Are Boomers to blame?

An interesting article over at the Burning Platform site - a nicely expressed summary of the widespread sense in the USA that our current crisis is caused by Boomer fecklessness, corporate greed and other cultural and psychological failings. This is the comment I posted:

Nice article but still just a footnote to the culture-wars debate. No real analysis of capitalism as an economic system, so not likely to get to the real nub of the matter. Just as your car is ultimately driven by its underlying engineering and your driving style only affects what it is capable of in relatively small ways, so the basic rules of a capitalist system are clear and simple and all this anger about corporate greed and reckless Boomers is secondary. So are complaints about CEOs offshoring America’s jobs: if you don’t get the basic fact that globalisation is the natural expression of capitalism and completely indifferent to American interests then you are just going to be reduced to another branch of the Tea Party any day now. A capitalist economy pursues the maximum possible ROI – and that is necessarily greater than any sustainable return from the real economy. So this structural requirement for ever-increasing profit will soon cease to be met by any conceivable real economy, especially in peace-time, and the unreal economy, where imaginary values can be made to look real just long enough to cash the cheques, will start to take over. But even the financial sector is only the pure form of capitalism: _all_ sectors of a capitalist economy – including the real economy – will eventually be forced to resort to the same tricks – short-termism, unsustainable debt, insane risks, creative accounting, illusory economics, perpetual motion machines, ridiculous leverage, subsidies to the biggest and richest companies, the constant destruction of (and forced demand for more) goods and services to fight imaginary security threats, and finally just plain dishonesty. Where else are the profits in a mature, free and open economy going to come from? Well, you could try being less mature, free and open, but I don’t think that’s a policy direction any of the subscribers to this site would like much – being cheap labour and having a security-obsessed state isn’t much of a future. None of which has anything to do with Boomers or greed or other cultural or psychological explanations. They are the symptoms – along with environmental devastation, the looting of developing countries, the appalling levels of poverty within America itself, the absurd dishonesty of so much of the media and government, and much else. But they are not the disease.

Not, I suspect, very congenial to most of the readers on that site, nor likely to be responded to, but what the hell.

Deepwater Horizon

An interesting (and more than a little unnerving) contribution to the current debate on the Deepwater Horizon spillage at http://www.marketoracle.co.uk/Article19923.html from Dr Stephen A Rinehart - advocating the use of nuclear weapons to plug the hole, raising the prospect of the Gulf of Mexico rapidly degenerating into a carcinogenic benzene pool, and concluding that 'this is a “National Emergency” on the scale of a nuclear weapon attack'. The author's conclusion:

Bottom Line: We are looking at the worse environmental disaster in human
history and it continues to grow and the US Government has failed totally in
responding to this epic crisis because of BP and Big Oil political clout and
money.

Al Gore, Kurt Vonnegut and the siren voices

At the very start of his 2009 book, Our Choice, Al Gore, Nobel Prize winner and darling of so much of the environmental movement, quotes the message Kurt Vonnegut suggested we should leave behind for any passing aliens who may happen upon the wreckage of planet Earth. ‘Carved in great big letters on a Grand Canyon wall’, it would read:

We probably could have saved ourselves, but were too damned lazy to try very hard… and too damned cheap.

When you have stared at our current environmental problems for long enough and marvelled at how little we seem to be willing to do to save ourselves or our children, it is tempting to go along with Vonnegut. But both he and Gore are wrong. We are not too lazy or too cheap and the solutions on offer from Mr Gore will not solve our problems. Neither the problems we face nor the solutions that will deliver us have much to do with technology or making business and governments account for the true cost of energy, manufacturing, agriculture, transport, etc., mass individual action, or any of the other things Gore advocates. Yet it is in many ways a very good book.

The real problem is not our inability to understand or act upon our present problems. It is rather that we are already committed to another way of doing things that prevents us from taking up any of the credible solutions to our environmental problems. Perhaps it’s worth quoting Aldous Huxley again here:

In the nurseries, … the voices were adapting future demand to future industrial supply. ‘I do love flying’, they whispered, ‘I do love flying, I do love having new clothes, I do love…’

The siren voices of growth, consumption, free markets, entrepreneurship and all the rest are busily pointing us in quite the wrong direction. The resources and system needed to fix our problems are under the control of processes, systems and institutions and in the hands iof nterests that would be completely undone by actually carrying the solution.

So the political powers-that-be, who have spent the last three decades abandoning the idea that the world could be a better place only if it were a different place, would have to perpetrate a genuine revolution to get us onto the right track.

Perhaps the single most important thing is to stop thinking of the problem as primarily reflecting personal selfishness (even of investment bankers). Personal actions are certainly part of both the problem and the solution, but it will only have a peripheral effect so long as we fail to also think of both problem and solution in systemic terms. Vonnegut was writing as a novelist and entitled not to be read too literally. But those who fail to understand the nature of our economic system, and the necessities and pressures it places on individuals, institutions and other systems (e.g., the entire social and political systems) are merely standing on the beach trying to bail out the ocean while the tide is coming in faster and faster.

Remember, Odysseus was forced to listen to the Sirens only because there were no other options open to him. Likewise we have few options that will in any way improve our environmental predicament - unless we change our ship and the ocean we sail. Likewise, even our most venal bankers were only following the system. Given a different system, they might not have had the option of running the ship onto the rocks (oops, different part of the Odyssey).

The bad guys and the worse guys

I’m looking for a new job. Yesterday evening, sitting in a local café, I shocked my wife by suggesting that I would consider working for an investment bank (in IT, not their signature skullduggery). If you have been reading this blog for any length of time, you may will be as astonished as she was – after all this ranting and raving about the causes of the recent crisis and recession, how could I possibly be thinking of working for such dreadful people! What a hypocrite!

Maybe. But the answer is, the investment banks are indisputably the bad guys, but where are the good guys? Haven’t you ever worked for someone who was doing some good, my wife replied? Someone who treated their staff well and was doing something socially useful (as opposed to the irredeemable social parasitism of the contemporary investment bank)?

Not really, I answered. Well, it’s not that they are all relentlessly evil, but rather that all their benevolence seems to stem from the single-minded desire to maximise profits. And if you had to be nice to people to achieve that, then you were damned well nice to them. And when it becomes more profitable to treat them like dirt, that too will come to pass.

Nor are personnel policies the only issue.

