As I was reading through Naomi Klein’s book This Changes Everything I was struck by a particular passage. The passage explained the relationship between the investment banking company JP Morgan Chase and companies involved in the highly polluting natural gas extraction method known as “fracking”.
JP Morgan, unsurprisingly, is a leading financier of the industry, with at least a hundred major clients who frack, according to the bank’s top environmental executive, Matthew Arnold. (‘We are number one or number two in any given year in the oil and gas industry worldwide,’ Arnold told The Guardian in February 2013). JP Morgan Chase has 'at least a hundred major clients who frack'.1
In order to protect its investments JP Morgan cannot allow tough regulations on fracking passed. Tough regulations will cut into the profits of the fracking companies it has loaned money to, possibly meaning that they cannot repay their debts. To this end (and many others) JP Morgan engages in extensive financing and lobbying efforts in the government. In the 2012 election cycle alone JP Morgan spent $8 million in lobbying efforts and $5 million in campaign contributions, including contributions to the presidential campaigns of both Mitt Romney and Barack Obama. 49 members of congress, nearly all of whom are millionaires, currently own stock in JP Morgan. 2
In addition to using its money to influence the government, JP Morgan also finances the non-profit group The Nature Conservancy. The Nature Conservancy has in turn, “responded to revelations about the huge risks associated with natural gas by undertaking a series of initiatives that give the distinct impression that fracking is on the cusp of becoming clean and safe.”3
Here we see the unplanned logic of Capital. JP Morgan made those loans to companies engaged in fracking. If the companies cannot repay the loans then JP Morgan might be in serious trouble. Here Capital’s power functions, exercises influence, and makes decisions intended to protect its interests. There is no reform that can change this cold hard truth. If an environmentalist movement were to be able to force the government to institute tough laws on fracking next week then JP Morgan might go belly up. This would be disastrous for the company’s workers as well as possibly the economy as a whole. This is the cold realism of capitalism. Here the company and its workers are engaging in dangerous activities which will harm everyone on this planet, but no one person seems to have control over it. The situation simply plays itself out according to natural forces.
This is no different from any number of seemingly intractable problems that the reigning hierarchical social order causes. For instance the university I attended was constantly raising its tuition. However, the university was also millions of dollars in debt and needed to raise the tuition in order to pay back the massive loans it had taken out. Protests against the university demanding that it lower tuition were intended to make it so that more people could afford to go to the school. But if the tuition was lowered then the university would be unable to repay its debts and would go bankrupt, then nobody could go to the school at all!
This is the false dichotomy. There is the mainstream which champions neoliberalism, and there are the reformists who like Naomi Klein wax nostalgic over the regulatory days before the neo-liberal consensus. These are the two political ideologies which we are told we can attach ourselves to. However the current reality of capitalism only allows there to be two positions that can be taken: revolution or barbarism. Reformism is not possible, the entire social order must be rebuilt from the ground up. JP Morgan and the university alike must be abolished along with Capital itself. Our social order creates an endless series of quagmires and their reality grinds us into the dust.
(Interestingly enough JP Morgan now faces the problem outlined above because OPEC is tanking the fracking industry by driving the price of oil down.)