-Altvater, Elmar The Future of the Market.

An Essay on the Regulation of Money an Nature after the Collapse of Actually Existing Socialism (London-New York: Verso) Pgs. 188-222.

The Future of the Market

An Essay on the Regulation of Money and Nature after the Collapse of Actually Existing Socialism ELMAR ALTVATER
Translated by Patrick Camiller 3. Value and Matter An ecological analysis of economic processes must therefore encompass both changes in value and changes in nature. Of Marx's critique of political economy one can preserve whatever one wishes; what is clear is that, unlike classical and neoclassical economics, it: is aware of the significance of time and space for economic processes. Forms of socialization and even abstract market procedures are located within the spatio-temporal system of coordinates of both human and natural history. The socializing effect: of market procedures is imperfect: it requires a cultural and natural 'substructure', without which 'autonomous individuals' cannot relate to one another as social beings. On the other hand, natural and cultural conditions are continually being changed by market-coordinated and market-stimulated economic activity. In order to account for this fact, Marx introduces a number of related concepts: the dual reality of commodities as use-value and value; the dual character of commodity-producing labour (concrete and abstract labour); the differentiation of the commodity into commodity and money, and of the production process into labour process and valorization process; and the duality of the forces and relations of production within the dynamic of the mode of production. Marx takes the category of the dual character of labour as crucial to an understanding of political economy; and indeed it creates the possibility of grasping economic processes at once as transformations of values (value-formation and valorization) and as transformations of materials and energy (labour process, 'metabolic: interaction' between man and nature). Marx, writing more than a hundred years ago, could not fully gauge the scope of this concept, as it has been drawn out in thermodynamic approaches to economics or in the preoccupation with the current and impending environmental crises. Alfred Schmidt's reflections on the concept of nature in Marx: -which were published not that long ago -show the limits of an analysis of the 'metabolic interaction' of man (human practice) and nature in which a naive humanization of nature substitutes for serious consideration of its ordering principles. For example: While natural processes independent of men are essentially transformations of material and energy, human production itself does not fall outside the sphere of nature. Nature and society are not rigid1y opposed. . . . [For] the content of this metabolic interaction is that nature is humanized while men are naturalized. Today we know that the 'humanization of nature', achieved through 'metabolic interaction' between man and nature, can have the opposite effect of destroying the natural conditions of human life. As to the 'naturalization of man', it may actually denote a process of industrialization in which genetic engineering brings the production of man as a technical artefact within the bounds of possibility: man as raw material and spare part, an undignified thing. Gnther Anders's pessimistic diagnosis of the 'antiquation of man' is, in this respect, more appropriate than the humanist belief in progress of Leo Kofler or Ernst Bloch, about whose 'obsoleteness' Anders waxes so ironic. Marx's critique of political economy is unique among the contributions of economic theory: it affords a first link in the conceptualization of the link between the system of values and the regularities of nature, without turning nature into economics - as in neoclassicism - or naturalizing the economy in an anthroposophic manner. Marx himself took pride in having been the first: 'to examine, critically the twofold nature of the labour contained in commodities': labour first as creator of value, but second as 'a specific productive activity appropriate to its purpose, a productive activity that assimilated particular natural materials to particular human requirements. Labour, then, as the creator of use-values, as useful labour, is a condition of human existence which is independent of all forms of society; it is an eternal natural necessity which mediates the metabolism between man and nature, and therefore human life itself... When man engages in production, he can only proceed as nature does herself, i.e. he can only change the form of the materials. Marx refers in this connection to Petro Verri, quoting some lines he wrote in 1771: All the phenomena of the universe, whether produced by the hand of man or indeed by the universal laws of physics, are not to be conceived of as acts of creation but solely as a reordering of matter. Composition and separation are the only elements ... [in] the reproduction of value ...and wealth, whether earth, air and water are turned into corn in the fields, or the secretions of an insect are turned into silk by the hand of man, or some small pieces of metal are arranged together to form a repeating watch.

Only as a result of production for exchange -whereby abstraction is made from the fact that materials and energy are transformed through concrete, quality-changing labour- does the labour product become a bearer of value and fall under the dynamic: of the system of values. The dual nature of labour is due to the form of capitalist reproduction. Superimposed on the dynamic: of the 'eternal metabolism between man/society and nature is the historical 'template' of the law of value and market procedures. It is not by any natural necessity that the transformation of materials and energy results in the production of commodities to satisfy the needs of others - needs which can be announced only through price bids on the market (effective purchasing power). That use-values are brought into being is both natural and necessary: if they were not, human life would collapse. But the creation of values that have to be converted into money on the market is entirely due to the social form of (capitalist) commodity production and the operation of the money medium. The market trade in commodities, and the need for theoretical analysis to identify the results of the reshaping of nature as values (expressed and measured in money), are in no way affected by any deficiencies of the theory of value; they are bound up with the socially established mechanisms of selection and evolution in capitalist market economies. Nature does not create any values and its components do not become values unless they are stirred by labour (Marx) and thrown on the market for exchange. This conclusion is not at all proof of one -eyed vision on the part of political economy, as Hans Immler has suggested; it follows from the historically specific form of capitalist societies, the only one in which labour functions as a value-creating power. Marx's central purpose was to unravel the social forms in which labour -in its equally specific form of wage-labour- must stretch itself to the limit to create value, to valorize capital and to keep the accumulation process underway. Material wealth arises only with the participation of nature; but only labour creates value. It is the social forms of commodity, money, capital, surplus -value and profit which define the dynamic of a capitalist society - not labour as such, which must be exerted at all times and in all social formations to reshape nature and appropriate its materials. Moreover, it is the form, of socialization which, in a market economy, mirrors the relation of people to one another and to nature as a natural property of things. To this fetishistic form corresponds a consciousness that nature can be apprehended only as a thing-like property, not as spheres of life. One-eyed vision in theory, as well as the 'forgetting of nature' in practice, can develop only as a result of the social forms of reification. A critique of the 'labour theory of value' (in Marx's version) would have to show how nature could actually take on value or become capable of functioning as creator of value. In fact: this could only be done by resorting to a physiocratic: conception that nature, or the land, is alone productive. In this approach - which was already criticized by Smith and Ricardo - only agricultural labour is productive, because it: uses the productivity of the land; all other labour merely reshapes things, without producing anything, including value. Immler laments the ignoring of nature, which he sees