Johannes Berger

[Bernstein] says that capitalist development does not lead to a general economic collapse .
He does not merely reject a certain form of the collapse. He rejects the very possibility of collapse .
R. LUXEMBURG , Reform or Revolution

With the growing development of society, a complete and almost general collapse of the present system of production becomes not more but less probable because capitalist development increases, on the one hand, the capacity of adaptation and, on the other hand … the differentiation of industry .
E. BERNSTEIN , Der kampf der Sozialdemokratie (The Fight of Social Democracy)

Questioning the future of capitalism is nearly as old as capitalism itself. The development of this new social order was from the very beginning accompanied by concerns about both its inner stability and its overall viability. These doubts are evident not only in Marx but also in the efforts of so-called bourgeois sociology to grasp the elements of capitalism. In many quarters in the nineteenth and the early twentieth century the system was viewed in a negative light. The classical writings in European sociology reflect the view that the category of "modern" society is a transitional one; modern society has torn down the old social order but has been unable to erect a new one (Freyer 1930, 10, 165). With the coming of structural-functionalism, however, this negative diagnosis receded. But even Parsons's theory of modern society (1971) is informed by deep concerns about its future viability, and Luhmann (1984a) acknowledges that modern society both destabilizes structures and increases opportunities for criticism.

To take up once again the question of the future of capitalism is a bold enterprise. Whoever does so seems to pretend to view society and its development from an undistorted perspective. Historical materialism believed that it possessed such a viewpoint. A classic formulation of the idea that there is a special place inside society from which the social totality can be recognized in an undistorted way can be found in an early essay by Lukács: "It is only with the appearance of the Proletariat that the recognition of social reality is completed. This completion is reached by having found in the class standpoint of the proletariat a point from which the totality of society becomes visible" (1923, 34, my translation). It is impossible, however, to espouse this viewpoint today because continuing social differentiation, complexity, and diversity mean that the essence of society cannot be captured by reference to its core or center.

Marx was convinced not only that a socialist society would necessarily follow a capitalist one but also that a socialist society would too represent a higher stage of civilization. In this chapter, however, I leave aside this normative dimension. Instead, I concentrate on the stability and the likely future of capitalism. I also touch briefly on the problems associated with doubts about the role of rationality in the modern world.

Because of the difficulty of investigating the future of modern societies, it is desirable to follow a famous predecessor. I choose Schumpeter as a starting point rather than Marx largely because Schumpeter created a new foundation for the study of the future prospects of capitalism. Both Schumpeter and Marx hold the view that "capitalism" is an adequate characterization of the present epoch of history. In general sociological theory there is a debate between cultural accounts of modernity, on the one hand (for example, Berger, Berger, and Kellner 1973), and Marxist accounts of capitalism, on the other hand (Bader and Berger 1976; Adorno 1969). This debate cannot be resolved here. I simply concur with Max Weber's belief that capitalism is "the most fateful power of modern life" (Weber 1920, 4). But insofar as capitalism and modernity become synonymous, it is necessary to enrich the theory of capitalism by a corresponding theory of modernity. I do not mean to fall into any kind of economic reductionism by asserting that capitalism played a central role in the "great transformation" (Polanyi 1957); I simply assert that the modernity of the economy is the model for the modernization of other institutional spheres.

I now turn to Schumpeter's central question: "Can capitalism survive?"

1. The Survivability of Capitalism

This fateful question opens the second part of Schumpeter's classic Capitalism, Socialism and Democracy . He answers this question with a resounding no (Schumpeter [1942] 1962). Having answered, he has to ask, What kind of society will replace it? Schumpeter believed that socialism would follow. Although he saw socialism as a matter of evolutionary necessity, he also asked whether socialism could function as an economic system. This question he answered with a clear yes, and in doing so rejected the mainstream argument, developed by Weber and Mises, that the economic order of socialism is unstable and inefficient.

Today, after the unprecedented forty-year boom of the capitalist world economy and after the final breakdown of socialist economies, almost every student of capitalist development will find it difficult to follow Schumpeter's logic. Why is socialism supposed to be an efficient economic order? And why is capitalism supposed to be an economic system with only a limited life span? Has not the postwar period proved that capitalism is an extremely flexible and efficient economic system?

