Call it whitewashing or greenwashing, World Bank subterfuge doesn’t fool us

Every so often, the World Bank puts out a paper that calls for better social protection or at least a somewhat better deal for working people. The public relations people there evidently believe we have very short memories.

No, dear reader, the World Bank has not changed its function, nor have elephants begun to fly. Without any hint of irony, the World Bank’s latest attempt at selective amnesia is what it calls its “Social Protection and Jobs” strategy, in which it purports to advocate that the world’s national governments “greatly expand effective coverage of social protection programs” and “significantly increase the scale and quality of economic inclusion and labor market programs.” Hilariously, the World Bank titles its 136-page report fleshing out this strategy “Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for All.”

In that report, the World Bank, with a straight face, writes that it “recognizes that the progressive realization of universal social protection (USP), which ensures access to social protection for all whenever and however they need it, is critical for effectively reducing poverty and boosting shared prosperity.” Furthermore, the report builds on a previous document that allegedly offers “an overarching framework for understanding the value of investing in social protection programs and outlined how the World Bank would work with client countries to further develop their social protection programs and systems.” The report asserts goals of achieving equity, resilience and opportunity for all people, especially the developing world’s most vulnerable, and “to create opportunity by building human capital and helping men and women to access productive income-earning opportunities.”

^{A demonstration in Oslo during the World Bank conference in June 2002 (photo by Vindheim)}

We arrive at that favorite set of code words, “human capital.” We’ll return to that shortly. But before we highlight the actual record of the World Bank and its role in imposing devastating austerity on countries around the world, at enormous human cost, let’s take a brief look at the International Trade Union Confederation response. The ITUC, which represents 200 million workers in 163 countries and has 338 national affiliates, says its “primary mission is the promotion and defence of workers’ rights and interests.” Readers may recall that the ITUC issues a yearly report on the state of labor, consistently finding that not a single country fully upholds workers’ rights.

In its four-page summary of the World Bank declaration, the ITUC said it agrees with the World Bank’s stated goals, and “agrees with the Bank that the lack of social protection for the majority of the world’s workers in the informal economy is a challenge that needs to be urgently addressed.” Nonetheless, the ITUC “has a number of considerable reservations to some of the policy messages” and disputes “the rigor of the analysis underpinning some of the policies proposed.”

The ITUC writes: “The Bank’s vision of universal social protection appears to prioritise the extension of targeted non-contributory social assistance at the expense of social security, when both forms of support serve distinct and complementary functions.” Further, it “disagrees with the Bank’s critique of social security schemes, especially pensions, as an undue burden on public finances and ‘regressive’ in nature.” The World Bank’s “solution” to make pension and social security systems sustainable “mainly involve reducing public subsidies to social security, strengthening the link from contributions to entitlements through defined-contribution schemes [retirement plans in which you pay into but have no guarantees as to payout], as well as strengthening the role of voluntary and private pensions.”

In other words, it’s work until you drop! That is already a long-term goal of right-wing ideologues and corporate interests not only in the United States but around the world.

Underneath the rhetoric, the usual right-wing prescriptions

And, true to right-wing form, the World Bank places the onus for unemployment squarely on individuals. The ITUC critique says: “the onus of addressing unemployment appears to focus on the individual, rather than on the broader structural forces at play. The [bank report] disregards in particular the measures that governments can take to create new, quality jobs, such as proactive industry planning, public sector job creation, and public investment – including in labour intensive sectors with strong social and environmental dividends, such as infrastructure, care and the green economy.” Finally, the World Bank claims that labor regulations are “excessive” and threaten employment, and advocates lowering already meager worker protections.

Once again, the World Bank has not forgotten its raison d’être; it has not suddenly changed its stripes. Elephants will continue to not fly.

Did we really expect otherwise? A look at the World Bank’s record provides all the evidence anyone could want of it being one of the world’s most destructive agencies, an organization dedicated to enhancing corporate plunder and imposing punishing austerity. A one-two punch with the International Monetary Fund. Both organizations do the bidding of the Global North’s multi-national corporations through playing complementary roles.

^{Three Gorges Dam, a project funded by the World Bank that displaced 1.3 million people (photo by Christoph Filnkössl)}

When I last checked in at the World Bank, in 2018, the bank was in the process of completing its “World Development Report 2019: The Changing Nature of Work,” which opened with quotes from Karl Marx and John Maynard Keynes. That was merely a feint. What we soon read in examining the report is that the problem is “domestic bias towards state-owned or politically connected firms, the slow pace of technology adoption, or stifling regulation.” Sure, jobs are disappearing, but that’s no problem because “the rise in the manufacturing sector in China has more than compensated for this loss.” Essentially, the World Bank was advocating that we become sweatshop workers in China. What else to do? “Early investment in human capital” — in other words, pay lots of money for advanced degrees you won’t be able to use — and “more dynamic labor markets,” which is code for gutting labor protections and making it easier to fire workers.

Elephants didn’t, after all, fly five years ago, either. 

The World Bank has even declared itself above the law. Unfortunately, at least one U.S. court agrees. A lawsuit filed in federal court in Washington on behalf of Indian farmers and fisherpeople ended with a ruling that the World Bank is immune from legal challenge. The bank provided $450 million for a power plant that the plaintiffs said degraded the environment and destroyed livelihoods. The court agreed with the World Bank’s contention that it has immunity under the International Organizations Immunities Act. The World Bank thus was declared the equivalent of a sovereign state, and in this context is placed above any law as if it possesses diplomatic immunity. Another suit, however, also filed by EarthRights International against the World Bank for its role in turning a blind eye to alleged systematic human rights violations by a palm oil company in Honduras for a project it financed, was allowed to proceed by the U.S. Supreme Court in 2019. That case, however, appears to yet be decided by the trial court. So the World Bank can sometimes be sued in the United States legal system but it remains to be seen if it will have to shoulder any responsibility.

The World Bank has a long history of ignoring the human cost of the projects it funds. The World Development Movement, a coalition of local campaign groups in Britain, reports that the World Bank has provided more than US$6.7 billion in grants to projects that are destructive to the environment and undermine human rights, a total likely conservative. To cite merely three of the many examples, the World Bank:

• Loaned an energy company in India more than $550 million to finance the construction of two coal-fired power plants. Local people, excluded from discussions, were beaten, their homes bulldozed and reported reduced food security and deteriorating health as a result of the power stations.
• An Indonesian dam, made possible by the World Bank’s $156 million loan, resulted in the forcible evictions of some 24,000 villagers, who were subject to a campaign of violence and intimidation.
• In Laos, a hydropower project made possible by World Bank guarantees displaced at least 6,000 Indigenous people and disrupted the livelihoods of around 120,000 people living downstream of the dam who can no longer depend on the rivers for fish, drinking water and agriculture.

