What is Development?

The process of development taught in modern economics classes is far different from the reality. They teach a process which is centered around progress, innovation, and economic growth. Economics teaches that the unfettered growth in GDP which is brought by development is explicitly a good thing and a good measure of happiness. GDP in reality only measures consumption, which is not only an inaccurate measure of happiness, but overconsumption of fossil fuels and other material goods is actively causing an environmental and human crisis. So according to modern economics, overconsumption is an ideal when it is actually causing our own destruction. In addition, GDP also fails to show inequality and rather shows the total consumption of a country. 

Development better connects the world and leads to better infrastructure, but decreases self sufficiency and leads towards massive inequalities. Development is the process of diversifying agricultural economies (often derogatorily referred to as “backwards” economies) into industrial powerhouses. Within industrial economies, production ramps up because of new technologies and scientific discovery. Factories produce goods which then serve a consumer market. Consumerism then shifts in the country from principles of necessity to principles of excess and greed, hogging the resources from those who need it most. Those who can afford it live in luxury and the ones who don’t struggle to survive in poverty. Society shifts from more rural to urban living, and resources are extracted to expand the economy, much to the detriment of the environment. Natural habitats are cleared to make space for skyscrapers and gargantuan homes with urban sprawl and gentrification. Development leads the world into “modernization” which supposedly benefits everyone, but in reality it doesn’t. Only the elite (De Paula 2015). 

Introduction

In this section, we want to highlight how development has contributed to inequitable distribution of wealth and resources, and how alternatives are necessary to deconstruct hierarchies within the capitalist system. Our fundamental critique of development under capitalism is that it’s designed to benefit the already wealthy and powerful. The notion of sustainable development is an oxymoron–it’s impossible for the economy to continuously grow without exploiting the environment. Capitalism is built around making a profit and growing the economy. But it doesn’t grow equally for everyone. Especially in the last few decades, there has been a stark increase in economic inequality. 

Capitalism is driven by growth, often at the expense of the less fortunate and the environment. Capitalism directly causes environmental degradation with the endless extraction of resources. Extractivism, or the extraction of natural resources from the environment, is inherently exploitative. Many of these resources are fossil fuels, which are burned and converted to atmospheric carbon dioxide, which is causing climate change and pollution. This adversely affects BIPOC populations disproportionately. The countries with the most power, past colonial powers in the Global North, continue to extract resources from poorer nations which were historically colonies, or the Global South. This is known as neocolonialism, or neoimperialism. Neocolonialism benefits the Global North, and supports hierarchical power structures of the wealthy and poor. The Global North is white-dominated and patriarchal by design.

In short, capitalism and development are controlled by white patriarchies in the Global North and designed to preserve their wealth and power. It is dominated by massive corporations which profit off of the degradation of the earth and suffering of the poor, most notably fossil fuel giants. The growth imperative is destructive and is unsustainable. An alternative is necessary in order to undo the colonial past and present, fight the inequalities faced by the global majority, and attempt to slow the climate disaster. In order to fully understand the complexities of who benefits from development in the capitalist system, we have to take a look at a brief history of capitalism. 

A Brief History of Capitalism

Capitalism arose far more recently than many believe, roughly the early 16th century. There had been market based economies before, but none that were centered around perpetual growth. The principle was easy: pull excess human labor and amounts of nature into circuits of accumulation. In other words, it centered around taking more than you give back. 

In the feudal system, peasants were indentured to their lords and endured brutal conditions. In the period between 1350 and 1500, feudalism declined because of peasant rebellions, most of which were swiftly put down; but the rebellions largely led to the abolition of feudalism in England because the constant warfare was expensive for the lords. During this time known as the ‘Golden Age for the European Proletariat’, peasants became free farmers and were self sufficient, building egalitarian cooperative societies with higher wages and better living conditions. It also did numbers for European ecology, with reforestation and the regrowing of overgrazed grasslands because of the peasants’ better relationship with nature compared to lords (Hickel 2020).

 Nobles and clergy alike were outraged and violently evicted peasants and formed private property in an attempt to drive down wages and end peasant autonomy. Land, pastures, fields, rivers, and forests were privatized for elite use. Peasants were barred access from the resources on these massive properties, most notably from game hunting and fishing. This was known as enclosure. Cheap labor brought back the power of the elite lords and allowed them to grow their wealth exponentially. The elites began to rape and plunder the land for materials in order to exponentially grow. Both Adam Smith and Karl Marx agree that this stage of elite wealth accumulation was necessary for the rise in capitalism in the 18th century (Hickel 2020).

With the rise of industrialization, innovative technology drove the destructive capitalist system to extract material wealth wherever possible in an unprecedented capacity. The earth was seen as something to be used for profit rather than something to be cherished and protected. Coal was mined and burned with no regard for the environmental repercussions, or for the hazards workers faced daily, within mines or in factories operating dangerous machinery with no training. The elite factory owners or owners of mines prospered because of the miniscule wages they paid, while the life expectancy of workers plummeted. In Manchester, life expectancy plummeted from 38 to 25 in the early 1800s (Heller 2018). Capitalism had created a degree of suffering which was unmatched in the pre-capitalist era. 

