Part 1 The General Theory of Conservation-Oriented Economy

Chapter 1 Overview of the Development of Conservation-oriented Economic Theory

Section A Marxist Concept of Conservation

In Marxian economics, conservation is an important concept with broad sense and profound connotation. It is neither simply confined to the conservation of raw material in the process of production, not only equal to the conservation of consumption in the traditional view. On the contrary, taking the conservation of labor time as basic concept, the concept of conservation is connected with the development of productive forces and the improvement of labor productivity, with consumption that are closely related with people's daily life and practical problems induced by consumption such as wealth accumulation and economic growth, with the free and comprehensive development of people as well as the harmony and unity of the whole society.

1 Marxian Concept of Conservation of Labor Time

In 1867 when the first volume of Capital was published, based on the criticism on classical economics represented by Adam Smith and David Ricardo, Marx built a massive theoretical system to explain real economic activity and operational law of the capitalism. Inspired by the labor theory of value, Marx profoundly analyzed a series of economic activities of capitalism including production, distribution, exchange and consumption. Conservation or conservation of labor time was emphasized by Marx as a huge power pushing the capitalist economy forward continuously. Marx claimed that the production of material was the basis for the existence and development of human society. The process of social production was the process of consumption of labor force and means of production, namely, the process of consumption of human labor and materialized labor. Since the consumption of labor was measured by labor time, all conservation was the conservation of labor time. “The real conservation=the conservation of labor time=the development of productive forces” Marx once assumed in Capital that the conservation of labor time was actually equal to the decrease of the necessary labor time of workers. Correspondingly, the capitalist sought to lengthen the surplus labor time of workers and gain surplus value or profit continuously. Thus, the conservation of labor time firstly came from the differentiation between necessary labor and surplus labor. In a capitalist economy, when value turned into something which can bring surplus value, the exchange based on labor would turn into surplus labor and profit. Marx drew this conclusion by using abstract analysis method, showing that the purpose of hiring workers to produce was to gain profit. This is the capitalist economic relations in which the surplus value comes from surplus labor. According to the definition in Capital,the surplus value is created by the labor of workers, occupied by capitalist for free, exceeding the value of labor force.“G'=G+△G” is equal to an added value being supplemented to the prepaid monetary amount. We call this added value or residual amount that exceeds the original value surplus value. The labor time in working over necessary labor is called surplus labor time and the labor consumed in it is called surplus labor. When surplus labor exists in the form of value in the condition of commodity economy, then it is surplus value. In this regard, Marx once clearly pointed out in Capital,“The labor time of direct producer must exceed the necessary time for reproducing their labor force or themselves, for which they generally must finish surplus labor. This is a subjective condition, while the objective condition is that they can finish surplus labor. With regard to natural condition, it means that one part of labor time at their disposal is enough to produce and sustain themselves as producers and the production of their necessary means of subsistence won't consume all their labor force.”

Based on the differentiation between necessary labor time and surplus labor time, Marx built rich theories pertinent to the conservation of labor time, nearly covering every field including production, consumption, both macro and micro ones. For example, the familiar discussion on the thought of conservation in the course of capitalist production was often quoted by scholars. In fact, as the equivalent of production in a market economy, consumption was also an important problem that Marx attached great importance to. Marx believed that consumption produced the ability of workers, which was the real power for the development of productive forces. However, compared with the unlimited demand of people and the scarcity of time, consumption should be moderate. In the view of Marx, applying the assumption of classical schools that capitalist profit was used to deposits and investment and worker's wages were used to consumption, the dialectical relationship between consumption and accumulation and capitalist unremitting pursuit of surplus value was the very key to the problem of capitalist effective demand. Certainly, Marx put the thought of conservation into consumption theory mainly for discussing the driving force of conserving labor time to the full development of human and harmonious society based on the relation between conservation and production, consumption and growth instead of elaborating consumption problem. Marx argued that society was a group of people connecting with each other for common material conditions. The purpose of economic development was not only for the production and growth but also for meeting the various demands of human to promote their all-round development. Therefore, when the productive forces are highly developed and human can obtain a considerate amount of surplus time from the socially necessary labor time, the whole society can maintain economic harmony and unity based on the free and comprehensive development of individuals.

2 Social Production and Conservation

Marx once conducted a profound analysis of the accumulation process in capitalist social production which he thought was one of the most important characteristics of the capitalist mode of production.

In the view of Marx, the capitalist spirit of accumulation for accumulation mainly depends on two elements, namely the pressure from the competition of capitalist society and capitalist inner impulse in pursuing profit. It is the capitalist action in accumulation for accumulation that determines their consumption behavior.

