay, there was moreover an increasing reluctance to work in remote rural areas or deprived inner cities. This has all over Europe led to what is referred to as “medical deserts”, characterized by many vacancies proving impossible to fill.²⁶⁸

According to the article, 87% of France may be called such a true medical desert.²⁶⁹

The article of Jon Henley, Kate Connollyin, Sam Jones and Angela Giuffrida warned that all these elements combined represent a true ticking time bomb, which will most probably lead to poor health outcomes, amongst which increasing waiting times for medical and health care, increasing preventable deaths, and possibly even an overall health system collapse.²⁷⁰

3.2.3.4.4 Further Evolutions and Prospects of the Care and Education Sectors

Already in the Chap. 2 above, the main reason for these ongoing evolutions in the education and care sectors has been described (cf. Sects. 3.2.3.4.2 and 3.2.3.4.3), i.e., the fact that in capitalism, the pursuit of money has been proclaimed as the highest societal value, with all other values, ranging from the focus on quality and sustainable goods and services, to the protection of the environment (and, by extension, of the Earth itself), and the care for the wellbeing of one’s fellow man, all being sacrificed to this pursuit.

Under the rule of economic neoliberalism, this motive has now become so universal that it has become determinant, throughout the world, in all possible sectors, including those for which this is inherently problematic, such as, for example, health care and education. What has been lost sight of, however, is that the subjection of these sectors to the principles and processes of capitalism, has been of a nature to violate their reason of existence and fundamental intent. In particular, it is clear that institutions such as hospitals, nursing and care homes, and schools, which increasingly have to adopt the objectives of capitalism—in particular, the maximization of profits and/or a drastic cuts, especially in personnel costs—have been losing performance and professionalism, which ultimately benefits no one, especially not the sick or the people in need of education, who make use of the services provided by these institutions.

It is no coincidence, but rather the consequence of a top-driven economic-neoliberal policy, that when these sections of the present text were written, areas such as Flanders and the United States of America (besides presumably numerous others) found themselves faced with a distressing shortage of staff in these two sectors (health care and education), with already clearly noticeable, negative effects on the quality of the services provided. Moreover, hardly any policymaker seems to want to still raise the question why young people are increasingly reluctant to be still employed in said sectors. Elements of an answer to this question can, in our opinion, be found in the main order in the consequences of a neoliberal economic policy driven to the top for decades.²⁷¹

As for young people themselves, it has become obvious that they can earn much more money in other sectors than in the sectors of education and care. At a time when money is still the only societal value of relevance, professions in which money making has traditionally been much less important (and where the underlying motivation for choosing such a profession used to be of a more altruistic nature) have obviously become less attractive, especially at a time when such soft sectors are increasingly being eroded by neoliberal measures of all kinds, amongst which austerity at the level of lower (care and educational) staff. In addition, as a result of this cascade of neoliberal measures that have negatively affected these sectors, employment in this type of sectors has been made increasingly unattractive through various other neoliberal policy measures, such as a systematic increase in the range of tasks and assignments, a reduction in the number of staff per number of patients or children or young people in education, continuous cutbacks, unattractive working conditions (e.g., in terms of staff status, salary, working hours, etc.), among various other (bullying) measures with which neoliberal governments have intensified their attack on public service systems.²⁷²

In all of this, one of the creeds of economic liberalism, picked up by economic neoliberalism, keeps resonating that those who are employed by the government (and, by extension, in government-designed and/or funded sectors) are freeloaders who do not contribute to society. To the extent that economic neoliberalism has, increasingly, come to give credence to this creed, resulting in policies aimed at the continual downsizing and/or continual undermining of the workforce employed in such sectors, it can of course come as no surprise that employment in these sectors has been made increasingly unattractive.

Moreover, it can be observed that the search for solutions to these problems has come to rely, quasi-unilaterally, on the economic-neoliberal recipes that have caused the problems to begin with. Applied to education and health care, this implies that these sectors themselves are, to an ever-greater extent, being subjected to the principles and working methods of economic neoliberalism, with in the past years an emphasis on all kinds of austerity measures.

Furthermore, as the transfer of these sectors to the free market continues, their financing is carried increasingly less by public funds and, instead, they must be financed by the mechanisms that are common in the free market(s) themselves. These generally involve the payment of a (market-based) price by the consumer of the services (and goods) in question.

In other words (and as we already had seen before regarding the energy sector), it is to be expected that a (further) transfer of these sectors to the free market will increasingly result in the services and goods involved—i.e., health and medical care and education—becoming increasingly expensive for their end users. The latter implies that said services (and goods) become less and less accessible, or, in other words, only sufficiently accessible to those who are rich enough to afford these services and goods (in addition to all possible other goods and services offered on the free market, and between which each consumer must choose, and this all the more to the extent that he has less purchasing power—i.e. money).

For those who believe that this is exaggerated or at least still very distant, it can be pointed out that there are countries in which this transfer of the sectors of education and health care to the free markets, is already in full swing.

In the United States of America, for example, the higher and university education sector has for some time been largely in private hands, which helps explain the high tuition fees prevailing at American colleges and universities. In our own region, we can point in a similar vein to the alarming reports (since 2022) that an increasing proportion of the population, to be able to pay their energy bills, will have to cut back significantly on various other expenses (including, for example, education-related costs, but even various forms of—too expensive—food).

In such a system, as a rule, those who are poor can no longer afford such higher or university education, except subject to a willingness to take out (often very) high credits. Not coincidentally, in the United States of America (as well as in the United Kingdom), student credit constitutes one of the great societal challenges of our time, where it can be observed that an increasing proportion of the American (respectively British) population who receive higher education is (also) burdened by high student credit (in addition to various other types of (consumer) credit), and that for many people this has even become a lifelong problem.²⁷³

As mentioned above (cf. Sect. 3.2.3.4.3), a similar trend can be observed in the sectors of health care in the broad sense of the word, where, in certain countries, niches of the health care sector in the broad sense of the word (e.g., the nursing home sector) have already been largely transferred to the free markets and where, in anticipation of the same fate befalling the rest of the health care sector, savings are already being made in hospitals, for example (e.g., on nursing staff, on authorized overnight stays in a given hospital, etc.).

In Belgium, this evolution in the health sector is producing disturbing effects. A newspaper report that appeared in the newspaper De Morgen on July 4, 2022, was entitled, ‘We are going to have to have the discussion: to whom do we give what care?’ (own free translation).²⁷⁴ This newspaper article reported that the staff shortage in Flemish hospitals is becoming increasingly prevalent, with, on the one hand, it becoming more and more difficult to find sufficiently trained staff, while on the other hand, partly due to the aging of the Belgian population, there is an increasing need for qualified care. The article, furthermore, mentions that the Belgian hospital sector has been struggling with a shortage of personnel for years, with the COVID-19 pandemic having added to the problem. According to a survey by Zorgnet-Icuro quoted in the newspaper article, as many as eight out of ten hospitals in Flanders are struggling with staff shortages to such an extent that they are having to reduce certain activities. In a quarter of the hospitals, this implies a reduction in the capacity of operating rooms; in a fifth of the cases, this implies a reduction of medical-technical services, such as medical imaging. The situation is more than dramatic, with the newspaper article quoting Margot Cloet, managing director of Zorgnet-Icuro, as saying, “At some point we are going to have to have a socio-ethical discussion: to whom are we still giving what care?” (own translation). It even seems that such a ‘triage policy’ is already occurring under the skin, for which reference can be made to how in the period of COVID-19 Belgian hospitals systematically closed their doors to elderly patients.²⁷⁵ On top of that, the projections are anything but rosy, hot on the heels of the fact that the ongoing influx of new caregivers is far too small to make up for the outflow of older staff, let alone the growing need for medical care itself.²⁷⁶

So far, political proposals to solve these problems have not yielded the expected relief,²⁷⁷ while especially from a right-wing political point of view, there are already calls for even further privatizing (more and more segments of) education and care for the elderly and the sick.²⁷⁸

The ideal neoliberal society is one where everything that can be transferred to private markets, is to undergo this fate as soon as possible. The underlying idea is that everyone should just make every effort to develop their talents to the fullest in order to secure a good job that makes enough money to be able to afford all those goods and services that are only offered on the free market anymore. It is assumed that society will benefit best from this, where no one will be able to afford any sloth or laziness (at the risk of no longer having access to certain essential services or goods).

It is obvious that the ‘survival of the fittest’ idea (itself stemming from evolutionary theories) clearly lurks around the corner, if it is not already fully endorsed by many adherents of economic-neoliberal thinking. The further underlying message (which is diametrically opposed to the message proclaimed in the aforementioned traditional religions and philosophies, for example) is that those who fail to participate in such a system—i.e., fail to earn enough money to be able to purchase all things offered on the free market, which is the case for an increasing part of the global population (according to some, at least ±85%)—have but themselves to blame and must therefore be left to their own devices.

What the adherents of economic neoliberalism lose sight of is that their learning system could at best only work in an unbounded world, where there are no restrictions on raw materials or other resources of nature and where everyone, from their birth, is given the same life chances. Only in such an ‘unlimited equal opportunity world’ could the economy continue to grow with impunity, and with it, the wealth to which every human being, by doing their best, will gain access upon further implementation of the doctrine(s) of economic neoliberalism. In such an unlimited world, then indeed everyone would be able to earn heaps of money to be able to acquire various castles, yachts, and private planes all over the world, implying, in other words, that the promise of neoliberal thinking that all those who do their best will be able to afford all this, could perhaps be somewhat fulfilled. Who, then, in such a world will still play the slave role of house and other staff of the rich is a question that does not yet seem to have been considered, unless this is a role to be played by robots who themselves would become one of the mass-produced luxury products of such an unlimited world.

The reality, however, is completely different. The reason for this is that the world and its resources are not unlimited, so not everyone can accumulate such an extreme wealth. Moreover, there is no equality of opportunities whatsoever, but, on the contrary, a veritable lottery of life chances (to which we shall return further; cf. Sect. 7.1.3.2.1.2).

As a result, wealth distribution under capitalism remains utterly unequal, with hardly any correlation between hard effort and wealth accumulation (which in most cases is itself the resultant of other factors). (Cf., furthermore, in Sect. 3.3.) In other words, in a world of scarcity and opportunity inequality, the mythological frame of mind of neoliberal thinking can never be achieved, but sooner or later the numerous problems in which the world is currently mired were bound to arise, including heavy pollution, climate change, extreme poverty for part of the world’s population, a centuries-long maintenance of systems of exploitation, polarization between rich and poor (with all the resulting societal unrest that this entails), among many others.