as a subject that is continually producing itself at the same time. But he is not able to decipher the social forms in which nature can manifest itself in a 'high1y productive, planful, conscious and single-minded way'. Of course nature is productive: it brings about the most wonderful creations, of which the evolution of the species over billions of years supplies the evidence; and the many catastrophes in the history of the earth show that nature's productivity cannot be had without destructiveness. In no case, however, is nature productive of value, for its creations are by nature not commodities. Labour, for its part, is productive because in its operation it changes both itself and nature; and in capitalist society it is also productive of value. Value is the social relation in which isolated private labour is linked to aggregate labour, becoming social through the division of labour. We have said before that economics is in need of supplementation from a thermodynamic point of view. What does this mean? Materials and energy are transformed during the creation of use-values (extraction of raw materials, their separation or assembly in production, and their transportation to the site of use), during the employment of use-values as a means to the satisfaction of needs (consumption), and during the final loss of their property of use value (their becoming waste that is no longer useful for the satisfaction of any human need). For these reasons, an ecological critique of political economy hinges on an analysis of use-value: not as the object of the satisfaction of individual needs (as in the subjective theory of values), nor as a determinant of form in the system of values, but as an element in an interaction in the course of which entropy increases. 4. Use-Value and Entropy In the terminology of thermodynamics, use-values may be defined as: (1) materials or energy with low entropy or high order, such as Verris repeating watch. It is important, however, that (2) the order should be produced with regard to the satisfaction of specific human needs. Certain materials are isolated from others which are not use-values because they are not suited to the satisfaction of human needs; or the combination of various materials (which are useless in their non-combined form) brings about new products, or concentrates free, available energy for the performance of work (in the sense employed in physics). Lower entropy is not therefore by itself sufficient to define use-value. A car or a computer is an orderly, high1y organized ensemble of materials. A great deal of intelligence, energy and materials is necessary to produce the orderly ensemble of materials for the satisfaction of a need, with the result that entropy is increased in the environment by cars and computers. In their ordering as car or computer the materials have less entropy than before, precisely because they have required an input of energy that has been taken somehow, somewhere from the environment. In the process of use-value consumption the product is worn out: at some time or other the car and the computer will break down, because in the ordering of particular materials they can no longer carry out their function, or can no longer be associated and directed in the way that the operational mechanism requires. In other words, the order falls into disrepair, because the collection of parts no longer obeys the principle of need satisfaction. It might be objected that a car wreck or a non-functioning computer is still a high1y organized structure, even if it is no longer suitable for the satisfaction of locomotion or data-processing needs. But not every ensemble of materials with high order or low entropy is a use-value. Here we can see the force of Georgescu-Roegens's argument 2

that the law of entropy must be interpreted anthropomorphically; low entropy is a necessary but not a sufficient condition for suitability as use-value. 'No man can use the low entropy of poisonous mushrooms.' It is therefore not low entropy per se, but only in association with the capacity to satisfy human needs, which constitutes the ordering principle. Environmental entropy, which has been increased by the production of the use-value (car or computer) through the complex ordering of materials, rises in the consumption of the constituent materials and energy until finally nothing is left but waste, in the lithosphere, the atmosphere and the hydrosphere. The effects on the biosphere may be such as to reduce the complexity of systemic interaction with the abiotic sphere, and thus to lessen the capacity of the entropy removal as compensation for the entropy increase. The destruction of forests is one example of this: for it reduces the binding of carbon-dioxide waste in the atmosphere and accelerates the greenhouse effect, which in turn reacts upon all other spheres in ways that we cannot precisely ascertain. Nothing can be defined as a use-value, then, without regard to the social, biotic and abiotic environment. But that is precisely what happens if it becomes a bearer of value and acquires the properties of a commodity within the capitalist social formation. A car or computer has a price as an individual product, its use-value being put to use by its purchaser. But it is also part of the ecosystem, and the production and consumption of the use-value changes the natural environment. The air is thorough1y mixed with harmful substances, until it no longer enhances the 'enjoyment of life' but triggers asthma and bronchial disorders. The natural environment thus becomes ever less suited for conversion into a use-value - unless further energy is consumed. As a rule, materials acquire the property of use-value through the purposeful expenditure of energy, particularly in the form of labour which separates or recombines them according to a plan (thereby increasing order) or which isolates energy-bearing materials to make their powers useful. In order to obtain useful energy from freely available energy, ft is necessary for energy itself to be expended. That is the point of energy balances or the calculation of energy effectiveness. There remains a 'disorderly' mixture of materials which is not 'useful and is therefore not a use-value - so long as the materials are not separated through fresh expenditures of energy (in 'recyc1ing' or air and water purification) or combined in a new way. The more 'disorderly' the mixture of materials, and the less useful the remaining energy potential, the more unfavorable is the energy balance. Thus a residue of waste air, water and solids from materials that can no longer be changed back into use-values remains even in the most: intelligent recycling business. The concept of entropy, derived from physics, makes sense only in relation to the definition of a system and its limiting environment. It describes the state of a (closed) system at temperature tn which consists of entropy at t = 0 and the integral of all infinitesimal entropy changes through incremental heat: input up to temperature tn. Two aspects are of significance here. The energy and material reserves of the system - ultimately of the universe - remain fixed in any change of materials and energy (first law of thermodynamics). But their quality (their capacity to perform work or to satisfy human needs) is reduced in any use of energy and materials: that is, there is an unavoidable increase in entropy (second law of thermodynamics). In other words, in the course of development the energy balance always remains in equilibrium, but the portion of free, unbound and therefore useful energy declines in comparison with that: of bound, dissipated energy that: can no longer be converted into work. The reason for this is that the conversion of thermal energy into work is possible only if a difference in temperature exists within the system or between system and environment, and energy in the form of heat can be given off in a cold depression (environment). Only where there is a difference in temperature can anything move - for example, a steam-engine, a turbine or a petrol engine. By way of illustration, we might take the simple candle -wheel used in Christmas decorations. Air heated by the candle rises upwards and moves a small, lightweight wheel, so that: the thermal current is converted into kinetic: energy. Both the warm air current and the motion of the wheel cease as soon as the candle burns out, when a temperature difference can no longer be produced through the conversion of wax-stored energy into heat. In this process entropy increases, since the energy of the candle is dispersed in space and is no longer available in a free, usable