Capitalism damns the environment

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Capitalism, the system—Chinese, American, or Eu­ ropean style—has struck yet another devastating blow against all humanity.

One of the world’s largest solar-panel manufactur­ ing plants, employing 10,000 Chinese workers at the city of Wuxi on China’s east coast, has declared bank­ ruptcy—a victim of its own “success” and capitalism’s inherent drive to destruction. The Wuxi plant is the major and dominant subsidiary of SunTech Power, one of the world’s leading solar-panel manufacturers. (The plant is owned and controlled by SunTech but “legally” separate from it.)

SunTech increased the production of solar panels tenfold from 2008 to 2012 and drove down the cost of solar panels 75 percent, “undermining the eco­ nomics of the business,” according to the March 21 New York Times.

The fact that cheap solar power has the potential of making a qualitative dent in the still increasing and life-threatening carbon footprint of virtually all na­ tions did not figure into the financial equations that brought down SunTech. For SunTech’s competitors the question was how to establish their own monop­ olies over the industry.

The U.S. and the European Union retaliated by im­ posing massive tariffs—which increased the cost of importing Chinese solar panels by 40 percent or more—and by granting billions in loans to U.S. manu­ facturers, the most infamous of which was the Fre­ mont, Calif.-based Solyndra Corporation. Solyndra received more than $500 million in loan guarantees at the behest of the Obama administration, only to file for bankruptcy itself—but not before granting super-bonuses to its top brass and cooking the books so that its creditors were placed first in line to collect whatever funds remained, while the U.S. government was last.

SunTech did the same thing, organizing its Wuxi plant as a legally separate subsidiary to minimize its vulnerability to creditors. Meanwhile, SunTech stashed its profits in Cayman Island Banks to avoid paying taxes to the Chinese government, just as some 6000 Russian corporations used the Cyprus tax ha­ ven to shield themselves from Russian government tax collectors. Indeed, an estimated one-third to per­ haps one-half of the funds held by Cyprus banks was of Russian oligarch origin.

Solyndra’s solar panels were state of the art, using cylindrical panels that were said to be 20 percent more efficient than any other on the market. But in capitalism’s mad scramble for control and domina­ tion of world markets, life-sustaining technologi­ cal advances are subordinate to profit. In the case of solar panels, this new industry couldn’t compete against the new technologies that extract so-called clean natural gas from shale deposits that were pre­ viously inaccessible from the point of view of profit making. The fact that the relatively new fracking process threatens to pollute with deadly chemicals the fundamental ground water systems of the entire country is of no interest when natural gas (and oil as well) profit margins are compared to the cost of sus­ tainable energy from the sun.

The SunTech bankruptcy comes after a dozen U.S. solar-panel manufacturers and another dozen in Eu­ rope have either failed or cut back production when they found that they could not cover their costs given the dramatic fall in prices for solar panels. Here we have a contradiction that runs through the entire cap­ italist system of production for profit. Low-cost and planet-saving technologies fail because the profits of the energy that their products produce are too low.

In the March 21 New York Times article entitled, “China’s Solar Panel Giant Is Tainted By Bankruptcy,” this phenomenon is explained quite clearly: “The in­ dustry’s problem is that most of the cost of a solar panel lies in building a factory, not in operating the equipment.” Indeed, today’s super-modern Chinese plants are operated largely by robots, as opposed to low-cost migrant labor that is paid near-starvation wages, as is the case with so many other Chinese and U.S.-owned corporations operating in China.

The Times continues: “When the industry has severe overcapacity, as it does now, each company contin­ ues running its factories to cover its tiny operating costs, and at least a small part of the interest on the loans it took out to buy the costly factory equipment. But when every company pursues that strategy, the whole industry loses money and virtually no business is able to cover its full interest costs.” Imagine that! A world where robots at virtually no cost other than the price of their production produce solar panels to power the world, and yet the industry goes bankrupt.

A spokesperson for Bloomberg Business News put it more bluntly: “The winner emerges through constant competition between different approaches and the workings of a free market as it allocates capital.”

In this case, as in the world system of competitive capitalist production as a whole, there are no winners other than perhaps the last mega-corporation stand­ ing. No matter how improved the technology, to stay in the game, the lesser players must introduce yet an­ other level of efficiency and/or to combine resources of the weaker competitors. Competing capitals, today ever more in the form of great monopolies, constantly drive down the cost of production while simultane­ ously building more and more factories that employ less and less labor.

The result? The rate of profit, based always on the exploitation of human labor as the source of all prof­ its, is ever declining, thus forcing competing capital­ ists to invest in schemes aimed at beating the low rates of return on their investment in manufacturing.

In today’s crisis-ridden capitalist world, investment has shifted dramatically from industry to massive speculation in previously unheard of financial instru­ ments. Money creates more money in the gambling casino of modern capitalism without the intermedi­ ary of working people producing commodities that have a use for all humanity. As with the 2007 world­ wide crash, the speculative game must end in disaster as the house of cards fall and compliant governments make workers pay.