• Some years ago I was working for a major testing consultancy. It collapsed as a result of the .dotcom debacle. And then the fun began. Within a few months we were hearing fascinating tales about the board being investigated by the FBI and our own ex-CEO being highly sought by some quite undesirable company that wanted a word about their relationship.
• More recently, I spent some time with a major UK supermarket. Their employees told me that they were pretty good to work for – but as soon as you found out anything about how they exploited their suppliers, you’d realise that this was not out of unqualified benevolence. And so on. It’s the norm – companies are indeed becoming more benevolent, but only a) where they have to, and b) it’s the price they pay for extracting more and more high-level value from the employees – you only give potted plants to the ones who need a comfortable environment in which to work effectively.
• Or going right back into ancient history, when the creative accounting practices used by Arthur Andersen at Enron came to light, I seem to recall that the reaction of many people in the City was ‘Why couldn’t you do that for us?’

So in a sense they are all the bad guys – that’s what it means to be in business. True, some are truly beyond the pale – the tobacco companies, for example, or arms dealers. But investment bankers? Given how the average company uses its ‘treasury’ operations (i.e., lending cash, buying and selling derivatives, etc.) to boost its profits, they were colluding with Morgan Stanley, Lehman and a rest. They weren’t very clever about it – most of them were caught out – but that doesn’t make them less culpable.

Conversely, the investment bankers aren't breaking the system - on the contrary, they represent its apotheosis.

So perhaps I’m making the wrong distinction – there are bad guys, and there are worse guys. The worse guys seem only to be a little smarter and little more determined than the not-quite-so-bad guys, but fundamentally? I’m not sure I can really tell the difference anymore. I’d love a job with the good guys, but I have no idea who they are.

Staring down the pipeline

A telltale sign of our various governments’ inability to grasp what the environmental problem actually is is the enthusiasm with which they embrace the possibility of a business-led solution. That it is specifically business-led view of the world is indicated by the specifics. For example, it is perfectly clear that a huge campaign of insulation would be a powerful, low-tech method of substantially reducing our collective carbon footprint at minimal cost and with a huge impact on key economic problem such as issues as employment.

But although this is an economic solution, it isn’t a business solution, so it won’t do. Well, not for central government anyway. Local government (such as Kirklees) is busy insulating, distributing energy-efficient light bulbs, updating boilers and otherwise making millions of one-off improvements in the countries’ carbon consumption. But that’s the problem: from business’s point of view, one-off is only one step better than ‘no step’. What business needs is a continuing stream of buyers who will need to come back over and over again.

But pandering to a growth-obsessed economy – which is to say, a capitalist economy – is precisely how we got into this mess in the first place: by creating an economic system that not only busily generated an endless pipeline of new demand (through marketing, built-in obsolescence, consumerism, and so on) but also is unable to survive if that pipeline is ever turned off. The current finance-driven crisis is only a taste of what would happen if demand for industrial products as a whole collapsed, or even stood still. That really would be a global crisis, and no amount of Asian savings would get us out of it, not least because the manufacturing-based Asian economies would be as badly affected as everyone else.

So the business necessity for an endless pipeline explains why it is that central governments (who, unlike local government, have both the power and the obligation to drive the capitalist economy as a whole) all but ignores one-off, ‘passive’ measures such as insulation. The scale of the effort that would need to be mounted is vast, but being a single shot, is not what business needs. So business programmes and journals, having finally got over their initial queasiness about green ventures, are looking at alternative energy, nuclear power, and so on – because they mean continuing streams of high-value sales that can be safely predicted to go on mounting and mounting for decades to come!

How much more ironic could it get? The solution to an environmental problem caused by uncontrolled growth is to give the people who got us here a whole new area into which to grow! Clever us. Likewise for the obsession with toys like electric cars: what purpose do they serve from an environmental point of view, given that the electricity they will run on will reduce the electricity available for genuinely social purposes such as heat and light. It isn’t very likely at the moment that we will be able to safely generate enough clean energy for those purposes in time to deflect our environmental problems, but we are talking about electric cars anyway. The odd allusion aside, we are not talking about public transport, reducing travelling for work and the many opportunities they would offer to clean up our planet ant, but rather methods for keeping an inherently unsustainable economic system in its present image. And why? Because that is what business needs. And what society needs? What the environmental needs? Who cares.

Of course, we need alternative energy and many other things for which the only solution is mass production by industrial methods. But what we don’t need is another turn of the very wheel that got us where we are today. There will be no solution to our environmental problems until we take a good clear look at the economic system we are relying on to deliver it.

The worst threat to the environment on Earth

By far the single best demonstration that business is about profit, not any sort of social or environmental responsibility, is the Alberta Tar Sands. Billed by Greenpeace and others as the largest industrial and energy project, the biggest capital investment and the worst environmental crime on earth, it really does have to be seen to be believed.

For a first-hand view, click here. Right now.

The real point? That tar sands make no environmental or social sense at all. Imagine someone replacing Florida with a slag heap - that's the new Alberta.

But for business? Lots and lots and lots of money. A no brainer, really. Say goodbye to Alberta now, children - and don't worry about the mess. No, I don't ahve any plans to clear up after me, but always remember - Daddy Business knows best.

Return on investments: it doesn't add up

The fundamental problem with relying on markets to solve our environmental problems is extremely straightforward. No investment will be made unless market conditions – prices, profits and prospects – justify it. If there is no profit to be made – and a profit that beats the alternatives – then no investment will be made. The environmental consequences are obvious, and easily illustrated with a simple practical example.

T. Boone Pickens, the Texas oil billionaire, has been planning to spend $10-20 billion on a vast wind farm in the American Midwest. But like all business investments, this was really a gamble, in this case based on the assumptions that oil prices would stay high and subsidies would be on hand. Neither assumptions has proved correct, and the projected 25 percent return on investment he had predicted now looks highly implausible. So – few investors, and little prospect of his wind farms seeing the light of the Texas Panhandle for the foreseeable future. In other words, a planned four gigawatts of environmentally friendly electricity will not now come on stream by 2014.

Now it is essential that we invest in alternative energy and other solutions to our environmental problems absolutely as soon as possible. The vicissitudes of the market, however, which are driven by many factors apart from environmental impact, can never be relied on the deliver substantive solutions to serious problems.

Pickens’ dilemma is only one example of a very general problem of capitalist economics that will make it extremely hard to make a rapid transition to a low-carbon economy. A second, even bigger problem refers to the simple question all attempts to move to a different ‘installed base’ for any major sector such as energy generation, food production or manufacturing must answer. If we are going to move to a different technology, who will pay for the technology I already have installed? After all, most currently installed systems – coal-fired power stations, fossil-fuel powered cars, fertiliser and plastic plants, and all the rest – has been paid for by loans from banks and other investors who will still want their money back, regardless of what new systems we plan to install in future. In many cases, the financial commitments go on for decades into the future, and cannot be significantly changed without a massive dislocation to our economy.