form. Another illustration will help, to reinforce the point. A warm body (a stove, for example) gives off heat: energy in a cold space until the temperatures level out assuming that no new energy is provided through additional coal. Once the temperature potentials are equalized, however, no further interchange or work takes place. The total available energy has remained the same, but it can no longer be used to perform work. The concept of entropy may also serve to describe differences in the ordering of substances or systems. It is always differences in order (caused by planned separation and/or combination) which make a system or substance a use-value. The order may occur 'by nature' in what Drr has called a 'syntropy island' for example, if aluminium, the commonest mineral in the Earth's crust, is present in a particularly high concentration as bauxite deposits. Or it may be induced by an 'ordering' human hand - for example, if the forest biomass contains precious woods, so that tree trunks above a certain diameter are isolated and concentrated in a timber-yard. Nevertheless, there are certain limits. In the case of heat: differences, order can be produced if they are levelled out so that: the warm depression becomes ever cooler and the order ever more 'disorderly'. The order differences (and heat differences) become ever smaller. In thermodynamics the limit exists at the absolute zero of temperature (o on the Kelvin scale, or -273 Celsius). This temperature can never actually be reached: it excludes any heat difference (third law of thermodynamics). At the limit there is thus a 'disorderliness' which can in no way be regarded as an ordering principle; even an incremental change in order, through separation and combination, is no longer possible. All materials and energy are so completely mixed up that: distinctive structures of substances or sub-systems are out of the question: evolution runs up against an absolute limit; heat differences are totally eliminated; work can no longer be performed; use-values can no more exist as isolated materials and energy serving to satisfy needs. And if differences come to an end, life itself is impossible. For life is synonymous with lived difference. 5. Entropy Balance and Systemic Intelligence

This hypothetical limiting-case is not actually of practical relevance, especially if the unavoidable increase in entropy is kept within bounds by either (a) entropy discharge into the environment, or (b) energy intake from the environment and (c) techniques of materials and energy transformation which increase entropy as little as possible. The assumption of a closed system should therefore he given up: neither the Earth as a whole nor the sub-systems upon it (societies of individual countries, the production process, industry, etc.) are closed systems. The Earth is inserted into the sun's energy stream - which means that: it takes in short-wave solar energy, converts part of it into growth and work through the complex regulation'. This in turn requires that reification - the mirroring of social being by human artefacts, as if they had not been produced through transformation of materials and energy and hence the reshaping of nature - should no longer characterize the relationship between society and nature. Reified consciousness is an obstacle to the development of systemic intelligence. Thermodynamic laws are, on the one hand, independent 'iron' conditions of the interchange or - to use Marx's metaphor metabolism between labour and nature. Labour itself is both a social activity falling within the compass of social science, and a physical category accessible to study by thermodynamics. If, on the other hand, thermodynamic laws can acquire relevance within social science and even become a political matter, this is due to the contradictions between the social ordering principle of the valorization of capital and the conditions of the reshaping of nature involved in the production of concrete use-values. Such contradictions are today more significant than at the time when Marx was writing his 'critique of political economy', and so today they must be explicitly grasped within a critique of political economy and integrated into the theoretical system. Economics can no longer dispense with a theory of use-value, in which the concept of entropy occupies a central place. 6. Five Dimensions of the Contradictions between Ecology and Economics 'Dualization', particularly of the valorization process and the labour process, and the resulting contradictions between the capital-valorization dynamic (the side of form) and naturally given economic conditions of production and reproduction (the side of nature), refer to distinct and not necessarily compatible ordering principles which structure human economic behaviour. These can now be reformulated, in such a way as to define more precisely the relationship between economies and ecology. Quantity and quality The dynamic of the modern capitalist economy should be understood primarily as a process of quantitative increase of values. Marx's concept of the form of value, or the concept of the general unit of measure in Ricardo or Keynes, theorizes the obliteration of qualitative differences which allows economic results to be measured by quantitative increases. Economics thus sets up (in Aristotle's sense) the chrematistic spiral of expanded production and consumption beyond household needs. Production of a surplus is imposed by the market in accordance with instrumental rationality as we have demonstrated at length in Chapter 2. In the ecological system, however, evolution primarily consists in the fact that qualitative changes or regroupments of energy and materials take place. Insofar as we are talking of closed systems, quantitative changes in energy balances and material endowment can be ruled out: that is the final conclusion of the first and second laws of thermodynamics. The amount of energy remains the same, but its quality deteriorates because it can be used less and less for the performance of work. Hence there can be no scarcity in the physical sense, only economic and social scarcity generated by transformations of materials and energy and explained by the second law. Therefore, when we burn fossil fuels, such as coal, oil, and nuclei, we are not diminishing the supply of energy. In that sense, there can never be an energy crisis, for the energy of the world is forever the same. However, every time we burn a lump of coal or a drop of oil, and whenever a nucleus falls apart, we are increasing the entropy of the world ... Put another way, every action diminishes the quality of the energy of the universe. And diminishes it first of all on the Earth, whose fossil energy reserves are by no means unlimited. It might well be objected that we cannot realistically assume the existence of closed systems. In fact, the Earth is an open system which is provided with energy by the sun and radiates heat into space; and on the Earth itself people act within integrated and open systems. Yet it should be borne in mind that, with the quantitivism and expansionism of the capitalist world economy, a tendency operates to subject the whole globe, including non -economic life-worlds, to the capitalist principle of valorization - and thus to create a truly closed economic (not thermodynamic!) system on Earth. Among the consequences, of course, is the fact that energy reserves and rubbish heaps no longer belong to 'another world' but have become part of 'One World'. As Koslowski points out on other grounds, it is 'wrong to assume that domination of nature, expansion of the economy, can continue without any limits. The same is true of the reserves of individual lifewor1ds, which can also be exhausted by quantitative overmoulding. The result is then an erosion of the socially necessary 'general other', through which each individual can recognize himself or herself in others. Time and space versus timelessness and spacelessness Acceleration of the economic system means that temporal differences within it tend towards zero. Simultaneity is in fact unattainable, because the irreversible character of transformations of materials and energy, as well as the increase of entropy, assure the directionality of the 'time-arrow' moving from the past through the present to the future. Asymptotically, however, it is possible to draw closer to the principle of simultaneity by disregarding irreversibility and entropy increase. Georgescu-Roegen distinguishes between Newtonian time t (lower case) and social time T (upper 4

