How to Build an Alternative to Capitalism

How Do We Build Movements That Can Win

Naomi Klein (2017)

In this presentation, Naomi Klein  outlines the strategy she feels grassroots activists need to pursue to resist the growing attacks on working people while building build a genuine alternative to post industrial capitalism. It’s very similar to the one Kali Akuna proposes (see Don’t Just Fight, Build).

While she begins by focusing on climate change, she heavily emphasizes that environmentalists alone can’t solve the crisis of catastrophic climate change – that it will require a large diverse coalition of activists organizing around a broad array of environmental and social justice issues. While she doesn’t state directly that it’s impossible to prevent climate change under capitalism, this is strongly implied.

Another concept Klein stresses is the importance of radical ideas in creating the conditions for major reform. She gives the example of the calls for socialist revolution following the 1929 Depression and during the Vietnam War – how serious discussion of revolution scared the corporate elite so much that they granted major economic reform (the New Deal) under Roosevelt and major environmental reform under Nixon (creation of the Environmental Protection Agency, the Clean Air Act, the Clean Water Act, etc.).

Klein also gives the example of the Leap Coalition in Canada, which is working for bold social and environmental justice reforms, as well as the development of community controlled energy systems (similar to Germany’s) – where the profits from energy production fund community services, such as teaching, daycare and senior care – rather than distant corporations.

America’s Favorite Billionaires

The Koch Brothers Exposed

Robert Greenwald (2014)

Film Review

The Koch Brothers Exposed examines the myriad of ways America’s favorite billionaires are using their inherited wealth to make themselves the dominant players in the US political system.

Their father Fred Koch made his fortune in the 1920s by helping Stalin establish the Soviet oil industry. On his death, Charles and David Koch used their inheritance to found Koch industries, the second largest privately* held corporation in the US. It has holdings in oil and gas, coal, paper products, plastic and consumer goods.

Koch Industries is notorious for breaking environmental laws (and other crimes, such as stealing 2 million barrels of oil from Indian reservations**). They have paid millions in fines in seven states for criminal pollution. Thanks to their generous campaign donation, George W Bush reduced the 97 counts in one federal indictment to one count – lowering their fine from $370 to $20 million.

Their Georgia Pacific plant in Crossett Louisiana, which discharges toxic chemicals to natural streams (illegal under the Clean Water Act), is responsible for more than a dozen cancer deaths. Yet instead of stopping the toxic discharges and cleaning up the streams, the Koch brothers bribe Republican politicians (through campaign donations and other perks) to weaken and discredit the Environmental Protection Agency (EPA), the entity responsible for enforcing the Clean Water Act.

Determined to roll back the Civil Rights Act, the Voting Rights Act, the minimum wage, labor rights, electoral financing reform, environmental protection laws and federal and state workplace safety laws, the brothers have spent more than $80 million creating and funding conservative and libertarian think tanks and Astroturf organizations – such as Americans for Prosperity and the Tea Party. They are also the primary funders, along with Exxon, of the climate denial movement.

They provided the financial backing in the Citizens United case***, in addition to sponsoring the attendance of two Supreme Court justices at an Americans for Prosperity conference. The prior involvement of Clarence Thomas and Antonin Scalia in this Koch brothers group posed a clear conflict of interest. Both had an ethical and legal obligation to recuse themselves. Obviously they didn’t.

The Koch brothers are also major funders and backers of Canada’s tar sands industry and the Keystone pipeline, as well as the American Legislative Exchange Council (ALEC). The latter writes model legislation for state legislators to use in creating vote suppression, labor rights and workplace safety legislation, as well as laws promoting anti-immigrant campaigns and prison privatization.

Meanwhile the Koch Foundation uses educational grants to over 150 cash-strapped colleges and universities to influence their educational policies. The grants are always conditional, ie dependent on hiring professors who share the Koch brothers conservative philosophy.

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*A privately owned corporation is one in which partners provide the capital and share the profits, as opposed to publicly owned corporations in which shareholders provide the capital and share in the profits.
**Charles and David’s younger brother Bill blew the whistle on this operation in 1999.
***Citizens United v. Federal Election Commission was a constitutional law case in which the Supreme Court ruled that the First Amendment prohibits the government from restricting independent political expenditures by nonprofit corporations, for-profit corporations and labor unions. According to investigative reporter Greg Palast, a major agenda behind the decision was to retroactively decriminalize extensive past donations the Koch brothers had already made to Republican campaigns – in other words to keep them out of jail.

