Sunday, 7 March 2010

‘Beware! The end is nigh!’

Why global capitalism is 
tipping towards collapse,
and how we can act for a decent future1



The fable behind the stereotype

Global capitalism tipping towards collapse? “C’mon,” goes the standard response, “don’t you know that’s been predicted for ages and it’s never happened?”

That standard response is reinforced by the mass media’s visual cliché of some crazed guy, usually wearing a monk’s cassock, preaching the Apocalyptic message: “Beware! The end is nigh!”

Behind this sneering stereotype lurk denials that global capitalism could suffer the same fate as all past civilisations.

Early capitalism grew amidst the slow-motion collapse of medieval Europe3 which, after lasting for a millennium, was being overwhelmed by market forces. Feudalism’s forerunner, the ancient slave-based epoch, lasted 4,000 years until the Western Roman Empire4 fell quickly in 476 after several centuries of internal decay and border wars.

Before perishing, past civilisations spawned fables about their everlasting nature. Those fables gave popular legitimacy to societies divided by class, gender, ethnicity, nationality and religion.

The tradition of ages is continued by capitalism. According to its ideologues, “flexibility” is so embedded in capitalism that collapse becomes impossible. Yet such claims fly in the face of history. We need to do our own thinking so that our minds cannot be colonised by anyone’s fables.

Wild times of late feudalism

In the late Middle Ages, Europe’s land-based hierarchies were disintegrating under pressure from unstoppable market forces. Feudal society was collapsing before capitalism had solidified into a new type of civilisation.5

The dieback of half Europe’s population from famines, pandemics and wars6 gave life to the independence of landed serfs from their feudal masters. A swing from subsistence agriculture to farming for profit led to the enclosure of peasant commons. The growth of urban populations disconnected from feudal land relations was nurtured by industrial production and invention. An expansion of trade, money, credit and markets, fueled by colonisation of the New World, saw the rise of a capitalist class increasingly conscious of its own “manifest destiny”. A scientific, educational and cultural Renaissance7 fed into the Great Schism within Christianity, eroding Papal hegemony8. The rapid increase in the ranks of wage workers coincided with an explosion of popular uprisings across Europe9 and the rise of absolute monarchies, all diminishing feudalism’s nobility and church.

From these wild times grew new productive forces which gave birth to new social forces, collapsing late feudalism’s mode of production and hierarchy of privilege in the midst of chaos, wars and uprisings.

From our vantage point five centuries on, we know that medieval civilisation could never have survived these multiple crises as they converged into a perfect storm10.

Near the end of the Middle Ages, however, hardly anyone was calling for the creation of a capitalist world. It just happened out of a volatile mix of economic revolution, social combustion and historical accident.

Complex and random

Today, our ability to interpret world trends is exponentially greater than in the Middle Ages. So is our need to do so, given the potential for catastrophes like sea level rises, global hunger and war without end.

Despite our ability and our need to do serious forecasting, we must avoid the trap of downplaying the unknowable effects of random events and dynamic complexity.

Events buck trends,” says British historian Piers Brendon11. “The past is a map, not a compass.” Still, he admits, “history is our only guide”.12

Random events, those happenings that nobody could foresee, always have a huge impact on historical outcomes. Let’s be warned by a church in America whose electronic billboard declared: “[Our] class on prophecy has been cancelled due to unforeseen circumstances.”13

Unstoppable forces leave large footprints whose direction we can see. Yet it is impossible to predict what historical outcomes might be produced by the infinite number of possible interactions of systemic crises and human actors and random events. This dynamic complexity would fool even a deterministic God.

Global capitalism is easily the most complex social system in history. This mega-complexity increases the likelihood of system failures, like the international financial implosion of 2008.14

But there’s a flip side to complexity. It offers multiple layers of protection against a system failure leading onto system collapse. The financial implosion, therefore, sparked a multi-state mobilisation to ward off immediate world economic collapse.15

Convergence of five existential crises

Even the in-depth defence offered by layers of complexity could not protect capitalism from a convergence of existential crises16 which overwhelm multiple fronts of the world system.

Such a perfect storm is now gathering force.

Jorge Benstein, a Marxist economist in Argentina, points to the historic intersection of economic, food, energy and other “visible crises” which could strike the world system at any time. He concludes: “We are facing the convergence of numerous crises which in reality is one global gigantic crisis with different faces, never seen before in history.”17

During the 20th century, capitalism was destabilised by occasional intersections of just two system-level social crises. Examples include the imperial and legitimacy crises flowing from both World Wars, and the Great Depression’s profitability and legitimacy crises.

Today, for the first time since its birth 500 years ago, global capitalism is facing the convergence of five system-level crises embracing nature as well as society:
  • Profitability crisis.
  • Ecological crisis.
  • Resource crisis.
  • Imperial crisis.
  • Legitimacy crisis.

As these five crises converge into a perfect storm they will tip global capitalism towards collapse amidst international revolutions and counter-revolutions.

We cannot foresee what type of new civilisation(s) will result from the unpredictably complex interactions of human actors with economic, ecological and imperial shifts.

But a perfect storm overwhelmed late feudalism, and there seems no reason to expect that late capitalism’s fate will be any different. Given its global interconnectivity and the life-threatening scale of its problems, capitalism is likely to fall at speed compared to feudalism’s slow-motion collapse.

So let’s put the five existential crises of capitalism under the microscope.


Growth gene dominates capitalism’s DNA

To understand the world system we need to see how capitalism arrived at where it is today.18

After finding solid form in the Italian city states of the late 15th century, capitalism’s first great wave of geographical expansion had by 1650 rolled over most of Europe and some of the Americas. A second expansionary convulsion, from 1750 to 1850, incorporated the rest of the Americas, Russian Empire, Ottoman Empire, South Asia and parts of West Africa and South-East Asia. During the half-century up to 1900, an orgy of imperial conquest fueled capitalism’s final wave of expansion into East Asia, Oceania and the rest of Africa and South-East Asia.

For the first time in human history, all societies on all continents were absorbed into a single world economy. On its economic foundations grew capitalist states juggling national sovereignty and international connectivity.

This relentless geosocial expansion points towards the system’s key dynamic: capital, and thus capitalism, must grow to survive. The growth gene in capitalism’s DNA was dominant from Day One, compelling an eternal accumulation of capital for its own sake.