case): Time flows through the observer's consciousness. Time derives from the stream of consciousness, not from the change in entropy.' In the time of Newtonian physics the historicity of time T, and thus the difference between past, present and future, blurs into a mete interval which is ever the same in' all times and places. In sport an ever frustrating attempt to eliminate historical time and to measure only unhistorical intervals is quite the usual thing. Thus the interval of time which a record sprinter needs to cover a hundred meters - let us say 10.1 seconds - is identical in Los Angeles 1980, Nairobi 2010 or Hamburg 1878. But apart from the fact that it is defined by the actual measuring of time on each occasion, that interval is completely different in terms of the historical time elapsing between the three acts of measurement. With regard to space, there is a similar tendency to overcome all the obstacles that make it distinguishable, as distances are narrowed by the construction of roads, bridges, locks, tunnels, airfields and so on. The quality of space, as well as that of time, is thus asymptotically reduced to zero: the 'annihilation of space by time' -and vice versa. The economic dynamic of capitalist societies, with its technical preconditions for the reduction of spatial and temporal differences, points to the possibility of disregarding nature. However trivial it might seem, to mention it, nature cannot exist without time and space: the disregarding of space and time does away with nature, and since humans are themselves natural beings, their mode of existence is thereby undermined. Hence theoretical economics which abstracts from historical time and concrete space gives us the form of homo economicus, a homunculus in whom nothing but decision-making rules, subordinated to the principle of reason, are programmed. Seen in this light, Immlers reproach that economics 'forgets nature' is fully justified. Reversibility/circularity and irreversibility In the economic system, the logic of market calculation implies that capital must complete an expansive circulation process if valorization is to be achieved. The compulsion to aim for a surplus is inescapable if production processes have been financed with credits and interest has to be paid. Thus all economic processes must be circular or reversible. In the traditional circulation diagrams and reproduction schemas (beginning with Quesnay's tableaux conomiques) this is very clearly expressed. And in the manuals of economics and business management, performance indicators such as profitability, return on capital or rate of profit indicate the circularity of the flow of capital within the relationship between results and outlay. Should the circle be broken, capital will not flow back multiplied (through profit and interest) and tendencies towards economic crisis will become unavoidable. In nature, on the other hand, complete processes of materials and energy transformation are characterized by irreversibility. This follows ultimately from the law of entropy. For within a closed system, the natural direction of the conversion of energy and materials is bound up with an irreversible decline in their quality. Such degradation need not apply in an open system, provided that energy and materials can be introduced into the economic system from the surrounding world. So long as economic theory is conceived with a national focus - as the German terms Volkswirtschaftslehre and Nationalkonomie both strongly suggest - and. so long as it investigates the connections to the surrounding world merely as flows of value (commodity imports and exports, movements of capital and labour power, financial flows), then the contradiction between circularity/reversibility and irreversibility hard1y enters into the field of vision. Admittedly the above-mentioned tendency operates here too. The quantitivism and expansionism of the economic system itself are responsible for the fact that the whole planet is subordinated to the capitalist principles of the transformation of values and materials, so that it becomes increasingly inadmissible to postulate open systems with an environment rich in energy and materials and to ignore irreversibilities. Changes in stocks must therefore be taken into account in the analysis of flows. Profit, interest and entropy change In the economic system, profit and the rate of profit on real capital, or the rate of interest on money assets, are the measure of success of microeconomic and - in a mediated way - macroeconomic processes. Marx's own formula for the rate of profit (surplus-value over the outlay of variable and constant capital) is no different in its logical structure. The same is true of the rate of interest - expressed as a percentage of the money outlay - which is a circular unit of measure par excellence, formed on the money and capital markets and readable from the daily listings. The rates of profit and interest have a central importance in the economic system, and not only as measures. Their levels (and their variations between countries, regions or branches) greatly influence the dynamic and direction of economic and social development. Economic measurement of the profit-rate (however computed), the interest-rate and the growth-rate is circular, although it is true that circularity only makes sense if it is expansive, if it has a spiral form. Zero growth of capital is therefore not possible. The ecological measure of the qualitative processes of materials and energy transformation is the change in entropy. It is noncircular, because it measures the diminishing order of materials or the diminishing availability of energy in the course of time. A rise in entropy is synonymous; with a decrease in the quality of energy for future conversion into work. A fall in entropy, by contrast is synonymous with an increase in usable energy (or, by analogy, in usable materials). High rates of profit and accumulation (in terms of values or prices) usually indicate a high throughput of materials and energy: that is, in a closed system, high rates of entropy increase. The rate of profit signals that, in the period between past and present, a value surplus has been produced over and above the capital outlay. It is at this level that the success of the economic system is calculated; the rate of accumulation, and hence the economic growth-rate, are dependent upon the rate of profit. The rate of entropy increase indicates that, in comparison with the present state of things, a lesser amount of useful energy and materials is available in the future (leaving aside energy input from another system, such as the sun). The economic and ecological times of comparison are thus not the same in the measurement of the rates of profit and interest, on the one hand, and the entropy change on the other. 5

Rationality and irrationality The logic of economic development - which calls in turn for social regulation - requires an increase in profits, and thus high rates of profit and growth in the economic system. Employment and rising prosperity are dependent on the actual outcome. At the same time, natural processes of transformation are organized in such a way that they maintain a dynamic equilibrium between entropy intake and entropy discharge, between the Earth as a global system and the universe as an environment. This logic dominates development on Earth, considered as the 'Gaia' system of interaction between all its spheres over billions of years, on the basis of which evolution takes place. Life would be impossible without system-intelligent organization of an energy equilibrium on Earth; the living biosphere itself organizes processes in the lithosphere, hydrosphere and atmosphere with a view to the lowest possible rate of entropy production. As Prirogine has argued, the dissipation of energy and materials can itself result in evolutionary structures. Growth and development, differentiation and complex interaction of the species would otherwise be ruled out. The 'steady-state principle' is thus rational within the ecological system. And yet, what is rational in the ecological system is irrational in terms of market economics: an economy without profit. The logic of the market makes it: necessary to aim for a money surplus, without which a microeconomic unit (a firm) has to admit defeat and declare itself bankrupt. National market economies may fall into a debt crisis if they are unable to comply with the hard external budgetary constraint, and if the profitability of capital and the rate of growth of labour productivity remain below the rate of interest for any length of time. Conversely, high rates of profit and accumulation indicate success in the economic system and favourable conditions for investment, mass income and employment. As a rule, however, high rates of accumulation are bound up with high use of energy and materials and may thus accelerate the entropy increase of the natural system. From this contradiction between rationality and irrationality, it follows that Western instrumental reason necessarily and inescapably involves an irrational element. It may, of course, be objected that low-growth economies (e.g., in 'actually existing' socialist countries) have been even more profligate with energy and materials than modern capitalist economies. But they too strove for high rates of accumulation: and in the end they were both ecologically destructive and less successful in terms of market economics. 