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[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.

In 1995, multinational oil corporation Shell conspired with the Nigerian government to brutally suppress a popular nonviolent social movement that called for environmental justice in their polluted land. A key moment in this campaign of violence was the military show-trial of Ken Saro-Wiwa, leader of the Ogoni people and nonviolent advocate, which led to his execution.

Shell is currently facing trial in New York in a lawsuit brought by the Wiwa family, charging the oil company with “requesting, financing, and assisting the Nigerian military which used deadly force to repress opposition to Shell’s operations in the Ogoni region of the Niger Delta.”

This short video tells the story of Ken Saro-Wiwa and how corporate and state power merge to violently suppress grassroots social movements in order to protect the exploitation of the environment and workers.

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.”

Past Recession and Causal? Oil Spikes

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?

Some Economic Implications of Peak Oil

By Roger Baker • on April 27, 2009

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 »

Anatoly Karlin at Sublime Oblivion has compiled some provocative graphs which suggest that the global peak of oil production has played a large causative role in the global economic meltdown of the past few years. Right off the bat we should look at how skyrocketing oil prices caused global food shortages and price inflation for other necessities, but also how the rising gas prices hurt US Real Estate markets and burst the subprime mortgage bubble. We know how that damage was compounded into the financial crisis and got us where we are, but what hasn’t been studied is the role of oil in originating the breakdown, not to dismiss the role played by lax regulatory oversight, financial mismanagement or straight-up theft by large banks and speculators.

I look forward to this argument on the role of oil being expanded and enriched by an anti-capitalist framework. [alex]

Excerpts from Oily Origins of the Economic Crisis.

Anatoly Karlin, February 18, 2009.

In an article some months ago I suggested that “perhaps this crisis is simply an unconscious recognition of this inconvenient truth?” – namely, the peaking of oil extraction and all that it implies for the continued survival of a financial system built on assumptions of continuous economic growth. In other words, the fashionable approach of focusing on exotic financial instruments, regulatory failures, etc, if a case of mistaking the forest for the trees.

The Oil Drum had a nice graphical summary. According to the author, Gail the Actuary, the chain of causation runs thus:

This explains the extreme severity of the crash – record GDP growth at a time of plateaued oil extraction in the 2005-2008 period was patently unsustainable, so a very big “correction” could not have been unexpected.

And it is quite a correction.

As of the September-November average, global industrial production was plummeting at an annualized rate of -13% and merchandise trade by a truly remarkable -43%. And it is obvious the collapse accelerated since then…

Already far worse than during even the worst month of 2000-2001, the last and only global slowdown for which the IMF has data.

Another Oil Drum blogger, Phil Hart, wrote about the dramatic rise and fall in oil prices in terms of simple supply and demand curves…

Oil demand and supply.

His thesis is that because of the geological limits to oil supply, the marginal cost of providing ever more oil is generally low until it reaches some point – say, 85mn barrels a day – and then veers off into the sky (i.e. becomes very inelastic). Demand is also inelastic, since modern society basically runs on oil. Hence there comes a time when the demand curve reaches a point when its intersection with the supply curve – i.e., the market price – starts rising exponentially. Read the rest of this entry »

A massive wave of layoffs was announced yesterday by 12 major US corporations, including Caterpillar, General Motors, Home Depot, Sprint Nextel and Pfizer. Microsoft also announced its first-ever mass layoffs of 5,000 workers. Overall, more than 75,000 jobs are being cut from the workforce after Unemployment levels were reported as 7.2% in December, the highest level in over 16 years, with no end to the bleeding in sight.

As more and more workers fill the unemployment rolls, it’s time to ask: where will future jobs come from?  While government and corporate bigshots plan yet another “economic stimulus” and bailout of the banks, what long-term jobs can we realistically create right now?

Lots of answers present themselves if we look through the lens of peak oil, and start replacing our oil-based economy with a people-based economy. Instead of relying on greenhouse gas-producing fossil fuels, we can tap into the power of human labor, which happens to be our greatest renewable resource.

