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| Deforestation for Coffee Production Source: MDI |
In a recent World Economic Forum (WEF) virtual
meeting, the ageing heir to the British monarchy, Prince Charles spoke
with IMF chief Kristalina Georgieva. Charles’s speech was part of a launch
event for The Great Reset, a project involving the WEF and the Prince
of Wales’s Sustainable Markets Initiative, aimed at rebuilding the economic and
social system to be more ‘sustainable’. Charles called for a
resetting of the world economy after the COVID pandemic subsides.
I think this is the first time that I have agreed with a member of any ‘royal family’ on anything. But Charles is right, we need to reset the world economy after the pandemic has shown all its failings in stark reality.
Of course, Charles did not have in
mind replacing the capitalist mode of production but simply making
capitalism work better, more fairly and put on what he called a path of
‘sustainable development’. He outlined a ‘five point plan’ written for him
by his advisers. First, he said, we must recognise “the interdependence of
all living things”. In other words, there was a breakdown in the link
between humanity and nature. Here Charles agreed with Marx and Engels’
analysis of over 150 years ago that, with the development of the capitalist
mode of production, a ‘metabolic rift’ had been cleaved open between humans and
nature.
The drive for profit under capitalism had spread
uncontrolled industrialisation and urbanisation globally. The
productivity of labour had rocketed along with the world population, but with
no regard to the environment, nature and in particular wildlife species,
whether flora or fauna. Localised farming had been replaced by globalised
industrial farming’; forests were being decimated through logging and the
exploration for minerals and fossil fuels for the world economy. This had
brought humans into formerly remote areas and close to pathogens which have
been in wildlife for thousands of years. These pathogens have now jumped
across into industrial farmed animals and into food markets, infecting humans
who have no immunity. COVID-19 is just one of these new pathogens as
‘nature strikes back’.
Charles wants the strategic leaders
of the global capitalist economy to recognise this ‘rift’ and find ways to
bring humanity back into harmony with nature on a ‘sustainable path’. But he
ignored the question of whether that was possible under a mode of production
for profit and accumulation of capital without restraint. Indeed, Charles “emphasised
that the private sector would be the engine of recovery and was heartened by
the pledges from business leaders to recognise the damage to the environment
that would result from an unfettered dash for growth.”
In his five points, Charles noted
that the uncontrolled industrialisation of the world using fossil fuels for
energy had led to a rise in global warming that was changing the climate of the
planet at a disastrously rapid pace. He said that the world economy had
to be reset to advance ‘net zero emissions’ as soon as possible. But how was
this to be done? According to Charles: by the market. “Carbon pricing
can provide a critical pathway to a sustainable market.” The fact that
carbon pricing: the market solution for controlling emissions had clearly
failed – as many studies show – was ignored. If this were the only solution to global warming and
climate change, then the planet is doomed.
However, Charles did offer another
solution. One of his five points was that “Investment must be rebalanced.
Accelerating green investments can offer job opportunities in green energy, the
circular and bio-economy, eco-tourism and green public infrastructure.” But
again, he did not explain where this investment was going to come from – the
capitalist sector, the fossil fuel industry? There was no mention of taking over the fossil fuel industry
and phasing it out. Instead, we had to rely on ‘green investment’
becoming more profitable and creating jobs.
And in the last of his points, he
placed his hopes on the science, technology and innovation. He claimed that the
reset of the world capitalist economy on a sustainable path’ could be achieved
because “humanity is on the verge of catalytic breakthroughs that will alter
our view of what it possible and profitable in the framework of a sustainable
future.” “Possible and profitable.” So that’s all right then.
The recent movie, Planet
of the Humans by Jeff Gibbs and Michael Moore, has been roundly
condemned for its inaccuracies and its implied Malthusian approach that the
problem is’ too many people’. But what the movie does do well is show that
‘green capitalism’ ie relying on the fossil fuel industry and other capitalist
companies to develop technologies that will save the planet, is a sham, a
colossal pipe dream. The fossil fuel industry is the main generator of
greenhouse gas emissions and indeed the global military is the main user.
Charles offered no solutions here.
Capitalism is going to do little or
nothing to save the planet from climate disaster or bring humanity back into
harmony with nature. That requires global planning and public control of energy
and food production. Mariana Mazzucato, the celebrated ‘scariest economist in the world’, has pointed out that “Given the global nature of
the economy, without a truly global recovery plan, a rest of the world economy
on a sustainable basis will not be possible. We need policies that are not only
reactive but also strategic, bringing us closer to an investment-led global
Green New Deal. Bold plans to create carbon neutral cities and regions could
foster creativity and innovation”.
Mazzucato argues that we should “remember
2020 as the year we rediscovered the need for strong global health systems and
the world avoided a new Depression with a Green New Deal and an investment-led
recovery.” Unfortunately Mazzucato, having promoted the need for the
state to take a lead and not just leave it to the market, offers a solution
based on ‘partnerships’ with the capitalist sector. But any Green New Deal
based on partnership with the fossil fuel industry will fail.