A common feature of all currents of socialist thought is that in the long run capitalism will necessarily be replaced in a revolutionary process by socialism. No doubt, Schumpeter shared with these strands of thought the idea of a shift from capitalism to socialism, but he did not believe that socialism represents a higher stage of evolution. He merely viewed socialism as a feasible economic order. For Schumpeter what distinguished socialism from capitalism was that in capitalism markets function as mechanisms for the distribution of the social product. The essence of capitalism was the combination of the functions of allocation and distribution within the framework of one economic mechanism, namely, the market. By institutionalizing markets for capital and labor, capitalist societies relieved themselves of questions of distributional equity. To abolish the markets for capital and labor, however, does not imply that in socialist societies rational economic behavior is impossible. For Schumpeter the reason for the decay of capitalism is not its economic failure. He does not substantiate his argument about the inability of capitalism to survive with the traditional argument that it is prone to crisis. On the contrary, Schumpeter posits an inherent relationship between a capitalist economic order and growth. No other economic system is capable of attaining a comparable rate of economic growth. Therefore, if capitalism perishes, it is not all because of its economic failure. In fact, it is capitalism's success that dooms it. "My thesis," Schumpeter writes ([1942] 1962, 61), is "that the actual and prospective performance of the capitalist system is such as to negate the idea of its breaking down under the weight of economic failure, but 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 point to socialism as the heir apparent."

In this way Schumpeter puts the theory of the self-destructive tendencies of capitalism on a new basis. He wants to demonstrate that, contrary to Marx, there are no purely economic reasons for the breakdown of capitalism. He emphasizes that capitalism's self-destructive tendencies can be ascertained only if one leaves the field of economic considerations and turns to the cultural complement of the capitalist economy, namely, its sociopsychological superstructure ([1924] 1962, 198). Among the social institutions that are undermined by the success of capitalism Schumpeter includes (1) the entrepreneurial function, (2) nonbourgeois groups, and (3) private property and the freedom of contracting. The individual entrepreneur is made superfluous by the transition from liberal to corporate capitalism: "The perfectly bureaucratized giant industrial unit … ousts the entrepreneur (Schumpeter [1942] 1962, 134). As to nonbourgeois groups, Schumpeter argues that the aristocracy, the craft guilds, and the peasantry are not only feudal shackles but also a precondition for the vitality of capitalism, in part because they are allies in the conflict of the bourgeoisie with the proletariat and in part because the bourgeois class, when compared with the aristocracy, is "ill equipped to face the problems, both domestic and international, that have normally to be faced by a country of any importance" (Schumpeter [1942] 1962, 138). Private property and the freedom of contracting are threatened by bureaucratization, the replacement of small firms by big enterprises, and a "tropical growth of new legal structures" (Schumpeter [1942] 1962, 191).

To analyze the future prospects of capitalism, Schumpeter uses the metaphor of a fortress under siege. Capitalism diminishes its chances to survive not only by weakening the walls that protect it but also by increasing the hostility of its enemies. Intellectuals play an important role in capitalism's creation of an "atmosphere of almost universal hostility" (Schumpeter [1942] 1962, 143). The bourgeois fortress becomes defenseless because a capitalist order is unable to control its intellectual sector, which "lives on criticism" (Schumpeter [1942] 1962, 151). This argument is far from being compelling. But even if the specific details of Schumpeter's argument are weak, the general argument is worth pursuing further. His general argument consists of two propositions: (a) capitalism will be undermined not by its failure but by the consequences of its success, and (b) these consequences are to be found not in the economic system but in the specific relationship between the economic system and its environment.

By replacing the Marxist "deterioration" perspective with a perspective that emphasized improvement and that focused on the negative consequences of success, Schumpeter revolutionized the foundations of the theory of capitalist development. However, when he speculated about the results of capitalist development, Schumpeter was quite conventional: he kept to the idea that socialism was the "heir apparent" of capitalism (even though he did not believe in socialism). Since he wrote these words, history has totally refuted Schumpeter's conviction about the inevitability of socialism; today only a small minority regards socialism as the solution to the problems that the capitalist mode of production has created. After the Second World War, the advanced capitalist countries enjoyed an extended period of prosperity for which it is impossible to find a precedent. This golden age of prosperity ended in the 1970s, but since the mid-1980s the leading industrial market economies have again experienced a period of growth. Either the social institutions that protect capitalism did not erode as Schumpeter expected or their erosion did not prevent capitalism from growing.