7. Politicization of the Contradiction between Economy and Ecology Two problems arise from the contradictory nature of capital valorization and the reshaping of nature, from the interference between the ordering principles of economy and ecology. First, the raising of productivity - a necessary condition for the realization of profit and interest - comes about through an extension of individual and social access to nature. The productivity of labour is no mere gift of nature, even if nature does provide 'free productive forces'; rather, it is the result of 'thousands of centuries' of human history and of the reshaping of nature that has taken place during that time. But it is only in the last few centuries, when the capitalist mode of production has prevailed, that a huge, systematic impetus has been given to increases in productivity. Indeed, ever since the Industrial Revolution, capital has tended to make its expansion as independent as possible of natural constraints and of the limitations of the 'subjective' factor of production, human labour. The raising of labour productivity may also be interpreted as accelerated entropy increase, if no new 'heat depressions' of entropy discharge or new sources of energy can be developed. But as the construction of the perpetuum mobile is excluded in principle, faster rises in productivity necessarily lead to accelerated entropy increase ~ that is, to a qualitative deterioration in the capacity of energy and materials for work, or, more generally, in their usefulness for the satisfaction of human needs. It should be stressed that this applies only on the assumption of a closed system. If that assumption is removed, productivity may also rise through the intake of energy and materials from, or the discharge of entropy into, systems other than the one in which the productivity increase occurs: whether the otherness is spatial (the shipping of European waste to Africa) or temporal (the plundering of mineral resources from. future generations and the leaving behind of waste mountains). Martinez-Alier has convincingly shown that the high productivity of modern agriculture (measured in money income) requires the input of cheap energy and plentiful fertilizer from another system, and the replacement of crop variety with a simply and mechanically processable (and easily marketable) monoculture. As a result, however, the quality of the soil may deteriorate and its future productivity be reduced. Insofar as there is interference between two systems - for example, agriculture and the system from which energy and fertilizer are introduced - they fashion a system in which, once again, entropy increases through the development of productivity. Marx, who expected the development of the productive forces to result in human emancipation from the narrow capitalist relations of production, was not for all that so blind as to overlook the reverse side. In an agriculture subjected to the regime of industrial rationality, all progress in increasing the fertility of the soil for a given time is a progress towards ruining the more long-lasting sources of that fertility. The more a country proceeds from large-scale industry as the background of its development . . . , the more rapid is this process of destruction. Capitalist production, therefore, only develops the techniques and the degree of combination of the social process of production by simultaneously undermining the original sources of all wealth - the soil and the worker. The scale of the destruction of the 'original sources' of wealth increases with productive power - that: is, with the reach of human activity. In this sense, the 'industrial revolution' has had more far-reaching consequences than the 'neolithic' revolution ten thousand years ago. As we can see, Marx was not at all 'oblivious of nature': he was fully aware of the ecologically destructive power of economically productive forces. Only in later Marxist formulations did the development of the productive forces become fetishized as an intrinsically dynamizing factor of progress. 6

Second, the contradictions become more and more politicized in that ecologically destructive processes entail a withdrawal of present and future, actual and potential, use-values. Thus, it may happen that: time-honoured ways of satisfying human needs, which used to be taken for granted, will become more difficult and expensive, or even quite impossible, to operate. In reaction to this, a potential for social resistance may then take shape. There is a systemic reason why this should happen. The tendency for the use of energy and materials to result in their qualitative deterioration is measured in terms of capacity to satisfy human needs. Hence the concept of the 'quality' of energy and materials has an anthropocentric charge. Purely in terms of energy, nothing changes on Earth and in the universe as a result of a hundred atom bomb explosions; but the entropy increase blots out the conditions for human life on the planet, or at least for human civilization. That is why entropy increase -and its extent - is not only a physical process. There is no natural necessity for atom bombs to be detonated; nor is there a natural law determining that one, two or five billion people should drive a motor car; the felling or burning of tropical rainforests has nothing to do with biology, meteorology or physics, but is entirely a question of socio-economic relations and political regulation. And so, if the quality of materials and energy or whole ecosystems deteriorates, with adverse effects on the possibility of satisfying human needs, the basis for social conflict begins to accumulate. The natural process of entropy increase is thus intertwined with the social process whereby the rate of entropy increase is determined. To mobilize social resistance against physical laws is worse than intellectual, but the law of entropy also has a social dimension which is susceptible to regulation. It would therefore be misleading to postulate, in the manner of the early Club of Rome or Global 2000 reports, that humanity's resource endowment is given once and for all and must eventually reach a point of natural exhaustion. The first law of thermodynamics states that the energy in the universe remains constant; only its quality changes, in accordance with the second law of entropy increase, and this results in economic scarcity and social demands for regulation to deal with scarcity. Society can influence the scale of entropy increase, though market procedures are by no means sufficient to achieve this because they are part of the problem rather than part of its solution. Koslowski also refers to the fact of scarcity when he writes: What is scarce is not matter but orderly, living organic nature and qualitatively determined material resources. It is not water as such which becomes scarce, but qualitatively pure water, drinking water... What is scarce are not material resources in themselves, but structures and orders of nature in which the resources in their pure form and nature itself make themselves available. In the end, Koslowski is thinking of nature as an 'organic whole', as the 'great organism Earth', which is broken down through selective access to particular resources. Nature must be regarded as a 'value' and 'be asserted in politics and economics as a value'. But if nature actually is valorized in the economy, the outcome is precisely the destruction of nature that Koslowski wishes to avoid - even if man, transcends nature 'in the realm of the spiritual. 