The essence of capitalism, in the famous shorthand of Karl Marx19, is M-C-M’. Money capital (M) is exchanged for commodities (C) which are transformed into new commodities embodying the fruits of labour and then sold in the market for more money (M’). And so the cycle continues forever. Any interruption in the unending accumulation of capital throws the system into crisis.20

Immanuel Wallerstein, pioneer of world-systems analysis, puts it this way: “In this system, past accumulations were ‘capital’ only to the extent they were used to accumulate more of the same.”21

The interwoven worlds of work and nature were colonised by the market forces of rival capitalists and states. Ever more things were given a money value and turned into commodities. Ever more people became commodified wage workers. Wages were much lower in value than the surplus produced by workers, but captured by capitalists and turned into profits through market exchanges. This “free lunch” for capitalists, bolstered by imperial pillage of the global South22, bankrolled the reinvestment of profits, fueling an endless cycle of capital accumulation. Overseeing that cycle were a colourful mix of politicians whose souls were all mortgaged to the Dictatorship of the Profitariat. The fusion of government and business went hand-in-hand with the conglomeration of capital into global oligarchies.

There were constant threats to capitalism’s accumulation cycle, including economic slumps, political crises, inter-state warfare, popular revolts, national liberation conflicts, Communist23 revolutions and Karl Marx. While their impact was often significant, the world system always managed to claw back an adjusted equilibrium.

Three strands of neoliberalism

Alternating highs and lows in system profitability, with each phase typically lasting a decade or two, were a longtime feature of capitalist evolution.

After World War II ended in 1945 there were more than two decades of feverish economic growth and ultra-high profitability.24 This global Long Boom bankrolled expansions of state services in rich countries and state capitalist industrial projects in poor countries.

In 1971 the collapse of the Bretton Woods international finance architecture25 marked the onset of a stubborn decline in system profitability. Global capitalism spiralled into profit shock. The previously rare virus of stagflation migrated around the world.26

Karl Marx was clear on the root cause of capitalism’s economic crises. He stated: “The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit.”27

Yet global capitalism’s response to a crisis embedded in grassroots “poverty” was to make the masses even poorer, giving a temporary boost to profitability by feeding the demons of crises to come.

Led by US president Ronald Reagan28, and promoted by big business everywhere, governments embraced the agenda of neoliberalism.29 This agenda had three main strands:
  • Privatisation.30
  • Globalisation.31
  • Financialisation.32

While none of these strands was new, the key difference was their elevation into strategic imperatives.

In rich states of the global North, grassroots outrage was mostly directed at the first strand, privatisation, which undercut the historic welfare state gains of social democratic parties.

In poor states of the global South, grassroots outrage was mostly directed at the second strand, globalisation, which undercut the historic economic development gains of national independence movements.

As time has passed, however, it seems that the greatest longrun impact on world trends is coming from neoliberalism’s third strand: financialisation.

A global Ponzi scheme

Government deregulation, starting in the rich economies and spreading outwards, stimulated a gigantic expansion of the financial sector. Its promise, in essence, was of bumper returns today from larger claims on tomorrow’s income streams.

Fueling this promise were two things: first, income transfers from poor to rich, and second, upsurges of speculation in asset bubbles33. Both flowed from the neoliberal agenda enforced by social democratic as well as conservative governments.

Despite rising productivity in America, the world’s biggest economy, real hourly wages have fallen over the past generation. In 1973 US real hourly wages peaked at $20.30, tumbling to $16.39 in 2008.34 A similar story can be told for most other countries since the onset of neoliberalism.

Capitalist capture of a greater portion of the surplus created by workers fed an accumulation cycle increasingly reliant on financial speculation to maximise profits.

At the same time, workers in America and other rich states offset their declining wages through increasing levels of home mortgage borrowing and credit card spending.

The combined result was a phenomenal rise in debt ratios, especially across rich economies. Total US debt as a percentage of gross domestic product soared from around 130% in 1950 to 370% in 2009.35

International financial transactions climbed to 60 times the level of global gross domestic product.36

Big banks grew ever more powerful within global capitalism. For instance, America’s six largest banks now have assets in excess of 63% of gross domestic product. This is a significant increase from even 2006, when the same banks owned assets worth around 55% of GDP, and a complete transformation from just 15 years ago when the six largest banks held combined assets of only 17% of GDP.37

As debt creation provided the security for further debt creation, the increasingly shaky edifice took on the look of a global Ponzi scam.38 But the perpetuators of this international rort were shielded as never before by government laws, corporate politicians and state officials.39

Feeding the unfinancial monster

On 18 September 2008, US Federal Reserve chair Ben Bernanke40 and US Treasury secretary Henry Paulson41 made an emergency dash to Capitol Hill. There they told senior politicians that the United States and other major economies were just “days away from a complete meltdown of our financial system”. Lawmakers at the heart of the world’s most powerful empire were left stunned.42

But central bankers knew what they had to do: bail out the financiers. Since September 2008, in the greatest orgy of debt creation in history, central bankers have pumped countless hundreds of billions of dollars into the financial sectors of America, China, Europe and elsewhere.43

The first rule of central banking,” says US economist James K. Galbraith44, is that “when the ship starts to sink, central bankers must bail like hell.”45

What the Great Bailout means is a global transfer of liabilities from private financiers to central banks on an unprecedented scale. A breathing space has been won by shifting the problem.

But the problem has not been solved. Just the opposite. Governments are feeding the unfinancial monster with such magnitudes of bailout money that bankruptcy is looming for many states, especially the United States, Britain and Europe’s PIIGS (Portugal, Ireland, Italy, Greece, Spain).

Decades ago, the limits and risks of financialisation were indicated by two US socialists, Harry Magdoff and Paul Sweezy. At some point, they said, the rising mountain of debt would grow beyond the capacity of governments to intervene effectively as lender of last resort. When that point was reached, capitalism faced the collapse of the entire financialised regime of accumulation.46

Fallout from the 2008 financial implosion has compelled even some capitalists to start visualising that point.

Todd Harrison47, a longtime Wall Street financier, aptly asks: “If sovereign lifeguards saved corporations when the financial crisis first hit, who is left to save the lifeguards?”48

And Britain’s neoliberal journal The Economist points to growing dangers in shifting the problem from banks to states. The editor sounded a grim warning in February 2010: “Last year it was banks; this year it is countries. We, like the markets, are preoccupied with the growing dangers to the world economy. Sovereign risk in countries such as Greece, Spain, Portugal and Ireland is a large part of it, but there are also good reasons to worry about how governments are going to manage the difficult business of withdrawing the stimulus that has kept economies going.”49

So temporary respite from world financial breakdown has been purchased at the price of greater system instability. That instability poses great risks to future profitability and the accumulation cycle upon which capitalism’s survival depends.

Marxists dispute why, not what

Can global capitalism stage an orderly retreat from its risky financialisation strategy? Can the world system be reformed so that profitability is more firmly anchored to the real economy?

That does not seem possible. The shift to financialisation occurred because the real economy could no longer generate sufficient profits to sate capitalism’s growth gene. This still holds true, say most Marxists. Where they disagree is over why.