Certainly there is a need to employ millions to weatherize homes and build and install solar panels and wind turbines (which Obama may address), but there is also a huge need to re-tool Detroit automakers to STOP producing gas-guzzling individual cars, and start making buses, trains and other forms of public transit. Bicycles are also desperately needed, so we need workers to build them and more to repair them too.

We also need lots more doctors and nurses if we make health care universally available, and social workers and therapists to help deal with the psychological trauma our population has suffered from militarism and soulless consumerism.  Since many of these jobs require education and training, we need to hire lots more teachers, and we also need education to be a lot more affordable to so more people can access these kinds of careers.

Perhaps the largest gains in the job sector can be achieved by shifting food production away from mega-scale agribusinesses and fossil-fuel intensive monoculture and factory farms, towards community-based, local, organic, family farming and free-range livestock raising.  By breaking up the huge corporate farms into family-size and community-size plots, we can repopulate rural America (and stop suburban sprawl), produce better, healthier food, respect animal rights, and create millions of new landowners.  Simultaneously we can follow the example of Cuba and turn our blighted inner-cities into gardens, by utilizing permaculture and organic community-run agriculture, which would reduce crime and poverty in our decaying urban areas, bring quality food to places currently plagued by malnutrition, and create millions upon millions of rewarding and meaningful jobs.

How will we finance it?  Simple.  Disassemble the huge financial firms and multinational corporate banks whose greed caused this economic crisis and create thousands of local banks and credit unions, run by people in the community (even more jobs!)  Taxing the rich would help a lot too, and we can cut tons of wasteful government spending on things like the wars in the Middle East, excessive prisons, and nuclear, biological and chemical weapons.  The money is right there, we just need to redirect it to things that actually help people instead of killing them.

This of course requires a revolutionary change in the economic and political structure of the United States, which means average people like you and me having control over the decisions affecting our lives, instead of remaining at the whim of wealthy elites who in the current crisis have shown themselves unable to run a lemonade stand, let alone the global economy.


Deluge of layoffs hits U.S. economy

January 27, 2009

Los Angeles Times

By Jerry Hirsch and Maura Reynolds


Scott Olson, Getty Images
A worker walks between Caterpillar earth-moving equipment at a road construction site near Joliet, Ill. The company has announced that it will cut nearly 20,000 jobs as the recession reduces demand for its products.

Companies including Home Depot, Caterpillar, Pfizer and Sprint plan to cut nearly 60,000 jobs, adding urgency to the need to agree on a stimulus plan.

U.S. companies slashed nearly 60,000 jobs Monday, adding impetus to the Obama administration’s efforts to reach agreement on a plan to pump $825 billion into the economy over a two-year period.

But it’s unclear whether even that massive influx of funding and tax cuts would be enough to get companies hiring again in the near term.

The cuts by firms including Caterpillar, General Motors, Texas Instruments, Home Depot, Sprint Nextel and Pfizer brought the total of jobs shed so far this month to 187,550, more than November or December and well over double the number of January 2008, according to employment firm Challenger, Gray & Christmas Inc.

Analysts believe that Obama’s strategy of pouring money into state and local governments could prevent layoffs and furloughs of public sector employees, including teachers, police officers and other government workers.

Economists have estimated that the plan will protect or create 3 million to 4 million jobs in the next two years.

But the U.S. economy lost 2.6 million jobs last year and could lose 2 million more during the first half of this year. Read the rest of this entry »

“The Tyranny of Oil: The World’s Most Powerful Industry and What We Must Do to Stop it”

by Antonia Juhasz

2008 HarperCollins

Ever wondered why the US government spends trillions of dollars to launch massive wars against Middle Eastern nations that have never attacked us, but refuses to do absolutely anything about the ongoing climate crisis?  This book is for you.

The Tyranny of Oil is an exposee of “Big Oil”, meaning Exxon-Mobil, Chevron, BP, ConocoPhillips, and Royal Dutch Shell, the largest oil corporations in the world (and some of THE largest corporations in the world).  The book exposes how these enormous oil octopi have gained virtually total control over the US government, and use their money and political power to make big profits at the expense of the public and the planet. (For example, Exxon Mobil in 2003 posted the largest profits of any corporation in history, then proceeded to beat that record each of the next 5 years).