Although the viability of capitalist economies may be undisputed and socialist economies have failed to become a convincing alternative, it is imperative to reconsider Schumpeter's problem. Even if the industrial market economies prove to be capable of sustainable growth, it cannot be denied that this growth causes serious problems in the environment of the economic system, of which the destruction of nature is only the most obvious example. The impairment of the social and natural environment by economic growth may have repercussions on the functioning of the economy. Sociological theory must face the possibility that the economy affects its environment in a manner that makes it difficult or impossible for the economy to reproduce itself in this environment. To study the repercussions of the future prospects of industrialized market economies, a Schumpeterian framework is more apt than a Marxian one. However, two important modifications of Schumpeter's framework must be made. First, it is necessary to give up the capitalism-socialism dichotomy; socialism is in no sense the future of capitalism. Second, we must strictly separate the idea that a successful capitalist economy may endanger itself through the negative consequences that it sets off in its environment from the idea of a "general economic collapse" (Luxemburg 1937).

Insofar as the framework of the following analysis differs from Schumpeter's, it is because I assume that the viability of capitalism can be ensured by structural changes. This assumption does not serve to deny that capitalism is prone to crises. Quite the contrary. However, these crises cannot be identified with the total dissolution of the existing order or with the idea that the existing order will be replaced by an entirely different order in a way that is comparable to the transformation from feudalism to capitalism. Rather, I conceptualize crises as situations in which tensions that are inherent in the system have developed to a point where the system's central features can no longer be maintained. The structure must be transformed, but the direction of the transformation is uncertain. If we understand a crisis to be a phase of restructuring whose outcome is uncertain, this enables us to both reckon with a new prosperity and acknowledge the inherent tensions in the system. In any case sociologists should avoid forecasting with certainty the breakdown of the capitalist economy. The immense flexibility, adaptive capacity, and innovative potential that capitalist economies have a displayed since World War II should prevent us from rushing to any doomsday conclusions.

I would like to approach my main question by dividing it into three parts:

1.     What does capitalism mean?

2.     What is capitalism's central problem?

3.     Is there a solution for capitalism's central problem or will it finally collapse?

I argue that capitalism increases its viability by integrating elements that are alien to its pure form.

2. The Meaning of Capitalism

It is often asserted that the decisive feature of capitalism is that the means of production are controlled by a small group called capitalists, and that the majority of the labor force is forced to sell its labor power to the owners of the means of production in order to earn a living. Thus capitalism means the separation of the worker from the means of production. However, one may ask whether an approach that focuses on the conflict of capital and labor is not too simplistic a conception of the fundamental change that occurred during the "great transformation" (Polanyi 1957). Even if one accepts the notion that the control of the means of production is the decisive feature of the capitalist economy, it is still not clear that this description is a complete characterization of the structure of modernity. In practice the sociological theory of modernity may be read as a critique of the attempt to root the theory of society in a theory of the economy (Luhmann 1986). Taking these objections into account, I interpret the rise of the capital-labor relationship as an essential factor within the broader process of modernization. But what are the main features of this broader process?

Marx himself described modernization as a process in which the economy is set free from traditional bounds and gains autonomy. His successors did little more than work out the different aspects of this Freisetzungsprozess (process of setting free) that are constitutive for modernization. In traditional societies "the economic system was submerged in general social relations … the self-regulating market was unknown; indeed the emergence of the idea of self-regulation was a complete reversal of the trend of development" (Polanyi 1957, 67). The autonomy of the economy from the rest of society is essential for modernization. To be sure, other spheres of modern society—the state, law, science, etc.—also became relatively autonomous. For this reason I believe it is unnecessary and futile to look for a dominant structure in history. The separate spheres of politics, law, economic science, and the like cannot be deduced from the "principle of value" (cf. Sieferle 1984, 22). But these spheres differ in the degree to which they achieved autonomy from the rest of society.

Three features characterize the rise of the capitalist economy as a process of Freisetzung: first, the separation of society into an economic and political sphere, second, expanded reproduction (that is, ceaseless accumulation), and third, the dissolution of "communities" and "worldviews."

