Labor Advocate Online

Global Capital’s Turbulent Trifecta
Bets On Food, Fuel, Fear Drive Destructive
Speculation
A Working Class Response Urgently Needed

by Bill Onasch

Sticking To the Basics
The resilience of the greatest concentration of wealth in human history–global capital–is remarkable.

After the subprime pillaging of the U.S. housing market finally ran its course the losses were staggering, reckoned in the trillions. The main losers were those millions who lost, or will lose their homes. But some of the less nimble speculators took a bath as well.

Some of the CEO-level fat cat losers simply grabbed very golden parachutes and are now dedicated to spending their personal fortunes. But the institutions of capital can never decide they have made enough to retire. The rules of the game require both winners and losers among the captains of industry, commerce, and especially finance, to seek outlets at the highest possible rate of return for the capital they have accumulated. For now, their speculation shifts from housing to other basic human needs–food and fuel.

The image “http://llnw.image.cbslocal.com/0/2008/03/16/320x240/gas_prices_80232810.jpg” cannot be displayed, because it contains errors.

Their admirable ability to rapidly adapt to changing situations is unfortunately also marked by a cynical focus on the short term bottom line. Success for this ruling elite comes at the expense of disregard of long term social consequences imposed on the great majority. The profitability of war, for example, trumps all hopes for peace.

Recently, the world has come to recognize a challenge to humanity’s future at least as serious as the threat of nuclear war–climate change resulting from global warming. The as yet unchecked heating up of our biosphere calls in to question the viability of civilization, perhaps ultimately the very survival of our species.

There is no room for doubt that the environmentally destructive practices of industrial capitalism–magnified in its present stage of globalization–bear the brunt of responsibility. Those in charge understand our predicament and are aware of their culpability. But the internal laws of the system that they run require them to ignore not only the consequences of their past success but to also resist any meaningful changes to what has worked so well for them–even though future generations of their own class will be doomed by climate change along with the rest of us.

In this Feb. 25, 2008 file photo the tower of a church is seen ...

A Russian revolutionary once remarked that if the capitalists are being led to the gallows they will try to sell rope to the executioner. He might well have had in mind the cynical “green” globalization that seeks new profit centers in the impending ecological disaster they are creating.

Faux green is the new camouflage used by the food/fuel speculators who are profiting from human suffering ranging from increased hardship for America’s besieged “middle class” to outright starvation throughout what used to be called the Third World.

Our Taxes Set the Table For Feast Of the Gluttons
Hailed as “clean, renewable energy,” that could free us from dependence on foreigners, and help hard working farmers, biofuel, especially corn based ethanol, was eagerly embraced by nearly all American politicians–and too many foolish “environmentalists” as well. Because ethanol cannot be profitably produced in even today’s markets, enormous sums of subsidies and tax credits were provided to Agribusiness, and sometimes politician’s in-laws, to prime the pump. State and federal regulations require ever increasing amounts of ethanol and biodiesel to be sold in filling stations. It’s the worker’s tax money that has created this huge new profit center.

Of course, ethanol is not really so clean. When you factor in the energy used to produce it, and the fact that it has been shown to aggravate ground level ozone problems, its environmental benefit is highly dubious.

Ethanol is also promoted as a cheaper per gallon alternative to gasoline. Leaving aside the subsidies that all–including non-drivers–contribute, it should be remembered that ethanol doesn’t have the firepower of gasoline meaning you must use substantially more of the stuff to go the same distance/speed.

But these are not the worst problems with biofuels.

Corn used for biofuel

Feed the Tank, Starve the World
The politicians in Washington hotly deny that the massive conversion of food to fuel is responsible for food price escalation throughout the world. They attribute the rise to more prosperous consumers in emerging economies such as China and India, clamoring for more and better food, and droughts in breadbaskets such as Australia.

An as yet unpublished report for the World Bank, obtained by the British newspaper Guardian, refutes this. They say,

“Without the increase in biofuels, global wheat and maize [corn] stocks would not have declined appreciably and price increases due to other factors would have been moderate, says the report. The basket of food prices examined in the study rose by 140 percent between 2002 and this February. The report estimates that higher energy and fertilizer prices accounted for an increase of only 15 percent, while biofuels have been responsible for a 75 percent jump over that period.