Among different Marxist interpretations of the longrun profitability crisis in the real economy are these five strong contenders:

  • Profitability is under siege from structural stagnation caused by the global growth of monopolies, forcing ever more investments into financial bubbles rather than the real economy.
  • The industrialisation of China, India, Brazil and other formerly peripheral countries, funded in large part by investments from the global North, is trimming the inflated profits previously extracted by corporate monopolies in core states.
  • The increasing ratio of capital inputs as compared with labour inputs in the global competition for higher unit productivity is hollowing out the extraction of surplus value from labour exploitation.
  • The transformation of surplus value into actual profits through market exchanges is being blighted by unprecedented wealth polarisation and the consequent weakening of consumer purchasing power.
  • Profits are being squeezed by longrun rises in wages, taxes and environmental costs which flow from the increasing social weight of workers on a world scale and the necessity to mitigate climate change and other ecological disasters.

Each of these five interpretations seem to have strengths in different areas. Perhaps this just highlights the complexity of global capitalism.

Doomsday cycle’ risks world ‘collapse’

America is now immersed in a “doomsday cycle” where banks use borrowed money to take massive risks in a drive for big shareholder dividends and big management bonuses, and when the risks go wrong the banks receive taxpayer bailouts from the government.

So says a panel of economists, financiers and officials in a March 2010 report commissioned by the Roosevelt Institute, a mainstream US think tank.

Risk-taking by banks,” the report cautions, “will soon be larger then ever.”

Despite calling on the Obama administration to make planned reforms of the US financial sector more stringent, the report admits: “Our government leaders have shown little capacity to fix the flaws in our market system.”

The report declares: “In 2008-09, we came remarkably close to another Great Depression. Next time we may not be so ‘lucky’. The threat of the doomsday cycle remains strong and growing.”

The next financial shock may spark a “calamitous global collapse”, warns the report.50

State nationalises economic crisis

The 2008 financial implosion caused the same sort of “existential crisis” for neoliberal economists as 1970s stagflation caused for social democratic economists, says Larry Elliott, economics editor of Britain’s Guardian newspaper. The “structural weaknesses” behind the crisis “remain untackled”, leaving the economy “sick”.51

With the accumulation cycle suffering from hardening of the arteries, capitalism becomes more dependent on financialisation. This risky stimulant, legalised by the state, increases the frequency and severity of economic seizures.

After each seizure, the government doctor is called in to prescribe more taxpayer-funded stimulants, a cure that soon worsens the disease. In effect, the state nationalises economic crisis, guaranteeing the bad habits of “too big to fail” corporations who drag the economy into chronic failure.

Propping up big business with government protection rackets is an inevitable outgrowth of capitalism. US liberal Barry Lynn notes: “Our political economy is run by a compact elite” who “fuse the power” of government and corporations in ways that allow members of the elite to decide “who wins, who loses and who pays”.52

Not surprisingly, over the history of capitalism, those hardest hit by economic crises have always been the grassroots of poor states and the workers of rich states. They have often taken to the streets, and sometimes the barricades, to resist job losses, income reductions and government austerity measures.

Since the 2008 financial implosion, and state bailouts of bankrupt corporations, grassroots anger in Europe and America has been focused as much on politicians as capitalists.

That’s an early sign of how state nationalisation of economic crisis will change the nature of popular protest in times to come. Of necessity, protests over economic hardships will take on the look of uprisings against governments. The institutional subservience of politicians to capitalists will stir people to insurrections that cross national borders.

Make the rich pay for the crisis!’

Make the rich pay for the crisis!” That chant rang out from multitudes of Greek unionists in 70 cities on 24 February 2010. From a total workforce of five million, two million were striking against the PASOK social democratic government’s austerity plan to fund the bailout of Greek financiers.

People are outraged. Their blood is boiling! Now there’s a mood to escalate the strikes. We shouldn’t pay for the crisis, the ones who caused it should pay.” So said Vagia Gouma, a public sector worker taking part in the mammoth march in Athens.53

The day before, huge rallies took place across Spain’s cities in opposition to the PSOE social democratic government’s crisis measures on behalf of the rich elites.

A week later, half a million public sector unionists in Portugal went on strike against a pay freeze and other budget cutting by the PS social democratic government. “There’s a huge amount of discontent,” reported Manuel Carvalho da Silva, general secretary of the General Confederation of Portugese Workers.54

This cross-border wave of social unrest was bolstered by high-profile strikes of German and French unionists.

Europe’s workers are becoming increasingly restive,” notes Sean O’Grady, economics editor of The Independent newspaper in Britain. He spoke of “the start of the greatest demonstration of public unrest seen on the continent since the revolutionary fervour of 1968”.55

On the other side of the globe, China’s grassroots are growing more restive. According to Beijing’s own figures, almost certainly understated, incidents of “mass unrest” grew from 8,709 in 1993 to over 90,000 in each of the past three years. And that’s despite a harsh state ban on independent unions and parties.

More and more evidence shows that the situation is getting more and more tense, more and more serious,” reports Yu Jianrong, director of social issues research at the Chinese Academy of Social Sciences56, an affiliate of the State Council of China. He said the Communist Party’s obsession with retaining state power through “violence” and “ideology” was taking China to the brink of “revolutionary turmoil”.57

Different political systems in Europe and China have produced different types of government, one parliamentary, the other authoritarian. Yet both forms of capitalist administration are now facing a similar challenge: popular uprisings. The obscenity of governments protecting the rich at great cost to the poor is stirring up a social contagion. What cannot be foreseen is how far and how fast the contagion will spread around the globe.


If the climate were a bank’

If the climate were a bank, they would have saved it by now.” So said Hugo Chavez, the socialist president of Venezuela58, inside the recent Copenhagen climate summit59, echoing a slogan chanted by 100,000 protesters outside.

The governments of America and Europe have spent 313 times more on the Great Bailout than on climate change programmes.60 These corporate politicians well know that climate change threatens life on Earth, yet they put profits first.

According to professor Kevin Anderson, director of the Tyndall Centre for Climate Change Research61, only around 10% of the planet’s population will survive if global temperatures rise by 4C. The current UK Met Office projections are that 4C could be exceeded by 2060, and 6C by century’s end.

The prospects are “terrifying”, says Anderson. “For humanity it’s a matter of life or death.”62

2,500 climate experts from 80 countries issued a statement in March 2009 saying that, without strong carbon reduction targets, “abrupt or irreversible” shifts in climate may occur which will be “very difficult” for societies to cope with. Their statement was delivered to a preparatory conference of the Copenhagen summit.63

Nine months later the Copenhagen summit ended in failure, with no binding agreement to reduce carbon emissions. A cabal of rich states, led by US president Barack Obama64, had sabotaged the proceedings.

The governments of the elites have no solutions to offer,” observed the Climate Justice Now! coalition65, an eyewitness to the summit.66

Deep fracture inside world system

Copenhagen exposed a deep fracture inside the world system. Delegates from poor states chanted “We will not die quietly” as they staged walkouts in protest at the sabotage of rich states.67

This system fracture reflects the geosocial inequality of climate change.

