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Is the economy “recovering”? What does a “jobless recovery” mean anyway? How should workers respond to a deteriorating situation? Professor Richard Wolff drops some knowledge and suggests that workers need to take control of their companies.
“The Shock Doctrine: The Rise of Disaster Capitalism”
by Naomi Klein
2007 Metropolitan Books
I feel confident saying that The Shock Doctrine is one of the most important political non-fiction works of the last decade. This should be a high school textbook, or at least required reading in college. Naomi Klein applies her extensive vision and intellect to present us with a way of seeing our world that is extremely relevant and powerful: in the pursuit of enormous profits, those running the global economy intentionally exploit terrible catastrophes, or even create them, to take things for themselves that only shocked and traumatized populations would give up. This ambulance-chasing strategy of those in power is defined as the “shock doctrine,” and “disaster capitalism”, alternatively known as “neoliberalism” is the dominant social paradigm it has created.
Although there are flaws here, which I will mention, this book is both timely and well-written; Klein carries the reader through a story about grandiose topics like neoliberalism, torture, psychology, and international politics that is fundamentally readable.
The most important contribution made by this book in my view is the dismantling of the myth that capitalism’s global dominance is a function of democracy or destiny. This is the notion that with the defeat of the Soviet Union, all alternatives to “the free market” have naturally faded into history, presumably because capitalism is so irresistible. To the contrary, Naomi Klein provides numerous case studies to show us the exact opposite is true – the temporary triumph of global capitalism has been fertilized by the victims of natural disasters, terrorist attacks, wars, campaigns of torture, and economic calamity. In short, alternatives to capitalism have been shocked into submission wherever they’ve appeared.
This is no accident, it is part of a conscious crusade by market fundamentalists, those devoted to the pseudo-religious belief that “the market solves all.” Klein explains that the shock doctrine was developed (at least in part) by the patron saint of neoliberalism, free-market economist Milton Friedman. In his words, “only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” And he intended to provide those ideas. It was Friedman’s opus “Capitalism and Freedom” that proclaimed neoliberalism’s core edicts: deregulation, privatization and cutbacks to social services.
Since the 1970s, these teachings have been vigorously applied across the globe by the “holy trinity” of the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). Read the rest of this entry »
[Good news from the best oil/environment writer, Heinberg. The current economic crisis is easing pressure on the planet and its resources, ecological danger is decreasing. This is hopeful. I particular enjoy this statistic: “in the first four months of 2009, more bicycles were sold in the US than cars and trucks put together (over 2.55 million bicycles were purchased, compared to fewer than 2.4 million cars and trucks).”
Lately i’ve become convinced that hope is our greatest ally in working for a better world. If this article doesn’t inspire you, look at what’s happening in Iran at this moment. – alex]
Richard Heinberg
Originally published by Post Carbon Institute, June 5, 2009.
Recently I’ve begun compiling a list of things to be cheerful about. Here are some items that should bring a smile to any environmentalist’s lips:
- World energy consumption is declining. That’s right: oil consumption is down, coal consumption is down, and the IEA is projecting world electricity consumption to decline by 3.5 percent this year. I’m sure it’s possible to find a few countries where energy use is still growing, but for the US, China, and most of the European countries that is no longer the case. A small army of writers and activists, including me, has been arguing for years now that the world should voluntarily reduce its energy consumption, because current rates of use are unsustainable for various reasons including the fact that fossil fuels are depleting. Yes, we should build renewable energy capacity, but replacing the energy from fossil fuels will be an enormous job, and we can make that job less daunting by reducing our overall energy appetite. Done.
- CO2 emissions are falling. This follows from the previous point. I’m still waiting for confirmation from direct NOAA measurements of CO2 in the atmosphere, but it stands to reason that if world oil and coal consumption is declining, then carbon emissions must be doing so as well. The economic crisis has accomplished what the Kyoto Protocol couldn’t. Hooray!
