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OpEdNews Op Eds    H4'ed 7/26/10

The End of Capitalism?: Part 2A. Capitalism and Ecological Limits

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A disturbing but necessary example is the Congo, where hundreds of thousands of women have been raped and mutilated in the past decade. This mass rape is a weapon in the ongoing war between various guerrilla and state factions over minerals like coltan. Coltan is used in many of our electronic devices such as laptops and cell phones, making it highly valuable. The factions that export these minerals to the global market make a lot of money, which they can use to purchase weapons. Attacking women's bodies has been one way to assert control over territory, as the shame of rape too often leads to the ostracizing of the women, thus breaking apart peasant communities. Once the village is displaced, their land becomes available for mining.

This appalling violence in the Congo is more than a throwback to the enclosures which first launched capitalism, for as Silvia Federici says, systemic violence "has accompanied every phase of capitalist globalization, including the present one, demonstrating that the continuous expulsion of farmers from the land, war and plunder on a world scale, and the degradation of women are necessary conditions for the existence of capitalism in all times" (pg. 13).

In other words, enclosure has been an ever-present feature of capitalism because the system cannot reproduce itself without constantly putting up walls to control and limit human possibility, as well as controlling the planet itself. To be blunt, people usually only submit to capitalism when they no longer have any option.

Federici's work challenges many myths about capitalism, such as the conservative assertion that capitalism works best without state interference, as well as the vulgar Marxist assumption that capitalism was a progressive advance over pre-capitalist forms of life, on some linear march of history. On the contrary, Federici uses the example of the witch hunts to demonstrate that capitalism has always relied on state violence in order to attack not only women's position in society, but all communal or non-capitalist forms of life. Although she makes it clear that not all pre-capitalist forms of life were idyllic or free of oppression, the ultimate lesson she draws is that capitalism is an enemy of life itself, and that its spread has been a dramatic setback for all of us, including the planet.

Limits to Growth

2010 is a very different moment than 1492, or 1929 for that matter. In earlier times, there remained entire continents, entire populations of people, and vast reserves of natural resources remaining to be exploited for the capitalist regime of profit. Now that globalization has worked its wonders and you can order the same McDonald's hamburger virtually anywhere in the world, what growth markets remain untapped? The answer is, in my view, remarkably few. The limits to growth are being reached. The system needs growth now. It can't find it. And the machine is straining to keep running on the promise that profit will come tomorrow. So it turns to speculative bubbles like the dot-coms and the housing market to create imaginary growth and keep the party going, even for a little while. But it's only a temporary strategy. Each time the bubble bursts, the hangover is worse. Reality is beginning to set in. Steady, long-term growth is elusive because capitalism is overstepping its limits. If you want a simple explanation for the collapse of the financial markets, it's that.

Let's explore this concept of the limits to growth. It can be divided into two categories: ecological limits and social limits.

Ecological limits are the restrictions placed on economic growth by the planet's inability to sustain that growth indefinitely, either because of lack of resources or lack of capacity to withstand more ecological damage. The list of ecological limits is long and awareness of them has been growing rapidly. Some big ones include the limits of oil, natural gas, coal, uranium, phosphorus, copper, fresh water, arable soil, fish, and more broadly, climate. Perhaps the most decisive limiting factor is oil, which I've called the "lifeblood of industrial capitalism" because it supplies 40% of the energy for the total economy, making it the system's primary energy source. Oil's critical contribution includes powering 95% of transportation. Oil is the fuel that moves the people and equipment that do virtually all of the work in the capitalist economy. There is no known substance on Earth that can replace it.

Peak Oil

Since the oil price shock of 2008, "peak oil" has become something of a household word in the United States, but I'll just give a few facts to back up the validity of the concept. First, US oil production peaked in 1970. Oil was discovered in Pennsylvania in 1859, and the US quickly became the main exporter of petroleum in the world, like Saudi Arabia is today. After its oil supply peaked, the US became a chronic importer of oil and went into severe debt to pay for it. Today, contrary to the cries of "Drill, Baby Drill!", there is no amount of drilling that could bring US oil production back to the level of 40 years ago. In fact, production is about half what it was then, and still declining.

A second essential fact is that global discovery of oil peaked in 1960 and for the last 50 years less and less oil has been found across the planet. Demand keeps growing, but supply has not been, despite the efforts of every oil company to discover more "black gold." With all the cheap, easy oil pretty much gone, they're left to spend millions to drill in remote locations, like the Gulf of Mexico, which is now a disaster area. So we know peak oil is a real phenomenon because it happened to the US. And we know there's not enough oil being found anywhere in the world to sustain growing demand. The only question is when the global peak will be reached.

There are a whole slew of geologists, ecologists and engineers dedicated to answering that question, and I can't add much to their debate. But I do want to highlight this remarkable graph created by Princeton geologist Kenneth Deffeyes, author of the books Hubbert's Peak and Beyond Oil. He graphs global production of oil against the price of a barrel (equal to 42 gallons). We can see that as global production hits about 27 billion barrels, the price spikes into the heavens. We would expect, according to Economics 101, that as the price increases, supply would also increase. It's in the interest of producers to pump more oil from the ground, and develop more expensive oil wells, in order to take advantage of the high prices. Instead, we can see that no matter how expensive oil has gotten, production has hit a wall. What Deffeyes argues, and I agree with his analysis, is that the peak has already been hit. No matter how wildly the price of oil fluctuates, growth in production is no longer possible.

In Beyond Oil, Deffeyes also makes the case that there is nothing that can do what cheap and plentiful oil has done for global capitalism. Solar and wind are great technologies, and they certainly have a role to play in transitioning to a democratic and sustainable future, but not being liquid fuels, they're useless for powering the Army's tanks and planes in Afghanistan. Even hydrogen fuel cells or electric engines would solve little, because there would still need to be a massive influx of energy to make up for the 40% provided by petroleum. And that's without factoring in necessary growth.

Efficiency is another crucial piece to look at. Efficiency in energy can be measured in Energy Returned on Energy Invested (ERoEI). The ERoEI of oil is something like 10-to-1, meaning for every calorie or joule of energy expended in getting oil out of the ground and making it a usable fuel, 10 times that much energy is made available by it. If the ERoEI for a particular fuel was 1-to-1, it would be useless. It would take just as much energy to extract the fuel as they could get out of it. This is the trouble with "non-conventional" fuels such as the tar sands, corn ethanol, or coal liquefaction. All are tremendously destructive to the planet, but none comes anywhere near oil in terms of efficiency, and corn ethanol may actually waste more energy than it produces. The bottom line is that no energy source is as abundant, cheap, versatile, easy-to-transport, and efficient as oil.

Oil is also not the only energy source hitting its peak. Natural gas appears to be in the same position, and coal and uranium aren't far behind. All are being exploited at a rate much higher than can be sustained. This is why Richard Heinberg has written a book called Peak Everything, and argues that from ecological limits alone, growth is no longer possible. Capitalism needs abundant and growing sources of energy to move its resources, products and labor around the world, to organize them into the production process, and to power the assembly lines. We are now entering a period in which for the first time in 500 years, less energy will be available, the energy that exists will be more expensive, and therefore profits will be severely constrained. Without energy, the shark stops swimming and dies.

Did peak oil trigger the economic crisis? It's difficult to know for sure. One thing is certain, in 2007-8 the price of oil skyrocketed to a record high of almost $150/barrel, while production stayed flat. And as former Chairman of the Federal Reserve Alan Greenspan noted in 2002, "All economic downturns in the United States since 1973" have been preceded by sharp increases in the price of oil."

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Alex Knight is a proponent of the End of Capitalism Theory, which states that the global capitalist system is breaking down due to ecological and social limits to growth and that a paradigm shift toward a non-capitalist future is underway. He is (more...)
 
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