[A-List] Enron, Part II

Mark Jones mark.jones at tiscali.co.uk
Wed Dec 5 06:57:03 MST 2001

[ Part II ]

Earlier, in February 1996 while still UN ambassador, Albright reacted with
righteous indignation when a Cuban air force pilot said after shooting down
Miami-based Cubans illegally entering Cuban airspace: "This one won't mess
around any more."
"I was struck by the joy of these pilots in committing cold-blooded
murder," Albright said, accusing the Cuban pilots of "cowardice".
[Washington Post 2-28-96]

But of American pilots who, while strafing retreating Iraqis in 1991,
exclaimed: "we toasted him" ... "we hit the jackpot" ... "a turkey shoot"
... "shooting fish in a barrel" ... "basically just sitting ducks" ...
"There's just nothing like it. It's the biggest Fourth of July show you've
ever seen, and to see those tanks just 'boom', and more stuff just keeps
spewing out of them ... they just become white hot. It's wonderful." --
Albright was, of course, silent. [Los Angeles Times, 2-27-91] ]

The solution to OPEC cheating in 1991 was to sequester an entire country:
Iraq. Ten years later, the emerging solution appears to be the direct
imposition by the US of colonial rule over large tracts of the Middle East
and South-Central Asia.

After the USSR collapsed, whole new sources of supply came on stream.
Soviet production fell precipitously, by almost 50 percent within three
years after 1989. But the collapse of socialist industry reduced demand in
the former socialist bloc by more than half, thus freeing net production
for the capitalist world market. Meanwhile the creation of new states in
the east, including Russia, Azerbaijan, Turkmenistan and Kazakstan opened
the door to a carnival of plunder of the whole natural resource base of the
FSU. Large previously-closed oil provinces in Kazakstan, the Caspian Sea
and the Russian Arctic North, have been taken over by western oil majors
under the strategic umbrella of US imperialism. The fall in energy prices
was one of the main benefits to world capitalism of the collapse of the
east. Each 10% fall in oil prices can stimulate a net one percent increase
in OECD GNP. The flood of capital released by the fall of socialism and end
of the Cold War and the sharp hike in the profit rate has been insufficient
however to launch a new cycle of world growth; the glut in oil and fall of
prices, celebrated by the Wall Street Journal, the capitalist media and
such oil-industry pundits as Daniel Yergin, who celebrated the 'final
victory' of free market capitalism in his 1997 book 'The Commanding
Heights'  as proof that there are no 'Limits to Growth', in fact is only
evidence of the built-in limits to capitalist growth.

Privatisation, deregulation and liberalisation were presented as goods in
themselves, as rational and logical policies signifying the final victory
of capitalism; but the oil industry shows the truth beneath the
market-mantras: there is no free market in energy. This high-technology,
highly-capitalised, strategic industry functions as an important
organisational, political and social nexus between capitalism as a blind
process of production, and imperialism as its political form. The energy
complex is a materialisation of capitalist production relations in the
stage of late imperialism, imperialism in necrosis. It combines military
might, unconstrained imperial predatoriness and a fantastic technological
armoury of plunder. The capitalist energy complex is a historically
unprecedented form of natural rapacity. As with the world fishing industry,
it applies ever-heightened technological powers to the problem of growing
resource shortage. The present glut, which may continue for some time, is
the direct consequence of imperialism's successful offensive. All doors
have been opened; the unrestrained pillaging of the energy resource-base
has begun. The consequence will be famine following the feast. Instead of
the planned exploitation of oil for the economic and social development of
the world's people, maximum deployment of extractive technology will
continue until the industry crashes and production just falls off a cliff.

That is the real meaning of privatisation and deregulation. When the
collapse comes the vast tanker fleets, the huge refinery complexes, the
pipelines and distribution networks will be so much rusting metal. The
communities which serviced this industry will be left to die, just as the
Canadian fishing communities have been abandoned. The inheritors of this
wasteland may not even understand what criminality produced such a
catastrophe, the more so since the collapse of the oil industry has a
different and more serious significance than the collapse of the fishing
industry, ominous though that is both as a portent of things to come and
for its direct effects on the dietary standards of billions of people. Oil
is at the heart of the capitalist world system. Take that away and
industrial collapse becomes inevitable. The destruction of transportation
systems will destroy the lives of hundreds of millions of people,
especially in North America where suburbanisation and the construction of
the built environment has been premised upon private, gasoline-powered
More: the collapse of oil will severely impact agribusiness. To take one
example: the loss of major world fisheries has been substituted by the huge
growth in fish farming. The terrible effects on coastal regions, loss of
biodiversity, spread of disease and pollution are sufficient answer to
those who argue that the rise of fish-farming proves that there are no
'limits to growth' and that human ingenuity can always and easily find
substitutes for any scarce resource (in this case wild fish extracted from
its native habitat).  Thus the critics of 'limits to growth' arguments
point out that while annual fishing yields may be declining, aquaculture
now produces 20m tonnes of fish a year. But this yield, as with all forms
of modern farming, is dependent of fossil-fuel energy inputs. Fish that is
fed on land-grown cereal crops is just as dependent on the petrochemicals,
fertiliser, pesticide, insecticide and energy-inputs as any other kind of
farming. The collapse of the oil industry will just as surely entail the
liquidation of much of the world fish-farming industry. Oil is the basis of
life. Yet this essential resource is being pillaged and squandered in the
party at the end of history.

Path-dependency is a problem that is specific to industrial capitalism,
because the drive to Accumulate! Accumulate! Means that capitalism, unlike
all natural process and ecosystems, does not readily permit built-in
redundancy. Its perpetual process of 'creative destruction' means that
feasible but less profitable alternatives to any particular production
process, tend not to survive the vicissitudes of competition.
Paradoxically, this means that original conditions specific to successful
innovations, tended to get locked in, with potentially disastrous results.

The QWERTY system is a good illustration of path-dependence. The
QWERTY-keyboard was deliberately designed to be inefficient. A better
arrangement of letters would have resulted in faster typing speeds, but
Victorian production technology was unable to manufacture typewriters
capable of higher speeds. The QWERTY standard became universal and could
not be changed even when these restrictions no longer held (for example
with electronic keyboards).

Industrial capitalism as a whole is similarly path-dependent. The
Industrial Revolution began in England when a set of technologies
fortuitously converged to overcome a shortage of energy and raw materials
(principally iron and steel). The shortage emerged at the end of an
extremely rapid cycle of proto-industrial development during the 17th and
18th centuries. The technologies of steam power and of iron-manufacture
utilising coal instead of wood-charcoal, has interdependent origins. The
first railways and steam engines were developed in coal-mining districts to
answer specific problems of deep shaft working, where coal had to be
transported considerable distances and flooded mines had to be pumped dry.
Once the technologies emerged they swiftly became generalised, first to the
iron and steel industries, then to textiles, machine building, transport,
agriculture and arms manufacture. The era of fossil fuel-based industry was
launched and led to very rapid population increases which consolidated the
new system's dependence on its material and energy basis, which emerged in
this fortuitous way at the beginning of the 19th century. World capitalism
has enjoyed two centuries of sustained development since 1800. However the
gigantic growth in social productivity, resource-use and population, the
creation of a vast new built environment and the subordination of natural
processes and resource-systems, has never enabled capitalism to shake free
of its initial path-dependence. On the contrary, capitalism today is more
critically dependent on fossil fuels and the use of non- renewable
resources than at any time in the past, and the absolute level of
resource-extraction and energy use continues to grow. The capitalist
world-system has become hopelessly locked into its origins in what were
essentially piece-meal, ad hoc solutions to a specific set of problems. The
'Malthusian break-out' of the early 19th century has thus been reproduced
at a higher level, as a colossal set of interlocking and inescapable
crises, of demography, resource depletion, climate change and energy declines.

  Although much capital and inventiveness has gone into searching for
alternative energy bases, and in seeking out more energy-efficient
production technologies, no real progress has been made in finding
substitutes for fossil fuels. For a variety of reasons, none of the
alternatives which have been explored have anything more than marginal
importance: biomass, wind, tidal and solar power, hydrogen fuel-cells,
hydropower and nuclear energy still account for less than fifth of energy
consumption and can never replace fossil fuels, primarily oil and gas which
together account for more than half of energy consumption in the
industrialised world (it should be borne in mind that more than half of
humankind still has almost no access to electricity or fossil fuels and
relies upon wood, dung and other biomass for heating and cooking fuel and
animal or human powered transport). The exhaustion of primary fuels would
under present circumstances lead quickly to a complete collapse of western
industrial civilisation. Despite much talk about dematerialisation,
'virtualisation', energy-conservation, substitutability and 'sustainable'
technologies, it remains more true than ever that there are simply no known
alternatives to fossil fuels; the industrial energy base has not changed
substantially for most of this century, other than for a gradual transfer
from coal to oil and gas. Throughout its history until the 1960s,
capitalism never experienced energy shortages other than local or transient
ones as the result of war, the effects of economic crisis and so on. The
transition from coal to oil occurred long before there was any pressure on
coal supplies, which remain (theoretically) abundant. It appeared (and is
still commonly argued) that there are no foreseeable shortages of
hydrocarbons, and the picture drawn by official oil reserve estimates
suggest a rosy picture of oil reserves which have continued to increase as
a result of new discoveries, despite the high current world consumption of
more than 25 bn barrels/year. One of the achievements of the fantasy world
created by deregulation in the 1980s, was to blind people to this truth:
oil is a distinctly finite and non-substitutable resource.

PLEASE clip all extraneous text before replying to a message.

More information about the Marxism mailing list