Exxon-distortion

Exxon “Catastrophe”

Exxon case divulges my assumption that Crony Capitalism will fight back against Climate Catastrophe. Read Jane Mayer and Naomi Klein.

This case provides the smoking gun evidence that Capitalism will willingly destroy Earth for the sake of profit.

Study

WaPo, NYT Exxon, NYT background;

BBG Exxon doubles down, 25% increase, until 2025, $200 bn in new drilling. So contesting Exxon’s expansion: oil in Brazil & Guyuna and LNG in Mozambique and Papua New Guinea, is essential. Climate news. Inflated value of reserves, violating SEC: Climate News good source re tar sands as, like coal, potential stranded resource. See background, nat gas shift. Industry undermines climate talks.

NB, catastrophe as sudden, oed, final, conclusive. So need synonym.

Shift from future to present threat.

Capitalisms-sources

Annotated Bibliography

Alperovitz, Gar: Pluralist Commenwealth and capitalist reform book. Peruse for insight.

Clark, Colin: sectors as SIC, with payoff, including connection to Fed regions.

Gordon, Robert S. Rise and Fall of American Growth. Classic, the best source. [use for PWII and general source.]

Hymer, Stephen: a forgotten great re hierarchy.

Piketty, Thomas. Capital in the 21st Century. Masterpiece.

Schweikert: Kindle, sociological, ideological, vague & unpersuasive.

Schumpeter: silly at times but highly influential and ideological, not empirical.

Stiglitz. Inequality, AGLZ.

 

CCIR

Oreskes and Stern NYT 191024: much worst. Built in NOW: 5%, 32 to 65 feet ocean rise.

See Grantham Research Institute, Potsdam Institute, Earth Institute, Greenpeace

stationarity: presume from past conditions, bad to grasp rapid change; parameters become variables in models. Example Himalaya glacial melt and water downstream. Cascading feedbacks. Elizabeth Kolbert. Fugue state: disassociation from one’s world.

Nothing coherent, a gap that must be filled ASAP, from economics perspective, starting with Stern Report then elaborate.

review of IPCC; CC as social, not ind: rad urbanist, fail to act, or think w economist cover image. India slows down emissions in 2019, breakthrough: demand slows and shift to renewables (unstoppable?).

Coal plants in EU unprofitable: now what? More subsidies? As in Poland. Efficient plants okay. Carbon Brief compares 1.5 vs 2. -13% GDP at 2 degrees.

Disaster Capitalism

Naomi Klein argues that disaster creates opportunities for capitalism to expand. If so, opportunities will abound. Perpetual war will do the same.

Consider the plan by NYC to provide a protective wall around Lower Manhattan. First, the protection extends only to the rich, not to, say, the Bronx. Second, the plan confers expansion opportunities for real estate industries. Third, the $10 billion price tag is way too low.

Miami, for example, recently floated a bond issue for about $600 million to protect Miami from a rising sea with more intense storms. You get the picture: armoring cities and regions will cost a whole lot, so where is  Dick Cheney’s Hallarburton?

The Iraq War provided lots of lucrative contracts Hallarburton. Indeed, never forget President Eisenhower’s warning about the Military Industrial Complex.

Recession ==> Green Economy

I heard somewhere that a recession provides the opportunity to pause, to reconsider direction, strategy, and next steps for the organization. Many savvy observers see a recession on the horizon — although I see a robust consumer, low interest rates, and lots of opportunities for investment. This expansion is long in the tooth, lots of geopolitical risks threaten, and China slows.

However, should a recession hit I anticipate that:

  1. A period of at least three years before growth ensues again, not a short duration, will diminish further the legitimacy of capitalist.
  2. The opportunity for innovations and investments, particularly much needed infrastructure, opens up a needed transition to a green economy.

A recession could, should, become the gateway to an adaptive green economy, labor intensive and fair. Why not?

 

Capitalism: Explain

Capitalism (sometimes “K” or “GK” as global capitalism) remains central to the present and future world (hence Ontos) but remains shrouded, so must be disclosed. This disclosure is central to my mission and my passion.