The rich states, which produced 75% of the carbon now in the atmosphere, sucked much of their wealth from poor states through a mix of market forces and military power. Now the poor states, mostly sited in geographical zones forecast to be hit first and worst by climate change, are being deserted by the rich states. In keeping with market traditions, the global North is disputing and devaluing its ecological debt to the global South.

80% of the planet’s population reside in countries classed as “developing”. These 5.6 billion people live mostly in poverty and increasingly in urban slums. Now many are on the front line of climate catastrophe. Their survival will hinge on their struggle to “change the system, not the climate”, as protesters chanted at Copenhagen.

The main historic agent and initiator of a new epoch of ecological revolution,” says US socialist John Bellamy Foster68, could well be found in “the third world masses most directly in line to be hit first” by climate change. Like Marx’s proletariat, they have “nothing to lose” from making the “radical changes” needed to avoid disaster. Foster points towards poor people in low-lying areas facing rising sea levels, such as India’s Kerala state, China’s Guangdong industrial region and Thailand, Vietnam and Indonesia. With many of them being wage workers, they potentially form the “global epicentre of a new environmental proletariat”.69

The rights of Mother Earth

So who can inspire and mobilise the masses of the global South as the climate catastrophe lurches closer? Naturally, someone who looks and sounds and thinks like them.

Evo Morales, the first indigenous and socialist president of Bolivia70, has stepped into the void left by Copenhagen’s failure.

Morales is convening a People’s World Conference on Climate Change and Mother Earth’s Rights in Bolivia in April 2010. Invited without strings are national governments, UN agencies, social movements and climate scientists.71

Key objectives of the People’s World Conference are:
  • Analyse the structural and systemic causes of climate change.
  • Propose substantive measures for the well-being of humanity in harmony with nature.
  • Decide on a draft Universal Declaration of the Rights of Mother Earth.
  • Work towards a People’s World Referendum on Climate Change.
  • Move towards the establishment of a Climate Justice Tribunal.
  • Define strategies for mobilisation against climate change and for the rights of Mother Earth.72

According to Pablo Solon, Bolivia’s UN ambassador, Morales has called the conference with the aim of altering the international balance of forces and so changing the agenda on climate and other eco-issues.73

Will these aims be advanced by the People’s World Conference? Only time will tell. But times of change do call forward prophets of change who can mobilise the forces of change.

As Christophe Aguiton of the European Social Forum said in reference to the Bolivian president’s initiative: “In periods of uncertainty and transition, such as the times we are in, initiatives that could be seen as crazy or unrealistic are, from time to time, those that change the course of history.”74

Profiteering from pollution

In the centres of world power, a very different story is unfolding. Washington, Berlin, London and other capitals of capitalism are promoting a market “solution” to climate change.

A global carbon market75 is being pushed hard by the political and corporate elites of rich states. Their aim, in the words of a climate justice coalition, is to “create opportunities for profit rather than to reduce emissions”.76

Carbon trading transforms the planet’s atmosphere into a commodity, opening it up to speculative bubbles. According to a 2009 report by Friends of the Earth77, carbon trading could give rise to the world’s largest financial derivatives market.78

Carbon markets should be popularly named pollution markets. They allow a polluter to buy the right to continue emitting carbon, and to sell the right to pollute to other emitters.

Pollution markets are, in effect, planned to fail, otherwise there would not be sufficient tradable emissions to keep the market profitable. It is the worst form of climate change denial. “Green capitalism”79 is a dangerous mirage.

Government advisors who dispute official lies about carbon trading are being gagged and hounded. That was the experience of Clive Spash, an ecological economist in Australia,80 who was muzzled and threatened by his boss at the Commonwealth Scientific Industrial Research Organisation. Spash had to resign from CSIRO in order to publish his research paper critical of carbon trading.

In this paper, Spash reveals how carbon permits have become “a serious financial instrument in markets turning over billions of dollars a year”. Yet the “reality” of carbon trading is “far removed from the assumptions of economic theory and the promise of saving resources”. Spash says “corporate power” has shaped carbon market design and operation, giving “the potential for manipulation to achieve financial gain, while showing little regard for environmental or social consequences”. His conclusion? “The focus on such markets is creating a distraction from the need for changing human behaviour, institutions and infrastructure.”81

In capitalist mythology, markets are the best way to find the “real” price of anything. This claim is proven false by the artificially low market price of fossil fuels, a result of capitalism’s looting of nature without factoring in real ecological and social costs.

Climate scientist James Hansen, director of Nasa’s Goddard Institute for Space Studies,82 tells governments to face up to the truth: “As long as fossil fuels are the cheapest energy, their use will continue and even increase on a global basis. Fossil fuels are cheapest because they are not made to pay for their effects on human health, the environment and future climate.”83

Now it’s up to us all’

The huge banner held by young eco-activists as they blocked a coal train in Australia says it all: “Rich world greed wrecked Copenhagen. Now it’s up to us all.”84

A just society would outlaw profiteering in the carbon emissions threatening life on Earth. That sense of morality is driving the swift rise of the youth-based climate justice movement in the rich states.

Speaking on behalf of 100,000 climate justice campaigners at Copenhagen, the Klimaforum09 declaration rejected the carbon market and other forms of “climate neocolonialism”.85

The deep fracture of the world system between rich and poor states is being replicated within rich states between ruling elites and radicalising youth. The ecological crisis is making allies of people who may not otherwise have felt a common bond.

You probably know the saying, “Those who the gods would destroy, they first make mad”. It is mad for capitalism’s elites to profiteer in carbon emissions that may doom them and their kind. They are ruling a system unable to save either itself, or its citizens, from destruction because capital accumulation is more urgent.

As that realisation sinks into the public mind, a popular cry will ring out: “We won’t let you destroy us!” Then the climate crisis will also become a political crisis, a necessary tipping point being brought closer by the rapid growth of climate movements in poor states and among the youth of rich states.

Broad spectrum of ecological hazards

As the international climate movement blossoms, realisation will spread that global warming is just the most urgent threat among a broad spectrum of ecological hazards. Their common source is capitalism’s destructive exploitation of nature without being held to account.

If the world’s 3,000 biggest corporations were made to pay the cost of their environmental damage, says a United Nations report, in 2008 they would have faced a bill of $2.2 trillion. That figure, larger than the national economies of all but seven countries in the world, would have gutted their profits by an average of one-third.86

All operations of capitalism “violate” nature’s laws of “restitution and metabolic restoration”, notes John Bellamy Foster. While the most serious ecological threat is “widespread, multi-faceted” climate change, “the global environmental crisis involves manifold problems and cannot be reduced to global warming alone”.