“It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.”

It’s no wonder this report has not been made public. It acknowledges what many scientists, environmentalists, and honest journalists have been saying right along. Its findings are known to political leaders and technocrats associated with the World Bank–dominated by U.S. interests who have argued quite the opposite. Now, thanks to the Guardian, its conclusions are available to the rest of us.

The Establishment has consciously manipulated this win-win situation–for their class. The same monied interests benefit from higher food prices in the commodity market; increased sales of chemical pollutants to maximize crop yields; government subsidies for biofuel production ,which is distributed by Big Oil along with the oil based fuels--whose price has reached once unimaginable heights due to their speculation in crude futures.

Fear Itself
But, as we hear on late night TV commercials, there’s more. They also manipulate fear of shortages. They demand drilling rights offshore and in ANWR . They want land where the federal government is currently paying subsidies to preserve wilderness and wildlife to be released for corn cultivation. They insist on a surge in building new nuclear power plants. They promote more destructive mining of coal such as mountain top removal. They yearn for more shale extraction. And, in general, the newly “green” corporations are working to roll back each and every one of the modest environmental protections we have won through past struggles.

Back To the Ten-Hour Day
They have even used our anxiety about price and availability of fuel to start a return to the ten-hour workday–at straight time pay– to create a four-day workweek. During the oil shock of the Seventies there were places that set up three-day weeks–working 13 hours and twenty minutes a day straight time.

I’m all for shorter work weeks–but not by lengthening the workday and certainly not giving up time-and-a-half for over eight hours. The productivity of the typical worker has increased many times over since the Fair Labor Standards Act established five eight-hour days as the norm in 1938. We should already have a four eight-hour day week by now with at least as much take home pay as we currently get. That would share the work to eliminate unemployment and give everyone more family and leisure time. But you won’t find any boss willing to talk about that.

Political Problems Require Political Solutions
The food and fuel crises, and the larger general problem of global warming, are not due to lack of natural resources or technology. Scientists not only warn of doom–they offer solutions. There are proven technologies using genuinely clean renewable energy--solar, wind, and water sources–right now. Alternative transportation options that can greatly reduce our “carbon footprint” are ready to go now. Stopping and reversing urban sprawl could restore lost farm land and rational agriculture used for food and fiber, incorporating organic methods, can feed and clothe all of the world’s present population. What’s standing in the way of scientists, workers and farmers tackling global warming are the politicians.

The ruling class gets their designation because they control all levels of government as well as most of the economy. They use this power shamelessly to advance their interests that are usually counter to the needs of the working class majority. Nowhere is this more true than in energy/transportation policies where there is generally bipartisan cooperation.

Senator Obama has been endorsed for President by virtually every environmental as well as labor group. This is despite his unwavering support for subsidies, and protective tariffs, for corn-based ethanol. One of his campaign’s national co-chairs is Tom Daschle, former Democrat Majority Leader in the Senate–who today sits on the boards of three ethanol companies. Daschle also works closely with former Republican Senate Majority Leader, and 1996 GOP presidential nominee Bob Dole, known for his close ties with agribusiness giant Archer Daniels Midland (ADM), in the National Commission on Energy Policy. Not surprisingly this “commission,” a component of the Bipartisan Policy Center, a VIP super-lobby, is a big promoter of domestic corn ethanol while supporting a 54-cent per gallon tax on imported sugar cane ethanol from Brazil.

As a matter of fact, the evil Republican candidate, Senator McCain, opposes subsidies for corn ethanol and the taxes on imported cane fuel.

McCain does support building 45 new nuclear power plants, Obama says this is worth studying.

