Banks fueling global warming is business as usual

The gap between what needs to be done to save the Earth from the environmental disaster of unchecked global warming and what is actually being done continues to widen. Yet another exemplar of this gap is the funding practices of the world’s biggest banks.

Capitalists not concerning themselves with small things like the future ability of the planet to remain livable is nothing new, or we wouldn’t be in our present predicament. But a new report from seven environmental organizations finds that 60 of the world’s biggest banks have invested US$4.6 trillion in fossil fuel projects since the Paris Climate Accord was signed in 2015.

Our descendants, should they be faced with a chaotic climate, massive agricultural disruptions, mass extinctions on land and in the sea, drowned coastal cities and desertification — as they will be should present-day business as usual continue — are not likely to believe that their ruined world will be a fair tradeoff for a handful of industrialists and financiers of the past getting obscenely rich.

Can curses be made retroactive? Perhaps not. But perhaps a worldwide environmental movement can grow sufficiently large and militant to force the necessary changes. There are many out there trying to organize and raise attention — particularly young people, because they will be around long enough to potentially see today’s dire predictions become tomorrow’s reality — but perhaps global warming remains an abstract in too many minds. Or perhaps the daunting challenge of transcending capitalism, without which it is essentially impossible to reverse global warming, is too difficult a challenge. Throwing up our hands in despair would be easier, but if we wish our descendants (or people already alive) to inherit a living world, activism on a world scale is essential.

The Alberta tar sands (photo by Howl Arts Collective, Montréal)

What words should we use to describe an economic system under which it is profitable for a handful of powerful people to profit from the destruction of the environment, and this behavior is richly rewarded?

What words should we use to describe an economic system in which, despite overwhelming evidence of the suicidal course that system is leading humanity, is nonetheless heading straight for global calamity?

What words should we use to those who profit enormously from all this, and why do they have such enormous sums of money to be able to force a continuation of this suicidal course? None of you reading these words voted for this, and none of you can vote to put an end to this. Economic decisions are completely out of the hands of working people; current capitalist ideology has evolved to the point where it is supposed to be unthinkable that economic decisions could be subject to democratic processes. Yet more proof that without economic democracy, there can be no political democracy. A lesson capitalism imposes daily.

Nice words for the environment, gigantic sums of money for fossil fuels

The aforementioned exemplar, a report titled “Banking on Climate Chaos: Financial Fuel Report 2022,” sponsored by Oil Change International, Rainforest Action Network, Indigenous Environmental Network and four other organizations, “finds that even in a year where net-zero commitments were all the rage, the financial sector continued its business-as-usual driving of climate chaos.” Banks are investing in fossil fuels at levels even higher than in 2016, the year after the signing of the Paris Climate Accord, when the world’s governments agreed to the goal of holding the global temperature increase to 1.5 degrees from the pre-industrial level. Of the $4.6 trillion invested by 60 of the world’s biggest banks since the Paris agreement, $742 billion was invested in the industry in 2021 alone.

These banks come from countries around the world, but four United States-based banks were the worst offenders, the report said. “Overall fossil fuel financing remains dominated by four U.S. banks — JPMorgan Chase, Citi, Wells Fargo, and Bank of America — who together account for one quarter of all fossil fuel financing identified over the last six years,” it said. “RBC is Canada’s worst banker of fossil fuels, with Barclays as the worst in Europe and MUFG as the worst in Japan.” Three Canadian banks — RBC (Royal Bank of Canada), Scotiabank and Toronto-Dominion Bank (TD) — are among the top dozen in the world for financing fossil fuels.

Even more alarmingly, Royal Bank of Canada and TD have been the “leaders” in a grotesque expansion of tar sands financing — $23 billion was invested in tar sands production in 2021, a 51 percent increase from 2020. Those two Canadian banks combined doubled their funding for tar sands in 2021 compared to 2016. Even more money was poured into fracking. Last year alone, $62 billion was poured into fracking. Wells Fargo more than doubled its fracking investments to $8 billion in 2021. Since the Paris Climate Accord was signed, four U.S. banks are far and away the biggest culprits in fracking — JPMorgan Chase, Wells Fargo, Citigroup and Bank of America.

Graphics via Banking on Climate Chaos report

Yes, the world’s governments are hypocritical in signing agreements to reduce greenhouse-gas emissions with no enforcement mechanisms and are far from meeting their announced goals. But that certainly is no reason to excuse the financial industry for its significant role in ensuring that more greenhouse gases than ever are thrown into the atmosphere. Or bank hypocrisy. Take London-based Barclays, Europe’s biggest banking contributor to fossil fuel production and the world’s fifth-largest investor in fracking, trailing only the four U.S. banks mentioned just above.

What are we to make of Barclay’s pronouncement, right on its website home page, proclaiming that “Barclays gives shareholders a ‘Say on Climate.’ ” The bank says it will give shareholders “an opportunity to vote on its climate strategy, targets and progress” at its 2022 annual general meeting. Barclays Chairman Nigel Higgins, in a slick pamphlet, claims the bank aims to be “net zero” by 2050. It would seem to be heading in the opposite direction, unless the intention is to pour billions of pounds into fossil fuels until 2049, then magically stop. If the situation weren’t so serious, we could laugh at the chairman’s assertion that “We believe that our original championing of net zero and Paris alignment has made a difference in banking.” If hot air could displace carbon dioxide, I suppose it would make a difference.

The slick pamphlet, 36 pages long, is full of aspirational goals and even goes so far as to proclaim itself a founding member of the Net Zero Banking Alliance, “part of the Glasgow Financial Alliance for Net Zero.” How lovely. The result of last year’s Glasgow climate summit was to continue the tradition of “we were happy to talk and we will be happy to talk some more” while making commitments that ensure global temperatures will soar past 2 degrees C. As for Barclay’s, a reader searches in vain for any mention of what shareholders will be asked to vote on. Those affected by fossil fuel production won’t be asked, of course.

If only hot air could be tapped as an energy source

The intent here isn’t to single out Barclays. Rather, this sort of corporate greenwashing is all too typical. The world’s biggest funder of fossil fuel projects, JPMorgan Chase, for example, claims that it has a “commitment to align key sectors of our financing portfolio with the goals of the Paris Agreement” and “we are measuring the emissions of our clients in key sectors of our financing portfolio.” It would seem there are plenty of greenhouse-gas emissions to measure. But are we supposed to be fooled by this folderol?

Similarly, Royal Bank of Canada, the largest non-U.S. funder of fossil fuels and world’s fifth largest overall funder, says with a straight face that is helping clients reach net-zero goals and is “Setting the standard for best-in-class governance, including through our Climate Strategy & Governance group.” We’d hate to see what a lower standard might look like given the $201 billion it invested in fossil fuels from 2016 to 2021, with 2021’s total double that of 2020.

Although paling in comparison to the US$4.6 trillion the biggest banks have ladled out to the fossil fuel industry over the past five years, including $742 billion in 2021, the World Bank and International Monetary Fund have done their part. The World Bank, funded by the world’s governments, in particular those of the Global North, has provided tens of billions of dollars for fossil fuels since the Paris Climate Accords were signed, reports Urgewald, a non-profit environmental and human rights organization based in Germany. This money includes $12 billion in direct project finance in over 35 countries; as much as $20 billion annually given as government budget support, including for coal projects; and billions more for infrastructure projects that enabled new coal-fired plants that would not have been built otherwise.

The International Monetary Fund (IMF), notorious for imposing extreme austerity on peoples around the world as the price for loans, sometimes imposes additional conditions mandating they “roll out the red carpet for the fossil fuel industry,” reports the U.S.-based environmental organization Friends of the Earth. An FOE report found that:

“Aside from the austerity measures it is so well known for, the IMF has been found to attach conditions in its lending to a number of countries that support new tax breaks for Big Oil. One recent study found that IMF loan programs supported new producer subsidies for coal and gas in Mozambique and Mongolia. The Fund also enabled new legislation in these countries to facilitate public finance of fossil fuel projects. As more countries turn to the IMF for help in coping with COVID-19, it is imperative the IMF does not further entrench fossil fuel dependency around the world. But a recent analysis has found that the IMF’s COVID-19 era loans failed to boost green recovery policies. Another study found that most Covid-19 era loans by the IMF call for austerity measures to be implemented once the pandemic crisis subsides, limiting the resources that countries will have to spend on a just and green recovery.”

Nor can the massive industry subsidies be forgotten. A paper prepared in 2015 by, ironically, four IMF economists, found that subsidies for the fossil fuel industry totaled an astounding $5.6 trillion for 2014. This total included environmental damages, including air pollution, in addition to direct corporate subsidies, below-cost consumer pricing and foregone taxes. No, the IMF was not suddenly questioning capitalism, nor did this report, carefully noting that it did not represent the views of the IMF, devote so much as a single word questioning the economic system that has produced such disastrous outcomes. A more recent IMF study found that fossil fuel subsidies have increased to $5.9 trillion, of which 92 percent arose from undercharging for environmental costs and foregone consumption taxes.

Perhaps those responsible for IMF lending practices don’t read their own organization’s papers (or, if they do, ignore them when they contradict the IMF’s mission of enriching capitalists and immiserating working people). Government officials don’t pay attention to Intergovernmental Panel on Climate Change reports detailing the dire state of the climate. And oil and gas executives laugh at what they get away with and continue to fund “think tanks” that pump out a steady stream of global warming denial. Canada, during the Stephen Harper régime, went so far as to invent the new crime of being a member of an “anti-Canadian petroleum movement,” equating such a stance with terrorism. The Royal Canadian Mounted Police added to this criminalization of advocating for clean air and water by challenging the very idea that human activity is causing global warming or that global warming is even a problem. The basis on which a police force can make such a declaration is unclear.

Capitalism can’t be anything other than what it is

Capitalist governments, not only those countries like Canada and Australia that are dependent on energy and/or mining exports, are beholden to not only the industrialists and financiers who are the real rulers of the world but to the ever intensifying competitive pressures of capitalism, from which industrialists and financiers are not exempt. The controllers of corporations routinely threaten to move elsewhere if political office holders don’t do as corporate executives demand, and the decisions of those executives are not reviewable no matter the effect on the local area.

For corporate executives and the speculators whom they in turn must indulge, maintaining profits means cutting costs (in the first place, the cost of labor), taking bigger shares of existing markets, forcing open new markets and developing new ways of achieving these goals. An enterprise that doesn’t do these gets run out of business by enterprises that do. Larger enterprises, those big enough to be listed on stock markets, have to increase profits, not maintain them, piling on still more pressure — not only from the competition, but from the financial industry, which holds a whip over the producers and distributors of tangible goods and services. A company that merely has steady profits, no matter how high, will be punished by financial speculators because the stock price won’t rise. Stock prices are bets and claims on future profits, and finance capital is relentless in expecting higher stock prices. A corporate executive team that doesn’t deliver will be forced out and replaced by another team that will do as financiers demand.

A corporation can achieve the necessary profits by reducing wages, through either layoffs or moving production to low-wage locations with few regulations. Corporate globalization is due to precisely that. Corporations can also buy machinery so that they can employ less workers; they are doubly incentivized to do this because the machines can be depreciated, lowering their taxes. As more people are put out of work, faster overall economic growth is needed just to maintain existing employment; thus the long-term tendency of more unemployment and lower wages as more people compete for fewer jobs. As industries in national economies become consolidated in an oligarchy of the handful of giant corporations who survived national competition, the route to growth is to expand elsewhere. As the winners in other countries undergo the same process, the relentless competition, now on a planetary scale, winnows these national winners into a small number of global winners.

And when one competitor gives itself a boost to profits (including by finding the country with the lowest wages), the other competitors have to do the same to stay in business. Profits margins decline as the initial boost is eroded by competitors doing the same; and the next round of “innovation” — finding another country with yet lower wages, more layoffs, work speedups, exemptions from environmental rules, pressure on governments to reduce taxes and eliminate tariffs, and inducing governments to enact draconian “free trade” agreements elevating multinational capital above governments — touches off another round of cost cutting and doing whatever possible to boost profits. This is a cycle that has no end under capitalism.

As this mad, endless growth continues, more must be produced, more must be transported, new sources of energy and raw materials must be exploited and more pollution must be dumped into the environment with no cost to the corporate polluter. More carbon dioxide, methane and other greenhouse gases will be thrown into the atmosphere as a direct result of this growth and frenzied activity. Thanks to the massive capital accumulated by the winners of capitalist competition, industrialists and financiers can spend gigantic sums of money spreading propaganda through a network of institutions, bend school and university curricula to their interests, own and control the mass media and buy the political system.

Growth for growth’s sake, and without controls — capitalism is a cancer. A system that nobody controls nor can anybody control it. A system, however, that runs on its own momentum and can’t be anything other than what it is. That we can somehow get control of the machine and make it do good is worse than an illusion.

The future has no value in capitalist economics

Not only is the environment an externality that corporations do not have to account for, thereby dumping the costs on to the public, but orthodox economics doesn’t account for the environment, other than as a source of resources to exploit. The same capitalist market that is nothing more than the aggregate interests of the largest and most powerful industrialists and financiers is supposed to “solve” environmental problems. A May 2009 Monthly Review article by sociologists Richard York, Brett Clark and John Bellamy Foster, “Capitalism in Wonderland,” puts this contradiction in stark perspective:

“Where [orthodox economists] primarily differ is not on their views of the science behind climate change but on their value assumptions about the propriety of shifting burdens to future generations. This lays bare the ideology embedded in orthodox neoclassical economics, a field which regularly presents itself as using objective, even naturalistic, methods for modeling the economy. However, past all of the equations and technical jargon, the dominant economic paradigm is built on a value system that prizes capital accumulation in the short-term, while de-valuing everything else in the present and everything altogether in the future.”

A melting glacier (photo by Vojife)

From that perspective, it follows that present-day environmental damage is of minimal concern to capitalists and future damage of no concern. The industrialists and financiers who reap billions today won’t necessarily be around when the environmental price becomes too high to avoid. The “Capitalism in Wonderland” authors write:

[H]uman life in effect is worth only what each person contributes to the economy as measured in monetary terms. So, if global warming increases mortality in Bangladesh, which it appears likely that it will, this is only reflected in economic models to the extent that the deaths of Bengalis hurt the economy. Since Bangladesh is very poor, [orthodox] economic models … would not estimate it to be worthwhile to prevent deaths there since these losses would show up as minuscule in the measurements. … [E]thical concerns about the intrinsic value of human life and of the lives of other creatures are completely invisible in standard economic models. Increasing human mortality and accelerating the rate of extinctions are to most economists only problems if they undermine the ‘bottom line.’ In other respects they are invisible: as is the natural world as a whole.”

