{"id":63230,"date":"2026-06-15T17:58:47","date_gmt":"2026-06-15T07:58:47","guid":{"rendered":"https:\/\/billmitchell.org\/blog\/?p=63230"},"modified":"2026-06-17T13:21:08","modified_gmt":"2026-06-17T03:21:08","slug":"can-capitalism-survive-not-if-we-want-to-solve-the-climate-and-poverty-crisis","status":"publish","type":"post","link":"https:\/\/billmitchell.org\/blog\/?p=63230","title":{"rendered":"Can capitalism survive? Not if we want to solve the climate and poverty crisis"},"content":{"rendered":"

The opening line of Part II of Joseph Schumpeter’s 1942 book – Capitalism, Socialism and Democracy<\/a> – was “Can capitalism survive? No, I do not think it can”. His thesis was not that capitalism would perform badly, quite the opposite. Rather the considered that “its very success undermines the social institutions which protect it, and inevitably creates conditions in which it will not be able to live and which strongly points to socialism as the heir apparent.” The climate crisis facing the world is combining with the other outcomes of neoliberalism to create what is now called a poly crisis. Recently, a group associated with the United Nations Human Rights Council has released a – Roadmap for Eradicating Poverty Beyond Growth<\/a> (published June 10, 2026) – which proposes a series of policy shifts designed to address aspects of the poly crisis. While it recognises that we must “escape the trap of growthism”, it fails to articulate that the fundamental logic of capitalism is capital accumulation that requires growth. To escape the trap, we must move beyond that mode of production. Merely tweaking policy structures within capitalism will not solve the problem.
\n<\/p>\n

Success to Schumpeter was judged in terms of how the system had performed in relation to improving material well-being of the populace.<\/p>\n

At the time of writing, he concluded that it was an unambiguous success.<\/p>\n

On page 61, he wrote:<\/p>\n

\nThe capitalist process, not by coincidence, but by virtue of its mechanism, progressively raises the standards of life of the masses.\n<\/p><\/blockquote>\n

Of course, he was rather silent on the emerging role that social democratic governments had played in reducing the worst features of capitalism in this period.<\/p>\n

He considered that government intervention had actually undermined the potential of “full-fledged capitalism” (p.110). <\/p>\n

He also considered that (p.66):<\/p>\n

\n… if capitalism repeated its past performance for another half century starting with 1928, this would do away with anything that according to present standards could be called poverty, even in the lowest strata of the population …\n<\/p><\/blockquote>\n

His prediction has not been remotely accurate.<\/p>\n

The latest Global Multidimensional Poverty report – Global Multidimensional Poverty Index 2025 \u2013 Overlapping Hardships: Poverty and Climate Hazards<\/a> – produced by the Oxford Poverty and Human Development Initiative (OPHI), University of Oxford, and United Nations Development Programme (UNDP) – shows that around 18.3 per cent of the 6.3 billion people living in the 109 countries studied:<\/p>\n

\n… live in acute multidimensional poverty …<\/p>\n

27.8 per cent of all children live in multidimensional poverty …<\/p>\n

Nearly two-thirds of all poor people … live in middle-income countries …<\/p>\n

Around 635 million poor people live in households where at least one person is undernourished …<\/p>\n

Of the 1.1 billion poor people, 887 million live in regions experiencing at least one of four climate hazards: high
\nheat, drought, floods and air pollution …<\/p>\n

Some 72.2 percent of poor people who are exposed to any climate hazard live in middle-income countries (641
\nmillion) and 61.8 percent in lower-middle-income countries (548 million) …\n<\/p><\/blockquote>\n

The MPI report focuses our attention away from just ‘material’ concerns and considers existential matters relating to climate change.<\/p>\n

The likes of Schumpeter never took environmental destruction into account in their appraisal of the virtues of capitalism.<\/p>\n

In Part II of his book, he introduced the concept that he is most famous for – Creative Destruction<\/a> – whereby the dynamic of capitalism is seen as an “evolutionary process” (p.82).<\/p>\n

In fact, he derived the idea from Karl Marx and said that (p.82):<\/p>\n

\nCapitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. And this evolutionary character of the capitalism process is not merely due to the fact that economic life goes on in a social and natural environment which changes and by its change alters the data of economic action; this fact is important and these changes (wars, revolutions and so on) often condition industrial change, but they are not its prime movers. … The fundamental impulse that sets and keeps the capitalist engine in motion comes from new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.\n<\/p><\/blockquote>\n

So old gives way to new, always improving.<\/p>\n

He claimed that “this process of Creative Destruction is the essential fact about capitalism” (p.85).<\/p>\n

However, in contrast to Karl Marx’s view that capitalism is marked by creative destruction, which moves it inevitably to a situation where it fails, Schumpeter claims that this process leads the society onto ever higher planes of innovation and well-being.<\/p>\n