1.     The characteristic feature of capitalism as an economic order is the liberation of economic activities from political patronage. In the course of the transition from feudalism to capitalism the economy is detached from the social order, the core of which is political authority. The separation of economic functions from the broader social context has become the model of modernization as a whole. In sociological systems theory this process has been called "functional differentiation." Western Marxism also treats this differentiation as the separation of the economic from the political sphere. The economy did not exist as an independent structure, that is, as a sphere of trade and acquisitive activities, until this separation. The emerging acquisitive society was a "free" society in the sense that economic activities were no longer fused with political concerns, as had been the case in mercantile societies. Producers in the economy were now free to focus entirely on their economic functions. This freedom meant that capitalist firms no longer based their production decisions on external (political) interests. Rather their production decisions were based on the norms of economic rationality (Weber 1972, 79).

2.     Rational capitalism is not characterized by the pursuit of profit as such. We also find this in traditional societies. It is also not characterized by the appropriation of a surplus, which occurs in earlier modes of production, too. Rather, capitalism is characterized by the reinvestment of the appropriated surplus. "What is different about capitalism as a surplus-generating system is that it is the only system that invests its surplus, not in articles of personal or public luxury and adornment, but in the means to achieve more wealth" (heilbroner 1982, 35). The business of the entrepreneur is to invest this surplus. The wealth of the societies dominated by the capitalist mode of production is entirely based on the fact that capital accumulates. If the reinvestment of surplus is to take place continuously and in a rational manner, then wage labor is needed as a precondition of accumulation. Marx described this built-in coercion of capitalist systems to accumulate as a self-determining process. In the chapters on expanded reproduction in capital, Volume 2, Marx (1970) analyzed the economy of modern society as a closed, self-referential system  reproducing its elements by means of those same elements (cf. Luhmann 1984b, 315; Maturana 1979). Marx chooses the commodity as that basic element, unlike Luhmann, who designates payments to be the basic elements of the economy. If Marx is correct, the essence of a capitalist economy can indeed be characterized as the "production of commodities by means of commodities" (Sraffa 1960). Such a system is self-referential: accumulation takes place for the sake of accumulation, and it is closed in the sense that it reproduces the elements of which it consists. Thus the coercion to accumulate characterizes the mode of operation of an "autopoietic" system, that is, a system whose reproduction is based on the production of its elements with the help of a network of those elements.

3.     The dissolution of existing worldviews and communities is a manifold process. At least three different aspects should be distinguished.

(a)     The rationalization of worldviews (see Habermas 1981a) is a process that leads to the end of a unified metaphysics in the transition from the old to the modern world. As a result of this rationalization, the cultural value-spheres of science, morality, and art became separated. Since this time, there has been no unified belief system; at least three different belief systems have taken the place of the former metaphysics. "Since the 18th century," Habermas writes, "the problems inherited from these older worldviews can be arranged so as to fall under specific aspects of validity: truth, normative rightness, authenticity, and beauty. They could then be handled as questions of knowledge, or of justice and morality, or of taste" (1981a, 8). Whereas the philosophy of old Europe accommodated a "uniform" and "closed" society, capitalism is characterized by diverse, complex systems of belief, quite different from the unified ones in old Europe. Perhaps Lukács, in his theory of the novel ([1920] 1971) delivered the most impressive description of the "compact" world of classical antiquity and the Middle Ages. This compactness disappears when capitalism invades premodern societies. The rise of capitalism effects an opening of those closed worlds in both spatial and, above all, temporal respects. Before the rise of capitalism there is no open future.

(b)     Modernization is not limited to the emergence of separate subsystems, such as the economy, with specific functions. Of equal importance is the tendency for the "system" and the "life-world" to diverge (Habermas 1981b). In the course of modernization the sphere of (bourgeois) society is set free from "communal" ties. But in the very same process the meaning of "community" changes. Habermas's life-world concept stands for the same phenomenon  that Parsons referred to as "societal community" and that Tönnies was trying to get at in his distinction between "society" and community." Tönnies remarked that not social life per se but communal social life vanishes and a new social life develops (1982, 38). In sociological systems theory this process has been described as the uncoupling of society from its interactions (Luhmann 1984a). Undoubtedly there is already some difference between society and its interactions in primitive society, but the gap increases in the course of development; with the French revolution the existence of the gap became obvious. Since that time the belief that society is controlled by personal interactions has turned out to be illusory (Luhmann 1984a, 577, 579). The communications that are part of daily life are subject to principles and normative orientations that differ from communications in the functionally differentiated subsystems of society. In modern society normative orientations, which may be predominant in interactions, diverge as a rule from the dominant values and orientations of actions in the field of science, the economy, and politics (Luhmann 1975). In the modern economy the separation between society and its interactions amounts to the detachment from normative contexts the market becomes an "impersonal order"; it is not an accident that such different thinkers as Marx and von Hayek use term to describe the essence of the market order. Markets are distinguished from other realms of society by the fact that they only need a minimal morality to function. In Streissler's words, the market is an economic mechanism that could function even among devils (1980).

