April 2, 2013

Capitalism Damns The Environment


By JEFF MACKLER
Capitalism, the system—Chinese, American, or European style—has struck yet another devastating blow against all humanity.
One of the world’s largest solar-panel manufacturing plants, employing 10,000 Chinese workers at the city of Wuxi on China’s east coast, has declared bankruptcy—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 economics 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 nations did not figure into the financial equations that brought down SunTech. For SunTech’s competitors the question was how to establish their own monopolies over the industry.
The U.S. and the European Union retaliated by imposing 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. manufacturers, the most infamous of which was the Fremont, 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 haven to shield themselves from Russian government tax collectors. Indeed, an estimated one-third to perhaps 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 domination of world markets, life-sustaining technological 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 previously 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 sustainable energy from the sun.
The SunTech bankruptcy comes after a dozen U.S. solar-panel manufacturers and another dozen in Europe 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 capitalist 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 industry’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 continues 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 standing. No matter how improved the technology, to stay in the game, the lesser players must introduce yet another 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 simultaneously 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 profits, is ever declining, thus forcing competing capitalists 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 instruments. Money creates more money in the gambling casino of modern capitalism without the intermediary of working people producing commodities that have a use for all humanity. As with the 2007 worldwide 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 sustainable 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 production of fossil fuels puts a question mark over humanity’s future.
It is not an accident that global warming was barely mentioned in the recent highly orchestrated presidential 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 discover that cheap and sustainable energy was highly unprofitable.
The Chinese capitalists won no awards for producing solar panels in abundance. In fact, only a tiny percentage is put to use in China itself, the second largest 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 determining role in the failure of the solar panel business. The last thing that these monopolies want is relatively 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 sustainable 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 “Economic 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 fracturing, 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 fossil fuel production and massively substitute available 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 increasing the production of “cleaner” natural gas through a technology that produces deadly methane and inserts poisonous chemicals into the very drinking water that is essential for life itself.
Meanwhile, capitalism’s irrationality portents other 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 nuclear power plants in Japan.
The “accident,” which might have led to a new and deadly release of radiation into the atmosphere, dramatically raised the temperature of the cooling pools that stored 8200 spent-fuel-rods, causing a blackout at the reactors that have yet to be fully repaired and secured following the catastrophic triple meltdown of March 2011. Yet the Japanese capitalists, as with their Chinese counterparts, pressed by a paucity of fossil fuels, have every intention of pressing on with their nuclear-power projects.
As the above instances demonstrate, the drive for poisonous but profitable energy sources takes increasingly deadly forms. From the race to re-colonize Africa to secure its oil and mineral reserves to the endless wars in the Middle East and beyond—the “oil wars”—to the conscious ruin or subordination of promising sustainable technologies, capitalism cannot be other than the grim reaper, the personification of death and destruction until it is forever abolished by the conscious action of the billions that it exploits and oppresses.
There is but one alternative, a society based on the collective satisfaction of human needs as democratically determined by the world’s producers, the working classes determined to live well and prosper in the course of building a new world that preferences the health, well-being, and full development of all as against the profits of the rapacious few. This is the socialist credo and is well worth fighting for.




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