Every incentive is for more

Lest we doubt that orthodox economists are moving down a down a slippery slope in which some humans are valuable and others are without value, recall the infamous memo of Lawrence Summers, written when he was chief economist for the World Bank, in which he wrote:

“I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. … The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I’ve always thought that under-populated countries in Africa are vastly UNDER-polluted.”

The modern corporation has a legal duty only to provide the maximum profit for its shareholders. In other words, it is expected to act to further its own interest without regard to anything else. The corporation is considered a legal person under U.S. law — one that has no biological limits nor barriers to its growth. Joel Bakan, in the introduction to his book The Corporation: The Pathological Pursuit of Profit and Power, summed up capitalism’s dominant institution this way:

“The corporation’s legally defined mandate is to pursue, relentlessly and without exception, its own self-interest, regardless of the often harmful consequences it might cause to others. As a result, I argue, the corporation is a pathological institution, a dangerous possessor of the great power it wields over people and societies.”

That pathological institution is controlled by, and the wealth produced for, a tiny percentage of people. We can call them the one percent (using the language of Occupy Wall Street), the bourgeoisie (using classical terminology), or industrialists and financiers (using broad labels). Their towering piles of money, hidden away in tax havens and secret bank accounts, are directly built on the backs, the sweat and labor, of their employees. This would be the case even without the added bonus of corporate personhood. Yet no matter how successful today, corporations must expand and be ruthless in beating the competition on pain of going under tomorrow. Every incentive is for more growth, more production, more consumption. Nobody, not even the biggest or most powerful capitalist, has the ability to stop or control it. Even capitalists ride the tiger, although of course they have vastly better ability to manage the vicissitudes of capitalist competition than do working people.

Capitalism is a system that is built, and functions, to generate profit, not to meet needs. If you doubt that, then why are extraordinary amounts of money spent on advertising to get us to buy what we don’t need? If global warming is to be reversed, a rational economic system based on human need, not on private profit, is what is needed. Cooperation for the common good, not competition for the profit of a few at any cost. Is corporate profit really worth the destruction of Earth’s livability?

Corporate greed keeps the pandemic alive

More than two years on, it is hard to imagine there could be someone who is not sick of the pandemic. Although we can point to multiple reasons for the inability to bring Covid-19 under control, a prominent factor is corporate greed.

The elevation of the private profit of a few over the welfare of the many is, sadly, the ordinary course of events in a capitalist world. This is brightly illustrated by the failure of the world’s governments to prioritize health care over money as exemplified by the ongoing failure to make vaccines available to the Global South.

Business as usual, yes, and it would be easy enough to lament the standards of the United States and its wildly expensive health care system being exported to the rest of the world. The U.S. does play a role here, but this time the U.S. is not the biggest villain. The European Union, with its obstinate refusal to waive any intellectual property rule because of fealty to Covid-19 vaccine makers, has been the biggest roadblock.

As new variations and mutations repeatedly spread, achieving a critical mass of vaccinated people is the only way the pandemic will be brought to an end. Covid-19 may never be fully eradicated but it can be reduced to a background nuisance as are many other illnesses. Hesitancy among many in the Global North to be vaccinated has played a not insignificant role, whether by right-wingers believing the nonsense peddled by the likes of Fox “News” or by people on the Left who, not without reason, are skeptical of Big Pharma.

Nurse graffiti COVID-19 in Málaga, Spain (photo by Daniel Capilla)

Those in the latter category see nefarious motivations behind pharmaceutical companies’ promotion of Covid vaccines. But is this another instance of Big Pharma pushing unneeded or even dangerous drugs? Such things do happen; suspicion does have a basis. But let’s consider what Big Pharma wants, which is no different from any other corporation: To accumulate the biggest piles of money possible. Given the global health emergency that arose in the first months of 2020, the surest path to achieving that goal would be to become the first to develop a cure. The pandemic was that rare instance in which the interests of Big Pharma and the general population coincided, and the vaccine makers wouldn’t be, and indeed aren’t, at all shy about taking advantage of an emergency to rack up huge profits, even by their industry’s standards. And with the whole world watching, a vaccine had better work and not cause undue harm.

Thus, because of unique circumstances, creating a safe, effective product for a real problem was actually in a corporate interest. And the profits, thanks to these rare circumstances and government largesse, are gigantic, a topic to which we will return.

Intellectual property as a weapon

It should surprise no one that the vaccine makers are doing everything they can to keep windfall profits rolling in. That means clinging to intellectual property (IP) law, heavily skewed in their favor, to maintain a monopoly. Capitalist governments have rolled over for corporate interests for decades, making IP laws ever more rigid. National legislation has played a role, firmly augmented by so-called “free trade” agreements that are used as battering rams by the United States, the European Union and other advanced capitalist countries to force open less powerful countries’ economies and force the world’s governments, including themselves, to be subordinate to multinational capital. Seeking to undermine government health care systems, and especially the ability of governments to negotiate lower prices, is often a goal of “free trade” deals, most notably demonstrated in the efforts of the U.S. government to push draconian rules in the Trans-Pacific Partnership.

These developments are anathema to the interests of working people everywhere. It is unconscionable, or should be, when IP rules are used to keep life-saving vaccines away from most of the world’s people. Struggles to make Covid-19 vaccines available to the Global South kicked off quickly, and there is no sign that this issue will anytime soon be resolved. This is not only against the interests of those for whom vaccines remain out of reach, but, given that the pandemic won’t end until a substantial percentage of the world’s peoples are inoculated and thus end the risk of still more dangerous variants arising, it is against the interests of those countries whose governments continue to elevate corporate profits over human life.

What the world needs is for manufacturers anywhere in the world to be granted the unrestricted right to manufacture the vaccines.

To achieve this necessity, what is needed is something called a “TRIPS waiver.” This will require some explanation, as once again a trip into the weeds of global trade policy becomes unavoidable.

Traffic in a British village is reduced from two lanes to one so there would be sufficient space for walkers to maintain two-meter distances from one another. (Photo by Martinvl)

Under World Trade Organization (WTO) rules, IP rights are strictly enforced. As the neoliberal variant of capitalism became dominant with the decline of Keynesianism in the 1970s, economic decision-making has been separated from politics, leaving multinational corporations free to move production to the places with the lowest wages and least regulation, constantly on the prowl for locations that can be even more exploited. With components obtained from around the world, assembled in low-wage, low-regulation havens and finished products exported, barriers to trade such as tariffs were necessary and, having won those, corporate executives and financiers next sought to eliminate the ability of governments to regulate them. Thus the era of “free trade” agreements arose, and one of the institutions that was created to enforce corporate supremacy was the WTO.

One of the legs of corporate domination is IP law. How that relates to the pandemic is this: A handful of multinational corporations, interested in the biggest possible profits for their executives and shareholders, can decide who will receive vaccines and at what price. That human life is at stake — more than 6 million have died from Covid-19 — does not make for an exception. As Alain Supiot, writing on international law in the November-December 2021 issue of New Left Review, noted:

“On the one hand, the Preamble to the [World Health Organization] Constitution states that ‘The extension to all peoples of the benefits of medical, psychological and related knowledge is essential to the attainment of health.’ But on the other, since the creation of the World Trade Organization in 1994, this knowledge has become an object of private property, precisely opposed ‘to all peoples’ by virtue of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Until then, it was accepted in international law that the protection of public health interests took precedence over the interests of patent-holders. The TRIPS Agreement reversed this hierarchy and gave primacy to the protection of industrial property.

Negotiations to enact a waiver are stonewalled

A waiver of TRIPS rules, then, is what is needed. In other words, a comprehensive waiver that, even if temporary for the duration of the emergency, sets aside Big Pharma’s IP rights and allows all manufacturers of vaccines, wherever they are, to produce Covid-19 vaccines. The governments of India and South Africa proposed, in October 2020, just such a waiver to allow the production of one or more of the Covid-19 vaccines. A year and a half later, the world is still waiting, with no resolution in sight.

Sarah Lazare and Paige Oamek, writing for In These Times, recently wrote an article demonstrating the “big lie” of Big Pharma talking points as the industry, in particular Pfizer, furiously resist any weakening of their IP fortresses. They wrote:

“The lie relates to an October 2020 proposal from India and South Africa that the World Trade Organization suspend enforcement of key patent rules so that cheaper, generic versions of Covid-19 treatments and vaccines can get to more people more quickly. (The proposal is referred to as a TRIPS waiver, a reference to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.) The pharmaceutical giants Pfizer and Moderna, concerned with maximizing their present and future profits, emerged as virulent opponents of such a measure, which still has not passed more than a year later, even as just one out of 21 people in poor countries have been fully vaccinated. It is no anomaly that the industry would reject such a proposal — pharmaceutical companies had a big hand in shaping those WTO intellectual property rules in the first place, to protect pharmaceutical monopolies and their profits.”

Negotiations have centered on four-way talks among India, South Africa, the European Union and the United States. A report surfaced in March 2022 that an agreement had finally been reached, but that has been denied, most notably by the U.S. government. Text accompanying the reported agreement was widely and loudly condemned around the world as grossly insufficient, and possibly even adding additional barriers to global vaccine access. Weeks have gone by, and there is no word that any agreement has actually been reached. What the true state of the negotiations may be can not be stated with any certainty, but there is no indication that any deal is imminent. Or that any deal will resemble what is needed by the Global South.

A doctor in a hospital during the COVID-19 pandemic (photo by Pablo Jarrín)

A surprise announcement by the Biden administration in May 2021, when President Joe Biden announced support for a TRIPS waiver, in a partial reversal of U.S. policy that has consistently elevated corporate profits above all other considerations, raised hopes. But the Biden administration pronouncement is less than meets the eye, and the European Union has remained obstinately opposed to any waiver. Providing a fresh demonstration of the anti-democratic nature of the EU, that the European Parliament has three times called for a waiver to be approved and many EU countries are in support have had no apparent effect on EU negotiators.

The U.S.-based watchdog group Global Trade Watch, in its analysis, says that accepting the EU proposal would be worse than having no deal:

“The European Union has been the primary obstacle to progress on the waiver. … The EU’s position had been to basically restate existing WTO flexibilities on patents that almost every WTO member already has, while requiring additional conditionalities. … Any proposal that follows the EU position is worse than no action at all, because it could further undermine current WTO rules that already allow governments to issue compulsory licenses. The need for far greater, not less, freedom to make and use medicines in a global health crisis like the COVID-19 pandemic is precisely why more than 100 countries have supported the waiver as introduced by India and South Africa.”

The EU, however, is not the only obstacle. The U.S. negotiating position isn’t for a full waiver. The Global Trade Watch analysis states:

“The longstanding U.S. position to support a waiver for vaccines only, excluding the tests and therapeutics, is shameful, particularly as President Biden recently lauded testing and treatment as key tools in fighting the pandemic at this stage. The new proposal only covers vaccines, with tests and treatments to be considered six months after the proposal is agreed, if it is agreed. Given the already seventeen-month delay since the waiver was introduced, it is irresponsible to suggest further delay for tests and therapeutics. … The U.S. had also reportedly suggested limiting the geographic scope of the waiver, which would only further limit the ability to scale up manufacturing all over the world. This demand was apparently agreed, as the proposal now on offer would only apply to developing countries that contributed less than 10% of the world’s exports of COVID-19 vaccine doses in 2021.”

Public statements by the Office of the U.S. Trade Representative have not been encouraging. The trade representative, Katherine Tai, “assured” the U.S. Congress that her office is not “working to give away American IP.” With the usual bipartisan commitment to corporate profits, congressional Republicans and Democrats oppose a meaningful waiver, echoing industry talking points to underline their disapproval. A bloc of Republican representatives is seeking to enforce this by introducing a bill that would grant Congress more oversight over negotiations.

Most of the world’s countries back India, South Africa

As many as 120 of the WTO’s 164 countries are said to be backing India and South Africa. Yet many of these countries would be excluded even from the limited and inadequate proposals put forth by the EU and U.S. As noted above, larger Global South countries would be excluded under the U.S. proposal to limit the countries eligible, while also limiting what would be available. Médecins Sans Frontières/Doctors Without Borders, for example, calls on WTO members to “tackle the current barriers to accessing all COVID-19 medical tools, including treatments and diagnostics, and also addresses patents and non-patent barriers in an effective way.” Dimitri Eynikel, EU Policy Advisor for MSF’s Access Campaign, noting the “considerable limitations” of what is on the table, said:

“It is incredibly concerning that the leaked text currently only covers vaccines, but neither treatments nor diagnostics. Excluding treatments and diagnostics is a critical weakness, especially as access to COVID-19 treatments remains a significant problem in many low- and middle-income countries, particularly in Latin America, in part because of patent barriers and restrictive licensing deals controlled by pharmaceutical corporations. Excluding countries with significant manufacturing and supply capacity like Brazil is highly problematic as it arbitrarily blocks potential critical avenues to increase access to COVID-19 medical tools for low- and middle-income countries.”

The severe limitations the EU and U.S. are attempting to impose make it unlikely that a “deeply flawed text” can be set right, according to Professor Jane Kelsey of the University of Auckland. Noting that by the end of 2021, more boosters had been given in high-income countries than total doses in low-income ones, Dr. Kelsey wrote, “The leaked ‘solution’ agreed by the informal ‘quad’ (US, EU, India and South Africa) is insufficient, problematic and unworkable. There are too many limitations to make any significant difference and it is a far cry from the original proposal from India and South Africa that would have effectively addressed the barriers.”

Perhaps activists and medical professionals going on the offensive as part of a public-pressure effort is one way that a fair deal might be forced. Nurses from 28 countries filed a complaint in November 2021 with the United Nations alleging human rights violations by the EU and four countries for “the loss of countless lives” in the pandemic. The nurses, representing more than 2.5 million health care workers around the world, named Britain, Norway, Singapore and Switzerland in their filing — the four countries known to be standing with the EU. The nurses charge that “these countries have violated our rights and the rights of our patients — and caused the loss of countless lives” through “continued opposition to the TRIPS waiver … resulting in the violation of human rights of peoples across the world.” The complaint notes human rights obligations to which WTO member states are legally bound.