(c)     Capitalism leads to the disintegration of all forms of communal life. The classical description of this process can be found in Marx's Grundrisse (1973). In the famous chapter on "forms which precede capitalist production" (1973, 471–79, 483–514) Marx outlines a discontinuous view of historical evolution that differs radically from the evolutionary scheme he posits in the Foreword to a Critique of Political Economy (1969), which places capitalism on a continuum of forms of society that stretches from slavery to socialism. Capitalism involves a fundamental structural break in history. This break may be characterized as a switch from a "natural" (naturwüchsig ) to a "pure" mode of social integration (Breuer 1983). Through this decisive shift in the mode of social integration, all social structures become contingent. Because each social phenomenon in modernity is "made" or "produced" (gesetzt ), it can in principle be arranged differently (see Touraine 1977).

Having distinguished between the three essential features of modernity, the question arises whether these features have a common root. I believe that this common root is the "liberation from the past," which results in the autonomy of the components of a modern society. A modern society differs from a premodern one in that there is no longer a social bond that keeps the parts of society from drifting apart. In premodern societies community acted as that social bond. Certainly community has not vanished in modern society but it has become another subsystem. To belong to a community today is not an all-embracing process that leaves little room for individuality. On the level of individual behavior this change in the "status" of community is reflected in an increase in the number of "options" and a decrease in "ligatures" (Dahrendorf 1979). During the transition of modernity the cultural net that held together different activities in traditional societies starts to disintegrate. In modern societies a comparable core of normative values that restricts the range of options does not exist.

In the economic realm Marx's concept of the "self-valorization of value" as a "ceaseless movement" had already formulated the fundamental process by which the economy was being freed from traditional life-orders. "All that is solid melts into air." This short sentence from the Communist Manifesto captures the essence of modernization (Berman 1982). But it would be misleading to regard this process exclusively as a negative one; on the level of society as a whole modernization means not only disintegration but also the development of productive forces, the increase of adaptive capacity, and the like. Moreover, on the level of the individual it means emancipation and self-development.

3. The Central Problem of Capitalism

Political economy examines the problems of capitalism that result from its inner weaknesses and instability. Unlike the crisis-theoretical approach of political economy, a theory of self-destructive tendencies (á la Schumpeter) emphasizes that the decisive problems of capitalism result from its continuing stability and strength, which is, for example, demonstrated by its ability to penetrate preexisting forms of social life. Although one may question whether the history of capitalism is the history of progress, obviously this mode of production is evolutionally superior in the sense that it substitutes for premodern forms of economic organization and that socialism is not a stable or promising alternative to it. If one follows this line of thought, the "contradictions" that are capable of endangering the advanced capitalist economies—if they exist at all—do not stem from the weakness but from the strength of the economy. From this point of view a capitalist economy generates systemic problems primarily by its functional efficiency and success, not by its functional deficiencies.

I have been arguing that the evolutionary core of the "great transformation" consists of a process of "freeing," "becoming autonomous," and "achieving independence" from different components of social life. Polanyi summarized this development with his concept of "disembeddedness." Only a disembedded social system is able to mobilize the energies needed to penetrate and disintegrate all given forms of social life, be they communities, life-worlds, worldviews, etc. The question is, How can one show that a mode of production based on Freisetzung contains self-destructive tendencies?

The only way to identify such self-destructive tendencies is to show that when capitalist economies are set free from normative bonds and instead pursue their own expansion, they destroy the preconditions for their functioning. These preconditions are located in the natural and cultural environment of the capitalist system. Insofar as a capitalist system does not keep within "reasonable" limits, it endangers itself by endangering its environment.

