Fossil fuel subsidies total trillions of dollars per year

Most of the cost of fossil fuels is hidden because environmental harms such as pollution and global warming are kept outside ordinary economic calculation. Energy companies externalize these costs (among others) — that is, they don’t pay them. The public does.

And we do, to a remarkable extent. When we think of corporate subsidies, we naturally think of taxes not paid, real estate giveaways and other ways of taking money from the public and shoveling it into corporate coffers. Then there are the environmental costs, something prominent if we are talking about fossil fuels. These, too, should be thought of as subsidies since these constitute costs paid by the public. A first attempt at seriously quantifying the magnitude of the totality of subsidies given to fossil fuels leads to a conclusion that the total for 2014 was US$5.6 trillion, a total expected to be matched in 2015.

Yes, you read that correctly: 5.6 trillion dollars. As in 5.6 million million. Or, to put it another way, more than seven percent of gross world product.

A lot of money.

These calculations are, interestingly, the product of an International Monetary Fund working paper, “How Large Are Global Energy Subsidies?” The paper, prepared by economists David Coady, Ian Parry, Louis Sears and Baoping Shang, sought to provide a fuller accounting of the costs of the environmental damages caused by fossil fuels, and found that those costs greatly exceed direct corporate subsidies and below-cost consumer pricing. The authors foresee huge benefits should all fossil-fuel subsidies be eliminated. They write:

“Eliminating post-tax subsidies in 2015 could raise government revenue by $2.9 trillion (3.6 percent of global GDP), cut global CO₂ emissions by more than 20 percent, and cut pre-mature air pollution deaths by more than half. After allowing for the higher energy costs faced by consumers, this action would raise global economic welfare by $1.8 trillion (2.2 percent of global GDP).” [page 7]

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

As dramatic as the preceding paragraph is, the International Monetary Fund is not suddenly questioning capitalism. The paper carries the caveat that it is “research in progress” and does not represent the views of the IMF. Nor does the paper devote so much as a single word questioning the economic system that has produced such astounding distortions, not to mention the hideous social effects of massive inequality and power imbalances. Nonetheless, it does present an implicit challenge to business as usual and helps conceptualize the massive costs of profligate energy usage. The paper lays out in plain language the environmental, fiscal, economic and social consequences of energy subsidies, stating that energy subsidies [page 5]:

  • Damage the environment, causing more premature deaths through local air pollution, exacerbating congestion and other adverse side effects of vehicle use, and increasing atmospheric greenhouse-gas concentrations.
  • Impose large fiscal costs, which need to be financed by some combination of higher public debt, higher tax burdens and crowding out potentially productive public spending (for example, on health, education and infrastructure).
  • Discourage needed investments in energy efficiency, renewables and energy infrastructure, and increase the vulnerability of countries to volatile international energy prices.
  • Are a highly inefficient way to provide support to low-income households since most of the benefits from energy subsidies are typically captured by rich households.

Paying for air pollution and global warming

The biggest subsidized cost is air pollution, which the paper’s authors estimate accounts for 46 percent of fossil fuel subsidies. Global warming is the next biggest subsidy, at 22 percent, with corporate and consumer subsidies, foregone taxes and other items accounting for smaller amounts. From this calculation, the authors argue that local benefits from ending subsidies are high enough that doing so should be done in the absence of action in other countries. They write:

“An important point, therefore, is that most (over three-fourths) of the underpricing of energy is due to domestic distortions — pre-tax subsidies and domestic externalities — rather than to global distortions (climate change). The crucial implication of this is that energy pricing reform is largely in countries’ own domestic interest and therefore is beneficial even in the absence of globally coordinated action.” [page 21]

When the costs are broken down by forms of energy, it is no surprise that coal is the most subsidized form. Coal subsidies alone total almost four percent of global GDP, according to the paper, with “no country … impos[ing] meaningful taxes on coal use from an environmental perspective.” Petroleum is also heavily subsidized.

If we could at a stroke eliminate all forms of fossil fuel subsidies, the gains would be significant. The authors believe that global revenue gains would be $2.9 trillion for 2015, a total less than the current cost of subsidies because it accounts for a reduction in energy usage from higher prices and an assumption that some tax money would be used for emission-control technologies. The authors also calculate a $1.8 trillion net gain in social welfare, a gain that could be increased were this gain used to invest in education, health and other public benefits.

So if so much good can come from rationalizing the fossil fuel industry, why does this sound like an impossible dream? Unfortunately, in real world of capitalism, there is very little to prevent corporations from externalizing their costs.

With increased corporate globalization, capital can pick up and move at will, inducing political office holders to hand out subsidies, waive taxes and refuse to enforce safety and environmental laws. They do this because the alternative is for corporations to move elsewhere in a never-ending search for the lowest wages and weakest regulations with an accompanying disappearance of jobs. And this globalization, fueled by “free trade” agreements that arise from relentless competition, aggravates global warming as components are shipped around the world for assembly into finished products that are shipped back, greatly adding to the environmental damage imposed by transportation.

Environment doesn’t count in orthodox 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 Monthly Review article by sociologists Richard York, Brett Clark and John Bellamy Foster, “Capitalism in Wonderland,” puts this contradiction in stark perspective:

“Mainstream economists are trained in the promotion of private profits as the singular ‘bottom line’ of society, even at the expense of larger issues of human welfare and the environment. The market rules over all, even nature. For Milton Friedman the environment was not a problem since the answer was simple and straightforward. As he put it: ‘ecological values can find their natural space in the market, like any other consumer demand.’ ” [May 2009, page 4]

From that perspective, it follows that present-day environmental damage is of minimal concern to capital 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:

“[T]he ideology embedded in orthodox neoclassical economics [is] 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. …

[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.” [pages 9-10]

Tinkering versus analyzing the structure

The International Monetary Fund paper does offer a brief discussion of social disruptions should fossil-fuel subsidies be removed, suggesting a need for “transitory” programs such as worker retraining and protection of vulnerable groups. [page 31] But their proposed program centers on environmental taxes as a way to align fossil fuels with their costs to make energy prices “efficient.” Certainly, polluters and causers of global warming should be required to absorb those costs. But given that market forces tilt overwhelmingly in favor of large polluters, the fact of massive imbalances in power, and that governments have handcuffed themselves in terms of confronting capital (a trend itself a product of market forces), it is unrealistic to believe such a program is currently politically feasible.