Nurses demand safe staffing (Photo via National Nurse magazine)

The organizations behind the filing are mostly from the Global South, but among the 28 are ones from Canada (Canadian Federation of Nurses Unions and Fédération interprofessionnelle de la santé du Québec), the United States (National Nurses United) and Australia (Australian Nursing and Midwifery Federation)).

Deborah Burger, president of National Nurses United, which represents more than 175,000 members in the United States, was unsparing in her assessment. She said:

“The maldistribution of vaccines in the face of more than 5 million deaths, many of them preventable, is a devastating reminder of the deplorable disparity of wealth between the rich nations of the north and the global south. To refuse to act simply to protect the profits of giant pharmaceutical corporations is unconscionable, inhumane, and must be ended.”

Upon receipt of the complaint, Dr. Tlaleng Mofokeng, the UN’s Special Rapporteur on Physical and Mental Health, said, “The nurses’ core demand is one I share.” She said:

“States have a collective responsibility to use all available means to facilitate faster access to vaccines, including by introducing a temporary waiver of relevant intellectual property rights under the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS Agreement). Nurses and health care workers have been on the front line keeping us safe and have witnessed the most painful and heart-wrenching effects of the Covid-19 pandemic. Their evident commitment to the right to physical and mental health provides them with moral authority.”

No executive or shareholder is any danger of starving

Let us now return to the profit margins of pharmaceutical companies and the massive windfall profits being racked up by Covid-19 vaccine manufacturers, which will provide some context to industry arguments. The business news agency Bloomberg reports that Pfizer’s vaccine generated $20 billion in pretax profit in 2021 while Moderna “is expected by analysts to earn $12.2 billion before taxes this year.” Pfizer’s vaccine may rack up $36 billion in revenue this year.

The pharmaceutical industry was already one of the most profitable. To provide some examples, health technology was found to be the most profitable of 19 broadly defined “major” industrial sectors in the U.S. for 2015 and 2016. A BBC report found that pharmaceuticals and banks tied for the highest average profit margin in 2013, with five pharmaceutical companies enjoying a profit margin of 20 percent or more — Pfizer among them. The most profitable pharmaceutical corporations spent far more on sales and marketing than they did on research and development. With little control exerted over pharmaceutical prices in the U.S., it is no wonder that U.S. health care costs are the world’s highest, greatly exceeding any other country.

Even by these rarified standards, the boost to profit margins from Covid-19 have been noteworthy. Pfizer reported almost $22 billion in net income for 2021, only $3 billion more than it reported for 2020 and 2019 combined. Moderna, which even self-described “capitalist tool” Forbes magazine says produced a vaccine “largely funded by taxpayer dollars,” reported $12.2 billion in profits for 2021. Moderna received a billion dollars in government subsidies for its vaccine, and has, overall, received $6 billion from the U.S. government to develop, test, manufacture and deliver its vaccine.

Johnson & Johnson reported net income of almost $21 billion for 2021, a healthy gain of 40 percent over the previous year, a much larger gain than the gain it reported in revenue. And AstraZeneca reported a 37 percent increase in its core earnings per share (a comparison apparently used to exclude special one-time costs from an acquisition).

So it appears that no executive or shareholder of these four pharmaceutical makers is in any danger of being out on the street.

What is the problem in sharing the technology that would finally put an end to the pandemic? The real reason is that the maximum possible amount of profit wouldn’t be accrued. No big corporation is going to admit that, so other excuses are offered.

Debunking Big Pharma’s favorite talking points

The director-general of the World Health Organization, Tedros Adhanom Ghebreyesus, had a revealing conversation with Pfizer’s chief executive officer. As reported by Bloomberg, Dr. Tedros, on a conference call with pharmaceutical executives, said, “Honestly, I’m not seeing the commitment I would expect from you.” The Pfizer chief executive, Albert Bourla, whined that Dr. Tedros was speaking “emotionally.” Consistent with that exchange, Johnson & Johnson’s chief scientific officer, Paul Stoffels, declared at an industry lobbying group gathering that there was no need for any waivers because the industry’s efforts are “sufficient.”

Letting the pharmaceutical industry have its way quite clearly hasn’t been “sufficient,” given the small numbers of vaccines available to the Global South well more than a year since vaccines became available and the inability to stop the pandemic given that lack of availability. The Bloomberg report admitted that “Vaccine inequality didn’t happen by itself. It was the result of decisions by corporate executives and government officials.”

Yonge-Dundas Square in Toronto during the pandemic (photo by Sikander Iqbal)

Big Pharma talking points have revolved around claims that restrictive patents are necessary to encourage research and development, without which supposedly nothing would be invented. (Yet Jonas Salk famously declined to pursue a patent on the polio vaccine.) A new line has emerged during the pandemic: That even if a full waiver were granted, the Global South is incapable of producing vaccines because of a lack of capability or capacity, and thus granting rights would do nothing to solve the pandemic. Government officials backing the pharmaceutical industry loudly echo these claims, among them former German Chancellor Angela Merkel, French President Emmanuel Macron, and members of the U.S. Congress who are recipients of Big Pharma donations.

The In These Times article “Big Pharma’s Big Lies About Vaccine Patents,” debunks these talking points:

“It’s clever messaging, because it has an air of expert knowledge, casting companies as patiently informing activists who are well-intentioned but don’t understand how vaccine production works. It also plays to pre-existing racist assumptions that the Global South does not have pharmaceutical sectors capable of producing quality goods, but must rely on its more sophisticated former colonizers. … We don’t have definitive proof that pharmaceutical executives sat in a room somewhere and said, ‘Let’s deceive the public about the world’s vaccine manufacturing capacity.’ But there have been enough activists, scientists, and heads of state pointing out holes in Big Pharma’s narrative to make it highly likely that the industry, at the very least, was aware of challenges to the veracity of its claims. And it was in its interest to ignore them. Remarkably, the industry has shown it would rather build its own facilities from scratch — like the BioNTech facilities in Rwanda and Senegal, which won’t even start construction until mid-2022 — than give Global South countries the ability to produce vaccines themselves.”

India, for example, ranks third in the world in producing pharmaceuticals, measured by volume, and generics already constitute 70 to 80 percent of the world pharmaceutical market. The Serum Institute of India is the world’s largest producer of vaccines by number of doses produced and sold.

It’s not only vaccines that are being held back

Beyond vaccines, what about pills that are being developed? Pfizer has developed a Covid-19 oral antiviral treatment and granted a royalty-free license for the pill to the United Nations-backed Medicines Patent Pool, but the license covers only about half the world’s population. The Associated Press reported, “The deal excludes some large countries that have suffered devastating coronavirus outbreaks. For example, while a Brazilian drug company could get a license to make the pill for export to other countries, the medicine could not be made generically for use in Brazil.”

The Medicines Patent Pool said on March 18 that 35 companies around the world will produce generic versions of the pill, which has received an emergency approval by the U.S. Food and Drug Administration. The countries where the generic producers are located include Bangladesh, Brazil, China, the Dominican Republic, Jordan, India, Israel, Mexico, Pakistan, Serbia, South Korea and Vietnam.

Nonetheless, health care activists note that the license is less than adequate. Yuanqiong Hu, senior legal policy advisor for Médecins Sans Frontières/Doctors Without Borders’ Access Campaign said:

“Pfizer’s license with the Medicines Patent Pool for its potential oral antiviral treatment offers supply to 95 countries by generic companies that take up the license, covering about 53% of the world’s population, but this again shows how voluntary licenses come up short and do not harness the full capacity available globally for sufficient and sustainable production and supply of lifesaving medical tools for all. Many upper middle-income countries, such as Argentina, Brazil, China, Malaysia and Thailand, where established generic production capacity exists, are excluded from the license territory. We are disheartened to see yet another restrictive voluntary license during this pandemic while cases continue to rise in many countries around the world. The world knows by now that access to COVID-19 medical tools needs to be guaranteed for everyone, everywhere, if we really want to control this pandemic.”

What is more important: Ending the pandemic or increasing corporate profits? Life or money? The world capitalist system is making its choice. Should that choice be allowed to stand?

Another global warming worry: Parts of Earth could become uninhabitable

When we think of the coming disasters of global warming, rising sea levels, disruptions to agriculture and disappearing species come readily to mind. We don’t necessarily think of the livability of the Earth’s surface. But if global warming continues to worsen — and every indication is that will be so — there will be places on Earth that could become uninhabitable.

Uninhabitable in the literal meaning of human beings not being able to survive there.

Such places could come into existence during this century, and perhaps sooner than even climate scientists currently fear, given that lethal combinations of heat and humidity have started to occur for brief periods of time. We are not talking about thinly populated or uninhabited desert locations. We are talking here of cities where tens and hundreds of thousands of people currently live.

Yes, one more reason for humanity to tackle global warming.

To understand why survivability could become impossible in small geographic regions in the foreseeable future and, potentially, much larger regions in the more distant future should current trends in global warming continue, we need to turn to an obscure meteorological measurement known as the “wet-bulb temperature.” This is different from the common air temperature, nor is it the same as the various versions of a “heat index” that provide a “feel like” temperature.

Dawes Glacier at the head of Endicott Arm in Alaska (photo by Sean White)

The wet-bulb temperature is a representation of heat and humidity that measures the impact on the ability of human bodies to cool. A discussion of it by the American Association for the Advancement of Science explains it this way:

“It is so named because it is calculated by wrapping the bulb of a thermometer in a wet cloth. In low humidity, water will evaporate from the cloth, carrying away heat and cooling the thermometer in the same way sweat cools the human body. In these conditions, the wet-bulb temperature will be lower than the air temperature. In high humidity — when the air is more saturated with water vapor — the water cannot evaporate as easily so the cloth stays hot. If the wet cloth cannot cool below the air temperature, neither can human skin.”

Because human skin must be cooler than the body’s core in order for metabolic heat to be conducted to the skin, human skin temperature is strongly regulated at 35 degrees Celsius (95 degrees Fahrenheit). Thus a wet-bulb temperature at that level, should it be sustained, represents the upper limit of what a healthy human being can endure without dying from overheating. It is generally believed that six hours in such conditions, even with steadily drinking fluids and sitting in shade, would be fatal for even the healthiest person, and a sustained wet-bulb temperature a couple of degrees lower would be fatal for many, perhaps most, people.

Simply put, at 35 C/95 F, sweat would not evaporate and our bodies would not be able to regulate our internal temperature.

“When wet-bulb temperatures are extremely high, there is so much moisture in the air that sweating becomes ineffective at removing the body’s excess heat, like what happens in a steam room,” said Colin Raymond, the lead author of a 2020 study on the future habitability of the climate, in an interview published by the U.S. National Oceanic and Atmospheric Administration. “At some point, perhaps after six or more hours, this will lead to organ failure and death in the absence of access to artificial cooling.”

It’s the heat and the humidity

Can a combination of heat and humidity become so intense that a wet-bulb temperature of 35 degrees C (95 degrees F) — the point of effective universal lethality — be reached? Such levels have already been reached in a handful of places, albeit for only one or two hours. Wet-bulb temperatures approaching that lethal level are becoming more common — more than 250 occurrences of 33 degrees C (91 degrees F) have been recorded around the world since 1979.

But such high levels don’t have to be reached for death to occur. “Even at lower wet-bulb temperatures, like 79°F (26°C), those with pre-existing health conditions (like respiratory, cardiovascular, and renal disease), the elderly, as well as those performing strenuous outdoor labor and athletic activities, are at a high risk,” said Radley Horton, a co-author with Dr. Raymond of a 2020 academic study published in Science Advances that examined how high wet-bulb temperatures might get. The 2003 European heat wave caused more than 50,000 deaths at wet-bulb temperatures close to 26 degrees C.

The paper, authored by Dr. Raymond of the Jet Propulsion Laboratory, Dr. Horton of Columbia University and Tom Matthews of Loughborough University, found that “Climate models project the first 35°C [wet-bulb temperature] occurrences by the mid-21st century. However, a comprehensive evaluation of weather station data shows that some coastal subtropical locations have already reported a [wet-bulb temperature] of 35°C and that extreme humid heat overall has more than doubled in frequency since 1979.”

The three climate scientists believe that, under the “business-as-usual RCP8.5 emissions scenario” (a worst-case model in which fossil fuel use continues to increase in a world with ongoing high emissions), wet-bulb temperatures could regularly exceed 35 degrees C in parts of South Asia and the Middle East by the third quarter of the 21st century. They cite three other studies to back up this prediction. They write:

“Our findings indicate that reported occurrences of extreme [wet-bulb temperatures] have increased rapidly at weather stations and in reanalysis data over the last four decades and that parts of the subtropics are very close to the 35°C survivability limit, which has likely already been reached over both sea and land. These trends highlight the magnitude of the changes that have taken place as a result of the global warming to date. At the spatial scale of reanalysis, we project that [wet-bulb temperatures] will regularly exceed 35°C at land grid points with less than 2.5°C of [global] warming since preindustrial—a level that may be reached in the next several decades. According to our weather station analysis, emphasizing land grid points underplays the true risks of extreme [wet-bulb temperatures] along coastlines, which tends to occur when marine air masses are advected even slightly onshore. The southern Persian Gulf shoreline and northern South Asia are home to millions of people, situating them on the front lines of exposure to [wet-bulb temperatures] extremes at the edge of and outside the range of natural variability in which our physiology evolved.”

The limits to the human ability to withstand heat stress

A 2010 study published in PNAS (Proceedings of the National Academy of Sciences) in 2010 by climate scientists Steven C. Sherwood and Matthew Huber warned that the areas that may someday be subject to wet-bulb temperatures are currently inhabited by billions of people, in a worst-case scenario. Dr. Sherwood and Dr. Huber were writing before the Paris Climate Accord, and although the Accord remains inadequate to constrain global warming to 2 degrees C, much less the pact’s 1.5 C goal, it renders the worst-case scenarios less likely. But not impossible, given that a global temperature rise of more than 2 C would set off a cascade of events and feedback loops that are not possible to reasonably forecast.

Even if now somewhat less of a possibility than at the time of their writing, the potential disaster sketched out by Dr. Sherwood and Dr. Huber is frightening. Noting that “heat stress imposes a robust upper limit to adaptation,” they wrote:

“[E]xcedence of 35 °C … would begin to occur with global-mean warming of about 7 °C, calling the habitability of some regions into question. With 11–12 °C warming, such regions would spread to encompass the majority of the human population as currently distributed. Eventual warmings of 12 °C are possible from fossil fuel burning. One implication is that recent estimates of the costs of unmitigated climate change are too low unless the range of possible warming can somehow be narrowed. … If warmings of 10 °C were really to occur in the next three centuries, the area of land likely rendered uninhabitable by heat stress would dwarf that affected by rising sea level. Heat stress thus deserves more attention as a climate-change impact.”

