THE WORLD IS NEW, PART 2
[Rachel's introduction: We are all struggling to understand a world
that has changed almost completely in the last 50 years. What have been
the most important changes?]
By Peter Montague
Here we continue describing the new world that has evolved during the past 50 years.
In the past 50 years, corporations have grown almost unimaginably
influential. Originally invented as a way for entrepreneurs to raise
capital from strangers, publicly-traded corporations have proven to be
extraordinarily successful and they have grown steadily, year by year.
In many cases, growing bigger has become their main purpose.
In the past 50 years -- between 1955 and 2004 -- large corporations
came to thoroughly dominate the U.S. economy. In 1955, sales of the Fortune 500
corporations accounted for 1/3 of gross domestic product (GDP). By
2004, sales of the Fortune 500 amounted to 2/3rds of GDP, a major
consolidation of wealth and power. [1, pg. 22]
Peter Barnes -- co-founder of the Working Assets Long Distance phone
company -- describes some additional changes that have occurred during
the past 50 years. In his must-read new book, Capitalism 3.0; A Guide to Reclaiming the Commons,
Barnes points out that, 50 years ago capitalism entered a new phase. Up
to that time, people had wanted more goods than the economy could
supply. After 1950, there was essentially no limit to what corporations
could produce. Their new problem was finding buyers.
Others have remarked on this shift as well. In 1967 in The New Industrial State,
John Kenneth Galbraith observed that large corporations require
stability and so they must control both supply and demand. To control
demand, they manufacture wants. In 1950, everyone's basic physical
needs could be met, so to promote growth, corporations had to learn to
manufacture desire. Physical wants are limited but, properly
stimulated, desires can become infinite.
You might ask, given that the economy can now satisfy everyone's
physical needs, providing the basics of a good life, why do we need to
manufacture desire to stimulate growth? Because growth is what provides
return on investment.
The amount of money available for profitable investment expands
exponentially year after year. Therefore, it is essential to keep
demand (desire) growing apace -- to create new opportunities for
investors to earn a decent rate of return year after year. The U.S. spent $263 billion on advertising in 2004, largely to stimulate desire. Despite this, production continues to outpace effective demand.
In his book, The Return of Depression Economics
(1999), Princeton economist Paul Krugman pointed out that inadequate
demand (the flip side of overproduction) is now a worldwide problem. He
wrote, "What does it mean to say that depression economics has
returned? Essentially it means that for the first time in two
generations [50 years], failures on the demand side of the economy --
insufficient private spending to make use of available productive
capacity -- have become the clear and present limitation on prosperity
for a large part of the world." (pg. 155) Overcapacity is chronic.
In the U.S., there have been two major responses to declining
opportunities for a decent return on investment. One solution has been
to invent new ways of manipulating money. As Peter Barnes points out,
today "the world is awash with capital, most of it devoted to
speculation."
If we take Barne's word "speculation" to mean, loosely, the
manipulation of money itself for profit, then speculators have indeed
grown more important in the U.S. economy in the last 50 years.
Corporate profits of the financial industry
in the U.S. in 1959 were 15% of total corporate profits; by 2004 the
financial industry's profits represented 36% of total U.S. corporate
profits. In round numbers, manipulating money now accounts for 40% of
all corporate profits.
The second major response to limited investment opportunities has been
"globalization" -- creation of a new set of rules that essentially
erase national borders, so that materials and capital are now free to
flow to wherever costs are lowest. Now if investors see an opportunity
to gain a decent return by, say, manufacturing toothpicks by cutting
down Indonesian rain forests, they are free to move their money there
instantaneously to take advantage of the opportunity. Within the U.S.,
this has worked out well for investors but it has not been quite so
beneficial for the working class or the middle class. As an editorial
writer for the New York Times pointed out in 2002,
"Globalization has been good for the United States, but even in this
country, the gains go disproportionately to the wealthy and to big
business." Globalization has been one of the factors that has
consolidated wealth in fewer and fewer hands in recent years.[2]
Globalization also helps explain another important feature of the new
world -- the expanding U.S. military. As New York Times columnist
Thomas Friedman pointed out in 1998 in an article
about the global spread of electronic inventions, "The hidden hand of
the global market would never work without the hidden fist. And the
hidden fist that keeps the world safe for Silicon Valley's technologies
to flourish is called the United States Army, Air Force, Navy and
Marine Corps..." The current U.S. military budget of $450 billion --
equal to the military budgets of all other nations combined -- is
another aspect of the need to keep growth going, to create
opportunities for investors.