There is a hidden hitch when it comes to sustain­ able energy. Since the capitalists have not yet been able to meter the sun for corporate gain, they much prefer investments that are profitable. This is where the highly monopolized fossil fuel industry enters the picture.

Today some six massive oil and gas corporations dominate world production. They have a similar power and influence over the world’s governments that their corporate elite, the less than “one percent,” control. In this scenario, solar panels and all other forms of sustainable energy pose a threat to the very industries whose continued and increasing produc­ tion of fossil fuels puts a question mark over human­ ity’s future.

It is not an accident that global warming was barely mentioned in the recent highly orchestrated presi­ dential debates. Indeed, President Obama went to great lengths to present himself as the top gun and unswerving advocate of the oil and gas industries, bragging that under his reign the U.S. has produced more and opened more drilling sites on public lands and in the ocean than any previous administration in history.

Meanwhile, the workings of capital, operating at breakneck speed, sent an initial several billions to “glut” the world with solar-panel factories only to dis­ cover that cheap and sustainable energy was highly unprofitable.

The Chinese capitalists won no awards for produc­ ing solar panels in abundance. In fact, only a tiny per­ centage is put to use in China itself, the second larg­ est coal-based CO2 polluter in the world. While top Chinese officials like Fu Ying, spokesperson for the National People’s Congress, publicly stated that she opened her curtains daily to check for smog and wore a protective face mask on particularly horrible days, while strapping her children with the same, China’s solar-panel production was aimed at beating the competition worldwide and exporting its products at prices that undercut its competitors, driving many to bankruptcy. The use of solar panels in China today remains minimal.

No doubt, the world’s oil monopolies play a deter­ mining role in the failure of the solar panel business. The last thing that these monopolies want is relative­ ly free power from the sun, one object that at least to date they have not been able to meter. In a similar vein, the very water that people drink in a growing number of nations is owned, or controlled, by giant U.S. corporations that charge small fortunes for its delivery and “production” after capitalist industry has drastically reduced and fouled the planet’s water supply.

Some pundits have recently pointed to the fact that U.S. CO2 production has fallen by 13 percent since 2007, the steepest decline of any of the advanced capitalist nations. But this decline has little to do with increasing energy efficiency or a turn toward sustain­ able energy technology. Only 7 percent of U.S. energy today comes from these sources.

A better explanation was presented by New York Times staffwriter Eduardo Porter in his recent “Eco­ nomic Sense” column. Says Porter, “The main reasons [for the decline in fossil fuel use] are economic. The great recession and the world’s sluggish recovery have depressed energy use. As in the 1970s, high oil prices have encouraged people to drive less and switch to cars and trucks with better fuel economy.”

“There is a new force as well,” says Porter, “high prices [monopoly controlled] underpinned the widely trumpeted investment in hydraulic fractur­ ing, or fracking, of shale rock rich in oil and natural gas, which pushed the price of gas to some $2 per thousand cubic feet last April, down from $9 four years ago. Cheap gas, in turn, has encouraged power companies to switch to the cleaner fuel, replacing the most heavily polluting source of energy that we know, coal.”

There you have it. U.S. capitalism has not reduced CO2 emissions by a conscious effort to curtail fos­ sil fuel production and massively substitute avail­ able sustainable energy producing technologies. The slight reduction has come instead by an unexpected and unplanned, yet inevitable, worldwide depression that has brought misery to billions, and by increas­ ing the production of “cleaner” natural gas through a technology that produces deadly methane and in­ serts poisonous chemicals into the very drinking wa­ ter that is essential for life itself.

Meanwhile, capitalism’s irrationality portents oth­ er disasters in the years ahead. The charred body of a rat was found in late March in a vital electrical switchboard that regulates the cooling system of the still crippled and jury-rigged Fukushima Daiichi nu­ (continued on page 11, in “New York forum for the Cuban Five”)

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... Cyprus banks a southern European economy open to the west as an EU member since 2004, which is connected to north­ east Africa, Middle East and Asia, drawing on the la­ bor reserves, tourism and financial services exported from its neighbors… “With the collapse of Beirut as a financial center in the early 1980s, its geographical location, good rela­ tions with its Arab neighbors and with the eastern bloc, and later the collapse of the USSR and its allies, allowed the sector to grow massively.”

He also pointed to a wide array of regional and glob­ al players with potential stakes in newly discovered gas reserves off the Cypriot coast, such as the U.S., the EU, Russia, Turkey, Egypt, and Israel. (The Cyprus gov­ ernment’s first plan would have pledged profits from these reserves to rich bank depositors in exchange for the money seized from their accounts.)

All these connections mean that the economies con­ cerned feel the bruises when Cyprus stumbles, yet each can only see its way clear to telling the island to pick itself up without any assistance.

A workers’ solution to the crisis Several radical authors have pointed out that these events present both the need and the opportunity to forge a genuine workers’ alternative, drawing its po­ tential from the willingness shown by Cypriot work­ ers (and their allies in Greece and elsewhere) to mo­ bilize against such outrages as the proposed deposits theft.

