How we live and how we might live - Part 4 (2024)

From the December 2024 issue of the Socialist Standard

(Continued from last month)

In his 1884 talk, ‘How We Live And How We Might Live’, William Morris set out to describe what socialism can offer to working people that capitalism can’t. He began by inviting his audience to imagine a world without the miseries of poverty and war, curses that class societies like capitalism inflict upon us. In earlier articles in this series we explored how, in the modern world, the source of those ills lies in the deep structure of capitalism itself. This month we will explore those causes a little further and look at some of their consequences.

At the heart of modern capitalist societies lies a property system of universal competition based on the employer/employee relationship. This is a relatively recent development. Earlier ways of making a living by common access to the land or through small-scale craft work, for example, were largely extinguished as capitalism advanced and came to dominate Western Europe and America, and then later, the world. Today, everyone born into a capitalist society is forced to rely on the market to obtain what they need. According to their circumstances, they are forced into the role of an employer or an employee. If they are members of a cooperative or the owners of a small business, they must take on both roles, and manage the conflict between them.

Maximising profits

The aim of any capitalist business is to make a profit. It uses money capital to purchase materials, part-finished goods, machinery, office equipment, and other physical means of production. Crucially also, it buys human labour-power. It sets this and machinery to work on its purchased materials in order to produce goods for sale on the market. If the business has judged the market correctly, it will receive back from the sale of its products a sum of money equal to the capital sum originally advanced plus an additional amount — its profit — derived from workers’ labour. A portion of this money it will put into a fund for reinvestment in future production. Another portion will be used to pay taxes, rent and overhead costs like insurance. A third portion will be taken as revenue by the owners of the business or allocated as interest to shareholders.

If a business wants to stay in the market it must continuously receive back more money than it initially advanced. This is not just an aim but a necessity imposed by capitalism’s competitive property system. This additional sum, the business’s profit, is what allows it to grow. Growth, like profit, is not a choice, but a necessity enforced by the system. Let’s say our business owner has a very simple, inexpensive lifestyle (just for the sake of argument. Bear with us!). Could they not choose to keep their business small and make a minimal profit? For some small businesses who have found a niche market, that might be possible, at least for a while, but capitalism is a competitive society. Businesses compete for the money in your pocket. They know that if they do not grow by introducing labour-saving machinery, for example, or by taking advantage of economies of scale, then their competitors will, and they will be in danger of being priced out of the market. Competition drives growth in a capitalist economy.

To ensure that businesses stay competitive in the market, they must not only grow, but they must also maximise their profits. If at any time our frugal business-owner needs to replace less efficient or worn-out equipment, their low profit levels could well be a liability. If they need to borrow for this same purpose or simply to bridge the gap between investment and return, they may find themselves in difficulty. Lenders and investors aim, like other capitalists, to maximise their revenue, and will not be attracted to invest in businesses which cannot pay a going rate of interest. Thames Water, in the UK, is currently in just such a quandary. It is in dire need of inward investment, yet its inability to generate sufficient profit in the future has led its potential investors to declare it ‘uninvestable’.

To maximise income, businesses need to minimise their costs. In particular, they need to minimise their labour costs by keeping down their workers’ wages. Capitalist competition tends to result in businesses each making the same average rate of profit with respect to their invested capitals. By lacking direct competition, however, near-monopolies and cartels can often raise their individual rate of profit above the average. Exceptionally innovative businesses like those in the high-tech sector can often do the same, at least temporarily. Raised profits in these industries give their highly trained and creative workers scope for negotiating higher wages, especially, as is often the case, if their skills are in short supply on the labour market.

Below average

The bigger the front, however, the bigger the back. While some businesses can raise their profits above the average, others must operate below it. These need to keep wages down more firmly. Businesses of this sort often rely on a lot of partially skilled labour, which is often more plentiful and cheaper to buy in the market place. To get the maximum productivity out of their workers for minimum cost, their work regimes are often pressured, tedious and exhausting, leaving employees dispirited and lacking in self-esteem. Businesses of this kind tend to rely on a heavy disciplinary management style. They can demand long, irregular or unsocial hours of work. And if the law of the country permits, they tend to provide low levels of sick and maternity leave, and scant holiday pay. They often provide workers with little training or career development, giving them fewer chances to better their situation. When the market is in one of its cyclical declines and profits fall, their workers, being easily replaceable, are quickly laid off and find themselves surviving on minimal state benefits or, in the worst case, unable to pay rent and becoming homeless. And so the downward spiral continues.

Workers living on the poverty line and with few prospects sometimes gravitate towards the informal ‘black’ economy. This consists of businesses often operating in a highly competitive market that are fighting to minimise costs. Under these conditions, operating outside the law becomes a risk worth taking. For workers this has some advantages. If they get paid ‘under the table’ they can avoid deductions for tax and national insurance. The downside is that such companies tend to pay low wages, offer no training or possibility of advancement, and provide no arrangements for holiday or sick pay or other statutory benefits.

Another possibility which has always been an option for those with low skills and poor prospects is the criminal economy. For men, today, this generally means theft or burglary, or selling drugs. Most thieves are young men with few saleable skills. Despite the glamorous image perpetuated by heist films, a life of crime for most has few real rewards and the chances of getting caught are high. Selling drugs on the street is often gang-related and dangerous. And for the average dealer it nets little income. For women, entering the criminal economy generally means sex work or shoplifting where the prospects are even worse. Voluntary sex work is inherently dangerous. It is often illegal and dominated by pimps who skim off significant portions of a woman’s earnings. Shoplifting is stressful, provides low levels of income and again carries a high chance of arrest.

