PARIS — Capitalism is in a vicious circle. For lack of a project, it ends up consuming its own capital. And this represents a real threat to the future, because capitalism offers tremendous economic efficiency. It's to capitalism, after all, that we owe much of the fabulous improvements in living conditions over the past two centuries. Even its most ferocious critics, such as the Swiss sociologist Jean Ziegler, concede to that much.

Capitalism also has much to do still. But it can't go it alone. It will have to be saved by its enemies, as has been the case several times in the past.

Let's start by agreeing on the terms, because we find ourselves here in the fantasy mill. Anarchist essayist Pierre-Joseph Proudhon gave a clear definition of capitalism more than a century-and-a-half ago. It's an "economic and social regime," he said, "in which capital, the source of income, does not generally belong to those who use it through their labor."

French historian Fernand Braudel later dispelled the frequent confusion between market economy and capitalism. The former is an area of competition where, as Karl Marx observed, the slope is the "tendency of the rate of profit to fall." Capitalism, in contrast, is the "upper story" dominated by monopolies where the natural slope is accumulation, as Marx — and more recently Thomas Piketty — also noted.

The survival of the planet is not an income that can benefit just a few.

If capitalism is formidably powerful, it's because it allows for the accumulation of capital, and this capital is then invested where it's most effective: in machinery, transport infrastructure, research, etc. It's so powerful, in fact, that it cannot exist without opponents such as government, trade unions and intellectuals.

"Without this presence of counterpowers, capitalism would disappear in its excess of power, through the imbalances of income, the losses in production and the revolutions that would result from it," philosopher and venture capitalist Sébastien Groyer explains in his fascinating dissertation.

Today, however, capitalism has lost its way. It doesn't know where to go. To be more precise, the operators of capitalism — business leaders and large investors — no longer know what to do with the masses of money they move around. They don't have any big plans anymore. So that money goes to the shareholders. Instead of raising money by issuing new shares to finance their growth, companies buy back their old shares. Apple alone has announced a $100 billion buyback program.

The saving-the-planet project

Supporters of this strange practice put forward two arguments to justify it. First of all, they say that when interest rates are low, a company makes more money by borrowing to buy back shares. That is absolutely correct. But said company could hope for even more profits if it had beautiful projects to finance.

Secondly, they say it's better for a company without projects to return the money to its shareholders, who are in a better position than the company to detect promising innovations. That's correct again... except that the shareholders who receive the money don't seem to be putting it into other firms. They prefer, in particular, to inflate the real estate bubbles which are forming everywhere.

The digital revolution should, of course, have been a wonderful investment opportunity. In his campaign for the 1992 presidential election, in the United States, Bill Clinton promised an ambitious "information superhighway" project. But this project has absorbed too little money. It's turned into a commonplace modernization of telecommunications networks. Beyond this, the economic and financial impact of information technologies has been nanified by Moore's terrible law, which divides the price of the basic brick of this revolution, the electronic chip, by 1,000 every 10 years.

Karl Marx monument in Chemnitz, Germany — Photo: gravitat-OFF

Capitalism has always been at its most effective when mobilizing huge sums of money to finance colossal projects: maritime expeditions to the new worlds in the 16th century, cities and railway networks from the 19th century, infrastructure (electricity, roads, telecommunications) and large mass production factories in the 20th century. Today, though, nothing seems to be up to the task. Digital is too cheap, and the next revolution, that of biology, seems to be affected by the same virus — the price of sequencing the human genome has been divided by 10,000 in 10 years.

In the end, it's a good thing.

Nothing, that is, except the greatest challenge in human history: saving the planet. As we've known since at least 1972, with the Club of Rome's The Limits to Growth report, growth financed by two centuries of capitalism is unsustainable over time. It's too greedy in non-renewable resources, too threatening to the biological and climatic balance that has allowed life to appear and the human species to flourish. And yet, only capitalism is powerful enough to finance the ecological and energy transition. Likewise, only environmentalism is ambitious enough to give capitalism a new project.

Still, capitalism is unable to make this switchover on its own. As always, it needs norms, impulses and constraints in order to succeed. This time, it will also need a new ingredient, because the survival of the planet is not an income that can benefit just a few. So we will have to create new financial channels, a different sharing of risk and income. In the end, it's a good thing. Capitalism's most fascinating characteristic, after all, is its ability to reinvent itself.

See more from Opinion / Analysis here