Adding together the Paris Climate Accord goals, if fully implemented, and the efforts by institutions around the world to reduce carbon footprints, it might appear that humanity will avoid the worst-case scenarios. With further effort, those scenarios can be avoided. Nonetheless, it is far too early to breathe a sigh of relief. The emergence of large areas of Earth’s surface that become uninhabitable remains a possibility. The PNAS study said:

“Warming will not stop in 2100 if emissions continue. Each doubling of carbon dioxide is expected to produce 1.9–4.5 °C of warming at equilibrium, but this is poorly constrained on the high side and according to one new estimate has a 5% chance of exceeding 7.1 °C per doubling. Because combustion of all available fossil fuels could produce 2.75 doublings of CO2 by 2300, even a 4.5 °C sensitivity could eventually produce 12 °C of warming. Degassing of various natural stores of methane and/or CO2 in a warmer climate could increase warming further. Thus while central estimates of business-as-usual warming by 2100 are 3–4 °C, eventual warmings of 10 °C are quite feasible and even 20 °C is theoretically possible.”

Record heat around the world

The record heat reported around the world in recent months, even if not yet deadly in the absence of sufficiently high humidity, portends trouble. On January 13, the highest temperature ever recorded in the ocean-dominated Southern Hemisphere was reached in Onslow, Western Australia, at 50.7 degrees C (123.3 F). Three stations in Western Australia exceeded 50 degrees C that day; before that week, the entire nation of Australia had recorded only four 50 degree C days in recorded history, according to the Eye on the Storm blog. That same week, multiple stations in Argentina, Brazil and Uruguay neared or beat their all-time high temperatures.

The summer 2021 heat wave in British Columbia, Washington state and Oregon is said by some climate scientists to have been without precedent in meteorological records. The village of Lytton, British Columbia, set an all-time heat record for all of Canada three days in a row and then was destroyed by a wildfire on the fourth day. Portland set its all-time high temperature three days in a row. Seattle reached an all-time high on consecutive days and broke 100 degrees F (37.8 C) three days in a row; there had only been two 100-degree days in its history prior.

Lytton, British Columbia, before the wildfire (screen grab from Google maps)

In his research, Bob Henson, a meteorologist then writing for Weather Underground, reported that 14 examples of 35 degree C wet-bulb readings that have already occurred since 1987 in Pakistan, Saudi Arabia and the United Arab Emirates. Ten of these have occurred since 2000. Six of the 14 occurrences were in one city, Jacobabad, Pakistan; five of these since 2005. Separately, my own study of an interactive map provided by the Columbia University Climate School found six locations where a 35 C/95 F wet-bulb reading had been recorded on at least one occasion. These are Sindh and Khyber Pakhtunkhwa provinces in Pakistan (specific cities not given, but Jacobabad is in Sindh); Hisar, India; Mecca, Saudi Arabia; Ras Al Khaimai, United Arab Emirates; and Yannarie, Western Australia.

There are locations in North America that have approached that level — Palm Springs, California, and multiple locations in Mexico along the Gulf of California have recorded wet-bulb readings of 33 C/91.4 F.

To give an idea of what conditions would achieve a 35 C/95 F wet bulb temperature, these combinations would be required:
• 105 F (40.6 C) & 67% humidity
• 110 F (43.3 C) & 56% humidity
• 115 F (46.1 C) & 46% humidity

Alarm bells continue to get louder, if we want to hear

Unfortunately, the possibility of future areas of uninhabitability isn’t an abstraction or alarmist. Even if all post-Paris promises made at the yearly global climate summits, including last November’s in Glasgow, were fulfilled, global warming would almost certainly go beyond 2 degrees C, and as we have been forced to repeatedly note, there are no enforcement mechanisms to ensure these pledges are met. Following the Glasgow summit (the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change or COP26), Climate Action Tracker reported that full implementation of the goals set for 2030 would be enough for the world’s temperature to rise by 1.9 to 3 degrees by 2100. Worse, what the Tracker calls “real world action based on current polices” would result in a temperature increase of 2 to 3.7 degrees by 2100.

Not that any of this is somehow unknown. The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), summarizing the knowledge of the world’s climate scientists, issued last summer, states, “many of the changes observed since the 1950s are unprecedented over decades to millennia. Updated paleoclimate evidence strengthens this assessment; over the past several decades, key indicators of the climate system are increasingly at levels unseen in centuries to millennia and are changing at rates unprecedented in at least the last 2000 years.”

The latest report from IPCC climate scientists, released to the public on February 27, said there is a “very high confidence” that global warming of 1.5 degrees C in the near term “would cause unavoidable increases in multiple climate hazards and present multiple risks to ecosystems and humans.” For the mid to long term (2041 to 2100), there is “high confidence” that “climate change will lead to numerous risks to natural and human systems” and “the magnitude and rate of climate change and associated risks depend strongly on near-term mitigation and adaptation actions.”

There are plenty of other warnings out there. For example, a widely cited 2015 study by the Stockholm Resilience Center, prepared by 18 scientists, found that the Earth is crossing several “planetary boundaries” that together will render the planet much less hospitable. Or that two scientific studies issued in 2015 suggest that so much carbon dioxide already has been thrown into the air that humanity may have already committed itself to a six-meter rise in sea level. Or that the oceans can’t continue to act as shock absorbers — heat accumulated in them is not permanently stored, but can be released back into the atmosphere, potentially providing significant feedback that would accelerate global warming.

Lurking in the background, and not often something that many wish to notice, is the role our world economic system plays in all this. Economic incentives under capitalism are for producing and consuming more, and capitalism can’t function without growth. As has been said so many times, you can’t have infinite growth on a finite planet, and even if taking resources from the rest of the solar system were to become financially viable — something unlikely to happen anytime soon no matter how much we might enjoy watching Star Trek — the solar system is finite as well. We can create a sustainable world economy and society, or nature will impose it on us. And the harshness of the latter will only be magnified by the vast number of refugees that runaway global warming will surely impose. We are part of nature, whether or not we wish to acknowledge that.

There’s no money? Then how can there be $10 trillion for financiers in two years?

Noting that there is always money to be thrown at the finance industry but little for social needs is by now about as startling as noting the Sun rose in the east this morning. But what is eye-opening is the truly gargantuan amounts of money handed out to benefit the wealthy.

We’re not talking billions here. We are talking trillions.

For example, the amount of money created by the central banks of five of the world’s biggest economies for the purpose of artificially propping up financial markets since the beginning of the Covid-19 pandemic totals US$9.94 trillion (or, if you prefer, €8.76 trillion). And that total represents only one program of the many used by the U.S. Federal Reserve, the European Central Bank, Bank of Japan, Bank of England and Bank of Canada.

That is on top of the US$9.36 trillion (or €8.3 trillion at the early 2020 exchange rate) that was spent on propping up financial markets in the years following the 2008 global economic collapse.

So we’re talking approximately US$19.3 trillion (€17.1 trillion) in the span of 14 years for five central banks’ “quantitative easing” programs, the technical name for intervening in financial markets by creating vast sums of money specifically to be injected into them and thereby inflating stock-market bubbles. And that total doesn’t include various other programs that also come with price tags, nor the similar programs of other central banks, including those of Australia, Sweden and Switzerland. As just one example, the Paycheck Protection Program initiated by the U.S. Congress in 2020 sent most of its money into the grasping hands of business owners and shareholders rather than workers earning a paycheck.

Given these repeated massive subsidies, why are we supposed to believe that the capitalist economic system “works”? And why do working people always have to pay for financiers’ ever more imaginative speculations?

“Greed” (Nicholas Kwok)

Imagine all the public good that could have been done with even a fraction of that money. Fixing infrastructure, proper funding of social programs, upgrading health coverage, adequately funding hospitals, canceling student debt, strengthening education systems and more — all of this could have been done.

For example, the consultancy firm Aecom estimates that Britain’s infrastructure needs are underfunded by a total less than what the Bank of England spent on its quantitative-easing scheme for the past two years. Parallel to that, the U.S. could wipe out all student debt, fix all schools, rebuild aging water and sewer systems, clean up contaminated industrial sites and repair dams for less than what the Federal Reserve spent on quantitative easing since the pandemic began. As for Canada, one estimate is that the country needs to spend an additional C$60 billion per year on technologies that would enable Canada to meet its carbon neutral targets by mid-century — a total that is a fraction of what the Bank of Canada has thrown at the financial industry.

Spending big to inflate a stock-market bubble

What is quantitative easing and why does it matter? Quantitative easing is the technical name for central banks buying their own government’s debt in massive amounts and, generally in lesser amounts, corporate bonds. In the case of the Federal Reserve, it also buys mortgage-backed securities as part of its QE programs.

The supposed purpose of quantitative-easing programs is to stimulate the economy by encouraging investment. Under this theory, a reduction in long-term interest rates would encourage working people to buy or refinance homes; encourage businesses to invest because they could borrow cheaply; and push down the value of the currency, thereby boosting exports by making locally made products more competitive.

In actuality, quantitative-easing programs cause the interest rates on bonds to fall because of the resulting distortion in demand for them, enabling bond sellers to offer lower interest rates and making them less appealing to speculators. Seeking assets with a better potential payoff, speculators buy stock instead, driving up stock prices and inflating a stock-market bubble. Money also goes into real estate speculation, forcing up the price of housing. Money not used in speculation ends up parked in bank coffers, boosting bank profits, or is borrowed by businesses to buy back more of their stock, another method of driving up stock prices without making any investments. And the strategy of governments to lower the value of their currencies — a widespread tactic in the years following the 2008 collapse — can’t succeed everywhere because if someone’s currency devalues, someone else’s concurrently rises in value.

In other words, these programs, along with most everything else central banks in capitalist countries do, are to benefit the wealthy, at the expense of everybody else. Although we wouldn’t reasonably expect capitalist government agencies to act differently, central banks are particularly one-sided in their policies, which they can do because they are “independent” of their governments. Thus they openly serve the wealthy without democratic control.

A trillion here, a trillion there but not for you

Figuring out what central banks are up to and how much money they are creating for financiers is difficult because they don’t provide totals; at best there are monthly targets for spending and, even then, targets are not listed for all programs. And some, such as the Bank of Canada, are particularly reluctant to share money figures. Most often, banks’ websites and press releases proudly list the many programs designed to benefit financiers but without putting price tags on them. Thus the figures below may not be precisely accurate, but they are in the ballpark. To the biggest financial corporations, what’s a hundred billion more or less?

Having provided the caveats, my best calculations of what some of the world’s most prominent central banks have spent on quantitative easing are as follows (figures in U.S. dollars):

  • U.S. Federal Reserve $4.04 trillion
  • European Central Bank $3.4 trillion
  • Bank of Japan $1.6 trillion
  • Bank of England $600 billion
  • Bank of Canada $300 billion

That’s a total of US$9.94 trillion. Imagine the height of the stack of bills that such a sum would reach — maybe it would be so high that orbiting spacecraft would ram into it, scattering the money across wide areas. At least that way, more people might benefit.

The European Central Bank in Frankfurt (photo by DXR)

The above of course are not the only central banks to join the party. The Reserve Bank of Australia has spent an estimated A$320 billion in the past two years, although, according to Reuters, it is “considering how and when to wind up its A$4 billion ($2.84 billion) in weekly bond buying given the economic pick up.” Sweden’s Riksbank and the Swiss National Bank also indulge in quantitative easing; Switzerland’s central bank has done so much of it that it owns assets valued at more than the country’s gross domestic product. Similar to Australia’s, central banks, the Bank of Japan excepted, also are indicating they’d like to wind down their latest QE programs, but doing so is a delicate operation given that speculators have become drunk on the spending and cutting off the money could lead to sudden downturns in stock prices, in turn triggering disruptions in the economy.

Nothing like free money to make the party fun. But, on a less humorous note, how is it that deficit scolds and ideologues of austerity, who never miss an opportunity to shoot down legislation intended to give working people assistance, are silent about these gargantuan piles of money thrown at financial markets? The later version of the Build Back Better plan pushed by President Joe Biden, originally estimated to cost about $3.5 trillion before being reduced to less than $2 trillion, would have cost less than half of what was spent on quantitative easing. And, however flawed, would have provided vastly better relief.

And remember, the nearly $10 trillion and counting in two years of QE programs are only a portion of the money rained on business and the wealthy who benefit from these policies.

One sure outcome of all this is that inequality will increase, as exemplified by the dramatic increases in the wealth of billionaires. A report published last month by Oxfam, appropriately titled “Inequality Kills,” found that the wealth of the world’s 10 richest people has doubled since the pandemic began while “99% of humanity are worse off because of COVID-19,” a situation Oxfam calls “economic violence.” The wealth of the world’s 2,755 billionaires has increased by $5 trillion in less than a year — from $8.6 trillion in March 2021 to $13.8 trillion in January 2022.

And although increasing inequality is nothing new, the pace is accelerating. The Oxfam report states:

“This is the biggest annual increase in billionaire wealth since records began. It is taking place on every continent. It is enabled by skyrocketing stock market prices, a boom in unregulated entities, a surge in monopoly power, and privatization, alongside the erosion of individual corporate tax rates and regulations, and workers’ rights and wages—all aided by the weaponization of racism.”

Unlimited money for U.S. financiers, a little money for workers

In addition to quantitative easing, the Federal Reserve has instituted nine lending programs; three of these are “unlimited” and the other six authorized for $2.9 trillion. (This is all in addition to the $4 trillion spent on QE.) Of this additional $2.9 trillion, just $500 billion is earmarked for revenue-strapped state and local governments; the remainder are for businesses, including those in the financial industry. About $450 billion per day for several weeks during spring 2020 was dedicated to dollar swaps with other central banks — an agreement between two central banks to exchange currencies, most often to enable central banks to provide foreign currencies to domestic commercial banks.

Is there anyone who actually knows how much money the Federal Reserve is spending to keep capitalism running?

And even when money is supposed to go to working people, it mostly doesn’t go to them. A prime example of this not terribly surprising phenomenon is the U.S. Paycheck Protection Program (PPP). Multiple studies over the past year have shown that most PPP money flowed upward, regardless of what the intentions of Congress members who designed the program may have been.