I think Karl Marx understood the process better than Schumpeter even though the forces he predicted would bring down capitalism did not include a climate emergency.<\/p>\n

Schumpeter was also writing in the time that industrial capitalism was dominant – things were being produced that fed into the mass consumption era that was about to unfold (especially into the 1950s).<\/p>\n

It was easier to make the case that the proliferation of products that consumers could bring into their homes to make life easier was the hallmark of where capitalism was heading.<\/p>\n

However, now the ‘banksters’ have replaced the ‘robber barons’ (and the AI corporates are also emerging) and there is a less direct link between growing material prosperity and capitalism endeavour.<\/p>\n

The FIRE sector effectively produces nothing and mostly constitutes an elaborate and fragile casino that shuffles wealth between the players, while the rest of us have been left with declining real wages, reduced productivity, and a range of issues that can be summarised under the heading – ‘poly crisis’ – a conglomeration of individual crises (education, health, housing, environment, transport, etc) that are all linked to a common cause – neoliberal capitalism.<\/p>\n

Schumpeter did think that the ‘entrepreneurial’ role would be undermined as the shareholding class spread into wider parts of thus reducing the motivation to accumulate property.<\/p>\n

But he also claimed that capitalism spawned mass education and (p.146):<\/p>\n

\n… unlike any other type of society, capitalism inevitably and by virtue of the very logic of its civilisation, creates educates and subsidizes a vested interest in social unrest …\n<\/p><\/blockquote>\n

The rise of the “intellectuals” under capitalism – highly educated members of society – creates problems because it means that unemployment, low wages growth and mundane jobs – associated with the creative destruction – cedes discontent.<\/p>\n

The “role of the intellectual group” (p.153):<\/p>\n

\n… consists primarily in stimulating, energizing, verbalizing and organizing this material and only secondarily in adding to it …\n<\/p><\/blockquote>\n

The material in question is the “hostile atmosphere which surrounds the capitalist engine” – the job displacement and the losses that emerge for some cohorts from the creative destruction process.<\/p>\n

There is a tension here between the so-called intellectuals and the hoi-polloi (the workers in the factories) but the former amplifies the problems endured by the latter.<\/p>\n

That tension is high at present with the rise of Right-wing political movements around the world who, among other things, reject concerns advanced by the more educated cohort as ‘woke’ and go further to dismiss climate science.<\/p>\n

It is the latter issue that is exercising my mind at present in relation to this literature.<\/p>\n

While the corporate elites keep harking back to Schumpeter’s visions of deregulated ‘full-fledged capitalism’ as a cure for the ailing productivity in the advanced world, and, reject rules governing the environment as undermining the entrepreneurial function, they ignore history that shows us that creative destruction has been associated with severe environmental destruction (species’ extinction, widespread habitat loss, dangerous levels of air and sea pollution, and unsustainable carbon emissions).<\/p>\n

The ecological footprint is currently around 1.7 times the regenerative capacity of the biosphere to sustain itself.<\/p>\n

That sort of resource usage is thus unsustainable.<\/p>\n

The Schumpeter vision ignored all those problems.<\/p>\n

The concession that mainstream economists made to ‘pollution’ problems was to characterise them as market failures arising from a lack of properly specified property rights.<\/p>\n

In that guise, if property rights were properly assigned, then a person (firm) who infringed on another person’s rights with smoke emissions or dirty rivers etc would have to pay damages.<\/p>\n

In other words, the higher costs that would arise would subsequently be reflected in the price of the polluting good which would reduce its demand potential.<\/p>\n

So the pollution problem is dealt with via the ‘market’ through appropriate pricing and adjustments.<\/p>\n

In other words, economists really only saw pollution as an issue in correct assignment of rights to pollute rather than in biological terms (the probability of a bio entity dying).<\/p>\n

Economists considered pollution was just part of a trade-off that markets would optimally solve if left to their own devices (with property rights correctly specified).<\/p>\n

While that ignorance has changed a little and relative prices have shifted in favour of renewable energy via technological innovations, the profession is still firmly entrenched in a growth = prosperity mindset consistent with Schumpeter’s defence of capitalism.<\/p>\n

However, the link between on-going poverty and climate hazards is not entertained by the mainstream economics profession.<\/p>\n

The MPI Report makes it clear that:<\/p>\n

\nPoor people disproportionately experience climate hazards, a reality that threatens to derail efforts to eliminate poverty … Impoverished households are especially exposed to climate shocks as many depend on high-risk sectors such as agriculture and informal labour … When hazards overlap or strike repeatedly, they compound existing deprivations. Designing poverty reduction strategies that are resilient, inclusive and responsive to a changing climate depends on understanding these relationships, who bears the brunt and how to reach them with solutions.\n<\/p><\/blockquote>\n