'Man' can perfectly well recognize nature as a 'value' and, at the same time, place himself under the economic constraints of valorization. Equipped with both an ecological ethic and economic rationality, man can still degrade nature. We cannot, therefore, abstain from an analysis of the social forms of the human interchange with nature, as well as the forms of social fife. Energy-based approaches to political economy fall short of the mark if they assess economic processes in terms of energy balances, or if a 'dull and tedious dispute' is unleashed concerning the value productivity of nature, or 'the part played by nature in the formation of exchange -value'. Political economy is not oblivious of nature, but the thesis that political economy is oblivious of nature is itself oblivious of form. Entropy increase in the production of use-values - that is, in the transformation of materials and energy - is a natural law, but the rate of entropy production is a matter for social and political organization and therefore becomes an object of social conflict. The dimensions of the contradiction between economy and ecology are thus not at all an inescapable human destiny; they too are capable of being shaped by society. 8. Spatial Polarization and Temporal Piracy At first sight it appears as if the interferences between economic and ecological crisis may be treated primarily as an ethical problem, whose solution lies in an ascetic pragmatics of behaviour. Minimize the sharpening of contradictions! Use as little energy and materials as possible! Act in such a way that the natural environment is left for future generations in no worse a condition than that in which you found it! Do not take away future development options by degrading today's environment beyond measure! Follow the profit principle, but keep entropy increase within bounds! Observe the principle of responsibility! Such maxims underlie all those environmentalist approaches which aim for a theoretical or practical 'reconciliation' between economics and ecology. Categorical imperatives here serve to ground a practice which seeks out techniques and forms of social organization which will keep the rate of entropy production at its lowest possible level. Decision-making rules conforming to the principle of rationality therefore build in ecological criteria derived from a 'Gaian ethic' (Jos Lutzenberger), according to which the Earth ('Gaia') is a living organism and the flow of energy can be kept stable only through a complex interaction of biotic and abiotic spheres that is unique in the solar system. Life on earth thus looks after the maintenance of its own preconditions. From this follows the rule of refraining from any intervention in the biotic and abiotic cycles that might disturb their interaction. However, ethical principles must still be converted into moral imperatives: they must be universalizable and should not contradict other ethically grounded moral imperatives. The debate on an 'ecological ethic' has brought to light the inconsistencies of the aim of reconciling economics and ecology. In practice, the conflict between ecological ethics and other ethically based principles in the Third World makes itself felt when the struggle against poverty today accepts a worsening of the natural conditions of fife tomorrow. For universalizable principles cannot be used to decide which generation has greater rights: the hungry of today who need to be fed better, or future generations who will need an undamaged environment. Of course, this is 7

no argument against the necessity of ethically based rules to regulate the intercourse with nature, especially since self-positing market regulation is not adequate to the ecological conditions of economic activity. If an attempt is made to base ecological calculation upon monetary values, it will inevitably erect into a principle the characteristics of the commodity form: reification and the screening out of the natural constraints of production and consumption. If, on the other hand, that principle is discarded, the possibility of economic calculation based upon commodification and monetization will be curtailed. Categorical imperatives are insufficient, however, without institutionalized rules of ecological behaviour. If they simply remain imperatives, there will be a constant demand for strenuous personal efforts that threaten to end up in the rationality trap of individual decisions and behaviour: the contribution of individuals to a solution of the ecological problem is too limited for their non-ecological behaviour to enter significantly into the overall balance. Ecological asceticism may be moral, but free-riding is rational. Moreover, the coordination of multiple individual activity is too difficult and too cost1y to be maintained over any length of time. This rationality trap dooms any approach based upon never-ending 'campaigns': against the waste crisis, against the expansion of car transport in the cities, or for a boycott of tropical wood. The imperatives must be institutionalized and equipped with sanctions, so that they become behavioural constraints for everyone in all areas where there is agreement in society (according to the rules of parliamentary democracy). Admittedly this raises a further difficulty to which we have already alluded in the previous chapter. Ecological problems are global and intergenerational in character, and within a national society of those living today they can be addressed only with an awareness of vicarious functions. We have already indicated that economic expansionism pushes outward a number of contradictions that: remained practically insignificant or locally bounded for several millennia of human history. The economic system, originally defined in national terms, loses its tendency to openness through development (and closure) into the modem world capitalist economy. The 'white patches' on the map of the world are disappearing, and with them the 'environments' of the already developed system that began in Europe. First the 'environment' was constituted as an object of imperialist exploitation, as a colony of the capitalist heartland; but then the capitalist system lost its capacity to achieve compensatory entropy discharge by drawing in materials and energy from outside - from the 'white patches' of our knowledge, which might be more correct1y seen as 'black boxes' of out ecological ignorance. As the system moved toward closure, it was forced to increase its own 'systemic: rationality'. Entropy increase was also minimized through the dumping of waste on future generations -a temporal rather than a spatial strategy of intergenerational externalization. The mechanisms of the economic system tend to solve problems at first by eliminating the ecological limits of economic quantitivism: time and space. The ordering principle of economics takes nature in its grip and imposes the logic of quantity, profit, interest and circularity. The extensive answer to the ecological challenge is to open ever new spaces of hitherto 'undisturbed' nature, discharging entropy into them or drawing energy from them in compensation for increasing entropy -up to the limits of what animate and inanimate nature can support on the planet. The tendencies to seize outer nature and to occupy time and space have long been a theme of political economy. In his analysis of the working day and large-scale industry, Marx showed how factory-time replaces the rhythms of the lifeworld and how the log quantity of time appropriated by capital is pushed to the physical limits of human nature. Earlier still, in The Condition of the Working Class in Eng1and, Engels had shown how the subjugation of life relations to the capitalist production process forces outer human nature into line. Thompson describes the history of the working class in England as, among other things, a permanent struggle against the subjection of traditional time rhythms to the discipline of capitalism. Seasonal time and the time of the day, individual demands for time and collective allocations of time (such as festivals) increasingly lose their significance in structuring the rhythm of life and work. For 'time is money', and the time appropriated by capital presses against all the physical limits of human nature, tending to engulf all twenty-four hours of the 365 days of the year. Recent debates in Germany about a shortening of worktime display very clearly the virulence of this tendency to dissociate machine time from individual labour time, and thus ultimately to free capitalism from the limits of a temporal regime which takes human needs into account. The principle of the shortening of production time asserts itself in technological rationalization, methods of increasing labour intensity, the artificial quickening of product incubation, the accelerated catalysation of chemical reactions, and so on. Circulation time, for its part, is shortened through the creation of global systems of transport and communications, the development of the credit system and the