Capitalism and Climate Change: Cause and effect (2019)

From the September 2019 issue of the Socialist Standard

In a recent interview with Channel Four veteran Jon Snow, Bank of England Governor Mark Carney made the audacious claim that capitalism is part of the solution to climate change (LINK.). Carney calmly delivered this claim in an ongoing capitalist context of political malaise, escalating trade tensions, continued financial mismanagement, and imminent sovereign debt crises.

The argument he made was that in order to mitigate risks (not doing anything about climate change rendered a risk to profitability, rather than dealing with the problem being a genuine social priority), capitalist businesses will have to move their focus from where we are today, to where we need to be tomorrow. Perhaps this wooliness doesn’t placate your concerns? Well, Carney went further in arguing that the financial sector had a prominent role to play in this switchover, whereby funds will be withheld from businesses that are unable to move with the times and prioritise climate change.

When probed by Snow, Carney reiterated that capitalist businesses which ignored climate change would go bankrupt ‘100 percent’. While you could argue that an incumbent business which completely disregarded climate change could plant the seeds of their own long-term demise, the ‘100 percent’ route to bankruptcy is by a capitalist ignoring profitability.  Carney would most probably respond that, as climate change poses a ‘risk’ to long-term profitability, capitalist businesses will be forced to prioritise the mitigation of climate change. However, surely the Governor cannot believe that other ‘risks’ of not making a profit are simply going to make way for the prioritisation of the environment?

Leaving aside Brexit and the US-China dispute, let us consider a few contemporary ‘risks’ prioritised by financial institutions. Argentina, for example, faces yet another sovereign debt collapse. Once perceived as an emerging market with relatively wide investment margins, its borrowings from western financial institutions soon proved to be unsustainable. Rather than allowing for an accountability of failure on behalf of banks and investors, the Argentinian government has been provided with multiple large IMF bailouts. Only months since a $7.1 billion IMF loan, Argentina’s dollar-denominated sovereign debts appear on the precipice of default as the strongly IMF backed incumbent government came second in primary elections, resulting in a 25 percent devaluation of the peso and a stock market collapse. 

In Malaysia, Goldman Sachs has promised to ‘vigorously defend’ itself against state prosecutors who claim that senior bankers and domestic politicians alike had embezzled state investment funds, defrauding investors in the process. Does any of this inspire confidence that the financial sector can lead a gilt-edged defence of the environment? Not when such unprofitable investments in loans are bailed out and fraud and embezzlement are vigorously defended. Capital that risks disappearing because a sovereign state borrower is unable to repay the loan cannot be protected by central banks and monetary funds indefinitely, but they will be defended as long as possible at whatever social cost. The idea that investments in loans that are not ‘profitable’ will lead to an immediate risk to bankruptcy or to a redirecting of capital into sustainable and socially acceptable ends is an age-old laissez-faire myth.

As per usual with liberal economics, climate change has been reduced to an economic abstraction in an effort to plead for the capitalist system. Can we afford to wait for climate change to pose the biggest risk to capitalist profits? Are central banks and the IMF going to allow financial institutions to go ‘bankrupt’ if they continue to make loans that turn out to be unprofitable investments, as Carney insists?  Is it likely that in the immediate future climate change will overtake the quarterly demands of investors? How long will it take to simply wait for the profitability of environmentally-damaging goods to slowly deplete?

Can we afford to wait? The answer of course, is no. Environmental groups must no longer prioritise the achievement of empty emissions promises from politicians on behalf of financiers and capitalists. The socialist response is to advocate a system based on common ownership and economic democracy which can prioritise social need, rather than the ability to make profits and if not, to defend unprofitable investments at any social cost. 

James Clark

Freedom of Movement: Another Euromyth (2019)

From the July 2019 issue of the Socialist Standard

The freedom of movement for workers is one of the European Union’s ‘four economic freedoms’. Freedom of movement is one of the key elements of membership and is championed by Liberal and Social Democratic parties. How then, do socialists engage with and redirect support for this concept, to support for socialism?

Genuine socialists seek to abolish class, and with it the money, wages and nation states which facilitate its reproduction. As such, one could say that the freedom of labour will become as irrelevant in socialist society as the freedom of capital. However, socialists accept that work of some form – in contrast to wage labour – will continue to exist in a democratic society. It follows then that there will still be ‘workers’ who would benefit from an enhanced and genuine freedom of movement. In a border-free world, workers will be able to reside where best suits their abilities and needs, without the constraints of economic and social mobility.

The socialist response to this is to categorise freedom of movement in the EU as freedom of movement of wage labour. This, of course, is oxymoronic. Under a wage labour system, freedom of movement is utilised to facilitate economic and political regression. Freedom of movement undoubtedly generates national and ‘racial’ divisions between workers in a context of false scarcity. It is also, in reality, a contradictory concept to say the least. At its southern frontiers, workers from outside the EU are often presented with a grave fate quite polarised from that of freedom.