The disruptions to a capitalist economy with a forced large reduction in energy usage are also significant. It is not only that a capitalist economy can’t function without growing (and a growing economy uses more, not less, energy, especially because of ever more complex machinery and lengthening supply chains), but that a capitalist economy doesn’t offer millions of workers who lose their jobs new work in new industries. Every incentive under capitalism is for more energy usage; thus “the market” will object to dramatically higher energy prices, no matter how rational those higher prices.

Ultimately, the authors of the IMF paper are trapped in the same inability to imagine anything outside the present capitalist system, similar to those who claim that stopping global warming will be virtually cost-free. Their paper has done a necessary service by providing the first real quantification of the gigantic costs of fossil fuels and the massive subsidies they receive. Subsidies for renewable energy, in comparison, are minuscule. The massive subsidies for nuclear energy, which is a complete failure on any rational economic basis before we even get to the physical dangers, demonstrate that nuclear is no solution, either. These should also be eliminated.

The size of the social movement that would be necessary to eliminate all these subsidies would be enormous. Why should such a movement ask for mere reforms that fall well short of what is necessary, worthy as they would be. Energy is too important not to be put in public hands. The trillions of dollars of fossil fuel subsidies are the logical product of allowing private interests to control critical resources for private profit and leaving “the market” to dictate outcomes.

We can’t make what is unsustainable sustainable through a better tax policy. That the enormous scale of reform proposed by the IMF paper still falls far short of what is actually necessary to create a sustainable economy demonstrates the severity of the crises we are only beginning to face.

Speculation for its own sake pays billions

The absurdity of the tsunami of money crammed into speculators’ bank accounts is illustrated in the fact that the 25 highest-paid hedge-fund managers vacuumed up a collective $11.6 billion in 2014 — and that was considered to be a bad year for them by the business press. Stratospheric though that total is, it is barely more than half of what the top 25 took in a year earlier.

All together now: Awwww. Yes, somehow these speculators will have to get by on a paltry average of $467 million.

Institutional Investor’s Alpha magazine — one can hear their editors’ teeth gnashing at their heroes’ bitter fate — lamented that 2014 was the worst year since the 2008 stock meltdown for hedge-fund managers in announcing its “Rich List.”

City of London expanding (Photo by Will Fox)

City of London expanding (Photo by Will Fox)

Nonetheless, some observers might believe that these moguls earned somebody serious money to collect such enormous paychecks. But that wasn’t necessarily the case. For the sixth consecutive year, hedge funds fell short of the average stock-market performance, returning a composite average of three percent. Perhaps the 25 hedge-fund managers who hauled in the most money for themselves were better? Not really. Alpha reports that the hedge funds of at least 12 of the individuals on its top 25 list posted gains below the 2014 average.

The S&P 500 Index, the broadest measure of U.S. stock markets, gained 11.4 percent in 2014 and the benchmark Dow Jones Industrial Average gained 7.5 percent. So somebody throwing darts, or parking their money in a passive fund that tracks a major index, would have done as well or better in many cases. Despite their subpar performances, hedge-fund managers continue to receive an annual fee of two percent of the value of the total assets under management and 20 percent of any profits. The fee gets paid even when the fund loses money.

So it’s heads, Wall Street wins and tails, Wall Street wins. And hedge funders pay less in taxes. Much of their income is classified as capital gains under U.S. tax law, and the tax rate on capital gains are much less than on regular income.

Imposing austerity on others is a job never finished

What is that hedge-fund managers do to “earn” such enormous sums of money? Let us take a look. The top person on the 2014 list is Kenneth Griffin of Citadel Capital, who hauled in $1.3 billion for the year. Citadel makes lots of money through computerized high-speed trading — buying and selling securities in microseconds to take advantage of momentary price changes. Apparently allowing computers to do the work leaves Mr. Griffin with time to pursue his hobby of widening inequality still more.

Not content with the fact that his 2014 earnings are equal to the combined median wage of 26,000 U.S. workers, he contributed $10 million to an Illinois campaign that seeks to cut workers’-compensation benefits, make it illegal for employees to contribute to political campaigns through their union, abolish prevailing-wage laws and render union dues collections much more difficult. He’s also contributed millions to the Koch brothers’ war chest. Mr. Griffin’s firm also owns a stake in ServiceMaster, a company that profits from the privatization of public services by firing employees and rehiring them at lower wages.

A Huffington Post article, noting that Mr. Griffin is also a major donor to Chicago Mayor Rahm Emanuel, nonetheless reports that he believes Mayor 1% is too soft on public employees despite the mayor’s attacks on pensions and teachers. The article said:

“Griffin, alone, could fund all of Chicago’s pension liabilities for [2014] (estimated at $692 million) and still have $208 million [from his 2013 income] left to scrap by on. Yet Griffin is terribly worried that the mayor is being too soft on retirees. He castigated Chicago and Illinois politicians for not making ‘tough choices,’ blaming Democrats who control city, county and state government for not fixing pension, education and crime problems.”

Second on the hedge-fund list is James Simons of Renaissance Technologies. Although Alpha reported that he no longer runs his firm on a day-to-day basis and “spends a good chunk of the year on his 226-foot yacht,” Mr. Simons hauled in $1.2 billion in 2014. His firm employs physicists, others scientists and mathematicians to develop models for its computerized trading. Alas, speculation pays much more than scientific research that might benefit humanity.

Buy, strip, profit, repeat

Third on the list is Raymond Dalio of Bridgewater Associates, who took in $1.1 billion in 2014. He specializes in bond and currency speculation. Fourth on the list is William Ackman of Pershing Square Capital Management, who is what the corporate media likes to call an “activist investor.” In other words, someone who buys stock in a company and immediately demands massive cuts so he can make a large short-term profit is an “activist investor” because he does this more loudly than others.

Mr. Ackman hauled in $950 million in 2014. Forbes magazine, as consistent a cheerleader for the corporate overclass as any institution, summed him up this way last year:

“[H]edge fund billionaire William Ackman has tried to destroy a company that sells diet shakes, played a prominent role in nearly driving a 112-year-old retailer into the ground [and] helped launch a hostile takeover of a pharmaceutical company in a way that the Securities & Exchange Commission is reportedly examining for potential violations of insider trading law. Now, Ackman is suing the U.S. government.”

He is suing the U.S. government because it is taking the profits from federal housing-loan programs Fannie Mae and Freddie Mac to recoup money used to bail them out rather than handing the profits over to speculators such as himself. Never mind that the government spent hundreds of billions of dollars bailing out speculators. Among his most recent exploits, he was involved in two separate deals that would have moved a U.S. corporation’s headquarters to Canada so that it could avoid paying taxes, savings that would be earmarked for speculators’ wallets.