Race to the bottom

Poverty is not an unfortunate accident. It is a built-in feature of capitalism’s competitive property system and its employer/employee relationship. Businesses maximise profits by holding down wages, but they will take whatever means they can find to minimise costs. They will use cheap materials in their products like non-biodegradable plastics, or they will externalise costs by pumping waste into rivers and into the atmosphere. And just as the need to minimise costs drives pollution, so the competitive pressure towards growth fuels climate change. Damage to the human and natural environment is also a built-in feature of the capitalist system.

In 2005, Gordon Brown, then UK Chancellor of the Exchequer, commissioned Nicholas Stern to conduct research and report back on how moving to a low-carbon economy in the UK might be managed. The Stern Review, when it was finally delivered in October of the following year, was a vast, 700-page monster of a document. It has since spawned a significant academic industry. Today, however, its arguments seem ridiculously optimistic. It concluded that if states were to cooperate, the drivers of climate change could be economically managed, and CO2 levels kept below a threshold that at that time was thought to be sustainable. Skimming through its summary today, what stands out is the political naiveté on which it rested, its entire weight pirouetting on one tiny, innocent-sounding word: ‘if’ – ‘If states collaborate…’

Capitalism is not a collaborative system, nor is it designed to solve common problems. It is a system of ruthless competition. In the years before and since The Stern Review it has demonstrated over and again just how impossible it is for capitalist states to achieve the level of international cooperation Stern hoped for. Every year since 1995 thousands of scientists, politicians, and ‘stakeholders’ have sat closeted together in the UN’s COP meetings, thrashing out the issues. The effective outcome of all this activity has been negligible. Beyond a legally binding commitment of each participating country to implement its own greenhouse gas reduction measures, little has been achieved. Globally capitalism is still pumping CO2 into the atmosphere like there is no tomorrow. This year alone, CO2 levels have been soaring.

In 2013, George Osborne, Chancellor of the Exchequer in the Cameron government, summarised the problem in a carefully worded statement: ‘I want to provide for the country the cheapest energy possible, consistent with… playing our part in an international effort to tackle climate change. But I don’t want us to be the only people out there in front of the rest of the world’. And there we have it. Cheap energy is the key to keeping businesses competitive in the global marketplace. In a world of international competition, no country can afford to commit to using more expensive forms of energy unless all do. Finding anything but the loosest and most ineffective agreements on this issue has proven impossible. At the opening of the 29th meeting of COP last month in oil-rich Baku, Azerbaijan, Simon Stiell, the Climate Change Executive Secretary for the UN, made yet another plea for international cooperation to stem the rise in global temperatures. It is a plea that over thirty years has yet to generate meaningful results.

And so, here we are. War, poverty, pollution and climate change are just a few of the features damaging human life and disfiguring our world, all of them rooted in capitalism’s wage-labour/capital relationship which sits like a supermassive black hole at our economy’s galactic core. The only real and permanent solution to capitalism’s woes lies in its elimination. Yet, what kind of a society would that produce? In his talk 140 years ago last month, William Morris considered what kind of a world might result from eliminating capitalism’s class society. Yet we can ask, what would such a world look like in its own terms, and what might we be able to say about it? Is it feasible? How would it operate? These are the questions we will turn to next month in the Socialist Standard.

Hud.

Link to Part 5.

The Stern gag – capitalist policies for capitalism’s problems (2006)

From the December 2006 issue of the Socialist Standard

“At every step we are reminded that we by no means rule over nature like a conqueror over a foreign people, like someone standing over nature – but that we, with flesh and blood and brain, belong to nature and exist in its midst, and that all our mastery of it consists in the fact that we have the advantage over all other creatures of being able to learn its laws and apply them correctly. We are gradually learning to get a clear view of the indirect, more remote social effects of our productive activity, and so are afforded the opportunity to control and regulate these effects well. This regulation, however, requires a complete revolution in our existing mode of production . . . in our whole contemporary social order”

You could be forgiven for thinking the above quotation came from a modern-day ecologist or environmentalist, commenting on impending global ecological catastrophe and drawing upon the myriad reports currently in existence, written by concerned scientists, that portend cataclysmic changes to our life-styles if we don’t stop abusing our natural environment immediately. The quote is in fact 131 years old and is taken from Dialectics of Nature, written by Frederick Engels (1875).

Let’s get one thing straight from the outset. Socialists have been warning about the effects of capitalism’s penny-pinching production methods and how they impact on the wider environment for well over a hundred years, and it is often with despair that we reiterate Engels’ message from the later 19th century, more so now that state-of-the-art technology exists that provides hard evidence as to the exact effects of capitalist production.

Global disaster

It was, therefore, not with any great sigh of relief, or with shock and disbelief, that socialists received the findings of the much-trumpeted Stern report on climate change and indeed the government’s reaction to it. It does make for grim reading, suggesting that time is running out to really address the environment question previous opportunities having been pathetically squandered at the Hague and Kyoto Summits and that the possibility of preventing a global disaster is “already almost out of reach”.

The 700-page report, commissioned by the Treasury and carried out by the former World Bank chief economist, Sir Nicholas Stern, argues that environmental problems will be “difficult or impossible to reverse” unless something is done now. It paints a disturbing picture of the future of the planet if overall global temperatures rise by just two degrees Centigrade. It suggests that four billion people could face water shortages, that sixty million Africans would be exposed to malaria and that forty percent of the world’s species would face extinction.