Economic migration is seen as undermining wage rates, and placing a strain on welfare resources. To many in deprived areas, these arguments against immigration have become intrinsically logical and deeply engrained. Despite its considerable merits in comparison to a system of economic migration such as ‘hukou’ in China, Liberals and Social Democrats obnoxiously replicate and encourage support for right-wing populism by acting as dogmatic apologists for the EU.

Unfortunately, recent political developments have provided increasingly fertile ground for smug liberal apologism in certain circles as well as right-wing populism in deprived economic regions. As this binary divide deepens, it increasingly becomes perceived as a question of good and evil. Going by results in the recent EU elections, potential socialist sympathisers seem to have been unable to not prioritise supporting the supposed ‘good’ option.

As socialists, we are right not to take sides in capitalist debates such as Leave or Remain, but we must be forthright in our economic critique. In other words, we must challenge, engage with and supersede capitalist debates and binaries. It is up to us to present the objective and inherent forces of capitalism as being to blame for economic deprivation, monotony, strife and the working class’s distance from any influence over their communities and society in general. It is only the socialist critique of capitalism that can reconcile the interests of workers. Only socialism can rebuild a sense of empathy between deprived workers inside relatively desirable borders, and those who are desperately trying to reach them. Ultimately, all workers are driven by a sense of fear regarding our own ongoing economic security – it is socialism’s job to bring those in the same economic class together politically.

It is vitally important that socialists provide a critique of EU freedom of movement, if we don’t, right-wing nationalists and vacuous liberals will continue to be able to frame a capitalist binary divide and prevent socialism from taking root in the working class.

James Clark

Mogg/Corbyn: Duelling Dinosaurs (2019)

From the June 2019 issue of the Socialist Standard

Jacob Rees-Mogg has called Jeremy Corbyn a ‘Marxist’ on more than one occasion. Is this delusion or cynicism? This ‘known Marxist’ is a politician who campaigned to remain in a capitalist trade bloc, their current political stance to nit-pick over the EU Customs Union.

The election of a ‘left-wing’ candidate as Party Leader has laid Labour bare as equal managers of capitalism in Britain. The fundamental belief held within the Labour Party is that what is good for business is good for workers. 

It is the absence of Marxist economic theory and the approach associated with this which renders Corbyn and his followers intrinsically incapable of challenging capitalist and reformist politicians in the Labour Party. By the same logic, it has also left Corbyn’s Labour unable to differentiate their position from the classic arguments for nationalisation and increased funding for the NHS.

This should not come as a surprise. Corbyn and his kind have consistently been far more interested in foreign policy debates than in Marxist political economy. For as long as state capitalist regimes and religious conflicts remain a priority to the British left, false titles such as Marxist will remain easily attributable to these politicians. This of course also applies to minor ‘Socialist’ parties who seek to influence Labour from the outside, unwilling to even stand candidates against a party which wouldn’t have them as members.

Instead of debating foreign policy, the welfare state and customs unions, a ‘known’ Marxist would be putting forward a class-based approach to contemporary capitalism. Known Marxists would argue that the exploitation of human labour is inherent in the capitalist system and that the interests of capital and labour are fundamentally opposed. In short, a known Marxist would argue for a new, socialist system of society. They would not argue for reforms to capitalism or state control of a capitalist economy.

The likes of Jacob Rees-Mogg will always scaremonger with regards to social democracy, reformism and state capitalism. Despite rhetoric of a return to a fabled decent society of years gone by, their intention by this is to drum up contemporary support for further liberalised capitalism. 

Regardless of their ideological posturing, many capitalist politicians appear well aware of the polarised interests of capital and labour and the exclusive role that the exploitation of the working class plays in generating profits. Evidently, the same cannot be said of the Labour Party. This can come as no surprise, as reformism is a capitalist ideology. Whether this is conscious, or derives from ignorance, is of course a question similar to this article’s premise.

Rhetoric continues to hide the real nature of the capitalist political debate. What level of working class compensation best facilitates the reproduction of the capitalist system? Should capitalists pursue profits without state interference or should the state apply restraint to protect capitalism’s interests as a whole? Social democracy or conservatism? Free markets or protectionism? 

The only way out of these reformist binaries is socialism. Socialism is a world without wages, money and profit; in short, it is a world without economic exploitation which by nature cannot exist under the current system. In this respect it is nonsensical to call Corbyn a socialist, and it is even more absurd to call him a Marxist. However, socialists should be aware of the right-wing cynicism behind these absurd statements.

James Clark