No summation of hedge-fund greed would be complete without a mention of Paul Singer, another entrant on the rich list. The vulture capitalist specializes in buying debt at pennies on the dollar and then demands to be paid the full face value, regardless of human cost. Among other exploits, he has seized an Argentine naval ship, demanded $400 million from the Republic of the Congo for bonds he bought for less than $10 million and compelled the government of Peru to pay him a 400 percent profit on the debt of two banks he bought four years earlier.

The outsized renumeration of financiers is due to the disproportionate size of the financial industry. A rough calculation estimates that in 11 business days speculators trade instruments and contracts with a value greater than all the products and services produced by the entire world in one year. In other words, a year’s worth of gross world product is traded in about two weeks on the world’s stock, bond, derivative, futures and foreign-exchange markets.

Such frenzied trading, often involving high-speed computers and ever more exotic betting, has little to do with actual economic needs and much to do with extracting money by ever more imaginative needs. Such is a system that values financial engineering more than human life.

Renewable energy isn’t a shortcut to reversing global warming

Denmark has distinguished itself as the country moving the fastest toward the eventual replacement of fossil fuels. Its goal of 100 percent renewable energy by 2050 is laudable, but the assumption that this path will reverse global warming while otherwise continuing business as usual, is unrealistic.

At first glance, Denmark has made remarkable strides. The country’s intention to totally eliminate fossil fuels by the midpoint of the 21st century appears to be realistic. Already, Denmark is the world leader in wind energy and it intends to also exclude all use of nuclear power. At the start of 2015, the country’s energy agency, Energistyrelsen, said renewable energy sources account for 25 percent of Denmark’s total energy consumption, and more than 40 percent of its electricity comes from renewable sources.

Danish countryside (photo by "Old Dane")

Danish countryside (photo by “Old Dane”)

The Danish government acknowledges that continuing consumption patterns based on “cheap and easy access to coal, oil and natural gas” is a “road [that] is not an option.” True enough. But the switch to renewable energy is promoted as cost-free. The Danish government says:

“Business … stands a great chance to move into the heavy league of successful super green companies. For instance, the energy efficiency measures a company makes are often paid back within [a] few years. Onwards, the savings on the energy bill can be unleashed to strengthen the core business of the company. Likewise, there is an enormous global market for green technology, services and systems. This market is only going to grow once more governments follow in the carbon-light footsteps of Denmark.

But of course such a strategy would come at a great cost to Danish society? The answer is a resounding no. … [T]he transition is relatively cheap, and business competitiveness not harmed. The government’s estimates are a price tag of approximately 10 euro pr. household pr. month at the highest (2020), a price tag that will only slowly increase to this level. In the opinion of the Danish government this is a reasonable insurance policy against unexpected increases in fossil fuel costs and a solid investment in Denmark’s future energy security.”

Enthusiasm for renewable commitment

An expected rising efficiency of renewable energy sources will ultimately lead to lower costs, more than offsetting the investments in renewable-energy infrastructure and reversing the present-day higher costs, the government says. So no change in consumption patterns after all. This enthusiasm is shared by environmental institutions that have become large nongovernmental organizations. Greenpeace, for example, issued a brief paper in October 2014 that reads like a press release. In this paper, “Denmark’s commitment to 100% renewable energy,” Greenpeace agreed that no changes in consumption will be required. It wrote:

“Denmark’s emissions reductions have not affected the economy negatively. The decoupling of economic growth from energy consumption is partially due to Danish companies being subsidised for using renewable energy and increasing energy efficiency, which in turn increases their creativity and prompts energy savings. Job creation is an explicit objective of the Danish Climate Plan, and because Denmark has invested heavily in research and promotion of renewable energy, energy-efficient technologies and renewable heat supply systems, the climate and energy system has already created thousands of jobs. The full transition to 100 per cent renewable energy is expected to generate at least 30[,000] to 40,000 new jobs in a country of 5.5 million people.”

Moreover, this will come easy, Greenpeace says:

“Although Denmark’s roadmap to fossil fuel independence and 100 per cent renewable energy is specific to the Danish context, many of the recommendations are relevant and applicable to other nations around the world. One finding may be of particular interest: The costs of phasing out fossil fuels are expected to be almost equivalent to or only marginally more expensive than a ‘business as usual’ scenario.”

Too good to be true? Unfortunately, yes. That global warming and the accelerating damage to the global environment can be reversed without cost — and without any alteration to the high-impact consumerism of the global North’s advanced capitalist countries — echoes the unrealistic conclusions of the Intergovernmental Panel on Climate Change report issued last year. The IPCC concluded the annual reduction in “consumption growth” on a global basis would be only 0.06 percent during the course of the 21st century. Nothing more than a statistical blip!

In actuality, the IPCC assertion that we can remain on the path of endless growth is a fantasy argument that we can have our cake and not only eat it but make more cakes and eat them, too.

Bioenergy not necessarily a savings on greenhouse gases

When we look past the cheerleading for a bright renewable future, two problems immediately pop up: Renewable energy is not necessarily clean nor without contributions to global warming, and the limits that living on a finite planet with finite resources presents are all the more acute in an economic system that requires endless growth.

Denmark’s phaseout of oil, gas and coal is dependent on wind power and biomass, and to a lesser degree on solar energy. But just because energy from biomass is classified as renewable, that doesn’t make it sustainable or environmentally friendly. Denmark is the biggest per capita user of bioenergy, with Germany and Britain significant users as well. But the primary source of bioenergy is wood, and much of this wood must be imported. British plans for expanding bioenergy, if brought to fruition, could consume nine times more wood than can be supplied internally. Denmark is already a heavy importer of wood pellets.

Increased logging is surely not a route to reducing global warming. A paper by the British watchdog group Biofuelwatch reports:

“Increased demand for bioenergy is already resulting in the more intensive logging including very destructive whole tree harvesting or brash removal and replacement of forest and other ecosystems with monocultures. Expansion of industrial tree plantations for bioenergy is expected to lead to further land grabbing and land conflicts. At the same time, communities affected by biomass power stations are exposed to increased air pollution (particulates, nitrogen dioxide, sulphur dioxide, dioxins etc.) and thus public health risks. Meanwhile, a growing number of scientific studies show that burning wood for energy commonly results in a carbon debt of decades or even centuries compared with fossil fuels that might otherwise have been burnt.”