A study of World Bank policies, “Foreclosing the Future” by environmental lawyer Bruce Rich, found that:

“Drawing on Bank studies, project evaluations and sectoral reviews, it is shown that the World Bank still suffers from a pervasive ‘loan approval culture’ driven by a perverse incentive system that pressures staff and managers to make large loans to governments and corporations without adequate attention to environmental, governance and social issues. In 2013, Bank Staff who highlight social risks and seek to slow down project processing still risk ‘career suicide.’ … [The bank] has continued to binge on enormous loans to oil and gas extraction, coal-fired power stations and large-scale mining generating environmental damage, forest loss and massive carbon emissions.”

Destroying the environment in the service of short-term profits

Want more? The World Bank has provided nearly $15 billion in financing for fossil fuel projects since the 2015 signing of the Paris Climate Accords. An October 2022 report by Big Shift Global, a coalition of 50 environmental organizations across the Global North and South, notes that despite World Bank claims that it would end financing for upstream oil and gas production, it has other avenues to promote fossil fuels. One of these methods is to send funds to a financial institution, which in turns sends the money to the fossil fuel project. Another is to provide non-earmarked funds but make the money conditional on instituting reforms encouraging fossil fuels.

The biggest fossil fuel funding, according to the Big Shift Global report, is $1.1 billion for the Trans-Anatolian Pipeline, a gas distribution project in Azerbaijan. Another $600 million went toward a gas storage project in Turkey and another eight projects were given at least $100 million by the World Bank. Projects that the World Bank has financed include expansion of coal. Other work by the World Bank includes $2.8 billion so that Ghana could move its energy mix from mostly hydropower to majority fossil fuels, and pressured Ghana to enter into gas contracts that causes it to pay $1.2 billion annually for gas it doesn’t use, which also has put a greater debt burden on the country. 

The World Bank also encouraged Guyana to use a Texas law firm that has Exxon as a major client to rewrite its petroleum laws, while providing money for oil and gas development in Guyana. That development will benefit Exxon as the fossil fuel multinational snagged a contract under which Guyana doesn’t receive any of the profits until the costs of the field are paid off. In other words, the Big Shift Global report says, “Exxon can continue to charge Guyana for every newly developed oil field. It could take decades before the money trickles down to the people.” 

^{Protest at the World Bank (photo by “Jenene from Chinatown,” New York City)}

The World Bank attempted the same whitewashing stunt with its fossil fuel funding, once issuing a report lamenting global warming while completely ignoring its role in worsening global warming. At the time of that whitewashing report, the bank was providing billions of dollars to finance new coal plants around the world. By any reasonable standard, the World Bank is a key organization in the concatenation of processes that has brought the world to the brink of catastrophic climate change. The policies of the World Bank and its sibling, the International Monetary Fund, have constituted non-stop efforts to impose multi-national corporate control, dismantle local democratic institutions and place decision-making power into the hands of corporate executives and financiers, the very people and institutions that profit from the destruction of the environment.

A trail of evictions, displacements, gross human rights violations (including rape, murder and torture), widespread destruction of forests, financing of greenhouse-gas-belching fossil-fuel projects, and destruction of water and food sources has followed the World Bank. It works in conjunction with the International Monetary Fund, whose loans, earmarked for loans to governments to pay debts or stabilize currencies, always come with the same requirements to privatize public assets (which can be sold far below market value to multi-national corporations waiting to pounce); cut social safety nets; drastically reduce the scope of government services; eliminate regulations; and open economies wide to multi-national capital, even if that means the destruction of local industry and agriculture. This results in more debt, which then gives multi-national corporations and the IMF, which enforces those corporate interests, still more leverage to impose more control, including heightened ability to weaken environmental and labor laws.

The World Bank compliments this by funding massive infrastructure projects that tend to enormously profit deep-pocketed international investors but ignore the effects on local people and the environment. The two institutions are working as intended, to facilitate the upward distribution of wealth, regardless of human and environmental cost.

World Bank solution for lack of jobs: Cut worker protections

The World Bank is in the process of completing its “World Development Report 2019: The Changing Nature of Work” and, surprisingly, the latest draft version opens with quotes from Karl Marx and John Maynard Keynes. Has the World Bank suddenly lost sight of its purpose and will now take up the cause of working people?

Well, you already know the answer to that question, didn’t you?

Only a few paragraphs down we begin to see where this paper is heading. After a bit of perfunctory hand-wringing over disruptions caused by robotics, we read the problem is “domestic bias towards state-owned or politically connected firms, the slow pace of technology adoption, or stifling regulation.” And although some jobs are disappearing, fear not because “the rise in the manufacturing sector in China has more than compensated for this loss.”

Oh, so we should all move to China to get new jobs.

Never mind that the highest minimum wage for Chinese workers, that mandated in Shanghai, is $382 per month. In some places the minimum wage is half that, if workers are fortunate enough to be paid regularly. And that millions of rural Chinese are being driven into cities to become sweatshop workers, so for now there won’t be enough work for the rest of the world. Then again, letting bosses have the upper hand is what the World Bank has in mind. No, its economists haven’t forgotten what the institution’s purpose is nor why it exists.

A Chinese-owned factory in Lesotho (photo by K. Kendall)

So what to do? The World Bank report does suggest not allowing corporations to dodge taxes to the degree that they do. Very well, but even if taxes were collected at the statutory rates, that would still leave corporations vastly under-taxed. No suggestion by the bank, of course, that corporations actually pay a fair tax rate. Corporations currently account for a paltry nine percent of U.S. tax receipts; in the 1950s, they accounted for 30 percent or more. Similarly, in Canada personal income taxes account for three and a half times more revenue than do corporate income taxes; these were equal in 1952.

There is much discussion of “investing in human capital,” a particularly favored mantra of the World Bank. What does that mean? Capitalists are likely to interpret such talk — rather common in NGO circles these days — to mean demanding more skills or degrees from prospective workers, but in the United States graduates with doctorate degrees are being forced to take jobs in academia as part-time adjuncts, and plenty of folks in other fields are “over-educated” already for the jobs they hold. This concept comes from the idea that the problem is that there aren’t enough skilled people for all those wonderful jobs that are out there, just over the rainbow. But in the real world, as opposed to Right-wing think tanks, that is not so.