It should come as little surprise that the world’s rich have started to think of space travel and colonization of other planets as solutions to the problems created by capitalism. How realistic such a view is, we shall leave open for further discussion here, although it can at least be noted that the slowness of technological progress in these areas contrasts sharply with the speed with which the problems created by capitalism are becoming increasingly widespread, with all their detrimental impact on the Earth and on human societies around the globe.

3.3 Poverty and Polarization Between Rich and Poor

3.3.1 Poverty

One of the consequences of capitalism that the supporters of the ideologies that help sustain capitalism prefer to conceal, or at least disguise,²⁷⁹ is that capitalism still traps a large proportion of the world’s population in poverty, to extreme poverty, and that, as the implementation of neoliberal ideology has continued, this poverty—in addition to an increasing polarization between rich and poor—has begun to reappear in ever-increasing numbers.²⁸⁰

In his lecture of July 10, 1985,²⁸¹ quoted earlier, the Indian philosopher and mystic Jiddu Krishnamurti (1895–1986) articulated this moral dilemma, inherent in contemporary, capitalist societies, as follows:²⁸²

I hope you ask yourselves that question – are you responsible for bringing about this appalling, dangerous world, this violent, terrifying world? If you have visited different countries, you see it all, enormous poverty, millions and millions of poor people, starving, and others who are incredibly rich, who occupy high social positions by virtue of their origins and spend the rest of their lives clinging to their wealth, their castles, mansions, and so on.

This topic is already extensively covered in specialized literature,²⁸³ with probably the most reliable data already provided, for many years, by the International NGO Oxfam (to which we ourselves have already referred several times in our earlier work), in addition to numerous various, public international organizations, such as the United Nations (in its various branches) and the World Bank.

For the benefit of those who still do not believe this fact—including, in particular, the most ardent supporters of the theories of economic neoliberalism, who prefer to conceal poverty, or, to the extent that they are willing to acknowledge its existence, attribute poverty to the laziness or incompetence of poor individuals,²⁸⁴ but certainly not to the mechanisms of capitalism itself—the present Sect. 3.3.1 hereafter briefly addresses the findings one of the most recent reports that Oxfam, with great regularity, makes public, specifically a report dated April 12, 2022, entitled ‘First Crisis, Then Catastrophe’.²⁸⁵

According to this report First Crisis, Then Catastrophe, more than a quarter of a billion additional people were at risk of extreme poverty by 2022, as a result of a confluence of factors, including (1) the COVID-19 pandemic, (2) the long-standing increase in inequality in the world²⁸⁶ and (3) the shock of rising food prices that began to occur during the aforementioned pandemic, factors that were exacerbated by (4) the Russian warfare in Ukraine.²⁸⁷

According to the Oxfam report, the combined effect of these factors was expected to push an additional 263 million people into extreme poverty by 2022, bringing the total number of people below the extreme poverty income line of USD 1.90 per day to 860 million.²⁸⁸ These figures were also reflected in the data on world hunger: the number of undernourished people, according to the report, would reach 827 million by the end of 2022.²⁸⁹

Oxfam, furthermore, pointed out that, shortly before, the World Bank had already projected that, due to COVID-19 and rising inequality, there would be an estimated 198 million more extreme poor by the end of 2022, wiping out two decades of progress. Based on additional World Bank research on the impact of rising food prices that had begun to occur since 2021, Oxfam came up with an additional projection that, due to rising food prices alone, 65 million more people worldwide would fall into extreme poverty, making a total of 263, million more people extremely poor by the end of 2022—as many as the populations of the United Kingdom, France, Germany and Spain combined.²⁹⁰

Indeed, world food prices reached a record high in February 2022, even surpassing the peak of a previous, similar crisis in 2011. At the same time, oil and gas giants reported record profits, raising the expectation that similar trends would begin to emerge in the food and beverage sector as well.²⁹¹ There wore moreover indications that rising food prices (in addition to rising energy prices) were caused not so much by external factors, but in the main order by the profit-seeking of the food-producing enterprises (and energy producers, respectively), which, simply put, implied that these price increases resulted from the principles and working methods of capitalism itself. (On this, cf. furthermore Sect. 3.3.2.2.)

In its report, Oxfam further noted that at the time that its report went public, worldwide, a wave of governments were on the verge of defaulting on their debt and were forced to cut government spending to pay creditors and finance food and fuel imports.²⁹²

In all of this, it is obvious that, in accordance with the principles and working methods of capitalism, people in poverty were hit hardest by these shocks. According to calculations cited by Oxfam, rising food prices accounted for 17% of consumer spending in rich countries, and as much as 40% in sub-Saharan Africa. The Oxfam report also pointed out that within rich economies themselves, this inflation was attributing to increased inequality: e.g., in the United States of America, in 2021, the poorest 20% of families spent 27% of their income on food, while the richest 20% spent only 7% on it.²⁹³

Figure 3.3 provides an illustration of these data in terms of the countries the United States of America, Mozambique, and Peru.

Fig. 3.3

Share of income spent on food in the United States of America, Mozambique, and Peru [Source: Oxfam Media Briefing (2022) First crisis than catastrophe, p. 6]

The Oxfam report in addition showed that, because of all this, entire countries have been plunged even deeper into poverty than was already the case before the COVID-19 pandemic. While the COVID-19 pandemic hit the coffers of every government in the world, the economic challenges faced by developing countries were relatively much greater, in part because these poor countries did not receive equal access to the COVID-19 vaccines²⁹⁴ and were forced into far-reaching austerity measures in the aftermath of the pandemic.²⁹⁵

The Oxfam report also showed that, true to the tenets of economic neoliberalism—including the fact that a crisis, as a rule, results in the rich getting ever richer at the expense of the rest of the world’s population—the wealth of billionaires has risen more since COVID-19 than in the previous 14 years combined, and that, globally, governments—with few exceptions—have failed to raise taxes on the richest, this as the costs of COVID-19 pile up.²⁹⁶ In contrast, according to Oxfam’s estimate, an annual wealth tax of 2% on millionaires and 5% on billionaires could generate USD 2.52 trillion a year—enough to (1) lift 2.3 billion people out of poverty, (2) create enough COVID-19 vaccines for the entire world, and (3) ensure universal health care and social protection for everyone living in low- and middle-income countries.²⁹⁷

By way of conclusion on this part of its report, Oxfam rejects the idea that governments lack the money or resources to lift all people out of poverty and hunger and to ensure their health and well-being. The failure to do so is, in Oxfam’s view, purely due to a lack of economic imagination and political will to actually do so,²⁹⁸ an argument that we ourselves have also made in our own earlier work, hence the proposals formulated therein to, starting with a new monetary system—including new models of money creation—to push for an alternative economic model to capitalism.²⁹⁹ As will be further explained in the Chap. 4 of this book, one of the principles of the new money creation system discussed therein could be that national governments could, for their financing, rely on periodic (non-refundable) allocations, enough to guarantee smooth government functioning, including providing sound public services and social security.

Incidentally, the Oxfam report itself offers some more arguments in further support of such a proposal. Indeed, in said report, it is argued that public spending on services such as education, health care and social protection reduces poverty and the gap between rich and poor, because the benefits of such public spending determine a greater proportion of the well-being of poor people than of rich people. It is, furthermore, argued in this regard that, while things such as free health care benefit everyone in society, because poor people spend a much larger proportion of their meager income on health, the introduction of free health care would disproportionately benefit them. In this way, it is clearly demonstrated that public services reduce poverty and inequality in a country. The same is true for systems of social protection.³⁰⁰

Conversely, cuts in public spending are shown to increase inequality and poverty and disproportionately affect poor people, women, and people stemming from minority groups.³⁰¹

All this provides more than a justification for the proposals for the establishment of a new monetary order that we have already formulated in our earlier work³⁰² and the main principles of which we shall resume below, in Chaps. 4 and 5, in the light of some of the evolutions currently underway.

3.3.2 Increasing Polarization Between Rich and Poor

3.3.2.1 General

As already mentioned above (cf. Sects. 2.3 and 3.1.2.2)—and as also explained in our earlier work³⁰³—capitalism, in addition to causing poverty, inherently brings about a very strong polarization between rich and poor within societies.

This finds its explanation in the fact that the main principles and working methods of capitalism (such as, for example: (1) the idea that all prosperity in society is due to entrepreneurs, that this entitles them, by definition, to the greater part of the added values created by the economy, and that, for the rest, nothing may be placed in their way, as well as (2) the trickle-down economics theory, on the basis of which, in numerous countries, as well as in various international organizations, an economic policy prevails in which, relying on a mythical world view, it is assumed that: (A) through employment in enterprises, the rest of the population also benefits from the wealth generated by the entrepreneurial sector, and (B) the capitalist mechanisms (such as, for example: (i.) the idea that the economic added values generated by enterprises, through the mechanisms of company law, should accrue as exclusively as possible to the underlying capital providers and CEOs, (ii.) the theory of voluntary contracting, which is supposed to govern all soci(et)al relations, and (iii.) neoliberal wage and tax policies) should all be aimed at maximizing the wealth of the wealthy classes (of entrepreneurs and bankers in particular), at the expense of the working classes.

Under neoliberal rule of the past four to five decades, moreover, these effects of capitalism have only been exacerbated, which finds its further explanation in the systematic phasing out of the methods of correction to unbridled capitalism that had been established in the (Western) welfare states in the post-World War II period.³⁰⁴ (Cf. Sect. 1.5.)

In other words, the dismantling of the welfare state model already discussed above, under neoliberal impulse, has been of a nature to further accentuate the inherent polarizing effect of capitalism. One consequence of this is that since the implementation of economic neoliberalism began, the polarization between rich and poor is increasing, with the side effect that in certain Western countries the middle classes are dying out.

We have already explained this phenomenon in more detail in some of our earlier work,³⁰⁵ citing various empirical research. Hereafter, we shall not repeat these earlier findings in as much detail but suffice to explain how this polarizing effect of capitalism has further emerged from the COVID-19 pandemic. The latter will be explained in Sect. 3.3.2.2, after which Sect. 3.3.2.3 will present some (current) numerical data regarding the polarization between rich and poor.

3.3.2.2 Impact of the COVID-19 Pandemic on the Profit Motive of Large Enterprises in General, and Within the Energy and Food Sectors in Particular

Various sources suggest that the big winners of the COVID-19 pandemic—as was ultimately also the case for the 2007–2008 financial crisis—has been the (large) entrepreneurial sector.

With this, capitalism has once again demonstrated that moments of crisis mainly generate new enrichment opportunities for the wealthy classes (of entrepreneurs and bankers), at the expense of the rest of society.

