PostCapitalism-_Paul-Mason_-_z-library.sk_-1lib.sk_-z-lib.sk_

disappeared, the modern left became preoccupied simply with opposing things: the privatization of healthcare, the reduction of union rights, fracking – the list goes on.

Today we have to relearn to do positive things: to build alternatives within the system; to use governmental power in a radical and disruptive way; and to focus all our actions towards the transition path – not the piecemeal defence of random elements of the old system.

The socialists of the early twentieth century were absolutely convinced that nothing preliminary was possible within the old system. ‘The socialist system,’ Preobrazhensky once insisted categorically, ‘cannot be built up molecularly within the world of capitalism.’³⁶

The most courageous thing an adaptive left could do is to abandon that conviction. It is entirely possible to build the elements of the new system molecularly within the old. In the cooperatives, the credit unions, the peernetworks, the unmanaged enterprises and the parallel, subcultural economies, those elements already exist. We have to stop seeing them as quaint experiments; we have to promote them with regulation just as vigorous as that which capitalism used to drive the peasants off the land or destroy handicraft work in the eighteenth century.

Finally, we have to learn what’s urgent, and what’s important, and that sometimes they do not coincide.

If it were not for the external shocks facing us in the next fifty years, we could afford to take things slowly: the state, in a benign transition, would act as the main facilitator of change through regulation. But the enormity of the external shocks means some of the actions we take will have to be immediate, centralized and drastic.

The Rational Case for Panic

Wherever I go, I ask questions about economics – and get answers about climate. In 2011 in the Philippines, I met landless farmers living in rural slums. What had happened? ‘The typhoons,’ came the answer. ‘With more typhoons the rice doesn’t grow as well. There are not enough days of sunshine between planting and harvesting.’

In Ningxia Province, China, walled off from the Gobi desert by barren mountains, I met sheep farmers who’d become reliant on chemical pellets as the grassland died around them. When, back in 2008, scientists trudged the mountains to find out what had happened to the 144 springs and mountain streams marked on the map, they reported: ‘With climate change and deterioriation of the environment, the southern mountainous areas have no springs and no mountain streams.’¹

In New Orleans, in 2005, I watched the social order of an already fragile modern city, in the richest country in the world, disintegrate. The proximate cause was a hurricane; the underlying problem was the failure of the city’s infrastructure to deal with a change in weather patterns, and the inability of the poverty-stricken social and racial structure of the city to survive the blow.

There’s a pointless argument between economists and ecologists over which crisis is more important – the ecosphere or the economy? The materialist answer is that their fates are interlinked. We know the natural world only by interacting with it and transforming it: nature produced us that way. Even if, as some supporters of ‘deep ecology’ argue, the earth would be better off without us, it is to us that the task of saving it falls.

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In the world of suits and climate summits, a complacent calm rules. The focus is on scenarios for ‘what will happen’, the climate catastrophe that awaits if we allow global temperatures to rise by more than two degrees Celsius above pre-industrial levels. But in the edge-places of the world the catastrophe is happening already. If we listened to those whose lives are being destroyed by floods, deforestation and encroaching deserts, we would better understand what is coming: the total disruption of the world.

The IPCC’s fifth report, published in 2013, states unequivocally that the planet is warming. ‘Since the 1950s,’ say the world’s most respected climate scientists, ‘many of the observed changes are unprecedented over decades to millennia. The atmosphere and ocean have warmed, the amounts of snow and ice have diminished, [the] sea level has risen, and the concentrations of greenhouse gases have increased.’² The IPCC is confident that this is primarily caused by human beings using carbon to fuel economic growth – so much so that in this report it upgraded from ‘likely’ to ‘very likely’ the probability of hotter temperatures, more frequent hot days and more frequent heatwaves being caused by humans. Scientists do not use such terms lightly; they are the equivalent of a qualitative increase in their degree of certainty.

Because our ecosystem is so complex, we can’t trace every disruption of the climate to a human cause with 100 per cent certainty. But we can, says the IPCC, be fairly certain that extreme weather – hurricanes, floods, typhoons, droughts – will increase in the second half of the century.