This argument is pitched at a very general level. The general idea that expanding markets destroy the resources on which a market economy relies is one of the most fundamental contributions of social theory to the analysis of the functioning of a market economy. But to point to this feedback loop is not sufficient to demonstrate that the destruction of the environment of a capitalist economy threatens its reproduction. To make the argument compelling, one has to demonstrate the mechanism by which such a self-threatening situation can evolve. A lot much happen before a robust economy is endangered. Given that the fundamental problem of a capitalist economy is not its inner weakness but its strength, in principle such a situation can only evolve if (a) a capitalist economy is crucially dependent on external resources and (b) these resources are being exhausted by capitalist growth.

Apropos the first issue, the radical ecologists contend that capitalist systems expanded in the past only because they found a variety of previously undiscovered natural resources (Immler 1989). But this interpretation may be disputed. It conflicts with the view that capitalist expansion is caused mainly by endogenous factors. This view is held by mainstream economics and even the neo-Ricardian interpretation of Marx does not deviate very much from it, stating that surplus labor "can play no essential role in the theory of why profits are positive" (Steedman 1977, 50). According to this view the viability of the capitalist economy relies on its productivity. An economy is productive if it produces more commodities than it consumes. Mainstream economics maintains that the productive quality of the capitalist system is owing to its technology. Neo-Ricardians add, And to the level of its real wages.

Apropos the second issue, the main problem consists in specifying the limits beyond which the destruction of external resources endangers the reproduction of the economy. Self-destructive tendencies can remain unnoticed for a long time because they vary with the ability of the environment to cope with impairments, not with the adaptive capacity of the system. Provided that one can quantitatively specify the amount of pollutants nature can cope with, these quantities need not indicate a limit for the functioning of the economic system producing this pollution. Before the natural limits to growth are attained, presumably normative limits make themselves felt. Whether and to what degree the destruction of the natural environment has repercussions on the functioning of the economy largely depends on a collective decision about the normative issue of how much pollution a society is willing to accept.

But attempts to substantiate the idea that the ongoing destruction of nature "in the long run" will impair the functioning of the economy have to take into account not only the indefiniteness of objective limits to the destruction of nature but also the problem that the economic system—as far as the consequences of the destruction of the environment are concerned—is less sensitive than other parts of society. Public opinion, new social movements, and the societal community react with more sensitivity to ecological issue because a central value of those systems, the quality of life, is endangered by the deterioration of the environment. That ecological issue lack resonance (Luhmann 1986) in the economic system is mainly the result of the fact that the economic system succeeded in realizing a high degree of autonomy vis-à-vis its environment. It disposes of a system-specific meaning of action—the provision for future needs—a system-specific criterion of selection—efficiency—a system-specific medium of communication—money—and a system-specific code—the price system. These system-specific features, which underline the stable expansion of the economic system, may also explain why the economy tends to perceive environmental problems in a distorted way. For instance, the "language of prices" (Luhmann 1983) can comprehend problems that arise from the exhaustion of natural resources only if these resources have a price and even then it can only map the price aspect of the problem in question.

So far I have discussed the question of whether the destruction of external resources may impair economic expansion only with reference to natural resources. I left aside the destruction of normative and cultural resources and the possible repercussions of their destruction on the economy. Hirsch (1976) has studied the "depleting moral legacy" of capitalism. He regards the market system as an attempt "to erect an increasingly explicit social organization without a supporting social morality" (1976, 12). According to Hirsch the

social morality that has served as an understructure for economic individualism has been a legacy of the precapitalist and preindustrialist past. This legacy has diminished with time and with the corrosive contact of the active capitalist values…. The system has thereby lost outside support that was previously taken for granted by the individual. As individual behaviour has been increasingly directed to individual advantage, habits and instincts based on communal activities and objectives have lost out. (1976, 117–18)

As Hirsch emphasizes, welfare losses and increasing difficulties in managing capitalist economies are the direct consequences of the weakening of traditional social values.

Although Hirsch's argument is appealing, I do not propose to discuss it at length. The only point I want to make is that in order to study the repercussions of the exhaustion of external resources on the economy, it is reasonable to give ecological arguments preference over moral ones. The main reason for this preference is that a capitalist order not only destroys the moral order it has inherited from the past but also creates a new one resting on capitalist foundations. As Axelrod (1984), for instance, has shown, self-interest may act as a source of cooperation. Whereas a capitalist order can create a social morality that is capable of supporting the functioning of the system, the same is not true for natural resources. The economy may lower its consumption of natural resources and there may be substitutes for them, but no economic system is able to create them. Thus there is a strong case for focusing on ecological problems if the fundamental problems of a capitalist market economy, which are connected with its strengths and not its weaknesses, are at stake.