It all starts with the origin of Big Oil, the mother, Standard Oil. Juhasz stresses the importance of monopolies and corporate mergers, in a sense missing the deeper analysis of capitalism, but nevertheless we come to understand how enormous companies wielding enormous profits can and do undermine democracy.

The book progresses to tell a story about Big Oil’s development and control over the government agencies that are supposed to be regulating it, and finally Big Oil’s plans for the future (War and Trashing the Planet, basically), before an inspirational chapter on What We Can Do. (There’s also a shoutout to SDS here and to our No War No Warming action in DC last year! Cool!)

This is essential reading for all US citizens, because if you aren’t familiar with the concepts she lays out, you frankly have no understanding of the country you live in.  Environmental racism, corporate lobbyists and corrupt government agencies, the criminal behavior of Cheney’s Energy Task Force, deregulation and Enron-style fraud, tar sands, and the list goes on.

My only major complaint of the book was the virtual silence on the looming and imminent reality of Peak Oil and how this will transform everything.  Juhasz does recognize the scarcity of oil and the likelihood of oil peaking, but chooses to essentially overlook its importance, instead blaming oil companies and speculators for driving up the cost of oil.

This is not just a minor quibble, because the BIG TRUTH is that we’re not just in a struggle against Big Oil, we’re in a struggle against capitalism, and it’s a fight that is reaching perhaps its final act.  Peak Oil will challenge the dominant for-profit institutions of power, and can create an opening for social justice activists and organizers to push for much more radical change than appears possible within the current system.  Nevertheless, this is probably a subject for another book (mine!), and Juhasz treads on steady ground by appealing to a more mainstream audience and demonizing the oil companies exclusively.  This is a very effective book, highly recommended!

Finally, my favorite quote (pg. 325):
“As Paul Wolfowitz said in 1991, ‘The combination of the enormous resources of the Persian Gulf, the power that those resources represent – it’s power. It’s not just that we need gas for our cars, it’s that anyone who controls those resources has enormous capability to build up military forces.'”

Richard Heinberg (author of the seminal work The Party’s Over: Oil, War and the Fate of Industrial Societies) lays out a clear program for Obama, to move the US away from its current suicidal path and towards a green economy.  However, the danger may be that Obama has surrounded himself with people who are telling him to do the exact opposite of each of these recommendations.  Our job, as a movement, is to move the country away from fossil fuels by blocking the construction of more death machines (coal plants, oil-guzzling cars, the military…), and by simultaneously creating irresistible alternatives. [alex]

Memo to the President-elect on Energy Realism and the Green New Deal

MuseLetter 200
December 2008 by Richard Heinberg

Executive Summary

Our continued national dependence on fossil fuels is creating a crippling vulnerability to both long-term fuel scarcity and catastrophic climate change.

The current economic crisis requires substantial national policy shifts and enormous new government injections of capital into the economy. This provides an opportunity for a project whose scope would otherwise be inconceivable: a large-scale, coordinated energy transition away from fossil fuels and toward renewable energy.

This project must happen immediately; indeed, it may already be too late. We have already left behind the era of cheap and plentiful fossil fuels, with a permanent decline of global oil production likely underway within three years. Moreover, the latest research tells us we have less than eight years to bring carbon emissions under control if we hope to avoid catastrophic climate change. Lacking this larger frame of understanding and action, a mere shift away from foreign oil dependence will fail to meet the challenge at hand.

The energy transition must not be limited to building wind turbines and solar panels. It must include the thorough redesign of our economic and societal infrastructure, which today is utterly dependent on cheap fossil fuels. It must address not only our transportation system and our electricity grid, but also our food system and our building stock.

Our 21st century nation’s dependence on 20th century fossil fuels is the greatest threat we face, far more so than the current financial crisis. A coordinated, comprehensive transition to an economy that is no longer dependent on hydrocarbon fuels and no longer emits climate-changing levels of carbon—a Post Carbon Energy Transition—will be the Obama Administration’s greatest opportunity to lead the nation on a path toward sustainable prosperity.

Overview: Need and Scope

As a new Administration prepares to take the reins of power, America’s economy is descending into a recession or, quite possibly, a depression. Read the rest of this entry »

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