spread of advertising. All these methods and tendencies are designed to overcome the natural constraints on capitalist production. Innovations thus take place 'so fast that natural systems have no chance to build up cycles and networks', to absorb shocks and to stabilize the development of the ecosystem. The declining relevance of space and time is disastrous for the evolution of natural systems. Technological advances in transport largely involve the ignoring of natural reliefs that might obstruct the desired acceleration. Agglomeration effects are used to minimize transaction costs and to eliminate others that are produced by the overcoming of distance. The resulting urbanization brings with it the contradiction between town and country, metropolis and periphery, domination and dependence. In this regard Marx noted that the ever-growing preponderance... of the urban population ... disturbs the metabolic interaction between man and the Earth, i.e. it prevents the return to the soil of its constituent elements consumed by man in the form of food and clothing; hence it hinders the operation of the eternal natural condition for the lasting fertility of the soil. That urbanization disturbs the natural cycle of materials is shown clearly enough by municipal refuse dumps. But ecologically significant value relations are also established between town and country or between metropolis and periphery on the world market: dependencies based on value, capital and money (in the debt crisis, for example) involve corresponding transfers of resources and one-sided flows of energy and materials. Dependence in the area of economics thus interrupts ecological sequences and generates entropy increase that is higher than it would otherwise have been. 8

The consequences of the reduced practical significance of space and time are spatial polarization and temporal piracy. As space is trimmed to accelerate circulation and production, it becomes more difficult or even impossible to use it to satisfy other human needs for example, recuperation from the strains of work. Space and time are thus 'scarce' resources for which 'use competition' takes place. Since the need for recuperative leisure cannot be entirely excluded but only modified in form, its satisfaction must: be relocated in space or delayed in time with the payment of monetary compensation. Management of this initially traumatic polarization becomes the object of a new tourist industry, which ensures that people affected by this trimming of space and time for the purposes of capital valorization can be transported to specially prepared areas of recuperation. Temporal piracy expresses itself as an antithesis between work and leisure time, in which the latter is governed by the accelerated temporal regime of the production process: the best consumer is the fastest consumer. These spatial and temporal phenomena are both elements in the 'estrangement' of men and women from nature. Spatial polarization and temporal piracy are the causes of social and political conflicts, even when these are overlaid by surface tensions which appear to have nothing to do with time or space. Capitalist societies, driven by the money form and the valorization of capital, not only provoke conflicts but also make available the form in which they are handled: that is, the monetization of the ecological degradation of inner and outer human nature. Economic quantitivism, which stands in contradiction to qualitative ecological processes, thus offers money not only as a way of solving economic and ecological problems but also as the medium of their ongoing management. The dual character of social processes, described at the beginning of this chapter, proves to be a resource for the management of conflict: ecologically damaging factors produced on the materials side are initially absorbed on the value side by the general form of value, money. Money is produced in the commodity-exchange process as the typical social form of mediation. Its functions also suit it to handle complex problems, to operate as 'procurer of social intercourse' and compensator of social damage. Money is the social prerequisite for the internalization of external effects. Damage to health caused in the labour process is compensated by danger-money, air pollution by a 'dirty conditions bonus', water contamination by a tax on effluents. And conversely, residences with good air and an unharmed landscape attract a higher rent than those in polluted districts. The basket of goods entering into the price of labourpower in highly developed industrialized countries includes an annual holiday trip. Money thus pays off the expropriated time, while global space is converted into a bundle of commodities whose elements can be used for 'holiday time'. The category of money enables the various phenomena of ecological degradation (i.e. of entropy increase) to be reduced to a common quality and thereby made accessible for rational economic calculation. Water pollution is measured in terms of money, just like the loss of species diversity or the costs of holiday travel. Money is here the means of both compensating for and rationalizing ecological degradation. The limits to such rationality have been shown at the beginning of this chapter. Monetization presupposes, first, that enough money as means of purchase is available to compensate for the lost time and space, and, second, that compensatory offers of space and time are also made. Money is ultimately the medium of market-exchange relations and therefore requires both supply and demand. Money is needed, however, not only to purchase effective compensation but also to carry out expensive repairs to the degraded environment insofar as there is a readiness to pay for such measures. Thus, after nature has been so extensively degraded through economic expansionism that the 'enjoyment of life' is reduced and human existence itself threatened in many regions, the expansionist drive turns to reconstruct the environment itself as an artefact. This may be interpreted as a specific result of the modern economic system. With the he1p of the money medium, ecological consequences of production and consumption can be introduced into the system of values in such a way that they are handled through expenditure on the 'defensive costs of growth'. Here again, the natural environment is not simply regarded as a store of resources or a refuse container, but rather as the produced product of the production process, insofar as the social collective is ready and willing to pay for reconstruction of the environment in the collective interest. The rebuilding of the environment may thus become a field of capital accumulation. Ecological capitalism' would seem, then, to be both imaginable and feasible as a society which continually recreates its own 'natural' foundations as a consumption good. Yet this does not cancel the basic fact that even the restorative recreation of a natural human environment ('humanized nature') implies an increase in entropy. For entropy discharge through repair of ecological damage is necessarily bound up with entropy intake at other points of the environment: no more than the recyc1ing of waste is it capable of offering a radical solution to the problem. If industrial waste or degraded nature is converted into use-values for the satisfaction of human needs, this can be done only through fresh expenditure of energy and materials. The repairs thus become a constitutive part of the problem. There remains only one answer: namely, from the outset to organize the transformation of energy and materials in such a way that the unavoidable entropy increase is kept as low as possible; to build into the functioning of the economic system a series of imperatives which prevent ecological damage. 11. An Ecological Marxism? James OConnor has also recently addressed himself to this problem. By formulating a dialectic of relations of production, productive forces and conditions of Production, he seeks to outline the essentials of 'an ecological Marxism' -broader than 'traditional Marxism- which will theoretically serve new social movements. His argument is that two types of crisis tendency are to be distinguished within the capitalist mode of production. First, crises emerge through intensification of the contradiction between productive forces and relations of production: this is the object of 'traditional Marxist' analyses. Second, the contradictions between forces, relations and conditions of production bring forth crisis phenomena which are becoming the object of analysis within an ecological Marxism' that is still in its early stages of development.