Hence the problem with Robert F. Kennedy’s otherwise sensible suggestion that the United States could quickly cut its greenhouse gas emissions by a simple change in the way it manages its existing power generation systems. Apparently US generator capacity is managed to ensure that coal-powered stations are used in preference to gas-powered stations, but if this situation were reversed and gas-powered plant was given preference, then

Mothballing or throttling back these plants would mean huge savings to the
public and eliminate the need for more than 350m tons of coal, including all 30m
tons harvested through mountain-top removal. Their closure would reduce US
mercury emissions by 20-25 per cent, dramatically cut deadly particulate matter
and the pollutants that cause acid rain, and slash America’s CO2 from power
plants by 20 per cent – an amount greater than the entire reduction envisaged in
the first years of the pending climate change legislation at a fraction of the
cost. (Financial Times, 19/7/09)

It seems simple, and from both an environmental and an engineering point of view, perhaps it is. But from an economic perspective, the problem is obvious: who will pay for the existing capacity then? Largely unused but still indebted, these other, high-carbon power plants still need to be paid for. If the income from their electricity will be moved to other, more environmentally friendly gas generation plans, one can only ask, from where? And this is only one instance of a problem that pervades any capitalist economy: investments demand returns, and if returns are not forthcoming, then either economic activity stops or undesirable indirect methods, from lobbying to subversion, start.

Nor could we expect investors to simply accept the losses caused by a sudden technological change – and in this case, sudden means ‘in less than the several decades we need to recoup our investment on existing power stations’ – as their contribution to society’s battle with global warming. These are after all not a minor factories and power plants out on the edge of the economy; to a very large extent, these vast investments are the economy. To stop paying for them would be economically catastrophic in about the same proportion that it was environmentally beneficial. Conversely, we can scarcely turn to these same investors to ask them to pay for the new, environmentally friendly investments we need for a low-carbon environment: in the absence of continuing, reliable returns on their existing investments, where will they get the money from? We could of course subsidise them, but where are we going to get the money from? Money is after all the lifeblood of the capitalist economy, and if the owners of existing ‘investments’ find that what they really own is a vast collection of liabilities rather than assets, then making this environmentally essential switch will lead to a near-instant collapse in returns on investment, profits, employment, tax revenues, industrial capacity, credit (for everyone) and a viable economy.

Or at least, so it is while we carry on playing to capitalism’s rules.

Some market failures cannot be corrected

Currently reading Nicholas Stern’s Blueprint for a Safer Planet, and I find – as I usually do when reading authors for whom the market is some kind of shibboleth – that he really doesn’t understand how secondary the market is to strictly political decisions – or the absence of decisions – about how we want our economy to work.

Markets are rather like games: how well they work and what their consequences are depend very much on how you set up the rules and referee individual games. Without that there is no game, so to appeal to ‘the game’ as a solution to problems with the game itself makes very little sense. In the case of markets, to imagine that ‘the market’ can solve social, environmental or even economic problems on its own is irrational, to say the least.

In the present context, we know that markets will not, in their current incarnations, solve environmental problems of the size and kind we now face. Stern himself lists a very large number of market failures and rightly insists that markets need to be regulated in very deliberate ways if they are to contribute to environmental solutions. But what he does not seem to recognise three fundamental problems with the entire model.

1. Firstly, many of these problems – asymmetric information, externalities, imbalances of economic power – are direct products of the market economy.
2. Secondly, especially in markets with relatively few major producers (which is currently most markets of any global significance), these same ‘market failures’ are quite consciously wielded by all major players in the markets to ensure that markets do not in fact operate as their apologies imagine.
3. Finally, markets have failure built into them in a more important and enduring sense. Whatever ‘correction’ they may be subjected to, unless that correction is perfect the market will continue blindly on, unable to envision or anticipate the next disastrous shortcoming. The only signal markets respond to, once all the regulations are in place, is price. Since price is inherently indifferent to anything but the current rules of the market, it cannot ‘see’ that there is something else wrong. So another round of intervention becomes necessary, which disrupts the markets again, and in fact will probably only be introduced because a new crisis is upon us. Which is exactly what, in a warming, degrading and ever more crowded world, we cannot afford to wait for.

In summary, ‘market failure’ is actively created by markets, is deliberately perpetuated by participants in that market, and is in fact an inescapable fact until markets can no longer operate solely in terms of prices – which is an unlikely state of affairs without very substantial political intervention.

There's no money in saving the world

We continue to see the repercussions of relying on business to deliver our response to climate chaos, global warming and resource depletion. The last few days have thrown up these stories in the media:

• Canadian environmental groups on Wednesday accused Royal Dutch Shell, Europe’s biggest energy group, of reneging on its promise to reduce greenhouse gas emissions at its oil sands project in Alberta. (FT, 8/4/09)
• At least five big wind energy projects are in danger of being delayed or shelved owing to higher costs and a shortage of credit, the British Wind Energy Association said on Wednesday. (FT, 9/4/09)
• Japan is expected to restart the world’s biggest nuclear power plant shortly – nearly two years after it was damaged by an earthquake. The prolonged shutdown of the Kashiwazaki-Kariwa plant’s seven reactors knocked Tokyo Electric Power into the red and threatened Tokyo with electricity shortages during the hot summer months, when air-conditioner use pushes up demand. The facility accounts for 13 per cent of Tepco’s generating capacity and without it the company has been forced to rely on more expensive coal, oil and gas plants. (FT, 9/4/09)
• Several prominent energy companies have scaled back their commitment to renewables, including BP, Shell and Iberdrola. (FT, 9/4/09)

And so on. On the other hand, Mars and Cadbury have promised to move to sustainable, Fairtrade supplies of cocoa (FT, 9/4/09). So we don't need to worry about Peak Chocolate just yet. On the otehr hand, I would not be very confident that they would ahve done anything about this were it not for ethically motivated public and staff pressure - as Fiona Dawson, managing director of Mars UK, has said, consumers and employees expected Mars to “do the right thing” because “nobody has to buy confectionery”.

The fact is, a monkey will type Hamlet before profit-driven companies will create a credible and effective answer to our many, many environmental problems in the middle of a slump. (I was going to say that Hell will freeze over, but at least that is one outcome global warming protects us from.)

