The Complex Costs of Calamari

Every time I get near the Central California Coast, I try to arrange a side trip to Cambria by the Sea. It is a beautiful little town, though rather too “touristy” these days. And, of course, the beauty of the seacoast is a major draw for this ol’ California Jubilado. But it is one simple fact that draws me to Cambria more than all the rest. The Sea Chest Oyster Bar has the best calamari in the world! The world as I have experienced it anyway. Yet, all the Costs of Calamari are greater than the price of the meal.

Anyone who enjoys seafood knows that ordering Calamari is a haphazard proposition in most restaurants, even the “best” (expensive) ones. Nearly always, you get a plate of those little deep-fried breaded rings and tentacles. They may be tender or tough, or even downright rubbery, whatever the price. I was unequivocally shocked when, during my inadvertent adventure in Truth or Consequences, New Mexico, a waitress delivered a large plate of calamari strips I had bravely ordered for an appetizer. We quickly learned that they serve huge portions of everything in “T or C,” and all the people are above average…weight. Out in the middle of the southern New Mexico desert, I tasted Calamari that was in my top ten ever. I was surprised that I got strips, not rings and tentacles. They were amazingly tender and tasty. More can sometimes be better.

Best Dinner

However, the calamari strips or steaks at the Sea Chest in Cambria are clearly number one. According to Steve, who has cooked there forever, they buy their Calamari from a fishing outfit somewhere in the western Pacific. Those squid must be huge. Once tenderized and lightly breaded, the steaks range to ten inches across and about a quarter inch thick.

Calamari.SteakWatching the cooks behind the Sea Chest Oyster Bar is an entertainment in itself. They prepare everything on industrial grade high-fire stoves, mostly in large pans and pots. Scallops, halibut, crab legs, whatever, it is all fresh and delicious. A Sea Chest calamari steak is a meal in itself, so tender you can cut it effortlessly with a fork. It is lightly breaded and sautéed in butter to a golden brown. The action at the stoves among the five or six cooks is a study of efficiently orchestrated motion as they weave their motions in the small space between the prep counter behind the bar and the stoves at the back wall.

“External” Costs

So, there I was the next morning recovering from calamari overload, a once in a few years delight. Yet I wondered what the real costs of this extravaganza might be. Sure, we know that the restaurant incorporates various materials (calamari, butter, etc.), labor, rent, supplies, power, equipment maintenance, and overhead in the price of its dishes. The costs of extraction from the western Pacific, shipping, refrigeration, etc., go into the price tag as well. However, as with so many of the production processes of industrial society, the so-called “externalities” of such supply chains are not part of the equation.

I might find it difficult to calculate easily the global carbon emissions from the entire chain of energy consumption from extraction to consumption and waste in the ‘calamari trade.’ The costs of calamari were not all reflected in the price of the meal. I did not waste any of my dinner; it was too good, so I had my leftovers for breakfast. Yet, if I could calculate the external costs, how much of the $29- price of my fantastic meal would reflect the damage done to the planet?

Not much, if any, I suspect. If all the costs of the Calamari trade were included in the price of a meal, I doubt that I would ever afford to eat a calamari steak again. We must recognize that even with the best of policies responding to the converging crises of the early twenty-first century, life will not be the same. We must shape it anew. For more on carbon emissions and the costs of affluence, see other posts on www.thehopefulrealist.com.

Trapped by Finance Capital: Business as Usual While Planet Burns. Part II: Chaos

The role of Exxon in delaying climate action over the past three decades since its executives were made aware of the consequences of global warming by its own engineers was huge. But it was made possible by the great power that the largest fossil-fuel corporation has had on the society because of its integration with finance capital. Also, the corporate state is totally dependent on fossil-fuel energy for its ability to pursue its projects of social control. The consolidation of power in the central elites of finance, corporate, and political institutions has continued as long as the resources it requires have been exploitable. But we have reached a tipping point. It is more and more difficult for it to continue as resource depletion draws near.[1] The result is also growing economic, social and ecological chaos.

