Crisis of the Environment: Time to Push the Economy to do More With Less

The political project of neoliberalism developed a two-prong approach: (1) dismantle any barrier to the exercise of unaccountable private power; (2) erect barriers to the exercise of any democratic public will. The policies of privatization, deregulation, tax cuts for the rich, free trade deals have liberated corporations to accumulate enormous profits and treat the atmosphere like a sewage dump, and hamstring our ability through the instrument of the state to plan for our collective welfare. At the very moment that climate change demands our unprecedented collective public response, neoliberal ideology stands in the way. Steeped in a culture telling us to think of ourselves as consumers instead of citizens, as self-reliant instead of inter-dependent, such that we now turn in droves to ineffectual, individualistic efforts. The excesses of privatization enabled by neoliberalism has created a common goods gap that we need to take care of, including the environment.

This initiative was carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labor. Ideas were also important to the ideological front, but there was awareness at that time that universities were impossible to organize because the student movement was too strong and the faculty too liberal-minded, so they set up think tanks like the Manhattan Institute, the Heritage Foundation, the Ohlin Foundation. These think tanks brought in the ideas of Freidrich Hayek and Milton Friedman and supply-side economics. At the same time, ideological projects to privatize and deregulate were developed to create unemployment. So, unemployment at home and offshoring taking the jobs abroad, and a third component: technological change, deindustrialization through automation and robotization was the strategy to squash labor.

It was an ideological assault but also an economic assault. They found that there was a legitimizing theory out there – neoliberalism – which would enable these actions. For example, you see reforms of campaign finance that treated contributions to campaigns as a form of free speech. While there was a long tradition in the United States of corporate capitalists buying elections, following a series of 1970s Supreme Court decisions, it is now legal rather than being under the table as corruption. Yet while the capitalist class is doing very well, capitalism is doing rather badly. Profit rates have recovered but reinvestment rates are appallingly low, so a lot of money is not circulating back into production and is flowing into land-grabs and asset-procurement instead. Neoliberalism promotes (an existing theory) that rather than being affected by structural problems of an exploitive system – poverty, joblessness, poor health, lack of fulfillment – was in fact a personal deficiency.1

 Neoliberalism has gamed the self-blame, telling you that you should not only feel guilty and shame if you cannot secure a good job, are deep in debt, and are too stressed or over-worked for time with friends – you are also responsible for bearing the burden of potential ecological collapse. This neoliberal con-job is to persuade us to address climate change through your pocket-book, rather than through power and politics. In reality, we need mass movement to stop thinking like individuals. This means using ‘affordable’ mass transit, buy local organic food rather than fossil-fuel intensive super-market chains, support clean energy economies in cities. It requires taxing the 1% to pay for these changes. At climate conferences, economic growth and the right to development are central themes, with some nations appearing to be more concerned with their GDP than with the potential environmental crisis on the horizon – this points to neoliberalism as the problem.

What does a solution encompass? In 2016, transportation overtook power plants as the top producer of carbon dioxide emissions in the US for the first time since 1979. Nearly a quarter of the transportation footprint comes from medium- and heavy-duty trucks. And increasingly the impact is coming in what people in the world of supply-chain logistics call “the last mile,” meaning the final stretch from a distribution center to a package’s destination. (The “last mile” can in truth be a dozen miles or more.) Before the online revolution, the majority of last-mile deliveries were to stores, which tended to cluster in areas that can be more easily served by large trucks. Today, most packages are now going directly to residential addresses. We’ve traded trips to the mall, in relatively fuel-efficient cars, for deliveries to residential neighborhoods by trucks and other vehicles. The last mile today ends on our doorsteps.

To bring down emissions fast it is necessary to overcome the free market mantra. Studies show that more than 90 percent of the trips by parcel delivery vehicles are within a 100-mile range. Slower and more consolidated shipping isn’t just better for the environment; it saves these companies money by reducing the number of trucks on the road and simplifying their logistics. Presently only Walmart and Amazon have enough clout to drive such change. Green shipping options come up against the profit incentive. The International Marine Organization (MIO) rules now drive the industry to cleaner, greener solutions on several areas. Ships used to run on unrefined crude full of sulphur and environmentally-harmful impurities. This is because this type of fuel is the leftover of the oil refining process and extremely cheap when compared to other options. In 2005, the IMO began to control sulphur content in marine fuels. Efficient solar integration in greener ships can save fuel up to 20%.

Solar energy systems/power plants do not produce air pollution, water pollution, or greenhouse gases. Using solar energy can have a positive, indirect effect on the environment when solar energy replaces or reduces the use of other energy sources that have larger effects on the environment. The biggest issue comes with adapting these new resources. Aside from the fact that it would be a major pain for companies to make the switch, cost is the real problem. Building fossil fuel plants and resources, as well as actually using them, is cheaper option for most big businesses. Alternative energy costs more to install and maintain, and with natural gas prices presently low, one is hard pressed to convince corporate America that switching to cleaner energy is better for business. It may help the environment, but often hurts bottom line returns. We need investment in climate-risky infrastructure and renewable energy – so that solar panels go on everyone’s roof top, not just those that can afford it.

The antipathy of neoliberal hegemony towards environmental regulation has set it in opposition to environmental movements. What neoliberalism misses or ignores is that a world of apparently neutral rules is still a world of power inequalities. When capital has more freedom than people, serious democratic deficits are guaranteed. Voters may prefer a strong welfare state, but they may get austerity instead. In many nations, including the United States, the power of money in politics gives concentrated wealth a sword to hold over democracy’s neck. As the wealthy exert ever more influence over the political process, we may be closer to ideas of William Hutt (1899-1988), an English economist who was active in Mont Pelerin, with income-weighted votes as one tool among many for limiting democracy in the name of property rights. In the neoliberal view, this is how it is supposed to work. It is, in Hayek’s language, the “discipline of freedom.” But it makes the goal of achieving relative equality through democracy very difficult.

Globalization is driven by the desire of corporations to pursue economic liberalization. In this system countries primarily compete for the world’s investment capital. This means capital moves to locations where it will find the best conditions for return. This activity increases the opportunities for commercialization or introduction of a commodity into the free market for mass consumption. The process of corporate expansion across borders creates rapid change in many communities with subsequent negative consequences for workers. The fact that there is little international regulation has dire consequences for the safety of the people and the environment. Like the approach to Big Tobacco it is necessary to have as many agencies as possible participate with respect to cross-cutting issues. For example, effective tobacco control required the use of fiscal policies to reduce tobacco consumption, allied with labor and environmental laws to reduce exposure to smoke, and regulation of marketing practice.

What is the best overall response to the crisis of the environment? Renewable energy is the future, whether solar, wind or geothermal, is free, so the technology is going to get cheaper as time goes on. Energy efficiency – buildings are responsible for 32% of energy use globally, and almost 80% of that energy is wasted due to lights and electronic left on and or poor insulation. Another arm of energy efficiency is to electrify everything: oil heaters, diesel trucks, gas stoves. That way, as sources of electricity get cleaner, they pay climate dividends throughout the rest of the electrified economy. And products like electric cars are more energy-efficient than their gasoline powered counterparts. There is need for wider subsidies to renewable resources so that all families can participate, and it’s time to get rid of direct and indirect subsidies to fossil fuel industry. Overall, we need financing, incentives, and penalties to push the global economy to do more with less.

1 Neoliberalism Is a Political Project (23 July 2016)

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