- Consumption of goods is falling. Every environmentalist I know spends a good deal of her time railing both publicly and privately against consumerism. We in the industrialized countries use way too much stuff — because that stuff is made from depleting natural resources (both renewable and non-renewable) and the Earth is running out of fresh water, topsoil, lithium, indium, zinc, antimony…the list is long. Books have been written trying to convince people to simplify their lives and use less, films have been produced and shown on PBS, and support groups have formed to help families kick the habit, but still the consumer juggernaut has continued — until now. This particular dragon may not be slain, but it’s cowering in its den.
- Globalization is in reverse (global trade is shrinking). Back in the early 1990s, when globalization was a new word, an organization of brilliant activists formed the International Forum on Globalization (IFG) to educate the public about the costs and dangers of this accelerating trend. Corporations were off-shoring their production and pollution, ruining manufacturing communities in formerly industrial rich nations while ruthlessly exploiting cheap labor in less-industrialized poor countries. IFG was able to change the public discourse about globalization enough to stall the expansion of the World Trade Organization, but still world trade continued to mushroom. Not any more. China’s and Japan’s exports are way down, as is the US trade deficit.
- The number of vehicle miles traveled (VMT) is falling. For decades the number of total miles traveled by all cars and trucks on US roads has relentlessly increased. This was a powerful argument for building more roads. People bought more cars and drove them further; trucks restocked factories and stores at an ever-growing pace; and delivery vans brought more packages to consumers who shopped from home. All of this driving entailed more tires, pavement, and fuel — and more environmental damage. Over the past few months the VMT number has declined substantially and continually, to a greater extent than has been the case since records started being kept. That’s welcome news.
- There are fewer cars on the road. People are junking old cars faster than new ones are being purchased. In the US, where there are now more cars on the road than there are licensed drivers, this represents an extraordinary shift in a very long-standing trend. In her wonderful book Divorce Your Car, Katie Alvord detailed the extraordinary environmental costs of widespread automobile use. Evidently her book didn’t stem the tide: it was published in the year 2000, and millions of new cars hit the pavement in the following years. But now the world’s auto manufacturers are desperately trying to steer clear of looming bankruptcy, simply because people aren’t buying. In fact, in the first four months of 2009, more bicycles were sold in the US than cars and trucks put together (over 2.55 million bicycles were purchased, compared to fewer than 2.4 million cars and trucks). How utterly cool.
- The world’s over-leveraged, debt-based financial system is failing. Growth in consumption is killing the planet, but arguing against economic growth is made difficult by the fact that most of the world’s currencies are essentially loaned into existence, and those loans must be repaid with interest. Thus if the economy isn’t growing, and therefore if more loans aren’t being made, thus causing more money to be created, the result will be a cascading series of defaults and foreclosures that will ruin the entire system. It’s not a sustainable system given the fact that the world’s resources (the ultimate basis for all economic activity) are finite; and, as the proponents of Ecological and Biophysical Economics have been saying for years, it’s a system that needs to be replaced with one that can still function in a condition of steady or contracting consumption rates. While that sustainable alternative is not yet being discussed by government leaders, at least they are being forced to consider (if not yet publicly) the possibility that the existing system has serious problems and that it may need a thorough overhaul. That’s a good thing.
- Gardening is going gonzo. According to the New York Times (“College Interns Getting Back to Land,” May 25) thousands of college students are doing summer internships on farms this year. Meanwhile seed companies are having a hard time keeping up with demand, as home gardeners put in an unusually high number of veggie gardens. Urban farmer Will Allen predicts that there will be 8 million new gardeners this year, and the number of new gardens is expected to increase 20 to 40 percent this season. Since world oil production has peaked, there is going to be less oil available in the future to fuel industrial agriculture, so we are going to need more gardens, more small farms, and more farmers. Never mind the motives of all these students and home gardeners — few of them have ever heard of Peak Oil, and many of the gardeners are probably just worried whether they can afford to keep the pantry full next winter; nevertheless, they’re doing the right thing. And that’s something to applaud.
[T]he items outlined above suggest that we’ve turned a corner. Read the rest of this entry »
I’ve recently discovered the brilliance emanating from the pages of Yes! Magazine.