The New York Stock Exchange (photo by Elisa Rolle)

The most recent and likely most comprehensive of these studies, a National Bureau of Economic Research “working paper” issued in January 2022 by 10 authors led by David Autor of the Massachusetts Institute of Technology, found the PPP to be “highly regressive.” About three-quarters of PPP money wound up in the hands of the top 20 percent of households. The paper estimates that 23 to 34 percent of PPP dollars went directly to workers who would otherwise have lost jobs. The majority of the funds flowed to business owners and shareholders. The study focused on 2020 results; the paper’s authors believe that 2021 loans did not boost employment, a result that implies the share of PPP money going to workers would actually reduce the 23 to 34 percent estimate.

The paper calculates that for every $1 in wages saved by the PPP, $3.13 went somewhere else. To put it another way, the cost of saving a job for a year was $170,000 to $257,000, three to five times the average compensation for affected jobs. “This program was highly, highly regressive,” Dr. Autor told The New York Times.

Three papers published earlier came to similar conclusions. A study by Michael Dalton, a research economist for the Bureau of Labor Statistics, that was issued in November 2021, found that “a range of $20,000 to $34,000 of PPP spent per employee-month retained, with about 24% of the PPP money going towards wage retention in the baseline model.” To put it another way, $4.13 were spent for each $1 of wages saved. Finding still worse results, a separate National Bureau of Economic Research working paper, with Raj Chetty as lead author, found that so little of PPP spending flowed to businesses most affected by the pandemic that employment at small businesses increased by only 2%, “implying a cost of $377,000 per job saved.” Finally, a paper published by Amanda Fischer, then the Policy Director at the Washington Center for Equitable Growth, concluded that PPP funding did not have a statistically significant impact on preventing avoidable layoffs among employees and that PPP money was not geographically directed at the worst-hit areas, further reducing effectiveness.

Class warfare in action, pandemic style. A little bit for working people, lots for those who already have more. The PPP did provide benefits, including saving jobs, and surely played a role in the unprecedented reversal of the high unemployment rate of 2020, but at a price far higher than necessary — no help for working people without more going to the wealthy.

Class warfare in Europe

In addition to its quantitative easing, the European Central Bank is increasing borrowing limits and easing borrowing rules for banks; it is also reducing required capital holdings for banks. The ECB has upped its QE spending to €40 billion per month and will reduce that to €20 billion by October 2022. A December 2021 announcement implied it intends to eventually end the program altogether, “shortly before it starts raising the key ECB interest rates.”

Remember all the finger-pointing and scapegoating of Greeks when the ECB and the European Commission imposed punishing austerity on Greece? There was no money and people had to be punished. Yet there are virtually unlimited funds to benefit financial speculators. These disparate responses aren’t completely inconsistent — Greeks had to be punished because the ECB and European Commission, leading institutions of the European Union, were determined that big banks, particularly French and German banks, had to be repaid in full, no matter the cost to working people or the Greek economy — the ECB even cut off Greek banks from routine financial flows in 2015 to enforce their diktats.

Britons recently received a fresh lesson in who the Bank of England serves when the bank’s governor, Andrew Bailey, declared that employees should not be given raises. It was sufficiently embarrassing that this open class-warfare statement, the sort of policy that is supposed to be kept behind closed doors, was said in public that the British government actually issued a rebuke. Noting that British household disposable incomes are expected to fall by 2 percent this year and that inflation-adjusted pay remains below the pre-2008 financial crisis peak, The Guardian reported:

“The governor of the Bank of England has come under fire from unions and earned a rebuke from 10 Downing Street for suggesting workers should not ask for big pay rises to help control inflation. Andrew Bailey said he wanted to see ‘quite clear restraint’ in the annual wage-bargaining process between staff and their employers to help prevent an upward spiral taking hold. However, his comments drew a furious response from union leaders, as households face the worst hit to their living standards in three decades as soaring energy prices cause inflation to outstrip wage growth. … Bailey was paid £575,538, including pension, in his first year as the Bank’s governor from March 2020, more than 18 times the UK average for a full-time employee.”

The average full-time employee is not who the Bank of England, or any other central bank in the capitalist world, has in mind when setting policy. What this episode nicely illustrates is that profits increase when wages are held down. Profit, it can’t be said too often, comes from paying employees only a small fraction of the value of what they produce. The drive by the corporations of the advanced capitalist countries to move production to low-wage, low-regulation havens around the world, continually in search of the next stop on a race to the bottom, is why so-called “free trade” agreements contain ever more extreme rules to benefit multi-national capital.

Class warfare in Canada and Japan

Getting precise figures on what the Bank of Canada is up to is impossible as it is particularly coy in announcing money figures. Bloomberg, for example, could only say that “hundreds of billions of dollars” has been spent in the bank’s QE program. My calculation on what the bank may have spent on quantitative easing is based on the C$376 billion differential on the amount of assets held by the bank between the end of 2019 and on February 2, 2022.

Like the other central banks, the Bank of Canada has several other programs to benefit the financial industry. In the first weeks of the Covid-19 pandemic, it announced multiple programs. The bank implemented several QE programs for buying corporate bonds, federal and provincial government bonds, mortgage bonds and commercial paper (short-term debt issued by corporations), as well as programs to provide credit and “support the stability of the Canadian financial system.” The bank was not forthcoming about the total cost of these programs at the time; it committed to spending C$5.5 billion per week, with no cutoff date, on just two programs, the purchases of federal government bonds and mortgage bonds.

The amount of “direct aid to households and firms” was only a small fraction of what was committed to helping the financial industry. No different, of course, than the response of other central banks.

Ottawa from the McKenzie Bridge (photo by Siqbal)

The Bank of Japan, which had never ended the quantitative easing it began after the 2008 economic collapse, has committed to unlimited government bond buying. In a September 2021 announcement in which it committed to buying ¥20 trillion worth of corporate bonds, the central bank said it “will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent.” So large has the bank’s purchases been that it owns assets worth almost 130 percent of Japan’s gross domestic product. The bank doubled the pace of its bond purchases at the beginning of the pandemic.

Since March 2020, the benchmark index of the Tokyo Stock Exchange, the Nikkei 225, has increased 51 percent. In contrast, Japanese wages are “about at the same level as two decades ago,” The New York Times reports. Wages actually fell by around one percent in both 2020 and 2021, Reuters reports, with wage declines accelerating at the end of 2021. Working people have not done well from the world’s longest experiment in quantitative easing.

Circling back to the (admittedly rhetorical) questions asked in the opening paragraphs of this article, it depends on what is meant by “works.” If we mean by that word, as most people likely would, that an economic system functions for the benefit of all, then the scope of money required to keep it functioning forces a conclusion that it does not work in any meaningful sense. If, however, we mean “works” in the meaning given that word by financiers, industrialists and those who serve them and/or interpenetrate with them, most certainly including central bank officials, then all is well because it facilitates the accumulation of capital. Working people around the world pay to maintain financiers and industrialists in their accustomed wealth and power because that is how capitalism is supposed to work. How else would absurd “theories” like trickle down still be implemented after 40 years of failing to do what they are publicly advertised to do?

Another reminder that capitalist markets are simply the aggregate interests of the most powerful financiers and industrialists, and those interests are diametrically opposed to the interests of the vast majority of humanity. It cannot be otherwise.

As long as capitalism exists, the threat of fascism exists

Six years is an eternity in politics. Consider what was common opinion at the start of 2016: That changing demographics in the United States favored the Democratic Party; it would soon be impossible for Republicans to win a national election unless they sharply changed from their primary strategy of sending dog whistles to their base of conservative white people, a dwindling percentage of the U.S. population.

Six short years later, there is not only much hand-wringing that Republicans are using bare-knuckle tactics that are poised to give themselves a permanent grip on power despite their minority status but there is open worry of a possible coup by fascistic elements in the Republican Party that would put an end to formal democracy. No longer, it seems, is demographics destiny; the Democratic Party, ever haughtily giving the back of the hand to its base, had believed it merely need show up to win elections.

One year on from Donald Trump’s attempt at a fascist coup — that the attack on the Capitol by his deluded but fanatical followers had no chance to succeed does not mitigate the severity of that day — the Orange Menace’s grip on the worst of the two parties of capital has further tightened. And perhaps Republicans won’t have to resort to widespread cheating and voter suppression to win back the White House — not that the possibility will in any way give them second thoughts about blocking access to the ballot box — given the pathetic performance of Democrats since winning the 2020 elections, a lack of results dismal even by Democrats’ standards of ineptitude.

Fascism is a global phenomenon, not limited to any one country. (Photo by The All-Nite Images from New York)

Many reading these lines will wonder why we should care which party wins since neither of the two parties of capital will work for working people, who constitute the vast majority of United Statesians as they do in any advanced capitalist country. Even the minuscule number of genuine progressives among Democratic members of Congress are constrained by their party’s dominant corporate wing and, due to the material realities of elite politics, inevitably find themselves politically supporting that wing. Nor is the corporate wing reluctant to undercut its electoral base and its progressive colleagues. Witness House Speaker Nancy Pelosi doing an end-run around the Squad’s refusal to back the bipartisan infrastructure bill until the larger Build Back Better bill passed the Senate by gathering sufficient Republican votes to win passage of the infrastructure bill and thus torpedo the only leverage the party had over its two Senate holdouts, fossil-fuel mouthpiece Joe Manchin and perfidious Kyrsten Sinema. It is impossible to avoid thinking there are other Democrats secretly glad the focus is on those two holdouts, allowing them to avoid the pressure to vote for Build Back Better.

There are others who argue that people should hold their noses and vote for Democrats anyway, given that when Democrats are in office there is more room to maneuver and some possibility of some small reforms. The all-out assault by Republicans, when Trump occupied the White House, on seemingly every front does provide support to lesser-evilism voting. So those who do hold their noses and vote for Democrats won’t get any criticism from me although I can’t bring myself to do it. Whether voting for lesser evils or for socialist or Green candidates, the important thing is to be involved in organizing; taking a half-hour to vote once a year need not detract from activist work.

Nonetheless, there are anti-capitalists, including Marxists, who argue forcefully that Trump and his minions are a unique threat, a threat that rises to the threat of fascism. Fascism is far worse than capitalist formal democracy, sham as the latter is. There is no question, or shouldn’t be, that Trump has aspirations of being a fascist dictator. That alone should be enough to see him and his followers as a mortal threat. Trump does not have sufficient support of industrialists and financiers (however much they applaud what he did for them while in office) to actually become a fascist dictator, and his base, although depressingly large and immune to reason and reality, is not big enough for a successful putsch.

Trump does have the blind support of the Republican Party, after Republican leaders momentarily wavered during the immediate aftermath of the 2021 insurrection, so he does have an institutional base he originally lacked — an institution that has become singularly focused on voter suppression and using all means available to put themselves in a position to overturn election results that don’t go their way. There is indeed here an existential threat to the formal democracy of the United States. History provides no shortage of warnings of what could happen, from Weimar Germany and post-World War 1 Italy to Chile and Argentina in the 1970s.

Fascism is a specific form of dictatorship

First, let’s clarify what the political term fascism means. It does not mean any right-wing movement or politician we don’t like, and shouldn’t be thrown around as such. What it does reference is a specific political phenomenon.

At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of big business. It has a social base, which provides the support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interest of its social base. Militarism, extreme nationalism, the creation of enemies and scapegoats, and, perhaps the most critical component, a rabid propaganda that intentionally raises panic and hate while disguising its true nature and intentions under the cover of a phony populism, are among the necessary elements.

Despite national differences that result in major differences in the appearances of fascism, the class nature is consistent. Big business is invariably the supporter of fascism, no matter the content of a fascist movement’s rhetoric, and is invariably the beneficiary. Instituting a fascist dictatorship is no easy decision even for the biggest industrialists, bankers and landowners who might salivate over the potential profits. For even if it is intended to benefit them, these big businessmen are giving up some of their own freedom since they will not directly control the dictatorship; it is a dictatorship for them, not by them. It is only under certain conditions that business elites resort to fascism — some form of democratic government, under which citizens “consent” to the ruling structure, is the preferred form and much easier to maintain.

Boston Free Speech rally counter-protesters on August 19, 2017 (photo by GorillaWarfare)

Fascism is instituted when it is no longer possible for capitalists to enjoy the profits they believe they are entitled to, or to put a forceful end to large and rising left-wing movements threatening the power of industrialists and financiers. Neither of these conditions are in place in the United States, and with one party dedicated to using existing legal power to repress working people and giving capitalists all they want, and the other party giving them much of what they want while absorbing and smothering nascent movements, formal democracy works just fine for them. What immediate need do they have of going to the trouble of instituting a dictatorship? (Although some of course would love to have one no matter the circumstances.)

The foregoing does not give us license to be complacent. The economy is fragile, environmental destruction steadily mounts, and the numbers of people willing to oppose capitalism has grown tremendously over the past couple of decades, particularly since the 2008 economic crash. And industrialists and financiers — the bourgeoisie to use the classical term — believe themselves entitled to rule. The most important lesson from studying the fascism of the past is the overwhelming violence they will use to keep themselves in power. (No surprise there, given that violence, slavery, colonialism and plunder established capitalism and has kept it in place ever since.) U.S. capitalists are quite content to have police and the world’s biggest and most well-equipped military at their service, and there has never been much hesitation to use it.

If conditions continue to deteriorate, then Trump (or, more likely, someone with more intelligence and self-control) could be tapped on the shoulder. Trump is hardly the only demagogue out there. It could have happened in the 1930s. In Franklin Delano Roosevelt’s first year as president, a group of bankers and industrialists, backed by financing from DuPont, General Motors and Morgan Bank, hatched a scheme to institute fascism. Wall Street bond salesman Gerald McGuire approached retired Marine Corps General Smedley Butler with an offer for him to be the fascist leader and deliver an ultimatum to Roosevelt to either take orders from businessmen or be forced from office by an army of 500,000 veterans. Their arms were to be supplied by Remington, a DuPont subsidiary.

Butler declined, informed Roosevelt and the plan was defused by leaking it to the press. No one was punished and the coup threat was treated as a joke. Perhaps the coup plotters didn’t do their homework — Butler, in 1929, became the first general officer since the Civil War to be placed under arrest. His crime? Criticizing Benito Mussolini! Butler, summing up his highly decorated career in 1935, said in an interview, “I spent thirty three years and four months [in] the Marine Corps. … [D]uring that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and for bankers. In short, I was a racketeer for capitalism.”