To summarize, in order to make the search for possible solutions to the ecological problem an imperative, it is only necessary to make two assumptions:

1.     An expanding economy is capable of destabilizing nature. It is not necessary to assume that its expansion relies on the exploitation of natural resources.

2.     There is a need for action even though the economy may be less concerned by the consequences of the destruction of the environment than other social systems, for example, the societal community.

4. Possible Solutions

If we assume that the ecological problems arising from the "ceaseless movement of accumulation" supersede the problems occurring on the labor-capital front, then the key question is whether this accumulative movement can be restrained and made sensitive to its side effects. A satisfying answer to the question of which strategies are successful in steering an economy towards a path of no or less harm to the ecology would require an examination of the different steering mechanisms a modern society dispose of (markets, the state, community, corporations, etc., see Streeck and Schmitter 1985). This task, however, is far beyond the objective of this chapter. I confine myself to some sketchy remarks on the question of whether democratization could help. I also want to point out that self-control (self-regulation) and an increase in self-responsibility seem to be a promising way to cope with the ecological problem.

In a stimulating article on the reasons why "big rare whales still die," Gonigle (1980) describes the conflict between ecology and economy as the consequence of the "economizing" of the ecology. For him ecology means more than merely the protection of the natural environment. "Economy" and "ecology" stand for different sets of "decision rules." The difference between the two sets of decision rules is defined by the different time horizons each implies. Because they provide for future needs, economic decisions are directed to the future (Weber 1972, 31, 35). But their time horizon is restricted to the short term. Long-term problems are not considered in rational investment decisions. The investor, neglecting the future, pursues a strategy of maximizing returns, even if this leads to the exhaustion of the natural resources on which he depends. In contrast to economic decision making, ecological decision making acknowledges that the earth has to be preserved for future generations. Therefore, present needs have to be weighed against future ones. From the ecological point of view economic behavior can be regarded as an attack of the present on the future. In terms of economics market allocation is suboptimal in intertemporal and intergenerational respect.

In its evolutionary aspect the main problem of the economic mode of decision making is that it threatens the balance between economy and ecology. For this reason it is short-sighted to regard the transition to socialism as a solution to this problem. This distinction between capitalism and socialism does not capture the essence of the problem. Gonigle sees the extermination of big whales as connected with the general problem of the lack of integration between the economic system and its natural environment. For him the solution to the problem lies in the politics of ecological transition. The result of such a transition would be the institutionalization of a radically changed mode of decision making. Gonigle describes this in conventional terms as "democratic" decision making that should take into consideration the interests of the natural environment. But Gonigle does not explain what he means by "democratic." Usually, democratic decision making is identified with the participation of the workers in the investment decisions of the firm. Following this conventional definition, one would have to explain how the participation of the workers is necessarily a means to integrate the interest of the natural environment. Quite the opposite can happen. The postwar growth of the European welfare states was based on a capital-labor accord that included the reckless disregard of the consequences of growth to the natural environment.

The problem of how to control ecological risks in decision making leads to a more emphatic and more radical idea of democratization. This idea is present in Marx's projection of a postcapitalist type of association that enables people to control their Lebenszusammenhang (social life) instead of being controlled by it. Heilbroner, with reference to Branko Horvat's book. The Political Economy of Socialism, describes this radical democratization of decision making as the "complete lodging of decision making and responsibility for the labor process in labor, and the complete lodging of political responsibility in citizens" (1982, 39). Considering the degree of differentiation in modern societies, it is unclear what type of institutional change would be required to effect such control. It is not enough to refer simply to the principle "only the persons concerned ought to decide" as a general rule for decision making. This rule is impracticable because one cannot separate the persons concerned from the persons not concerned. Who, for instance, is affected by an economic decision? Moreover, this rule could be repudiated for normative reasons, not to mention the decline of efficiency it would probably cause.

