Political Economy

•What forces determine the characteristics of the forest industry?

• What factors motivate forest companies?

• Who has power over forestry in British Columbia? Why? What is the basis of power, how is power exerted?

• Who lacks power regarding forestry issues in British Columbia? Why?

DISCUSSION QUESTIONS #1: POWER

• What social class do you belong to? Why? (What is the basis for your answer.)

• What social class does your family belong to (e.g., parents and siblings)? Why? (What is the basis for your answer.)

• How might social class be related to forestry issues?

Discussion Group Questions #2: Social Class.

Marchak defines political economy as follows:

"political economy involves the study of power derived from or contingent on a system of property rights: the historical development of power relationships; and the cultural and social embodiments of them.”

Carroll argues that in examining the connection between economic and political power in Canadian society, three important questions may be asked:

1. What is the basis of economic power?

2. How is economic power translated into political power?

3. What is Canada's specific location in the world system?

Dependency theory focuses on the metropolis-hinterland relation between a dominant country or region and a subordinate one.

The subordinate country or region's economic backwardness is thought to contribute to the relative affluence of the metropole.

The staples approach viewed hinterland development as shaped by the pattern of demand and level of technology in the metropole and by the geography and resources of the hinterland which trades its raw material staples for manufacture goods from the metropole.

Staples refer to the raw materials or semi-processed goods, such as fur, fish, lumber, wheat, oil, and minerals, which are produced within hinterland economies mainly for export.

Hinterland refers to an underdeveloped region or country from which an economically developed metropole extracts resources.

Interregional or international divisions of labour, sometimes lead to a "staples trap".

This refers to a situation whereby a hinterland's specialization in staple exports perpetuates its dependence on imported manufactured goods.

The hinterland by perpetually exporting raw materials, fails to develop its own industries.

This explanation is often used to describe British Columbia.

The Treadmillof Production

Schnaiberg, working within the tradition of political economy, has developed a theoretical model for analyzing the causes and consequences of production for the natural environment.

In his theoretical model, entitled the treadmill of production, ecosystem elements are converted by capitalists through market exchanges into profits.

Capitalists then reinvest some of these profits in more productive physical capital.

This requires still greater ecosystem access in order to keep equipment operating at an economically efficient rate.

(This process is what has led to the depletion of B.C. salmon fishing stocks; see Pearse 1982).

The implementation of advanced equipment inevitably leads to changes in the structure of an industry because it raises the capital-intensification of production and hence requires a growing share of national production in order to remunerate capital owners.

These increased costs require greater production and in turn necessitates expanded ecosystem exploitation.

According to the treadmill model, there are further demands on production besides the need to cover capital costs (and profits).

Enough surplus must be generated to supply an adequate level of wages to maintain consumer demand (for the capitalist system to function) and to generate enough tax revenue to cover the social expenditures of the state.

The need for increasing exchange value tends to accelerate "the environmental demands of modern treadmills".

Schnaiberg and other political economists consciously working within the "new ecological paradigm" argue that it is the commitment of the dominant institutions (as well as ideological commitment) to growth that is the root of alienation of humans from natural ecological systems.

George Bush Sr. ironically reinforced this notion with his comments at the Rio Earth Summit.

Criticized for refusing to sign important accords on global warming and endangered species, Bush responded by stating:

"Twenty years ago, some spoke of limits to growth. Today we realize that growth is the engine of change and the friend of the environment."

Schnaiberg discusses various structural theories of the state. He argues that modern western states have experienced serious internal conflicts regarding environmental issues.

On the one hand the state serves as a facilitator of capital accumulation and economic growth.

On the other, it acts as a social legitimator of the socioeconomic structure for its citizens (see O'Connor 1973).

Schnaiberg:

The former role commits the state to looking at environmental resources for their exchange-values.

Conversely, the latter leads the state to view ecosystems' capacities to produce the use-values (as habitat and/or biosocial resources) of various constituents, who are among the political constituencies of state actions.

EcosystemExploitation

Profits

CapitalInvestmentIn MoreEfficientEquipment

Need for AdequateWages to MaintainConsumer Demandand GenerateTax Revenue

AcceleratedEcosystemExploitation

The “Treadmill of Production”.

The Societal-Environmental Dialectic

Schnaiberg, drawing upon the intellectual tool of dialectical analysis (developed by Hegel, and Marx), proposes the condition of a societal-environmental dialectic. He argues that economic growth (the thesis) is a basic value of contemporary western societies, while "ecological disruption" (the antithesis) "is a necessary consequence of economic expansion.

A tension emerges between these two forces because while economic growth is valued, "ecological disruption is harmful to human society".

ECONOMICGROWTH(the thesis)

ECOLOGICALDISRUPTION(the antithesis)

POSSIBLE SYNTHESES

1. An “Economic” Synthesis.

2. A “Managed Scarcity” Synthesis.

3. An “Ecological” Synthesis.

The “Societal-Environmental Dialectic”.

Schnaiberg notes that there are three possible resolutions (or syntheses) of this dialectic:

(1) an economic synthesis which ignores ecological disruptions and attempts to maximize growth;

(2) a managed scarcity synthesis which deals with the most obvious and harmful consequences of resource-utilization by imposing controls over selected industries and resources;

(3) an ecological synthesis in which "substantial control over both production and effective demand for goods" is used to minimize ecological disruptions and maintain a "sustained yield" of resources.

Schaniberg argues that which of these outcomes emerges depends upon the economic structure of a society

He argues that the following are important in determining which synthesis will prevail:

"(1) social/economic/political actors' interests in various elements of ecosystems, and

(2) the power that each group of actors has in pushing its interests in various economic markets and/or political arenas, and

(3) emergent institutional structures that reflect these interests and powers.”

“In short, we need to understand how the motives (consciousness) and power (control capacities) of various social class segments shape the dynamics of political-economic conflicts and lead to particular syntheses, as classes and class segments seek to control ecosystems for their own interests."

Schnaiberg argues that the modern treadmill of production produces an enduring systemic bias towards the economic synthesis, and against the ecological synthesis because major social institutions continue to maintain and transmit the dominant belief: the necessity of economic growth.

Schnaiberg states that there are two central questions that arise for the dominant classes and economic institutions: (1) how to generate more surplus, and (2) how to allocate the surplus that is generated.

At the level of the state, "regressive" (inequality-magnifying) societies are likely to continue the "economic" synthesis while "progressive" (equality-fostering) societies are least resistive to the "ecological" synthesis

Schnaiberg notes that the U.S., with its "non-redistributive" ideology, has tended to engage in the "managed scarcity” solution to environmental and resource problems