Two-hundred million more people, it goes on, could be exposed to hunger and that figure could rise to 550 million if the temperature rose one extra degree because of a knock-on 34 percent drop in crop yields across Africa and the Middle East. Australia’s arable land would become simply too hot to sustain cereal crops. Another couple of degrees rise in temperature would, according to the report, see the ice glaciers of the Himalayas melt, depriving 300 million Chinese of a water supply. Rising sea levels would inundate half the world’s major cities, creating more homelessness, and increased ocean acidity would result in a serious decline in fish stocks.

The report further informs us that “changes in weather patterns could drive down the output of the world’s economies by an amount equivalent to up to £6 trillion a year by 2050, almost the entire output of the EU.” But all is not lost, believe Chancellor Gordon Brown and Environment Secretary David Miliband. They point to the ‘positive message’ arising from the report; this being that the world has the means to avoid the awaiting cataclysm. Money can be thrown at the problem – the earth-shattering sum of one per cent of Global GDP should suffice; a figure, incidentally, which is dwarfed by global military spending.

Whiff of profits

Responding to the report, Miliband sounded quite optimistic. Interviewed by the Independent (30 October), he said: “The second half of his message is that the technology does exist, the financing, public and private, does exist, and the international mechanisms also exist to get to grips with this problem – so I don’t think it’s a catastrophe that he puts forward. It’s a challenging message.”

What we are offered are capitalist remedies, and to make it all the more attractive there are profits to be had – well, the master class has to have some damned incentive before they act. As the Independent reported: “Combating climate change could become one of the world’s biggest growth industries, generating around $250bn of business globally by 2050.” Providing, that is, that we still have a planet worth saving in 50 years time.

Environmental disaster and the best capitalist politicians can think up is to tempt the master class with the whiff of profits to come if they agree to mend their ways! Indeed, the report is punctuated with terms such as “cost-effective” and “profitability”. Well, Stern is after all a leading world economist so his thoughts are naturally with his associates in big business. The very people who have disregarded the effects of their production methods on the natural environment for hundreds of years are now being asked to show it some mercy! Global environmental catastrophe can be halted by throwing money at the problem!

The simple fact is that businesses will not take the risk of falling behind in the struggle for profits and nor will any government enforce policy that will result in a drop in the profits of its respective capitalist class. This is exactly what President Bush cited when he pulled the USA out of the Kyoto Agreement. He is no doubt aware that the USA consumes more than one quarter of global oil production and is accountable for one quarter of the world’s carbon dioxide emissions, while being home to only 4.5 per cent of the world’s population, but his remit is not to protect the environment, nor the millions who would suffer as a direct result of environmental chaos. His job is protecting US interests all over the world, interests which are inseparable from profits.

Capitalist businesses survive by forcing out their competition, by cutting costs and sidestepping policies that hinder their expansion. They seek new outlets for their wares, to sell more and more, because this is the law of capitalism, and it is a law antagonistic to ecological concerns. It is the crazed law of capitalism that compels the big oil producers to pay teams of scientists to prepare reports that refute the findings of environmentalists who forewarn of the dire effects of current production methods.

The market economy demands that businesses only take into account their own narrow financial interests. Pleasing shareholders takes far more priority than ecological considerations. The upshot is that productive processes are distorted by this drive to make and accumulate profits. The result is an economic system governed by anarchic market forces which compel decision-makers, whatever their personal views or sentiments, to plunder, pollute and waste. They may well be loath to contaminate ecosystems, but the alternative is closure should they invest in costlier eco-friendlier production methods. Little wonder then that nature’s balances are upset today, and that we face problems such as melting glaciers, rising sea levels, acidic oceans and the like.

All Greens now

The Greens have long insisted that things could be put right with a change of government policy, which is exactly what Labour now proposes. The problem, they believe, can be rectified by governments forcing through laws and imposing green taxes on air travel, motoring and high emission vehicles – to protect the environment. Even the Conservatives, with their new infantile eco-logo, and the Liberals have jumped on board the green bandwagon. Shadow chancellor George Osborne promises a whole swathe of green taxes. All are seemingly convinced the problem facing the environment is an economic one insofar as the world’s governments can spend their way out of environmental catastrophe.

Governments, to be sure, exist to run the political side of the profit system and, no matter how well intentioned, do not have a free hand to do what is sensible or desirable. They do not control the market-driven profit system it controls them and shapes their policies. Which government is going to tell its oil companies to produce less oil, when these same oil producers are under constant pressure to pump more out of the ground and as cheaply as possible? Within three years annual car sales are set to hit 60 million per year, 10 million up on 2004. Which government will dare threaten these car sales with its eco-policies? At the very best their eco-policies can only slow down the speed of environmental decay, not halt it in its tracks at some future date.

Socialists are no different from others in desiring an environment in which the safety of all animal and plant species is ensured. Where we differ from our political opponents is in recognising that their demands have to be set against a well-entrenched economic and social system, based on class privilege and property and governed by the overriding law of profits first.

It has long been our case that human needs can be satisfied without recourse to production methods that adversely effect the natural environment, which is exactly why we advocate the establishment of a system of society in which production is freed from the artificial constraints of profit. We are not talking about nationalisation or any other tinkering with the present system, but rather its entire abolition and replacement with a global system in which the Earth’s natural and industrial resources are commonly owned and democratically controlled; a society in which each production process takes into consideration not only human need but any likely effect upon the environment.