In this regard, the World Inequality Report 2022 states, in general terms, that inequality in income and wealth distribution (at the start of 2022) reached (even) extreme(r) proportions than before.

According to this report, in 2021, expressed in PPP,³⁰⁶ an average adult individual earned 16,700 euros (or 23,380 USD) per year, and such an average adult owned 72,900 euros (102,600 USD) in assets. According to the report, however, these averages mask extreme differences, both between and within countries. Indeed, the richest 10% of the world’s population, in early 2022, accounted for 52% of world income, while the poorest half of the population, collectively earned only 8.5% of that income. On average, a person from the top 10% of global income distribution earned 87,200 euros (USD 122,100) per year, while a person from the poorest half of global income distribution earned an average of only 2800 euros (USD 3920) per year. In addition, this report shows that wealth inequality, globally, was even greater than income inequality. The poorest half of the world’s population possessed hardly any wealth, specifically only 2% of the total. In contrast, the richest 10% of the world’s population owned 76% of all wealth. On average, the poorest half of the population possessed 2900 PPP per adult, or 4100 USD, while the top 10% possessed 550,900 EUR (or 771,300 USD) on average.³⁰⁷

Figure 3.4 provides an overview of global income and wealth inequality, measured for 2021.

Fig. 3.4

Global income and wealth inequality, 2021 [Source: Chancel et al. (2022) World Inequality Report 2022, p. 10]

The (already quoted) Oxfam report ‘First Crisis, Then Catastrophe’ similarly shows that as early as September 2020, i.e., ±6 months after the outbreak of the COVID-19 pandemic, 32 of the world’s largest enterprises had seen their 2020 profits increase by USD 109 billion.³⁰⁸

As we have explained ourselves in our book Covid-19 and capitalism,³⁰⁹ this research by Oxfam confirms that during the COVID-19 pandemic, enterprises around the world, systematically, put profits (and their payouts to shareholders) ahead of jobs and worker safety, reducing costs and risks due to COVID-19 in their supply chains themselves. In doing so, Oxfam’s report shows that the 25 most profitable enterprises, by 2020, were expected to pay out more than USD 378 billion to their shareholders—equivalent to 124% of their earned profits.³¹⁰

According to the Oxfam report ‘First Crisis, Then Catastrophe’, this trend continued in 2021. As a result, the value of the world’s 1200 largest corporations rose 56% in 2021 compared to the beginning of 2019, with U.S. corporations in particular posting record profits. At the same time, corporations in the United States of America paid, on average, a smaller share of federal tax revenues than in the 1950s, from a third then to just a tenth in 2021.³¹¹

While global average salaries of workers fell during the COVID-19 pandemic, shareholder distributions broke all records in 2021 and global dividends paid rose to a record USD 1.47 trillion, representing a 16.8% increase. Mining and financial enterprises were the largest contributors to this growth.³¹²

Moreover, the trend of stagnant or falling wages versus rising corporate profits and dividend payments, in addition to rising inflation, already began to emerge during the COVID-19 pandemic, on a global scale.³¹³

This trend of rising profits and dividend payouts has been particularly pronounced among large corporations. Although small and medium-sized enterprises (i.e., so-called SMEs)—traditionally defined as those employing only 250 workers, or less—are crucial to global employment, accounting on average for 70% of total employment and 50% of GDP, they did not fare as well during the COVID-19 pandemic as large enterprises themselves. According to the information provided by Oxfam, 18% of small businesses, globally, reported closure by September 2021. Of the SMEs that did still operate, 36% reported that they were functioning with fewer staff. Here, SMEs run by women and minorities were more likely to close than the global average.³¹⁴

One possible explanation is that—in the best of neoliberal traditions³¹⁵—the monetary and fiscal policy rescue programs put in place during the COVID-19 pandemic,³¹⁶ were targeted in main order at large corporations, and only subsidiary at SMEs.³¹⁷

It is perhaps even more notable how these trends have manifested themselves very strongly in well-defined sectors, including energy and food, which would in turn, throughout 2021–2022, result in true energy and food crises.

Oxfam’s research results thus show that at the beginning of 2022, 2 years after the COVID-19 pandemic had started, the world was faced with a multitude of crises and inflation (cf., furthermore, in Sect. 3.3.2.5), as well as that there was a disturbing trend of (large) enterprises beginning to take advantage of the situation to systematically increase their profits, thereby obeying one of the other basic principles of capitalism, namely that enterprises exist for only one purpose, namely to make profits as quickly and as much as possible (at the expense of all possible other—including generic soci(et)al—interests).³¹⁸

In that regard, the Oxfam report ‘First Crisis, Then Catastrophe’ points out that rising energy prices pushed oil companies’ profits to record levels: in 2021, the 25 top oil and gas companies posted as much as USD 205 billion in profits.³¹⁹

As energy prices rose in 2021 (to even reach their highest levels in more than a decade), both profits, and profit margins of energy companies increased (cf. Fig. 3.5.). This suggests that energy enterprises took advantage of the COVID-19 crisis to maximize their operating profits. As a result, oil and gas enterprises were able to repurchase 2.181% more shares in the fourth quarter of 2021 to provide shareholders with newly distributed wealth very quickly.³²⁰

Fig. 3.5

Net profit margins in the energy sector (Q4 2020 to Q4 2021) [Source: Oxfam Media Briefing (2022) First crisis than catastrophe, pp. 11–12]

It should be noted that in the distant past, large parts of the energy sector were in public hands, to be systematically liberalized—in many cases privatized—from the 1980s and 1990s onward. Even earlier in recent history (cf., for example, the Enron scandal at the start of the millennium), the supposedly beneficial effects (for consumers) of these waves of liberalization and privatization (and, consequently, the mendacious ideologies on which they are based) could be more than seriously questioned³²¹ (cf. already in Sect. 3.2.3), albeit that the events that already began to unfold in the energy markets in the course of the COVID-19 pandemic have started to defy all imagination.

Figure 3.5 outlines the evolution of profit margins within the energy sector during the period running from Q4 2020 to Q4 2021 (i.e., before the start of the Russian war in Ukraine).

Given the also rapidly rising food prices in 2021–2022, the Oxfam report expressed the expectation that similar trends would also soon occur in the food and beverage sector. In doing so, Oxfam made reference in its aforementioned report to the fact that half of the 28 food and consumer goods manufacturers listed in the Fortune 500 saw their profit margins rise in 2021–2022, with the United States of America, for example—again, even before the start of the Russian war in Ukraine—at the time expecting grocery bills to rise by 22% in 2022 from pre-COVID-19 pandemic levels.³²²

A September 7, 2022, editorial opinion piece by The Guardian recalled that in 2015, world leaders had committed to an extremely ambitious goal: to end world hunger by 2030.³²³ In formulating this goal, however, no account was taken of the fact that the blow from decades of sustained neoliberal policies would one day follow, making the goal of eliminating hunger from the world currently further away than ever.³²⁴

In contrast, according to a (conservative) estimate, the United Nations estimates that the number of people with hunger emergencies—just one step away from famine—will rise from 135 million in 2019, to 345 million in 2022.³²⁵

Moreover, the forecast is that by 2023 the situation will be even worse.³²⁶

According to The Guardian, these crises expose the broken food system underlying it, in which consumers and some (small) producers struggle, while others make huge profits. For example, the global grain trade is concentrated in the hands of just four enterprises, which are making record profits on much-needed staple foods.³²⁷

A long-term solution requires addressing at least certain outgrowths of capitalism. At a minimum, carbon emissions must be curbed, crops must be adapted to the climate crisis, dependence on fertilizers must be reduced, and the dominance of a small number of players in food markets must be challenged. Furthermore, it has been argued that the failure of governments to address the real problems has been the one that has paved the way for the corporate sector to charge high prices for their products to make excessive profits, a tactic that The Guardian fears others will follow suit, knowing full well the deadly costs of doing so.³²⁸

3.3.2.3 Empirical Data on the Polarization Rich-Poor

3.3.2.3.1 Data Provided by Oxfam, CBS News, and Forbes

The rising profit margins of large enterprises discussed in Sect. 3.3.2.2 far from constitutes a neutral factor, but on the contrary asserts a major impact on the pre-existing gaps³²⁹ between rich and poor.

According to the Oxfam report First Crisis, Then Catastrophe, during the COVID-19 pandemic, partly as a result of the aforementioned trends, the wealth of billionaires rose the most ever, to reach its highest level ever by the end of 2022.³³⁰

According to Oxfam, this rise concerns the largest increase in the wealth of billionaires since its measurements began. In fact, since the beginning of the COVID-19 pandemic, a new billionaire has been added every 26 h. Moreover, during the COVID-19 pandemic, the ten richest people in the world saw their fortunes double. This implies that the world’s small elite of 2755 billionaires saw their fortunes grow more strongly during COVID-19 than in the previous 14 years before, that in themselves had already been a goldmine for the billionaires’ wealth growth.³³¹

Figure 3.6 provides a representation of the growth of wealth of billionaires over the period 1987–2021 in real terms.