As a result of these trends in the past 50 years, 5% of the U.S. population now owns more private wealth than the other 95%.
Naturally, this 5% has gained outsized power to go with its outsized
wealth. No one begrudges the fortunate their fortunes (almost all of us
think it is better to be rich than not rich), but democracy assumes
that everyone has approximately equal standing. Our system of
governance is legitimized by the premise, one person, one vote, not one
dollar, one vote. Since money talks -- or, in the case of the top 5%,
money screams -- we can no longer say we have even the pretense of a democracy. Instead, we have a plutocracy -- rule by wealth -- and one wholly devoted to economic growth.
As economist Herman Daly observed
not long ago, we now have a "religious commitment to growth as the
central organizing principle of society. Even as growth becomes
uneconomic we think we must continue with it because it is the central
myth, the social glue that holds our society together."
So even though economic growth is shredding the biosphere, causing more
harm than good (which is what Daly means when he says growth has become
"uneconomic"), it is heresy to try to imagine a different way of being
on the planet.
This is a uniquely modern puzzle -- we have a deep religious commitment
to an idea that was once true, but is now false, and which is
destroying the future.
[To be continued but not next week.]
==============
[1] Peter Barnes, Capitalism 3.0; A Guide to Reclaiming the Commons (San Francisco: Berrett-Koehler, 2006) pg. 22.
[2] There is nothing wrong with international trade, and it can bring substantial benefits. As the New York Times
points out, "China, Chile and other nations show that under the right
conditions, globalization can lift the poor out of misery. Hundreds of
millions of poor people will never be helped by globalization, but
hundreds of millions more could be benefiting now, if the rules had not
been rigged to help the rich and follow abstract orthodoxies.
Globalization can begin to work for the vast majority of the world's
population only if it ceases to be viewed as an end in itself, and
instead is treated as a tool in service of development: a way to
provide food, health, housing and education to the wretched of the
earth."
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From: Rachel's Precaution Reporter #65
November 22, 2006
SAN FRANCISCO'S RIGHT TO PROTECT ITS CHILDREN IS CHALLENGED AGAIN
[Rachel's introduction: In case you missed this hugely important story in Rachel's Precaution Reporter last week:
Chemical corporations have sued San Francisco again -- this time in
federal court -- claiming the city had no right to pass a law
protecting children from poisonous chemicals in toys. This is the first
major legal challenge to the
precautionary approach.]
By Peter Montague
The American Chemistry Council (ACC) -- formerly known as the Chemical
Manufacturers Association -- on November 16 filed a second lawsuit
against the City of San Francisco, aiming to prevent the City from
protecting children from toxic chemicals in toys.
San Francisco passed a law in June prohibiting the sale of toys
containing six toxic chemicals called phthalates (tha-lates) and
another toxicant called bisphenol-A. In October, the ACC and other
corporations sued the city in California state court, claiming that state law preempted the city's right to protect children by controlling toxics in toys.
The second lawsuit was filed in federal court and it claims that
federal law preempts the city's right to protect its children from
toxic chemicals in toys. Specifically, the ACC's complaint
says the Federal Hazardous Substances Act, plus decisions by the
Consumer Product Safety Commission, make it illegal for municipalities
to pass laws to regulate toxic materials in toys.
This is a definite trend -- corporations trying to prevent local
governments from passing laws to protect citizens against hazards and
dangers created by corporations. In many instances the federal Congress
is passing laws that prevent local governments from passing laws to
curb corporate abuses. It's called "federal preemption."
We can draw three conclusions from this second lawsuit:
1. This is a major attack on the precautionary principle. The American
Chemistry Council has hired a fancy law firm to pursue this case.
Clearly the ACC is putting a lot of money behind its effort to stop San
Francisco from taking a precautionary approach to protecting children.
2. This lawsuit is a sign of just how powerful and bold corporations
have become that they would sue San Francisco, asserting that
corporations have the right to expose children to known poisons and
there's nothing local governments or individual citizens can do about
it. They are thumbing their noses at the Moms of the world and at
everyone else who may try to protect children from chemical trespass.