One does not need a mastery of Earth sciences to envisage types of farming that preserve and enhance the natural fertility of the soil, the systematic recycling of materials obtained from non-renewable energy sources while developing alternative sources that continually renew themselves (i.e. solar energy and wind power); industrial processes that avoid releasing poisonous chemicals or radioactivity into the biosphere; the manufacture of solid goods made to last, not planned to break down after a period of time.

Once the Earth’s natural and industrial resources have been wrested from the master class and become the common heritage of all humanity, then production can be geared to meeting needs in an ecologically acceptable way, instead of making profits without consideration for the environment. This the only basis on which we can meet our needs whilst respecting the laws of nature and to at last begin to reverse the degradation of the environment caused by the profit system. The only effective strategy for achieving a free and democratic society and, moreover, one that is in harmony with nature, is to build up a movement which has the achievement of such a society as its objective.

John Bissett

Pathfinders: Hot Air Emissions (2006)

The Pathfinders Column from the December 2006 issue of the Socialist Standard

“It is now plain that the emission of greenhouse gases… is causing global warming at a rate that is unsustainable”, writes Tony Blair in the preface to the UK government report which concludes that “there is only a small chance of greenhouse gas emissions being kept below dangerous levels.” When questioned about this report on Radio 4 Margaret Beckett, environment minister, states “we could come to a tipping point where change could be irreversible.”

This is not the much-publicised Stern Report of October, but an earlier report, Avoiding Dangerous Climate Change, published by the UK government in January of this year, based on research presented by speakers at a conference held by the UK Meteorological Office in February 2005. (BBC Online, 30 January).

Since then the heat and emissions released by politicians of all persuasions has increased to dangerous and unsustainable proportions. A summit in Monterrey in Mexico in October was hailed by the 20 biggest global polluters as ‘very positive’, then more noise over the Stern report later that month, which tended to be taken more seriously by politicians since they listen to economists with infinitely greater attention than they ever listen to scientists. But then in November the politicians were complaining that the politicians weren’t doing anything, as Kofi Annan despaired at the UN climate summit in Nairobi that global warming was as “grave a threat as conflict, poverty and the spread of weapons.” Sceptics, he added, with a politician’s ear for the ringing soundbite, were “out of step, out of arguments and out of time”.

The only politician in Britain in recent weeks to actually do anything, as opposed to making speeches and going to junkets in Mexico for Important High-Level Talks, has been dear old Red Ken Livingstone, the Mayor of London, who has infuriated the Kensington and Mayfair set by announcing a punishing £25 per day congestion charge for Band G motor vehicles, which is effectively the SUV-class 4×4 ‘Chelsea tractor’, emitters of carbon roughly double that of any other car. Many of these can be seen outside school gates during the school run, and are apparently second family cars used for kids, shopping and round-town errands, themselves the most carbon-inefficient types of journey. Ken observes,correctly, that people who can afford these monsters can afford any mainstream car so their decision to buy these heavy polluters and stick two fingers up at the world is clearly deliberate.

Most people who have even the mildest concern over capitalism’s damage to the planet must surely have the most searing contempt for anti-social yahoos in bull-bar Mitsubishi tankettes, so it was not surprising that this measure was greeted with ecstatic cheers, even though it won’t come in until 2009.

What a pity Ken went and spoiled it all immediately by getting himself into trouble over a freebie junket (by carbon reckless air travel, of course) to Venezuela to visit his soulmate Chavez, at the council taxpayer’s expense. Never mind, the thought is what counts.

And the thought, in government circles, is all about counting at the moment, carbon counting. The UK government has announced, through the annual speech made by its velvet glove puppet the Queen, that its target of reducing carbon emissions by 60 percent by 2050 will now be enshrined in law, with a Carbon Committee set up to make sure it happens (BBC Online, 15 November).

They’ll check every five years or so and make a speech, or an excuse, depending on where they’re up to. So, lots of noise again for now, and leisure enough not to worry for the next five years, until everybody’s forgotten about the targets. And what if the targets haven’t been met then? Well, they can just hold over publishing the report until a useful ‘bad news day’ comes along.

Everyone’s showing willing, and that’s nice. The Nairobi conference was held, not to do anything, but to agree a timetable to discuss globally binding emissions targets in time for the expiry of the Kyoto Protocol in 2012. Nobody stuck to the Kyoto Protocol in the first place, but nevertheless it is very important to hold talks to establish agreement over the next generation of agreements that nobody will stick to either.

The European Union has set itself the pious goal, not of reducing total carbon emissions, but of containing the increase to levels which will push the average temperature up by ‘only’ 2 degrees. An increase of 2 degrees centigrade is enough to melt all the ice in Greenland, but this is considered acceptable considering the dire consequences if they go even higher than that.

To keep to this target, atmospheric carbon – originally 227 parts per million (ppm) at pre-industrial levels and now at 380 ppm – needs to be stabilised at around 450 ppm. Speaking on the same programme as Margaret Beckett in January, the UK government’s chief scientific adviser, Sir David King, called this ‘unlikely’. “We’re going to be at 400 ppm in 10 years’ time”, he said. “To aim for 450 would, I am afraid, seem unfeasible.” So why set such a target then? Well, they’ve got to say something, haven’t they?