Establishing a strong health system
that prevents humanity dying from future pandemics and protects those infected,
by going into ‘partnership’ with profit-making big pharma companies and
outsourcing services and medical supplies to private contractors, has already
proven a failure in this pandemic.
Take the example of big pharma. Several
years ago, the EU Commission decided to set up a partnership body, IMI, made up
of commission officials and representatives of the European Federation of
Pharmaceutical Industries (EFPIA), whose members include some of the biggest
names in the sector, among them GlaxoSmithKline, Novartis, Pfizer, Lilly and
Johnson & Johnson. The IMI had a budget of €5bn (£4.5bn), half public money
and half from the pharma companies. But the pharma companies controlled those
research projects. They rejected an EU plan to fast-track vaccines in
preventing the pandemic. They decided against funding
projects with the Coalition for Epidemic Preparedness Innovations, a foundation
seeking to tackle so-called blueprint priority diseases such as Mers and Sars,
both of them coronaviruses.
Instead, the IMI did projects that
made profits for the companies, not for social need. As one report concluded, rather than
“compensating for market failures” by speeding up the development of innovative
medicines, as per its remit, the IMI has been “more about business-as-usual
market priorities”. So much for public-private partnership.
The world’s 20 largest
pharmaceutical companies undertook around 400 new research projects in the past
year, according to Bloomberg Intelligence. Around half were focused on treating
cancer, compared with 65 on infectious diseases. It’s just not profitable to
find drugs to deal with diseases that affect the wider population particularly
on poor countries. But don’t worry, the EU now plans to spend more billions in advanced
purchased deals with pharmaceutical companies for promising drugs
and vaccines to fight COVID-19. So the companies will now be paid yet
more big bucks by the taxpayer to make profits.
Surely, what the pandemic has shown
is the market and investment for profit cannot deliver an effective global
health system. What is needed in any resetting is public ownership of the
major pharma companies and increased public investment in fully publicly-owned
health services.
Reacting to Prince Charles, IMF chief Georgieva wrote down some ideas for “promoting
a more inclusive recovery”. But as usual it was the same old message
of “increasing people’s access to opportunities”. So people should have
more opportunities to make money but not have any control over the planning of
resources for social need and the protection of the planet. That task remains
as before in the hands of big capital.
Yes, says Georgieva, we need to “scale
up public investment in health care to protect the most vulnerable and minimize
the risks from future epidemics. It also means strengthening social safety
nets; expanding access to quality education, clean water, and sanitation; and
investing in climate-smart infrastructure. Some countries could also expand
access to high-quality childcare, which can boost female labor force
participation and long-term growth.” But how is that to be
done? Well, by “improving the efficiency of spending and to mobilize
higher public revenue…through “tax reform: for example, by raising the
top rate of income tax” and “there should be a concerted effort to
combat illicit flows and close tax loopholes, both domestically and
internationally.” But no takeover of the big tax-avoiding multi-nationals,
of course.
Georgieva says we need “more
investment in education—not just spending more on schools and
distance-learning capacity, but also improving the quality of education and the
access to life-long learning and re-skilling.” But how is that to be
achieved without massive increases in public spending and the ending of
subsidies to private education for the rich?
Georgieva says we need to
“harness of the power of financial technology” for everybody. She means
banking mostly. But technology can also be applied to ensuring everybody
has access to the internet free at the point of use. How is that to be
achieved, without public ownership of the major telecoms and social media
companies, as well as the banks themselves?
The leader of the IMF talked about
world coordination of this resetting of the economy. But such
coordination has been sadly lacking in dealing with the pandemic. That’s
because it depends on national governments tied to the interests of their own
capitalist sectors and because coordination has depended on the market, not on
social need.
Big capital is getting ready to try
and ‘return to normal’ by boosting the profitability of capital by sackings,
lowering wages and introducing robots and automation to replace living
labour. But any resetting of the world economy cannot be achieved by
‘returning to normal’ ie with private profit as the driver of investment,
production, employment, health and protection of the planet.
What would a resetting of the
economy based on social need involve? Here are a few suggestions.
We need a global plan for full
employment, with jobs for all at a living wage. Pensions and benefits for those
who cannot work must be raised to at least two-thirds of the average wage.
We need substantial public
investment in infrastructure and public services like health, education,
housing and communications. Such a re-direction of investment could soon
establish much of these services as free at the point of use globally.
And it must be investment that is in
harmony with nature and the planet. The fossil fuel industry must be
phased out, just as the tobacco and military should be. The technology is there to do it, what is lacking
is the economic and political power in the hands of democratic institutions
rather than in big capital and its representatives, who prattle on about
‘inclusion’ and ‘sustainable growth’.
Yes, we must cancel the debts of the
poorest countries exploited by the multl-nationals of the imperialist
countries. Yes, we must end the tax havens for the rich and
powerful. Yes, we must re-introduce proper progressive taxation (one of
the first demands of the Communist Manifesto back in 1848) to reduce
inequality.
But none of this will be possible without public ownership of the major financial institutions and multi-nationals so that the world can be planned through democratic organisations for social objectives, not for profit of the few owners of capital.
That’s what resetting the economy
should mean.
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