3. There is one benefit from a lawsuit like this: It allows us to see
clearly that the system we call "regulation" was set up not to protect
citizens from harm, but to protect corporations from citizens who try
to curb corporate power. The regulatory system doesn't regulate
polluters -- it regulates citizens, by strictly limiting how they are
allowed to respond to corporate abuse.
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From: Associated Press
November 21, 2006
GLOBAL WARMING SAID KILLING SOME SPECIES
[Rachel's introduction: A review of 866 scientific studies finds
evidence that global warming is speeding up the extinction of species.]
By Seth Borenstein
Washington -- Animal and plant species have begun dying off or changing
sooner than predicted because of global warming, a review of hundreds
of research studies contends.
These fast-moving adaptations come as a surprise even to biologists and ecologists because they are occurring so rapidly.
At least 70 species of frogs, mostly mountain-dwellers that had nowhere
to go to escape the creeping heat, have gone extinct because of climate
change, the analysis says. It also reports that between 100 and 200
other cold-dependent animal species, such as penguins and polar bears
are in deep trouble.
"We are finally seeing species going extinct," said University of Texas
biologist Camille Parmesan, author of the study. "Now we've got the
evidence. It's here. It's real. This is not just biologists' intuition.
It's what's happening."
Her review of 866 scientific studies is summed up in the journal Annual Review of Ecology, Evolution and Systematics.
Parmesan reports seeing trends of animal populations moving northward
if they can, of species adapting slightly because of climate change, of
plants blooming earlier, and of an increase in pests and parasites.
Parmesan and others have been predicting such changes for years, but
even she was surprised to find evidence that it's already happening;
she figured it would be another decade away.
Just five years ago biologists, though not complacent, figured the
harmful biological effects of global warming were much farther down the
road, said Douglas Futuyma, professor of ecology and evolution at the
State University of New York in Stony Brook.
"I feel as though we are staring crisis in the face," Futuyma said.
"It's not just down the road somewhere. It is just hurtling toward us.
Anyone who is 10 years old right now is going to be facing a very
different and frightening world by the time that they are 50 or 60."
While over the past several years studies have shown problems with
certain species, animal populations or geographic areas, Parmesan's is
the first comprehensive analysis showing the big picture of global-
warming induced changes, said Chris Thomas, a professor of conservation
biology at the University of York in England.
While it's impossible to prove conclusively that the changes are the
result of global warming, the evidence is so strong and other
supportable explanations are lacking, Thomas said, so it is
"statistically virtually impossible that these are just chance
observations."
The most noticeable changes in plants and animals have to do with
earlier springs, Parmesan said. The best example can be seen in earlier
cherry blossoms and grape harvests and in 65 British bird species that
in general are laying their first eggs nearly nine days earlier than 35
years ago.
Parmesan said she worries most about the cold-adapted species, such as
emperor penguins that have dropped from 300 breeding pairs to just nine
in the western Antarctic Peninsula, or polar bears, which are dropping
in numbers and weight in the Arctic.
The cold-dependent species on mountaintops have nowhere to go, which is
why two-thirds of a certain grouping of frog species have already gone
extinct, Parmesan said.
Populations of animals that adapt better to warmth or can move and live
farther north are adapting better than other populations in the same
species, Parmesan said.
"We are seeing a lot of evolution now," Parmesan said. However, no new
gene mutations have shown themselves, not surprising because that could
take millions of years, she said.
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From: The Oregonian
November 16, 2006
SAVE THE ENVIRONMENT AND MAKE JOBS FOR THE POOR
[Rachel's introduction: Van Jones is redefining environmentalism. He
sees environmental solutions as job-creating opportunities for the poor]
By Darren Freeman
When Van Jones thinks about building an environmentally sustainable
economy, he pictures lots of new jobs -- workers installing renewable-
energy infrastructure, growing organic food or running mass transit
systems.
And Jones, who has spent the past 10 years working on criminal justice
reform, wants at-risk urban youths to get those jobs. He's calling on
environmentalists and human rights activists to join in a national
drive to save the environment and improve the lives of the working poor.
Jones, 38, is working with politicians, business leaders, educators and
community activists to develop such cooperation in Oakland, Calif.,
where he founded the Ella Baker Center for Human Rights in 1996 to
tackle criminal justice issues.
He spoke recently in Portland during a visit organized by the Oregon
Natural Step Network, which promotes environmentally sustainable
business practices. The following was edited for brevity and clarity.
Q What is the message you bring to Portland?
A We need to expand and transform our definition of environmentalism.