Those Fracking Lies

Snake Oil: How Fracking’s False Promise of Plenty Imperils Our Future 

Richard Heinberg (Post Carbon Institute, 2013)

Book Review

Snake Oil is all about the economics of fracking. Also known as hydraulic fracturing, fracking refers to using pressurized water and chemicals to release oil or natural gas trapped in underground rock formations. Heinberg’s new book describes the behind-the-scenes role of Goldman Sachs and other investment banks in driving the present fracking boom.

Technology to extract oil and gas deposits trapped in rock formations was first developed in 1866. Because the process is extremely capital intensive, fracking for oil only became economically sustainable in when the price of oil tripled a decade ago. In the case of natural gas, it took the elimination of price controls and federal tax credits to make fracking financially feasible.

How Fracking Loses Money

According to Heinberg, fossil fuel companies are losing money on fracking. The recent boom has led to a surplus of natural gas. This, in turn, has driven the price down, forcing the oil/gas industry to sell it for less than they spend to get it out of the ground. Because only a small fraction of shale gas can be extracted cost effectively, production declines by an average of 80-90% over the first 36 months. Industry data indicates it costs between $10-20 million to operate a fracking rig that will produce $6-15 million worth of natural gas in the well’s lifetime.

Obviously you can’t tell investors that fracking for natural gas is a money-losing proposition. Investors only want to hear that fracking is the miracle solution to America’s dependence on dirty coal and foreign oil. Thus oil/gas companies, the banks that finance them, the federal agencies that regulate them and Obama himself all parrot the hype that fracking will supply cheap natural gas to fuel US power plants for the next 100 years. According to Heinberg, this wildly optimistic prediction was calculated by extrapolating the best production rates of the best fracking sites over the 20,000 or so existing rigs. The problem with this methodology is that it fails to allow for rapid depletion rates or the fact that the best wells are already tapped out.

This pressure to meet financial targets forces the companies to sink more and more wells. Thirty-five to fifty percent of existing wells (7,200 wells) must be replaced every year “just to pay off the bankers.”

Fracking Based Derivatives

The only way companies can stay in business is by selling assets and financial products. This includes unused oil and gas leases^* they acquired cheaply in the 1990s, company shares, derivatives and credit default swaps. The investment banks themselves have created their own fracking-based derivative called volumetric production payments (VPPS). The banks bundle them and sell them to gullible pension fund managers, just like they did toxic mortgages before the 2008 crash.

The billions they’re losing explains why the industry is so keen to start exporting fracked gas as Liquified Natural Gas (LNG) to China, Japan and India. These countries are happy to pay $15 per million BTUs, nearly four times the domestic price of $4. A growing export market will quickly drive up US prices.

Environmental Consequences of Fracking

Meanwhile the explosion of fracking rigs across the landscape is causing massive environmental damage and eating up scarce dollars we should be investing in renewable energy. Owing to strong public opposition, fracking is banned or strictly regulated in most of Europe. As a result, Europeans are far more likely to invest energy dollars in renewables. In 2012, Germany obtained 23% of their electricity from renewable sources, Denmark 41% and Portugal 45%

Snake Oil debunks the widely promoted myth is that that burning natural gas to produce electricity creates less greenhouse gasses than burning coal. If you count all the methane (a greenhouse gas 20-100 times more potent than CO₂) released during fracking, using fracked natural gas to fuel power plants produces 20-100% more greenhouse gas emissions than coal.

The massive amount of freshwater consumed by tens of thousands of fracking wells is also a major concern, especially in drought-stricken regions. The water take for a single well pad cluster can exceed 60 million gallons. The Halliburton Loophole, championed by Dick Cheney, amended the Clean Water Act in 2005 to remove the requirement that oil and gas companies disclose the toxic chemicals they use in fracking. This is especially concerning given recent studies documenting serious health problems in people and livestock adjacent to fracking sites.**

In 2011, the EPA made the determination that fracking waste is too radioactive (from exposure to underground cesium and uranium) to be processed in municipal waste facilities. Thus most of it held in large evaporation pools or re-injected into old wells. A recent US Geological Service study has linked deep well re-injection to a rash of earthquakes in regions that rarely experience them. In 2011 central Oklahoma experienced a fracking-related 5.7 earthquake that destroyed 14 homes and a highway and injured two people.

Other Unconventional Production Methods

Snake Oil also debunks the flimsy economic hype used to promote other methods of unconventional oil and gas production (e.g. oil fracking, deep sea oil drilling, tar sands, etc), as well as examining what the inevitable transition to renewable energy will look like. Because renewable energy will never be as cheap as fossil fuels, some modification will be necessary in our current energy intensive lifestyle.

 *An oil or gas lease is a contract by which a landowner authorizes exploration for and production of oil and on his land, usually in return for royalties from the sale of the oil or gas.

**According to Al Jazeera, a jury has just awarded a Texas family $3 million for fracking related health problems.

 

Originally published in Dissident Voice