It’s all a question of motivation.The ugly truth is probably that Europe is hoping to trade its problem away with the new carbon emissions trading system, whereby they get to smoke and Africa gets the cancer. Russia didn’t even turn up to Monterrey, presumably because global warming doesn’t seem so bad when you’ve got frostbite in Irkutsk, and it’s a very chill wind that blows nobody any good. The Chinese, meanwhile, on being invited to join in huge emissions reductions at a time when they are the fastest industrialising nation on Earth, smile politely at this blatant imperialist attempt to clip their dragon’s wings, and carry on about their filthy business, supremely confident that the greedy foreign investment will continue unabated in the free-for-all of their boomtown economy.

The people who are most worried are not the Europeans or the Americans or the Russians or the Chinese, it is the so-called developing countries who in fact are never allowed to develop and who occupy the equatorial belt which is soon likely to become an incineration zone. That they are less guilty of pollution than anyone, but are going to more punished than everyone, is yet another example of the sort of ‘justice’ meted out by an economic system in which nice guys finish last and rich guys fix all the races. Their coastal infrastructures are going to be flooded out, their wetlands will dry out, their crops will die, and wars and migrations will escalate. The Nairobi conference, the first climate change conference to be held in that continent, aimed to bring another dimension to the debate,that of human rights. It was, said Kofi Annan and other delegates, a human right not to be killed by the callous self-serving vandalism of other people’s behaviour. Perhaps this is true in some moral sense. But capitalism is a blind process of profit accumulation. It doesn’t understand morals. The administrators of capitalism serve a supremely ignorant master.

For all their hot air, they are never going to challenge the thing they most believe in. They will still be making speeches while the world burns.

Paddy Shannon

Pathfinders: Let’s start the real debate about climate change (2021)

The Pathfinders Column from the November 2021 issue of the Socialist Standard

Anyone who cares about the environment and global warming (which ought to be everyone) must have been appalled by news stories late last month that illustrate how the vast majority can want one thing while governments do the complete opposite. The fact that global fossil fuel production is not going to go down but up in the next decade, despite all the IPCC reports, the Paris Agreement, and all the pledges, shows that when it comes down to it, there’s no stopping the juggernaut of capitalism. Oil, gas, even coal use are expected to rise to double the level required by the Paris Agreement, making the 1.5°C threshold look increasingly like a bad joke.

But what are countries that derive their income largely from fossil extraction supposed to do? Of course they will mouth platitudes at COP meetings but they’re not seriously going to gut their own economies for the sake of the global common good. Quite the opposite, they’re going to increase production if there’s money in it, with the result that ‘governments continue to plan for and support levels of fossil fuel production that are vastly in excess of what we can safely burn’ (bbc.in/3vubcZZ).

Even the Queen recently felt compelled to note how irritated she was that politicians do a lot of talking about the climate but don’t DO anything, a point that would have been fair comment from anyone else but is a pretty staggering piece of hypocrisy from someone who, as Marina Hyde pointed out in the Guardian, travels everywhere by helicopter and private jet and ‘whose lawyers very recently lobbied the Scottish government in secret to change a draft law to exempt her private estates from a major carbon-cutting initiative’ (bit.ly/2Z8VVla).

Not only is no country on track to meet its climate targets, no country has any credible way of doing so. The UK’s best-case scenario is to achieve about a fifth of what it needs to do. If it even manages that it will be miraculous.

Is this just because governments are clueless and don’t care? No, it’s because capitalist economics is clueless and doesn’t care. Its logic is straight out of Alice in Wonderland. As an example, the UK is a world leader in offshore wind and has pledged to quadruple capacity to 40GW by 2030, potentially supplying electricity to every UK home (at least when the wind is blowing). Great, so what’s the problem? Well, the more there is of something, the lower the price falls, thus wind companies face a declining incentive to invest in more capacity (bbc.in/3vrBhc8). Abundance is great for people but terrible for business. That’s why there’s a gas shortage. That’s why oil prices are high. Capitalism depends on keeping things in short supply, even to the extent of destroying food and burning clothes. And when oil prices are high, people invest in alternatives like renewable energy, which you might think is good, but it also means more Arctic oil drilling and more deforestation. In climate terms, there is no ‘ideal’ capitalist situation. A win is always a lose somewhere else.

While climate campaigners have the luxury of making absurdly unrealistic demands, like net-zero by 2025, governments know they have to manage a system that puts profits first, and simply cannot back any reform which endangers this. So the UK government – so keen to position itself as a global leader on climate action – has recently defanged its own ‘landmark’ Environment Bill by rejecting virtually all the changes that environmentalists wanted, such as protection for ancient woodland, legal pressure to stop water companies polluting rivers, and not exempting the armed forces (a huge source of GHG emissions) from environmental restrictions (bbc.in/30NyVJH). Perish the thought that the army can’t drive its obsolete tanks or the navy its plane-less aircraft carriers because of namby-pamby climate concerns!

Governments exist to keep capitalism going, not to undermine it. Just as the poorest find their Universal Credit being cut in the name of the gigantic Covid deficit, chancellor Rishi Sunak has announced he’s cutting corporation tax surcharge on banks from 8 to 3 percent to keep the City competitive (bit.ly/3aV7SxI).