Don’t confuse form with content

What we shouldn’t get hung up on is appearances. Chilean fascism under Pinochet and the Argentine “Process” took different forms than did the classical German and Italian varieties, and any fascism in the U.S. would have further divergences and would be wrapped in Christian fundamentalism and phony right-wing “populism.” Political culture in North America is such that brownshirts goose-stepping down the street wouldn’t have much appeal, and we need not have that. There were fascist street gangs in Chile and Argentina who did much marauding and received funding, but in those cases the military was the decisive organization. The military and police would almost certainly be decisive in any fascist takeover in the U.S., with crucial support from the right-wing militias that already exist and Trump’s middle-class base that we saw in action at the Capitol during the January 6, 2021, insurrection.

Comparisons of present-day United States to Weimar Germany are easily overstated, but the years leading up to Hitler being handed power (it is a myth that he was elected) are instructive. Consider the full name of the Nazi party — the National Socialist German Workers’ Party. Yet workers were whom the Nazis intended to suppress on behalf of their corporate benefactors. At the same time that Nazi rhetoric claimed to uphold the right to strike and other worker interests, Hitler was assuring Germany’s industrialists that such policies were merely an attempt to gain popular support and would not be implemented.

Mural paintings in honor of Jecar Neghme of Chile’s MIR in the place where he was killed by the Pinochet government. (Credit: Ciberprofe)

What Hitler’s corporate bankrollers wanted was clear enough: the destruction of their workers’ ability to defend themselves and higher profits in a stable atmosphere. This Hitler promised in meetings of Nazi leaders and industrialists. But no matter how powerful they are, numerically these big businessmen are a minuscule portion of the population. How to create popular support for a movement that would destroy unions, strip working people of all protections, regiment all spheres of life, mercilessly destroy several groups of society, reduce the standard of living of those who still had jobs and inevitably lead to war? This is not an appealing program.

Germany’s blue-collar workforce mostly didn’t buy into fascist siren songs, and continued to support the Communists and the Social Democrats, although it was sharply divided between the two. Most of the middle class, however, was a different story. The desperate economic crisis of the Weimar Republic devastated the shopkeeper, the professional, the white-collar worker on the lower rungs of management. The middle class was losing or threatened with losing what it had, and its sons and daughters were unemployed with little or no prospects. From here the Nazis were able to draw their votes, and these sons, along with unpoliticized people at the bottom of society, swelled the ranks of the storm troops.

The Nazis skillfully appealed to German middle class fears of economic dislocation, the increasing numbers of unemployed blue-collar workers, the threat of being swallowed by big business, and political instability (although the Nazis were the most responsible for the last of those four), creating the social base needed by the economic elite to bring its movement to power. A movement that was as anathema to the middle class as it was to the lower economic ranks, although its middle-class supporters were blind to that reality as the Nazis simultaneously appealed to its grudges against societal elites.

In the last election before President Paul von Hindenburg appointed Hitler chancellor, the Nazi vote was 2 million less than the combined vote for Communists and Social Democrats. Although there were many Communists who bravely battled Nazis in the streets, there was no attempt at a united defense of the two parties or their armed followers. The Communists, the Social Democrats and the unions all failed to mount any effective challenge, and the leaders of what remained of Germany’s centrist and nationalist right-wing parties thought they could control Hitler. Had the Communists, Social Democrats and the unions made a common fight against the Nazis, that would have been enough to stop Hitler’s accession to power.

Once in power, Hitler quickly arrested the political opposition, putting Communists, Social Democrats, union leaders and others into concentration camps. Within weeks, the right to strike was abolished, union contracts were canceled and an employer-aligned fascist “union” began to replace the existing unions. With opposition silenced by terror, severe oppression of Jews, Slavs, homosexuals, artists and others began. Once Hitler had destroyed all political opposition, there was no need to maintain his corps of street thugs, some of whom began demanding that the populist promises begin to be fulfilled. The storm troops, too, found out those promises were fantasy and this potential internal Nazi opposition was crushed in the murderous 1934 “Night of the Long Knives.”

From German shopkeepers to U.S. small business owners

Yes, history never repeats exactly. But what is noteworthy here is the class composition of Nazi support beyond big capitalists, who provided huge sums of money. It was shopkeepers, professionals and the white-collar workers on the lower rungs of management. This is consistently the case with fascist movements. It was the middle classes who supported a military overthrow of Chilean President Salvador Allende, as did the parties they voted for. (Both parties of the opposition to President Allende’s Popular Unity government were banned after the takeover; Pinochet’s blood-soaked dictatorship was a régime for Chilean big business and U.S.-based multinational capital, not a régime for shopkeepers or white-collar professionals, nor even big business’ political representatives, as they would soon find out.)

Although the middle classes in a capitalist country, particularly in advanced capitalist countries, are highly heterogeneous, including a wide mix of people with varying interests and thus unable to constitute an organized bloc, the weight of their demographic size can make them decisive if large numbers go one way or another. Large numbers in the U.S. are anti-fascist and/or Democratic Party partisans, and many of their sons and daughters are describing themselves as socialists, even if an ill-defined socialism that is more oriented toward strong reforms of capitalism unable to be accommodated by Democrats. Nonetheless, it is from middle class ranks that support for Trump comes. That has been seen clearly as hundreds of Trump’s insurgents are prosecuted (albeit treated with kid gloves in contrast to the harsh treatment of Black Lives Matter and other left-wing protest movements).

Raleigh-Durham IWW stands with clergy at the stairs to Emancipation Park in Charlottesville, Virginia (photo by Anthony Crider)

The “Tea Party” that arose during the Obama administration was a classic “astroturf” operation, a “movement” that was begun, organized and funded by corporate interests such as the organizations of the Koch Brothers and Republican Party leaders like Dick Armey. It is a straight line from the Tea Party to Trump; they have similar social bases and many of the same financial benefactors.

A study by two University of Chicago researchers, for example, found that more than half of the January 6 insurrectionists held white-collar positions such as small business owners, architects, doctors and lawyers. The two researchers, political-science professor Robert A. Pape and senior research associate Keven Ruby, also found that a large number of the insurrectionists live in counties that have seen declines in their White, non-Hispanic population, also not a surprise given the “great replacement” canard Trump-style fascists are fond of peddling. That of course was a prominent theme in the 2017 fascist rally in Charlottesville, Virginia.

Whatever capitalist country you live in, it can happen there. Fascism is capitalism stripped of all democratic veneers. In every fascist state, wages drastically decline accompanied by draconian laws stripping working people of all protections at the same time that corporate profits rise dramatically, all in an atmosphere of state-organized terror. The only safeguard against this happening in any capitalist country, including the United States, is for working people to organize in their own defense. Given the sorry record of social democracy, no help from there will come to the rescue in Europe. In the U.S., it would be laughable to believe the Democrats would save us from potential Republican dictatorship, whether a conventional authoritarianism or an outright fascist régime.

The long history of Democrats falling to their knees

Democratic Party ineptitude and weak-kneed acquiescence has been on display long before the Biden administration and current congressional majority’s yearlong lack of resolve. From Jimmy Carter’s austerity setting up the start of the neoliberal era for Ronald Reagan to Bill Clinton ramming through regressive legislation that Republicans could only dreamed of having done to Democrats’ meek “me too” in response to Newt Gingrich’s Contract On America and the 1994 Republican takeover of Congress to Barack Obama’s serial capitulations to Democrats’ present inability (unwillingness?) to implement the programs they were elected to fulfill, and instead give the Pentagon another raise, liberals are persistently run over by conservatives. But however weak-willed Democrats are, that is only one side of the picture.

It shouldn’t be forgotten that Democrats believe in so-called “American exceptionalism,” imperialism and corporate control of society just as fervently as do Republicans.

Liberalism has reached an intellectual dead end, however much individual liberals may yearn for alternatives. There are various reasons that can be assigned as to the cause of the Democratic Party’s — and, thus, North American liberalism’s — steady march rightward: Dependence on corporate money, corruption, domination of the mass media by the Right, philosophical and economic myopia, cowardliness. Although these factors form a significant portion of the answer to the puzzle, an underlying cause has to be found in the exhaustion of North American liberalism. Similar to European social democracy, it is trapped by its core desire to stabilize an unstable capitalist system.

In contrast to the Right, which loudly advocates what it stands for and uses all means possible to get it, liberals are caught in the contradiction of knowing changes are needed but unable to put forth anything beyond the most tepid reforms, a bit of tinkering around the edges. The Democratic Party is not only reliant on corporate money, but in thrall to ideologies that promote corporate domination, propaganda blasted across the corporate media and propagated through a thick web of “think tanks” and other well-funded institutions. With no clear ideas to fall back on, they meekly fall to their knees when the world’s industrialists and financiers, acting through their corporations, think tanks and the “market,” pronounce their verdict on what is to be done.

There is no secret formula waiting to be discovered. The only way to prevent a fascist takeover is through the same methodology that is the route to a better world: A mass movement of movements linking together struggles, organizing with people who don’t look like us and uniting across borders. As long as capitalism exists, the threat of fascism exists.

Envisioning a world with no bosses

Many people, especially those with eyes open to the ravages of capitalism, know what they don’t want. Fewer know what they do want. That is understandable, given that the task of building mass movements on so many fronts is daunting. But while what is meant by the creation of a better world can’t be precisely the same for everybody, movements nonetheless have to have some basic concepts of what a better world might look like.

Providing a blueprint is impossible. Having visions is a necessity. Concrete concepts, even if only outlines, need to be part of our toolboxes if we are to overcome “There is no alternative.” There are many outlines that have been sketched, naturally of varying viability. One that has been around for three decades has been the concept of “participatory economics,” often associated with one of its leading proponents, Michael Albert.

In his latest book, No Bosses: A New Economy for a Better World, Mr. Albert has organized his decades of work on this project and presented what he terms a “scaffold” as opposed to a blueprint. At 200 pages, this scaffold is perhaps sufficiently detailed to be something beyond that, but however one wishes to classify his vision of participatory economics, No Bosses provides a stimulating contribution to the literature of a better world.

As always, judgment on a book’s merit should be on how well it encourages serious thinking and provides useful material and commentary, not on whether we fully agree with the content. On the former, it is hard to imagine anyone serious about wanting a better world not giving it high marks. The latter, of course, is a much more complicated proposition. So let’s see how viable this vision might be.

Crucially, the author does not declare his presentation a finished project. His intent is to show what is necessary, not provide a blueprint, and repeatedly says the project will need improvement. “We have no other choice,” he writes. “Alone on foot in the desert, we must walk until we reach water. To curse the sun’s heat and bemoan the sand’s seeming endlessness while standing still guarantees death.” [page 16]

Seven guiding principles in a world without capitalists

The guiding values put forth are viable self-management, equity, solidarity, diversity, sustainability, internationalism and participation for all who can participate. There would be no private ownership of productive assets, and thus no capitalists or capitalism. The author emphatically rejects both capitalist markets and central planning. Both, in his view, inevitably lead to small majorities bossing around and dictating to a working majority. Capitalism creates a “coordinator class” that monopolizes empowering tasks. Even if a workplace is democratic, if a corporate division of labor is retained, coordinators dominate, subverting self-management goals. That happened in Argentina’s recovered enterprises, Mr. Albert argues, with the “old crap,” in the words of a disappointed worker, returning in many recovered, self-managed enterprises after the old capitalist bosses were kicked out.

“They were all working class before, but some began to become coordinator class by doing empowering jobs. Those doing empowering jobs began to dominate council meetings. They had the needed information. They had the confidence to develop agendas. Attendance of others began to fall because others didn’t want to attend meetings which ran according to agendas set by the coordinators and dominated by coordinator speeches and proposals. … The coordinators had come to feel they were smarter, more responsible, and more essential. They deserved more. They paid themselves more. And the wages paid the others, the workers, as decided by the coordinator class, started to deteriorate. The upshot was that the old crap didn’t return due to an inexorable outcome of human nature or of the intrinsic requirements of complicated work. The old crap returned due to a social choice that wasn’t even consciously made. The workers had routinely, reflexively, maintained the corporate division of labor. And the corporate division of labor had in turn routinely, reflexively, subverted sought results.” [pages 49-50]

If there was a management that was making basic decisions, including those of wages, rather than all members, then such an enterprise can’t really be said to be self-managed. But even when there is a real self-management in place, the dangers of a division of labor can easily assert themselves. In communist-era Yugoslavia, enterprises were not in private hands and instead run by self-management — an assembly of all workers had to approve all decisions, including setting wages. (I wrote a chapter-length discussion of Yugoslav self-management for my forthcoming book What Do We Need Bosses For? [Autonomedia].) In this system, the workers elected a workers’ council — in effect a management board that made strategic decisions — and an enterprise was headed by a director (chief executive officer) not necessarily picked by the workers. Councilors were limited to two one-year terms and were recallable, enabling large numbers of people to sit on these councils and theoretically making them accountable. But there was a central plan that constrained what enterprises could do, and a pattern began where technicians and managers would present plans to the councils, which would simply rubber-stamp them. Holding the right to veto a plan they didn’t like, as opposed to drawing up plans themselves, was enough for many councils. That the councils were instituted in a top-down fashion, rather than being the organic product of grassroots activity, did not help.

There were many headwinds faced by Yugoslav self-management, including some unique to the country and its decentralized political structures owing to ethnic rivalries, and, ultimately, the forces of capitalism and capitalist competition, which buffeted Yugoslavia ever stronger, would eventually break down the system and tear apart the country itself, although it produced perhaps the world’s fastest growing economy for its first 20 years. The consequences of market forces — of being integrated into the world capitalist system — steadily mounted, and ultimately became unsustainable. Those consequences included debt to foreign banks and institutions, punishing austerity imposed by the International Monetary Fund and World Bank, strong sensitivity to the vicissitudes of capitalist cycles, and the discovery that competing in the world market is difficult, all the more so for a medium-sized developing country.

One lesson from here is that no better world can be reliant on market mechanisms — capitalist markets will assert themselves, and as I have often noted, capitalist markets are nothing more than the aggregate interests of the world’s most powerful industrialists and financiers. That a traditional division of labor was retained in the self-management system is another factor that can’t be overlooked.

Workers’ and consumers’ councils as the core

Back to No Bosses. The core institutions of participatory economics are workers’ councils and consumers’ councils. Workers’ councils in this conception are meetings of all enterprise workers that make all decisions, whether by simple majority or a specified super-majority. (Perhaps it would be better to call these “workers’ assemblies” to match generally used terminology.) These bodies of the whole make all decisions and there are no higher bodies. There are no managers or bosses, not even elected ones. Everybody participates in all decisions. Consumers’ councils are collective decision-making bodies that would democratically make decisions on public goods and services, such as “neighborhood pools, county parks, state utilities or national security,” as well as collate individual needs. Although expertise would be listened to, decisions wouldn’t be devolved to experts; rather these councils would seek to raise levels so that all could participate.