A Partnership for Policy Integrity study published in April 2014 found that biomass electricity generation, which relies primarily on the burning of wood, is “more polluting and worse for the climate than coal, according to a new analysis of 88 pollution permits for biomass power plants in 25 [U.S.] states.” The partnership’s director, Mary Booth, wrote:

“The biomass power industry portrays their facilities as ‘clean.’ But we found that even the newest biomass plants are allowed to pollute more than modern coal- and gas-fired plants, and that pollution from bioenergy is increasingly unregulated.”

Even the wind (energy) has toxicity

Wind energy has its environmental issues as well. The turbines used to produce electricity from wind increasingly are built with the “rare earth” element neodymium, which requires a highly toxic process to produce. Turbine magnets using neodymium are more expensive than those using ceramic, but are also more efficient. The U.S. Geological Survey estimates that an additional 380 metric tons of neodymium would be necessary if the United States is to generate 20 percent of its electricity from wind by 2030. That’s just one country.

Most rare earths are mined in China because the mines are so environmentally destructive they had been shut down elsewhere. Production has been re-started in other countries, lessening demand on Chinese exports, but increasing rare earth mining means more pollution and toxic waste. Renee Cho, a blogger for Columbia University’s Earth Institute, provides a sobering picture of this:

“All rare earth metals contain radioactive elements such as uranium and thorium, which can contaminate air, water, soil and groundwater. Metals such as arsenic, barium, copper, aluminum, lead and beryllium may be released during mining into the air or water, and can be toxic to human health. Moreover, the refinement process for rare earth metals uses toxic acids and results in polluted wastewater that must be properly disposed of. The Chinese Society of Rare Earths estimated that the refinement of one ton of rare earth metals results in 75 cubic meters of acidic wastewater and one ton of radioactive residue.”

Just because it’s renewable, doesn’t mean its environmentally friendly. As Almuth Ernsting, a founder of Biofuelwatch, summarized in a Truthout article:

“Defining methane-spewing mega-dams, biofuels, which are accelerating deforestation and other ecosystem destruction, or logging forests for bioenergy as ‘renewable’ helps policy makers boost renewables statistics, while helping to further destabilize planetary support systems. As long as energy sources that are as carbon-intensive and destructive as fossil fuels are classed as ‘renewable,’ boosting renewable energy around the world risks doing more harm than good.”

Increased efficiency in energy usage hasn’t resulted in decreases in greenhouse-gas emissions. A study by 10 scientists led by Josep G. Canadell found that the growth rate of atmospheric carbon dioxide is increasing. The growth rate in anthropogenic carbon dioxide was higher in the 2000s than in the 1990s. Not only has economic growth contributed to this rate increase, but the carbon intensity of gross world product began to increase during the decade of the 2000s. Adding to this sobering picture, the efficiency of natural carbon sinks (such as forests and oceans that remove carbon dioxide from the atmosphere) is declining.

The study said a growing global economy, an increase in the carbon emissions required to produce each unit of economic activity, and a decreasing efficiency of carbon sinks on land and in oceans have combined to produce unprecedented increases in atmospheric carbon dioxide.

Beyond renewables, fundamental change is necessary

The conclusion necessary to be drawn isn’t that we shouldn’t switch from fossil fuels to renewable energy sources as quickly as reasonably possible. Of course that should be done. But it is a delusion to believe that doing so in itself is a magic wand to wish away the growing crises of global warming, environmental degradation and resource depletion. There is no alternative to drastically reducing consumption of energy and material goods, an impossibility under capitalism, and bringing into existence a sustainable economic system.

All incentives in capitalism are for endless growth; it can’t function without it. Because of this expansionary imperative, that production is for private profit rather than human need and that enterprises are able to externalize environmental costs, decreases in energy prices are an incentive to increase energy usage, which is what has been happening. An economy that must expand will do so — introducing efficiencies can slow down the increase in energy consumption and resource depletion, but an ever expanding economy will ultimately use more energy, more resources.

A former White House Council of Economic Advisers chair, Christina Romer, says that economic growth of 2.5 percent is necessary to maintain the unemployment rate where it is and “substantially stronger growth than that” is necessary for a rapid decrease. In addition, energy usage due to transportation is increased from the movement of production to countries around the globe. Raw materials and component parts are shipped from all over the world to an assembly point, then the finished products are transported back.

This enormous contribution to global warming is another product of capitalism, specifically the dynamic of relentless competition that induces corporations to move production to the places with the lowest wages and weakest regulation, and to stretch supply lines around the world. These competitive “innovations” must be copied by competitors, thus increasing this tendency. (And are a catalyst for “free trade” agreements that incentivize the expansion of trans-national rootlessness.) As the depletion of natural resources accelerates, an inevitable byproduct of competitive pressures and the never-ending scramble for bigger profits, more energy and capital will be required to extract resources more difficult to exploit.

Carrying on with business as usual, with changes to the mix of energy production, is an illusion that “green capitalism” will save the world. Liberals and social democrats, in their own way, can be as unrealistic as conservatives. Conservatives correctly see that measures to combat global warming will come with a cost, so they screech that global warming doesn’t exist, despite the enormity of the evidence all around us. Liberals and social democrats readily acknowledge the real danger of global warming but, no more willing to tamper with the machinery of capitalism than conservatives, promise that the changes will be cost-free.

The changes won’t be. But the cost of doing nothing, of letting a runaway global warming take hold — the very path humanity is treading — will be much higher. The limits of the planet, of nature, will assert themselves. Yielding to natural limits now will come with much disruption, but having limits imposed on us in the future will surely be much worse.

War crimes and forgetting

Forty years after the long Vietnamese struggle for independence concluded with the capture of Saigon, the mythologies surrounding the war on the other side of the Pacific Ocean have not loosened their grip. The “debate” surrounding the war is a textbook example of corporate media obfuscation.

A strong debate played out in the corporate media outlets of the United States concerning the Vietnam War at the end of the 1990s, and that same debate, with the same parameters, continues today. This debate, however, is only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting.

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

Left out are the widely held views that the war should never have been fought because it was a war to extend U.S. hegemony or that the U.S. simply had no business fighting in another country’s civil war. Further, the first “acceptable” viewpoint implies, and the second explicitly states, that the U.S. didn’t really fight hard to win the war, ignoring the actual intensive level of the U.S. war effort in which most of North Vietnam’s larger cities were reduced to rubble, much of the farming lands were destroyed and three million Vietnamese were killed.