A 2014 report issued by the National Employment Law Project found that higher-wage jobs were created at a much lower rate during the “recovery” from the 2007-08 economic collapse than had been lost; conversely, low-wage jobs (paying less than $13.33 per hour) were created twice as fast as they had been lost. In separate studies, the Economic Policy Institute found that long-term unemployment is elevated for workers at every education level (and was increasing at a somewhat higher rate for those with some college or a four-year college degree than the average), and that the so-called “skills mismatch” is a myth.

So we come to the real “solution” in the minds of World Bank officials: Cut worker-protection laws.

Aw, you really aren’t surprised, are you?

(Graphic by Real-World Economics Review)

Here’s a key passage in the report: “Rapid changes to the nature of work put a premium on flexibility for firms to adjust their workforce, but also for those workers who benefit from more dynamic labor markets.”

Dynamic for who? What we have here are code words meaning make it easier to fire people. And that’s the real takeaway message, no matter the lofty rhetoric about governments creating a new social contract. “Creating jobs” and “investing early in human capital” are two elements of the World Bank paper’s suggested new social contract. Unfortunately, there are no thoughts on how new jobs might be created when capitalists are in a frenzy of eliminating jobs to maintain their profit rates and survive relentless market competition. More schooling, which is what “investing early in human capital” amounts to, is fine by capitalists, as long as they don’t have to bear any of the costs. It’s up to students to take on more debt to create this new “human capital.”

Contrast this happy talk with the reality of the capitalist workplace. A report just issued by Democratic U.S. Representative Keith Ellison found the average ratio of CEO-to-median-worker pay is 339-to-1. That ratio among the 500 biggest U.S. corporations is as high as almost 5,000-to-1. Nope, I don’t think the boss works thousands of times harder than you do. At McDonalds, for example, the CEO’s annual salary could be used to pay the yearly wages of 3,101 workers making the chain’s median pay.

The sort of societal priorities and imbalances of power that enable such appalling inequality might be summed up by the uses to which money is put. In Los Angeles, a new football stadium is being built and the estimated cost of it is now estimated at $4.9 billion. That figure has risen considerably and likely will again. Given all the homelessness in Los Angeles, and all the other social problems, what could have been done with $4.9 billion?

The number of homeless people in California is estimated at 130,000. Doing something about that might be one way to “invest” in human development, and doing so might even save money. A Rand Corporation study carried out for Los Angeles County found that homeless people who are provided stable shelter make fewer trips to the emergency room and are arrested less frequently, to the extent that the cost of the housing is more than offset.

Oops, but that’s not profitable for the well-connected as throwing money at stadium boondoggles or cutting jobs. But if you earn enough degrees, perhaps you’ll fulfill the World Bank’s prophesy by landing a job at a Chinese sweatshop.

World Bank declares itself above the law

The World Bank has for decades left a trail of human misery. Destruction of the environment, massive human rights abuses and mass displacement have been ignored in the name of “development” that works to intensify neoliberal inequality. In response to legal attempts to hold it to account, the World Bank has declared itself above the law.

At least one U.S. trial court has already agreed that the bank can’t be touched, and thus the latest lawsuit filed against it, attempting to obtain some measure of justice for displaced Honduran farmers, faces a steep challenge. Regardless of the ultimate outcome of legal proceedings, however, millions of people around the world have paid horrific prices for the relentless pursuit of profit.

A trail of evictions, displacements, gross human rights violations (including rape, murder and torture), widespread destruction of forests, financing of greenhouse-gas-belching fossil-fuel projects, and destruction of water and food sources has followed the World Bank.

Honduras (photo by Zack Clark)

The latest attempt at accountability is a lawsuit filed in the U.S. federal court in Washington by EarthRights International, a human rights and environmental non-governmental organization, charging that the World Bank has turned a blind eye to systematic abuses associated with palm-oil plantations in Honduras that it has financed. The lawsuit, Juana Doe v. International Finance Corporation, alleges that

“Since the mid-1990s, the International Finance Corporation [a division of the World Bank] has invested millions of dollars in Honduran palm-oil companies owned by the late Miguel Facussé. Those companies — which exist today as Dinant — have been at the center of a decades-long and bloody land-grabbing campaign in the Bajo Aguán region of Honduras.

For nearly two decades, farmer cooperatives have challenged Dinant’s claims to sixteen palm-oil plantations … that it has held in the Bajo Aguán region. On information and belief, Dinant’s former owner, Miguel Facussé, took that land from the farmer cooperatives through fraud, coercion, and actual or threatened violence. The farmer cooperatives have engaged in lawsuits, political advocacy, and peaceful protests to challenge Dinant’s control and use of the land. And Dinant has responded to such efforts with violence and aggression.”

Bank’s own staff cites failures

EarthRights International alleges that the World Bank has “repeatedly and consistently provided critical funding to Dinant, knowing that Dinant was waging a campaign of violence, terror, and dispossession against farmers, and that their money would be used to aid the commission of gross human rights abuses.” The lawsuit filing cites “U.S. government sources” to allege that more than 100 farmers have been killed since 2009.

The suit also says that the International Finance Corporation’s own ombudsman said the World Bank division “failed to spot or deliberately ignored the serious social, political and human rights context.” These failures arose “from staff incentives ‘to overlook, fail to articulate, or even conceal potential environmental, social and conflict risk’ and ‘to get money out the door.’ ” Despite this internal report, the suit says, the World Bank continued to provide financing and that the ombudsman has “no authority to remedy abuses.”

(World Bank representatives did not respond to a request for comment. Although not directly a party to the lawsuit, Dinant describes the allegations as “absurd.” In a statement on its web site, the company said “All allegations that Dinant is — or ever has been — engaged in systematic violence against members of the community are without foundation.”)

Three Gorges Dam, a project funded by the World Bank that displaced 1.3 million people (photo by Christoph Filnkössl)

EarthRights International’s lawsuit faces an uphill challenge due to an earlier suit filed by it on behalf of Indian farmers and fisherpeople being thrown out by the same court when it ruled that the World Bank is immune from legal challenge. The bank provided $450 million for a power plant that the plaintiffs said degraded the environment and destroyed livelihoods. The court agreed with the World Bank’s contention that it has immunity under the International Organizations Immunities Act. (The dismissal has been appealed.)

The International Organizations Immunities Act provides that “International organizations, their property and their assets, wherever located, and by whomsoever held, shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments.” The World Bank has been declared the equivalent of a sovereign state, and in this context is placed above any law as if it possesses diplomatic immunity.