Another key conception is a system of “balanced job complexes” to break down the division of labor. Here No Bosses offers one of the most serious proposals I’ve ever encountered to break down the division of labor, an often underappreciated contributor to inequality. Simply put, if there is not a serious effort to break down the division, inequality will remain. The book conceptualizes balanced job complexes not as short-term stints in alternative circumstances but rather having a set of tasks for all jobs that would enable comparable empowerment in all jobs. Balancing would occur not only within a given workplace, but across all workplaces, to give everybody an equal chance of participating in decision-making and provide a “steady social exchange.”

The book cautions that “balancing empowerment across jobs is not the same as balancing the amount of type of intellect required for that job.” There are numerous empowering jobs in any workplace, including how to best satisfy customers, how to plan for the future or determining how best to do other jobs. Along with equalizing job circumstances would be equalizing pay. Income would be based on duration, intensity and onerousness of socially useful work — a point repeatedly stressed. Differentials from an average, however, should be small and limited given that jobs would be balanced. The only way for pay to rise would be for the average to rise — thus, the book argues, mutual aid is built into the proposed system.

How would the average be calculated? The book doesn’t offer an answer to that important question. At one point, a complicated 20-point system is put forth, whereby every task would be assigned a number from 1 to 20 based on difficulty, with jobs being cobbled together based on averaging out the numbers and special bodies assigned with calculating these numbers. But it is then admitted that something so precise is unlikely to be put into actual practice and this detail seems to be offered more as a thought experiment. Indeed, such complications are unnecessary. There could simply be a standard wage and everybody paid it, and if an enterprise elects to allow differentiations, these should be minor (no more than, say, 20 percent) and within parameters established by law or consensus. However an average wage would be determined, having everybody make it or very close to it would uphold the ideals of solidarity and equality, as expressed thusly:

“[I]n a good economy, there should be no way to improve one’s consumption or one’s work life at the expense of others. There should be no opposed classes, nor even opposed individuals, at least in any damaging, persistent, structural sense. This can’t be achieved by market allocation where everybody buys cheap and sells dear and nice guys finish last. This also cannot be achieved by central planning where we do what others decide we must do. Equitable remuneration and solidarity instead point toward needing a new approach to allocation. It will turn out to be that we cooperatively negotiate outcomes to enjoy gains and endure losses together, even as we also seek work and consumption that is best suited to our personal fulfillment.” [pages 94-95]

If something can’t allocate products and services, it doesn’t work

And how would products and services be allocated? The seventh chapter of No Bosses, by far the longest chapter in the book, step by step builds a picture of how participatory economics would work. This is where the vision has to cohere into a workable model. Again, not a model in the sense of “this is how it will be or should be” but rather in the sense of useful ideas that can be seriously debated as we sketch out the basics of a better world. A series of “takes” provide successively more detail. “A new means of allocation that will sustain classlessness” and “foster solidarity/empathy” is the goal.

A new means of allocation would be necessary as the model rejects capitalist markets and central planning. Workers’ and consumers’ councils and federations (councils at the enterprise or neighborhood level would feed up into bodies successively representing larger territories up to the national level) would meet and preliminarily determine productive capacity and consumer needs; a national facilitation board tallies information and supplies information to the negotiators representing the councils and federations. Talks would continue until equilibrium is reached. Presumably that would necessitate multiple rounds. Plans would be done yearly.

The facilitation board would tally mismatches between worker and consumer proposals. Neighborhood consumer councils would make requests for collective goods (such as public pools, an image that repeatedly crops up; Mr. Albert perhaps likes to swim). As part of the negotiation, the facilitation board would adjust prices to reflect supply/demand mismatches to help negotiators reach agreement; the two sides would presumably adjust their proposals based in part on such price changes. There would be strict budgets — to consume more than your budget allows, the consumer council would have to approve, and if a workplace underutilizes its assets, a higher-level workers’ council would intervene and lower the workplace’s payroll. The idea is for enterprises to use their productive capacities fully and efficiently while meeting demand.

Numeric prices are presumed to “generate sufficiently accurate estimates” of costs and benefits of inputs and outputs, as well as account for environmental or other social costs. No Bosses argues that this kind of pricing would be superior to prices obtained in markets or central planning because they would be derived from cooperative social proposals that can be checked, and because aggregate social needs would be built into the system.

How would individuals meet their individual and family needs? Everybody would make a request for the coming plan year to their neighborhood council, with aggregate requests going up to higher consumer councils. Once all consumer requests and productive plans are aggregated, negotiations begin, with the previous plan’s totals as a reference point and using the information supplied by the facilitation board, including preliminary estimates of the coming plan year’s pricing changes. Rounds of talks would continue until a plan is reached; the plan would presumably be “loose” rather than “taut” so that adjustments can be made within the plan year.

A different sort of calculation problem

But here we come to a significant weakness of participatory economics. The plan would require everybody to know exactly what they will need for the coming year — shirts, automobiles, appliances, books, meals at restaurants, even theater tickets. This is impossible! Nobody knows, or can know, all they will consume for the next year, including how many movies they see in theaters. Most of the books I buy are on impulse when I see something interesting in a bookstore; how can I know what I will find ahead of time? Participatory economics presumes that if there are changes, these would cancel each other out and all would be fine in the end. But, note that we saw earlier that people had to stay within a strict budget. Despite the author’s insistence that this system would be freer than capitalist markets or central planning, neither capitalist nor Soviet-style governments constrained consumption into such a straitjacket. Sorry, you said you’d go to three theatrical performances; the neighborhood council doesn’t have excess theater tickets. Better luck next year.

These levels of negotiations would be enormously, and needlessly, complicated. Negotiations would have to begin months before the current plan year ended, so full information would not be available. Talks would have to conclude at the end of the year so it could go into effect at the start of the new plan year; this would be no simple task. There is no reason that a yearly plan couldn’t be worked out and be in place for a new plan year, but with such a complicated negotiation requiring vast sums of information, this simply isn’t realistic. The weakness of Soviet-style central planning shouldn’t be glossed over; one problem was that no group of officials, no matter how dedicated or sincere, could possibly possess all the knowledge necessary to make proper plans.

Planning is necessary to replace markets, but it should be acknowledged that Gosplan (the Soviet planning agency) proved to not be a substitute for markets, although of course central control and the decades-long emphasis (unchecked because of a lack of democratic control) on producer goods with consumer goods getting perpetually short-changed can’t be avoided as significant factors. Democratic, bottom-up planning would inevitably be a central component of any egalitarian future economy designed to meet social and individual needs and enable everybody to reach their potential. (Activists organizing workers’ councils in Czechoslovakia during the Prague Spring envisioned a democratic planning without Soviet-style hard numeric totals and held a national conference to begin codifying a new system based on workers’ control before the effort was shut down.)

I would argue that planning based on negotiations, and that it be bottom-up and not top-down, is a necessity. On that basic concept, I am in agreement with No Bosses. But it would make more sense, and be more efficient, for producers to get together and make plans, plans that would have input from consumer representatives. Put it this way: If 1.2 million shoes were produced and there was a small shortage, representatives from shoe factories (with possible participation and if not that then meaningful input from consumer representatives) could make an informed judgment and declare they need to produce 1.3 million shoes to meet projected demand. It is not as if sales figures are unavailable, and reports of shortages certainly could be collected easily. Replicating this across all industries would enable the assembly of a plan for the coming year. It would be important to know how many shoes would be needed overall; it is not necessary and not possible for hundreds of millions of people to each know precisely how many shoes or theater tickets they will need.

Moreover, one important factor is missing. How do we ensure that there is no discrimination, and that environmental, health and safety standards are upheld? Presumably, advocates of participatory economics would argue that the system would generate such high levels of egalitarianism and solidarity, and provide full employment so that nobody is stuck in a bad job, that such standards would automatically be upheld universally. Perhaps. But might it make sense to have boards that enforce standards, with real penalties for non-compliance. Participatory economics would reward cooperation rather than greed and anti-social behavior as capitalism does, but it might not hurt to have a bit of insurance.

Public goods and public detriments

Finally, the long seventh chapter circles back to collective goods. How would parks, infrastructure, recreation facilities, etc. be funded? A few ideas are kicked around. One example is if a public pool were requested by a neighborhood consumer council. A higher body would have to okay it, with the cost spread among all the areas that might benefit. If a project had a negative impact, such as causing pollution, then the affected areas would have a say in the project and if approved those affected would be compensated. This is an area of participatory economics that hasn’t been worked out, and in fairness it must be admitted that devising formulae to determine the cost of pollution or other harms would be extraordinarily difficult.

In reading this part of No Bosses, my own admittedly loose thoughts were that the average or aggregate health care costs of everyone who lives or works a specified distance, say 30 miles, downwind from a coal plant, plus the cost of sick days, be calculated against a regional or national average, and charge the plant that differential. But there is an immediate objection: How could multiple pollution sources be disentangled and quantified? So perhaps my loose idea would not be workable. No Bosses offers no plan due to the complexity and difficulty of such calculations. But it does firmly insist, properly, that environmental and health costs must be accounted for, including in pricing. That is something that would have to be worked out much closer to the arrival of a new economic system.

We can’t ask for perfection, and participatory economics is supposed to be a scaffold, not a blueprint. It would be useless to reproach it for not having all possibilities thought out, a task plainly impossible nor even desirable. Maintaining his optimism and enthusiasm, Mr. Albert concludes No Bosses with a series of answers to commonly asked questions. He rejects anarchism, social democracy and Marxism (although a cartoon version of Marxism) while offering participatory economics as “an approach … consistent with the human potential I can imagine.” I think we should employ some caution before simply dismissing all that has come before, however flawed — a tabula rasa is impossible. Nonetheless, what is proposed here certainly is imaginative. “Having vision matters for where we wind up,” he concludes. “Having vision matters for winning a new economy for a better world.”

However much we might quibble with this or that detail, having vision does matter. How could we believe a better world is possible, much less struggle for one, without vision? To restate what was written at the beginning of this review, the judgment to be made isn’t whether we agree with all details, it is whether it has made a needed contribution. No Bosses is a marvelous contribution to the growing and needed literature on the contours of a better world, of what we believe it should do. That participatory economics, or any other currently proposed system, is unlikely to actually come into being isn’t the point; what is is that we think concretely about the future and are prepared to discuss, dream and formulate serious ideas. And put them into action.

COP26: What you’d expect when oil companies are in and environmentalists are out

The annual get-together of the world’s governments, where in most years they express concern about global warming and announce they will continue to talk about it, was not quite the usual washout this year, as small progress was made, at least theoretically. But even if this year’s promises come to fruition, the new round of pledges fall well short of what is needed.

The 26th Conference of the Parties to the United Nations Framework Convention on Climate Change, otherwise known as COP26, concluded its two weeks in Glasgow with congratulations all around for themselves by government participants, as is traditionally the case. If you were to judge by the participants’ pronouncement, you’d think the environment is on the verge of being saved.

For example, the official communiqué issued by the conference loftily declared, “COP26 has today concluded in Glasgow with nearly 200 countries agreeing the Glasgow Climate Pact to keep 1.5C alive and finalise the outstanding elements of the Paris Agreement.” To be fair, there was more acknowledgment that more work needs to be done than is customary, as the communiqué also said, “The Glasgow Climate Pact, combined with increased ambition and action from countries, means that 1.5C remains in sight, but it will only be delivered with concerted and immediate global efforts.”

Glasgow at night (photo by Jcdro16)

But are those very much necessary “concerted and immediate global efforts” going to be undertaken? Ah, details. Another sentence in the communiqué declared, “All countries agreed to revisit and strengthen their current emissions targets to 2030, known as Nationally Determined Contributions (NDCs), in 2022. This will be combined with a yearly political roundtable to consider a global progress report and a Leaders summit in 2023.” We haven’t, alas, dispensed with the “we were happy to talk and we will be happy to talk some more” folderol that has been traditionally offered in lieu of sufficient action.

Consider the most recent conference results. COP25, two years ago in Madrid, ended with a statement that the conference “Notes with concern the state of the global climate system” but limited its action to announcing two more years of roundtables; COP24, which featured the host Polish government promoting coal, ended in an agreement to create a rulebook with no real enforcement mechanism to meet greenhouse-gas emission goals that also have no enforcement mechanism; and COP23 in Bonn ended with a promise that people will get together and talk some more.

They’re “concerned” but not concerned enough to do much about it

It is only proper to acknowledge when progress, however meager, is made, although the bar set by recent conferences is woefully low. Congratulations don’t seem to be in order here. The one tangible accomplishment is that many of the governments representing the world’s biggest contributors to global warming did agree to strengthen their goals to reduce greenhouse-gas emissions. The bad news is that the new commitments remain well short of meeting stated goals. The worse news is that the commitments still have no enforcement mechanisms. Peer pressure appears to remain the preferred methodology, which thus far has not imbued the world’s environmentalists with confidence. For sound reasons.

For example, an effort to have the COP26 negotiators agree to a “phase out” of coal was watered down to a “phase down,” a vague formulation with no specific meaning, and financial transfers from industrialized countries to underdeveloped countries most at risk (which are often the least culpable) have been below what has been promised and well less than what would be sufficient to mitigate damages. Mary Robinson, the former United Nations commissioner for human rights, wrote, “This represents a failure of leadership and a failure of diplomacy. World leaders must be held accountable for the climate disaster playing out on their watch. It is time to call out those who have obstructed the negotiations in Glasgow, and those who continue to downplay the climate emergency.”

Marchers for climate justice in Tanzania.

That would be difficult to argue against, although moral arguments have had limited effect thus far. Unfortunately, the final text from COP26 is full of the “concerns” and “notes” that past conferences have featured. For example, the final text states that it “Expresses alarm and utmost concern that human activities have caused around 1.1 °C of warming to date, that impacts are already being felt in every region, and that carbon budgets consistent with achieving the Paris Agreement temperature goal are now small and being rapidly depleted.” Furthermore, the text “Urges Parties that have not yet communicated new or updated nationally determined contributions to do so as soon as possible” and “Acknowledges the importance of coherent action to respond to the scale of needs caused by the adverse impacts of climate change.”

That will show the atmosphere!