In its 2014 update, the IPCC warned unequivocally: failure to stop the rise in carbon emissions would increase the likelihood of ‘severe, pervasive and irreversible impacts for people and ecosystems’. This, remember, is from a report by scientists. They do not sign off on words like ‘severe, pervasive and irreversible’ before weighing them carefully.

If you’re a mainstream economist, what’s coming will feel like an ‘exogenous shock’, an extra source of chaos within an already chaotic situation. For peasants in the Philippines, African-Americans in Louisiana and the people of Ningxia Province, the shock is already happening.

Climate policymakers and NGOs have produced numerous scenarios for what we need to do to stop it. But while they model the earth as a complex system, they tend to model the economy as a simple machine, with inputs/outputs, an energy requirement and a rational controlling hand – the market. When they speak of ‘transition’, they mean the phased evolution of energy policy towards burning less carbon, using a modified market mechanism.

But the economy itself is complex; just like the weather during the hurricane season, it is prone to reactions that accelerate uncontrollably and to complex feedback loops. Like the climate, the economy moves through a mixture of long- and short-term cycles. But, as I have shown, these cycles lead to mutations and ultimately to breakdown over timescales of fifty to 500 years.

In this book, I’ve avoided ‘building in’ the climate crisis until now. I wanted to show how the clash between info-tech and market structures is, on its own, driving us towards an important turning point. Even if the ecosphere was in a steady state, our technology would still be pushing us beyond capitalism.

But industrial capitalism has, in the space of 200 years, made the climate 0.8 degrees Celsius hotter, and is certain to push it two degrees higher than the pre-industrial average by 2050. Any project to move beyond capitalism has to shape its priorities around the urgent challenge of climate change. Either we react in time and confront it in a relatively orderly way, or we don’t – and disaster follows.

It has become common to laugh at the absurdities of the climate-change deniers, but there is a rationality to their response. They know that climate science destroys their authority, their power and their economic world. In a way, they have grasped that if climate change is real, capitalism is finished.

The real absurdists are not the climate-change deniers, but the politicians and economists who believe that the existing market mechanisms can stop climate change, that the market must set the limits of climate action and that the market can be structured to deliver the biggest re-engineering project humanity has ever tried.

In January 2014, John Ashton, a career diplomat and formerly the British government’s special representative on climate change, delivered the blunt truth to the 1 per cent: ‘The market left to itself will not reconfigure the energy system and transform the economy within a generation.’³

According to the International Energy Agency, even if all the announced emissions-reduction plans, all the carbon taxes and all the renewables targets are achieved – that is, if consumers don’t revolt against higher taxes, and the world does not de-globalize – then CO2 emissions will still rise by 20 per cent by 2035. Instead of limiting the warming of the earth to only a two-degree increase, the temperature will rise 3.6 degrees.

Faced with a clear warning that a 4.5-billion-year-old planet is being destabilized, those in power decided that a 25-year-old economic doctrine held the solution. They resolved to incentivize lower carbon use by rationing it, taxing it and subsidizing the alternatives. Since the market is the ultimate expression of human rationality, they believed it would spur the correct allocation of resources to meet the target of the two-degree cap. It was pure ideology and it has been proved plain wrong.

To remain under the two-degree threshold, we – as a global population – must burn no more than 886 billion tonnes of carbon between the years 2000 and 2049 (according to the International Energy Agency). But the global oil and gas companies have declared the existence of 2.8 trillion tonnes of carbon reserves, and their shares are valued as if those reserves are burnable. As the Carbon Tracker Initiative warned investors: ‘they need to understand that 60–80% of coal, oil and gas reserves of listed firms are unburnable’⁵ – that is, if we burn them, the atmosphere will warm to a catastrophic degree.

Yet rising energy prices are a market signal. They tell energy firms that it’s a good idea to invest in new and more expensive ways of finding carbon. In 2011, they invested \$674 billion on exploration and development of fossil fuels: tar sands, fracking and deep-sea oil deposits. Then, as global tensions increased, Saudi Arabia decided to collapse the price of oil, with the aim of destroying America’s new hydrocarbon industries, and in the process bankrupting Putin’s Russia.

This, too, acted as a market signal to American drivers: buy more cars and do more miles. Clearly, somewhere, the market as a signalling mechanism has gone wrong.