CO2 in Atmosphere, 1985-2015

CO2 in Atmosphere, 1985-2015

The confluence of societal control by finance capital, multinational manufacturing and trade, and corporate propaganda has given these giant institutions the ability to continue to extract huge financial profits. But it cannot last much longer. With no serious counter-force, these institutions will drive the world into a state of unprecedented economic, social, and ecological chaos.[2] Finance capital will not be exempt from the turmoil, but more-profit-now is a stronger motive for the executives who deploy it today; their incentives are all short-term. With a few minor exceptions, they will pursue the business of finance as usual – for them it is all about the next quarterly report.

Many signs of impending economic chaos are already apparent. The Great Recession of 2008 has yet to be resolved. Massive government bailouts of the Too Big financial institutions suspended their otherwise inevitable Failure. The risks of failure were thereby handed off to government in the form of massive new public debt. Result: the institutions of Finance Capital grow ever bigger and more dangerous. But the next collapse will not be salvaged by government bailouts. These same institutions have pressured Congress to structure the latest faint efforts to manage national finance capital in such a way that again the people will be left holding the bag. But any efforts by the Fed to stem the chaos next time will not be enough. The real economy and the people are still reeling from the last hit. The financial markets will not accept the next level of extreme debt. The monetary system will likely collapse and economic chaos will follow.

At the same time world financial stability falters, diverse climate disruptions are accelerating in frequency and intensity. The economic consequences of the next few super storms, droughts and floods will be that much more chaotic and of magnitudes beyond societal ability to manage or adapt to the destruction. The confluence of these destabilizing trends will lead to economic, social, and ecological chaos. To be effective, the societal response to this prospect must come from humanity itself; it will not come from the institutions that have caused and continue to cause the catastrophic convergence of destabilizing trends. And, it will not come from the political elites they control. Only we can resist these destructive institutional trends, replace the financial mega-institutions with local and regional public banking, and achieve a level of resilience capable of countering the level of chaos that is already inevitable.

Part III of this 3-part series will deal with the necessity of creating a massive social transformation to counter the destructive force of finance capital on people and planet, inevitably involving a new form of “creative destruction.”
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[1] Michael T. Klare, The Race for What’s Left: The Global Scramble for the World’s Last Resources (New York: Picador, 2013) enumerates the key resources, from oil and gas to rare earths and other critical minerals, to agricultural lands, that are fast depleting and subject to shortages, leading to armed conflicts around the world.
[2] As I’ve mentioned in previous posts, Christian Parenti gives us a detailed glimpse into the emerging chaos in various ‘at-risk’ nations around the world as extreme weather events, aggravated armed conflicts, and crises of poverty and political-military instability converge, leading to catastrophic conditions for human populations, in his book, Tropic of chaos: climate Change and the New Geography of Violence. (New York: Nation Books, 2011).

Overcoming Ideology: New Actions and New Ideas

Efforts to find a viable path to mitigating climate chaos and forging an ecologically viable economy are just not moving fast enough. They seem bogged down in struggles over old ideas and inadequate actions. Even some of the most esteemed liberal economists who are not on the corporate bandwagon have failed to escape this trap.

Paul Krugman and Joseph Stiglitz, both highly respected liberal economists, oppose the crass neo-conservative economic ideology of corporate imperialism. Yet, in his own way each remains trapped in the general economic ideology of extractive capitalism as the only way forward. Krugman imagines robust restrictions on carbon emissions without curtailing economic growth. Stiglitz imagines a ‘reformed’ capitalism where healthy competition can be restored. The imaginary and the possible are not necessarily the same.

French economist Thomas Piketty’s recent book, Capital in the Twenty-First Century, has received vastly more attention and sales than ever expected of a heavy economic tome. Piketty seems to expect inequality to be reduced by expanding economic growth. A simpler version of the myth of sharing a “bigger economic pie” or the “rising tide lifts all boats” story is available in any Econ. 101 class. Unfortunately for these fables, inequality is a positive feedback loop – greater power begets greater power.

Meanwhile, Krugman argued in his September 18, 2014 New York Times column, that carbon emissions can be reduced cheaply amidst strong economic growth. He does not mention the skyrocketing depletion rates of many important industrial materials – including petroleum – upon which continued economic growth depends. The connection between economic growth, growing poverty, and climate disruption is nowhere to be found.