The context here is that the world’s governments agreed at the Paris Climate Summit in 2015 to hold the global temperature increase to 1.5 degrees Celsius above the pre-Industrial Age average, a change from the previous commitment of 2 degrees, although no corresponding pledges were made to reach either goal. Following COP25 two years ago (COP26 was postponed a year due to the Covid-19 pandemic), the pledges then in existence by the world’s governments, were they honored in full, would have allowed global warming to reach 3 degrees, a catastrophic result. This was the conference in which the world’s governments were to have committed themselves to reach the Paris Climate Summit goal.

Temperature goal remains on paper, not in real world

What was actually achieved with the latest round of promises? Climate Action Tracker reports that 123 countries and the European Union submitted new NDC (nationally determined contributions) targets, although a dozen did not strengthen their commitments, a list that includes Australia, Brazil and Russia, each among the world’s biggest contributors of greenhouse gases. An analysis by the Tracker, a collaboration between Climate Analytics and NewClimate Institute, has found that were there to be full implementation of submitted and binding long-term targets and 2030 targets, the world’s temperature would increase by 1.7 to 2.6 degrees Celsius from the pre-Industrial Age average. That is well above the 1.5-degree goal.

Full implementation of just the goals set for 2030 would be enough for the world’s temperature to rise by 1.9 to 3 degrees. Worse, what the Tracker calls “real world action based on current polices” would result in a temperature increase of 2 to 3.7 degrees. The report concludes, “It is clear there is a massive credibility, action and commitment gap that casts a long and dark shadow of doubt over the net zero goals put forward by more than 140 countries, covering 90% of global emissions.” Furthermore:

“Under current policies, we estimate end-of-century warming to be 2.7°C. While this temperature estimate has fallen since our September 2020 assessment, major new policy developments are not the driving factor. We need to see a profound effort in all sectors, in this decade, to decarbonise the world to be in line with 1.5°C. Targets for 2030 remain totally inadequate: the current 2030 targets (without long-term pledges) put us on track for a 2.4°C temperature increase by the end of the century.”

The climate science news site Carbon Brief is not more optimistic. Although dismissing critics who say nothing happened at COP26, Carbon Brief nonetheless said that “current policies will lead to a best-estimate of around 2.6C to 2.7C warming by 2100 (with an uncertainty range of 2C to 3.6C)” and if both conditional and NDCs are met for 2030, the projected warming by 2100 would be 2.4C (1.8C to 3.3C). In the best-case scenario if all long-term net-zero promises are kept, global warming would be held to around 1.8C (1.4C to 2.6C) by 2100, though temperatures would likely peak at close to 2 degrees in mid-21st century before declining.

The above estimates are not set in stone and could prove to be underestimates, Carbon Brief wrote:

“These warming numbers come with some important caveats. First, uncertainties — due to climate sensitivity and carbon cycle feedbacks — are quite large. For example, while current policies are expected to result in around 2.6C to 2.7C warming, the Earth could, in fact, end up with anywhere between 2C to 3.6C or so, depending on how the climate system responds to emissions. These uncertainties are cause for caution and increase the urgency of emissions reductions.”

Despite rhetoric, oil companies welcome but environmentalists aren’t

Corporate influence is never far away when governments attempt to reach policy decisions, and COP26 was no exception. A look at the list of corporate sponsors on the COP26 official website shows at least two natural gas companies and assorted other corporations that would not seem to be appropriate for an environmental summit. Oil companies were also well represented.

DeSmog reports that, although oil companies were not allowed formal roles at COP26, oil majors and state oil companies participated in large numbers as part of business and trade groups or national delegations. “The official participant list is full of executives and employees from the largest publicly traded oil companies in the world, including Royal Dutch Shell and BP,” DeSmog reports. The investigative and research news site adds:

“The presence of oil interests does not stop at the employees and executives from national oil companies and government ministries. Even though the COP26 organizers banned oil companies from sending their own delegations, prominent publicly traded oil majors have found other ways to attend the climate negotiations as well. According to DeSmog’s tally, at least three dozen oil executives gained access to the talks thanks to business and trade associations — and those are only the ones who publicly listed their oil company affiliations. For instance, Royal Dutch Shell sent at least six employees under multiple designations.”

What DeSmog reports is only the tip of the iceberg. Corporate Europe Observatory’s Corporate Accountability campaign reports that more than 100 fossil fuel companies and 30 trade associations were represented at COP26, with so many attending that if the fossil fuel lobby were a country delegation, it would have been the largest. “At least 503 fossil fuel lobbyists, affiliated with some of the world’s biggest polluting oil and gas giants, have been granted access to COP26, flooding the Glasgow conference with corporate influence,” Corporate Accountability reported. Corporate Europe Observatory researcher Pascoe Sabido said:

“COP26 is being sold as the place to raise ambition, but it’s crawling with fossil fuel lobbyists whose only ambition is to stay in business. The likes of Shell and BP are inside these talks despite openly admitting to upping their production of fossil gas. If we’re serious about raising ambition, then fossil fuel lobbyists should be shut out of the talks and out of our national capitals.”

That access is in contrast to environmentalists, who had no such ability to influence negotiations. Mitzi Jonelle Tan, spokesperson for Youth Advocates for Climate Action Philippines, told Democracy Now!:

“It’s funny and ironic, actually, that on the COP26 website, they said they were aiming this to be the most inclusive COP ever, and I think this might have been the most exclusive one. Aside from having all those difficulties and obstacles to actually get to Glasgow, when we get there, COVID was used as an excuse to not let observers come into the important negotiations, yet the fossil fuel industry, the fossil fuel lobbyists, with over 500 delegates, which is more than any other country, was always welcome, was always given the platform, was always given space. And so you can really see that, once again, the U.N. climate summit just prioritized the voices of the privileged and not those that are most affected by the climate crisis.”

Net zero is net unrealism

What efforts that have been made by Global North governments have generally been expressed as goals toward achieving “net zero.” Net zero represents a stabilization in the amount of greenhouse gases in the atmosphere; that is, the amount of greenhouse gases thrown into the atmosphere is balanced by the amount of greenhouse gases that are removed from the atmosphere. The year 2050 is the most common date for countries to say they will achieve net zero, although some countries have pledged to reach that one or two decades later. Of the three largest contributors to greenhouse gases, the European Union and United States have 2050 pledges and China’s goal is “before 2060.”

Are these goals achievable, and, if so, will they be sufficient? This is an important question as the EU, the U.S. and China together account for 46 percent of the world’s greenhouse-gas emissions — more than 16 times the contributions of the 100 least-contributing countries. Climate Action Tracker rates EU and U.S. efforts as “insufficient” and China’s efforts as “highly insufficient.” This rating system “evaluates a broad spectrum of government targets and actions to reduce greenhouse gas emissions in line with the Paris Agreement temperature limit.”

No country is rated as compatible with the Paris Agreement, and only eight countries are rated as “almost sufficient.” Britain is the lone industrial country to receive this designation; the others are Costa Rica, Ethiopia, Kenya, Morocco, Nepal, Nigeria and The Gambia. (The worst category, “critically insufficient,” includes Iran, Russia and Turkey.)

Most of the world is far from achieving net zero. But would doing so truly avoid global catastrophe? Perhaps not. Net zero aspirations are based on the hope that forests and farmlands will pull enough carbon dioxide out of the air to offset the remaining greenhouse-gas production that would still be occurring. Two environmental research scientists, Doreen Stabinsky at the College of the Atlantic and Kate Dooley of the University of Melbourne, throw cold water on this escape hatch. Simply put, too much is being asked of nature.

“Since the world does not yet have technologies capable of removing carbon dioxide from air at any climate-relevant scale, that means relying on nature for carbon dioxide removal,” the two write. The idea that machines will be able to pull huge amounts of carbon dioxide out of the air remains in the realm of fantasy. Carbon dioxide remains in the atmosphere for hundreds to thousands of years; CO2 must be removed through some means, natural or technological, to have any hope of achieving net zero. As to the potential for the natural world to remove 5 gigatons per year of carbon dioxide from the atmosphere, as some optimistic forecasts hope for, Dr Stabinsky and Dr. Dooley write:

“Reaching the point at which nature can remove 5 gigatons of carbon dioxide each year would take time. And there’s another problem: High levels of removal might last for only a decade or so. When growing trees and restoring ecosystems, the storage potential develops to a peak over decades. While this continues, it reduces over time as ecosystems become saturated, meaning large-scale carbon dioxide removal by natural ecosystems is a one-off opportunity to restore lost carbon stocks. Carbon stored in the terrestrial biosphere — in forests and other ecosystems — doesn’t stay there forever, either. Trees and plants die, sometimes as a result of climate-related wildfires, droughts and warming, and fields are tilled and release carbon.”

If you can’t remove it, you shouldn’t produce it

The two scientists write that ecosystem restoration has the potential to reduce global average temperature by approximately 0.12 degrees C, but such a decline would not occur in time to offset the warming expected within the next two decades. Net zero strategies that rely on temporary removals to balance permanent emissions will fail. There is no alternative to drastically reducing greenhouse-gas emissions. The unreality of net zero pledges put forth by oil companies is laid bare by Dr. Stabinsky and Dr. Dooley:

“ActionAid reviewed the oil major Shell’s net-zero strategy and found that it includes offsetting 120 million tons of carbon dioxide per year through planting forests, estimated to require around 29.5 million acres (12 million hectares) of land. That’s roughly 45,000 square miles. Oxfam reviewed the net-zero pledges for Shell and three other oil and gas producers — BP, TotalEnergies and ENI — and concluded that ‘their plans alone could require an area of land twice the size of the U.K. If the oil and gas sector as a whole adopted similar net zero targets, it could end up requiring land that is nearly half the size of the United States, or one-third of the world’s farmland.’ These numbers provide insight into how these companies, and perhaps many others, view net-zero.”

Not realistic, to put it mildly, given that reforestation at such scales would require removal of a significant portion of the world’s farms. And on top of that, there is no universally accepted definition of what constitutes net zero. Governments can set their own metrics — yet another area of no real accountability — and we also have to think about methane, which although found in far lesser amounts in the atmosphere than carbon dioxide is nonetheless a far more potent contributor to global warming on a molecule-to-molecule basis. Jeff Mackler, writing in CounterPunch, put this together:

“U.N. Secretary-General, Antonio Guterres, has called for a clearer definition of net zero. ‘There is a deficit of credibility and a surplus of confusion over emissions reductions and net zero targets,’ he said, ‘with different meanings and different metrics.’ Indeed, each polluting nation employs its own ‘metrics,’ including positive and hyped deductions for the ‘natural capacity’ of its land mass to absorb carbon dioxide while omitting from its calculations negative factors like deforestation, not to mention the myriad of escaping methane from appliances, fracking and always leaking supermarket refrigeration facilities around the world. Methane’s global warming intensity exceeds CO2 by a factor of 80! Biden’s methane reduction pledge flies in the face of the fact that the U.S. stands first in the world in natural gas fracking, the chief poisonous polluting [byproduct] of which is methane.”

The chimera of carbon trading to achieve an illusory net zero

Unfortunately, the above does not exhaust the list of issues with net zero. Some national net zero goals will be met, in part, through “carbon trading.” One of the agreements reached at COP26 was a deal that permits countries to buy offset credits representing emission cuts by others, which will then be used by the buyers to “achieve” climate targets.

A tax on such offsets, intended to fund climate adaptation in poorer nations and advocated by them, will not be included. According to a Reuters report, “The deal suggests developing nations capitulated to rich nations demands, including the United States, which had objected [to] the levy.” That the carbon trading scheme is being hailed by Brazil’s extreme Right, anti-environment government, is more than enough to question it. The Reuters report said, “The deal was ‘a Brazilian victory’ and the country is gearing up to become a ‘big exporter’ of carbon credits, its environment ministry said on social media. … ‘It should spur investment and the development of projects that could deliver significant emissions reductions,’ Brazil’s chief negotiator Leonardo Cleaver de Athayde told Reuters.”

Terminus of Kangerlugssuup Sermerssua glacier in west Greenland (photo by Denis Felikson, via NASA)

The carbon trading deal, codifying Article 6 of the Paris Agreement after six years of negotiation, does have mechanisms to largely eliminate the double counting that countries like Brazil had previously wanted but does not appear to completely eliminate such practices. But even without double counting, using markets will make it less likely that net zero will be reached in reality rather than only on paper. A report by the Center for International Environmental Law notes, “[C]ountries that aim to meet a significant portion of their [2030 emissions targets] through such offsets — and about half of all countries that submitted [2030 emissions targets] by 2018 indicated an intent to participate in the markets — are less likely to pursue deep decarbonization swiftly than those that focus on domestic cuts. And those countries with a financial interest in exceeding their self-determined contributions, to sell ‘excess’ reductions, are less likely to set ambitious targets.”

To put it in stronger terms, Sebastien Duyck, a senior attorney at the Center, said, “Net zero is a scam. It is used as a smokescreen to avoid actual transition away from fossil fuels and carry on business as usual by relying on unproven carbon capture technologies and offsets. … Article 6 creates a way for public and private investors to weaponize the Paris agreement for the sake of profits at the cost of local communities and indigenous people’s rights.”

So why are fossil fuels subsidized to astonishing amounts? These subsidies are not trivial: A 2015 paper by four economists published by, of all places, the International Monetary Fund estimated the amount of subsidies thrown at the fossil fuel industry as US$5.6 trillion per year. Trillions! That total includes environmental costs in addition to direct corporate subsidies and below-cost consumer pricing. Some — only some — of the damage from these massive subsidies are premature deaths through local air pollution; exacerbating congestion and other adverse side effects of vehicle use; crowding out potentially productive public spending on health, education and infrastructure; discouraging needed investments in energy efficiency, renewables and energy infrastructure; and increasing the vulnerability of countries to volatile international energy prices.

Capitalism is not only cooking the planet to the point where portions of our planet will become uninhabitable and massive disruption to agriculture is certain, but the leading causes of the problem are lavishly subsidized. Who could dream up such a death-wish scenario? Yet here we are. As long as we live under capitalism, incentives will be for more growth, more energy usage, more waste, more accumulation, more inequality, and that inequality will make the struggle for environmental justice and to reverse global warming ever more strenuous. It is simply impossible to decouple the world economic system from the looming environmental catastrophe. The two go together.

Are we up to creating the massive global movement that is the only mechanism that can save the world? If not, our descendants are not likely to believe short-term profits for a few now will be a fair exchange for an unlivable planet for the many then.