With this piece, I want to sharpen my critique of capitalism in the context of urgent crises such as climate change, inequality and ecological damage. It draws on works such as “Less is more” and “Marx in the Anthropocene”

From my work as a designer, I know that a good understanding of the problem also reveals the solution. My intention is not to offer a solution, but to build context as I read about different ideas that could solve the multifaceted crisis.

It’s important to emphasise that criticising capitalism doesn’t mean endorsing failed authoritarian systems. As someone who lives in Estonia, which was formerly occupied by the Soviet Union, I’m aware of the tendency to equate criticism of capitalism with support for communism.

I don’t believe that we can replace one flawed system with another extractive system.

Capitalism is anti-democratic

The fundamental problem with capitalism is that it’s anti-democratic. While we have political systems with elected leaders, real power lies with the tiny percentage of people who control capital.

The wealthiest 1% with excess capital to invest makes investment decisions shaping our collective productive capacities. They make all the crucial decisions about where resources are allocated and what gets produced.

This wouldn’t be a problem if the profit motive aligned with human needs and ecological sustainability.

Consider this.

We have the technological capability to rapidly transition to clean energy and mitigate the worst effects of climate change. Yet, capital continues to flow into fossil fuels, SUVs, private jets, and other polluting industries—not because these are what humanity needs most, but because they’re more immediately profitable.

People fear that a post-capitalist economy would be totalitarian, but they fail to recognize the totalitarian aspects of the existing system. We know where the money should go to satisfy human needs, but the logic of capitalism overwhelms these considerations.

Capitalism is inefficient

One of the supposed virtues of capitalism is its efficiency. We are told that the invisible hand of the market allocates resources better than a central planner ever could. But if we take a closer look, this efficiency argument falls apart.

Take automation, for example.

If automation makes it possible to produce the same output with half the workforce, this leads to layoffs, not a reduction in working hours.

The free market then creates new jobs by creating a demand for products we didn’t know we needed. This leads to unnecessary production, resource depletion and environmental damage.

This example illustrates that capitalism proves to be inefficient in three ways:

First, technological progress does not improve the quality of life of workers in a capitalist system. Instead of using productivity gains to reduce working hours and improve work-life balance, the pursuit of profit leads to layoffs and job insecurity.

Secondly, new jobs are often created through artificially created demand or commodifying non-commercial aspects of life. This leads to unnecessary production that wastes resources and harms the environment just to create new opportunities for profit.

Ultimately, this dynamic leads to a “treadmill effect” where everyone does more and more, produces more and more, but achieves less and less satisfaction. It’s a system that prioritizes endless growth over human well-being and environmental sustainability.

To summarize, capitalism is inefficient when it comes to achieving human satisfaction and well-being, managing finite resources and ensuring justice for large segments of society. These inefficiencies are not bugs, but features of a system driven by the imperative of capital accumulation.

The GDP obsession

Speaking of GDP, our fixation on this single metric as the primary measure of economic success is the clearest example of capitalism’s misaligned incentives.

First, GDP doesn’t distinguish between beneficial and harmful economic activities.

GDP is an aggregate production indicator that summarizes everything the economy produces in a single, metric based on prices. Therefore, one million euros spent on healthcare counts the same as one million euros spent on tear gas.

Unpaid labor, environmental degradation or income inequality are not taken into account, and yet it is the standard for measuring national success.

Secondly, the pursuit of GDP growth by wealthy countries conflicts with the urgent need to reduce carbon emissions.

It is technically possible and is happening to decouple GDP growth and carbon emissions, but the current pace in high-income countries is not compatible with the decarbonization needed to meet the agreed Paris climate goals. In addition, increasing material consumption is driving biodiversity loss.

Companies do not produce money, they produce THINGS. Saying we need to increase growth (increase production) to fund green production is like saying we need to increase production of SUVs, fast fashion and private jets to increase production of solar panels and public transportation.

This is clearly absurd

The overwhelmed state

The logic and imperatives of capitalism are so powerful that they overwhelm the ability of governments to regulate the economy and protect the public interest.

Even small dips in economic output have serious social consequences, such as job losses, homelessness and food insecurity. In a capitalist system, growth is the main solution to unemployment.

Governments prioritize short-term growth over long-term sustainability and are afraid of minor economic downturns and their political consequences.

The result is a “capitalist realism,” a sense that there is no alternative to our current system, despite its flaws, as cultural theorist Mark Fisher put it.

Why capitalism can’t address the crisis

The climate crisis is a chronic problem that will worsen in the future, with far-reaching consequences:

  1. The frequency and severity of natural disasters such as hurricanes, floods, droughts and forest fires will increase.
  2. Food and water shortages due to changing weather patterns and environmental degradation.
  3. Accelerated inflation, affecting basic needs in particular and further exacerbating economic inequality.
  4. The disproportionate impact on poor countries leads to severe socio-economic problems and political instability.
  5. Increase in climate refugees fleeing uninhabitable areas to more stable regions.
  6. Host countries such as the USA and European states take defensive measures against the influx of refugees.
  7. Increase in right-wing populism and xenophobia as a reaction to the perceived threat to national identity and resources.
  8. Erosion of democratic values and institutions as societies struggle with these complex challenges.

This situation creates a multi-layered crisis: capital accumulation, climate crisis and democratic crisis. Since capitalism cannot overcome these crises, it’s untenable to continue with the same approaches.

And why is this the case?

Capitalism prioritises profit and growth over protecting people’s lives and satisfying their desires. Individuals are only “important” to it if they contribute to making more profit.

Growth has reached a point where it’s no longer productive or efficient because it can be achieved by sacrificing human lives and destroying the planet.

Where do we go from here?

I don’t claim to have all the answers, but I’m determined to continue my exploration of alternative economic models that can address the interlinked crises we face. Books such as “The Future is Degrowth”, “Climate Change as Class War” and “Half-Earth Socialism” offer promising ideas, and I’m eager to delve deeper into these and other perspectives.

Ultimately, I believe that achieving ecological stability and social justice requires a fundamental rethink of our economic system. A rational, democratic economy that prioritizes positive social and environmental outcomes over endless growth is not only possible, but necessary.

We just need to answer the following “How might we” questions: