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.)
Comments
So in this world of unplanned
So in this world of unplanned logic could successful reformism inadvertently kill capitalism? :)
I imagine it would require the fluffy reformers being more fanatical in their fluffiness, would they go in with all guns blazing and change.org up the place till there is nothing left to be reformed, till growth becomes impossible and the monster dies unable to feed himself enough to support his own weight or would they pat themselves on the back at a 2p raise in the minimum wage.
Is there a common sense reform(s) that hard working families up and down the country could rally behind that could give Capitalism the olde one, two?
2 W wrote: So in this world
2 W
Let us imagine a hypothetical situation in which there was a massive social upheaval so militant and powerful that it was able to force the unconscionably corrupt government to pass legislation curbing the rights of capitalists. This would, as I argue in this blog post, cause potentially serious economic crises which the rich would as usual shelter themselves from while the mass of society suffers. Another possibility would be what David Harvey argues occurred in both England and the US during the stagflation of the 1970s in which the ruling class engaged in a capital strike protesting government regulations which cut into their profits.
The question is first of all if there was a militant social upheaval why wouldn't we want to demand an end to capitalism itself? Instead reformists would want us to demand the passage of laws which would in the best case scenario allow the continual functioning of the current system and would allow the ruling class to reconstitute itself and soon enough exert their power to turn back all of the gains made.
I believe it is the case now that companies on a wider scale than ever before are involved in speculation about future profits to be made. If there are unexpected shifts in the market (like the collapse of housing prices for example) then this can lead to crises. In this vein I think that reformism now is not only just as hard to obtain as revolution but is also dangerous to all of us because it allows the continual functioning of capitalism.
I was being a bit flippant
I was being a bit flippant Soapy but I do think that there is potential for some subversive work to be done on this theme, even if it is only to set up the spectacle of people asking for a reduction in the rates of exploitation from bosses arguing for the continued increase in the rates of exploitation.
Your post highlights the fragility of the market, it needs to consume more and more to survive from a more and more depleted world and exploited people. I was just entertaining the idea that as Capitalism becomes bigger and bigger and needs to keep on maintaining this growth to support it's own weight, does it conversely need less and less force to destroy it?
As ludicrous as trying to put a monster on a diet is (reform), could it be that something as ridiculous as that or the threat of that could give it the heart failure we've been trying to give it for centuries.
More than likely the lunacy of reform will die before capitalism does I was just musing on two heads of the hydra: reform and neo-liberalism consuming each other.
2 W wrote: I was being a bit
2 W
lol mabes, but I don't know if a sudden collapse of capitalism without a libcom movement to replace it will result in a better society.
really good article soapy. it
really good article soapy. it was realizing the limits of reformism that made me finally turn away from my social democratic views.
"what David Harvey argues occurred in both England and the US during the stagflation of the 1970s in which the ruling class engaged in a capital strike protesting government regulations which cut into their profits."
do you remember where he makes this argument? (which book or article)
boomerang wrote: really good
boomerang
hey thanks, he argues it in his book "a brief history of neoliberalism"
I'm curious about this highly
I'm curious about this highly polluting natural gas extraction you talk about.. Polluting in what way?
plasmatelly wrote: I'm
plasmatelly
Methane gas leaks from the pipes they use to extract the gas. Methane gas warms the planet at a much higher rate than CO2 and the leaks are quite serious from what Naomi Klein describes
also pretty sure it is responsible for contaminating drinking water.
Well leaks can be fixed. Not
Well leaks can be fixed. Not sure Soapy if what Naomi K is describing is more a foil for nimby-ism than highlighting what she she really believes to be the crux of warming the planet.
As for contaminating drinking water, mining for tofu can do this too. I like your blog, I don't 100% agree with the shale thing - and apologies if it looks like I'm off on one, it's good writing.
plasmatelly wrote: Well leaks
plasmatelly
Later today I might have more time but she does cite at least one published study on the subject showing that fracking warms the planet at an alarmingly high rate
Mate, it can't be any more
Mate, it can't be any more than any other NG extraction process.
plasmatelly wrote: Mate, it
plasmatelly
Im not sure what you aare arguing exactly. Im not an expert on the subject but I do think Klein proves her point that fracking will lead to the release of significant quantities of methane
plasmatelly wrote: Mate, it
plasmatelly
i'd think by its nature it would give more opportunity for gas to escape
More than drilling a hole in
More than drilling a hole in the ground like in other extraction processes?
The (pro-fracking) government
The (pro-fracking) government puts fracking emissions about 12% higher than conventional natural gas1 (it puts it about 12% lower than LNG, but that's apples and oranges due to the additional energy required to compress gas to liquid, which would apply whatever the source of the gas).
However the bigger problem is that unconventional fossil fuels represent additional emissions by converting previously unrecoverable resources into economic reserves. Current proven global reserves are about 2,795 GtCO2, the 'emissions budget' to have a 66% chance of not totally fucking the climate is about 565 GtCO2, which means 80% of existing reserves need to stay in the ground. Adding additional reserves through unconventional methods thus adds additional pollution, to an already vast amount of 'excess' pollution.
(this is also why the 'bridge' approach of expanding natural gas production to substitute for coal seems dubious... creating a new unconventional gas industry today that would need to be shut down rapidly in 10-20 years, before all the infrastructure investment is recouped, just seems like kicking the can down the road and committing to a fossil fuel-based development path when a decisive change in direction is needed.)