Look at it as an investment problem: either the global oil and gas companies are really worth much less than their share prices indicate, or nobody believes we’re going to cut our carbon use. The stock market valuations of the top 200 carbon burners totals \$4 trillion; much of that could be lost if we persuade ourselves to stop burning carbon. This is not just scaremongering by excitable climate NGOs. In 2014 the governor of the Bank of England, Mark Carney, warned the world’s insurance giants that if the two-degree target is significantly breached it would ‘threaten the viability of your business model’.⁶

The lesson is: a market-led strategy on climate change is utopian thinking.

What are the obstacles to a non-market-led strategy? First, the lobbying power of the carbon burners. Between 2003 and 2010, climate-denial lobby groups received \$558 million from donors in the USA. ExxonMobil and the ultra-conservative Koch Industries were major donors until 2007, when there was a tangible shift to funds channelled through anonymous third parties, under pressure of journalistic scrutiny.⁷ The outcome? The world spends an estimated \$544 billion on subsidizing the fossil fuel industry.

But that’s just the most obvious part of climate lunacy. After the failure to agree a global path to the two-degree target at the 2009 Copenhagen Summit, energy companies realigned their efforts in order to pressure national governments for specific outcomes, always with the aim to slow the introduction of carbon targets, or to exempt specific firms.

Yet strong, positive action can work. In Germany, the sudden shutdown in 2011 of the nuclear programme after Fukushima, combined with heavy investment in renewable energy, has done to the power utilities what any hard application of carbon targets would do to market forces. It has shattered them.

In the German system, wind, solar and other renewable generators get the first opportunity to supply energy. If there’s sun, and a healthy breeze, as

there was on 16 June 2013, they can generate half of all demand. On that day, the gas and coal producers – who cannot easily adjust the output of their power stations, only switch them on and off – were forced to pay the German electricity grid €100 per megawatt to take unwanted electricity off their hands. The price of carbon energy had gone negative. As The Economist magazine put it: ‘For established utilities … this is a disaster … you cannot run a normal business, in which customers pay for services according to how much they consume, if prices go negative.’⁹

In many countries, energy policy is paralysed – not just by the lobbying power of oil and gas, but also by the difficulty of forcing behaviour change using market forces – e.g. higher prices – rather than by undertaking a rational redesign of the whole system.

For the advocates of green capitalism, it is easier to imagine the end of the world than to imagine a non-market, low-carbon economy.

So we need to imagine better.

HOW TO AVERT CLIMATE DISASTER

Climate science tells us that, in order to keep the temperature rise to around two degrees, we need to halve the amount of CO2 we burn by 2050. The IEA spelled out the importance of the timing: ‘If emissions do not peak by around 2020 and decline steadily thereafter, achieving the needed 50% reduction by 2050 will become much more costly. In fact, the opportunity may be lost completely.’¹⁰ The later emissions peak, the harder it is to halve them.

In response, various campaigns and research units have designed scenarios to show technically how this 50 per cent reduction might be achieved. Though they all differ as to the mix of alternative energy types and the way they model energy efficiency, they have one thing in common: nearly all of these scenarios conclude that it will be cheaper in the long term to go low carbon, than not.

The IEA’s Blue Map Scenario, which halves CO2 emissions by 2050, sees the world spending \$46 trillion more on energy investments than it would if nothing changed. But because the scenario involves burning less fuel, even by the most conservative estimate it still saves \$8 trillion.

Greenpeace, whose Energy Revolution Scenario is taken as a reference point in the wider industry debate, wants to achieve the target with no new nuclear power plants and less emphasis on carbon capture and storage, so that by 2050 85 per cent of all energy is produced from wind, wave, solar and biomass technologies. Even here, however, with much higher upfront investment costs and a bigger social change, the world saves money in the end.¹¹ In all the scenarios where carbon burning is halved, there is a spin-off benefit because the transition creates new jobs. Building and maintaining machines to generate electricity from wave, wind and solar power is a more technologically advanced solution than burning gas or coal.

Saving the planet, then, is technologically feasible and economically rational, even when measured in cash terms. What stands in the way is the market.