Foster includes these ecological “hazards”:
  • Species extinction.
  • Loss of tropical forests.
  • Destruction of ocean ecology.
  • Disappearing supplies of fresh water.
  • Despoilment of lakes and rivers.
  • Detrimental effects of large dams.
  • Desertification.
  • Toxic wastes.
  • Acid rain.
  • Urban congestion.
  • World hunger.
  • Overpopulation.

Together with climate change, “these threats constitute the greatest challenge to the survival of humanity since its prehistory”, he states.

Since “fundamental” changes in capitalism are “off limits”, the system can only offer technological responses to ecological problems, concludes Foster. “But any technological gains in efficiency in the use of natural resources are overwhelmed by the extensive and ecologically disruptive pattern of growth that characterizes this rapacious system. Hence, capitalism is a failed system where ecological sustainability is concerned.”87


Peak everything in the 21st century

US ecologist Richard Heinberg88, a senior fellow at the Post Carbon Institute89, captured a spreading mood of anxiety in the title of his 2007 book Peak Everything: Waking Up to the Century of Declines.

A deluge of research findings reveal that oil and gas,90 fresh water,91 at least eleven minerals (including lead, mercury, phosphate rock, potash and selenium)92 and other resources essential to industrial capitalism have either peaked or are close to doing so. Global coal production could peak within two decades.93

Capitalism’s growth gene has spurred a reckless looting and spoilage of nature, particularly since the invention of the oil well drill 150 years ago. The world system could not allow sensible conservation measures to impede its insane plunder of the planet.

Now the onset of a broad spectrum resource crisis is about to shove capitalist society hard up against the limits of capitalist growth. Probably the crunch will be first felt in soaring oil prices, triggering economic chaos and geopolitical shifts.

Over the past year, a barrel of crude oil has doubled in price to $78. Two leading oil traders, Bank of America and Barclays Capital, have told their clients to brace for relentless escalations in crude prices over the decade.

Oil has the potential to flirt with $100 this year,” says Amrita Sen, an oil expert at Barclays. “We forecast an average price of $137 by 2015.”

Driving these surging prices are falls in supply alongside longrun rises in world demand. Francisco Blanch, from Bank of America, reports that output from non-OPEC states is falling by 4.9% each year, despite Russia’s reserves. OPEC states can plug only a quarter of the gap.

The oil spike brought the global economy to a shuddering halt in 2008,” notes British economic commentator Ambrose Evans-Pritchard. “This time the crunch may hit before the West has fully recovered. Whatever happens, the US, Europe and Japan will soon transfer a chunk of their wealth to the petro-powers. It is a new world order.”94

Searching for a miracle

September 2009 saw the publication of Richard Heinberg’s 80-page report on net energy levels and the fate of industrial society, significantly titled Searching for a Miracle. Here 18 known energy sources are analysed, factoring in their energy returned on energy invested (EROEI).95

The world’s current energy regime, mainly oil, gas and coal, is “unsustainable”, Heinberg notes. It is a “commonly held assumption” that alternative energy sources will be readily available, so long as sufficient investments are made in them, allowing life to “go on essentially as it is”.

But is this really the case? “Alas, we think not,” he declares. “The fundamental disturbing conclusion of the report is that there is little likelihood that either conventional fossil fuels or alternative energy sources can reliably be counted on to provide the amount and quality of energy that will be needed to sustain economic growth – or even current levels of economic activity – during the remainder of the current century.”

That being so, he says, “a sensible transition energy plan will have to emphasize energy conservation above all”.96

Heinberg’s report offers detailed, believable and necessary research on net energy practicalities. That’s the up side.

And here’s the down side: it’s a technocratic response to problems, so does not put social change alongside energy change. Thus Heinberg is left with his “disturbing conclusion” that existing society will face an energy deficit in the 21st century.

False hope of conservation

Heinberg’s promotion of energy conservation is a false hope.

Nearly three decades ago Leonard Brookes, chief economist at the UK Atomic Energy Authority, showed how attempts to reduce energy consumption by increasing energy efficiency would simply raise demand for energy in the wider economy.97

Brookes had confirmed the 1865 findings of William Jevons on British coal consumption, widely known as the Jevons Paradox.98

Only heavy government taxation on corporate energy use will reduce energy consumption through depressing profit levels and economic growth.

Such a tax would require political restrictions on the accumulation cycle, a socialist proposal absent from Heinberg’s conclusions.

We need to reinforce technocratic responses, like Heinberg’s, with socialist proposals. We need to say something Bill Clinton would never say: “It’s the system, stupid!”99

Hooked on fossil energy

Nicholas Georgescu-Roegen,100 a trailblazer for ecological economics, is best known for his 1971 book The Entropy Law and the Economic Process.101

In this book, Georgescu-Roegen says that humanity’s existence ultimately depends on just “two resources of wealth”. The first is “the finite stock of mineral resources in the earth’s crust”, such as oil, and the second is “a flow of solar radiation”.102

Capitalism’s transition to industrialisation was a revolutionary break with the way human societies related to nature.

For the first time in history, the flow of solar radiation was no longer the main energy supply for the system of production and satisfaction of human needs. Instead, industrialisation was powered by concentrated (or mineralised) stocks of energy in the earth’s crust, which we call fossil fuels.

Fossil energy perfectly suited the imperatives of capital accumulation. Locality lost meaning with global transport systems powered by fossil fuels. Ready access to energy resources meant business could (re)locate anywhere in the world. The constant intensity of fossil energy impelled a constant intensity of work rhythms.

The switch to fossil fuels allowed capitalism to break free from historical limitations of space and time. Elemental market forces penetrated every geographical zone. Previously unthinkable extremes of the exploitation of labour and nature became possible, and thus necessary.

Despite marginal forays into renewable energy projects, 21st century capitalism remains hooked on fossil energy.

Here are the current ratios of world primary energy production103:
  • Crude oil 34%.
  • Coal 26.5%.
  • Natural gas 20.9%.
  • Combustible renewables (biomass) 9.8%.
  • Nuclear 5.9%.
  • Hydroelectric 2.2%.
  • Other (mainly wind and solar) 0.7%.
So fossil fuels (oil, coal and natural gas) today produce over 80% of the planet’s energy. And fossil fuels are not just essential to capitalism’s industry, transport and urbanisation. Over the last generation or two, oil has also become the basis of market agriculture.104

Leaving aside biomass105, which in its present forms probably cause more ecological problems than solutions, under 3% of world energy is currently produced by true renewables, mainly hydropower. Of that tiny portion, less than 1% comes from wind and solar power.

Can capitalism switch to renewables?

Facing the rapid depletion of fossil fuels, could global capitalism make an emergency switch to renewable energy? Before answering that question we need an acquaintance with four energy factors: net energy, unit cost, potential scale and output consistency.