Stiglitz writes in last September’s Harper’s Magazine, that Piketty is wrong in concluding that inequality is an inevitable outcome of capitalism. Instead, he says, ‘capitalism as we know it’ isn’t truly competitive like a capitalist system should be. Our system’s growing extreme disparities in income and wealth have been engineered by the wealthy. Stiglitz would reform capitalism.

Ending Economic Ideology

Stiglitz and Krugman are stalwart and articulate critics of the neoliberal economic ideology that attempts to justify corporate dominion over economic and political policy. However, despite their rather sophisticated economic analyses, our present economic system is what it is because it is not allowed to be reformed. The concentration of both wealth and income in the hands of a small elite is inherent in any economy in which excessive political power accrues to the financial elite. Inequality is becoming extreme, extractive demands of industrial production grow ever stronger as resources are depleted, and the devastation of the planet continues. Reform? You can’t get there from here.

As the international death dance continues around failed commitments to reduce carbon emissions, sufficient national and international actions to curtail climate chaos seem ever more unlikely. We know a lot about carbon emissions and the most important sources. Technically, the necessary reduction of greenhouse gas emissions could be planned as effectively as the U.S. mobilized the entire economy upon entering World War II. But execution is a political matter and therein lays the collective failure. Another way is needed and not even the most sincere and smart conventional economists seem able to help.

Increasing poverty, massive concentration of income and wealth, and accelerating climate disruption all have the same cause. The economy of endless growth required by the debt-driven imperatives of extractive capital is not susceptible to political reform. The very financial and corporate elites that drive the economy have captured and completely control the key players in the political process. We must look elsewhere for solutions. And elsewhere we will find them.

Resistance and Replacement: Actions Reforming Ideas

The people and the planet desperately need resistance to and replacement of the very institutions that even the most liberal critics of economic and environmental failure cannot give up. As neo-conservative economic policies still seek to solidify the empire of growth, progressive leaning conventional economists seek to reform what needs to be replaced. Powerful financial and corporate elites do not give up easily. Consider Jamie Diamond’s arrogant dismissal of Elisabeth Warren’s desire to regulate Wall Street’s excesses. The conversation in which it occurred is noted in the Afterward to the paperback re-issue of her book, A Fighting Chance.

Neither resistance nor replacement will be easy. But both will be nurtured by the growing sense among more and more people that we are on a path to catastrophe and need an immediate course correction. There is much to learn from non-violent movements of resistance that have succeeded, as reported in Peter Ackerman and Jack Duvall’s A Force More Powerful: A Century of Nonviolent Conflict. Even so, new models of resistance must involve accelerated withdrawal from the consumerist complex – no easy task. There is still a place for the forms of resistance seen in the Occupy and Arab Spring movements. But Gene Sharp, whose From Dictatorship to Democracy: A Conceptual Framework for Liberation, inspired those movements’ strategies, urged practical agility and creativity in fighting oppressive forces.

Today’s forces of oppression, especially in the ‘industrially advanced’ nations, are of a different order than the old dictatorships. The “inverted totalitarianism” with a façade of democratic formalism, as Sheldon Wolin describes in Democracy Incorporated, calls for new creative forms of resistance. Naomi Kline argues for ideologically driven forms of resistance in This Changes Everything: Capitalism vs. the Climate. However, new ideologies of humane social and economic relations, economic justice, and ecological society must be shaped by resistance that has direct and meaningful relationships to the immediate crises we face.

Replacement of the failed perpetual-growth political economy and its extractive energy-production and consumption practices requires even more creativity and organization. Various books, magazines, and Web sites, such as John Brown Childs, Trans-Communality, David Korten, Change the Story, Change the Future, Yes! Magazine, and Resilience.org – to name just a few – seek alternative cultural and political as well as economic paths. Works like that of Juliet B. Schor, author of True Wealth: How and Why Millions of Americans Are Creating a Time-Rich, Ecologically Light, Small-Scale, High-Satisfaction Economy, point to the formation of a new society grounded in humanity’s relationship to the earth and all its inhabitants. The idea of the good life is captured in that title. Many families and communities are experimenting with new ways of living outside of institutional entanglements. But much more is needed and on a much larger scale.

The hard part, of course, is getting it done, especially with so little time before catastrophic consequences of our current path become unavoidable. Some argue that it is too late. But that claim is pointless. We fight not because we will win; we fight because we must win.