This law is applied selectively; lawsuits against Cuba are not only allowed but consistently won by plaintiffs. These are not necessarily the strongest of cases, such as participants in the Bay of Pigs invasion winning judgments and a woman who was married to a Cuban who went back to Cuba winning $27 million because the court found that her marriage made her a “victim of terrorism”!

More than 3 million people displaced

Despite its immunity, a passport may not be needed to enter a World Bank office, but can it be argued that the lending organization uses its immense power wisely? That would be a very difficult case to make.

A 2015 report by the International Consortium of Investigative Journalists found that 3.4 million people were physically or economically displaced by projects funded by the World Bank. Land was taken, people were forced from their homes and their livelihoods damaged. Some of the other findings of the report, on which more than 50 journalists from 21 countries worked:

• From 2009 to 2013, the World Bank pumped $50 billion into projects graded the highest risk for “irreversible or unprecedented” social or environmental impacts — more than twice as much as the previous five-year span.
• The bank regularly fails to live up to its own policies that purport to protect people harmed by projects it finances.
• The World Bank and its International Finance Corporation lending arm have financed governments and companies accused of human rights violations such as rape, murder and torture. In some cases, they continued to bankroll these borrowers after evidence of abuses emerged.
• Ethiopian authorities diverted millions of dollars from a World Bank-supported project to fund a violent campaign of mass evictions, according to former officials who carried out the forced resettlement program.

One of the articles that is a part of this investigative report said the bank routinely ignores its own rules that require detailed resettlement plans and that employees face strong pressure to approve big infrastructure projects. The report says:

“The World Bank often neglects to properly review projects ahead of time to make sure communities are protected, and frequently has no idea what happens to people after they are removed. In many cases, it has continued to do business with governments that have abused their citizens, sending a signal that borrowers have little to fear if they violate the bank’s rules, according to current and former bank employees.

‘There was often no intent on the part of the governments to comply — and there was often no intent on the part of the bank’s management to enforce,’ said Navin Rai, a former World Bank official who oversaw the bank’s protections for indigenous peoples from 2000 to 2012. ‘That was how the game was played.’ …

Current and former bank employees say the work of enforcing these standards has often been undercut by internal pressures to win approval for big, splashy projects. Many bank managers, insiders say, define success by the number of deals they fund. They often push back against requirements that add complications and costs.”

Funding that facilitates global warming

Incredibly, one of the outcomes of the Paris Climate Summit was for leaders of the G7 countries to issue a communiqué that they would seek to raise funds “from private investors, development finance institutions and multilateral development banks.” These leaders propose the World Bank be used to fight global warming despite it being a major contributor to projects that increase greenhouse-gas emissions, including providing billions of dollars to finance new coal plants around the world. The bank even had the monumental hypocrisy to issue a report in 2012 that called for slowing global warming while ignoring its own role.

It is hoped you, dear reader, won’t fall off your chair in shock, but the World Bank’s role in facilitating global warming has since only increased.

What happens to rain forests when the market is allowed to decide. (Photo of Montane Rainforest in Ecuador by Gunnar Brehm)

Financing projects that facilitate global warming had already been on the rise. A study prepared by the Institute for Policy Studies and four other organizations found that World Bank lending for coal, oil and gas reached $3 billion in 2008 — a sixfold increase from 2004. In the same year, only $476 million went toward renewable energy sources. Oil Change International (citing somewhat lower dollar figures) estimates that World Bank funding for fossil fuels doubled from 2011 to 2015.

Destructive logging projects across the Global South funded by the World Bank accelerated in the 1990s. Despite a January 2000 internal report finding that its lending practices had not curbed deforestation or reduced poverty, Southeast Asia saw a continuation of illegal logging and land concessions, and untimely deaths of local people blowing the whistle, as has Africa.

Similar to its report on curbing global warming that ignores its own role, the World Bank shamelessly issued a 2012 report calling for international law enforcement measures against illegal logging. Perhaps what is illegal are only those operations not funded by the bank?

Loans to pay debt create more debt, repeat

Ideology plays a critical role here. International lending organizations, such as the World Bank and International Monetary Fund, consistently impose austerity. The IMF’s loans, earmarked for loans to governments to pay debts or stabilize currencies, always come with the same requirements to privatize public assets (which can be sold far below market value to multi-national corporations waiting to pounce); cut social safety nets; drastically reduce the scope of government services; eliminate regulations; and open economies wide to multi-national capital, even if that means the destruction of local industry and agriculture. This results in more debt, which then gives multi-national corporations and the IMF, which enforces those corporate interests, still more leverage to impose more control, including heightened ability to weaken environmental and labor laws.

The World Bank compliments this by funding massive infrastructure projects that tend to enormously profit deep-pocketed international investors but ignore the effects on local people and the environment.

The World Bank employs a large contingent of scientists and technicians, which give it a veneer of authority as it pursues a policy of relentless corporate plunder. Noting that the bank possesses “an enormous research and knowledge generation capacity,” The environmental and social-justice organization ASEED Europe reports:

“The World Bank is the institution with one of the largest research budgets globally and has no rival in the field of development economics. … A number of researchers and scholars have questioned the reliability of the World Bank-commissioned research. Alice Amsdem, a top scholar on East Asian economies, argues that since the World Bank continually fails to scientifically prove its conclusions, its policy justifications are ‘quintessentially political and ideological.’ Regarding the World Development Report (WDR) series, for example, Nicholas Stern, an Oxford professor in economics and former World Bank chief economist says that many of the numbers used by the Bank come from highly dubious sources, or have been constructed in ways which leaves one sceptical as to whether they can be helpfully applied.” (citations omitted)

Capitalist ideology rests on the concept of “markets” being so efficient that they should be allowed to work without human intervention. But what is a market? Under capitalism, it is nothing more than the aggregate interests of the most powerful and largest financiers and industrialists. No wonder that “markets” “decide” that neoliberal austerity must be ruthlessly imposed — it is those at the top of vast corporate institutions who benefit from the decisions that the World Bank, and similar institutions, consistently make.

Markets do not sit in the clouds, beyond human control, as some perfect mechanism. They impose the will of those with the most who can not ever have enough. Markets are not ordained by some higher power — everything of human creation can be undone by human hands. Our current world system is no exception.

G7 leaders fiddle while Earth burns

The G7 governments saying they will phase out fossil fuels by 2100 isn’t closing the barn door after the horse has left. It is declaring an intention to consider closing the barn door after waiting for the horse to disappear over the horizon. It is okay to be feel underwhelmed by this.