In colonialism, white European powers plundered the earth in their colonies when they had run out of most resources in their own lands in order to make maximum profits for themselves. They relied on slave labor, and later when slavery was abolished (although in Africa it continued well into the 1900s and Europeans turned a blind eye), they relied on cheap, usually coerced labor (Tropp 2023). Cheap labor is a necessity in capitalism because otherwise firms couldn’t make profits needed to reinvest and grow further. If a firm is stagnant in its growth, then it is outcompeted and goes belly up as another business takes its place. This is a driving force in capitalism, and colonialism was a major piece of the machine which benefitted these white European patriarchal governments and the minority of elites within them who grew immensely wealthy from them. Natives were pushed off of their homelands, with whites seizing the suitable farmlands. These colonies, who today are still populated mainly by indigenous people and people of color, were held hundreds of years back economically because of this colonial history. But it shouldn’t even be regarded as history, because colonialism persists today (Hickel 2020).

Neocolonialism 

Neocolonialism, or the intervention of the Global North in the affairs of past colonies, is extremely detrimental not only economically, but because it destabilizes the country, often intentionally, so that more powerful countries in the Global North can continue to enrich themselves and secure rights to materials. When white economic interests are impeded, covert missions are sometimes launched to overthrow leaders who present challenges to white power. African leaders Patrice Lumumba (left) and Amilcar Cabral (right) wanted to restrict the Global North’s influence and give their citizens a better life. Both were assassinated by European (and likely American) intelligence. This is what happens in the neocolonialist capitalist system when the rich and powerful are threatened by improving conditions in one of their colonies. The destabilization of the Congo and Guinea Bissau was directly caused by white intervention, which led to civil war, but the economic interests of the Europeans were secured (Tropp 2023). Therefore, in the eyes of the Global North, it was successful. 

Currently, we live in an era of intense globalization. Driven by the neoliberal mindset of decision makers in the Global North, the IMF invests in countries with a lot of debt. This sounds great, but there is a catch. The IMF invests or makes loans only if those countries agree to devalue their currency and artificially lower tariffs and taxes on trade. In the neoliberal viewpoint, this is a win because it makes world trade cheaper. However, in reality, workers aren’t paid as much and inequality increases within those countries because their products become inexpensive. In addition, it causes countries to rely on imports so they are far less self-sufficient. Often countries export and import the same products, which is inefficient and causes excess emissions in transportation for seemingly no reason (Gabor 2023). Probably the most significant demand the IMF makes is that countries must relinquish control over much of the country’s natural resources. This occurred prominently in Ecuador, which allowed corporations to secure the rights to the oil reserves (Nelson 2023). What the IMF justified as a mission to develop Ecuador into prosperity in actuality was a veiled attempt to extract their material resources for profit. The Global North, using extractivism to benefit themselves, steals the wealth of underdeveloped nations and continues to exert their dominance. The growing world inequalities between the Global North and South are directly related to the intentional material extraction in the capitalist system and the suffering which comes with it; the rich get richer and the poor get poorer.  

Inequality

Worldwide inequality has actually been decreasing since the 20th century because of populous countries like China and India growing rapidly. Within advanced economies however, inequality has been increasing rapidly since the 1980s. Worldwide, the wealthiest 1% holds 38% of all the wealth and the top 10% holds 76% due to capitalism upholding white patriarchal hierarchies which allowed such prior wealth accumulation (IMF 2022). In the United States for example, from 2005 to 2015 the share of wealth in the top decile increased from 66% to 69% (Gabor 2023). That 3% may not sound like a large increase, but it was the largest increase since the Great Depression. Not to mention 3% is also the share of the bottom half of earners. This is to say that the capitalist system is inherently designed to grow the economy and accumulate wealth, but not for the vast majority of people. Primarily the increase in inequality is due to the reduction in taxes of the 1% since Ronald Reagan, as the ones in power trying to hold their power. In the 1950s the wealthy had much higher taxation rates than the non-elites, but today the vast majority pay a similar tax rate. Many wealthy pay no taxes at all because of loopholes within the system. The racial disparity between Black and white Americans has also increased since the 1980s to the point that we are approaching the same levels of racial inequality that existed in the 1950s. Since the 1980s the gender wage gap has remained stagnant. One study found a raw gender wealth gap of women owning 32 cents for every dollar of male wealth (Oxfam 2023). The disparity for women of color is even more drastic, owning 12 cents on the dollar of white male wealth (Oxfam 2023). Clearly the capitalist system is only benefitting a small elite minority of the population: a white patriarchal elite.