The tragedy of the commons: tosh

One of the most famous essays in the history of economic thought was not, at first glance, an economic essay at all. Garrett Hardin’s 1962 paper in Science, ‘The tragedy of the commons’, bestowed a name on the whole class of social phenomena in which many people are vying for a given resource (e.g., the common land on which they can all graze their cattle and sheep), but because there is no control over how much each one can use it, they all try to use it more and more, until eventually the resource collapses through overuse.

The standard interpretation of this paper is that, had someone owned the common land, those would not have happened. They would have husbanded their resources more thriftily, nurturing it so that it was not exhausted. In this way, converting the common land to private property would save the say. This is supposed to be a lesson for our various environmental conundrums: if only someone owned stuff, they'd take care of it properly and all our climate/resource/ecosystem problems would go away. Hurrah!

It is hard to say why this idea should have caught on. Certainly from an economic point of view it is not very plausible – especially in cases that impact our current environmental problems. Take the case of non-renewable resources such as oil or gas or mineral wealth. A country such as Saudi Arabia may wish to conserve its fields so that future generations may also benefit from them, but that is only a factor because the Saudi régime has responsibility for future generations. The same cannot be said for ExxonMobil, BP or Total. Their paramount interest is quite clear and usually (by environmental and social standards) very short term: profit-maximisation. If they leave the oil in the ground they will incur continuing costs (rent, interest, maintenance and operating costs) while being unable to extract a single penny from their investments. They also run the risk that their resources will be taken from them by future governments. It is even possible that future fears of carbon emissions could lead to oil being banned from vehicles, power stations and other uses for which emission control is difficult.

By and large, oil wells are costly and precarious investments. So what should be done about them? Unless there is a realistic expectation that future price spirals will raise prices high enough to justify the risks and the costs, the answer is surely to pump it out of the ground and sell it right now. From a capitalist perspective, there is after all no other point in conserving such resources. In the ground they are worth nothing, and no matter how carefully I husband them, oil will not grow again. The only question is when the right balance of risk, cost and price tells me to start pumping. Given that time is a factor in all three of these, the chances are that the correct answer will be ‘soon’. Or if not ‘soon’, then ‘right now’.

So there is little incentive for a capitalist corporation to conserve non-renewable resources, and if the ‘tragedy of the commons’ argument is deployed to ensure that such resources are properly managed from society’s point of view, it will almost certainly fail.

But renewable resources aren’t likely to fare much better, and for very similar reasons. It is true that a forest or a field of ripening wheat is a valuable resource made all the more valuable by the fact that, carefully conserved, it will generate a return indefinitely. If I over-exploit it – by clear-cutting jungle or exhausting soil by intensive monoculture cropping and massive inputs of artificial fertilisers – then I will eventually shrivel it up to the point where it ceases to be a valuable property. In that respect at least, privatising is seems to be at least a possible solution to the potential tragedy of the commons.

Unfortunately the situation is not quite so simple. As before it comes down to a balance of prices, costs and risks. What if the cost of the resource is extremely low? If, for example, it can be acquired from a friendly government for a very low price? For instance, until his government was understandably overthrown in March 2009, President Ravalomanana of Madagascar had an arrangement with the South Korean conglomerate Daewoo to lease 1.3 million hectares of farmland – an area a little less than half the size of Belgium - for nothing more than a somewhat nebulous promise concerning local employment. Rent? Nope. Guaranteed return? Nope. Or what if – as is often the case in developing countries - the local population is simply ousted from the land?

In such conditions, costs do not include a significant price for the land itself. In other circumstances, other combinations will lead to the same conclusion: that it does pay (commercially, if not for society as a whole) for a private owner to exploit a renewable resource to the point where its vitality is destroyed and it is left worthless. At that point the company moves on, to new land and rapid returns. And the people they leave behind, whose land they have destroyed? Who cares.

So again, if I hand over a non-renewable resource to private interests, will this help society avoid the tragedy of the commons? Probably not. Indeed, so great is the disparity in resources between agribusiness and individual commercial farmers that even if both took an equally predatory attitude to the land (which, in the history of farming, farmers have not always been reluctant to do ), the damage would be done far faster by the corporations.

Note also the one option this approach does not allow for: that all the people who share this common resource will simply get together and agree how it will be used. Which is odd, because that is exactly how the land – the very ‘commons’ from which Hardin starts out – was managed before the triumph of capitalism. Medieval and early modern rural communities used to agree on who could use the land and how much. They also used to rotate who farmed which land, so that everyone had a fair turn at the best land. This method for avoiding the tragedy of the commons continued in use until the local landlord decided they could make more for themselves if they threw the peasants and the small farmers off the land and replaced them with sheep or cash crops. This process, know to European history as ‘the Enclosures’ is notorious as one of the most brutal in our history.

In short, the tragedy of the commons was not solved by the introduction of private property rights to the common land – rather, it was caused by converting socially managed resources into private property.

Social alternatives to privatisation have been shown to work over and over again all around the world. Over and over again local populations have demonstrated that they are capable of managing local resources is highly productive yet sustainable ways, given only access to modern knowledge and small amounts of specialised support. And yet over and over again they have been ousted by local landlords and international businesses intent on seizing their land for their own selfish purposes. This pleases international economic bodies like the IMF, the World Trade Organisation and the many other bodies that cannot imagine a solution to the world’s problems that does not start from global markets. It also pleases national governments, whose all-important economic indicators are nicely bolstered by the increase in GDP and other pleasingly visible data. After all, non-market economic activity, however fundamental it may be to the real lives of real people, is not visible in the economic data, and so is obviously not real. The only people it does not please, in fact, are the families who are expelled from the land and end up in the slums of a Sao Paulo or a Mumbai, hundreds of miles form home and with zero prospect of sharing in any benefits from their land being stolen from them.

There have been many cases where local people have organised themselves to share resources in ways that are both economically and ecologically sound. They owe little to market rationality and less to the idea that the only solution to the ‘tragedy of the commons’ is for someone to own everything and for the rest of us to work for them.

So why does enthusiasm for Hardin’s paper – historically false and logically unconvincing even when it was written – persist to this day, to the point where it is routinely cited by environmental economists and enthusiasts for markets alike? Because, I suspect, it creates a pseudo-historical, pseudo-scientific justification for the status quo. Despite the fact that capitalism is so destructive to the environment, the correct answer, say both Hardin and economic orthodoxy, is more of the same. You cannot have too much property, too much competition, too much exploitation – otherwise people might start to ask not whether we should have more but whether we should have quite as much as we have now. And that would never do.