Fig. 3.6

Growth of wealth of billionaires over the period 1987–2021 in real terms [Source: Oxfam Media Briefing (2022) First crisis than catastrophe, p. 12]

Similar numerical data, provided by CBS News, are of a nature to confirm these data provided by Oxfam. According to CBS News findings as well, the world’s 10 richest billionaires managed to double their wealth since the onset of the COVID-19 pandemic in early 2020. At the same time, the bottom 99% of humanity—which includes middle- and low-income households—lost income during the crisis due to layoffs, economic uncertainty, and increased worry due to school closures and diseases caused by COVID-19. In this process, the world’s 10 richest people saw their wealth double, from USD 700 billion to USD 1.5 trillion, a rate of USD 15,000 per second.³³²

According to Forbes, at the start of 2022, war, pandemic, and weak markets affected the billionaires of well-defined countries, including especially Russia and China. The most dramatic drops in mega-fortunes occurred in Russia, where, at the start of 2022, there were 34 billionaires fewer than before Vladimir Putin’s invasion of Ukraine, and in China, where a government crackdown on tech companies had resulted in 87 fewer Chinese billionaires on the Forbes list. Nevertheless, the early 2022 Forbes list also pointed to more than 1000 billionaires having become richer than a year earlier. By 2021, 236 newcomers had become billionaires, including the first ever from Barbados, Bulgaria, Estonia, and Uruguay. Also in early 2022, the United States of America still led the Forbes rankings, with 735 billionaires worth a combined USD 4.7 trillion, including Elon Musk, who then topped the world’s billionaires list for the first time. China (including Macau and Hong Kong) remained number two, with 607 billionaires, with a combined value of 2.3 trillion USD.³³³

As we ourselves have argued in our earlier work,³³⁴ the figures provided by Oxfam, CBS News, and Forbes (among many other sources) also show that as COVID-19 spread, central banks pumped trillions into economies, with the goal of keeping the global economy afloat. Much of that stimulus went to the financial markets, and from there to the net worth of billionaires. Since the onset of the COVID-19 pandemic, the governments of countries themselves have also pumped an estimated USD 16 trillion into the global economy, in the wake of which billionaires have seen their (combined) wealth increase by USD 5 trillion, from USD 8.6 trillion in 2019 to USD 13.8 trillion in early 2022, again as this government support has also driven up dividend payments and stock prices.³³⁵

These findings confirm that, under neoliberal rule, monetary and fiscal policy measures mainly benefit the rich classes at the expense of the poor classes (to the extent that public support, ultimately, should be borne from taxation of the general population). Again, we can refer to what we have already set forth on this subject in our book Covid-19 and capitalism (in addition to our previous work).³³⁶

3.3.2.3.2 Analysis of Balla

According to Balla (in a noteworthy contribution dated September 23, 2022), the skew between rich and poor has become so big that as much as half of the proverbial, world economic pie is swallowed up by the top 10% of the world’s population. This top 10% includes a large portion of the population of Western (affluent) countries. Meanwhile, the poorest half of humanity gets only 8.5% of the proverbial, world economic pie, and the bottom decile only 0.1%. On average, the bottom decile earns USD 289 a year, or about 79 cents a day. That is 436 times less than the average top decile, who earns an average of USD 126,000 per year, or USD 345 per day. The top 5% and top 1% account for an average income of USD 81,700 and USD 181,000 per year, respectively.³³⁷

According to this contribution by Balla, as much as 80% of individual income variation would be attributable to points of difference between nations. This implies that income variation is mainly determined by the good fortune of belonging (or not) to a historically advantaged group living in a wealthy nation—as a rule, a nation where economic opportunities are based on a litany of historical injustices, from slavery and genocide to ecological destruction, or on an abundance of energy resources or raw materials (provided these are not accreted by foreign enterprises). According to Balla, the United States of America alone is home to two hundred million top deciders and 33 million (or half of all) world citizens belonging to the top 1%. However, still according to Balla, outside rich countries, financial happiness declines rapidly.³³⁸

All this explains that in the classification of Our World in Data, only 15% of people count as non-poor. The remaining 85% of the global population earn less than USD 30 per day, the typical poverty line used in rich countries. This, in turn, implies that the progress optimism of the supporters of capitalism and/or economic neoliberalism, should be rejected entirely.³³⁹

To fully understand how fundamentally unfair the debate is being conducted, it should be kept in mind—still according to Balla—that the currently most widely used ‘extreme poverty line’ in the international context, which is set at an income of USD 1.90 per day, or less, equates to an income of USD 694 per year, or only 6% of the federal poverty line used in the United States of America itself, which is set at an income of USD 12,880 per year. This raises the question of why one-nineteenth of the poverty line in the United States of America would be a valid benchmark for determining the poverty line for the poor countries of the world.³⁴⁰

In his above referred to contribution, Balla furthermore explains that, over the period 2009–2019, total global personal income grew by USD 37 trillion. Of this, the top deciles accounted for USD 8.7 trillion (24%), while the bottom deciles only received USD 25 billion (0.07%). In other words, the 10% poorest received 0.07% of global income growth, or 345 times less than the top 10% richest.³⁴¹

According to Balla, such figures are inconsistent with the proud claim (often made by adherents of economic neoliberalism) that global, economic growth gradually is lifting people out of poverty. In another representation of these numerical data, the average annual individual income growth in this decade for the top and bottom deciles of the world’s population was USD 1800 and USD 5, respectively. USD 5 per year amounts to 1.3 US cents per day—custodially an admirable achievement. According to Balla, it is hence difficult to argue with any seriousness that USD 5 per year, added to USD 694 per year, really provides an escape from anything, let alone from poverty.³⁴²

Balla, furthermore, noted about these figures that if only 1% of the 2019 global income gains went to bottom-deciles, they would gain USD 55 per year, instead of (in 2019) USD 5 per year. If only 10% of the top-deciles’ gains were redistributed, the bottom-deciles would gain USD 180 (a 62% gain, which would lift them out of poverty thirty-six times faster).³⁴³

According to Balla, therefore, no acrobatic, ethical contortions can be devised that justify prioritizing improvements in the living standards of the top 10% elite, whose consumption is already 345 times greater than what would be required to fulfill the basic needs of the vast majority of the global population.³⁴⁴

As Balla himself articulated the underlying, ethical question that emerges from this:³⁴⁵

Are fancier wines or faster cars really that much more important than preventing 150 million kids from being permanently stunted by malnutrition, or getting food to the nearly two billion people experiencing food insecurity? The figures are obviously indefensible - and that’s why so many prefer to focus on other figures instead.

All this implies that ending poverty through economic growth alone, without establishing much more just redistributive mechanisms than those currently employed by capitalism, would take centuries and a 173-fold increase in the proverbial world pie (where, according to optimistic estimates, economic growth could be at most fivefold over a number of (coming) generations). In other words, the pace of economic progress hailed with great enthusiasm by supporters of capitalism and/or economic neoliberalism will never be of a nature to close the gaps between rich and poor (apart from the fact that even such a ‘mere’ fivefold economic growth will in turn put an unusually large pressure on the environment, resulting in the previously discussed impact on climate change). This implies, otherwise put, that capitalism itself has no real mechanism for eradicating inequality and poverty.³⁴⁶

In the opinion of Balla, as joined by us, the fact that so many (in the West), nonetheless, continue to believe that capitalism is making fantastic progress in the fight against poverty by delighting the poor strata of the world’s population with trickle-down blessings of economic progress in Western countries, basically amounts to a spectacularly successful coverup. Disguising the predatory profit motive of capitalist enterprises as the method of eliminating poverty is thus nothing more than (highly successful, albeit completely immoral) PR.³⁴⁷

In other words, the arbitrary yardstick by which global poverty is measured (specifically, the USD 1.9 per year income threshold mentioned before) hides a horrible, underlying truth. The idea that capitalism (or, in modern-day terminology, the free market economy) will ever eradicate poverty is hence completely wrong. Rather, the neoliberal creed that market forces will maximize general prosperity is, according to Balla, both a (cruel) joke (=the bare facts refute such fantasies), and testimony to a complete moral bankruptcy. After all, it is these market forces that grant the bottom 10% of the world’s population only 0.1% of the world’s wealth. Moreover, all this is by no means a coincidence, but the consequence of the working methods and principles of capitalism itself.³⁴⁸

3.3.2.3.3 Findings of the World Inequity Report 2022

The conclusion reached at the end of the Sect. 3.3.2.3.2 is also the one reached in the World Inequality Report 2022, where it is held that in recent decades multimillionaires have managed, worldwide, to account for a disproportionate share of global wealth growth: the top 1% have accounted for 38% of all the extra wealth accumulated since the mid-1990s, while the bottom 50% have been able to account for only 2% of it. According to this report, this inequality results from severe inequalities in growth rates between the top and bottom segments of the wealth distribution. As a result, since 1995, the wealth of the richest individuals on earth has grown by 6–9% per year, while average wealth has increased by 3.2% per year. According to the same report, since 1995, the billionaires’ share of global wealth has increased from 1% to more than 3%. In addition, this increase has also been particularly amplified during the COVID pandemic, where it is held that, in 2020, billionaires’ share of global wealth has increased the most ever.³⁴⁹

In the United States of America itself, the concentration of wealth at the top anno 2021–2022 even exceeds the peak of the so-called Gilded Age of the late nineteenth century. This seems to imply that the polarizing effect of contemporary capitalism, after more than four decades of neoliberal policies, is stronger today than it was at the end of the nineteenth century, during the height of industrial capitalism. Oxfam makes the (somewhat laconic) observation that, by 2021, we witnessed billionaires traveling to space for their pleasure, merely because they can (finance) it, at a time of unprecedentedly increasing poverty and suffering on earth.³⁵⁰

Similar reservations are expressed in the World Inequality Report 2022 itself, in which it is mentioned that inequality in the world at the start of 2022 appears to be about the same as it was at the height of Western imperialism in the early twentieth century. According to this report, the income share of the poorest half of the world’s population at the time the report was written, is about half that of 1820, before the great divide between Western countries and their colonies. The report goes on to say that world economic inequality is the result of the very unequal organization of world production (which is another way of saying that it is the result of capitalism).³⁵¹

Oxfam itself has noted, in a similar vein, that people like Elon Musk—at the time, the world’s richest man—received billions of dollars in government subsidies throughout the COVID-19 pandemic, while meanwhile systematically flouting labor laws, systematically undermining factory workers’ attempts to organize into unions,³⁵² and in many cases paying little to no income taxes themselves. Oxfam points out that Elon Musk, who at the time paid an actual tax rate of 3.27% between 2014 and 2018, criticized a proposed billionaire tax rate in 2021, arguing that his “plan is to use the money to take humanity to Mars and preserve the light of consciousness”³⁵³ (read: to allow the wealthy elite, after they have systematically killed the Earth, to emigrate to another planet).

But this extreme polarization is also occurring increasingly in other countries. For example, in India, billionaire Gautam Adani’s wealth increased eightfold during the COVID-19 pandemic, with this billionaire benefiting significantly from investments in the fossil fuel sector, a sector in which he is increasingly gaining a foothold. It is held that Adani has mainly taken advantage of his connections with the Indian state, which has allowed him to become the largest port operator and the largest producer of thermal coal in the country, and to gain market control over the electricity transmission and gas distribution sectors, as well as the recently privatized airports, sectors that were previously all in the public domain.³⁵⁴

3.3.2.3.4 Findings of Crédit Suisse’s Global Wealth Report 2022

Recent research by the Swiss investment bank Crédit Suisse led to similar findings.