... Rather than talking about environmental solutions as business
opportunities for the rich or consumer choices for the affluent, we
should be talking about them as job-creating, wealth-creating, health-
enhancing opportunities for poor people.
For example, one solution for global warming is renewable energy. Not
only could it save polar bears in the Arctic Circle, it could create
jobs for urban youths who are putting up solar panels. It could also
offer wealth-building opportunities for middle-class, working-class
people who could invest in those companies.
Q Why aren't environmentalists and social justice activists already working together?
A We live in a society that has a lot of social walls. When things are divided like that, it is harder to combine the wisdom.
What I'm trying to do is to point out that we might have different
issues or problems on the surface, but the solution to all our problems
is one thing: It is a green economy with shared prosperity as a key
value....
The only reason we haven't done it is we don't know each other, we
speak different languages, have different slang and different jargon,
and we're afraid of each other.
Q How would such a partnership work?
A In Oakland, we are building... a green enterprise zone to bring eco-
friendly businesses and industries to Oakland, to urban America.
We are working with community colleges and labor unions and prison re-
entry organizations to create a green job corps, where urban youths and
workers will be taught to install solar panels, do organic gardening or
retrofit buildings so they don't leak energy.
With our green enterprise zone and green job corps, we will align...
business and economic development with work-force training and
development.
Q How does this project connect with the social justice issues you have worked on in Oakland
The safest communities are not the communities with the most police and
prisons. The safest communities have the best education and jobs for
young people.
The same kids that we are throwing in the garbage can of failed schools
and prisons could be the kids who are putting up the solar panels,
inventing the new clean-burning diesel fuel or selling organic produce.
They are so creative and energetic, but nobody has given them a grand
call or a high mission.
Frankly, nobody has given the country a grand call or high mission.
There is a hole in the heart and soul of America right now. People want
to be brought together and do something great and noble again. And
building a green economy with shared prosperity as a key value is
something everybody in the country could feel good about.
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From: Los Angeles Times
November 22, 2006
MORE CITIES REJECT COAL-FIRED POWER
[Rachel's introduction: In a bold move, five major cities in southern
California have refused to renew electric power contracts with a coal-
fired plant. They are betting alternative sources of power will be
available when their present contract runs out in 2027.]
By Janet Wilson
In an abrupt about-face, Burbank and several other Southern California
cities are joining with the Los Angeles Department of Water and Power
in abandoning plans to renew long-term contracts for coal-fired
electricity from a Utah power plant.
In forsaking their largest power source, the cities will be gambling on
the availability of adequate alternative energy from cleaner sources by
2027, after their current contracts with the Utah facility expire.
"It's a huge change," Burbank Mayor Todd Campbell cheerfully admitted.
Campbell and the City Council had voted unanimously last month to
extend their contract with the Intermountain Power Agency in Delta,
Utah, to 2044, seeking to beat the clock on a landmark greenhouse-gas
state law that takes effect Jan. 1 prohibiting such contract renewals.
The change could put Southern California in the forefront nationally of
the commercial use of alternative energy in coming years, including
wind and solar power. It could also put the region ahead in the capture
and burial of carbon dioxide, the greenhouse gas believed to be most
responsible for global warming.
Six of the Southland's largest cities depend on Intermountain for half
to two-thirds of their electricity. Researching and building
infrastructure to replace it will be a costly, risky business, utility
managers warned.
"It's a very challenging undertaking. All of these technologies are
still in their infancy," said Phyllis Currie, general manager of
Pasadena Water & Power. Pasadena is one of the cities joining in
the decision. "We're still looking at the fact that right now, the
Intermountain plant is 65% of our energy."
DWP President David Nahai, who already had said the city would not
renew its contract with Intermountain, said, "We're very pleased that
our fellow cities have decided not to renew their contracts either.
Many of them had initially decided to do so, and then I think really
showed a lot of courage and grace in reconsidering their decision."
Pasadena, Burbank, Glendale, Riverside and Anaheim representatives all
told Intermountain's General Manager Reed Searle on Monday at the
utility's quarterly meeting that they would not be renewing their
contracts for cheap, coal-fired power.
"That is correct. I think everybody has decided basically not to renew
at this time," Searle said Tuesday, noting with exasperation that the
agency had drawn up the renewal contracts "at the request of the
Californians" and that he had gone to the Utah Legislature to obtain
special permission to do so.