Marx argues that all the important problems in the capitalist production system like effective demand come from capitalist pursuit of surplus value or profit. For example, before industrial society or the modern capitalist economy came into being, competition was also an important factor ruling social and economic relations in which there was economic surplus and the possession of such surplus, but there wasn't economic calculation of monetary value and profit margins. Certainly, since the feudal landlord's possession of the land was a particular resource which could not be renewable by investment, they occupied the surplus only for consumption, therefore, there was no profit-oriented capitalist production and capital accumulation. However, in capitalist economy, the emergence of deposit was not only a kind of storage, but also formed the desire for wealth accumulation which was a sign of capitalist social status, or more importantly formed the competition of capitalism by which such kind of capital accumulation was dominated, making the nature of currency change. Currency in the simple exchange economy was a kind of medium convenient to exchange while the one in market economy or capitalist economy became a sign of value and a symbol of wealth accumulation. It was directly related with the motivation and decision-making of production, that is to say, the individual or corporate production motivation was to maximize its yield or at least to earn money. Therefore, if products could not bring profit to entrepreneurs, they would not be produced even though they were technically optimal. To some degree, it was capitalist consumption that generated the problem. When the capitalist hired workers to provide them with services, the workers not only needed to consume parts of surplus products but also made a profit for the capitalist; if not, the problem of insufficient effective demand would rise.

3 Marxist Concept on Conservation of Consumption

Generally speaking, consumption could not exist without production. Most scholars tended to treat them as two dispensable parts among the four economic processes. They considered distribution and exchange as the intermediate links between production and consumption and consumption was the end and final goal of production. Marx criticized this superficial view for he believed that the production per se directly was consumption and the vice versa. Each part was directly its counterpart. In other words, in the view of Marx, consumption and production were of one identity, both being two aspects of the same entity. Certainly, if their identity reflected on the activities of a single person or many, they would in any case serve as two elements of a process, that is, consumption was also an intrinsic factor of production.

Consumption, as an important part of social life and economic activity, was closely related with the form of ownership, the form of commodity exchange and the mode of distribution. Therefore, it was also an important aspect of production relations. Generally, consumption could not only meet various demands of people but also promote the development of production. Its historically prescriptive property could reflect the essential characteristics of the consumption relations in different social stages. For example, Marx not only considered that consumption was closely connected with production, but also emphasized its role in social life and economic activity. Marx pointed out that consumption was an important part in the process of the total social production cycle. There would be no production without demand and consumption produced demand. Just like human, from the day when he was born, he consumed in various ways every day no matter before the production or during the production. However, though the category and amount of consumption were determined by production, consumption would react to production just as the relationship between production and consumption of relative surplus value. “Production of relative surplus value or the production of surplus value by enhancing and developing the productive forces requires the production of new consumption and the expansion of consumption scope in internal circulation similar to the previous expansion of production scope (in the production of absolute surplus value). First, it requires the expansion of existing consumption. Second, it requires the extension of the existing consumption to a larger scope to create new demand. Third, it requires the production of new demand, discovery and creation of new value in use. In other words, the case is that the surplus labor is not simply surplus in amount but qualitative, as the scope of labor is becoming larger and larger continuously, more and more diverse and differentiated.”

Here, Marx clearly pointed out the inevitable result after the realization of relative surplus value in that the new consumer layer not only added to the amount of consumption but also required the creation of new value in use as well as new consumer demand qualitatively, thus demonstrating the inevitable change of consumption in the condition where labor productivity increased.

Obviously, Marx was opposed to regarding production and consumption as two equivalent concepts, arguing that they could be established only at a particular stage in the development of human society. For example, when the economy was less developed, basic consumption was the sole purpose of people's life and production was conducted for this purpose. But this understanding of consumption was one-sided and it directly caused people to treat consumption which should be the self-realization process of people only as a process of reproduction of labor, thereby ignoring the important role of consumption as a means to show self-improvement and comprehensive development. Marx maintains that the social human should be cultured all properties and treated as having as rich properties and relations as possible, then people with wide ranges of new demands would be produced. The new demand mentioned here was certainly the new human demand. Moreover, the new products and the people who used and consumed these products were produced simultaneously. They served as the condition for promoting each other. Here, Marx emphasized that human with various demands was truly complete and comprehensive and considered various appreciative ability as a characteristic of people with high civilization. Therefore, Marx assumes that consumption could also produce the ability and quality of workers, which was the real driving force for the development of productive forces. “The real economy is the conservation of labor time, which is equal to the development of productive forces. It is obvious that real economy is by no means resisting desire but developing productive forces. To develop the ability of production is both to develop the ability of consumption and means of consumption. The ability of consumption is the condition of consumption, thus is the primary means of consumption and this ability is a kind of development of personal talents and productive forces.” Looking at the relationship between production and consumption based on this, we can naturally draw to a conclusion that production creates materials serving as external objects for consumption while consumption creates demand serving as internal objects and purpose for production. Thus, “there is no consumption without production and vice versa.” Obviously, production that curbs consumption cannot be the condition for economic development. Economic development must rely on raising labor productivity so that conserving labor time is the development of the productive forces. Meanwhile, the development of productive forces and consumption ability including means of consumption is simultaneous, that is to say, the enhancement of consumption ability is the prerequisite for the development of productive forces. More importantly, the development of consumption is also the development of individual ability, a kind of productive force.