Meanwhile, as if to add insult to injury, the media is full of news stories about how you yourself can ‘save energy at home and help the planet’ with meaningless little gestures that George Monbiot describes as ‘micro-consumerist bollocks’, and expensive domestic modifications that none but the well-off can afford. Now the government has announced a ban on new gas heaters from 2035, which means that if you’re a young couple now, even in the unlikely event you can afford a house, your gas boiler will be just about ready for replacement when the ban comes in. Then the poor who can’t afford the approximately £6-18,000 for a heat pump will presumably have to dance all winter to stay warm (not to mention run all the way to work because they can’t afford an electric car either). But fear not, the government’s recent announcement of a £5k subsidy for heat pumps means that anyone with a spare £10k to spend will be quids in.

Capitalism isn’t going to change how it operates for anyone. Instead governments rely on greenwash announcements about what increasingly cynical Greta Thunberg calls ‘fantasy-scaled, currently barely-existing, negative emissions technologies.’ Or, as she puts it even more succinctly, ‘blah blah blah’.

The 2007 Stern Report called climate change ‘the biggest market failure the world has seen’. In September this year even the UK business secretary admitted that it was a ‘market failure’ (bit.ly/3AYHQUI). Is it so hard, in the light of all the above, to conclude that markets simply don’t work, that capitalism is a ‘weapon pointed at the world’, as Monbiot says? The alternative isn’t soviet state capitalism or living in caves, it’s democratic common ownership where there is no out-of-control growth caused by the perpetual race for profit because there will be no markets and no money system. Capitalism’s greatest success is that it has made itself obsolete by delivering the technology, the communications and the know-how for us to actually turn the world into a giant volunteer cooperative, with no rich and poor, where we can all be free of the worst that capitalism dishes out and instead enjoy the best that life can offer. Why buy when you can just have? Why sell when you can just give? That’s not a utopia, it’s a practical and sustainable alternative to a system that is doing its best to destroy everything. There are a huge number of things we could do right now to limit climate change, halt species extinction, stop wars for oil or profit and stop terrible human misery and deprivation. But first we need to get real about the thing that, above all else, is driving these problems in the first place. It’s not human production, it’s human production for profit. We need to get real about capitalism. Instead of appealing to useless governments to ‘fix’ it, we need to start mainstreaming the debate about progressing beyond it altogether.

Paddy Shannon

Cooking the Books: International non cooperation (2007)

The Cooking the Books Column from the February 2007 issue of the Socialist Standard

In the December Socialist Standard we dismissed as quite unrealistic the claim put forward by Sir Nicholas Stern in his report to the government on the economic impact of global warming that, despite measures to cut carbon emissions affecting the competitiveness of different countries differently, this “should not be overestimated and can be reduced or eliminated if countries or sectors act together”.

Perhaps, if countries and sectors could be got to act together. But that’s precisely the problem. Companies from different countries and within different sectors are in competition with each other for a share of world profits. It is not in their nature or interest to act together or let one of their rivals get a competitive advantage over them. If one country or company feels that the adoption of some measure would result in this they won’t agree to it and will try to sabotage its adoption.

Stern’s pet measure to try to reduce carbon emissions was not, as might be expected in view of how serious he says the problem is, coercive legislation to force companies to comply, but carbon trading, or the buying and selling of a decreasing number of permits to emit carbon dioxide. The EU has already established such a scheme which has been functioning, not too successfully, since 2005. It is due to be renewed, in theory in a beefed-up form, from 2008 for a further four years.

At the moment it is essentially only power stations that are covered but the EU Commission is now proposing to extend it to other sectors, including air transport. Under a draft proposal published on 20 December, as from 2010 airlines would be required to record their carbon dioxide emissions and from 2011 would either have to keep their emissions down below a set level or purchase permits to emit more. This would initially apply just to flights within Europe but from 2012 will be extended to all flights leaving or entering Europe.

The airlines are not happy (except with the rather generous levels of emissions permitted). British Airways says that applying the scheme to flights going outside Europe will undermine its competitiveness. A BA spokesman declared: “It would disadvantage all EU long-haul carriers against their competitors around the world. All our flights would be covered but, for a US carrier, it would only be a small proportion” (Times, 16 November).

The Association of European Airlines predicted it would lead to “trade wars” while the US Air Transport Association said it “violated international law”. The US association added that such a scheme was unnecessary anyway as airlines were already taking adequate steps to reduce emissions.

That’s more like capitalism. Trade wars. International disputes. Denials that there’s a problem. If Stern’s warning in his report about what will happen if nothing or too little is done is not just scare-mongering, capitalism offers a truly disturbing future: “Our actions over the coming decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression.

Pathfinders: Desperate Deal in Davos (2016)

The Pathfinders Column from the February 2016 issue of the Socialist Standard

Not many people can be unaware that there is an antibiotic crisis looming, caused by big pharma moving out of antibiotic research into more profitable fields of enquiry, like hair restoring or erectile dysfunction.  Ask most people why this is happening and they will probably tell you it's because drug companies are run by greedy psychopathic bastards who couldn't care less about public health.

Back in October 2012 this column pointed to the fact that, for a number of very good reasons, drug companies simply couldn't make any money out of antibiotic research and that this amounted to the human race being failed by its own market system.

Confirmation of this has been provided by pharmaceutical companies themselves. At the recent Economic Forum in Davos, 85 drug companies signed a joint declaration promising to invest in antibiotic research if governments would agree to develop 'transformational commercial models' (BBC Online, 21 January).

The document, signed by Pfizer, Merck, Glaxo-Smith-Kline and Johnson & Johnson among others, stated that the current economic development model had 'largely failed' and that the 'formidable' (i.e. expensive) challenges of antibiotic research were the reason most companies had pulled out of the field.