This was the issue that spawned the concept of ‘Just Transition’.<\/p>\n

I have written about this issue before.<\/p>\n

For example, see the blog post \u2013 Is there a case for a basic income guarantee \u2013 Part 5<\/a> (September 27, 2016).<\/p>\n

I also published a major study in June 2008 (with my colleagues at the Centre of Full Employment and Equity) \u2013 A Just Transition to a Renewable Energy Economy in the Hunter Region, Australia<\/a> \u2013 which was one of the first modelling exercises to establish the case for renewable energy alternatives, long before the most recent technology developments have made these alternatives even more compelling.<\/p>\n

The point is that unless climate activists propose solutions that minimise the costs of reducing emissions on the workers directly involved in the creation of pollution, they will likely only increase the likelihood of resistance to change.<\/p>\n

And that resistance would come as the affected workers teamed up with the capitalists, with whom they normally had no common interests.<\/p>\n

I was thinking about these matters when I read the recent – Roadmap for Eradicating Poverty Beyond Growth<\/a> – which was published recently (June 10, 2026) under the ‘mandate of the Special Rapporteur on extreme poverty and human rights, Olivier De Schutter.<\/p>\n

The work is a partnership between the United Nations Human Rights Council and the new Economies for Eradicating Poverty.<\/p>\n

I will write at greater length about the specific detail presented in the ‘Roadmap’.<\/p>\n

Its articulation of the dimensions of the problem faced by an “ecologically unsustainable” growth mindset combined with a distribution system that does not fairly allocated the material benefits of economic growth is fine and rejects the predictions made by Joseph Schumpeter many years ago.<\/p>\n

It notes that:<\/p>\n

\n… economic growth often fails to translate into commensurate improvements in economic, social and cultural rights … A narrow focus on gross domestic product (GDP) \u2014 understood as a measure of total economic output \u2014 can thus distort decision-making in favour of forms of development that can weaken workers\u2019 rights … deepen inequalities, intensify insecurity and undermine mental health due to the pressures of increased competition.\n<\/p><\/blockquote>\n

But the focus on GDP also has:<\/p>\n

\n… resulted in higher levels of resource use; it has accelerated biodiversity loss, and it has generated waste and pollution. An economic model dependent on endless expansion thus undermines the very material conditions necessary for the realisation of human rights.\n<\/p><\/blockquote>\n

The questions they pose at the outset are:<\/p>\n

1. “How can we make economies more inclusive and sustainable by design?”<\/p>\n

2. “Where growth is still needed \u2014 in low-income countries in particular, as well as in some middle-income countries – , how can we ensure that it is less extractive and exploitative than it is in its current form?<\/p>\n

3. “Which governance mechanisms should be put in place to escape path dependencies, and to inject long-term thinking in policy-making, to ensure intergenerational fairness?”<\/p>\n

These are the questions that progressives in this space are being challenged by.<\/p>\n

The approach taken by the Roadmap, however, falls short of the solution.<\/p>\n

It is the ‘tax the rich to get more money for government services to the poor’ category of proposal.<\/p>\n

It assumes that policy changes – both immediate and gradual – will be sufficient.<\/p>\n

It also notes that:<\/p>\n

\nTo begin, however, we need to escape the trap of growthism: the ideological belief that no progress is possible without first increasing the total output of the economy, as measured by the Gross Domestic Product indicator.\n<\/p><\/blockquote>\n

To which I agree but to that we have to do more than change the ‘policy’ landscape within capitalism.<\/p>\n

Growthism goes to the fundamental logic of capitalism, a point that Karl Marx understood clearly.<\/p>\n

The logic of capitalism is to continually be doing things that accumulate ever increasing stocks of capital for the capitalist class and via creative destruction the more that class can extract for itself at the expense of the many the more successful capitalism is judged to be.<\/p>\n

It is essentially a myopic system and as Marx realised sows the seeds of its own destruction.<\/p>\n

The 1.7 times footprint represents those seeds because they will undermine the capacity of the system to continue.<\/p>\n

Conclusion<\/h2>\n

The Roadmap, however admirable in ambition (to eradicate poverty, restore fairness and reduce the ecological footprint) fails to articulate a vision for system change and thus fails to link the problems it identifies to the fundamental logic of capitalism.<\/p>\n

Changing the rules within which our economies operate – either locally or globally will not be sufficient.<\/p>\n

We need to move to a system whose logic is consistent with degrowth.<\/p>\n

That cannot be achieved within a capitalist structure.<\/p>\n

The question is how to move beyond that and create a socialist society.<\/p>\n

I’m not holding my breath.<\/p>\n

That is enough for today!<\/p>\n

(c) Copyright 2026 William Mitchell. All Rights Reserved.<\/p>\n","protected":false},"excerpt":{"rendered":"

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