The Real Cause of Unemployment: Automated and Outsourced Over-Production

In a growth economy, new jobs are created on a regular basis because new production expands the employment base. In a shrinking economy, just the opposite happens. The U.S. and most of the industrial world have enjoyed the benefits of expanded production and employment for many decades, minus the occasional downswings of the “business cycle,” along with some deep depressions. That is the ‘conventional wisdom,’ and within a narrow framework it has worked until now.

However, in addition to sending jobs to low-wage nations, ‘improvements’ in the processes of design, production, and optimizing the supply chain – all of which involve reducing the labor needed for these processes – capital invested in advanced production technology requires less and less labor. That is the key contradiction in the growth economy. Once labor costs are reduced beyond a certain point, buying power can no longer keep up with production. The addition of capital mobility amplifies this problem.

Capital is mobile; labor, not so much. Sure, Mexicans come across the U.S. border seeking work because highly automated production of corn in the U.S. – with the help of government subsidies and NAFTA – allows U.S. agribusiness corporations to undercut Mexican corn prices, flood their grain market, and drive traditional Mexican farmers off their land. Then the same corporations buy up or lease Mexican farmland to produce crops for export to the U.S. – especially those requiring hand picking. Desperate farmers who lost their livelihood can be hired at below poverty wages; some of the remainder head for the U.S. with nothing but hope.

A win-win situation for the corporations and their capital is a lose-lose proposition for both Mexican and American workers and the price of their labor. But when capital moves from the declining cities where American manufacturing once thrived, to the centers of large Asian populations in dire poverty, the immobility of labor is clear. Neither American nor Asian workers without highly specialized technical skills, can follow the movement of investment capital to obtain jobs. That is the real face behind the mask of “free trade.”

Those corporate elites who the pundits of CNBC and Fox News tout as the “job creators,” are, in fact, American-job destroyers. The claim is routinely made that these wealthy CEOs create jobs through investment of their wealth. Well, they do create poverty jobs in Asia to replace middle-class jobs in the U.S. In the process they destroy American jobs. And now we have the TPP, the “Trans-Pacific Partnership,” or “NAFTA on steroids,” formed in secret and intended to wipe out national standards for labor and environmental protection, even further extending corporate rule and economic control over nations.

Through most of the industrial revolution and subsequent expansion of economic production, investment of capital has been directed toward labor saving technologies of production as well as the invention of new products. The first coal-fired steam-driven textile factories in England and Scotland required many workers to maintain the machinery which did absorb some of the farmers driven off their land by the “enclosures” which were part of the first stage of industrialized agriculture. Most of the rest were encouraged to emigrate to Australia, the U.S., or Canada, where expansion into native lands provided new opportunities for workers displaced by the new industrial technology.

The industrial age has been characterized by continued economic growth. That growth absorbed most of the labor lost to automation of industrial processes. We are now at the end of that phase of the growth economy. Despite denials from the industrial and financial elites, the age of economic growth is ending. Converging crises of finance, resource depletion, accelerated climate disruption with increasingly costly expansion of fossil-fuel production, under-funded over-consumption sustained only by increased debt, and even greater over-production, make it inevitable.

Classical economics, the propaganda tool of industrial capital, sustains the illusion of endless growth. But it fails to recognize environmental reality. A new economics that faces ecological limits must assume curtailed fossil-fueled production and reliance on human labor for two reasons. First, no economy works without circulating its money. Wages are necessary for workers to purchase goods and services produced by other workers. Second, an adequately rapid withdrawal from fossil-fuel addiction will require converting many processes from capital-intensive to labor-intensive production. Some might yell “Luddite!” But existing science and technical knowledge will allow invention of many new labor-based methods and modification of old ones, avoiding the back-breaking pre-industrial forms of work. They just will not use so much fossil-fuel energy. Vast opportunities arise to invent new technologies that rely on human energy. Don’t forget the venerable bicycle. It remains the most energy-efficient mode of transportation yet devised.

Techno-Fix: Triumph or Tragedy?

So called “modern man” has basked in the illusion that something like “American Ingenuity” can find a solution to any problem by inventing a new technology that will do what needs to be done, whether to replace a no-longer viable technology – such as developing a new fuel that is somehow carbon-neutral – or to solve a new problem resulting from existing technology – such as finding a new material to replace one nearing depletion.