Their latest issue is called The New Economy. Check it out, a lot of the articles are online! It begins with the bold (and correct) declaration:
“This downturn marks the end of an unsustainable economy. Rather than trying to reinflate the old bubble economy, these activists, visionaries, and upstarts are trying something new: an economy that puts people first and works within the carrying capacity of Mother Earth.”
Groundbreaking approaches towards integrating the economy into the fabric of local communities and the ecosystem are presented in extremely accessible language and easy-to-read formats, with lots of great graphs!
Although the magazine shies away from using language like “capitalism”, “socialism”, “anarchism”, etc., the articles overflow with radical prescriptions for social change that challenge the status quo in bold new ways. This is the stuff of revolutions, because it appeals to the masses of Americans without shying away from real solutions, like breaking apart the large banks, investing in local organic gardening, drastically reducing the military budget, and ensuring universal health care.
Most importantly, the magazine fills its pages with a strong current of hope and joy, which is so desperately needed in these times. We need to remember that the collapse of the old system presents myriad opportunities for new grassroots endeavors, and a sense of joy is our strongest ally in this effort at rebuilding a world based on justice and sustainability.
Take a look, you won’t regret it! Yes!
[Below are excerpts from Kevin Carson of the P2P Foundation responding to someone who claimed, “post-capitalism talk is largely Utopian fantasy”. I agree with the thrust of Kevin’s argument, capitalism faces collapse on a global scale – but the key social question of our age will not be “can capitalism survive?” but “what new social system(s) will outlive it?”
There are powerful forces seeking to deny us the possibility of relocalizing and democratizing our own economic networks, and which favor a re-nationalization of economic organization and a more brutal resource imperialism. In short, using the State to protect wealth and privilege from the economic chaos, commonly referred to as fascism. Social change is not deterministic, we are faced with widely diverging paths. How we win this struggle and create a post-capitalist world worth living in is the subject of my work. – alex]
“Is post-capitalism a fantasy?”
P2P Foundation, June 7, 2009.
Quotes by Kevin Carson.
I believe that within a generation we’re going to see a radical shortening of supply and distribution chains from Peak Oil, a combined relocalization of most production and an explosion of LETS and barter networks as official money and wage employment dry up for a major part of the population, and a collapse of the old corporate proprietors in the culture and software industries.
…
The growth of the financial sector compared to physical assets is a major symptom of the problem. Given corporate capitalism’s chronic tendency toward overproduction and overinvestment, you can’t invest the surplus in plant and equipment that will generate even more goods when people can’t consume existing output. So you pile up the surplus investment capital in a FIRE sector that only works until the ponzi scheme collapses.
…
[O]ne reason for the growth of the FIRE economy from the ’90s on was that the export of industrial capital had reached its limits as a strategy for solving the crisis of overinvestment. China is saturated with more industrial capital than there is a market for. And second, there’s not much future in shipping goods overseas from Chinese factories when fuel costs two or three–or more–times what it did this time last year.
…
Had oil stayed at its summer 2008 prices indefinitely, some 20% of airline routes would have shut down and a comparable percentage of long-haul trucks left the market. And this was indeed a “hiccup” compared to what we can expect from Peak Oil in the future. Even a supply shortfall of a few percent can cause prices at the pump to double. What can we expect when supply falls by half or two-thirds over the next generation? I expect we’ll see a total collapse of intercontinental supply chains except in vital minerals, and an order of magnitude of reduction of continental supply chains for most manufactured goods.
The factories in China and Vietnam will become useless for anything but producing goods for people in–well, in China and Vietnam. Production of spare parts and modular accessories will grow massively at the expense of production of new goods, and the growth in such production of spare parts and modular accessories will occur mainly in flexible manufacturing nets in relocalized industrial economies. In-season produce will be almost entirely relocalized by backyard gardening and market gardening, and a much larger percentage of our diets will be either in-season or canned local stuff.
We’re barely two years into the real crisis: two years from when real estate prices began to slide, a year from when Peak Oil first became a household word, and nine months since inventories and employment began a free-fall.
