Oct 22, 2026 · 2 hr 7 min · 15 segments
Featuring Alyssa Battistoni on *Free Gifts: Capitalism and the Politics of Nature*. Fossil-fueled capitalism has pushed our planet into a profound set of crises. How Marxists should make sense of this…
Daniel DenvirHost
Mainstream economists have for a long time made the claim that the reason we're entering an era of ecological destruction and crisis is because capitalism has failed to put a price on nature.
As you write, quote, the gap between these two discourses, the language of existential threat and that of economic error is vertiginous.
The idea that the end of the world might come about as the result of an accounting blunder tilts into absurdity.
What's this mainstream economic theory about what prices do and how has it been applied to the ecological crisis?
The mainstream theory of economics is essentially that markets are supposed to work out how things are valued in terms of prices, in terms of what people are willing to buy and what people are willing to pay for them.
And that if two people are willing to make an exchange about something, that will sort of value it at what it's worth to each person.
And that will all sort of work itself out in sort of broader set of networks of exchange.
So the prices are supposed to represent not sort of like an absolute value per se.
I think most economists would recognize that that's a subjective phenomenon, but certainly that it reflects something about how we are sort of socially valuing these goods.
So the problem is with something like climate change has long been understood as the externality.
The externality is a concept that basically describes phenomena that don't have prices.
And that have effects in the world, nonetheless, that are sort of the strange aporia for a neoclassical theory of economics in which decision making is supposed to happen through prices.
Prices are the way to sort of mediate relationships between persons without needing kind of you know, overt coercion.
You're all entering into things willingly and voluntarily and sort of deciding amongst yourselves what kinds of trades are worth it to each person in the exchange.
But then the problem comes around when if you have all these sort of decisions that each individual enters into and we all sort of pay what we can afford for good or something.
But what happens when there are things that are sort of socially valuable, ecologically valuable, but are not being paid for? This has been the problem of what's been called the externality that's been named as a problem of climate change.
So Nicholas Stern, this British economist in this sort of famous report called The Economics of Global Climate Change back in 2007 said, Climate change is the biggest market failure the world has seen.
He diagnoses it as an externality, as something that has not been reflected in prices, has not been shown up in market relations, and so is absent from those kinds of ways that we're making decisions in the realm of the market and prices.
And the thing that's kind of funny about the externality, and I can say this more later, but when it was first identified, it seemed like this kind of marginal problem, like this small sort of thing.
Occasionally things don't kind of factor into decisions, like you have a smoky chimney here and there, making some of the laundry dirty, and the person who owns the smoky chimney factory isn't paying the launderer for ruining their laundry.
Mainstream economists have for a long time made the claim that the reason we're entering an era of ecological destruction and crisis is because capitalism has failed to put a price on nature.
As you write, quote, the gap between these two discourses, the language of existential threat and that of economic error is vertiginous.
The idea that the end of the world might come about as the result of an accounting blunder tilts into absurdity.
What's this mainstream economic theory about what prices do and how has it been applied to the ecological crisis?
The mainstream theory of economics is essentially that markets are supposed to work out how things are valued in terms of prices, in terms of what people are willing to buy and what people are willing to pay for them.
And that if two people are willing to make an exchange about something, that will sort of value it at what it's worth to each person.
And that will all sort of work itself out in sort of broader set of networks of exchange.
So the prices are supposed to represent not sort of like an absolute value per se.
I think most economists would recognize that that's a subjective phenomenon, but certainly that it reflects something about how we are sort of socially valuing these goods.
So the problem is with something like climate change has long been understood as the externality.
The externality is a concept that basically describes phenomena that don't have prices.
And that have effects in the world, nonetheless, that are sort of the strange aporia for a neoclassical theory of economics in which decision making is supposed to happen through prices.
Prices are the way to sort of mediate relationships between persons without needing kind of you know, overt coercion.
You're all entering into things willingly and voluntarily and sort of deciding amongst yourselves what kinds of trades are worth it to each person in the exchange.
But then the problem comes around when if you have all these sort of decisions that each individual enters into and we all sort of pay what we can afford for good or something.
But what happens when there are things that are sort of socially valuable, ecologically valuable, but are not being paid for? This has been the problem of what's been called the externality that's been named as a problem of climate change.
So Nicholas Stern, this British economist in this sort of famous report called The Economics of Global Climate Change back in 2007 said, Climate change is the biggest market failure the world has seen.
He diagnoses it as an externality, as something that has not been reflected in prices, has not been shown up in market relations, and so is absent from those kinds of ways that we're making decisions in the realm of the market and prices.
And the thing that's kind of funny about the externality, and I can say this more later, but when it was first identified, it seemed like this kind of marginal problem, like this small sort of thing.
Occasionally things don't kind of factor into decisions, like you have a smoky chimney here and there, making some of the laundry dirty, and the person who owns the smoky chimney factory isn't paying the launderer for ruining their laundry.
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