What they mean is, they're not charities and they're not going to run at a loss, and if governments won't help meet the costs, new antibiotics aren't going to be made, even if we die of bubonic plague as a result.

This is as direct from the horse's mouth as it gets. Now even capitalist companies are frustrated at the operations of the market system. Will governments work out a deal with the drug companies? Maybe.

What speaks volumes is that they have to have this discussion at all. If capitalism really worked the way its promoters and propagandists like to claim, we wouldn't need all these special fixes and deals and arrangements and restructurings and 'transformational commercial models'. It would just work. Trains would run. Houses would get built. People would get fed. Antibiotics would get made.

The fact that it doesn't work is attested by, among other things, these desperate Davos conferences. Instead of an economic powerhouse, capitalism looks more like a patient under 24 hour supervision in an intensive care unit, kept alive only by the greatest of collective will and effort.

This isn't the first time capitalism's economic logic has failed the entire human race. In 2006 the Stern Review described climate change as the 'greatest market failure the world has seen'. Well, so far, but a sudden outbreak of death by gonorrhoea, laryngitis, TB or tetanus from a minor cut might very well change people's minds about that.

One wonders what it will take to make people realise that abolishing capitalism isn't just one of several viable options, it's already an urgent survival imperative.

Either capitalism goes, or homo sapiens might. This planet isn't big enough for the both of us.

PJS

Capitalism and Climate Change (2006)

From the December 2006 issue of the Socialist Standard

"The Market has failed, long live the Market!", is the illogical conclusion of the Stern Report on the economics of climate change published at the end of October.

"Climate change", the report says, "presents a unique challenge to economics: it is the greatest and widest-ranging market failure ever seen". Further, if nothing is done - if "business-as-usual", or BAU as the report calls it, continues - things will get worse:

"Our actions over the coming decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century".

This devastating description of one of the consequences of capitalism doesn't come from some socialist critic of the profit system, but from a pillar of the Establishment, Sir Nicholas Stern, a former chief economist at the World Bank and now an adviser to the Chancellor of the Exchequer.

The failure in question is that the spontaneous operation of the market has resulted in the release of so much carbon dioxide into the atmosphere that it has caused the average world temperature to rise and to go on rising (because of the time lag between cause and effect) for the next forty or fifty years. The market-oriented enterprises responsible - coal, oil and gas burning power stations, heavy industry, airlines, rail and other transport firms, car producers - have only had to pay for those costs that they have had to buy on the market; as releasing carbon dioxide costs them nothing it is not something they have had to take into account. So they haven't, with the results described by Sir Nicholas Stern in the first part of his report.

As a conventional economist, he sees the solution as making the polluters from now on pay in one form or another. Traditionally this would have been through taxation and regulations. Stern still sees a role for these, but proposes to give spontaneous market forces a second chance via so-called "carbon trading".

Carbon trading
Under this scheme there would be an international agreement fixing an overall level of carbon emissions for each country which would be less than what it currently emits; that country would then set enterprises within it an allowed level of emissions. If they exceed this level they would be fined. On the other hand, if they emit less carbon than allowed they can sell the unused part of their quota to some other enterprise even in another country. This other enterprise can then emit more carbon than allowed to it, without having to pay the fine.

Carbon trading is the buying and selling of such "permits to pollute". It is supposed to help the environment by giving polluting firms a monetary incentive to reduce their emission even lower than the allowed level; the more they reduce their emissions below this level the more money they can make from selling their surplus permits. The buyers of these permits would be firms having difficulty reducing their emissions below the level allowed them; if they failed to reduce to this level they would still have to pay something, but the idea is that buying a permit would be cheaper than paying the fine.

A market for "permits to emit carbon dioxide" would thus develop. Where there's a market there will also be middlemen, who in this case will specialise in the buying and selling of these permits. There would also be the possibility of speculating on future changes in their price.

Two such schemes already exist. The Emission Trading Scheme, run by the European Union, and the Clean Development Mechanism provided for under the Kyoto Treaty. One carbon trader, James Cameron (who had helped negotiate the Kyoto Treaty), has said of such schemes:

"What is happening in these markets is the creation of environmental value. The deals being done will mean large volumes of greenhouse gases are being taken out using the capitalist system" (Times, 12 September).

Will it work?
That's the theory and it is true that, to work, such schemes depend on the emergence of profit-seeking carbon traders like Cameron. Actually, however, these schemes are still bureaucratic attempts to manipulate the market and so are open to political interference, mismanagement and corruption, as the experience of the EU's scheme shows. Under it member-state governments and the European Commission negotiate quotas per country and then the countries allocate the quotas to individual enterprises (mainly power stations) within their borders.

But instead of governments vying with each other to reduce carbon emissions, they have sought to win advantages for their own industries by asking for, and then allocating, over-generous quotas, with a view to allowing their industries to profit by selling permits they never needed in the first place. The trouble is that, if the quotas are too generous, the supply of permits will far exceed the demand, so undermining the whole scheme. Which has threatened to happen, as the Times (9 October) reported:

"The future of Europe's Emissions Trading System (ETS) hangs in the balance as officials in Brussels prepare to do battle this month with member states to uphold the credibility of a market in permits to pollute. The market stands accused of generating billions of euros in windfall profits for utilities at the expense of consumers.
The European Commission needs to clamp down hard on member states, market analysts say, if it is to rescue the ETS, which has fallen into disrepute over lax carbon emission targets set for the first phase of the scheme from 2005-07. The ETS was devised to create a market incentive to cut greenhouse gas emissions that cause climate change, but the market was undermined from the beginning by weak-willed governments. The system imposes a cap on emissions of carbon dioxide, forcing companies that exceed their allowance to buy 'permits to pollute' from companies that manage to cut emissions. European governments were too generous with the caps, causing the price of permits to collapse in May. Lack of confidence in the market encouraged power generators to switch from cleaner gas to dirty coal.
The cap in the first phase was 100 million tonnes more than actual emissions in the first year . . ."

