Capitalism refers to the production of goods and services for profit in a competitive market. The main aim of capitalism is profit maximization and growth. This encourages the producers and manufacturers to produce what they are best at and innovate with the latest technologies to increase productivity and efficiency. The profit-maximizing goal of capitalism utilizes and allocates resources in such a way that is conducive to the growth of the organization. The firms consider it rational to invest in cost-cutting technologies which increases their productivity and profit.
Capitalism has no doubt been very successful as it has led to the growth of the economy. But it has at the same time have a negative impact on the environment. It has raised many environmental concerns like depletion of natural resources, global warming, climate change, soil degradation, and pollution.
How does capitalism lead to environmental degradation? The answer lies in the goal of capitalism which is profit maximization. For continuous profit, the firm requires uninterrupted production and for production, it is necessary to have demand for the same. If there is no demand or consumption, then the production will be of no use. But to earn profits, capitalism forces towards consumption so that the production does not stop. If the production goes on, then our natural resources will be exhausted and it will lead to environmental problems. Also, it is cost-effective for the business to dump waste or ignore emission levels than thinking of ways and techniques to conserve the environment. To maintain their goal of profit-maximization, the firms might end up taking socially harmful decisions which can have a negative impact on the environment.
The statistics show that the world’s 3,000 largest companies cause around $2.2 trillion (around £1.4 trillion) of environmental damage every year. Capitalism and nature cannot go hand in hand. The firms will keep producing the products till they are earning profits. They don’t care about the waste that would be generated by the competitors which leads to soil degradation and choking of the rivers. What is required is the proper planning to manage waste that the environment can be protected and the production of eco-friendly products. Due to increased unemployment, the workers are ready to work on low wages which will help gain profit for capitalists. All this has led to the exhaustion of the natural resources and nothing left for future generations. No doubt capitalism has brought technical innovations but it has led to degrading the environment. Humans deserve an environment that is clean, green, and pollution-free. This is for us to maintain a balance between innovation and nature so that development and sustainability can go hand in hand.