A general view of the "sarcophagus" covering the destroyed 4th power block of Chernobyl's nuclear power plant. For a growing cadre of scientists, figuring out how to alert our distant descendants to perilous nuclear waste entombed hundreds of metres (feet) below ground has become a fascinating task.(AFP/File/Sergei Supinsky)

A few weeks ago, Obama delivered a “podcast” entitled “A Real Solution for High Gas Prices.” It is curious, considering his continuing support for Brazilian tariffs as a defense of American energy independence, that when calling for greatly expanded ethanol he says,

“If we had taken all these steps decades ago, like Brazil did when the call for energy independence was first issued, we'd be immune right now to the whims of oil-rich dictators and surging gas prices.”

Obama also wants Detroit to build more fuel efficient cars so his “real solution” included this,

“So I've proposed what I call the ‘Healthcare for Hybrids’ bill, where we'd strike a grand bargain with U.S. auto-makers. We tell them we're going to pickup part of the tab for the retiree healthcare costs, a tab which, by the way, ran 6.7 billion dollars last year but, in exchange, you've got to use the money to invest in transitioning to fuel-efficient cars.”

As our regular readers will know, the Senator is a bit tardy with this offer of a “grand bargain.” The Big Three have already set up VEBAs and turned over all future responsibility for retiree healthcare to their union. Some other excuse must be found for turning billions of tax-payer dollars over to the poor automakers to convince them to build cars the public will buy. If elected, I’m sure Obama will find a plausible explanation for such incentive.

Regrettably, the need to offer profit incentives to convince the polluters to do the right thing is also accepted as the only practical approach by the mainstream environmental groups and those unions who seek partnership with the boss in a new green economy. All indicators point to its utter failure.

Needed: A Working Class Alternative Plan
Clearly, it’s going to be up to the working class to formulate an alternative to literally save the world as we know it. Only our class has both the material interest and the potential social power to do so.

Given the magnitude of this task we need to be prepared to defy the conventional wisdom of “market mechanisms.” Even the Establishment does that at times when they see the interests of their class challenged.

The day after Pearl Harbor was bombed government leaders didn’t sit down and discuss how they could interest the Free Enterprise market in somehow offering massive numbers of tanks, ships, and planes needed for war. Instead, they took control of the production of American industry. The manufacturing of cars, refrigerators, washing machines, came to an abrupt halt for the duration of the war so that workers could build what was needed for battle. Food, gasoline, tires, and many other basic goods were strictly rationed. Some bright young lads just out of college–who later went on to become big names in the biggest corporations–took charge in planning virtually the whole economy. The success of this approach, which achieved the greatest and fastest industrial mobilization ever known, is an example of what can and must be done in times of crisis.

I am not an economist and don’t pretend to have a sure-fire, detailed plan to deal with the massive and complex challenges we face. I’m confident there are more bright young lads and lasses that could do for our class today what Robert McNamara and Tex Thornton did for the military-industrial complex in World War II.

In my view, some basic steps that need to be part of a working class response include,

* Pull Life Support For Biofuel
First off, end the subsidies and tax breaks that enable robbing the world of food to supply fuel for cars and trucks.

* Nationalize the Energy and Transportation Sectors Of the Economy
That’s a prerequisite for both getting a handle on carbon emissions and stopping the price gouging that is causing so much hardship. We need a plan for these crucial industries--developed and administered by a team of industry workers, scientists, and environmentalists--that can drastically reduce emissions while fairly providing transportation and utility services.

* For A Just Transition To A Green Economy
Green restructuring of the economy will eliminate many present jobs. That’s why we must have a policy from the beginning that will retrain any affected workers and place them in new suitable jobs. During that transition we will guarantee the maintenance of their standard of living.

I believe these are examples of what we should be discussing in unions, environmental groups, on college campuses and in community meetings. Such proposals may seem to some drastic. But so is what is happening to our society and our biosphere.

Of course, such initiatives can only be realized through political action. That’s not going to happen through the Democrats, Republicans, or Greens. It’s yet another compelling argument for reviving the movement for building a party of our own–a Labor Party.

None of these ideas are new or original. Most have been kicking around awhile. But we can no longer afford a leisurely pace approaching these questions. It’s not yet too late to do what is needed–but that point is not far off.

So let’s at least talk about it.

July 8, 2008


kclabor.org webmaster Bill Onasch represents Midwest chapters on the Labor Party Interim National Council

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