Thus there was all the appearance of a free and open media at the same time that the media obscured.

Elections only when you do as we say

What were some of the messy things going on in Southeast Asia at the time? (Most of the following is taken from Manufacturing Consent by Noam Chomsky and Edward S. Herman, Pantheon Books, 1988.) The U.S. sabotaged the scheduled 1956 all-Vietnam election that was a cornerstone of the 1954 agreement that ended the French intervention; an election that was not allowed to occur precisely because Ho Chi Minh would have won. The U.S. set up South Vietnam as an artificial puppet state, overthrew and killed South Vietnam’s “leaders” and installed new “leaders,” who were invariably military thugs.

The U.S. invented the Gulf of Tonkin attack, a deliberate lie to create a cover for increasing the U.S. military role. By the time of the U.S. land intervention in 1965, American aerial bombing, napalming and gassing had already killed 15,000 Vietnamese. The U.S. carried out a policy of rural and urban terror. The military forced peasants in wide parts of the country off their land and into “strategic hamlets” — in reality, rural concentration camps — and killed peasants who refused to leave their homes. Tens of thousands were swept from their homes and sent to camps in single ground operations.

A writer in Foreign Affairs wrote that destroying the countryside and forcing rural residents into cities was necessary because the Viet Cong were “a powerful force which cannot be dislodged from its constituency so long as the constituency continues to exist.” The U.S. systematically destroyed by force any South Vietnamese grouping opposed to the installed military dictators, even non-Communist groups such as organized Buddhists.

The U.S. leveled major cities — 77% of the buildings in Hue, one of Vietnam’s biggest cities, were completely destroyed. Dams were blasted away, allowing salt water from the South China Sea to flood farmland, making the growing of food impossible. When North Vietnam agreed to the Paris Peace Agreements in 1972, Henry Kissinger decided not to accept the pact, began demanding major changes to an agreed-upon document, then launched the Christmas bombings of Hanoi and Haiphong when the North Vietnamese government insisted the agreement be signed.

In South Vietnam, 9,000 of 15,000 hamlets were damaged or destroyed, as were 25 million acres (100,000 square kilometers) of farmland and 12 million acres of forest. Killed were 1.5 million cattle. One million widows and 800,000 orphans were left behind.

In North Vietnam, 34 of the largest 36 cities suffered significant damage, with 15 completely razed, while 4,000 of about 5,800 communes were damaged. More than one million acres of farmland and 400,000 cattle were destroyed in the North. The Central Intelligence Agency admitted that at least 30,000 North Vietnamese were killed per year by 1967 by U.S. bombing, with these deaths primarily civilian. The total tonnage of bombs dropped by the U.S. in Vietnam exceeded that of all bombing by all countries during World War II. Reports of the countryside at the end of the war spoke of entire regions as “bare, gray and lifeless.”

No mercy in neighboring countries

Next door, in Laos, following a 1958 election in which a two-party Left coalition won 13 of 21 legislative seats, the U.S. swiftly overthrew the government, with the new government seated by the U.S. vowing to disband the Pathet Lao, which had won the most seats. Two years later, that new government was overthrown by the U.S., which installed a CIA-backed extreme Right-wing general.

In rural Laos, entire districts were wiped out by bombing. A series of articles in Le Monde reported on a district capital that had been deserted for three years because of repeated bombings. This capital was a portion of a 20-mile area stretching into the countryside in which not a single building was left standing and in which were found the remnants of American fragmentation bombs, which are dropped to maximize civilian casualties.

There were areas of Laos where villagers hid in nearby mountains, in caves or in ditches during daytime because of the ceaseless bombardment and who could conduct life only at night. Craters so saturated some areas that it was impossible to distinguish them, and all vegetation was destroyed. More than 350,000 Laotians — more than 10% of the country’s population — were killed and a similar number left homeless.

In Cambodia, bombing by the U.S. during the period 1969 to April 1975 resulted in 600,000 deaths and two million refugees, according to the same Finnish Inquiry Commission that concluded one million people died during the subsequent Khmer Rouge régime. As the bombing was ending in 1975, the U.S. government estimated that deaths from starvation in the Cambodian capital, Phnom Penh, were near 100,000 per year.

This horrific bombing is believed to have played a role in the rise of the Khmer Rouge, which the U.S. covertly sided with during its murderous four-year reign. A U.S. government report in 1975 said 75 percent of Cambodia’s draft animals had died and that it would likely be three years before the country could regain rice self-sufficiency.

The carnage inflicted on Vietnam reverberates still. An estimated 19 million tons of toxic herbicides were applied that has resulted in more than half a century of damage to health and birth defects.

Such is the price of empire, paid by those on the receiving end. If these are not war crimes, then what would be?

Corporate green-washing on Earth Day

Earth Day was celebrated three days early in New York City, with a pop-up shopping mall in a park. Green-washing in all its glory: We’ll shop our way to a clean environment and a re-stabilized climate! Adding a touch of bitter irony, this corporate green-washing took place in Union Square, traditionally a site for organized protest.

Although not really expecting anything different, going only to hand out fliers against the pending Trans-Pacific and Transatlantic “free trade” agreements and the threat these agreements pose to knowing what is in the food you buy, it was nonetheless a depressing spectacle. There were large displays there for Toyota and Honda — the automobile industry can not realistically be described as “green.” Citibank was there, too, as were a collection of food companies who brand themselves as environmentally sensitive but are owned by multi-national behemoths who don’t believe you have a right to know what is in the food you eat.

The two automobile companies were hyping electric vehicles. A bit less fossil fuel exhausts adding to the atmospheres’s carbon dioxide is good, yes, but building and driving an electric-powered automobile hardly qualifies as a stroke for a cleaner world. An electric automobile still has the metal, plastic, rubber, glass and other raw materials a gas-guzzling one has. By one estimate, 56 percent of all all the pollution they will ever produce comes before the vehicle hits the road.

Atmospheric carbon dioxide levels for the past 800,000 years (Graphic by the Scripps Institution of Oceanography at the University of California, San Diego)

Atmospheric carbon dioxide levels for the past 800,000 years (Graphic by the Scripps Institution of Oceanography at the University of California, San Diego)

Then there is the matter of where the electricity comes from; the electricity used to power the vehicle is only as clean as its source. A full two-thirds of electricity produced in the U.S. comes from fossil fuels. Coal is the biggest source of U.S. electricity, accounting for 39 percent in 2014; natural gas, also a huge contributor to global warming, is the second biggest source at 27 percent. About half of European electricity comes from coal or natural gas.