The Group of 7 summit held earlier this month in Germany, representing seven of the world’s largest economies, ended with a declaration that these governments would commit themselves to a 40 to 70 percent reduction in greenhouse-gas emissions and a complete phaseout in 2100, and an invitation for “all countries to join us in this endeavor.” A communiqué issued after the summit declared:

“We commit to doing our part to achieve a low-carbon global economy in the long-term including developing and deploying innovative technologies striving for a transformation of the energy sectors by 2050. … To this end we also commit to develop long-term national low-carbon strategies.” [page 17]

The G7 governments say they are acting under the impetus of last year’s Intergovernmental Panel on Climate Change report and in anticipation of next December’s Climate Change Conference in Paris. In the conception of the IPCC report, greenhouse-gas emissions should be 40 to 70 percent lower globally in 2050 than in 2010 and “near zero” in 2100 to achieve a goal of holding greenhouse-gas concentrations in the atmosphere to 450 parts per million in 2100. Even that level is a substantial increase above the current level of 404 parts per million, at which the Earth’s climate is already undergoing dramatic changes.

Retreating glacier in Greenland (photo by Bastique)

The IPCC report, prepared by scientists from around the world but apparently watered down by the world’s governments, promises that mitigating global warming will be virtually cost-free and require no fundamental change to the world’s economic structure. Alas, there are no free lunches — the IPCC report’s insistence that techno-fixes will magically take care of carbon buildup, allowing humanity to continue the path it has been on since the dawn of the Industrial Revolution, is dangerously unrealistic.

So what do the G7 governments have in mind? Their communiqué says they will increase the number of people in developing countries who have access to insurance, increase developing countries’ access to renewable energy and raise funds “from private investors, development finance institutions and multilateral development banks.” [pages 15-16] Try to contain your excitement when you read the G7 prescription for combating global warming:

“We will continue our efforts to provide and mobilize increased finance, from public and private sources. … We recognize the potential of multilateral development banks in delivering climate finance and helping countries transition to low carbon economies.” [page 15]

It may already be too late

Before we delve into the idea that the World Bank, funder of gigantic greenhouse-gas belching, polluting projects around the world, is the cure for global warming, and before we contemplate the idea that we can bind the policies of governments eight decades in the future, let us ask what actually needs to be done to prevent the climate from spiraling into a feedback loop that will accelerate species die-offs and dangerously disrupt agriculture and water supplies. The U.S. government’s climate agency, the National Oceanic and Atmospheric Administration, issued a study in 2009 that flatly concluded “there’s no going back.” The study, led by NOAA senior scientist Susan Solomon, found:

“[C]hanges in surface temperature, rainfall, and sea level are largely irreversible for more than 1,000 years after carbon dioxide (CO2) emissions are completely stopped. … ‘It has long been known that some of the carbon dioxide emitted by human activities stays in the atmosphere for thousands of years,” Solomon said. “But the new study advances the understanding of how this affects the climate system.’ ”

Carbon dioxide thrown into the air stays in the atmosphere for a long time, warming oceans will retain added heat and transfer that back to the atmosphere, and we have yet to experience the full effect of greenhouse gases that have already been emitted. Global sea-level rises and major disruption to rain patterns will effect billions of people. The NOAA study said:

“If CO2 is allowed to peak at 450-600 parts per million, the results would include persistent decreases in dry-season rainfall that are comparable to the 1930s North American Dust Bowl in zones including southern Europe, northern Africa, southwestern North America, southern Africa and western Australia.

The study notes that decreases in rainfall that last not just for a few decades but over centuries are expected to have a range of impacts that differ by region. Such regional impacts include decreasing human water supplies, increased fire frequency, ecosystem change and expanded deserts. Dry-season wheat and maize agriculture in regions of rain-fed farming, such as Africa, would also be affected.”

A Massachusetts Institute of Technology paper, lamenting the widespread conviction that global warming can be reversed quickly when and if it is decided to do so, notes such beliefs are in violation of basic physics. The paper’s abstract says:

“[W]ait-and-see policies erroneously presume climate change can be reversed quickly should harm become evident, underestimating substantial delays in the climate’s response to anthropogenic forcing. … [Greenhouse-gas] emissions are now about twice the rate of GHG removal from the atmosphere. GHG concentrations will therefore continue to rise even if emissions fall, stabilizing only when emissions equal removal. In contrast, results show most subjects [of an MIT study] believe atmospheric GHG concentrations can be stabilized while emissions into the atmosphere continuously exceed the removal of GHGs from it. These beliefs—analogous to arguing a bathtub filled faster than it drains will never overflow—support wait-and-see policies but violate conservation of matter.”

More heating even if we stopped today

A commentary published on RealClimate, a Web site published by working climate scientists, calculates that if greenhouse-gas concentrations were kept constant at today’s level, there would still be an increase in global temperatures of as much as 0.8 degrees Celsius — combined with the global warming already experienced, that is close to the 2-degree overall rise widely believed to be the outer limit to avoid catastrophic damage to Earth’s ecosystem. But to achieve even that equilibrium requires immediate, significant cuts to greenhouse-gas emissions. The commentary says:

“[C]onstant concentrations of CO2 imply a change in emissions — specifically an immediate cut of around 60 to 70% globally and continued further cuts over time.”

“Immediate” as in now, not decades in the future. The actual proposed cuts, in the near term, are far less than that range, and less than initially meets the eye. The baseline of measurement is being shifted, for example, so that the benchmark against which the reductions are measured are higher than previously set. Environmental Defence Canada calculates that the Harper government’s switch to using 2005 rather than 1990 as the baseline reduces the goal by more than half. In a report, the group writes:

“The U.N. Framework Convention on Climate Change (1992) and the Kyoto Protocol (1997) both used 1990 as the reference or base year. Most countries still use 1990 as the base year but some have started using more recent base years. Since the Copenhagen summit in 2009, Canada has been using 2005 as a base year. This makes comparison between targets more difficult. It also makes targets look stronger than they are since Canada’s carbon pollution increased significantly between 1990 and 2005. For example, the Canadian government’s pledge to reduce emissions by 30 per cent below 2005 by 2030 is actually less than half as strong … when expressed using 1990 as the base year.” [page 3]

Emissions from the Alberta tar sands have increased almost 80 percent since 2005 and the Harper government has every intention of boosting tar sands production as much as possible, including plans for multiple pipelines, while equating environmentalists with terrorists. Environmental Defence Canada notes that the Harper government has no intention of regulating tar sands oil and flatly declares Canada’s post-2020 target “the weakest in the G7 to date.”

