Elmar Altvater, The Future of the Market
New York: Verso 1993.
ISBN 0860914259
Page 183

Market efficiency has been achieved by drawing upon nature’s reserves as if they were limitless, as if people did not have to be sparing with both inner and outer nature. A ‘positive feedback mechanism’ may thus be set up between the economic system and nature. Interest-rate signals force the production of a surplus through the overexploitation of natural resources.

The degraded natural basis of production and consumption then makes it more difficult to achieve profits commensurate with the rate of interest.

The debt crisis has negative ecological effects, while the degradation of nature intensifies the debt crisis.

If tight management of flows then leads to a reduction in stock levels, the traditional models break down and the transition to ‘positive feedback economics’ becomes unavoidable.

Economic behaviour is blind to its natural bases as long as these do not make themselves felt as economic limits—that is, as a cost burden within the economic system. The social ties between human beings, mediated by commodities and money, involve the ‘nature-blindness’ of behaviour. For the mirroring of human sociality as a natural property of the things people produce—that is, the ‘fetishism of the commodity’—also entails the screening out of the natural conditions of social behaviour.

The individual commodity (and qua commodity every thing is individual) does not make visible the conditions attending its production and consumption.

For example, advertising gives the details about a car’s horsepower, maximum speed, acceleration, comforts, optional extras, retail price, and so on; it attracts customers by playing on prestige or convenience value. But it says nothing about the using up of the countryside for highway construction; it remains silent about the inevitable victims of road accidents, or the vast quantities of water and energy used in the process of production.

In the individual thing social relations are only imperfectly reflected, as in a magic mirror which blanks out the ‘celestial constraint’ of the thing’s production and consumption.

The commodity is narcissistic: it sees only itself reflected in gold. In the first chapter we observed that reified socialization, stemming from the fetish character of commodities, has a disinhibiting effect which speeds up the evolution of society.

But now we need to discuss whether the very reification of social relations - whereby people relate to each other with money and commodities on the market - does not cause the natural constraints on production and consumption to disappear from the consciousness of society.

It would appear that nature again becomes relevant only when it imposes additional costs, or when its destruction lastingly disrupts the conditions of human life. Then a flash of lightning makes it clear even to reified consciousness that economic compulsions - such as those brought to bear in the servicing of debt - interfere with the natural conditions of business activity.

But when the destruction of nature eventually ‘makes itself felt’ in economic categories (costs), it is often too late for any alternatives, especially since the processing of ecological problems into economic calculation does not move beyond the reification that resulted in the ‘forgetting of nature’.


Interferences between economy and ecology do not come into the field of vision so long as the former is seen in principle as a balanced system, and so long as time and space are not given explicit significance (as causal elements of transaction costs) within production and consumption, the exchange process and the sphere of distribution.

In an economy without spatial or temporal constraints, economic analysis can perfectly well dispense with the transformation of raw materials and energy, leaving this to other branches of science.

Once it is assumed, however, that all economic processes have a spatio-temporal location, the analyst’s attention turns not only to the instabilities of the market (which have been discussed in Part II above) but also to the explicit significance for economic theory of the transformation of materials and energy.


The question immediately arises how it is ever possible to do this, without spiriting away the initial problem that the transformations of materials and energy are defined as monetized processes in which their special natural quality is disguised. For with the category of money, economics manages to banish time and space from its system, given that the future is ‘discounted’ in the present and spatial distance is levelled in arbitrage speculation.

The ‘resource economics’ approach, based on Hotelling’s classical rule, has not been lost for answers. Solow, for example, compares (a) the currently discounted net proceeds from the exploitation of a resource over the period between today and some future date, with (b) the market rate of interest obtainable on money assets, and assumes that the value of the resource also increases over time. But such a market-centered comparison contains a number of implication that make it rather questionable.

First, it presupposes that the market rate of interest defined the rate of exploitation of exhaustible resources and hence an optimal path of resource use. As we have seen in the chapter on financial instabilities, however, the market rate of interest offers no guarantee of optimal allocation.

Second, it assumes that between present and future there will be economic growth of the same order as the rate of interest— and in any case that new resources will be used. For growth could not take place if the level of exploitation of the one resource involved in decision-making were already fixed. This suggests that resources are, in Hirsch’s words, essentially ‘positional goods’ whose individual use-value depends upon the use-value properties of other resources.

Yet if the Hotelling rules are applied in such a way as to take account of the interference between different resources, they are unable to yield any unambiguous results.

Third, the rules posit a (privately owned) isolation of resources, and hence a splitting of complex ecosystems which simplifies them into legally definable and economically tradeable property rights.

Fourth, if the decision-making calculus is built around the rate of interest, the forward vision of economic actors will become increasingly ‘short-sighted’ the higher the interest rises.

Fifth, it is necessary to act as if future markets and the preferences of future individuals were already known, so that the present generation lives ‘vicariously’ for those to come.

Here at the latest it becomes clear ‘that there is no way of escaping an ethical choice, sometimes hidden away in the assumptions of the model’.