My thesis is that capitalism could be shrunk, or devolved, along the Braudel-Polanyi Synthesis:

  1. Expand the role and significance of primary social groups dwelling in households, a cross-cultural virtual constant;
  2. Build natural and social capital, an expansion mostly at the level of communities and bioregions. I distort the economic meaning of capital, means to make money, to include increasing value. Implicit is devolution, decentralization, accessible and appropriate means of citizenship and civil society (see Habermas, Bookchin).
  3. TNCs must share in responsibilities as good corporate citizens, but this is doubtful that profit, the ends of capitalism, can be achieved. Oil TNCs, in particular, have gone rogue. Ditto many food producers. CSR remains a fantasy as I write.

Classical economic thought

I have written my rebuttal of classical and neo-classical economics in the context of sustainability elsewhere.

Reinterpreting Adam Smith

Adam Smith, the father of economics, saw the threat at the Edinburg Customs House, ala India and China, from the London-based imperial hegemon. Smith fiercely favored his native Scotland over the economic aggressor, England. He understood that Scotland had been early absorbed as a colony into the British Empire, as had Wales and Ireland, for the enrichment of the hegemon of his day.

Sure, Smith stood for liberty, but actually from the joint-stock globalized corporations set upon his native land to rich the Other. Smith also saw the Invisible Hand within his village, as the small shop owners provided necessities, face-to-face, within the confines of the comfortable community that Smith cherished.

By the way, Smith had already invented the lasting image of the Invisible Hand, but had done so in The Theory of Moral Sentiment, published more than a decade before The Wealth of Nations. The Invisible Hand, however, was the hand of God guiding the world of men and women.

My interpretation of Adam Smith transforms his appropriation as a champion of unfettered capitalism as an advocate of freedom from external ties. As such, his thought comports to level two, the commerce and community, of my Braudel-Polanyi Synthesis.

Malthus the Eugenicist

Malthus attempted to bring theoretical rigor and empirical content to build a class-based ideology in which the good bourgeois should refrain from supporting the poor, who would simply multiply, lowering the stanards of civilization based on folks like him and his family. Malthus’s model:
d(food) < d(pop) = crash, where d = change, pop = population, and crash, or overshoot, is still with us

Many have attributed the Darwin’s notion of survival of the fittest to Dawwin’s reading of Malthus. So, Malthus was not a Social Darwinist, rather Darwin was, ironically.

Ricardo and Land Rents

Ricardo saw a crisis in land-based capitalism as monetary wealth and land accrued to land owners as this model:

rent ==> marginal land ==> loss of productivity ===> crash w peasants as neutered;

Henry George: Tax Land, not Improvements

Henry George, a mainstay in the US progressive era, took core ideas from Ricardo and adapted them to a policy of taxation of land over improvements that should not be abandoned. Tax land value, not the worth of the improvements. Doing so redistributes wealth at the local level, discourages speculation, and quickens capital investment in communities. Bravo!

Marx absorbed the Ricardian model into industrial capitalism with working class as agent and capital as land and capitalists equivalent to the unproductive land owners ripping off land. Engels and Lenin added to Marx but more aggressively.

Go read Schumpeter, the chamion of contemporary capitalism. Schumpeter, K fails due to its success in wiping out poverty by 1995, such that complacency destroys risk-taking of K. However, creative disruptions to the rescue per oligopoly, taken up by Baumol.

Me: EG slides w productivity + inequality + crony capitalism neglects CCIR, where interest rates soar and SOC crowds out investment, thus growth feedback per consumption and growing reactionary movement.

Marx? I do not enjoy reading Marx, but glean much such as commodification from Marx. I respect his mission and his corpus, much of which I have read. Marxism as a heavy and rigid ideology distracts us.

Corporate Citizens: Good & Bad

Ask Senator Mitt Romney (R-UT): “Corporations are citizens, friends.” SCOTUS enshrined corporations as citizens in its infamous Citizens United holding, thus creating another species of humanity, but giving life to Behemoths, a terrible prospect. Ever see a corporation go to jail? No, but the corporation is still vulnerable, despite its legal advantages, but that story is for later.

The Braudel global level is where these Behemoths roam, seeking (ironically as Lenin said) cheap labor, cheap nature (Moore), and markets, which consists of consumers with lots of money, typically dwelling in cities. I will use the shorthand TNC = transnational corporations to label the Behemoths.