So increasing electricity usage, if it means an increase in coal or other global-warming and polluting sources, isn’t “green.” Then we would need to consider the battery for an electric vehicle, which is not without greenhouse-gas emissions and which contains nickel as a major input. Nickel exposure can cause damage to blood, lung, noses, kidneys, reproductive systems and skin. Mining it causes not only pollution but contributes to global warming. So, again, not really “green.”

And Citibank as a “green” enterprise? A 2011 report by a coalition of environmental groups, “Bankrolling Climate Change,” found that Citibank provided more than €4 billion in financing for coal mining in the previous five years, the third highest total of any bank in the world, and is also one of the top three financiers of mountain-top removal coal operations.

“Organic” brands that promote GMO foods

Two of the sponsors of New York City’s Earth Day fair were Morningstar Farms and Honest Tea. Both had prominent displays. But these are not mom-and-pop operations; both are part of multi-national conglomerates. Morningstar Farms is owned by Kellogg Company and Honest Tea by Coca-Cola Company. Coca-Cola contributed $1.2 million and Kellogg more than $600,000 to the corporate effort that narrowly defeated California ballot measure Proposition 37 in 2012, which would have required labels on genetically engineered foods and banned the industry practice of marketing GMO-tainted foods as “natural.”

Most natural foods brands have been swallowed by multi-national corporate behemoths, which gladly use consumers’ money for purposes anathema to organic consumers’ interests. The Cornucopia Institute notes that:

“[M]any iconic organic brands are owned by the titans of junk food, processed food and sugary beverages—the same corporations that spent millions to defeat GMO labeling initiatives in California and Washington. General Mills (which owns Muir Glen, Cascadian Farm, and LaraBar), Coca-Cola (Honest Tea, Odwalla), J.M. Smucker (R.W. Knudsen, Santa Cruz Organic), and many other corporate owners of organic brands contributed big bucks to deny citizens’ right to know what is in their food.”

The Cornucopia Institute also reports that Morningstar Farms’ veggie burgers (along with several other brands) are produced using hexane, an air pollutant and neurotoxin. The institute writes:

“In order to meet the demands of health-conscious consumers, manufacturers of soy-based fake meat like to make their products have as little fat as possible. The cheapest way to do this is by submerging soybeans in a bath of hexane to separate the oil from the protein. Says Cornucopia Institute senior researcher Charlotte Vallaeys, ‘If a non-organic product contains a soy protein isolate, soy protein concentrate, or texturized vegetable protein, you can be pretty sure it was made using soy beans that were made with hexane.’ … Troubling, then, that the FDA does not monitor or regulate hexane residue in foods.”

At least two New York City food coops refuse to carry Morningstar Farms products. Yet there it prominently was at the Earth Day fair, with passers-by lining up to be green-washed.

And then we have Honest Tea, or more accurately, Coca-Cola, its owner. The worldwide string of human rights abuses that Coca-Cola is so frequently implicated in speaks for itself. The activist group Killer Coke has compiled a country-by-country list of outrages in various countries, including thousands of children, as young as eight-years-old, used as labor on El Salvador sugar-cane farms that supply the company; multiple kidnappings and murders of union officials at a bottling plant in Guatemala; and, in the Philippines, the use of outsourced labor to avoid paying benefits and accusations of “smuggling” sugar into the country to avoid taxes and undercut local sugar producers.

Shopping is not participation in your world

The organizers of Earth Day New York, said to be organized by an unspecified “broad coalition of environmental groups,” have this to say about it:

“Earth Day is more than a one-day event or annual environmental wake-up call. It is a catalyst for ongoing education, action, and change. It simultaneously broadens the base of support and rekindles old commitments through highly participatory strategies.”

So there we have it: Consumption of corporate products falsely branded as “green” or “environmentally friendly” is participatory! Undoubtedly, many, perhaps most, of the people passing through Union Square that day wish to be have a lighter footprint on the Earth and have would like to diminish their contribution to global warming. But to do that requires less consumption, not a re-arrangement of unsustainable consumption patterns.

Above all, it will require a complete overhaul of the world’s economy. Most of the ideas floated to deal with greenhouse-gas emissions reaching a critical point feature untested technologies, reliance on biofuels that are no less polluting than fossil-fuel energy or various other techno-fixes. The cost of all these too good to be true “solutions” to global warming will be virtually nothing, according to, for example, the Intergovernmental Panel on Climate Change report issued last year.

Alas, cost-free “green capitalism” is an illusion. The economies of the world’s advanced capitalist countries are highly dependent on consumerism; household spending accounts for 60 percent or more of gross domestic products across the global North. Wasteful practices such as planned obsolescence exist to continually induce us to buy more and more products. And nor is it simply a matter of wishing away polluting industries — capitalism has no mechanism to provide jobs for the untold millions of people who would be thrown out of work if just the most polluting industries were shut down.

Production in the capitalist system is done for private profit, not for human need; environmental costs are externalized. Thus a capitalist corporation, faced with the need to expand because of the rigors of competition and forced to focus on “maximizing shareholder value” over all other values by market forces, has to expand and dump as much of the costs of its production, including pollution and greenhouse-gas emissions, on society as possible. It also means that popular demands for “green” products are nothing more than a marketing opportunity to exploit.

Producing products that consume less energy and resources is certainly good, but if more of these are being produced, then there is no real savings. All the incentives in capitalism are for more production, more consumption.

There is no alternative to drastically reducing what is consumed and building a new economy based on human need, incentivized to protect the environment and possessing the flexibility to re-deploy labor in large numbers when industries are reduced or eliminated. This would require a socialized economy that would have no need to grow. We can’t shop or grow our way out of environmental crisis. No amount of corporate green-washing can render “green capitalism” anything other than an illusion nor can shopping replace organized activism.

Low wages don’t come cheap

When we think of the externalization of costs by capitalist enterprises, we think of environmental damage or infrastructure. But low wages are another burden foisted onto society, costing the public more than $150 billion annually in the United States.

So widespread have low wages become that a majority of federal and state money going toward public-assistance programs are paid to people who are part of a working family. This amounts to one more subsidy for U.S. business, already the recipients of massive largesse.

When it is impossible to live on meager wages — a position tens of millions of U.S. families find themselves in — there is no alternative to turning to public-assistance programs. The scale of this was calculated by researchers at the University of California Berkeley Center for Labor Research and Education, and released this month in their paper, “The High Public Cost of Low Wages.”