Commenting on the proposed seizure of small de­ positors’ cash, Kevin Ovenden, a leader of the UK’s Re­ spect party, wrote: “What was meant to be sacred— private property and the essential private contractual relationship—has become profaned; not at the hands of some North Korean ‘communist terror,’ but by the partisans of re-turbocharging the neoliberal model.”

A Left seriously claiming to defend workers, he wrote, would have to lead a fight to take control of the banks, using the crisis as proof of the realism of such a proposal: “The Cypriot state ... has just shown that this is not only possible but … is actually how this free market system operates.” It would also mean nation­ alizing the currency in “a direct break or rupture with the Eurozone and EU.

“That is to say that if the agencies of capitalism, in the interests of capitalism, can take over the banks and seize deposits, then so can the Left for entirely different interests and with different effect.”

And he argued against managing the crisis on behalf of capital, as many reformist left parties on the con­ tinent propose: “If the liberal capitalists cannot suc­ ceed in protecting rights of private property, there is no reason to imagine that we can. Rather, there is ev­ ery reason to base our arguments and agitation on an anti-capitalist position. Depositors in banks are not a social class. [Listen closely, Strike Debt activists!] (continued from page 1: “[9:30 am — Leninist Strategy in 2013. 11:15…]”)

Tony Savino / Socialist Action They are not a uniform interest group, and are not a potential bloc that the Left can mobilize, lead and rest on. For us, nationalizing the banks means protecting working people and the middle class at the expense of big business and finance.”

The Cypriot heist, he argued, poses the question of whether there needs to be “a renegotiation of auster­ ity or a radical rupture with it—not as a policy dilem­ ma of government, but as a political argument around which masses of people may be mobilized to have politi­ cal effect.” [emphasis added] In contrast to this stance, he points to statements by officials in the former Communist Party govern­ ment—which had approved a draconian austerity plan and was then voted out—that bank takeovers were at best provocations “that would prevent win­ ning broader [i.e. middle-class or even ruling-class] political support,” and were at worst “futile.” But, Ov­ enden pointed out, the futility was in not taking radi­ cal measures, which resulted not only in demobilizing workers but in the CP’s own dismissal by voters.

Ovenden concluded: “What the Left says and does now matters. First, can it encourage radical mass mobilization that can shift the political calculus. If it does not, the rise of the fascist Golden Dawn in Greece shows that there are others who will. “Cyprus and our response to it is a moment to advance an argument for just such a break.”

In the same vein, radical economics professor Rich­ (Left) Protesters mock the banks on Wall Street.

Some ask: If capitalist governments can take over banks and deposits, as in Cyprus, shouldn’t working people discuss how to take them over— in their own interests?

Nationalize the banks under workers’ control!

ard Wolff told “Democracy Now”: “[T]here is surely one argument here for the left—if they can seize banks and deposits to benefit bankers and other big depositors, then so can the left, but for other purposes.”

Dimitris Hilaris, a member of OKDE, Greek section of the Fourth International, also warned of illusions in reformist “solutions” that shy away from breaks with the rulers’ euro-solutions. He predicted that the deal’s reduction of the national income “will hit the working class. If the big capital funds lose about 40% of their investment, the insurance funds of the workers will collapse together with a number of small-medium enterprises. Unemployment will rise. And the upcoming memorandum will reduce the workers’ wages for a second time.”

This scenario, wrote Hilaris, increases the urgen­ cy of forging “an antisystemic and workers’ alterna­ tive. It is the only way that the argument over the public control of the banking system can be imple­ mented. It is an inevitable condition for a left which is actually fighting to change the balance of forces now and does not postpone the fight for one remote and uncertain future.”

Hilaris said a government could claim to be genu­ inely “left,” not to say communist, “only under the condition that it paves the road of rupture with the ruling economic and political framework. And this re­ quires an extra-parliamentary and extra-institution­ alist action that can produce new structures of work­ ers’ self-organization.”

An OKDE-Spartakos statement argued that a work­ ers’ solution should begin with the demand for na­ tionalization of the banks without compensation in a single public banking entity under workers’ control, combined with the unilateral cancellation of the debt and the nationalization of foreign trade, “requests ob­ jectively leading to the rupture with the EU and the Eurozone.”

Such steps can only avoid being reversed if they are part of motion toward fighting for workers’ power in society as a whole—and, in the Cypriot context, throughout the Mediterranean region, especially giv­ en the myriad ties to that region mentioned above.

Fortunately, signs of potential receptivity to such a radical vision have come not only in the form of Cypri­ ot workers’ brave “no!” but also in the regional politi­ cal and solidarity meetings occurring at the very same time in the late March World Social Forum in Tunisia. Among those in attendance are revolutionaries from across southern Europe, the Middle East, and North Africa who are using the forum to discuss just such crises and how to meet them with broader solidarity, fiercer militancy, and a more revolutionary analysis and program. n

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8 SOCIALIST ACTION APRIL 2013 Solar panels pose a threat to the industries whose production of fossil fuels puts a question mark over humanity’s future.