To say “everything’s OK so far” this early in the process is IMO about like saying, immediately after Alaric’s first repulse from the gates of Rome, “Well, the system’s still got a lot of life in it.” Or the old joke about the optimist who fell off a 100-story skyscraper and shouted to the people on the 99th floor, “OK so far!”
To say that things look good for capitalism except for Peak Oil is a bit like saying your uncle is just like your aunt except for his testicles.
Very well-spoken article poking fun at our enigmatic president, who continues to flirt with both of the groups who brought him to the Big Dance: the corporate/financial elites who paid for his campaign, and the millions of progressive Americans who mobilized and turned out the vote.
Inspirational words, impressive moves, and boyish good looks have kept the two suitors enamored thus far, but at some point Barack’s going to have to choose his partner for the slowdance. So far he’s been sipping punch with the bankrolling capitalists, who have seduced him with fancy airplanes and false promises, but we, the people have to work up the courage to demand his attention if we have any hope of him coming home with us at the end of the night. And we can’t hide our intentions; let’s make clear that partnering with us means rejecting the system that caused this crisis – capitalism. Let’s be realistic and demand the impossible. [alex]
Fred Astaire in the White House
by Michael Brownstein
Originally published by Reality Sandwich, April 13, 2009.
“You can never awaken using the same system that put you to sleep in the first place.”
–Gurdjieff
This is an appeal, an open letter, a cry in the night: no matter how cranky it may make us to brush the stardust from our eyes, no matter how many friends we think we’ll lose by looking long and hard at what’s going on around us, let’s try to stay awake. Let’s not lose touch with what we really want for ourselves. Let’s not forget what we know about the nature of consumer capitalism: it is unsustainable and unworkable because it depends on infinite expansion in a finite world. It can only survive by a violent takeover of what belongs to others. Let’s not settle for halfway measures.
And let’s not wait for deliverance from on high.
Because the president we elected — out of so much hope for a definitive break with what came before — is not who he seems. It’s true that unlike the previous inhabitant of the White House (remember him?), Barack Obama is sane, intelligent, and mature. He’s responsive to what others think. He hopes to institute real change in education, health care, the environment.
But even with his great charisma and silver tongue, he’s a proper soldier for the system which is ravishing the planet. As he said in his inauguration speech in January, already aware of the huge financial mess he was inheriting, “We will not apologize for our way of life.”
What do these words mean? They mean that the mall-i-zation of the planet will continue. They mean that the commercialization of all of life will not stop. They mean that our massive so-called footprint will never be substantially downsized.
And they mean that the force which has erased indigenous cultures and plant and animal species, which has sullied our air and soil and water, will essentially not be called into question, no matter how many of its most glaring excesses may be curbed.
More and more people are using the language of peak oil and becoming aware that the future we once took for granted is now being foreclosed (not incidentally, by the same folks who are foreclosing a lot of our homes). It is increasingly clear that we stand at a cross-roads, and that neither road leads anywhere similar to the global capitalist era we just passed through.
Here are some excerpts from a good article that acknowledges the reasons why the future will be nothing like the past, and lays out the 2 paths we can now head down. I wrote some thoughts at the end to inspire us to think realistically and demand the impossible. [alex]
Time to Deliver: No Turning Back, Part I.
by Sara Robinson
April 7, 2009
Originally published by Campaign for America’s Future
..[T]he two dominant scenarios about the American future that progressives seem to be wrestling with right now [might be described as]:
1) Permanent Decline — Due to Americans’ native hyperindividualism, political apathy, and overweening willingness to accept personal blame for their country’s failures, the corporatists finally succeed in turning the US into Indonesia. This time, we will not find the will to fight back (or, if we do, it will be too late). As a result, in a few years there will be no more middle class, no upward mobility, few remaining public institutions devoted to the common good, no health care, no education, and no hope of ever restoring American ideals or getting back to some semblance of the America we knew.
