The prevalence of hybrid systems
Although during the Cold War (1945-1991), it became common to divide the world into capitalist and communist camps, with the former comprising democracies and the latter comprising dictatorships, the reality has always been more complex. Not only were there many “non-aligned” countries and governments (among which India and Indonesia) that did not want to choose between these camps. However, many Western countries, especially in Europe, developed capitalist systems with what can be called “socialist characteristics,” such as public ownership of large industries, natural resources, and public housing. In large part, this was a reaction to the disastrous socio-economic and political consequences of unbridled capitalism that led to World War II.
Therefore, in many countries, governments adopted some kind of hybrid economic system, combining capitalist and socialist elements. Moreover, these mixed economic systems were implemented in countries with both (more or less) liberal-democratic or authoritarian political systems. Thus, in reality, there was a wide variety of hybrid political-economic systems (mixed economic systems combined with different types of political systems) around the world, rather than the “two camps” classification, which conflated political and economic systems, allowed for. It was only when, in the course of the 1980s and 1990s, neoliberalism became the globally dominant ideology that many mixed (capitalist-socialist) systems cast off most of their socialist characteristics. But although many countries reverted to “purer” capitalist economic systems, these continued to be combined with more or less democratic or authoritarian political systems. This defied the expectations of many political theorists, who believed that the introduction of neoliberal capitalism would lead to the adoption of liberal-democratic institutions. In reality, the return (and often imposition) of cruder forms of capitalism, along with the economic and social suffering this caused, led to growing support for authoritarian and populist leaders and regimes. However, in some countries, including the United States, these developments have also led to a revival of support for socialism, notably democratic socialism.
A Tale of Two Hybrids
To assess the merits of hybrid political-economic systems, it is essential to examine their past and potential environmental performance more closely. I have done so on two other pages. First, the Social Democracy page examines the environmental performance of social-democratic (“democratic-mixed”) systems. Social democracy has often been credited with bringing about an unprecedented improvement in the living standards and social welfare of most people in predominantly Western societies over the three decades following World War II. But whether or how these systems also had a strong capacity and willingness to deal effectively with the environmental challenge is a less explored question. Second, the Post-Mao China page examines China’s environmental performance, notably since the introduction of capitalism in the late 1970s. Like social democracy, China’s approach is often credited with an admirable socio-economic record that has lifted millions of people out of poverty. Both social democracies and China have been (and are still) held up as models of successful political-economic systems that have a good capacity to be greened, and thus able to achieve two important goals: economic prosperity and environmental protection.
The main difference between the two types of system lies in the political realm: an adherence to liberal-democratic principles in the case of social-democratic systems, and the alleged superiority of authoritarian political systems in terms of their ability to adopt the necessary policies and measures to achieve the transition towards sustainability. These contrasting approaches could be portrayed as a contest, albeit that some may argue that there is no contest as social democracy is dead. However, ideas never truly die, and the notion that capitalism can be managed democratically and sustainably has not entirely disappeared.
A key issue in this contest is whether either or both of these systems have been able to transform capitalism in a way that it is no longer inherently incompatible with long-term environmental protection. If capitalism is inherently incompatible with environmental imperatives, as I have argued, the economic systems under consideration here must have abandoned or changed some or all of their key features so that infinite economic growth is no longer an imperative. Arguably, this might have been (or be) achieved by the adoption of (some of) the features of a socialist system (such as rational planning), which have made that capitalist imperative redundant and unnecessary. Moreover, to claim that it is environmentally sustainable, such a hybrid system must have fundamentally altered the inherently unsustainable system of industrial production.
The Broken Promise of Social Democracy
Social Democracy was based on the belief that better societies (notably for the working class) can be achieved within the context of a capitalist economic system. For some 30 years after WWII, in many Western countries, it managed (or assisted in the management of) capitalism very successfully, delivering high rates of economic growth, economic stability, (near) full employment, rising standards of living, and building expansive welfare states. Arguably, the main achievement of social democracy was that it created public faith in the role and importance of the state as a protector and promoter of the common interest.
While this could be taken as an indication that social democracy would or should also assign high priority to environmental protection, this was not borne out by actual developments. When the inherent contradictions of capitalism reasserted themselves, social-democratic parties and leaders were among the first to adopt neoliberalism, to restore economic growth, even at significant social and environmental costs. Thus, social democracy lost much of its reputation and credibility as a superior political-economic system for creating a better societies, having allowed or even facilitated a sharp increase in inequality, the dismantling of welfare states, the gutting of trade unions and workers’ rights, and the return of poverty, begging, and social social suffering.