Yes, that's the point!

Europe's larger CO2 emitter, the German power company RWE, has issued a statement criticising the EU's plan to make electricity generators pay for their CO2 emission permits in full from 2013:

Companies such as ours that... rely on coal-fired power generation will
find themselves at a distinct disadvantage vis-à-vis companies like EDF, which
are based mainly on nuclear and have virtually no CO 2 costs...

This, RWE claimed, will spell the 'end of fair competition in the energy sector in Europe'

Maybe I've missed something here. Isn't that the point of this entire exercise - to end competition based on nothing but price? Or rather, to include in the price of electricity some of the all-too real environmental factors that we will all pay for before long, not least the 140 million tons of CO2 RWE pump into the atmosphere every year.

Pointing at EDF, France's nuclear power generator, is quite bogus - the same point could be made about wind farms.

No, this is where environmental policy starts to bite. Will the EU have the political will make it stick - and, given the commitment of most EU countries to coal-, gas- and oil-based power generation, is the policy going to lead to serious economic and political problems as electricity costs start to rise to pay for the permits?

A summary of where I think we are now

The problems posed by the human impact on the environment are huge and extremely urgent and we have no previous experience in solving problems of this type or magnitude. The means at our disposal are not only essentially incapable of solving these problems but they are inherently inclined to make them worse. Yet there is no time to create new systems. Therefore the only realistic option is to learn to manage these systems far more radically and on a far larger scale than we do at present. But so radical are the necessary changes that they are likely to be heavily resisted, and resisted by some of the most powerful forces on the planet.

The problems posed by the human impact on the environment are huge and extremely urgent. We need to reduce the impact we are having on the environment radically. In the leading industrial countries we need to reduce our collective carbon footprint by 90% or more, or perhaps even shift to a carbon-negative economy, in which we compensate for past excesses by absorbing more carbon than we emit. We are starting to move, but even the most ambitious national and international targets commit us to probably failing to halt this process. Meanwhile, almost every worst-case scenario – Arctic melting, climate damage, habitat loss – is turning out to be the best case. At this rate, we may well be living in the last century – if not the last few decades - of industrial civilisation.

At the same time, many strategic materials on which our current economic system relies – not only oil and natural gas but many metals and minerals - will become scarce to the point that they will start to disrupt our current economic systems within the foreseeable future. A number of absolutely basic resources such as fresh water and fertile soil will also come under threat within the same timescale, affecting so many people (especially in developing countries) that their effects are imaginable only if you are prepared to imagine the very worst.

But we started to exceed the Earth’s carrying capacity about a quarter of a century ago, and we have already started to witness the consequences.

We have no previous experience in solving problems of this type or magnitude. Pundits like to compare the impending crisis with the Second World War. As the next couple of chapters will make clear, if we do not take vigorous actions quickly enough, the fall of the Roman Empire may well turn out to be a better comparison – if not the last Ice Age. We are already losing – in many cases, actively destroying - the means to solve our problems. Within a few decades the losses will trigger a sequence of environmental implosions in which the collapse of this or that area – the Amazon forests, the Siberian tundra, vast undersea methane hydrate reservoirs - will release enough additional carbon to change the question from ‘How do we manage this?’ to ‘How do we survive this?’

Other events will be equally devastating. The melting of the Greenland and Antarctic ice sheets alone will make some of the world’s most heavily populated areas uninhabitable and flood many of the world’s greatest cities. The droughts that inevitably follow the final melting of most of the world’s glaciers (which feed many of the most important rives) will turn many of the world’s most densely populated – and nuclear-armed – regions to scrublands capable of supporting only the most meagre of populations. In the same timescale we can expect some of the world’s most fertile and productive agricultural areas to fail, including the American Midwest and California’s Central Valley, several of China’s rice-growing regions$$ and the Ganges valley.

Taken together, these processes will combine to ignite civil and political conflicts on an unprecedented scale even while massively damaging the social and political systems we rely on to manage such conflicts.

Meanwhile, the means at our disposal to solve all these problems are not only essentially incapable of solving these problems but they are inherently inclined to make them worse. Faced with any global problem, our most important resource is our economy. It is this that produces the means to do anything else, especially create the new systems and technologies we will undoubtedly need to deploy to escape our predicament. More than three decades after the first credible warnings of what would happen if we continued with unabated industrial growth and almost two decades since global targets and agreements on climate change were first promulgated, we have failed to meet practically every target we have set ourselves.

The fundamental reason for this is, straightforward enough. A capitalist economy relies absolutely on the continual expansion of profits. Without continuing the cycle of profit, investment and profit, it has no rationale and will cease to function. With that, all the remainder of society that relies so entirely on capitalist relationships – employment, consumption, taxation, government – will also collapse. With such a large proportion of all capital tied up in industrial machinery, global transport systems, vast retail networks and an enormous advertising and marketing industry – not to mention an almost official post-ideology ideology of consumerism – not only is our current economic system not designed to help us cut back, but it positively demands endless expansion. Although industry as such is not a problem – any machine can be turned off – capitalist industry is an absolute catastrophe. Under a capitalist regime, turning off the machines would put an end not only to the profits but also to the only system we possess that is capable of creating the means to solve our current environmental problems. Even replacing them with more environmentally friendly alternatives before they had recouped their original investment would cripple businesses.

Yet there is no time to create a new economic system. The problem is Now, and every past transformation as radical as the replacement of capitalism has taken literally centuries. Therefore the only realistic option is to learn to manage these systems far more radically and on a far larger scale than we do at present. The famous ‘turning on a penny/dime’ at the start of the Second World War is encouraging, but the changes needed now are far more fundamental. We have longer to complete them, but there is scarcely an area of everyday life they will not touch, and unlike the changes wrought at the start of the Second World War, this is not a transient change to be made in the face of a clear and present danger. If we are to succeed, we must take far more radical steps than anything ever contemplated before, forcing an extraordinary level of change (and perhaps disruption).

But so radical are the necessary changes that they are likely to be heavily resisted, and resisted by some of the most powerful forces on the planet. The situation is essentially that the next century will be by any standards the most expensive century in human history. That is, we will be investing not so much in grow as in change – often accompanied by shrinkage. Faced with such a situation, most governments and practically all businesses will try to deal with this problem by either evading their responsibilities or making someone else pay for them. Given that at least a significant fraction of governments and businesses have demonstrated a willingness to obtain economic resources and avoid social obligations by a combination of force and fraud, this may well prove to be the most violent century in human history too.

