Monday, December 03, 2018

The Market has failed, long live the Market!

On the face of it, those activists in the green movement have a lot of things in its favour. It would be difficult to find fault in their concerns about how the planet is being abused. Global warming, deforestation, and pollution are real areas of concern for anyone who examines how modern society is developing. Where the Socialist Party would differ from eco-activists is in two major areas. Firstly in their analysis of what causes the problems and secondly what is the solution to the problems. Quite often those in the environment campaigns make the assumption that the problems are caused by social ignorance and that the solution can come about by a series of legal enactments that would save the planet from its present dangers. The Socialist Party would repudiate such an analysis. 

There are plenty in the Socialist Party who would agree upon the urgent need to localise and decentralise political power, the need for sustainability and balance in our relationship to the environment, and a rejection of consumerism. The Socialist Party has for years railed at capitalist market production for being on a relentless collision course with the environment, and have been more than once been guilty of tired clich├ęs like 'profits of doom' and 'merchants of menace' yet the global crises are generated directly by the operation and structure of the world economic system with its untrammelled pursuit of accumulating capital. We claim that socialism by sharing the world without buying and selling property, an entire class of ‘commodification’ problems would disappear.

What many green economists propose are supposedly viable solutions such as the creation of international enforcement of a mixture of environmental taxes and carbon trading credits, so there are long-term protection and management of natural resources through market forces. The present off-sets of carbon emissions is just one example of putting these proposals into practice, and it has been taken up by those who are of the opinion that market forces hold all the solutions to the problem of environmental and health "external costs", i.e. the money that has to be paid for clearing up the environment or on health care that doesn't have to be paid for by capitalist firms whose activities cause them. Under the carbon trading scheme, there is 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. 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 far exceeds the demand, so undermining the whole scheme.

There's a lot more of such similar proposed 'solutions’ in the pipeline, but when stripped of their jargon, in practice it means that for capitalism to go green it must factor in all the possible and the expected environmental and health "external costs" and in effect set limits on the accumulation of capital. If the green economists have their way - and it's a very big if - it would mean that a brand new set of market conditions will have to be enforced, ignoring the realities of how capitalism actually operates. The green economists include the false assumption that a so-called 'common interest to protect natural capital' can be created within capitalism and adopted by society as a whole and that by increasing our understanding of the interaction between the natural environment and the impact of human activity, society will be in a better position to minimise the damage on natural resources, and be able to arrive at rational judgements on whether or not any interference in the natural environment is justified and warranted.

However, capitalism is not at all a rational system because the capitalist class have their own agenda which is totally blind to the creation of a common interest. The only interest the capitalist class have is to obtain profits through the quickest and easiest way possible so that the accumulation of capital continues. A fundamental contradiction of capitalism is that although the capitalist have a common interest - as a class - to cooperate to keep the system going, by necessity they also have to compete within the market. If they don't compete they go under or are at best taken over by other capitalists. This built-in rivalry between the sections of the capitalist class always results in casualties in some form or another. At one end we have the everyday casualties of lay-offs and redundancies. Whilst at the other end from time to time inter-capitalist rivalry erupts into a full-scale war - with extensive human casualties, refugees, communities being destroyed - and extensive damage to the environment and the destruction of wealth on a tremendous scale.

It is these conditions of competition which make it extremely difficult to reach any regulatory agreement which can have a global application. But not impossible. When it has been in the common capitalist interest to facilitate an expansion in the global market capitalist governments have drawn up international agreements, for example on postal services, maritime law, air traffic control, scientific research at the poles, etc. These agreements are generally abided by, specifically because they do not reduce the rate of profit. It's when any such proposals come into conflict with the rate of profit that the competitive self-interest of the various national sections of the capitalist class becomes focused on the problems of winners and losers appears. This is usually announced in the media as, "There was a failure to reach an agreement over who is to pay the bill".

 In order to achieve an accumulation of capital, market forces must not only create and produce commodities on a mass scale but also destroy them in a systematic fashion never known in human history. When confronted by barriers of environmental legislation which are designed to diminish the rate of expected profits and the accumulation of capital, the capitalists will do what they have always done in their search for short-term profits: finding or creating loopholes, moving the goal-posts, corrupting officials, trying to bribe the local population with empty promises, or shifting the whole concern to an area or region where a more favourable reception is expected and profits maintained.

If market forces essentially cause and create environmental damage by literally encouraging an irrational human impact, how can you realistically expect those self-same forces to solve it? A greening of capitalism is a fool's errand. If we were living in a rationally-organised world a co-ordinated global response to climate change would be organised as a matter of course, the problems encountered in doing so would only be technological, not political or economic, as there would be no vested interests lobbying to prevent or delay what needed to be done from being done. But of course, we are not living in a rational world. We are living under capitalism where there are vested interests galore – of the states into which the world is artificially divided, of the capitalist corporations seeking to make a profit by supplying some market or other. Those concerned about the threat to the environment should be campaigning not for capitalist governments and corporations to change their spots but for the end of capitalism.

Government is the executive arm of the capitalist system and forms the basis of capitalism with the enactment of private property laws. It is its job to maintain and revise those laws to ensure the private ownership of the means creating and distributing wealth in the interests of the owning capitalist class. The government’s collaboration with the capitalist enterprises encompasses protection of the latter’s national and international rights to operate as freely as possible through diplomacy, bribes, and even war, if necessary, and create a not-so-level playing field of economic activity, tipped, naturally, in favour of their capitalists. Many environmentalist groups complain that this state of affairs came about with globalization and ascendancy of greedy multi-national corporations. To socialists, this state of affairs is simply the normal operation of the capitalist system. Socialist productive and extractive processes will be driven primarily by consideration of human need in harmony with the planet’s eco-system. 

Capitalism follows the money, wherever it leads, even into the depths of hell, while human society and the environment inevitably get dragged down with it.

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