Now, relations of production and productive forces, like social formation or economic system, are certainly familiar categories within the Marxist theoretical tradition. A lot could be said on the subject, especially concerning the status and interdependence of the categories. But we may start by assuming that if the categories are to have any sense, they cannot be hierarchically structured according to the schema of base and superstructure. The productive forces do not determine the relations of production in a unilinear manner; the latter are not inscribed within the productive forces -for example, the dominant technology - of a society. The real substrata of the categories 'articulate themselves', and this must be taken into account by the categories that form the theoretical system. The same is true of the category conditions of production, which is located at another level as 'productive forces' and 'relations of production'. In the Grundrisse Marx describes the 'general conditions of social production' as what we might today call state infrastructural activity serving production by particular capitals. General conditions of production react upon the requirements of a social reproduction process -essentially for materials and energy - whose dynamic and structure are dominated by the valorization strategies of particular capitals. Bridges, roads, general education, public safety, and so on, are indeed indispensable for social reproduction, for communication between social individuals. As a rule, however, their provision is not profitable for particular capitals and must therefore be assured by the state in the form of 'public goods'. O Connor analyses further the conditions of production. First: there were the external physical conditions or the natural elements entering into constant and variable capital. Second, the 'labourpower' of workers was defined as the 'personal conditions of production'. Third, Marx referred to 'the communal, general conditions of social production', e.g., 'means of communication'. According to O'Connor, the fact that the general conditions of production are not produced in a capitalist way has a fateful consequence: namely, that (private) capital treats them as if they did not have to be produced at all, as if they were available without restriction. In other words, the elements of the conditions of production are lacking in economic scarcity, so that there is no effective signal which might 'rationally' control their utilization. The stocks necessary for the production of flows do not enter the consciousness of economic agents, who do not have to concern themselves with them. Thus production conditions are not subordinated to the institution (the market) in which the allocation of scarce goods takes place. Market theorists conclude from this that 'general conditions of production' should as far as possible be handed over to private ownership, so that the market mechanism can evaluate results and their use can be regulated by relative scarcities. For O'Connor, however, following Galbraith's well-known analysis of the contradiction between private affluence and public poverty, it is because general conditions of production are not adequately provided by private means that the state steps in between capital and its; conditions of production. The result is that these become politicized from the very outset. Their form is dependent upon social relations of power, which can in turn be influenced by social movements. Only if political power is asserted in the political field can influence be brought to bear upon the provision of general conditions of production. The economic mechanism of allocation breaks down at this point. For O'Connor, then, capital now has the tendency to undermine its own conditions of production by bringing about their 'underproduction'. In these ways, we can safely introduce "scarcity" into the theory of economic crisis in a Marxist, not neo-Malthusian, way. We can also introduce the possibility of capital underproduction once we add up the rising costs of reproducing the conditions of production. In addition to the overproduction crisis, which in O'Connor's view has been analyzed by traditional Marxism, there is thus also an 'underproduction crisis' which must become the object of ecological Marxism. In this context, however, the concept of underproduction is rather unfortunate. First, it implies what O'Connor himself rejects: namely, the reproducibility of the natural conditions of production (for only if they can be produced is their underproduction possible), and thus the circularity and reversibility of processes which are by nature irreversible. As we have already seen, the assumption of reproducibility and reversibility makes it impossible to develop the concept of scarcity, which arises precisely because transformations of energy and materials cannot be reversed. The concept of underproduction only makes sense as a synonym for shortage rather than scarcity. Second, underproduction in O'Connor's sense is nothing but a synonym for ecological degradation and resulting social problems, as his own examples make quite plain. Examples include the health bill necessitated by capitalist work and family relations; the drug and drug rehabilitation bill; the vast sums expended as a result of the deterioration of the social environment (e.g. police and divorce bill); the enormous revenues expended to prevent further environmental destruction and clean-up or repair the legacy of ecological destruction from the past; monies required to invent and develop, and produce synthetics and natural substitutes as means and objects of production and consumption; the huge sums required to pay off oil sheiks and energy companies, e.g. ground rent, monopoly profit, etc.; the garbage disposal bill; the extra costs of congested urban space; the costs falling on governments and peasants and workers in the Third World as a result of the twin crises of ecology and development. And so on. The list is not systematic: it partly refers to cases of degradation of the natural environment, but partly also to the 'defensive costs' of growth which must be incurred to repair or prevent undesired consequences of the ecological crisis. These costs are quite considerable: Leipert estimated them at ten per cent of the national product in 1985 for the then Federal Republic of Germany. As defensive costs, however, ecological damage is transferred to and handled within the system of values and market rationality - with all the limitations we have discussed above. Ecological degradation may be the reverse side of an increase in economic value (costs of growth) and may even stimulate a further increase if repair measures, which enter into the national product, are subsequently carried out. Paradoxically, therefore, it is conceivable that O'Connor's ecological underproduction crisis might he1p to overcome an economic overproduction crisis. But the two cannot he treated as the objects of alternative analysis within a 'traditional or ecological Marxism. 10

It may be that 'ecological underproduction' should be interpreted as a strategy for the avoidance of 'economic overproduction' (and overaccumulation). Within a non-Marxist theoretical framework, an attempt is made to account for this by means of the categories of 'external diseconomies' or 'social costs of private enterprise' (Kapp): private economic profitability could be raised if the costs of preventing ecological damage were avoided. And the category of 'defensive costs' itself suggests that 'social costs' and 'external diseconomies' have at least partially a monetary equivalent, so that ecological degradation reacts, albeit with some delay, upon the system of values. The unloading onto society of environmental costs that would otherwise increase the outlay of constant or variable capital has a counteracting effect upon 'the tendency of the falling rate of profit'. Rohwer, Knzel and Ipsen go so far as to identify the rising costs of constant and variable capital - due to the later internalization of environmental damage - as the only plausible and consistent explanation for the falling rate of profit. 'Underproduction', in the sense of spatial and temporal externalization, would for a certain period help to prevent 'overproduction' in the sense of overaccumulation of capital. Underproduction may thus be a strategy for the avoidance of overproduction. It follows from the logic of market decision, reacting upon the system of values when a growing outlay on constant and variable capital (without a compensating rise in the rate of surplus-value) is leading to a fall in the rate of profit and tending to produce the crisis of overproduction to which O'Connor refers. The defensive costs of growth may rise to such an extent that: they exceed the amount by which the national product is increased - in which case growth becomes an economically irrational proposition. The time dimension is thus decisive: economic and ecological time are different, but they are not independent of each other. Consequently, ecological underproduction and economic overproduction should not be assigned to separate analytic discourses.

11