In the late 1990s, this idea of a “Third Way”, a new version of social democracy, gained some popularity in academic and political circles (for instance, from Anthony Giddens, Tony Blair, and Bill Clinton. However, this new version of social democracy remained well within the newly dominant neoliberal paradigm. It did not fundamentally challenge capitalism, which was seen as the only “realistic” economic system. Having accepted the primacy of capitalist imperatives over common social and environmental interests, and not questioning industrialism as the dominant system of production and consumption, social democracy does not offer a programme for fundamental change aimed at rooting out the causes and sources of the inexorable process of environmental destruction.
A Chinese model?
While capitalism and neoliberalism continued to embed most liberal-democratic and authoritarian political systems, in China, capitalism remained embedded in the political system. China’s economic success is often attributed to the fact that the Chinese state has continued to play a leading role in the economy, both through strategic ownership of key industries, maintaining control over the financial sector, and active intervention (among other measures, through public investments). This approach, sometimes referred to as “Capitalism with Chinese Characteristics”, is often mentioned as an example or model of state-led capitalism, in part because it has allowed China to protect its economy better than many other countries from the global financial-economic crisis of 2007-2009. Thus, China’s political-economic system is often mentioned as an example or model of state-led (embedded) capitalism, arguably even more effective than social democracies have been.
However, China’s approach is also predicated on the primacy of economic growth and industrialism as the keys towards a better society. This has come at great environmental cost, in part due to the sheer scale of development and its impact on the rest of the world. The authoritarian nature of the political system (also at the local and regional level) does not allow environmental advocates to press hard for the mitigation of those costs and effects, let alone to bring a halt to environmentally damaging projects and activities. Like all other political-economic systems, China remains committed to economic growth and industrialisation as pathways to a better society. It is trapped in an authoritarian semi-capitalist system in which only technological solutions that do not upset the existing political-economic structures (notably the sovereignty of the CCP and its role in the management of capitalism) are deemed to be acceptable.
A Future for Hybrids?
In the 2010s, with the high tide of globalisation (global free trade and investment) receding, many countries began to reassign importance to rebuilding their own (national) industries and economies. The scope for “bringing the state back in” increased. In this respect, as discussed above, China is often referred to as a model, be it, in my view, not a very credible one. At the same time, in many countries, social democracy has died or is in its death throes, with social democratic parties fighting for their survival. Whether it can be brought back to life or regain strength is very uncertain.
Meanwhile, capitalism and neoliberalism continue to embed both liberal-democratic and many authoritarian political systems. However, in the 2010s, with the high tide of globalisation (global free trade and investment) going out and public discontent and disillusion about the prevailing political parties and systems fueling the support for populist leaders and nationalism, many countries and governments began to reassign importance to rebuilding their own (national) industries and economies. This increases the scope for “bringing the state back in” and for experimenting with new forms of economic management aimed at advancing socio-economic well-being and environmental protection within each country’s borders. As I discuss on the Global Transformation page, prioritising fundamental political-economic change at the national level is not only desirable but also the most realistic and promising approach to transformative change at all levels. Most likely, political-institutional change will need to be the first step in that process.
As noted above, a key finding of the analysis of the experiences of hybrid systems (both social democracies and China’s hybrid system) is that neither of these systems has been able to transform capitalism in a way that it is no longer inherently incompatible with long-term environmental protection. Neither social democracy nor post-Mao China has been able to achieve this. Social democracy remained, and China became hooked on capitalism as the motor of economic growth, which has remained the foremost political priority as it is perceived as the primary means by which all other goals can be advanced. Additionally, neither hybrid system questioned industrialism as the essential basis for the mass production of all goods and services considered necessary for “the good life”. Any initiatives towards creating new hybrid systems would do well to take these findings to heart.
Conclusion
To conclude, no actually existing political system (whether democratic or authoritarian) that has adopted a mixed (capitalist-socialist) system has proven to be capable of effectively addressing the environmental challenge, as they failed to fundamentally transform capitalism and the (industrial) production systems in ways making them compatible with environmental imperatives. One might argue that these experiences do not offer conclusive evidence that taming and truly greening capitalism is not theoretically possible but, as I argued on the Greening capitalism page, if capitalism is inherently incompatible with long-term environmental protection, it is more than likely that its core elements cannot be fundamentally altered without creating a different system, a system that can no longer be called capitalist.
On the page socialism and the environment, I concluded that, at a theoretical or ideological level, there are no reasons for thinking that socialism is inherently or logically incompatible with environmental imperatives. However, in practice, most countries with socialist economic systems have not effectively incorporated environmental concerns into their political-economic systems and have had abysmally poor environmental records. While plausible political reasons can be identified for why this has been the case, the fact that they took for granted that the path towards a better world had to be based on industrial production systems, which have their own inherent growth imperative, constituted a crucial but unacknowledged obstacle.
It remains to be seen whether democratic socialism can be a realistic alternative, as no such (hybrid) political-economic system has ever existed at a national level. Whether it is or will become politically possible to create such a system anywhere, let alone in the most powerful countries, remains to be seen.