It should be noted that the concept of consumption here is different from consumerism. In his explanation of the relationship between consumption and the full development of human, Marx criticized consumerism. In the mid-19th century, with the rapid development of a modern industrial economy, consumerism emerged. Its criterion raised the role of consumption in economic development, ignoring production and capital accumulation and positioning the value of human on the basis of enjoying material wealth and high consumption, assuming that consumption is everything. The emergence of consumerism generated many alienated phenomena of consumption such as advocating consumption for consumption, serving as the protection for excessive consumption and luxury consumption. It, more or less, maintains countless ties with materialism and hedonism. As Marx put it, “although proprietariat and the proletariat are both self-alienation of human, proprietariat feel self-satisfied and secured in this self-alienation with which they obtain a proof to be powerful and from which they get an overview of human existence.” “The provision of the dead wealth that only serves for pleasure and extravagance reveals that, on the one hand, people who enjoy the wealth act as indulgent individual and treat slave labor and human blood and sweat as prey for their greed, thus treating human and people themselves as worthless prey. On the other, they regard the realization of human essential power as the realization of their desire,quirky habit and bizarre thoughts.” Thus, people cannot help bringing human freedom into the system of consumption. The dynamic pursuit of profit maximization contributes to overproduction, calling for greater production scale and technical specification and more energy demand. In other words, excessive consumption becomes alienated consumption compensating for overproduction. It makes people measure the level of happiness by the amount of consumption, and they are driven by market mechanism to become desperate money-spending machine. Undoubtedly, this alienated consumption phenomenon poses great waste to society. For example, the excessive packaging of consumerism, together with overproduction generated by economism as well as people's own overproduction cause great pressure and damage to the Earth's environment. For one thing, it leads to the unfair market consumption, as 20% of the world's rich people consume 80% material and energy. In accordance with the law of diminishing marginal returns, this is the largest waste and inefficiency. For another, it contributes to the inefficiency of market in realization of consumption such as exaggerated advertisement and excessive packaging. Therefore, it calls for the change of human ethics and values orientation. Especially at present when the capacity of global environment is limited and the resources are scarce, we should advocate the reasonable and healthy concept of sustainable consumption. Certainly, to build consumption structure of sustainable development is a comprehensive and systematic project, requiring not only the culture of sustainable development as its awareness and value foundation, but also green production, green marketing and green consumption and moreover the improvement of political structure, economic structure and distribution structure as guarantee. In fact, consumption, to some degree, is also a kind of culture. While we encourage consumption to promote economic development, however, consumption is by no means a general material consumption but healthy consumption especially in high-level science, culture and education. Only this kind of consumption can give full play and development to individual talent and personality. Therefore, in term of social effect brought by individual consumption, we should not only pursue the short-term effect but also the long-term one. Meanwhile, we should also take the economic effect as well as the social and cultural effect into account, truly realizing consumption effect of conservation.