Yet there is a great deal we can do. But only if we are prepared to face up the reality of the situation, and only if we are willing to take action. Now.

Carbon leakage

Something I don't quite understand. About three weeks ago a member of the UK government appeared on the BBC, proudly claiming that the UK were successfully meeting their carbon targets by exporting manufacturing to China.

Leaving aside the obvious loud Doh! this warrants (where do they get these clowns from?), it also raises the whole question of carbon leakage. Today, for example, the Financial Times reports that industrialists in the EU are threatening to move production to areas where carbon emissions are not yet regulated (India, China, USA, and so on) if they don't get some concessions about targets.

But how have we arrived at a situation where such a threat is possible, or was not foreseen? Can we not require companies registered in the EU to calculate the total carbon cost of their good and services, regardless of where the inputs come from and the outputs go? Presumably not, but if we don't, what hope do we have of controlling emissions.

Is there no end to Microsoft's selfishness?

Good old Microsoft. Just when you might have thought people were starting to get the message about how environmentally damaging flying is, they offer air miles to anyone using their search engine:

Under the latest plan, known as Search Perks, Microsoft said that US
internet users would be able to earn a “ticket” each time they conducted a
search on its Live Search site, then redeem those for things such as ... regular air
miles. (Financial Times, October 1 2008)

Well done. Another generation addicted to flying. Still, it serves a higher purpose - bribing Google users to jump ship.

If you are a Google user, please don't accept the Microsoft bribe. And God knows the world would scarcely be a better place if Microsoft gain control of yet another area of computing!

Future for sale

I bang on a lot about how market economics is completely unsuited to our current environmental predicament. Here are a couple of practical - and potentially catastrophic - examples.

Now that we are growing crops for fuel instead of food, we have accidentally created a new nexus that markets have been quick to exploit – to all our costs. Now that corn is sought as eagerly by petrol companies as by food companies, the price of cereals for biofuels must converge with its equivalent in oil. However, even if, say, the USA converted all its crops to biofuels, it this would still barely touch its total fuel consumption, so the prices of cereals must move towards oil rather than vice versa - and the process of oil is currently a lot higher. So this will cause world food prices to rise – just as we complete the seventh year out of eight when we have consumed more food than we have grown, and prices are going up anyway.

Or how about this. In India, the city of Chennai – 7 million strong - is running out of water. So local water companies are buying the water from the farmers who till the surrounding land, who are happy to sell it because it is worth a lot more than any crops they might be able to grow by irrigating mere food. So sometime not long from now, when the currently falling water table has passed beyond practical or economic reach, there will be no more water – and no food either.

Nor is a Third World peculiarity. Cities in the USA (including San Diego, Las Vegas, Los Angeles, Denver, El Paso and many more) are perpetrating the same lunacy. Their water purchases run into hundreds of millions of tons and will undermine what is now invaluable farm land over decades and decades. And their purpose? To buy an unsustainable present in which vast quantities of water are squandered and paying for it with a truly terminal future.

But what can we expect if it takes 14 tons of water to make a ton of steel but 1000 tons to grow a ton of wheat, and the steel is ‘worth’ (treacherous word!) two or three times more than the wheat anyway?

Both classic examples of market economics, in which the commodity goes to the highest bidder, regardless of the consequences. Such a system cannot even see the consequences or distinguish human misery from a packet of cornflakes. Yet trade agreement after trade agreement places such arrangements ever more firmly in the driving seat.

And of course, if we don’t sort out a non-market mechanism for managing water soon, much worse will follow.

The price of petrol

I read an interesting fact about the price of petrol. I don’t what the price of petrol there is right now, but in 2007 Americans could buy a gallon of gas for $3. However, that price only includes the costs to the oil companies – the costs of exploration, pumping, refining and distribution – plus, of course, a margin for profit. That leaves out most of the real cost of petrol – the tax breaks, the enormous direct subsidies we pay these (fabulously rich) companies, the massive military costs of ‘protecting’ our access to oil fields, and of course the massive and growing environmental costs.

The International Center for Technology Assessment has calculated that, taken together, these additional factors total something like an extra $12 per gallon.

Now, it does seem very likely that a major part of making the transition to a more sustainable lifestyle will depend on making consumers pay the real costs of what they consume. So is anyone going to ask Americans to pay $15 a gallon for petrol? I doubt it, and not just because of the average American politician’s supine attitude to car culture, oil companies and all the other enthusiasts for mass environmental collapse. The real problem is much more serious than that.

Geographically speaking, Americans are very spread out. Leaving aside the fact that there are literally thousands of miles between the principle business and industrial centres on the East and West Coasts, Chicago and Texas, most Americans rely on their cars for an enormous range of practical purposes. There is more space and far less public transport than in Europe or Japan, so even if every American were suddenly smitten by a desire to get on a bus tomorrow, there probably wouldn’t be one to get on.

So if petrol cost Americans $15 a gallon, so many people would be literally unable to move – go to work, shop, or even move to a geographically more sustainable location - that the American economy would collapse - and with it much of the world’s economy too. Add to that the effect of making consumers pay four times as much for everything else they use oil for, and the end would be in sight for American society. We Europeans wouldn’t be far behind.

And if that happens, it would not significantly reduce the environmental damage we do. Much of that is a) embedded in things we have already made, whether or not we use them; and b) built into infrastructure such as power stations that will not stop operating just because we are poor.

On the other hand, it certainly would remove the primary instrument we have for solving the problem, which is the economy itself. Not only would a massive depression remove the economic surplus we need to make long-term investments in environmental solutions but it would so panic us that we would start to adopt short-term solutions that were environmentally catastrophic. So no, a recession would not be a good thing for the environment.

Most of the economic alternatives are little cheerier. Even a degree of economic direction through instruments such as tax and regulation are not credible so long as we continue to treat economic activity as primary and economic motives such as profit as sacrosanct. Yet the option of not accounting for the real cost of our high-energy, disposable lifestyles is also rapidly slipping off the table.

Finally – and perhaps the greatest impediment of all – our existing economic system has no way of managing any such transition. The way companies are organised and the mechanisms whereby capital moves through the system (essentially, directed solely by opportunities for short- and medium-term profit) mean that planning for a long-term transition is out of the question. It is not that we could not manipulate the structure of markets, and so of prices and profits, in the right direction; it is rather that the resistance to this from the existing economic powers – global corporations in particular – would be so great that it is scarcely likely to work in the very limited time we have available.