The potential global warming just from the Alberta tar sands is so large that the U.S. environmental scientist James Hansen believes it will be impossible to stop runaway global warming should that oil be burned.

Assigning contributions isn’t straightforward

The point here isn’t to single out Canada. But its cumulative greenhouse-gas emissions since the dawn of the Industrial Revolution is the ninth highest in the world, a ranking likely to rise if plans of current oil and gas companies come to fruition. So the argument sometimes made that Canada isn’t a significant contributor to global warming because of its small population isn’t true. The United States, not surprisingly, is easily the biggest culprit, having emitted 29 percent of the world’s cumulative greenhouse gases, according to calculations by the World Resources Institute.

China ranks second, with nine percent of the world’s cumulative greenhouse-gas emissions, and the top 10 countries account for 72 percent. (Italy is the only G7 country not among the top 10.) But even here, it could be argued that China’s ranking deserves an asterisk. Western multi-national corporations have eagerly transferred production to China, particularly U.S. companies such as Wal-Mart and Apple. So much of those Chinese greenhouses gases are the responsibility of U.S. corporations. A paper led by Glen Peters of the Center for International Climate and Environmental Research in Oslo estimates that, in 2008 alone, the U.S. imported as much as 400 million tons of carbon dioxide in Chinese goods.

Regardless of source, global warming does not come without costs. The nonprofit organization DARA claims that global warming already causes 400,000 deaths per year, and that “the present carbon-intensive economy moreover is linked to 4.5 million deaths worldwide each year.”

Can the World Bank and International Monetary Fund realistically be part of the solution to global warming, as the G7 communiqué would have it? No! The World Bank has poured billions of dollars into dams, power plants and other projects that worsen global warming, and shows no sign of altering its indifference to environmental costs. The World Bank and IMF also promote neoliberalism and austerity programs around the world; immiserating people makes them more vulnerable, not less, to the stresses of global warming and pollution.

The amount of industrial carbon dioxide emissions thrown into the atmosphere from 1988 to 2014 is equal to all the emissions from 1751 to 1988, according to the Climate Accountability Institute. That continually rising rate of emissions is reflective of the ever more intensive pressures for growth capitalism imposes, and the continual movement of production to the places with the lowest wages and weakest environmental laws imposed by capitalist competition, stretching supply chains ever longer, is itself a contributor to global warming.

The G7 communiqué is nothing more than wishful thinking that no real change is necessary. There are no free lunches: The world has to drastically reduce its consumption. As this is an impossibility under capitalism, another world is not only possible, it is necessary in the long run for our descendants to even have a livable world.

New development banks unlikely to threaten World Bank

Forecasts that new development banks sponsored by the largest developing countries are destined to erode the economic dominance of the United States are quite premature, but it is nonetheless no contradiction that the global hegemon has vigorously sought to stop them. More than a little hypocrisy is at work here.

The newly created Chinese-led Asian Infrastructure Investment Bank has drawn much more of Washington’s ire than has the BRICS New Development Bank formed by the five “BRICS” countries of China, Russia, India, China and South Africa. The U.S. government has leaned heavily on Australia and other countries sufficiently firmly that Canberra has declined to join the Asian Infrastructure Investment Bank despite its initial interest, nor have Indonesia and South Korea.

Although the infrastructure bank is to be capitalized with US$100 billion, it would be ridiculous to say that the World Bank or International Monetary Fund will be put out of business. It will not necessarily go much beyond complementing the existing Asian Development Bank, a regional multi-lateral institution controlled by the U.S. and Japan. And even the World Bank says Asia will require trillions of dollars to build its infrastructure in coming years that it and existing institutions can’t supply.

Protest at the World Bank. (Photo by “Jenene from Chinatown,” New York City)

The politics of imperialism are at work here. The very idea that a country outside the control of the U.S. dares to set up an institution outside the control of the U.S. is an example that Washington, as the ultimate enforcer of multi-national corporations’ prerogatives, is determined to stamp out.

In a front-page article, The New York Times reported:

“American officials have lobbied against the [infrastructure] bank with unexpected determination and engaged in a vigorous campaign to persuade important allies to shun the project, according to senior United States officials and representatives of other governments involved.”

And what excuse does the U.S. government give for its opposition? Officially, the Obama administration is not talking, but, quoting a “senior official” granted anonymity, the Times reports:

“A senior Obama administration official said the Treasury Department had concluded that the new bank would fail to meet environmental standards, procurement requirements and other safeguards adopted by the World Bank and the Asian Development Bank, including protections intended to prevent the forced removal of vulnerable populations from their lands. … ‘How would the Asian Infrastructure Investment Bank be structured so that it doesn’t undercut the standards with a race to the bottom?’ asked the senior official.”

Has the Obama administration, or, more accurately, the government apparatus that has steered U.S. policy on behalf of corporate interests for generations, suddenly grown a conscience? Quite unlikely. The World Bank and International Monetary Fund, as well as regional banks such as the Asian Development Bank, have been under U.S. suzerainty since their founding. Does the World Bank really uphold development ideals? The record firmly says otherwise.

The World Bank’s record of destruction

The World Development Movement, a coalition of local campaign groups in Britain, reports that the World Bank has provided more than US$6.7 billion in grants to projects that are destructive to the environment and undermine human rights, a total likely conservative. To cite merely three of the many examples, the World Bank:

• Loaned an energy company in India more than $550 million to finance the construction of two coal-fired power plants. Local people, excluded from discussions, were beaten, their homes bulldozed and complain of reduced food security and deteriorating health as a result of the power stations.
• An Indonesian dam, made possible by the World Bank’s $156 million loan, resulted in the forcible evictions of some 24,000 villagers, who were subject to a campaign of violence and intimidation.
• In Laos, a hydropower project made possible by World Bank guarantees displaced at least 6,000 Indigenous people and disrupted the livelihoods of around 120,000 people living downstream of the dam who can no longer depend on the rivers for fish, drinking water and agriculture.

A study of World Bank policies, Foreclosing the Future by environmental lawyer Bruce Rich, found that:

“Drawing on Bank studies, project evaluations and sectoral reviews, it is shown that the World Bank still suffers from a pervasive ‘loan approval culture’ driven by a perverse incentive system that pressures staff and managers to make large loans to governments and corporations without adequate attention to environmental, governance and social issues. In 2013, Bank Staff who highlight social risks and seek to slow down project processing still risk ‘career suicide.’ … [The bank] has continued to binge on enormous loans to oil and gas extraction, coal-fired power stations and large-scale mining generating environmental damage, forest loss and massive carbon emissions.”