This is not to say we have achieved nothing. If you discount China – which distorted the global figures by building hundreds of coal-fired power plants in the 2000s – the amount of generating capacity coming online from renewables outstripped that from fossil fuels in 2009. This is a clear signal that state intervention into the market – through financial incentives for renewables and targets for reduced carbon emissions – can work.

The problem is, first, that the market-led transition is too slow and too vulnerable to pressure from consumers (who naturally want cheap energy) and from fossil-fuel producers. Secondly, as political pressure on governments rises, energy turns into geopolitics. Germany’s move against nuclear energy came at the cost of giving Russia the power to hold the German economy to ransom during the Ukraine crisis. America’s turn to fracking – in addition to its environmental impacts – altered the global balance of power so significantly that Saudi retaliation has in the space of a year collapsed the price of oil by more than half.

Seen against the rising geopolitical tensions, the prospects for a deal at the COP (Conference of Parties) in Paris, in December 2015, do not look positive. More and more, the climate talks conducted in these conferences come to resemble the peace treaties that paved the way to the Second World War.

Meanwhile even radicals in the environmental movement are confused about markets. Greenpeace, for example, compares China with Europe as follows: China’s determination to fuel economic growth with coal boosted emissions, while privatization in Europe and the USA drove their switch to gas, which is less harmful than coal. This they see as proof that a market achieves better carbon outcomes than centralized control.¹²

However, to meet the critical emissions targets we are going to have to use some centralized control. Governments – at state and regional level – will need to take control, and probably ownership, of all big carbon producers. As the energy distribution grid becomes ‘smart’, using technology to predict and balance supply with demand, it makes sense for the grid to be a public resource.

If a state-influenced price mechanism can’t achieve the right mix of investment in renewables, nuclear energy and residual carbon burners, then it will have to be done using state ownership, direct control and targets. This is the ultimate conclusion we have to draw from John Ashton’s comments quoted above: if the market is not working then, given the urgency, state allocation must be tried.

Technically, if you use planning rather than market incentives, it will be easier to create a mix of ‘base load’ power generated by nuclear and cleaner carbon, with the rest coming from renewables: according to scenarios from Greenpeace to the IEA and other variants, that is what is needed to achieve the two-degree target.

The attempt to create a non-market economy and a low-carbon system are clearly interdependent. But while there are many routes to a postcapitalist economy, the potential variants of what we can do to address the climate emergency are limited.

There is, in short, a rational case for panic about climate change – and it is compounded when you consider the interrelatedness of climate and the other great uncontrolled variant: population.

Being old was a privilege denied to most of our ancestors. If you take an urban history tour – whether in Manchester, Chicago or Shanghai – it’s worth remembering, as you peer into the old industrial dwellings, that the life expectancy of those who lived there was forty years or less.¹³ Go to a steel or mining town, from West Virginia to northern China, and you will see forests of gravestones marking the deaths of working-class men in their fifties – not in the distant past but in the post-1945 era. In the early years of capitalism, it was unsanitary urban life that killed you. In the twentieth century, it was chronic industrial diseases, stress, bad food and pollution.

Now though, we have a new problem: demographic ageing. There are no activists to drop banners from buildings to protest against ageing, there are no ministries for ageing, no prestigious scientific panel or global negotiations. Yet it is potentially as big an external shock as climate change – and its impact will be much more immediately economic.

The UN’s projections are not disputed. The world’s population, currently above 7 billion, will rise to 9.6 billion by 2050, with almost all growth occurring in the global south. By 2050, there will be more people in developing countries than there are people on earth right now. So the future story of humanity is mainly going to be told in cities like Manila, Lagos and Cairo.

Globally, the proportion of older people to those of working age will increase. In 1950, 5 per cent of the world’s population was over sixty-five; by the mid-twenty-first century it will be 17 per cent. But it’s in the rich world where the problems of ageing will turn into a shock.

Here, the crucial problem is the age-dependency ratio: the number of retired people compared to the number of those of working age. In Europe and Japan, there are currently three workers for every one retired person. By 2050 the ratio will be one-for-one. And though most developing countries will continue to have mainly young populations, China bucks the trend due to its one-child policy. By 2050 China will be the ‘oldest’ of the big economies in the world, with a projected median age of fifty-three.¹⁴

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