2) Reinvented Greatness — Americans get over their deeply individualistic nature, come together, challenge and restrain the global corporatist order, and finally establish the social democracy that the Powers That Be — corporate, military, media, conservative — have denied to us since the 1950s. This happens in synergy with a move to energy and food self-sufficiency, the growth of a sustainable economy, a revival of participatory democracy, and a general renewal of American values that pulses new life into our institutions and assures us a much more stable future.
Conservatives and the mainstream media, of course, are also offering a third scenario:
3) Happy Face — Prop up the banks, keep people in their houses, and by and by everything will get back to “normal” (defined as “how it all was a few years ago.”)
[Sara recognizes that this third “road” is an illusion, for the following underlying realities which cannot be ignored any longer. -alex]
1. Energy regime change
The first reason there’s no going back to the way it was is that there’s simply not enough oil left in the ground — or carbon sinks left in the world — to sustain America as we’ve known it. We may well be able to sustain some semblance of that way of life (or perhaps, find our way to one even more satisfying); but we won’t be running it on oil or coal.
And when the oil goes, so goes the empire. Read the rest of this entry »
Below I’ve reposted a new article by Roger Baker, former ’60s SDSer and current peak oil activist in Austin, TX, linking the Economic Crisis with Peak Oil. There is more evidence mounting that last year’s global economic downturn was to some degree a direct result of the unprecedented oil price spike that immediately preceded it.
For example, this article (“Jeff Rubin: Oil Prices Caused the Current Recession”) explains that Europe and Japan (which are both more vulnerable to oil prices because they produce less oil than the US but consume plenty) entered recession before the financial subprime crisis hit global markets.
Quote: “Higher oil prices started four of the last five world recessions; we shouldn’t be too surprised if they started this one also.”
Keep in mind the unprecedented nature of this recent oil price spike, where the price of oil went to all-time record levels of nearly $150/barrel. This chart suggests that the economic effects of past price rises will likely pale in comparison to this much greater recent spike, at the end of the day.
Finally, we have this telling quote from Gail the Actuary: “It seems to me that the problem with non-availability of credit, particularly long-term debt, is ultimately tied in with peak oil. It is difficult to have more than a tiny amount of long term debt once an economy is no longer growing.”
My book, The End of Capitalism, will explore this theme in more depth, but it’s worth conjecturing: If the global economy literally cannot grow any more, because of real and unavoidable limits on vital resources such as oil, how can we anticipate the multi-layered global consequences?
We have arguably begun witnessing the first wave of financial consequences, but this is just the tip of the iceberg. How might the economy as a whole system have to transform, and if growth as the paradigm of industrial capitalism is literally behind us, what kind of economy will the paradigm shift towards? Will we see a new sustainability rooted in democracy and freedom, or an even greater tyranny than what capitalism has wrought?
[alex]
Some Economic Implications of Peak Oil
World oil production probably peaked in 2008. Liquid fuel production, including oil, is indicated by the OPEC data [1] to have reached a peak in July 2008 at about 86 million barrels per day, with its price peaking at about the same time. ASPO International agrees, as indicated on the chart page of their recent newsletters [2].
Peak oil has profound economic implications, most of which are unwelcome. There is good evidence indicating that peak oil triggered the global economic crisis; that oil price was the limiting factor that broke the momentum as the global economy tried to keep expanding. [3,4].
Predictably some factor like the end of cheap oil must limit the ability of global investments to expand exponentially, while paying interest on the global debt bubble. The risk was evenly spread by instruments like credit default swaps, so the collapse was global.There is scholarly confirmation of the role of the 2008 oil shock on the global economy should see the April 2009 Brookings paper “Causes of the Oil Shock of 2007-08″, by UC San Diego economist Dr. James Hamilton: [5,6].
“…Whether we would have avoided those events had the economy not gone into recession, or instead would have merely postponed them, is a matter of conjecture. Regardless of how we answer that question, the evidence to me is persuasive that, had there been no oil shock, we would have described the U.S. economy in 2007:Q4-2008:Q3 as growing slowly, but not in a recession.” Read the rest of this entry »
The End of Capitalism 
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