The so-called Global Wealth Report 2022 from the Crédit Suisse Research Institute,³⁵⁵ for example, shows that the ranks of global ultra-high net worth (or UHNW) individuals rose by 46,000 in 2021, to a record 218,200, with the main reason being that the world’s richest people benefited very strongly from what is described as ‘an explosion of wealth’ during and in the aftermath of the COVID-19 pandemic. This number of UHNW people—by which are meant people with assets of more than USD 50 million (£43.7 million)—rose so much in 2021 because the super-rich benefited from rising house prices and booming stock markets. This amounted to an increase of more than 50% in a 2-year period. This huge increase in the wealth of the richest 0.00004% of the world’s adult population, moreover, occurred at a time when billions of low- and middle-income people—many of whom saw their savings disappear during the COVID-19 pandemic—were themselves struggling with rising food and energy prices (cf. Sect. 3.3.2.2).³⁵⁶

Crédit Suisse’s 2022 Global Wealth Report in addition revealed, in general terms, that the recovery in macroeconomic activity in 2021 occurred in an environment of exceptionally low interest rates and, therefore, provided exceptionally favorable conditions for wealthy households’ wealth growth. According to Crédit Suisse’s estimate, global wealth at the end of 2021 amounted to USD 463.6 trillion, up USD 41.4 trillion (9.8%). Average wealth per adult grew by USD 6800 (8.4%) during that year, to USD 87,489, almost three times the level at the turn of the century.³⁵⁷

However, once again, the distribution of this increase in global wealth has been very uneven. In the process, the richest 1% of the global population saw its share of all the world’s wealth increase to 46%, up from 44% in 2020. The number of U.S. dollar millionaires increased by 5.2 million in 2021, to a total of 62.5 million—a number just below the 67 million inhabitants of the United Kingdom. It is even held in the report that the number of millionaires has become so large that it is hardly a relevant measure of wealth. Furthermore, in 2021, more than a third of millionaires resided in the United States of America, where 24.5 million millionaires lived, or 39% of the world total. The number of American millionaires increased by 2.5 million in 2021—nearly half of all new millionaires in the world. China ranked second, with 10% of the world’s millionaires, ahead of Japan with 5.4%, the United Kingdom (with 4.6%) and France (with 4.5%).³⁵⁸

Switzerland, in 2021, was again the richest country in terms of average wealth per adult, with USD 700,000, ahead of the United States of America, with USD 579,000.³⁵⁹

However, the inequality in these countries is evident when the average median wealth per adult is considered. Switzerland then drops to sixth place, with a median wealth of USD 168,000, while the United States of America drops to the 18th place, with a median wealth of USD 93,000. Australia tops the median wealth chart, with USD 274,000.³⁶⁰

3.3.2.4 Evolution Toward a Plutonomy

A remarkable piece by Andy Becket appeared in The Guardian of July 19, 2018, entitled ‘How to Spend It: the shopping list for the 1%’.³⁶¹

In this contribution, Becket explains that, today, the extremely rich have come to constitute an increasingly dominant and international elite: lightly taxed, politically pivotal, as admired as they are criticized, and in their lifestyles so untethered from everyone else that they seem to exist in a parallel world. It is hereby further mentioned by Becket that, since 1980 (ergo since the global implementation of economic neoliberalism), the share of the richest 1% of Britons and Americans in the national income of their respective countries, nearly tripled. Around the world, the top 1% owned half of all wealth in 2018, the highest share in nearly a century.³⁶²

In his opinion piece, Becket lays out what drives this contemporary, wealthy elite. In doing so, Becket points out, for example, that, very occasionally, this elite life is fleetingly visible to the rest of humanity—for example, as a luxury chauffeured car waits outside a boutique in an upscale area of London or New York. More often, the luxurious lifestyle is rather invisible—for example, in the form of a super yacht at sea.³⁶³

Becket continues his sketch by pointing out that the financial crisis of 2007–2008 and the subsequent global recession—followed by a severe imposed upon austerity wave—that the rest of mankind had to endure, left the life of the top 1% in unbridled luxury largely untouched—and often even amplified, e.g., because of emergency measures such as quantitative easing (QE), from which the wealthy in particular have benefited immensely—while at the same time having drastically altered the lives of almost everyone else. According to Becket, this helps explain why books and articles about the top 1% have become a thriving genre, with many newspapers, including The Guardian itself, even having wealth correspondents to report on the goings-on of the super-rich. Yet, still according to Becket, journalists and academics often struggle to absorb more than the hard, shiny surfaces of this private world, such as the size of yachts and the abundance of servants.³⁶⁴

Those who want to properly understand the underlying desires and pleasures—and the accompanying restlessness and competitiveness—of the top 1% are in addition advised by Becket to read the magazine ‘How to Spend It’. Becket explains that this magazine—and an accompanying website—present “an elegant luxury environment for readers and advertisers,” as the promotional material of the Financial Times (which initiated the magazine) puts it. Through “How to Spend It,” “the world’s most coveted audience, with the greatest buying power and highest net worth,” is judiciously steered by expert FT journalists toward the right buying decisions. A copy of the magazine typically runs between 80 and 100 pages. About half of these consist of advertisements, especially then for the world’s biggest luxury brands, in addition to more unusual goods, such as art and real estate. The other pages are generally a glossy parade of articles—not always easily distinguishable from the ads, still according to Becket—on the most expensive fashion, travel, food, interior design, and other consumer goods imaginable. Becket also gives some examples of themes covered in the magazine:³⁶⁵

A long recent feature suggests “a sumptuous gastronomic tour of Spain by private jet,” three days long “from £6,995 per person.” An artfully casual page of recommended “knick-knackery” includes a “Chaumet Liens Lumière Watch in gold with diamonds and mother-of-pearl on alligator strap”, costing £12,870. A 2012 article on home furnishings with an aeronautical theme included a decommissioned Sky Flash air-to-air missile, polished to a perfect sheen and mounted on a pedestal: “This could be sitting in your drawing room for a mere £29,500.” To read How to Spend It, depending on your income level and attitude to extravagance, is to enter a world that is seductive or ridiculous, escapist or intimidating, a voyeuristic thrill or utterly enraging - and possibly all at the same time. Sometimes, How to Spend It is almost comically refined - a French restaurateur describes her “perfect weekend,” featuring “brioche flavoured with orange blossom” and a visit to a favorite hat maker; and sometimes it is crassly ostentatious - a regularly themed issue called Boats That Rock. According to the FT, 61% of How to Spend It readers are men, and the average age of this readership is 47. The same trophy products for the middle-aged alpha male appear again and again: vintage motorcycles, fast cars, private aircraft. Alongside these paeans to old-fashioned masculine luxury - appropriate to our age’s Edwardian levels of inequality - are pages and pages of ads for the most delicate and rarefied women’s jewelry.³⁶⁶

Even more troubling is that these consumption habits of the top 1% elite have become increasingly important to the global economy; in doing so, the spending decisions of the rich have become socio-economic forces with enormous impact, especially since 1980. “As the rich have become richer,” a 2005 analysis by the U.S. investment bank Citigroup, to which Becket refers, found, “they have begun to save less and spend more.” Unlike other consumers, the report mentions, the rich find many products, such as branded clothing, more desirable the more expensive they become. Countries where the rich are massively abundant, such as the United Kingdom, Canada, and the United States of America, have thus been radically altered because of this spending frenzy: they have become ‘plutonomies’, economies driven by the rich.³⁶⁷

However, recently, because of the increasingly severe problems into which economic-neoliberal axed capitalism has plunged the world, there has been some reversal in the policy of the magazine. In late May 2022, the FT announced that the magazine’s name How To Spend It no longer reflected the “changing times and priorities” in a world of financial and socio-economic inequality. The magazine was therefore renamed, simply, HTSI, with the FT inviting readers to interpret the ‘S’ for themselves, “in accordance with their own deeper interests.” In doing so, the FT itself suggested that possible definitions of HTSI could be: “how to style it, how to save it, or how to steer, surf or savour it.” The magazine’s editors themselves commented that it was uncomfortable to run a magazine called ‘How To Spend It’ in a world dealing with the aftermath of a pandemic, where Russia is invading a neighboring country, and where the cost-of-living crisis (e.g., energy and food; cf. in Sect. 3.3.2.2) was beginning to hit hard. Despite this pro forma rebranding, the magazine announced that it would continue to focus on “optimism, fun and beauty” and remain “a bit hedonistic.”³⁶⁸

3.3.2.5 Inflation in 2022

In the first half of 2022, mainly because of the before mentioned rising energy and food prices, the doomsday image of inflation started to rear its head again (even though the entire economic-neoliberal policy aims to avoid too high inflation, but on the contrary, to make it ‘gradual’, e.g., as far as the EU is concerned, within a 2% per year range).

When the COVID-19 pandemic began, global inflation was generally subdued. According to Barrett, this trend even persisted during the first few months of the COVID-19 crisis. But the rise in prices since the late 2020s steadily pushed up inflation. In the 18 months following the start of 2021, the average cost of living, globally, rose more than in the previous 5 years combined. Food and energy prices were the main drivers of this inflation. As of early 2021, the average contribution of food alone exceeded the overall average inflation from 2016 to 2020. In other words, food inflation alone was said to erode global living standards as fast as the inflation of all consumption in the 5 years immediately before the COVID-19 pandemic. A similar observation applies to energy costs. However, this does not imply that the prices of other items did not also increase in that period. For example, in the United States of America and the euro area, inflation in the service sector had also risen sharply by mid-2022. In addition, the relative impact of prices for food, energy and other products on inflation varied significantly from country to country.³⁶⁹

At the end of May 2022, Eurostat thus reported that inflation, annualized, in the euro area in May 2022, was expected to reach 8.1%, up from 7.4% in April 2022.³⁷⁰

Figure 3.7 gives an overview of the inflation on the euro zone as of May 2022.

Fig. 3.7

Euro zone inflation, May 2022 [Source: Arnold et al. (2022) Eurozone inflation hits record 8.1%, Financial Times, May 31, 2022]

In terms of the main components of euro area inflation, energy was reported to have the highest annual rate in May 2022 (39.2%, up from 37.5% in April 2022), followed by food and beverages (7.5%, up from 6.3% in April 2022), non-energy industrial products (4.2%, up from 3.8% in April 2022), and services (3.5%, up from 3.3% in April 2022).³⁷¹ This is shown schematically in Fig. 3.8.