The cities acted in the face of mounting pressure from local
constituents, environmentalists and politicians, including Sen. Dianne
Feinstein and state Sen. Don Perata (D-Oakland), author of the
greenhouse-gas legislation, which includes a ban on power from sources
that generate more such gases than in-state natural gas plants.
Feinstein wrote a letter to an umbrella group for the cities last week
saying she was "shocked and dismayed by Burbank's decision" after the
council had voted to renew its contract with Intermountain.
Staff members of several utilities met in Sacramento on Monday with
Perata's and other legislators' staff to explain what was at stake for
the cities and ratepayers.
"We basically wanted to explain how important Intermountain Power is to
California cities.... It's a serious issue when you tell us to walk
away from it," said Currie, who like others noted that the cities had
been paying billions in long-term costs for construction of the coal
plants but would lose the right to much cheaper power after those costs
were paid off in 2027 and their contracts expired.
Traditional coal-fired plants are the cheapest, most reliable source of
power but emit tons of carbon dioxide skyward along with other harmful
air pollutants. Annual CO2 emissions at the Intermountain plants total
more than 16 million tons, according to an analysis by the conservation
group Environmental Defense.
V. John White of the Center for Energy Efficiency and Renewable
Technology, which is part of an environmental consortium trying to
replace coal-fired power across the West, said Intermountain is "not
used to the light of day. They're used to having a cocktail with a city
official and renewing a deal" with no public discussion. He said the
change of heart by Southern California officials occurred because
"there was a public outcry, and it forced yes or no votes on global
warming."
He said the next challenge would be to thoughtfully consider all
available alternatives, from wind farms in the Tehachapi Mountains
north of Los Angeles to desert solar power.
Intermountain's Searle said the Utah agency worked for three years on
the renewals and now was looking at ways to modernize its plants to
bring them into compliance with California's greenhouse-gas
legislation, including burning biomass -- which includes fast-growing
trees and plants as well as waste products -- instead of coal, or
possible burial of carbon dioxide. He warned that such measures "will
be costly" to consumers.
Biomass conversion would cost about $300 million, he said, and carbon
capture and sequestration technologies would cost billions. But Searle
said the Utah plants were uniquely situated over a large salt dome that
could be ideal as an underground storage site for the gas. The agency
also extended its renewal offer for any sort of power from the plants
until 2023. The previous deadline was next May. California utility
officials hope that state legislators will allow them to renew the
contracts if greenhouse gases are reduced.
"We can't just blanket 100 miles of the desert with solar panels. And
besides, solar doesn't work at night," said David Wright, general
manager of Riverside Public Utilities. He and Burbank officials said
they were most interested in integrated gasification combined cycle
power, which creates cleaner gas and steam power from coal and could
allow CO2 to be separated and buried.
The DWP's Nahai said the fact that the current contracts don't expire until 2027 leaves ample time.
"None of us are going to impose an economic upheaval on society, so of
course the issue of cost is tremendously important," Nahai said. "But
the question of benefits is also important... and 21 years is a long
time."
But Wright said, "Everybody keeps saying we can replace that power in
20 years. But we don't just replace that power with a decision in 20
years. We have to decide in the next five years where we're going to
get that power, and start constructing it."
janet.wilson@latimes.com
Copyright 2006 Los Angeles Times
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Rachel's Democracy & Health News (formerly Rachel's
Environment & Health News) highlights the connections between
issues that are often considered separately or not at all.
The natural world is deteriorating and human health is declining
because those who make the important decisions aren't the ones who bear
the brunt. Our purpose is to connect the dots between human health, the
destruction of nature, the decline of community, the rise of economic
insecurity and inequalities, growing stress among workers and families,
and the crippling legacies of patriarchy, intolerance, and racial
injustice that allow us to be divided and therefore ruled by the few.
In a democracy, there are no more fundamental questions than, "Who gets
to decide?" And, "How DO the few control the many, and what might be
done about it?"
Rachel's Democracy and Health News is published as often as necessary
to provide readers with up-to-date coverage of the subject.
Editors:
Peter Montague - peter@rachel.org
Tim Montague - tim@rachel.org
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Environmental Research Foundation
P.O. Box 160, New Brunswick, N.J. 08903
dhn@rachel.org
Rachel's Democracy & Health News #882
-
By Peter and Tim Montague, eds.
Environmental Research Foundation, Nov 23, 2006
Straight to the Source