(Graphic by the Economic Policy Institute)

(Graphic by the Economic Policy Institute)

The authors of the report, Ken Jacobs, Ian Perry and Jenifer MacGillvary, examined the cost to the federal government and the 50 state governments for four programs — the Medicaid and Children’s Health Insurance Program, Temporary Aid to Needy Families, the Earned Income Tax Credit and the food stamps program (known formally as the Supplemental Nutrition Assistance Program, or SNAP). Almost three-quarters of those enrolling in at least one of these programs is a member of a working family, defined as a family with at least one member who works at least 10 hours a week for at least 27 weeks in a year.

Overall, $153 billion from these four programs goes to working families, representing 56 percent of total public-assistance spending by the federal and state governments.

This massive amount of public money represents a subsidy of corporations. The less they spend on wages and benefits, the more goes to profits, which are ultimately stuffed into the bloated bank accounts of corporate executives and financiers.

Fast-food workers, child care workers and home care workers are heavily represented among those who depend on public assistance to supplement their subpar wages — about half of all the employees in these three industries. That is no surprise. What might be surprising is the increasing prevalence of this in “white-collar” fields. Twenty-five percent of adjunct college professors receive public assistance! So much for “lack of education” as the cause of stagnant or falling wages, as right-wing apologists for growing inequality like to claim.

The Berkeley Center report broke down the public-assistance money by state, which reveals some interesting statistics. The state with the highest share of public-assistance money going to members of working families is none other than Texas. A full two-thirds of federal and state public-assistance money in that state goes to working families. Something to keep in mind next time you hear former Texas Governor Rick Perry, a past and possibly future presidential candidate, drone on about Texas creating more jobs than any other state. The official web site of the current Texas governor, tea party extremist Greg Abbott, brags about the state’s alleged plentiful “good jobs for hard-working Texans,” declaring that “It’s not bragging if it’s true.”

In reality, if so many Texans rely on food stamps and other government programs to survive, not too many of those jobs pay well. The tax system there is also regressive — Texas has no state income tax, but it has high sales and property taxes structured to disproportionately place the burden of taxes on the poor and middle class. The top 1 percent of Texans pay an effective tax rate of 3.2 percent, while a middle-income Texan pays taxes at a higher rate than a middle-income Californian, according to a Washington Monthly analysis.

(Graphic by Economic Policy Institute)

(Graphic by Economic Policy Institute)

It’s not only Texas, however, even if it is done on a larger scale there. Higher-paying jobs have been disappearing in the U.S., with the most growth since 2010 in low-wage jobs paying less than $13.33 an hour. At the same time, the number of people enduring long-term unemployment because of the weak economy has sharply risen in the U.S., Canada, European Union, Australia and New Zealand.

Given the increased harshness of employment practices, more families may be needing public assistance. A particularly brutal practice, “on-time scheduling,” has become so pervasive that New York State Attorney General Eric Schneiderman has launched an investigation into 13 retailers. This is a practice in which workers are told what shift to work with less than one day’s notice, making it impossible for them to make arrangements for personal and family needs.

A measure of how far backwards we have traveled is that the Obama administration is offering U.S. minimum-wage workers two-thirds of what was demanded 50 years ago. One of the demands of the March on Washington in 1963 was a minimum wage of $2 an hour. Adjusted for inflation, $2 an hour in 1963 would be worth $15.34 today. Yet the federal minimum wage in the United States is $7.25 an hour. So the $15 an hour campaign that has rapidly grown over the past year is agitating for nothing outlandish. Nor will $15 an hour for someone who supports a family lead to a life in luxury.

Raises most certainly can be afforded. U.S. corporations were sitting on about $5 trillion of cash as of 2011, a figure that undoubtedly has since grown. The massive hoards of cash, bloated salaries and bonuses for executives and financiers, and the starvation wages endured by so many all come with a cost — a cost borne by working people. There are not only no free lunches for working people, you are paying for the lunches and dinners of the wealthy besides your own lunch.

Trans-Pacific Partnership says if a corporation claims it’s true, it must be true

Corporations are elevated to the same status as national governments under “free trade” agreements, but if the Trans-Pacific Partnership is approved, corporations will be elevated above governments. New language inserted into the text of the TPP declares that, in certain circumstances, arbitrators hearing a suit by a corporation must assume the corporation’s claim is true.

We know this thanks to WikiLeaks, which has published another section of the TPP, the investment chapter that spells out the enforcement mechanism — the muscle — that will codify corporate dominance over democratic processes and governments. There is this tidbit, found within Article II.22 (“conduct of the arbitration”), which specifies what an arbitration panel is to do if a government objects that a complaint brought by a corporation does not qualify for a hearing:

“In deciding an objection under this paragraph, the tribunal shall assume to be true the claimant’s factual allegations in support of any claim in the notice of arbitration (or any amendment thereof).”

Thus, there is no basis on which a government can block the most frivolous of claims. TPP apologists might object that only a “technical” issue is being addressed in the above passage. But given the context, it is not a large step to go from a presumption that a corporation’s argument is true on its face for eligibility to be heard to presumptions in the hearing itself. The corporate lawyers who double as the arbitrators in the secret, unappealable tribunals in which cases are adjudicated under “free trade” agreements have interpreted the text of past agreements to strike down safety, health and environmental laws, and that “investors” should be guaranteed the highest possible profit. These are rulings that governments obligate themselves to carry out.

Protest at TPP negotiations in New York on January 26. (Photo by Cindy Trinh; puppet by Elliot Crown)

Protest at TPP negotiations in New York on January 26. (Photo by Cindy Trinh; puppet by Elliot Crown)

All the elements of agreements like the North American Free Trade Agreement and the many bilateral “free trade” agreements that mandate arbitration in secret, unappealable tribunals are in the Trans-Pacific Partnership. In fact, TPP mandates the same arbitration body, the International Centre for Settlement of Investor Disputes — an arm of the World Bank. ICSID is no friend of regulation.

No limitations on eligibility to sue for ‘lost profits’

Who will be eligible to sue under TPP? No, not the governments that wish to sign the agreement. Only “investors” are eligible to sue. There is no limitation on who or what is an “investor” — any person or entity that has “an expectation of gain or profit” in any form of participation in any enterprise, holds any financial instrument, possess any intellectual property right or has a “tangible or intangible” right in any “movable or immovable property,” even liens, is qualified to sue. Any decision, regulation or law by any level of government can be challenged, regardless of the democratic procedures used to promulgate it.