In short, there is no straightforwardly economic solution to the crushing economic problem our environmental position confronts us with.

Which leaves only one option: a political solution.

That is not to say, a ‘political’ solution of the usual kind we apply to the rest of the world. The rich cannot cut themselves off in a comfortably affluent cocoon, but neither can they force the world into submission. The extent and intensity of globalisation makes any such idea laughable. Even the American military, it turns out, can barely down a single Middle Eastern nation we spent a decade starving into submission before we threw everything we had at it. Even together with Europe, Russian and Japan’s unqualified support, it is improbable in the extreme that we could force the rest of the world to pay for our continuing excesses.

So ‘business as usual’ is not an option, not even temporarily.

As far as I can see, we need a progressive (and very rapid) transition towards two goals – the protection of society as the transition is made, and a long-term sustainable energy position. It is likely that this will have to include capitalist business, and it will be interesting to see how we manage to keep that particular genie in its box – because it will not want to stay there.

Environmental ironies no.11 million or so

So a few days ago a satellite photograph is published showing that for the first time in 125,000 years, we can now circumnavigate the North Pole. It is a moment of genuine tragedy – another stake in the heart of life as we know it. Far from having to wait until late in the century to see the Arctic ocean ice-fee in summer, it could be any year now. Some scenarios even suggest 2013. Bearing in mind that practically every environmental worst-case scenario turns out to be the best-case scenario, even that may be optimistic.

But what is the media story that goes along with this moment of dreadful pathos? That politicians everywhere finally come to their senses? That we take some real steps to stop and reverse this trend? Not at all. Yesterday John McCain appoints as his running mate the incumbent governor of Alaska (of all places!), who tells us that the scientific jury is still out on global warming. And even the Independent on Sunday – the newspaper in which I read this story, and generally pretty conscientious about the environment – goes on to report that this means that shipping companies trading between Europe and Japan will be able to cut 8000 miles off the round-trip – which will no doubt encourage more long-distance trade, bigger carbon footprints and still faster melting.

I hope someone up there is laughing, because I doubt that anyone down here is.

The ratchet effect

One problem with powering down is the difficulty of overcoming the commitment to excess. It is not simply the volume of consumption on the individual level (reducing which would be directly threatening to manufacturing capital’s need to continually expand production) but also the built-in excess required for transient competitiveness which then becomes the entry level for all future products and services, even though it no longer serves any purpose – not even competitiveness.

For example… Just yesterday I was in the London Underground in a bleary kind of post-work state, so it took a while to notice that I was standing opposite a large electronic advertising hoarding. About 5 metres long, I can’t imagine how much energy it must have been using. Of course, from the advertiser's point of view, it was, great – a real edge over the competition. But then they all join in, and then there are thousands and thousands of them. In fact, given that every single advertising display on the main escalators in some major underground stations is a little electronic screen too, they will soon be filling up the entire system.

So then what? The competitive edge has been lost, because everybody’s doing it. There is no longer any benefit, to advertiser or client, is using a screen rather than an old-fashioned poster. Yet electronic advertising hoardings become the entry level medium. So it doesn’t buy you any advantage, but you can’t stop doing it. So advertisers have successfully ratcheted up the energy costs of advertising for short-term gain, and now they can’t get back down again. A transient advantage to a single company becomes a permanent burden on the environment.

I wonder how many such arrangements there are? Millions, I have no doubt – in public and private life, at every level, in every sphere. What can we do about it? Is there a process for getting us back down again, without any winners or losers?

Who will pay? Guess...

One of my recurring nightmares for the coming decades of environmental crisis and economic problems is that the essential solution will be what it has always been. We will make the poor pay. Of course we will – we always do, and it is built into the way we do things. It will be necessary to dress them up as villains or undeserving or perhaps just render them invisible by hiding them behind 'processes' and 'systems', or perhaps by the simple expedient of not looking that way. But in a world in which rich countries routinely promise a fraction of 1% of GNP to foreign aid and yet feel no shame when they cannot even manage that, how will that be a problem?

On the other hand, to the extent that we continue to pay them any attention, it will be largely in order to exploit their suffering. To take one of the ugliest examples of shameless exploitation, here is a summary of what is really happening in the world food system, and in particular the world of genetic modification, which has spent so man marketing dollars on trying to persuade us that GM is the great hope for the Third World in the face of coming age of droughts, plagues of insects and hunger:

This is the main reason nearly all transgenic crops are now planted in just six countries – the United States, Argentina, Brazil, Canada, China and South Africa – and almost none in the least developed countries, who cannot afford such inputs. It is also why, according to the FAO, just four crops (corn, canola, cotton and soybeans) and just two traits (herbicide tolerance and pest resistance) now account for 99% of transgenic crops planted worldwide. By contrast, the FAO says, because most transgenic research and development is being carried out by private companies there have been ‘no serious investments’ in creating transgenic varieties of crops such as sorghum, millet, pigeon pea, chickpea and groundnut, which are far less commercially viable than soybeans or corn but are the five most important crops for poor farmers in semi-arid tropical regions like sub-Saharan Africa and India… While many anti-transgenic activists continue to get worked up over patent production as the main threat to poor farmers, the larger risk is that the transgenic industry will simply bypass the developing world altogether. Genetically modified cops, complained Louise Fresco, the former head of FAO’s agricultural division, were created ‘to reduce inputs and labour costs in large-scale production systems, not to feed the developing world or increase food quality.’ Not only is transgenic research missing poor countries’ crops, Fresco continued, but it is largely avoiding the traits needed by the developing world, especially drought and salt tolerance and resistance to tropical diseases… This reality runs counter to the oft-stated forecasts that a gene revolution will restore food security in places like
Africa and southern Asia and has fostered the view among critics that the industry is simply using problems like hunger to gain political support for transgenic technologies it can’t afford to offer to the hungry.

(From pp. 262-263 of Paul Roberts’ excellent The End of Food. Read this book.)

But this in turn only reflects the category error (as those of who once shared a flat with an undergraduate philosophy student like to put it) of most debate about whether or how the problems of peak oil, declining soil quality, climate chaos, water shortages and all the rest can be solved by business. Business simply is not in the business of solving such problems. Business is in only one business and it only makes one product. Business is solely and exclusively in the business of making money, and its sole product is profit. Insofar as it can be forced through tax, regulation and the marketing constraint of its customers occasionally refusing to deal with vicious, evil corporations, business can make a useful contribution to society. All its other contributions are either negative or unintentional.