EROEI, energy returned on energy invested, measures net energy. For investment in an energy source to be worthwhile, EROEI needs to be more than 1:1, and the higher the ratio the better. Here is the EROEI of fossil fuels and true renewables:
  • Coal 50:1.
  • Oil 19:1.
  • Natural gas 10:1.
  • Hydropower 11:1 to 267:1.
  • Wind 18:1.
  • Solar photovoltaics 3.75:1 to 10:1.
  • Concentrating solar thermal 1.6:1.
  • Tidal ~6:1
  • Wave 15:1

The unit cost (measured in cents per kWh) of existing power generation in America is:
  • Coal 2 to 4
  • Natural gas 4 to 7
  • Hydropower 1
  • Wind 4.5 to 10
  • Solar photovoltaics 21 to 83
  • Concentrating solar thermal 6 to 15
  • Tidal 10
  • Wave 12

Here is today’s global annual electricity production from fossil fuels and true renewables, followed by their potential scale of electricity generation (measured in TWh):
  • Fossil fuels (oil, coal and natural gas) 11,455 / at or near peak
  • Hydropower 2,894 / 8,680
  • Wind 160 / 83,000
  • Solar photovoltaics 8 / 2,000
  • Concentrating solar thermal 1 / 100,000
  • Tidal 0.6 / 450
  • Wave ~0 / 750

Integrating the three energy factors of net energy, unit cost and potential scale delivers a clear verdict on alternative energy. Wind and solar thermal are the only likely contenders against fossil fuels, going by known technologies.

With optimum geographical placement, wind and solar thermal can produce net energy returns nearing those of fossil fuels, although often there is a deficit. They can already generate power at prices approaching those of fossil fuels, although often there is a gap, sometimes largish. And they have the global potential to produce more energy than fossil fuels.

But what about the fourth energy factor, output consistency? That’s where wind and solar thermal fall down. They suffer from intermittency. They cannot guarantee a consistent output of energy.

In the assessment of Richard Heinberg, no single energy source is capable of replacing fossil fuels “at least until the problem of intermittency can be overcome”. The “daunting” core problem is successfully replacing the “concentrated store of solar energy” in fossil fuels with a “flux of solar energy” in such forms as sunlight and wind. (Emphasis in the original.)106

While solar power and wind generation are expanding, sometimes rapidly as in China, nowhere do these energy sources get treated as anything more than useful auxiliaries to fossil fuels. None of the powerful states have plans to make true renewables their sole or main energy source in the foreseeable future. They are focused on cornering the world’s dwindling supplies of oil and gas.

Global capitalism’s response to the energy crunch is as logically insane as its reaction to climate change. A technically feasible emergency programme of wind and solar energy construction cannot take priority because it would reduce profitability throughout the world economy.

The accumulation cycle would be destabilised since net energy returns from these renewables are sometimes lower than fossil fuels, and unit costs often higher, while output consistency cannot be guaranteed.

So global capitalism is trapped in a resource crisis of its own making, placing most people on the planet at serious risk.

War of all against all

World population rose from 791 million in 1750 to 6.7 billion in 2008.107 This growth surge flowed from industrial and agricultural revolutions which remain massively dependent on fossil fuels.

As Richard Heinberg shows, an energy deficit in the 21st century is looming under capitalism.

If this energy crunch hits hard before capitalism has been replaced by a system of solidarity, then what? Then the outlook would be dire for billions of Earth’s citizens, especially those without wealth or in poor countries.

Powerful states would squander finite resources in infinite wars to monopolise dwindling resources. Their war machines, powered by fossil fuels, would divert resources away from renewable energy projects. In the wake of military devastation and resource loss, famine and disease would stalk the planet. Under the slogan of saving “our way of life”, economies and societies would be militarised, undermining living standards and traditional liberties. To divert internal dissent and seize external resources, mainstream politicians would scapegoat “barbaric hordes” from “uncivilised lands”.

It would become, as Thomas Hobbes wrote in his 1651 royalist classic Leviathan, a “war of every man against every man” where most lives were “solitary, poor, nasty, brutish and short”.108

If you think that sounds too grim, think about this: the end times of feudalism were the breeding ground for the Hundred Years War. During this semi-continuous war which actually spanned 116 years (1337-1453) two-thirds of the French population perished, standing armies were introduced into Western Europe for the first time in eight centuries, and the exclusionary ideology of nationalism came into vogue across England and France.109

No smooth transition

The first stages of a new Hundred Years War are already underway, this time global in scale.

The white Republican conservative George W. Bush invaded Iraq and Afghanistan, key states in the oil-rich Middle East region, and began talking about a “Long War”110. Both occupations are being continued by the black Democratic liberal Barack Obama, who is extending the Afghan war into Pakistan.

Bush prepared the ground for war against oil-rich Iran, a policy continued by his successor. Now Obama is surrounding oil-rich Venezuela with US troops and warships.

The common strategy of Bush and Obama expresses the commitment of US elites to a military-economic offensive to control the territories, logistics and pricing of oil. Parading in the name of “energy security”111, this petro-imperialism makes life insecure for people across the planet.

There is no possibility of a smooth transition to a world of renewable energy while the planet is ruled by fossil capitalism. The path to an alternative energy system merges with the path to an alternative social system.

As Marxist eco-philosopher Elmar Altvater says: “A society based on renewable instead of fossil energy sources must develop adequate technologies and above all social forms beyond capitalism. The relation of society to nature cannot remain the same when the fuel driving capitalist dynamics is running out.”112

Self-organising for social prosperity

Around the world, a host of community initiatives are pointing the way towards “social forms beyond capitalism” and a new “relation of society to nature”.

Some examples: transition towns, community housing, free public transport, bike sharing, cooperative businesses, indigenous collectivism, localised renewable energy, open source technologies, social networking, free universities, unofficial currencies, barter systems, seed banks, community gardens, urban farming, permaculture startups, farmers markets, food banks, social unionism, doctors without borders, community medicine, free legal aid, the list is endless.

These community initiatives reveal dissatisfaction with the old ways. Their common driver is an expansion of social wealth, not private profit, within the limits of nature, not exceeding them.

Through self-organisation, they are showing how to create the material possibilities for social prosperity despite the threats of economic crisis, energy deficits and climate change.

But something crucial to success is missing: the ability to apply the lessons of these community initiatives on a much bigger scale.

Our scale must be global

Our scale needs to be large enough to reshape world civilisation into a system of human solidarity and ecological responsibility. And that will require internationally coordinated political action.

Some may say this is not possible. Yet what is even less possible to imagine is a decent life for all Earth’s citizens while capitalism rules the world. The choice will be stark for most humans during capitalism’s end time: organise system change or be crushed.

Others may say that internationally coordinated political action is counter-productive. Their pessimism about politics is understandable, given the many historical negatives of social democratic113 and Communist114 parties and national liberation movements115.

Even so, our salvation depends on overcoming pessimism. Optimism must be organised.