It goes without saying that the purpose of socialist production is to meet people's growing demand for material and cultural life. Therefore, socialist consumption is neither for the false prosperity nor for production. On the contrary, the logic behind it is to develop the social productive forces healthily, especially in the regard of personal productive forces. As Marx suggested, “the ability of consumption is the condition of consumption and thus is the primary means of consumption, and this ability is the development of personal talent as well as productive forces.3So in the view of Marx, consumption directly reflects the purpose of socialist production. The purpose is not only significant for society but also for the comprehensive and free development of individuals. “Consumer's mode of spending and amount of income will make the process of economic life especially the process of circulation and reproduction of capital change dramatically.” In other words, the great consumer demand can contribute to the expansion of production scale, ensuring increased investment to achieve respected economic benefits. Capitalist production cannot be sustained without sufficient consumer demand. However, Marx places more emphasis on consumption effect generated by conservation. He posits that the enhancement of consumption ability would change the demand structure of people, promoting social progress. On the one hand, the purpose of socialist production determines the logic behind people's consumption ability and people tend to create greater material wealth by spending less socially necessary labor time so that they have more and more leisure time. This would also bring changes to consumer demand structure so that people would pay more attention to time value of consumption and shift from the pursuit of material to spiritual enjoyment, thus promoting the changes of industrial structure and consumer market. Consumer is also a producer in society. His talent and ability will be developed by continuously conducting consumption through the upgrade of demand structure and will be recognized by the society. In return, it will increase his income and promote economic and cultural development. This will play an active role in both consumption and economic growth. Therefore, consumption is also closely related with social civilization, economic prosperity and people's own quality. As Marx claims, in a socialist society, the confrontation between necessary labor time and surplus labor time would have been eliminated along with the elimination of class. In the condition that labor becomes the first demand of human, the law of time conservation will be manifested in a new form and people's personality enjoys free development. Therefore, people do not shorten necessary labor time to obtain surplus labor, instead, they directly reduce socially necessary labor time to a minimum. At this point, correspondingly, due to the time saved for everyone and with the help of effective means, individuals will spare more time to develop in arts, sciences and the like.

4 The Modern Value of Marxist Concept of Conservation

Marxian thought of conservation is a dialectical and systematic concept of production and consumption based on the interaction and interconnection of production, exchange, distribution and consumption. The four important elements are interconnected and indispensable within the same system. The knowledge and understanding of production are inseparable from the knowledge and understanding of exchange, distribution and consumption.

Similarly, the correct understanding of consumption should follow the same doctrine. Judging from this prospective, Marxian concept of conservation is a systematic concept of production and consumption in broad sense which is different from the concept of conservation in narrow sense that production is not related with consumption. It can provide significant reference and guidance to deal with production waste, which is prevailing in consumerism and gradually deteriorating ecological environment, creating difficulties for human development. Moreover, it also sheds some lights on how to understand consumption, how to form a scientific and rational concept of consumption as well as how to build a moderately prosperous society.

Building a conservation-oriented economy to achieve sustainable development

Conservation, needless to say, is the eternal theme of all economic society. Marx elaborated the economic thought of conservation and built the theoretical foundation for conservation-oriented economy 100 years ago. As Marx suggested, “Socialized man and united producers will rationally regulate the exchange of material between them and the nature, bringing it under their common control instead of making it a blind power to govern themselves. They conduct such exchange by consuming minimal power in the most worthy and appropriate condition.” “The real conservation is to conserve labor time and such conservation is equal to the development of productive forces. It is obvious that it is by no means the resisting desire but developing productive forces.”

The main idea of conservation is production conservation, green consumption, circular consumption and moderate consumption, against waste without curbing consumption. First, it advocates consuming green products that are not contaminated to public health. Second, opposite to extravagance and waste, it focuses on waste disposal in the process of consumption without causing environmental pollution, the development of circular economy.

The significance of green consumption to conservation-oriented society lies in operation of individual consumer behavior and design of lifestyle in green and healthy concept based on resource conservation. In consumption activity, we should not only ensure the consumer demand, safety and health of our generation but also pursue a comfortable life while focusing on environmental protection and conservation of resources to achieve sustainable development.

According to Marxian concept of conservation, consumption, as the starting point and destination of social reproduction, is the result of production, distribution and exchange and in turn affects these processes. It reacts upon production, requiring the implementation of green management mode of production which is beneficial to ecological environmental protection and sustainable development, namely implementing conservation production by means of clean technology and energy-saving technology. China is entering a critical period of building a moderately prosperous society in an all-round way so we need to unswervingly conserve consumption and production, build a conservation-oriented society and achieve sustainable development.

While people's consumption ability has been developed with the enhancement of productive forces, people's purchasing power also has been greatly improved. Many people have mindless consumption without considering the actual condition of social development and ecological balance, the result of which is a series of global problems such as depletion of natural resources, environmental pollution and difficulties in human development. Meanwhile, abundant material life fails to bring healthy and fulfilling spiritual life to people, instead, people are enslaved by materials. The fundamental reason is the lack of fundamental consumption ability and the effect of focusing solely on meeting material demands while ignoring spiritual and ecological demands. Marx maintains, “To enjoy many aspects, he must be able to enjoy, so he must be a highly civilized man.” Therefore, only by continuously strengthening the cultural education of main consumers, enhancing their consumption ability and improving consumer quality can we truly make consumption with the expression of “human nature-human subjectivity” and promote the comprehensive development of people. As Marx put it, “the social human should be cultured all properties and treated as having as rich properties and relations as possible, thus people with as wide ranges of demand as possible will be produced.”