After all, just look at the steady growth of technology throughout the industrial era of the past two hundred years. Invention has continued, sometimes at a seemingly breathtaking pace. Manufacturing, transportation, and communication have all benefited from the combination of new inventions and new forms of energy, from the first coal and steam driven factories to the latest nanotechnologies in micro devices with diverse applications from medicine to surveillance. Why can’t this triumph of technological progress just continue indefinitely?

Endless progress of technology has not been an entirely unreasonable assumption given the modern history of science and technology and the seemingly endless development of products to do all sorts of things, from washing our dishes to space travel to the moon and maybe soon to Mars. Yet the pantheon of technical progress has been intimately connected to and dependant upon the unlimited availability of cheap readily available fossil-fuel energy, both for development of technologies and for their deployment. The fossil fuel energy era has allowed continued development of advanced highly complex technologies.

But wait! What if we look closely at the context of all this and what conditions allowed such bounty? Well, we then find that most of the products we idolize arose in the context of an expansive materials science and the ready availability of more and more exotic minerals extracted from locations around the world and cheap energy to process them. Many of these materials are far from plentiful, yet are required for the new technologies to work.

Lithium, a key material in the manufacture the new lithium-ion batteries, which are gaining such widespread use in everything from hand tools to electric cars, is only found in a few places in the world. Various rare earth metals used in electronics are increasingly difficult and costly to extract as demand accelerates. Extraction, processing, and manufacture with these new materials all require fossil fuel energy – they cannot be made available without very large energy inputs. Furthermore, extracting and processing fossil fuels needed for these processes takes more energy and cash. As sources of fossil fuel are depleted, new more remote ones yield lower quality material. Net Energy Gain (NEG) declines and costs accelerate with deep water wells and “fracking” for onshore low-quality deposits. No new technology can change that.

A strong cultural belief in our inevitable salvation by technological innovation is evident in claims for particular technological imaginaries. One such claim is that all we have to do is send privately funded rockets (more efficient than NASA) to the moon to mine abundant minerals, and we will have plenty to fuel continuous economic growth through advanced technologies. Another imaginary ‘techno-fix’ is the strange resurgence of “cold fusion” a hypothetical type of nuclear reaction proposed by Stanley Pons and Martin Fleishmann in 1989. Under a new name, “Low Energy Nuclear Reactions (LENR)” – or other assumed names used to disassociate it from the scandal that resulted from early misrepresentations of results and failures to present data to support the first claims of evidence for this unlikely process – some still believe in the concept, but without scientific evidence to support it.

In the case of moon-mining, the fantasy simply does not address the underlying problem of continuing on the path to full climate chaos; rather its claim is to enhance extravagant extraction and consumption. In the case of ‘LENR,’ there have been no verified experiments demonstrating a process for which there is also no viable theoretical construct consistent with nuclear science and no experimental evidence that would confirm the claims that it even exists no less produces vast quantities of usable energy from low-energy inputs. It is a long story of “pathological science,” where claims were taken to the press but never substantiated by the scientific processes of replication and verification. This led to funding for more research but not to viable scientific results, yet the idea still garners some support from ‘true believers’ who just don’t want to give up on the fantasy and do not understand the scientific method. A brief summary of that history can be found at Wikipedia under “cold fusion.”

Because of the short history of technological successes in the fossil-fueled industrial age, the culture of consumerism includes a solid belief in the wondrous human ability to create solutions to any problem with new technology, thus allowing us to imagine that we can ignore the (inevitable) prospect of having to dramatically curtail the consumerism that increasingly defines our personal and social identities as it destroys the planet. We have projected our belief into a limitless future of technologically enabled endless consumption, just when the material and ecological limits to economic and technological growth are upon us. The convergence of the ecological, financial, industrial, energy, and climate crises we are now experiencing is not amenable to any technological fix, including “geo-engineering,” the final hubris. These crises are endemic to the relationship we have cultivated between our debt-driven growth-dependent economy and the biosphere upon which our lives depend. It is we who must change, and our technology must be reinvented to adapt to that change.