A study prepared by the Institute for Policy Studies and four other organizations found that World Bank lending for coal, oil and gas was $3 billion in 2008 — a sixfold increase from 2004. In the same year, only $476 million went toward renewable energy sources.

It could be pointed out that China’s industrialization has had serious environmental consequences, and that Chinese money was critical to the building of the Three Gorges Dam, the construction of which led to the forced removal of at least 1.3 million people. True enough, but Canadian, French, German, Swiss, Swedish and Brazilian capital were also necessary to build the dam. The World Bank also provided loans associated with Three Gorges and provided experts during the project’s planning stages.

Despite the pressure from Washington, 21 countries signed up to be founding members of China’s Asian Infrastructure Investment Bank, including India, Singapore and the Philippines.

BRICS bank expected to bow to the logic of capital

China’s new bank was formed three months after the BRICS New Development Bank. The BRICS bank will be more modest, with a goal of US$100 billion capitalization, spread equally among the five countries. In a July 2014 communiqué, the five countries said their bank will have the “purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies.” They also pledged to organize a “BRICS Contingent Reserve Arrangement” to “help countries forestall short-term liquidity pressures” resulting from foreign-exchange or debt markets.

Although this bank is intended as a gesture of independence from the U.S.-dominated world financial system, and will use some combination of the BRICS currencies, detaching from the world system is not a simple matter of setting up new institutions. A New Delhi economics professor, C.P. Chandrasekhar, sees the bank being limited in what it can potentially do. Writing on Naked Capitalism, he said:

“However, the new development bank is fundamentally not detached from the global financial system. Being a bank, even if a specialised one, it must ensure its own commercial viability. And it must do so when a large part of the resources it lends would be mobilised from the market. … [W]anting to be seen as respectful of the sovereign interests of borrowing countries, the [New Development Bank] would be careful not to frame its lending rules in ways that threaten the policy sovereignty of borrowing countries. If the countries that approach the institution are pursuing neoliberal strategies, there may be clear limits in terms of what the new development bank itself can achieve.”

Professor Chandrasekhar concludes:

“The decision of the BRICS to set up mini-versions of the World Bank and the IMF seems to be more a symbolic declaration of resentment at the failure of the US and its European allies to give emerging countries a greater say in the operations of the Bretton Woods institutions. … The desire to redress the obvious inequities in the global financial system seems far less important.”

If it is a safe haven, it is not going away

That, for at least the near future, U.S. hegemony is not threatened received fresh confirmation during October’s week-long decline in the world’s stock markets — money from around the world quickly poured into U.S. treasuries as a safe haven. From a capitalist standpoint, doing so is entirely rational: If the U.S. government unravels, the entire global capitalist system disintegrates.

Although predictions of the U.S. eventually being dethroned will one day come true — every empire has an expiration date — that such a dethronement is imminent is wishful thinking. This is not to say that U.S. power is not eroding, but there is no conceivable replacement for the U.S. at the center of the world capitalist system. The U.S. spends about as much money on its military as every other country on Earth combined and the dollar remains the world’s reserve currency; that the world continues to buy U.S. debt as a safe haven enables the U.S. to continue to run up deficits and finance its military.

There is no military remotely in a position to become the global enforcer of capital, nor any currency that could replace the dollar at the present time. The euro is not a candidate because the eurozone is too fractured and unstable; the renminbi is not fully convertible. According to the Bank of International Settlements, the U.S. dollar was involved in 87 percent of the world’s foreign-exchange transactions in April 2013, while the euro was involved in 33 percent and the renminbi in 2 percent.

The U.S. needs China to buy its debt but China needs the U.S. as an export destination; Chinese growth continues to be dependent on unsustainable levels of investment rather than internal consumption, a situation difficult to adjust because production is moved to China to take advantage of its low sweatshop wages. A contradiction on the other side of the Pacific is that U.S. foreign policy treats China as a capitalist competitor that must be contained at the same time that U.S.-based multi-national corporations are instrumental in transferring production to China.

A change in the global hegemon from the U.S. to another country or bloc, leaving the capitalist system intact, provides no salvation, no more than did the early 20th century’s transfer from Britain. Another world is possible only with an entirely new economic system. Otherwise, the subaltern will remain subaltern, be they nation or people.

World Bank’s call for slowing global warming ignores own role

Global warming appears, or so it seems, to have begun to be taken more seriously this week as none other than the World Bank issued a report sounding the alarm bells. But let us not grow warm in our hearts just yet that corporate leaders have suddenly decided to yield to science and reality.

What we have here is a case of truly monumental hypocrisy. The policies of the World Bank and its sibling, the International Monetary Fund, have constituted non-stop efforts to impose multi-national corporate control, dismantle local democratic institutions and place decision-making power into the hands of corporate executives and financiers, the very people and institutions that profit from the destruction of the environment.

The World Bank’s report, “Turn Down the Heat,” prepared for it by the Potsdam Institute for Climate Impact Research and Climate Analytics, does incorporate the latest thinking of climate scientists. It paints a dire picture of a world in which the average temperature will increase by four degrees Celsius (seven degrees Fahrenheit) by the end of the 21st century without large-scale policies to reverse the trend. Among the effects of such a rise in temperatures, according to the report:

“[T]he inundation of coastal cities; increasing risks for food production potentially leading to higher under and malnutrition rates; many dry regions becoming dryer, wet regions wetter; unprecedented heat waves in many regions, especially in the tropics; substantially exacerbated water scarcity in many regions; increased intensity of tropical cyclones; and irreversible loss of biodiversity, including coral reef systems.”

The World Bank report advocates that the century’s temperature rise be held to less than two degrees Celsius. The bank says that “more efficient and smarter use of energy and natural resources” can reduce the climate impact of development “without slowing poverty alleviation or economic growth.” Despite the bank’s neo-liberal agenda, a goal stated in these terms is consistent with Center-Left political parties around the world. Among the initiatives proposed by the report are:

“[P]utting the more than US$ 1 trillion of fossil fuel and other harmful subsidies to better use; introducing natural capital accounting into national accounts; expanding both public and private expenditures on green infrastructure able to withstand extreme weather and urban public transport systems designed to minimize carbon emission and maximize access to jobs and services; supporting carbon pricing and international and national emissions trading schemes; and increasing energy efficiency.”