Fig. 3.8

Eurozone annual inflation rate, May 2022, % [Source: Eurostat (2022a) Euro Indicators 61/2022—31 May 2022]

According to the Financial Times, this rise in euro zone prices, coming from 7.4% in April 2022, was much higher than predicted by economists, who had expected a 7.7% increase for May 2022. Moreover, the core rate—which does not include the more volatile energy and food prices—rose, also above expectations, from 3.5% to 3.8%. The higher-than-expected core rise, which indicated faster price increases in most categories of goods and services, soon raised expectations that the ECB would revise its policy toward higher interest rates.³⁷²

Inflation continued to rise until August 2022. According to an estimate by the EU statistical body, annual inflation in the euro area for August 2022 was as high as 9.1%. According to this August 2022 estimate, prices for food, alcohol and tobacco, non-energy industrial goods and services in particular had increased compared to July 2022, when annual inflation in the euro area was estimated at 8.9%. According to this August Eurostat estimate, energy inflation itself was 38.3%, up from 39.6% in July 2022.³⁷³

According to CNN, inflation in the United Kingdom rose above 10% in July 2022 for the first time in 40 years, due to the skyrocketing cost of energy, food, and fuel. The Bank of England predicted that inflation would reach 13% by the end of 2022. Analysts feared even higher inflation in early 2023.³⁷⁴

Measured in September 2022, annual inflation in the European Union stood at 9.1%, while inflation in the United States of America had remained at 8.3%. Inflation in the United Kingdom reached a 40-year high in 2022 before falling slightly to 9.9% in August 2022. Price increases also occurred in parts of Asia.³⁷⁵

The euro area annual inflation rate amounted to 10.6% in October 2022, up from 9.9% in September 2022. A year before, the inflation rate was 4.1%. European Union annual inflation amounted to 11.5% in October 2022, up from 10.9% in September 2022. A year before, the European Union inflation rate was at 4.4%. In October 2022, the lowest annual rates were registered in France (7.1%), Spain (7.3%) and Malta (7.4%). The highest annual inflation rates were recorded in Estonia (22.5%), Lithuania (22.1%) and Hungary (21.9%). Compared with September 2022, annual inflation had fallen in eleven Member States, remained stable in three, and risen in thirteen.³⁷⁶

Belgian inflation reached its highest level since 1975, at 12.3%, in October 2022.³⁷⁷

According to data provided by the OECD, “Year-on-year inflation in the OECD as measured by the Consumer Price Index (CPI) fell to 10.3% in November 2022, back to the level recorded in August 2022, from 10.7% in October 2022. Declines in inflation between October and November 2022 were recorded in 25 of 38 OECD countries. Nevertheless, inflation increased by at least 0.5 percentage point in Chile, the Czech Republic, Finland, Hungary, the Slovak Republic and Sweden. The highest year-on-year inflation rates were recorded in Estonia, Hungary, Latvia, Lithuania and Türkiye (all above 20%).”³⁷⁸

As regards the Euro area, annual inflation was expected to be 9.2% in December 2022, down from 10.1% in November 2022.³⁷⁹

The question is the root cause of this inflation is. According to Robert Reich, the answer to this question is simple:³⁸⁰

Corporations are pushing up inflation. The biggest single unique source of inflation in the United States is the pricing power of corporations.

In that approach, the inflation wave of 2021–2022 was mainly due to the producers’ own pricing of goods and services (which then, to the extent that it deals with essential goods, such as energy and food exerted a further cascading effect). (Cf. already in Sect. 3.3.2.2.) In other words, it is the principles and working methods of capitalism itself, including above all the profit-seeking of the entrepreneurial sector, that caused this wave of inflation.

Robert Reich (in another opinion piece) also coined an appropriate term for this corporate behavior and its consequences, namely ‘profit-price inflation’.³⁸¹

Following its counterparts elsewhere in the world,³⁸² on July 21, 2022, in response to these waves of inflation, the European Central Bank, for the first time in 11 years, raised interest rates by half a percentage point, a higher amount than initially expected.³⁸³ The measure announced on July 21, 2022, however, raised as new concern whether the rush to make credit more expensive would plunge large economies into recession, at the expense of prices people spend on food, fuel, and everything in between.³⁸⁴ A second ECB rate hike of 0.75 percentage points (or 75 basis points) followed on September 8, 2022. This increase applied to all three base interest rates.³⁸⁵

The ECB’s interest rates still remained far from a level capable of bringing inflation to 2%, despite the sharp interventions. The ECB, therefore, soon announced that it would continue to raise interest rates further in the coming period to address far too high inflation.³⁸⁶

At a time when the British economy was formally in recession, the Bank of England also continued to raise its central interest rate. Specifically, on September 22, 2022, a majority of the Bank of England’s nine-member monetary policy committee (MPC) decided to raise the base rate by 0.5 percentage point, to 2.25%—the highest level since 2008—on the grounds that the risks of entrenching inflationary pressures outweighed the short-term dangers to the economy. In doing so, the Bank of England considered that the energy price guarantee would prevent a higher spike in inflation, with the overall rate peaking just below 11% in the fall of 2022, according to the Bank’s own expectations. By then, inflation in the United Kingdom had risen to 9.9%, the highest rate since the early 1980s, and nearly five times higher than the Bank’s 2% target.³⁸⁷

3.3.2.6 The Big Dupe of All This: The Working and Poor Classes

3.3.2.6.1 Impairment of Purchasing Power (in the West)

In the Western world, the inflation wave of 2022 (of course) has mainly had an adverse impact on the purchasing power of the general population, and then especially the members of the lower and middle classes.

For instance, figures from an ING-survey of some 1000 Belgians in early November 2022 showed that six in ten Belgians had started cutting back on daily expenses as a result of inflation and skyrocketing energy prices. Belgians were reported to start paying extra attention when buying fresh food and groceries. A slight majority of Belgians were also cutting their clothing budget. About half of Belgians were, furthermore, cutting back on spending on catering, travel and recreational activities. The crisis caused by the 2022 inflation was also strongly reflected in online spending. During the corona pandemic, Belgians had started ordering massively over the Internet, but according to ING, e-commerce has become under pressure since the corona easing. This decline was primarily due to a general deterioration in the economic climate, and not because consumers were once again finding their way to physical stores more readily. A further striking fact was that Belgians appeared to be cutting back more on online spending, and in all product categories, than, for example, the Dutch and Germans. In early November 2022, some 28% of Belgians were purchasing fewer clothes and shoes online, compared with only 14% in the Netherlands, and 23% in Germany. Finally, as many as nine in ten Belgians were taking extra measures to reduce their energy consumption. Some four out of ten were using electrical appliances more sparingly, and almost one out of ten switched energy suppliers. Due to the increasing energy prices, for 37% of Belgians, more than a tenth of their net household income was in early November 2022 spent on energy, and for 7% this even amounted to more than a quarter. Households with lower household incomes were hit relatively harder by rising energy prices. One of the reasons was that they were more likely to live in homes with poor energy efficiency, making energy costs more of a burden.³⁸⁸

Given the causes of the 2022 inflation wave, the question has been raised whether a hike in central interest rates, has constituted the most ideal response, especially as it mostly affects the modal consumer (e.g., in the form of more expensive mortgage and consumer credit).

According to Robert Reich, the answer to this question is quite simple: central banks (in addition to the ECB, for example, the Federal Reserve) raise central interest rates when prices rise. The explanation is, simply, that this is the only tool in the central banks’ toolbox to respond to price increases. The problem with this policy, however, is that it particularly burdens working people and low incomes the most, putting the cost of inflation even more on their shoulders. Not only are they the ones who suffer most from the price increases themselves, they are also the first to lose their jobs and income when the economy slows down (because of higher interest rates). According to Reich, all of this would, perhaps, still be justifiable if enterprises invested their windfall profits in more productive capacity—adding factories, materials, warehouses, and jobs—which would allow them to better meet future demand and thus better guard against inflation. But, in 2022, that was something that has not been happening (anymore). Instead, enterprises used their higher profits primarily to buy back their shares (among other things, to combat downward pressure on stock prices and/or to distribute their acquired reserves among their shareholders).³⁸⁹

Incidentally, Reich is not alone in this position. A similar position was taken, around the same date, by Australian economist Greg Jericho. This author pointed out that Australia also experienced rising inflation in 2021–2022. There too, this was mainly due to price increases provoked by the entrepreneurial sector itself. Jericho pointed out that in the 2021–2022 period, non-mining sector profit margins were above 9%, only quietly returning to pre-COVID-19 pandemic levels after the summer of 2022—a level still above that of 2011–2016. A look at individual, Australian industries showed that, by September 2022, profit margins in manufacturing, construction, wholesale trade, and other services (including services such as auto repair and personal care such as hairdressing) were all above pre-pandemic levels. In other words, even in Australia, the wave of inflation was not caused by wage increases, but by rising corporate sector profit margins. Because average prices rose faster than wages for eight quarters in a row, the purchasing power of average people was naturally affected as well: the average ability of people to buy goods or services with their wages declined by 3.9% over the years 2021–2022 as a result. Jericho’s conclusion, like Reich’s, is that it has mainly been the working classes that had to pay the price for the inflation wave of 2021–2022.³⁹⁰

For that matter, this insight also seems to be present (at least implicitly) in the lap of certain of the central banks themselves. For example, in its decision to raise the central interest rate de dato September 22, 2022, the Bank of England itself explicitly warned that the effect of the government’s support measures could further increase inflationary pressures.³⁹¹

What these critiques essentially boil down to is the following. Under neoliberal policies, the capitalist, economic growth model tolerates managed inflation, which in most Western countries, since the implementation of economic neoliberalism, has been set at 2% annually. This objective is the mirror side of the design of steady or controlled economic growth, as contained, for example, (implicitly) in the basic articles of the IMF Articles of Agreement.³⁹² In the context of such steady, or monetary institution-controlled economic growth, limited price increases may occur. When economic growth occurs (which is what all capitalist policy agencies strive for), the economy is doing well and employment, and therefore the purchasing power of the population, rises. The increased purchasing power then translates into an increase in demand (for goods and services), which will cause prices to rise (in accordance with the law of supply and demand).

If price increases become too high—in other words, if inflation starts to exceed 2% on an annual basis—central banks will begin to be wary. At some point, this will lead to monetary intervention, generally an increase in the central interest rate. In such a case, credit will be made more expensive (again), implying that economic growth will be slowed down. There will then be a decline in employment, and therefore a decline in the purchasing power of the population. When the prices of credit rise, people will moreover be less willing to enter into consumer (including mortgage) credit agreements. This in turn can then result in a decrease in demand (for goods and services), which will cause prices to fall (again in accordance with the law of supply and demand). In this way, inflation will be brought back under control (and, ideally, reduced to below 2% on an annual basis).

It is for this (theoretical, (neo)liberal economic) scenario that (neoliberal) monetary policy is conceived (and is also included in the objectives of various, central banks) via central interest rate steering.

However, the inflation wave of 2021–2022 did not correspond to this classical scenario. Indeed, the price increases of 2021–2002 were not the result of excessive economic growth (and/or of an increase in the population’s purchasing power that would have resulted) but were instead mainly the result of profit price speculation.

