[Marxism] Protectionism, British mine workers, and air traffic controllers

Jurriaan Bendien bendien at tomaatnet.nl
Thu Feb 5 21:45:02 MST 2004


Brian Shannnon asks:

supposing the mine workers were threatened with the importation of
cheaper coal from, let us say, West Virginia or the Ruhr (this is fiction,
of course--I have no idea whether it would be cheaper or not) or elsewhere.
Is it in the interests of labor generally to protect the British
mineworkers? Or do they take the view of another person on this list who
argues that only the workers in the foreign coal industry can take this
position? And is it the workers in the foreign coal industry who make this
argument or their government (members of which are subject to bribery, of
course)? Certainly, the workers in the foreign coal industry might see their
temporary, and perhaps their long-term, interest be to dig the coal for
exportation.

In my opinion, your question is not well researched, a speculative Marxist
hypotheticalism, a bit of philistine poetry really. Of course socialists
should defend the interests of British mine workers. But we have to look at
the whole background of this story, otherwise we cannot even discover any
intelligible policy beyond innuendo. Here's a few notes.

Coal represents about a quarter of world energy consumption,  less than
crude oil (two-fifths) but more than natural gas (a fifth) although Iranian
gas exploitation will change that. Therefore the coal industry is still very
important to world energy needs. Most coal production is however consumed in
the country of origin, for the generation of electricity. Only around 10
percent of world coal production is exported, but with deregulation,
international trade in coal has grown, especially steam coal. US coal
production is:

- 1 billion short tons,
- only about 4 percent is exported,
- it occurs mainly in Pennsylvania, West Virginia and Wyoming
- is mainly used for electricity generation
- increasingly strip-mining (three fifths of US coal production).

Relative to imported coal prices, exported US coal is becoming more
expensive; the largest recipient of US coal are Canada and Japan. The world
coal market was depressed in the 1990s, but recovered somewhat in recent
years, due to recovery in global steel markets, especially Asia. But
basically the US coal market is relatively stagnant and controlled to a
large extent by the petroleum companies (Shell, Exxon, Gulf, Arco, Mobil and
so on) while the steel industry has divested from its coal holding.

Just three corporations (Archcoal, Peabody, and Kennecott - the last two are
owned by British interests) own the production of over half of all US coal
output. Rio Tinto, BHP, RAG, DuPont, Billiton, Rheinbaun, and
Amcoal-AngloAmerican and Peabody dominate the world coal market.

Thermal coal prices in future are influenced by the rate of increase in
electricity generation, mergers in ownership of the world coal industry,
deregulation, and fluctuations in coal exports from Australia and China, the
latter which has a third of world coal reserves (the topic of coal price
formation and coal rents is an understudied topic in Marxian analysis).
Coal use in the non-electricity sector is declining.

Burning coal produces twice as much CO2 as natural gas, and 50 percent more
than oil and gasoline. This means coal is a big contributor to greenhouse
gas and global warming. Coal burning is responsible for 70 percent of
America's sulphur dioxide emissions, the number-one cause of acid rain. As a
result of the US Section 29 Tax Credit law, coal-synfuel plants have begun
to affect the coal market, and natural gas is becoming a serious competitor
for coal. The amount of coal processed by coal-synfuel plants has increased
has doubled since 2001.

US coal exports overall are in fact stagnating or declining, around 40-50
million short tons in recent years, and actually the US is now importing a
certain amount of coal from Colombia, Venuzuela and Indonesia (perhaps 5-7
million tonnes). Deregulation of the US coal industry means that the US
electricity generating industry could decide to import more and more coal at
a cheaper price (up to half of US total coal consumption needs), quite
possibly from China.

When the UK Labour government nationalised coal in 1947, the industry
employed 750,000 people at 1,000 deep mines and produced 186 million tonnes
a year. At the start of the 1980s, UK coalmines employed 200,000+ people,
producing over 100 million tonnes per year. By the end of the 1990s, more
than 95 per cent of those jobs and 80 per cent of the output had been lost.
UK coal production after privatisation is now dominated by government
subsidised UK Coal (RJB Mining), whose investors seem more interested in
share dividends, rather than real profit and loss. It produces about 50
million tonnes a year and most of that (over four-fifths) is used in
electricity generation plants.  The UK imports more coal than it produces,
mainly from South Africa, Colombia,  Russia, Poland, and Australia. As gas
reserves run out, coal remains a strategic reserve, but basically
electricity privatisation led to a 'dash for gas', and changes in
international energy markets reduced the real value of UK coal output by
two-thirds. The real rate of unemployment in the mining communities in the
1990s was about one in five.

Currently the US SWP has some coal worker recruits campaigning for union
recognition - see http://themilitant.com/2004/6804/680401.html

Jurriaan









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