Per capita fossil consumption and carbon emissions are miles above global averages in the rich nations. Way over half of their economic and state activities would be senseless in a global society of solidarity. Redundant would be much of the existing finance, advertising, retail, transport, manufacturing, real estate, chemical, auto, oil, coal, weapons and security industries, along with most of the police and all of the military agencies (army, navy, air force, spies).

Eliminating economic and state activities dedicated to capital accumulation, not social prosperity, would slash fossil consumption and carbon emissions while freeing up workers and resources for green jobs.

To move on this scale would clearly require internationally coordinated political action.

The real question is: how do we prevent our necessarily global scale of self-organisation from being subverted into serving sectional interests rather than the social good? That comes down to participatory democracy, itself a reason for the widest possible participation in political action.

We’re not wired for autonomy’

Even establishment thinkers are flagging the end of the road for capitalism as we know it.

We’re nearing an endgame for the modern age,” says Jeremy Rifkin, a key advisor to the European Union. He points to “singular events” over recent times which “signal the end”: spiking oil prices in July 2008, food riots in 30 countries, financial implosion in September 2008 and “the breakdown in Copenhagen”.

Rifkin crafted the Third Industrial Revolution plan, a response to the triple crisis of economy, climate and energy, which was endorsed by the European Parliament in 2007 and is now being actioned by European Commission agencies. He is founding chair of the Third Industrial Revolution Global CEO Business Roundtable which embraces over 100 of the world’s leading companies in the fields of energy, transport, construction, architecture, real estate and information technology. Rifkin has authored eighteen books about science and technology’s impact on the economy, society and environment.116

Failure runs very deep,” notes Rifkin. Copenhagen failed because every world leader was “thinking geopolitics” and thus “looking out for their nation’s self-interest”, rather than “thinking biosphere”.

Moving towards “biosphere politics” will mean transformations in capitalism’s governance, economics and consciousness.

Governing units are going to change,” he predicts. “There’s going to be a shift towards continentalization.” The European Union is a “first attempt at organising a new frame of reference across continents”. In their early stages are “the Asian Union, African Union and South American Union”.

Given the “extreme dangers” of climate change, it is vital to “make thermodynamics the basis of economic theory”. Rifkin advocates “peer-to-peer sharing of energy across an intelligent grid system” in order to distribute renewable energy sources to every building on the planet.

Distributed energy requires distributed capitalism, and that relies on the opposite view of human nature than that of market capitalism,” he states. “We have to share across the world for it to work.” But this “collaborative commons” is not “socialism”, just a necessary shift from the current “top-down, centralized economic system”.

New scientific discoveries reveal human nature to be different from that suggested by capitalism’s Enlightenment117 philosophers. “We are not wired for autonomy or utility,” says Rifkin. “We are a social species” which is “wired for empathy and social engagement”.

A shift to continental governance and distributed energy will globalise the scope of human empathy, he forecasts. “When energy and communications revolutions converge it creates new economic eras and changes consciousness dramatically by shifting our temporal and spatial boundaries, causing empathy to expand.”118

Mixed messages in dying days

Looking at Rifkin gives us insights into the evolving ideology of an intelligent capitalist.

He sees the perfect storm coming. He knows emergency measures are needed if capitalism is to have any chance of survival. So he advocates radical reforms of capitalism’s market and governance, which he knows will also transform society’s consciousness.

Yet nowhere does Rifkin challenge the power and wealth of capitalism’s rulers. His contradictory strategy is: change the dynamics of capitalism while saving its old elites.

Such mixed messages were typical of establishment reformers in the dying days of past civilisations.

For instance, in a desperate bid to expand the social base of absolute monarchy, Czarist Russia sold land to freed serfs while also expanding the power of their oppressors, landlords and capitalists. These contradictory moves hastened the collapse and overthrow of the imperial order.119

Our response to Rifkin is simple. We seize on his good ideas, like distributed energy and global empathy, while rejecting his bad ones, like distributed capitalism and competing continents. That way, his good ideas can be put to good use, not subverted by loyalty to capitalism’s rulers.


Capitalism’s first hegemon

If you could time travel back to the early era of capitalism and ask 17th century citizens to name the system’s first hegemonic power, their answer might take you by surprise.

And the answer? The United Provinces, as the Netherlands was called in those days.120

During the 17th century the United Provinces founded the first modern share market, dominated world trade, ruled the ocean waves, conquered a vast colonial empire and subordinated rival states through a mix of wars and alliances.

The United Provinces was the imperial hegemon for around one century until fading in the early part of the 18th century. Its decline was due to a combination of internal dissensions and the pressures of commercial and military conflicts with rivals, especially England.

The United Provinces has now mostly slipped from our historical consciousness. Yet the Roman Empire, much more remote from us in historical time and social structure, remains universally known. Why? Because the scale of the United Provinces seems ridiculously small compared with what we see as necessary for today’s hegemon. Size does matter.

Superiority of scale

As the United Provinces declined in relative strength, England became the hegemon-in-waiting.121

A combination of geography, population, technologies, coal, factories, farming, canals, trade, banks, navy and colonies gave England a growing superiority of scale over rivals during the 18th century.

By the mid 19th century its manufacturing strength had earned England the title of “workshop of the world”.

The world hegemony enjoyed by England lasted around one century, similar to the time span of the United Provinces. And the causes of England’s demise were also similar: internal dissensions and the pressures of commercial and military conflicts with rivals, especially Germany.

England came out of World War I (1914-18)122 in a much weakened condition, eclipsed economically by the United States, clearly the new hegemon-in-waiting.123

Rise, dominance, decline, ouster

Now we start to see a repeat pattern. One country rises to world hegemony on the back of economic and military strength that is significantly greater in scale than rival powers.

Its period of global hegemonic dominance lasts a century or so. During this time the hegemon keeps relative order in a fractious world system, thus fostering the process of capital accumulation.

Then begins a period of relative decline caused by a combination of internal rot and external pressures.

Following a turbulent period of transition the old hegemon is ousted as Top Dog. Its place is taken by the hegemon-in-waiting.

A date with Uncle Sam

So when did “Uncle Sam” first become widely recognised as the global hegemon?

Maybe it was 1918, when the United States emerged as the big winner from World War I and was treated by other powers as deal maker at the Treaty of Versailles.124

Or maybe it was 1929, when the US dollar eclipsed sterling as the world’s leading reserve currency.125

Or maybe it was 1935, when European powers looked to United States leadership in standing up to Hitler, and when Washington wouldn’t, nobody else nipped Nazi expansionism in the bud.126

Or maybe it was 1941, when America’s entry into World War II (1939-45)127 was hailed as the beginning of the end for the fascist coalition of Germany, Italy and Japan.128

1918, 1929, 1935, 1941. It’s a judgement call. The important point is that America’s global hegemony will be nearing an end if the same one century time frame holds as true as for the two previous Top Dogs. And if similar causes of decline are eroding US strength.