The real-world effect is that any corporate entity can move to overturn any government action, simply on the basis that its “right” to the maximum possible profit, regardless of cost to a community, has been “breached.”

Worse still, the expansive language of the TPP means that even more corporations will be eligible to sue governments, a Public Citizen analysis of the leaked investment chapter reports:

“Existing ISDS-enforced agreements of … developed TPP countries have been almost exclusively with developing countries whose firms have few investments in the developed nations. However, the enactment of the leaked chapter would dramatically expand each TPP government’s ISDS liability. The TPP would newly empower about 9,000 foreign-owned firms in the United States to launch ISDS cases against the U.S. government, while empowering more than 18,000 additional U.S.-owned firms to launch ISDS cases against other signatory governments.”

Corporations not based in a TPP country but which operate in a TPP country, even when they have no real investment in a TPP country, will be eligible to sue. (The “ISDS” in the above passage refers to “investor-state dispute settlement,” the technical term used to refer to rules that mandate the use of the secret arbitration bodies.) Additionally, previous language that purported to provide support for health, safety and environmental rules is missing from the latest text, according to Public Citizen.

That does not mean that the boilerplate language in past “free trade” deals concerning health, safety and the environment has any meaning. The most recent ruling on a complaint brought under the North American Free Trade Agreement, handed down on March 17, put Canada and the province of Nova Scotia on the hook for a minimum of C$300 million because a U.S. concrete company was denied a permit to turn an environmentally sensitive beach into a quarry.

Health and environment laws swept away

The list of decisions (which become precedents for future disputes) under NAFTA alone is infamous. Here is a sampling:

  • Ethyl Corporation sued Canada for $250 million because of a ban on a gasoline additive known as MMT, a chemical long believed to be dangerous to health. Ethyl claimed the Canadian ban was an “expropriation” of its “investment” and a violation of the principal of “equal treatment” of foreign capital even though had a Canadian producer of MMT existed, it would have been subject to the same standard. Canada settled to avoid a total defeat, paying Ethyl a smaller amount and reversing its ban.
  • A U.S. company, Metalclad, sued Mexico because a city government refused to grant it a permit for a waste dump (similarly denied to a Mexican company that previously wanted to use the site). Mexico lost, and had to grant the permit despite the environmental dangers and pay $15.6 million to Metalclad.
  • Another U.S. company, S.D. Myers, sued Canada because of a ban on the transportation of PCBs that conformed with both a Canada-United States and a multi-lateral environmental treaty. A tribunal ordered Canada to pay $5.6 million and reverse the ban, negating the two environmental treaties and ignoring the fact that PCBs are known carcinogens banned since 1979 in the U.S. The tribunal ruled that, when formulating an environmental rule, a government “is obliged to adopt the alternative that is most consistent with open trade.” So much for democracy!

In another infamous case, the tobacco company Philip Morris moved some of its assets to Hong Kong so it could declare itself a Hong Kong company eligible to sue Australia under the Australia-Hong Kong bilateral investment treaty, which, unlike some Australian trade pacts, allows corporations to sue one or the other government. Philip Morris seeks to overturn Australia’s rules limiting tobacco advertising and packaging, enacted in the interests of public health, which were found to be legal by Australia’s supreme court, the High Court. (This case is still pending.)

That case is shocking enough in itself, but there is an extra twist — the lawyer for Philip Morris, David A.R. Williams, is one of the judges appointed by New Zealand to the arbitration body hearing the case, ICSID. That is far from an isolated case as many ICSID judges are lawyers who specialize in representing multi-national corporations in front of these arbitration bodies. In another example, a judge ruled in favor of Vivendi Universal against Argentina in a failed water-privatization scheme, and her ruling was allowed to stand even though the judge served on the board of a bank that was a major investor in Vivendi. The TPP is completely silent on conflicts of interest. The leaked TPP chapter reveals for the first time that ICSID would hear disputes brought under TPP.

You won’t be able to buy local anymore

Those corporate lawyers, and especially the multi-national capital they represent, have had their wish lists brought to life in the leaked TPP text. No capital controls of any kind are allowed, “buy local” rules would be prohibited, “investors” can sue for large damages even when their claim has been covered by insurance, and the arbitration body hearing a case should apply “customary international law.”

That last item may sound bland, but in practice it means that rulings declaring reasonable laws and regulations to be illegal impediments to corporate profits are precedents that must be followed. Consider, for example, a London Court of International Arbitration panel, ruling in July 2005 for a unit of the Occidental Petroleum Corp. in a case heard under the U.S.-Ecuador bilateral investment treaty, which declared that any change in business conditions constitutes a violation of “investor rights.” If such a ruling is accepted as precedent, any attempt at regulation is at risk of being ruled an illegal “expropriation” of future profits.

The TPP, along with the Transatlantic Trade and Investment Partnership and the Trade In Services Agreement, are not done deals. The TPP is much closer to the conclusion of negotiations than the others, but can be stopped. Grassroots opposition across the 12 countries currently engaged in TPP talks continues. Militant opposition is critical in all countries, but perhaps the single most important factor at the moment is what the U.S. Congress will do.

Reports consistently say that several governments will not commit themselves to passing TPP until the U.S. Congress passes what it is commonly called “fast-track authority.” Officially known as “trade promotion authority,” fast-track is a method of sneaking unpopular bills into law. Under fast-track, Congress has a limited time to debate a bill and can not make amendments or change so much as a comma, only vote yes or no. The Obama administration is pushing hard for Congress to re-authorize fast-track because that is the only way the TPP, which can not stand the light of day, can be passed into law.

Because of opposition from most Democrats and some tea party Republicans, fast-track passage is not assured. The introduction of fast-track into the Senate depends on a Democrat from Oregon, Ron Wyden, who is being heavily pressured by his constituents not to introduce a fast-track bill he has been negotiating with a conservative Republican from Utah, Orrin Hatch. One of several groups pressuring Senator Wyden, the Oregon Fair Trade Campaign, has rented a recreational vehicle to shadow him across the state.

Where ever you are, voicing your opposition to the TPP to your elected officials, and joining a local or national group in opposition, is critical. The U.S. government is pushing the hardest, and attempting to insert the most draconian rules, to cement the control of U.S.-based multi-national corporations over the world’s resources and markets, and the other governments are willing to throw overboard what sovereignty remains to them so that their multi-national corporations get a slice of the pie.

Allowing the TPP to pass means nothing less than an end to democracy and a world where corporate power and money becomes more dominant than ever, where corporate profits are codified in law to be above all other human concerns.