British capitalists have been complaining that the less stringent quotas proposed by other governments would give their enterprises a competitive edge over British ones:

"Britain has submitted its carbon allocation plans to the European Union before most other countries, generating fears that ministers will damage industry's competitiveness through their eagerness to be in the vanguard of environmental improvements. ( . . .)
Martin Temple, director general of the EEF, the manufacturers' organisation, said:
'Yet again, the UK is in the vanguard whilst the rest of Europe remains in the starting blocks. Not only have we published targets ahead of the majority of our major European competitors, but set limits which are likely to be far more stringent.
While much of the immediate burden will be felt by the electricity generators, these costs will be passed on to industry and other energy consumers. At a time of rapidly rising energy prices, the Government's desire to show leadership risks further eroding our competitiveness'" (Times, 22 August).

Some of this will be upping the ante in negotiations, and the scheme will survive, perhaps in a more rigorous form. But if such a scheme experiences difficulties like this in the EU which, with a relatively strong inter-governmental body in the Commission, reasonably reliable statistics and a relatively corruption-free civil service, is the part of the world where it stands the most chance of working, what is the likelihood of one working at world level, as Stern insists would be necessary?

Competition not cooperation
In fact, what are the chances of any world agreement to reduce carbon emissions being achieved? Clearly, climate change is a world problem and as such can only be tackled at world level. But, as the experience of the Kyoto Treaty of 1997 shows, the chances of the world's major capitalist states agreeing on an adequate and effectively enforced programme are practically nil.

The reason for this is mentioned, but only in passing, in the Stern report:

"Costs of mitigation of around 1% of GDP are small relative to the costs and risks of climate change that will be avoided. However, for some countries and some sectors the costs will be higher. There may be some impacts on the competitiveness of a small number of internationally traded products and processes" (emphasis added).

Quite, but then Stern adds complacently, not to say idiotically, "These should not be overestimated, and can be reduced or eliminated if countries or sectors act together".

If it is going to be that easy to get international cooperation on reducing carbon emissions why has the US consistently refused to sign the Kyoto Treaty? And why have most of the wars of the last century had oil as a factor either directly or indirectly? And what about the current war in Iraq - and other conflicts in the Middle East and Central Asia - , are these not evidence of the near impossibility of getting international concord and harmony about oil, the burning of which is the root of the problem of global warming?

President Bush, in a television interview with Trevor MacDonald when he was in Britain for the G8 Summit last year, bluntly stated the US government's view of Kyoto:

"There was a debate over Kyoto, and I made the decision . . . that the Kyoto treaty didn't suit our needs. In other words, the Kyoto treaty would have wrecked our economy . . . I walked away from Kyoto because it would damage America's economy, you bet. It would have destroyed our economy. It was a lousy deal for the American economy" (ITV, 4 July).

The clue to why the Bush administration took this position can be found in the figures for carbon dioxide emissions per person by country. A map published in the Times (30 October) showed that only three countries exceed 15 tonnes per person - the US, Canada and Australia. EU countries all fall in the 5-10 tonnes range. In fact the US releases more than twice as much carbon dioxide into the atmosphere per person than Britain: around 20 tonnes compared with 9.5. (Incidentally, such statistics are often interpreted wrongly to mean that the average individual American releases twice as much carbon as the average British individual; what in fact it means is that US industry releases twice as much carbon as European industry per head of population. If individuals in the US, or in Britain for that matter, were to reduce their personal release of carbon dioxide into the atmosphere, as for instance by not driving gas-guzzling cars or by turning off the lights when they leave a room, that would only marginally reduce the figures.)

Bush and his government are charged with looking after the overall, general interests of US capitalist corporations. They concluded that, because US industry depends proportionately more on energy derived from burning fossil fuels than most other countries and trading blocs, it would cost it comparatively more to reduce carbon emissions, so undermining its competitiveness vis-a-vis its main rivals on the world market, especially Europe. This is why US corporations have hired scientists to rubbish the proposition that the current global warming is mainly caused by human industrial activity (they suggest a natural cause such as a slight warming of the Sun). And is why the US government will walk away from any other scheme to reduce carbon emissions that would put its industries at a competitive disadvantage.

We are not in a position to judge who is right about what is causing global warming but it is happening and, whatever its cause, its consequences - changing agricultural productivity in different parts of the world, population migrations, a rise in sea level - can only be dealt with by planned and coordinated global action within the framework of a united world. Only in a frontierless world in which the Earth's natural and industrial resources have become the common heritage of all humanity can the necessary measures be taken to stabilise carbon emissions and to deal with the consequences of global warming.

At one time even supporters of capitalism would have proposed, if not a world capitalist government, at least some world body with real powers to coordinate a response. Now, all they can come up with - as in the Stern report - is to rely on profit-seeking "carbon traders" to solve the problem. If that's all capitalism can offer, then, in the words of Private Fraser, we are all doomed – unless, that is, we establish world socialism.

Adam Buick