So if the above quote expresses how agribusiness operates, it is not because these businesses are run by bad or foolish people; it is because that that is the only way a capitalist enterprise can operate. Although a great deal of ‘corporate social responsibility’ is little more than PR, and a lot more simply what they are obliged to do by law - in good times there is a degree of Good Works. But even the corporate good guys cannot resist the demands of shareholders, especially when the going gets tough.

So we should never trust businesses to do anything but pursue their own interests. Never never never. Unless, that is, someone can show me a single case of a large business doing something completely altruistic that cost it real money (of its own terms) without them making anything out of it – no indirect or indirect benefit, in fact not even any public claim for recognition that they were responsible. Just the ordinary, decent sort of thing you might expect any morally responsible individual to do. Only with billions of dollars.

Why won't markets solve our environmental problems?

Like most unrepentant lefties, I get tired of hearing people talk about markets as though they we some kind of panacea rather than the combination of adolescent abstraction and crooked game they obviously are to anyone who bothers to work out how they really operate.

But just to cut through the usual theological speculation (which would, I am quite sure, have shocked Adam Smith, who seems to have been generous, humane and sophisticated moral philosopher who distrusted business deeply), would someone please point me at, say, three major corporations that organise their own internal operations as a market?

Can't think of even one? Me neither.

So why not markets? Because they don’t work, they don’t make sense and they don’t exist.

Markets don't work

Well, they work in part, but only to the extent that you would expect self-regulating system to work that had no mechanisms to directly tell them whether or not they are doing the right thing. Money and profit are quite good guides to certain kinds of poorly understood or marginal situations, but neither ‘running society as a whole’ nor ‘forestalling the worst ecological crisis since the glaciers retreated from Oxfordshire’ are among them.

A market is like evolution: pretty impressive on its own terms, but if you wanted to create an intelligent organism, would you settle for a system that took half a billion years, repeatedly went off in all sorts of directions no one in their right mind would have chosen, and finally came up with – a giraffe?

Likewise for markets. They have created a fantastic (and I mean that word literally) level of productivity, knowledge and control. But they have absolutely no sense of direction, purpose or self-control.

And as we have been discovering almost daily ever since the world’s government decide that markets were The Answer, if you don’t like markets but work in an area where they predominate, you had better have massive political power at your disposal if you plan to buck them, because not only do markets have no self-control but they are too big for anyone who does have an idea of where they want to go or how they want to get there to deflect, and too deaf to anything but profitability to be persuaded. Like a muscle-bound idiot, markets are wonderfully impressive to people who like gawping at lats and pecs, but you would be very ill advised to engage them in conversation about anything of any actual significance - or to get in their way.

So markets go wherever their own witless impetus takes them. As a result they have created (some of – let’s not exaggerate their significance) the enormously powerful economies and societies of the modern world. But they have also created systems for energy use, food production, resource utilisation, mass communications and any number of other basic social functions that are currently showing every sign of running us straight over a cliff.

Markets don't make sense

Nor do markets really make much sense. If companies don’t operate internally in terms of markets, and neither do governments or any other kind of organisation that knows what it is trying to achieve, it is for the simple reason that, again like evolution, relying markets really is an extraordinarily irrational way of behaving. It is as if you wanted to know what the average of the numbers from 1 to 6 was, and instead of simply dividing the sum of these numbers by how many numbers there are (i.e., the lamentably centralised approach of mathematics), we decided to ask thousands of people to guess, and assumed that the group shouting loudest were right.

True, there are many social functions we do not know how to directly organise efficiently or effectively yet. But if that is the rationale for markets, then they make sense only as a last resort, could only work if we kept a careful eye on how things were going, and they would have always to be surrounded by the power to intervene when things start to go wrong.

For example, the exploding problem of ‘externalities’ – i.e., the fact that the markets are utterly unresponsive to the fact that the environment is collapsing – can only be detected by markets if you cobble together some artificial regulatory and pricing system that can tell this poor deaf, simple-minded creature what the hell the is going on.

Hence the autism of markets that is so truly frightening. If markets were human beings, they would be kept in a home for the terminally bewildered. But our current approach to markets is the very reverse. It is to empower them to make every possible decision about how we will run the world – some of the most crucial parts of which markets cannot even register.

Even those things we are pretty good at doing rationally and we know from massive experience that markets cannot do, such as running health, defence or social security systems, are increasingly being handed over to markets to run, and through a succession of global treaties and agreement, we are progressively (is that the right word?) abdicating our right to regulate and intervene.

Markets don't exist

Which brings me to the third problem – that markets don’t actually exist. When we abdicate our control of major social systems to ‘the market’ we are not in fact doing any such thing. In practically every industry and sector, the entire world market is under the thumb of perhaps seven or eight companies. Oil, food distribution, money, cars, computers, pharmaceuticals, fertilizer – in how many of these sectors do the seven largest players make up more than 70% of the market? In such conditions, the entire theoretical basis of the market, with its freedom of movement and openness of information, disappears.

In a way this could be a good thing. If there are only a few global players, each operating truly planetary systems that manage the flow of the world’s resources, then clearly a massively rational system is in fact in control. In that case, could it not be argued that the illusion of the market in fact conceals a rational system for managing society’s needs? So it would seem, listening to some market advocates.

But unfortunately, because the interests that control what counts as ‘rationality’ are those of shareholders rather than society as a whole, both the power of public reason and the economic power of society as a whole have been co-opted to narrow sectional interests. What is more, those interests are not only not neutral to the interests of society as a whole; the two sides are directly and fatally opposed.

All economic systems assume some form of exploitation. We exploit mines and forests and agricultural land and the powers of physics and chemistry and biology and the talents of human beings. But the most fundamental basis of a capitalist system is the fact that the people who actually make and do everything are rewarded for their efforts with only a fraction of the wealth they create. We work, hand over everything we make, and get paid. And because what we have done is worth more than our collective pay, there is a profit left over.

This exploitation is concealed by the superficial fairness of contract relationships, even to the point where the participants are perfectly convinced of fairness of this exchange and the absence of any alternative. But from the present point of view, what it ultimately means is that society’s economic powers have been co-opted to serve the interests of a class whose entire livelihood relies on the exploitation of society at large.

So markets don’t work, don’t make sense, and don’t exist. Especially if you are faced with a crisis on the present scale. On the other hand, if I were planning to organise the end of the world, I know exactly who I’d turn to - someone blind, deaf, self-centred, simple-minded… Now, who might that be?