In other words, the very economic system that has brought the world to the brink of a disaster that could arrive in the lifetimes of many people alive today is supposed to magically eliminate the problem, and without significant changes to consumption patterns. Alas, that is wishful thinking.

The very energy corporations that stand to most profit from continued high energy use and increasingly damaging resource-extraction techniques are the biggest sources of misinformation intended to deny the reality of global warming or to claim that climate change is “natural” and to do anything about it would wreck the economy.

Increase in extreme weather events

Those executives who peddle that ideology will have long ago lined their pockets with outsized profits and will have left this Earth by the time the environmental bill comes due. Last month’s Hurricane Sandy, which devastated the coasts of New Jersey and New York, can’t be seen as anything other than a harbinger of what is coming; similar to the heat waves that destroyed crops in Russia and North America in 2010 and 2012, respectively, and the dramatic retreat of the Arctic ice cap.

Of course, no single storm or single heat wave can be attributed to global warming. But global warming increases the odds of destructive, deadly weather events. One measure is the number of “extreme” weather events (top or bottom ten percent of extremes in temperature, precipitation, and drought) as measured by the U.S National Oceanic and Atmospheric Administration. Through the end of October, 38 percent of the contiguous U.S. land mass had experienced at least one of these extreme weather events in 2012, the second-highest figure since records began to be kept in 1910. The average for the past century is 20 percent; all but four years since 1991 have exceeded this average.

Consistent with the initiatives proposed by the World Bank report, the Obama administration has advocated “green capitalism” to deal with global warming, although in practice (particularly during the just-concluded presidential election campaign) Barack Obama has offered little better than the standard head-in-the-sand ideas of ramping up oil and gas extraction, salted with chimera like “clean coal” and “safe nuclear energy” — two concepts that are the epitome of oxymoronic construction.

Coal throws more global-warming carbon dioxide into the atmosphere than any other energy source and the meltdowns at Fukushima and Chernobyl should be sufficient warnings against building more nuclear power plants even before we contemplate the impossibility of safely disposing nuclear waste.

Energy companies continue to sue to overturn regulations

Hydraulic fracturing of rock — or “fracking” — using jets of water and chemicals to force natural gas from underground is the latest offer from the world’s energy companies. Bitter battles across North America are raging over fracking and the pollution and destruction of water sources left in its wake. But lest we believe the latest World Bank report might induce a pause for thought, consider this: A U.S.-incorporated energy firm, Lone Pine Resources Inc., is suing under the North America Free Trade Agreement (NAFTA) to overturn Québec’s regulations against fracking.

Lone Pine, which is actually headquartered in Calgary, Alberta, despite its formal incorporation in the U.S. tax-haven state of Delaware, is seeking $250 million in compensation, reports The Globe and Mail newspaper of Toronto. (More corporations are incorporated by far in Delaware than any other U.S. state because of its laws specially tailored to benefit corporate executives; the state even has a special court that only adjudicates business disputes.)

Technically, Lone Pine is suing the Canadian government because only the three national governments can be sued under NAFTA. The company is suing under NAFTA’s Chapter 11, which authorizes corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or act that might prevent the corporation from earning the maximum possible profit. The Wall Street Journal reports that Québec “banned shale-gas exploration in parts of the Saint Lawrence Valley and revoked previously issued mining rights as it studied the environmental consequences.”

NAFTA allows a Canadian company to sue the Canadian government in a way it wouldn’t otherwise have been able to do — an excellent deal for polluters.

Because the rules of NAFTA are heavily tilted in favor of business and against labor or environmental regulation, almost every case brought to a tribunal under NAFTA ends with either a hefty payout to the suing corporation or an overly generous settlement by governments seeking to avoid an even bigger payout, and a reversal of regulations passed by democratic governments. These decisions are handed down in secret tribunals in which many judges are attorneys who specialize in representing companies in disputes with governments.

The rules of NAFTA, draconian as they are, are merely the starting point for still harsher rules under the secret Trans-Pacific Partnership being negotiated by nine countries. Moreover, the TPP would require the use of a tribunal controlled by the World Bank, a tribunal already in common use under many existing trade agreements. Each time a tribunal overturns a regulation or protection, it becomes a precedent — that is, a new starting point from which further corporate control of national laws can be launched.

World Bank policies fuel global warming

Environmental laws are frequently the target of corporate assaults under free-trade rules, and the most frequent initiators of these assaults are energy and chemical corporations. Tribunals controlled by the World Bank or other institutions that promote corporate globalization ensure that environmental, labor and other legal protections are eviscerated, thereby accelerating the destructive activities that fuel global warming.

The World Bank has long imposed harsh austerity on countries around the world, in exchange for drowning those countries in debt, which then gives multi-national corporations and itself, which enforces those interests, still more leverage to impose more control, including heightened ability to weaken environmental and labor laws.

The bank also plays a direct role in global warming, having provided billions of dollars to finance new coal plants around the world in the past few years.

The World Bank is a key organization in the concatenation of processes that has brought the world to the brink of catastrophic climate change. To issue a report on the likely future destruction to be wrought by global warming without acknowledging its own role and without calling for a fundamental change in the global economic system that it enforces — which is the root cause of a potentially runaway chain of environmental disasters — is beyond chutzpah.

Capitalism is incapable of reversing global warming. All of its incentives are for private profit without regard to public effect. The maximization of profit in the short term is the aim of a capitalist corporation (indeed, for one listed on a stock exchange, it is required by law to have no other purpose). Its incentive, then, is to shed costs whenever possible — not only to reduce wages, but to offload the costs of pollution and other public nuisances onto governments and, ultimately, taxpayers.

The rigors of competition require that ever bigger profits be made and expansion continually undertaken, under pain of going under if a competitor does this more successfully. Because of the necessity of endless growth, and the lack of need to take into account pollution and of the amount of carbon dioxide thrown into the atmosphere because those are not assigned to the corporate bottom line, every systemic incentive exists to extract and use more natural resources, regardless of long-term costs.

It is impossible for such a system to clean up its own mess. At best, it might, in the future, innovate new technologies for renewable energy, but not in a rational manner. The Chinese government has so over-invested in solar-energy equipment, for example, that it is estimated that capacity is now three times more than demand. This explains why U.S. solar-equipment companies are going out of business despite being granted significant government subsidies.

Capitalism has developed to the point where the very existence of humanity could be at stake in the future; where ever more inequality leads to deepening crises and an inability for humanity to deal logically with these crises, even ones that carry the potential for catastrophic destruction. What could be more unsustainable?