Much propaganda and greenwashing depicts TNCs as the saviors riding to the rescue with leadership, capital, and good will towards all, but in reality TNCs, the most favored agents of capitalism, seek one goal: PROFIT, period. All else is propaganda.

Corporate social responsibility (CSR)? Milton Friedman, along with Ayn Rand the ultimate capitalist ideologues, would scorn such a position, as the NeoLiberal acolytes proclaim.

Aspects of this are covered well in Baumol, et al., Good Capitalism, Bad Capitalism, a neglected book, written and funded from a pro-capitalist perspective.

Some  bleak opinions:

  • Bad capitalism outweighs good capitalism, and crony capitalism with rule as capitalism and profit unravels.
  • The historic situation will reveal itself within the coming decade, sooner and worse than expected. This working hypothesis must be documented and justified. Too conjectural as I write.
  • Trump will be re-elected, advancing Fascism in USA.

Cases

Boeing, again,  but no longer failure of precautionary principle,  but example of Bad Capitalism.

Cases: Wells Fargo; Monsanto the seed company, Walmart; Deutsche Bank; trump corruption reveals cronyism. See Korten, AGLZ lit. Ray Dalio and Larry Fink and Mark Benoitt have emerged as good citizen proponents. More media hype than results.

[collect sites and cases]

Good Capitalism/Bad Capitalism

The world has been hooked by capitalism as if it were a systemic monopoly, or as Margaret Thatcher proclaimed: “There is no alternative,” branded as TINA, the battle cry of neoliberalism. Pure capitalism of the Milton Friedman, neoliberal variety enables cronyism, monopoly, plunder, exploitation, greed, and exclusion, as I see it. The free market myth does not work in the world that I inhabit.

However, the potential generativity of “good capitalism,” where all stakeholders and the earth benefit is essential, but rare. perhaps an oxymoron. A pro-capitalist version of this argument is made by Baumol, et al.: Good Capitalism, Bad Capitalism.

As climate woes deepen and spread, as capitalism loses legitimacy, as inequality grows, and as fiscal crises loom, enlightened leaders of capitalism, typically from the investor class, will recognize the imperative for corporate social responsibility and sustainability.

Should growth falter, capitalism will sour in global public sentiment and forfeit its already shredded legitimacy, especially among youth. Export-driven economies (Germany, Singapore, South Korea) now wobble.

Long Term Implications

Should recession hit in 2020 or 2021, the duration might well drive US capitalism through 2025.

Watch several trends:

  1. Growth and investment is down in China. If the US economy weakens, given fiscal and monetary policies are out of play, the two major global national economies can not lead growth. DT is down as well, indeed, EU as a whole. Brexit drags within fractured EU. Japan remains in a torpor.
  2. Look deeper into China. Article above’s headline not justified by data. Worrisome is shift from export to consumer econoomy. Bond defaults up.
  3. So long as $ strong, US exports will lag. Trump’s attempt to revive US PWII industrial economy has failed, broken the bank, despite advantages of low interest rates, low inflation, and big deficits. This will not last.
  4. Despite the technology breakthroughs, the tech sector, a narrow sector, has not produced increases in overall productivity.
  5. Next US recession will not be industrial cycle, rescued by lower interest rates and Keynesian pump-priming — these have been played out. If ROW can’t perform, the potential for stagflation looms for perhaps a decade, pushing us to 2030, past tipping points.
  6. Trade war creates awful environment that will spread and deepen over time.

Discussion

The longer time horizon here states that the next two years, 2020 and 2021, will mark an secular inflection bending toward mid-century and beyond: slow growth, multiple crises, climate catastrophe, and potentially a historical move away from democracy and toward reactionary authoritarianism.  Capitalisms of all sorts will experience stress comparable to 2007 and 2008.

Recession inherently resides within capitalism’s notorious business cycle as a permanent and inherent feature of the dynamics of capitalism. Sustainers must anticipate these gyrations and splinters within capitalism at both the macro and the micro level. A fine-grained understanding of these dynamics will disclose opportunities to leverage and to spot potential crises that will exacerbate ecological, social, and economic conditions. I call this approach strategic sustainability.

I contend that now must provide the moment that finally acts upon the emerging civilizational crisis, a harbinger of

Disclaimer

This post contains a running commentary on a brewing uncertain but essential economic trend, the historical bane of economic downturns that have chronically, historically plagued capitalism.