Indeed, as explained above, in the aftermath of the COVID-19 pandemic, producers belonging to various sectors—especially energy and food—had seen an opportunity, at their discretion, to dramatically increase their prices. The chaos in certain fossil fuel markets created by the Russian-Ukrainian war has added to this opportunism. For the enterprises involved, this implied making usurious profits (cf. supra, in Sect. 3.3.2.2), but for small consumers, this amounted to a drastic erosion of their purchasing power. Since energy and food are vital goods, it is difficult for a consumer to save (drastically) on them, especially when facing completely out-of-control price increases. The consumer can adjust his behavior a little (for example by using a little less energy, by looking for the cheapest distributor, by no longer buying certain luxury foods, respectively), but basically the average consumer’s room for maneuver is rather limited, which is all the more true the more energy and food expenditures make up a larger share of a consumer’s budget (which is generally the case for consumers belonging to the low(er) income bracket(s)). Thus, in the energy and food crisis of 2021–2022, we found that consumers from the lower classes were particularly hard hit, resulting in a drastic erosion of their purchasing power. This erosion—and therefore the underlying waves of inflation—resulted not so much from too high, economic growth, but from an excessively large share of spending on well-defined products (energy and food) in the spending budgets of the consumer population.

Incidentally, what is true for small consumers was also true in the case of energy prices for various categories of enterprises, including especially small and medium-sized enterprises that are highly dependent on energy and/or whose profit margins leave little room for large price shocks in essential commodities (including energy).³⁹³

Under normal circumstances, free competition should take corrective action in such cases. Indeed, artificially inflated prices should allow new market players to enter the market, by selling goods or services at a price below that of existing producers. This should then, theoretically, translate into an increased supply of the goods or services in question (in this case, food and energy), which would then naturally reduce prices. However, the events of 2021–2022 demonstrated that such an expected correction did not occur, which is caused by several factors, most of which can themselves be traced to the neoliberal economic policies of the previous four decades. For example, the liberalization of the energy markets of the 1980s–1990s did not lead to more free competition, but rather to semi-monopolization on the part of certain market players (who, as a result, were given free rein in terms of price formation in various markets³⁹⁴). There have also been various manipulations of the supply of basic raw materials (e.g., fossil fuels such as oil and gas). Also in the food sector, during the same period, there has been a strong concentration, so that in many countries large segments of food markets are in the hands of only a limited number of market players.

In this way, the inflationary wave of 2021–2022 is one that had already strongly affected the purchasing power of consumers, especially the lower classes. If we then unleash the classic, monetary instrument of raising the central interest rate on this, a cascade effect can occur. Economic growth may then be curbed, with a possible fall in employment and thus a decline in purchasing power, which will be felt, above all, by those sections of the population whose purchasing power is already strongly affected by the initial waves of inflation themselves. In these circumstances, monetary policy itself may contribute to the emergence of an economic recession.³⁹⁵

Put another way, the inflation experienced by numerous Western countries in 2021–2022 was not the result of wage increases due to excessive economic growth and employment rates. On the contrary, this inflation was due, in main order, to profit increases that are themselves the result of excessive power of certain enterprises. In other words, it is these profits, and not (through a classical monetary policy) wages, that must be controlled.³⁹⁶

This has raised questions, among several commentators, about the effectiveness of central bank action (of raising central interest rates).

According to Reich, the inflationary waves of 2021–2022 were, in part, an outgrowth of the COVID-19 pandemic, and for that reason they are similar to post-World War II inflation, when economists advocated temporary price controls to buy time to resolve supply bottlenecks and prevent excessive corporate profits. For Reich, limited price controls should therefore also have been considered anno 2022, for the same reasons.³⁹⁷

Thus, a better alternative to raising central interest rates might be for (national) governments to take direct action to combat (usurious) profit pricing. Reconnecting with a tradition of strong antitrust enforcement could be a good first step in the right direction, where even a sufficiently credible threat of antitrust enforcement could deter enterprises from raising prices so far above their costs. A so-called windfall profits tax³⁹⁸ could also constitute a useful policy tool. Even temporary price controls could be considered.³⁹⁹

In addition to the erosion of purchasing power in the Western world discussed in Sect. 3.3.2.6.1, as with other crises, the disastrous impact of the 2021–2022 food and energy crises (and the inflation they caused) in non-Western countries has proven to be even greater. This will be further explained in the Sect. 3.3.2.6.2 below.

3.3.2.6.2 Increase in Hunger

Zero hunger by the year 2030 is one of the 17 sustainable development goals set by the UN in 2015.⁴⁰⁰ The 2021–2022 food crisis has since compromised this goal. In mid-September 2022, the UN predicted that the number of people suffering from hunger will exceed 840 million by 2030. Instead of the situation improving, it is held that millions find themselves trapped in the worst hunger crisis in living memory.

Indeed, upon consulting the United Nations website on September 21, 2022, the following alarming message could be read:⁴⁰¹

The world is not on track to achieve Zero Hunger by 2030. If recent trends continue, the number of people affected by hunger would surpass 840 million by 2030.

According to the World Food Programme, 135 million suffer from acute hunger largely due to man-made conflicts, climate change and economic downturns. The COVID-19 pandemic could now double that number, putting an additional 130 million people at risk of suffering acute hunger by the end of 2020.

With more than a quarter of a billion people potentially at the brink of starvation, swift action needs to be taken to provide food and humanitarian relief to the most at-risk regions.

According to information from the World Food Program, as many as 50 million people in 45 countries were balancing on the brink of famine by mid-September 2022. An open letter⁴⁰² signed by 238 NGOs and addressed to UN member states, which met in general session for the first time in 2 years during the week of September 19–25, 2022, called for the immediate funding to prevent suffering now and in the future for that reason. “In a world of plenty, letting people starve is a policy choice,” the letter rightly reads. “The lack of political will and institutional failure to act quickly before the worst happens means that people are sent from crisis to crisis. People are not starving; they are being starved.”⁴⁰³

As expressed in more detail in the open letter itself:⁴⁰⁴

From Somalia to Haiti, South Sudan to Yemen, Afghanistan to Nigeria, people’s lives in the most fragile contexts are being devastated by a global food crisis, fueled by a deadly mix of conflict, climate change, rising costs and economic crises, exacerbated by COVID-19 and the Ukraine conflict.

Fifty million people are now just one step away from starvation. Over 345 million more are bowing under the crushing weight of hunger, struggling to feed their families and at risk of death.

Behind these statistics are real people and lack of action has horrific, real life and death consequences. For the woman who fled her country to escape the violence of war and now has her food ration halved or suspended completely. For the hungry child forced to drop out of school to work so their family can eat. For the young girl forced into marriage, where she faces sexual exploitation and abuse. And for the caregiver who makes the long journey to seek treatment for a severely malnourished toddler only to find the health clinic is closed due to funding shortages.

The international community and national governments are failing to meet their duty and have prioritized political and economic interests over the wellbeing of the world’s most vulnerable children, families and communities. While political leaders have made many promises, in the cities, towns, villages, and refugee and internal displacement camps where millions of lives hang in the balance, far too little has changed.

In a world of plenty, leaving people to starve is a policy choice. We call on you as world leaders to take urgent action to stem this crisis and prevent future ones. You must immediately deliver the funding needed to reach 50 million people on the edge of starvation to save lives NOW. You must also support vulnerable countries and communities to build resilience NOW. And you must take action to anticipate, prevent and prepare for subsequent crises to secure the future, including by delivering much needed climate finance, reallocated Special Drawing Rights, and meaningful debt relief.

According to information provided by UNICEF in mid-September 2022, global prices for RUTF (=ready-to-use therapeutic food) were expected to rise by another 16% over the 6 months to follow, the main reason for this being the fact that the prices of transportation and ingredients themselves also continued to rise. Meanwhile, worldwide, malnutrition underlies nearly half of all deaths among children under five. Most of these children die from infection because their immune systems are compromised by a lack of nutrients. As a result, measles, malaria, pneumonia, and diarrhea remain common causes of death in children suffering from malnutrition.⁴⁰⁵

But similar effects of the 2021–2022 energy and food crises have also been felt in more affluent countries.

According to a report by the U.S. National Energy Assistance Directors Association dated September 12, 2022,⁴⁰⁶ the expectation played out that in the fall and winter period to come, heating costs would increase by 17%, affecting mostly lower-income families. Costs were expected to exceed USD 1200 in the winter of 2022–2023, up from USD 1025 in 2021–2022. Lower-income families were thereby at greater risk of falling behind on their energy bills and were even expected to be forced to make choices between heating, medicine, food, and rent.⁴⁰⁷

As for the United Kingdom, in August 2022, expectations rose that the average British household would see its annual energy bill rise to £3549 (about USD 4180), from October 2022 on. According to analysts, this constituted a crisis that should have been the government’s policy prerogative. Instead, then-outgoing Prime Minister Boris Johnson was all but absent during that period (since he had taken two vacations in less than a month), dismissing all responsibility for his country’s disastrous situation by citing the war in Ukraine, while his successor, Liz Truss, asserted herself primarily by promising traditionally tried-and-true neoliberal prescriptions—including tax cuts for business owners and the further removal of social benefits from the working classes.⁴⁰⁸

According to Kara Fox (of CNN)—relying on data from the Center for Ageing Better—there were an estimated two million retirees in the United Kingdom living in poverty even before the 2022 energy crisis. The 2022 annual report of the Center for Aging Better reported on this that there were more than 200,000 poor pensioners in 2021 than the previous year. Most pensioners in the United Kingdom must make do with a basic pension of 141.85 pounds a week (about USD 170), or about 7400 pounds (USD 8770) a year. This state pension increased by 3.1% in April 2022, a figure that was, however, well below the then inflation rate of 9%. The subsequent increase in the government pension was scheduled for April 2023, therefore after the winter period of 2022–2023. This information raised the expectation that, starting from the winter of 2022–2023, even more people would fall into poverty. It even was suggested that the poor in the United Kingdom, in the winter of 2022–2023, would be faced with the choice of starving or freezing to death,⁴⁰⁹ which still did not prevent the Conservative party—which, after decades of neoliberal policies since the 1980s, is one of the main culprits for this state of affairs—from continuing to enjoy great political support among the poor (older) strata of the British population.⁴¹⁰ As the latter concern has been phrased by Aditya Chakrabortty, “this is the UK’s horrific doom-loop, where voters are told the untenable is inevitable, while the sensibles keep mouthing stupidities and capitalists mirthlessly toast a cadaverous capitalism. Further downstream, surveys suggest over half (54%) of the 4 m households on universal credit have gone without food in the last month, sick people in Wales can wait nearly two days inside an ambulance before getting admitted to A&E, and about 100,000 households each month are rolling off their mortgages into financial disaster.”⁴¹¹