The Great Jobs Myth and the Transformation of the Growth Economy, Part I

A lot of congressional politicians and media pundits of both Republican and Democratic persuasion are jabbering these days about “job creation.”  The 2014 mid-term elections are fast approaching and nobody wants to be caught looking indifferent to the lack of jobs for an increasingly large numbers of Americans.

Their approaches are different, of course.  The Democrats want more ‘stimulus’ to “grow the economy” by restoring government spending and infrastructure investment.  The Republicans, as usual want to cut even more taxes on business and the wealthy than ever, despite already record low taxes and swollen corporate coffers.  They would “encourage investment” in economic growth to “create jobs.”  But despite the obvious cruelty of actions such as cutting food stamps – a program benefiting more working age recipients than ever before – and failing to extend unemployment benefits when jobs are so hard to come by, neither wing of the ‘republican/democrat’ Corporate Party gets the basic facts of a changing economy nor wants to face them if they do understand the situation.

The entire history of the industrial era has involved forcing people off their lands and into a vast pool of “free labor” to be tapped by growing industry as needed, then forcing them out of their jobs by outsourcing capital to cheaper labor markets.  The whole time, investment in growth has included technical innovations that increase production while reducing the labor required for a given level of production.  Only the slave holders of the South wanted to retain a labor-intensive method of agricultural production – the labor was free!  Government policy all along has been to subsidize increased productivity and to supply the kinds of labor needed.

After World War II, the G.I. Bill allowed returning vets to get a college education that would open employment for them in a technologically expanding economy.  Continuing technological innovation – especially the explosion of computer technology from the 1980s onward – required fewer middle-management jobs and increasingly required smaller numbers of new jobs with highly technical skills in product development for military hardware, medical devices, industrial processes, computer hardware, software, and networks.  The labor market bifurcated into 1) high paying upper-management and technically-skilled jobs and 2) low paying unskilled jobs, as manufacturing capital was moved overseas for production with labor at a fraction of the cost that manufacturing labor had been in the U.S.  The middle class shrunk accordingly as consumption was increasingly funded by credit-card and mortgage debt.  That, of course, rolled into highly leveraged financial “assets” by the Big Banks, led to the 2008 financial collapse.

We now have a labor market which is composed of an increasingly smaller number of very high paying executive positions, well paying technical jobs, fewer and fewer moderately compensated white-collar jobs, very few blue-collar manufacturing jobs at depressed wages.  This followed the successful destruction of unions in the U.S.  Wage suppression and outsourcing let to an expanding labor market for low to minimum wage dead-end jobs that cannot be outsourced because they involve direct manual labor in the service sector, largely retail clerking, cleaning, building maintenance, etc. –  jobs that cannot adequately support a worker no less his/her family.

Despite my thirty-five years in higher education and belief in the importance of education for every citizen in a democracy, I know that more college educated workers in a labor market that does not need them is no solution to the shortage of jobs with a living wage.  Nor will technical training programs create the jobs they are meant to fill.  Most proposals from politicians to improve access to college education – low-interest student loans, subsidized tuition, loan forgiveness for those who go into teaching, etc. – are good in their own right.  But they will not solve the problem of insufficient livable-wage jobs available in the labor market.  Too many private training ‘institutes’ or ‘universities’ arrange federally subsidized student loans to pay for training that does not result in jobs for graduates.  The problem is not just the lack of educated workers; it runs much deeper than that.  The political rhetoric completely misses the real problem.

Labor markets were sustained in the growth economy because expanding production always needed new workers, even when technological innovations reduced the number of workers needed for individual industrial processes.  As long as growth could be sustained, debt-based capital infusion into new production increased the total number of new workers needed even though each process needed fewer workers to function.  But that is over now.  And the end of the growth economy is in fact the beginning of the Great Transformation that politicians are entirely unprepared to deal with, even as it fast approaches.

The accumulation of massive private and public debt is today running up against the enormous accumulation of the waste and damage produced by unfettered economic growth as we approach the end of cheap energy and natural resources.  As resource limits and ecological collapse draw near, a Great Transformation is inevitable.  What that transformation will look like is a very open question.  How it plays out will be up to the ability of humanity to recognize the new planetary reality and to reorganize society and its deployment of technological and social innovation to create a new realism of hope that transcends the illusions of the recent past.  Part II of this post will explore where we stand in that quest.