The coronavirus crisis also paved the way for billionaires to profit exponentially while others suffered. According to Forbes, since the COVID-19 pandemic U.S. billionaires are a third richer (Oxfam 2023). For every 100 dollars created in growth since 2013, $37 has gone to the richest 1% while the bottom 50% has only received $2 (Oxfam 2023). This counters the false theory of trickle-down economics: that when the elite grow, so do we all. During the pandemic, which shut down most of the economy and caused millions of people to lose their jobs, billionaires continued to accumulate wealth and make seemingly endless profits. While the majority went through a recession, the wealth of elites still grew exponentially. The record inflation rate during and following the pandemic greatly outpaced wages: more than half of the inflation rate can be accounted for by corporate profits, where margins are the widest they’ve been since 1949, and continue to strip money from the poor and line the pockets of the rich and powerful (Oxfam 2023). The government ended up propping up economies by issuing huge cash bailouts to many of these megacorporations which did not need it, while leaving everyone else to crumble. This led to a stock market surge, which ultimately benefited the ultra rich but not the majority. Additionally, this surge lacked the guardrails of fair taxation practices, thus furthering the massive inequality within the U.S. today. Developers of the COVID vaccine, Pfizer and Moderna, also made huge profits because of raising prices with the large demand worldwide. It’s clear that corporations value profits over people. However, we are not entirely without fault. We have to recognize, as a privileged community in the United States, that as buyers in the capitalist system who tend to heavily overconsume, we are part of the machine which is causing the polycrisis.  

Beyond Consumerism: Making Meaningful Change

“It’s easier to imagine an end of the world than the end of capitalism” 

–-Fredric Jameson

We are all cogs in the capitalist machine. Though we may not pollute to the extent of fossil fuel megacorporations or inflict suffering upon the masses like European controlled mines in the Congo, we certainly contribute to the polycrisis with our overconsumption of goods and energy. Without the consumer, the capitalist system fails. Our Western ideals of materialism, having the next new Iphone or new car when it’s not a necessity to upgrade needs to change. Planned obsolescence, or the designed failure of a product after a few years, is also an extremely wasteful practice in capitalism that is inherently designed to produce overconsumption and use more than necessary. The recycling label in much of the developed world is also a tool to make consumers feel better about their consumption, even though only a tiny fraction of recyclable products are actually recycled. Only 5% of plastics put in the recycling bin actually turn into new items, the rest ends up in a landfill (Sullivan, NPR 2022). Even the most recyclable material in the US, steel, is only recycled at a rate of 88% (Sullivan, NPR 2022). Reduction and reuse of products are far better tools to affect one’s carbon footprint. Our future economy has to be built on principles of self sufficiency, environmental protection, equality, and necessity. If we only use what we need, we will radically reduce our emissions and perhaps keep global warming under 1.5 degrees Celsius. This certainly will not be easy; the changing of habits is difficult and the changing of systemic problems is harder still. But it is necessary, not to save the world, to save the environment, or save biodiversity, but to save ourselves from certain destruction. Here are some useful videos by The Simplicity Institute on postcapitalism by design and Ecological Civilization: Beyond consumerism.

Works Cited

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Gabor, Daniela. The Global South Must Be at the Center of the Making of a Just Global Economic Order. https://jacobin.com/2023/02/neoliberalism-global-south-finance-climate-washington-consensus. Accessed 29 Apr. 2023.

Henry Heller’s Marxist History of Capitalism. Directed by Henry Heller. www.youtube.com, https://www.youtube.com/watch?v=CK8tSsz3NR8. Accessed 17 Apr. 2023.

Hickel, Jason. Less Is More: How Degrowth Will Save the World. William Heinemann, 2020. Library of Congress ISBN, https://blackbooksdotpub.files.wordpress.com/2021/08/jason-hickel-less-is-more-random-house-2020.pdf. 

Nelson, Peter. Place and Society. Middlebury College Lecture on Neocolonialism in Ecuador. 21 Apr. 2023. 

Oxfam. Tax Wealth, Tackle Inequality: Five Reasons Why a Wealth Tax Makes Sense. Oxfam Media Brief, Apr. 2023, https://webassets.oxfamamerica.org/media/documents/Tax_Wealth_Tackle_Inequality_2023.pdf?_gl=1*1lr4rdx*_ga*MzQ2MjE3MzU4LjE2ODE0OTM4NjM.*_ga_R58YETD6XK*MTY4MTQ5Mzg2Mi4xLjEuMTY4MTQ5MzkwNi4xNi4wLj  

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Tropp, Jacob. History of Modern Africa. Middlebury College Lecture on the assassinations of Amical Cabral + Patrice Lumumba; Neocolonialism in modern Africa . 12 Apr. 2023.

“U.S. Income and Wealth Inequality Are No Longer Increasing, but a Return to the Equitable Levels of the Mid-20th Century Isn’t Likely Anytime Soon.” Equitable Growth, 17 Jan. 2023, https://equitablegrowth.org/u-s-income-and-wealth-inequality-are-no-longer-increasing-but-a-return-to-the-equitable-levels-of-the-mid-20th-century-isnt-likely-anytime-soon/.