Poor performance in recent times

A key performance indicator for hegemons is how well they rally the world system against challenges to their supremacy and strategies.

Facing serious crises of profitability, ecology and resources, the US hegemon has done poorly in recent years. Very poorly.

The international financial implosion of 2008 began in Wall Street, undermining US credibility as the arbitrator of neoliberalism.

The US-led bank bailouts bought a breathing space, but only at the cost of greater system instability, open splits with longtime allies (such as Germany) and an erosion of popular legitimacy.

China revved its growth engine in large measure by defying US pressure to revalue the yuan, yet Washington has not retaliated. Why? Beijing owns 10% of US public debt.129 That’s enough currency leverage to bankrupt America if Communist China’s capitalist rulers so chose.130

Since China’s economy would also suffer from any move by Beijing to dump greenbacks, it will remain an implicit threat unless Washington takes extreme action. There are parallels here with the Cold War nuclear standoff between Washington and Moscow. What message does that send?

One of Obama’s election pledges was to lead America out of the climate change denials of the Bush era.

Obama’s actions have shown what his pledge really meant: promote a global pollution market while continuing the Bush policy of protecting US production of coal, the biggest carbon pollutant.

Even to other rich states, this sounds like a mixed message which will be hard to sell, given public sourness with financiers who sucked up bailouts and now look to profit from carbon trading.

Meanwhile, most poor states are in revolt against Washington’s climate strategy, a split with the potential to destabilise the world system.

Control over Middle East oil resources is the lynchpin of US petro-imperialism.

Following George W’s proclamation of “victory” over Iraq in 2003, US troops were soon engulfed in the flames of people’s resistance. Unsure how to respond, the Washington-Pentagon-corporate axis of evil tried three strategies. At first, use more firepower. When that failed, the US began to fund, arm and empower a minority of insurgents while terrorising the rest. After the failure of strategy 2.0 came 3.0: fund, arm and empower all groups of insurgents if they cease fire. Most of the guns went quiet, since effective power was ceded to the insurgents.131

Now, on Obama’s orders, US forces in Afghanistan are acting in ways similar to what delivered humiliation in Iraq.132

In Yemen, southern gateway to the Middle East, a Muslim insurgency in northern provinces and a national liberation uprising in southern provinces threaten the authoritarian rule of president Ali Abdullah Saleh, Washington’s crony. Despite an influx of US money, arms and troops into Yemen, Saleh is on an “ejection seat”, according to Mohamed Hassan, a specialist in geopolitics and the Arab world.133

During February 2010 the leaders of Syria, Iran and Hezbollah convened a war council in Damascus to plan joint counterstrikes if Israel attacked any one of the three parties. The editor of Al Quds al Arabi newspaper says the war council expresses “an unprecedented sense of self-confidence and an unheard-of preparedness for retaliation” against Israel, America’s ferocious ally in the Middle East.134

The net result of these US setbacks is an erosion of Washington’s power across the Middle East, allowing Turkey and Iran to gain ground.135

Collapse of ‘New American Century’


Anonymous said...

The detailed tracing of revolutionary history is interesting .
I don't think the conclusions flow from the document's central collapse trajectory of capitalism message.
In conclusion to his warning of tumultuous apocalypse, Grant suggests three local action points; support for three small reformist union/community campaigns, support for the CTU's "alternative strategy" and an abstract call for "strategic unifications of the left".

I 've been actively supportive of the Unite union's $15 campaign, but without any illusion that it a presents a potential challenge to capitalism.

As a worker's choice of weapon in the final showdown with capitalism, the CTU document is bizarre.
The paper contains some useful information, but politically it is a forthright defence of capitalism. In its opening and closing argument the 'alternative strategy" emphasizes its aim as "an economy that works for everyone". It calls for support for business, including the reactionary nationalist line of "Buy kiwi made".
The CTU's document is not even consistent partisan unionism, in every phrase and at every turn it carefully avoids taking a class stand.
In the section specifically about unions there is no mention of the present stifling restrictions on workers freedom to strike. The underlying assumption of the "alternative economic strategy" is the fairy tale that sensible discussion can lead to the future adoption of a new social/ economic model that "works for everyone".

The "alternative economic strategy" contains no handles or levers which working people might grasp and turn to change the world. That was never its purpose. Those sort of documents have a different purpose. They are routinely created to give some legitimacy to the talking heads of the union bureaucracy as they seek to maintain their position by parley with our rulers rather than organisation of the working class.

Strategic unifications of the left are dialectical, they can only result from honestly stated expressions of difference.

in solidarity,

Don Franks

Anonymous said...

At the G-20 meeting, one very brief discussion over global warming is scrunched into a meal break.
According to Scientific American, despite calls from some EU leaders to raise this issue at the G-20, they were unable to get it onto the formal agenda.
So what is it that so distracts the governments of the G-20?
What is it, that is absorbing their attention so much that dangerous global climate change endangering the lives of millions of people, mostly in the third world, is not even considered worthy of being an official topic for discussion?
The answer is, -- CURRENCY WARS --

In an echo of the 1930s, Currency Wars between the major powers have broken out. Each are trying to shore up national growth at each others expense by devaluing their currencies. This preoccupation has according to Scientific American pushed climate talks onto "the back burner".
Scientific American: "Currency Wars have pushed climate talk even further on the back burner of the G-20 meeting in Seoul, Korea, this week as President Obama and other world leaders spar over the global economic recovery."
In response to the global economic downturn Central Bankers, and the governments they advise, are trying to increase export trade advantages by slashing the value of their currencies.
As well as consuming the G-20′s full attention and putting global warming off the agenda, Currency Wars have a number of other effects.
1/ The most important effect and the reason for doing all this- It promotes profit growth, (at least on a national level).
2/ In a world awash in unsold goods, and glutted markets, it makes your country’s trade goods cheaper on the world stage.
3/ Theoretically this increases export sales, while cutting imports. (as long as everyone else doesn’t do it as well, this can grow your nation's economy, but at the expense of other countries.)
4/ It slashes the buying power of working people delivering a massive wage cut to the working people of each country that devalues.
5/ It threatens a race to the bottom and a call for trade protectionism to avoid this.
5/ It increases the likelihood of trade wars, stirs up nationalism and heightens the tensions that lead to shooting wars.
At a time of negative profit growth, due to the recession, you can see why the governments of the G-20 would be concerned. As maintaining profit/growth is their main obsession.
In the 20th Century most of these same governments fought wars and staged coups, violently suppressed unions and other social movements, stood by while public and private enterprise were allowed to recklessly pollute and damage the environment. All to promote the advance the profit system. So it is no surprise to me that in the 21st Century these same governments are preparing to commit ecocide.
It is like being locked in a burning house that is being looted by gangsters, who are too distracted fighting each other over the loot, to attend to putting out the fire…
Except in this case, there is no other house to go to, and these dangerous gangsters are locked in the house with the rest of us.