What the dismantling in the United Kingdom of the welfare state model—or in other words, the establishment of a neoliberal society—means practically for the life of the modal man is further aptly described in an opinion piece written by Denis Campbell of November 23, 2022. In it, Campbell elaborates on a cry of alarm raised by the head of the Royal College of GPs regarding the disastrous condition in which the most vulnerable within British society find themselves after decades of neoliberal policies.⁴¹²

In his opinion piece, Campbell starts by explaining that many people in the United Kingdom, increasingly, refuse sicknotes from their GP because they cannot afford time off work. Campbell, furthermore, points to an increase of patients who experience asthma attacks, or similar serious breathing problems, because they can no longer afford to heat their homes. Many GPs also report deteriorating mental health among the British people because of financial stress. Rising food costs are thereby leading to illnesses such as rise in fatigue, mouth ulcers and weak muscles, with many people being deficient in key vitamins—such as vitamins B—because they can no longer afford to eat anything else than a poor diet. In general, an alarmingly increasing number of British patients suffer from complex physical and psychological problems related to poverty, domestic violence, childhood abuse, or poor housing. The article also points out that GPs are becoming extremely distressed at seeing patients’ health worsen because of long NHS waiting lists. An example of this concerns the growth in the number of people with painful hips and knees who do not receive proper medical treatment anymore and who have to literally crawl up the stairs in their home, because they cannot walk up anymore, and their only toilet is on their upstairs floor. The combined effect of all these problems is that more and more GPs themselves are suffering psychologically because of their inability to take appropriate action to end all of this suffering.⁴¹³

Also according to data through the second quarter of 2022, collected by the European statistics office Eurostat, more and more Europeans were struggling to make ends meet.⁴¹⁴

Although the Eurostat figures were only made available for about a dozen countries and thus did not give a complete picture for the situation in the whole of Europe, the occurring trend was clear: almost everywhere, except for Finland where there was a slight improvement compared to the first quarter of 2022, more and more people were struggling to make ends meet.⁴¹⁵

In Belgium, 16.3% of the population declared that they were struggling to make ends meet. The absolute leader in this trend was however Bulgaria, where the number of residents experiencing financial hardship hovered around 40% (39.8%). In Slovakia and Italy, it concerned more than a quarter of the population, and in France more than 20%.⁴¹⁶

One of biggest problems in Belgium was that energy prices in 2022 were rising much faster than general inflation. For instance, the price of natural gas was 64% higher in November 2022 than in November 2021, while electricity was up 42%. It has been remarked of little consolation that occasional purchases in the Belgian inflation basket, such as electronical devices and smartphones, have become cheaper, while the prices of energy and food have been rising to a much greater extent. As a result, 73% of Belgians considered automatic indexation as not enough to compensate for the rising prices, according to an Ipsos poll for Le Soir the results of which were made available on December 5, 2022. More than two-thirds of the people interrogated had said that their purchasing power had diminished in 2022, versus 26% who had indicated that it had remained stable, and 6% who had indicated that it had grown.⁴¹⁷

Figure 3.9 gives an overview of people’s ability to make ends meet, with great difficulty or with difficulty, in 11 EU Member States.

Fig. 3.9

Ability to make ends meet “with great difficulty or with difficulty”, in 11 EU Member States (data of November 28, 2022) [Source: Eurostat (2022c) Ability to make ends meet becoming harder]

Even one of Europe’s most prosperous welfare states, notably Sweden, has not escaped the issue. Indeed, according to a contribution that appeared in The Guardian on December 5, 2022, the erosion of purchasing power has increasingly made itself felt in that country as well. One of the underlying reasons indicated in this article is that similar to what has happened in other countries, Sweden’s welfare system has been steadily been eroded during recent years. This had attributed to a widening of the gap between rich and poor which has left an increasing number of people vulnerable to inflation that, in the autumn of 2022, amounted to 8% in Sweden. In addition, household incomes were severely hit by electricity bills that had in some cases doubled.⁴¹⁸ Petrol and food prices also soared during 2022. At early December 2022, the cost of butter was up by about 25%, meat by 24%, and cheese by about 22%.⁴¹⁹

3.3.2.6.3 Rising Intergenerational Injustices

As we already explained in certain of our previous work,⁴²⁰ one group of people who are increasingly victimized by the practices of capitalism is the group of young people, and this on a global scale.

This warning was since echoed by the OECD in a report published in May 2021. That report explained how the vulnerability of the generation of young people further increased because of the COVID-19 crisis. Because of this, unemployment among young people between the ages of 15 and 29 in the group of OECD countries at the end of 2020 was as high as 14%, accounting for 23.4 million young people. In addition, young people were also overrepresented among those in temporary or otherwise flexible jobs. Young people were also those most affected by the measures enacted under COVID-19 (such as lockdowns and physical distance measures), resulting in a decline in their income and an increase in mental problems.⁴²¹

However, still according to the OECD-report, the COVID-19 crisis has mainly been in the nature of confirming pre-existing trends in the labor market. For example, the automation and flexibilization of labor markets, worldwide, have been shown to have had a strong polarizing effect that has excluded young people from many opportunities and life chances. A disturbing consequence of this is that in 2/3rds of OECD countries, highly educated young people are much more likely to be employed in low-paying jobs. It has also been shown that the flexibilization of the labor market has deprived young people of various forms of social security protection, job protection and even access to vocational training. Also, the opportunities of access to entrepreneurship for the current generation of young people are less than before, partly because of insufficient access to start-up capital or to a support network. Especially young people belonging to the lower social classes also face greatly reduced chances of ever becoming homeowners themselves, while their families are also increasingly unable to support them to do so. In addition, the report shows that the generation of young people increasingly feel abandoned by the policy world that pays insufficient attention to their interests and problems.⁴²²

Not surprisingly, this same group of young people have been hit hard by the waves of inflation that have begun to manifest themselves from 2021–2022. Because of this, people under-30 found their ambitions, once again, frustrated by worsening economic conditions, with the young generation, on a global scale, again experiencing extreme pressures in making ends meet, often while having to juggle work and studies.

In an article that appeared in The Guardian of December 19, 2022,⁴²³ Oliver Haynes reported on the dire situation of the young generation in various European countries.⁴²⁴

For instance, said article highlights the miserable state of young people in Spain, which, with a youth unemployment rate of 32%, leads the ranks of youth unemployment in EU and OECD countries combined. As a result, an increasing proportion of young people must continue to live with their parents until an increasingly advanced age. Unemployment, combined with high rent costs, low wages and rising living costs, makes it increasingly difficult for this group of young people to live independently and making ends meet financially.⁴²⁵

A similar trend is occurring in France and England, especially in London as far as the latter is concerned, where rising rent and other living costs are also primarily affecting the younger generations. Here too, high inflation of (in early December 2022) 11% on average in Europe is taking its toll, leaving young people increasingly struggling with rising rent and living costs, even for essentials such as food. The article goes on to mention that young people in the Baltic states, where inflation reached 20% in early December 2022, were even more severely affected than average. One consequence is that many of the young people are leaving their countries, a phenomenon that has begun to occur in Lithuania in particular.⁴²⁶

As we ourselves have pointed out in our work since 2015,⁴²⁷ all this is no accident, but the direct result of decades of sustained economic neoliberal policies. Indeed, today’s generation of young people are those who enter the labor market—and, more broadly, reach the age of adulthood—without still being able to enjoy the systems of social and labor protection that had been put in place under the model of the welfare state. This is, in addition, also because the dismantling of the welfare state model in various countries has been gradual rather than sudden and abrupt, with the result that each succeeding generation increasingly has to contend with its negative consequences, a fate that increasingly falls upon younger generations.

All of this, of course, is even more of a case for advocating a fundamental change in the systems of socio-economic order, which will be the subject of Chaps. 4–7 of this book.

3.4 Conclusions

It is clear from the foregoing that capitalism in general and economic neoliberalism more specifically have recast (and is still recasting) the world into a world in which any kind of service is available only on payment of a price, which in addition must be borne entirely by the individual user of the service.

At the socio-economic level, this obviously contributes to the class division that already inherently results from capitalism itself, with numerous services, increasingly, available only to those rich enough to pay the price for them.

In the wake of this evolution, these factors drive both poor individuals and poor countries (even more) toward debt financing, of which we have known by now—since Classical Antiquity—that this is one of the many methods by which the rich continue to enrich themselves at the expense of others.⁴²⁸

It is therefore no surprise that, as the implementation of economic neoliberalism progresses, poverty and polarization between rich and poor continue to increase. In recent times, this is moreover becoming increasingly problematic for an increasing proportion of humanity, even in terms of access to essential goods and services (including medical care, education, energy, and food).

As also discussed at length in this chapter, the models of capitalism are also in question because of their disastrous impact on the Earth itself, with in recent times the increasingly devastating impact of climate mitigation.

This raises the question of how much further the model of capitalism can be pushed to its limits and whether it is not time to work for an alternative approach to socio-economic order, a question that we have already answered in the affirmative in our earlier work⁴²⁹ and which we shall, again, address in more detail in the following chapters.

As Jason Hickel⁴³⁰ aptly outlined this intent to push for a more equitable socio-economic order model, the reason why economic growth, as a rule, does not lead to a better distribution of wealth is that most of the wealth it creates disappears directly into the pockets of the wealthy classes.⁴³¹

In other words, the wealthy classes are the only, real beneficiaries of the (neoliberal) economic growth model.⁴³²

Bearing this in mind, it becomes clear that the economic growth model is little more than a (part of neoliberal) ideology that continues to benefit a limited few at the expense of the collective future of humanity and the Earth it inhabits. In this manner, economic neoliberalism mainly promotes and perpetuates a socio-economic model that has deadly consequences for our planet and much of its population, with the sole purpose of making a rich elite even richer.⁴³³

According to Hickel, the truth is that it does not take more economic growth to improve the lives of all people. On the contrary, it is possible to build a socially just world, without further economic growth, simply by distributing more fairly what is already there and by returning more attention to building out the public realm.⁴³⁴

Incidentally, as we have argued ourselves in our earlier work since 2015,⁴³⁵ justice is the antidote to the persistent lie that continued, economic growth would be necessary—and thus the key to solving many of the problems caused by capitalism, including the climate crisis.⁴³⁶

What we think the prospects of a socio-economic ordering based on these starting premises might be, will be explained in more detail in the following Chaps. 4–7.