If we want to minimize ecological risks, more than a vague appeal to democratic decision making is required (cf. Perrow 1984). We must explore the available strategies to sensitive the economic system to the destructive consequences that "ceaseless accumulation" has on the environment of the system. The recent literature on control strategies and social planning attempts to explore the potential of institutional change by "self-control" (Selbststeuerung ). Self-control replaces state intervention, but it is not the same as deregulation. Under self-control the political system helps to increase the capacity of the economy to organize itself. The principle of self-control may be summarized as follows: the economy is restructured in a way that enables it to become aware of the side effects of economic decisions in the environment of the economy. As the capacity of self-control increases, the economic system stops maximizing efficiency without regard to the environment: the standards of a healthy environment are taken into account in economic decision making. By this measure, the purposive rationality of economic decision making is increased insofar as the purposive rationality of decisions depends on the capacity of a system to be aware of the consequences of its actions.

These consequences may be indirect, remote, or noneconomic in nature. To internalize standards of rationality that include the environment does not imply giving up in toto the pursuit of self-interest or of system-specific goals. Rather it means that these goals must be pursued in such a way that the side effects of pursuing these goals are taken into account from the beginning (Teubner and Willke 1984).

Each reorganization of the economy that is based on self-control amounts to an increase in the perceptive faculty of the economy. One possible way of attaining the required institutional change is to monetarize the ecology, that is, ecologize the economy by economizing the ecology. As long as nature is a free good, rational decision making has to treat is as such.

One must not confound this opening of the economic system for environmental problems with "dedifferentiation." Dedifferentiation occurs if the economy pursues noneconomic goals (for example, education). In contrast, to include environmental effects in economic decision making does not concern the functional specialization of the economic system. Rather it concerns the autonomy of the economic system. A model for the opening of the economy to its environment is social policy. Heimann ([1929] 1980) describes the principle of social policy as the realization of social welfare ideas in capitalism against capitalism. Social welfare ideas are inherently anticapitalist insofar as their realization amounts to the revolutionary restructuring of the capitalist economy. However, the implementation of social welfare ideas stabilizes demand and attenuates opposition to the capitalist order. Thus social welfare ideas contribute to the survival of capitalism, and social policy is at the same time both revolutionary and conservative (Heimann [1929] 1980).

One can now argue that the politics of realizing ecological ideas in capitalism against capitalism is analogous to Heimann's definition of the contradictory nature of social policy. Provided that ecological politics finds normative consent, the most important question is whether ecological ideas should be realized by means of external control or an increase in the spontaneous self-control of the economy. In the latter case "control" means to increase the empathy of the system and to bind its autonomy by "heteronomizing" it. As a result, an ecologized economy would prevent both the further deterioration of the natural environment and the disintegration of life-spheres. Such a transformation to an ecological economy would imply a rearrangement of the relationship between the economy and the other social orders. It would also allow a greater variety of modes of production and life-styles. In this manner "reflexive" types of control are compatible with the autonomy of the economy. By reflexive types of control, I refer to the types of control that reflect the negative consequences of system operations on its environment. Because of reflexive types of control, a system becomes aware of the disturbing effects of its operations; this awareness is a necessary precondition for the readiness to decrease the level of such effects.

I argue that autonomy (a lack of common bonds) is, on the one hand, a necessary condition for the efficiency of the economy and, on the other hand, leads to a neglect of the environment. Therefore, skepticism vis-à-vis the possibility of an ecologically sensitive capitalist economy is advised. One can certainly argue that given the self-referential mode of operation of the economy, reflexive forms of control are rather improbable. In my opinion, at least two preconditions must be fulfilled to render self-control effective:

1.     Governments must give priority to environmental policy, and

2.     Social movements that are trying to win influence over economic decision making by means of public discourse must exist.

However, in order to ensure that the environment appears on the "screens" of the subsystem, it is worthwhile to make use of the medium specific to the particular subsystem. In the case of the economy this medium is money.

As recent ecological catastrophes have repeatedly demonstrated, there is still a crucial lack of self-control and reflection. But does the autonomy of the economy necessarily imply its inability to learn? If the answer is yes, then the question of capitalism's survival turns into one of whether capitalism can ride out a political discussion about the costs and benefits of a type of production that purchases growth by destroying the environment; not much imagination is needed to depict a situation in which the refusal of the economy to take ecological concerns into account renders state intervention which restricts the autonomy of the economy inevitable.

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