Climate crisis will stop when Capitalism is dismantled

Writing in the Guardian, renowned economists Jason Hickel and Yanis Varoufakis make the case that tackling the climate crisis first requires dismantling capitalism and its interests.

Hickel and Varoufakis astutely point to the ‘extraordinary paradox’ we find ourselves. One where we have the technology and resources to produce more than we could ever possibly need. At the same, time inequality is increasing rapidly, leaving millions of people suffering through severe deprivation.

Supporting their argument, they state:

Capitalism cares about our species’ prospects as much as a wolf cares about a lamb’s. But democratise our economy and a better world is within our grasp

Capitalism: the cause of this paradox

Hickel and Varoufakis are sounding the alarm over our continued adherence to capitalist structures and principles. In this piece, they argue that we “have an urgent responsibility” to chart a different course. As they state, we’ve all learned it makes no difference who we vote for if we don’t have systemic change.

Additionally, they point out it’s ludicrous to tinker around the edges of a system that works against the interests of the 99%.

Quite aptly, they describe capitalism as:

an economic system that boils down to a dictatorship run by the tiny minority who control capital – the big banks, the major corporations and the 1% who own the majority of investible assets. Even if we live in a democracy and have a choice in our political system, our choices never seem to change the economic system. Capitalists are the ones who determine what to produce, how to use our labour and who gets to benefit. The rest of us – the people who are actually doing the production – do not get a say.

The latest situation in Argentina under far-right Trump-ally Milei only reinforces their claim that ordinary people’s quality of life is consistently sacrificed for billionaire profits:

‘Irrational forms of production’ feeds into the climate crisis

Hickel and Varoufakis highlight the imbalance in principle between what’s best for capital and what’s best for people. To do this, they point out that capital does not prioritise social good or human need. Instead, its priority will always be to ‘maximise and accumulate profit’.

Elaborating on this point, they argue that capitalism’s demand for “perpetual growth” pushes questions of necessity or harm far down the priority list, with chasing profit firmly at the top. The result, they say, are “irrational forms of production”: endless SUVs, sprawling mansions, and mountains of cheap fast fashion. All excellent for boosting the wealth of the already rich, whilst hurting the environment and reducing value for ordinary people.

Meanwhile, genuinely urgent needs such as affordable housing fall to the bottom of the pile — unless governments step in to make them profitable through tax breaks and the stripping away of so-called “burdensome” regulations. Regulations, of course, that exist to protect people and the environment.

Further to this point, they refer to the climate crisis and the desperate need to turn to renewable energy and abandon fossil fuels. They write:

Similarly with energy. Renewables are already much cheaper than fossil fuels. Alas, fossil fuels are up to three times as profitable. Thus capital forces governments to link electricity prices to the price of the most expensive liquified natural gas, not of cheap solar energy. Similarly, building and maintaining motorways is many times more lucrative for private contractors, car manufacturers and oil companies than a modern network of superfast, safe public railways. So capitalists continue to push our governments to subsidise fossil fuels and road building, even while the world burns.

Since Donald Trump’s election, many major investment firms enthusiastically abandoned their climate commitments, which had, in favour of the common good, restrained their profitability.

‘Keep southern economies subordinate’

They add that this contradiction between what is best for capital and what is best for people ‘lock us into never-ending cycles of imperialist violence’. The need for cheap labour and nature from the global south incentivises western capitalist powers to use:

debt, sanctions, coups and even outright military invasion to keep southern economies subordinate.

Trump favours the strong man tactics of recklessly breaking international laws and norms for his own greed and power. With that in mind, there’s definitely weight to their argument.

Hickel and Varoufakis insist there are three conditions required that will ensure this necessary change happens to our economy:

1. A new financial system that makes harmful private investments expensive by enforcing penalties. The implementation of a new public investment bank, making it easier to get public finance for things that benefit the public. They suggest that this could run in tandem with the central banks.
2. Increase the use of ‘deliberative democracy’ to decide focused goals at sectoral, regional and national levels. The public financing provided in point one would then be directed towards those goals.
3. Introduction of the Great Corporate Reform Act which would look to democratise corporations. They say, favouring companies who adopt the change would incentivise more companies to work with a fairer system of ‘one employee, one share, one vote’.

The economists finished saying:

We live in a shadow of the world we could create. A world in which we shall be able to avert an almost certain ecological collapse, rather than waiting around for capitalism to push us beyond the point of no return. A world where the abolition of economic insecurity, precarity, poverty, unemployment and indignity is possible, while we lead meaningful lives within planetary boundaries. This is not a distant dream. It is a tangible prospect.

Climate crisis needs radical change — no more sticking-plaster politics

Our own James Wright wrote in November last year how inequality is exactly what capitalism is built to do, writing:

The non-work-based profiteering is taken to new heights by the few who are rolling in it to the point where they can pay experts to invest their money. Indeed, the global increase in rent-based income corresponds with a G20 report finding. Throughout the world, from 2000-2024, the richest 1% took 41% of new wealth, while 50% gained just 1% of it.

When it comes to neoliberal capitalism, we’re being fed a vision that’s well past its sell-by date. Like a decaying potato in the kitchen cupboard, we should preserve any positive parts and bin the rest ASAP.

Some public figures have also demanded an end to capitalist structures, arguing that they harm the vast majority of people. Ahead of the CEC elections, Zarah Sultana, the Grassroots Left, and aligned communities made their stance clear. Meaningful change requires a decisive break from what they describe as a system that traps people in the grip of self-interested capitalists.

This article from Hickel and Varoufakis backs their point up superbly.

At the Canary, we stand firmly behind that call and will keep speaking truth to power. No matter how loudly the establishment protests.

Featured image via Counter Fire