The Contemporary Condition

Wednesday, August 24, 2016

Liar, Liar, Pants on Fire: Exxon, Neoliberalism, and the Climate Crisis

 John Buell is a columnist for The Progressive Populist and a faculty adjunct at Cochise College. His most recent book is Politics, Religion, and Culture in an Anxious Age.

After investigations by Inside Climate News and the Los Angeles Times showed ExxonMobil’s own scientists recognized the risks of burning fossil fuels in the 1980s., the company faced harsh criticism even from some shareholders as well as possible legal action. Yet remarkably even in the face of these revelations Exxon continues to fund climate science denial. Recent recipients include such stalwart denialists as the American Enterprise Institute and the American Legislative Exchange Council (ALEC).

My initial reaction to this story was the famous Upton Sinclair line: “It is difficult to get a man to understand something when his salary depends on his not understanding it.” But there is much more than simple greed in Exxon’s actions. Understanding the broader context of Exxon’s malfeasance is one clue to a more complete recognition of the harm it has inflicted. Exxon’s early climate science denialism took place within an emerging neoliberal rejection of the New Deal and post World War II capitalism. Among other changes, emergent neoliberal capitalism altered earlier notions of corporate responsibility and not only restored but deepened and extended faith in the market.  As always, Milton Friedman provided the baldest defense of this position: “The businessmen believe that they are defending free en­terprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else may be the catchwords of the contemporary crop of re­formers. In fact they are–or would be if they or anyone else took them seriously–preach­ing pure and unadulterated socialism. Busi­nessmen who talk this way are unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.”

Friedman himself reflects and helped develop a view of the market that goes beyond even Adam Smith. Smith saw markets as instruments for the allocation of physical goods. Neoliberals up the ante. Markets are viewed as perfect self-organizing systems and ideal information processors, able to solve an indefinite range of social problems.  As one neoliberal advocate puts it, “markets are superb mechanisms for the delivery of information, as they capture a huge array of information and make it available in a single price…Even unknown unknowns are quickly revealed in market   prices. “  What conventional moralists might regard as lies are perfectly okay. They represent the interest of one market participant and are fully balanced by other interests in the marketplace of ideas.  Furthermore, as both Johns Hopkins political theorist William Connolly and Notre Dame historian of economics Philip Mirowski point out, modern neoliberalism differs from its classical predecessor in acknowledging that markets do not emerge spontaneously. They must be imposed. Toward this end, neoliberals develop an exoteric version of their worldview for public consumption while articulating an esoteric version among themselves.

That markets can serve as information processors in certain domains and time frames does not establish their universal validity. Markets are not the only self-organizing systems in our universe, and, as Connolly puts it, economic markets are “more fragile, interdependent, and volatile than their most fervent supporters imagine.” Their evolution can just as easily lead to system threatening crashes as to a higher rationality. Models based on this ideal failed to anticipate even the possibility of a market crash, let alone its timing.

Exxon’s Lies and a Word from the Pope

Viewers of the recent Olympic games were treated to another deceptive effort by Exxon to rebrand itself as a responsible corporate citizen. The neoliberal worldview—often called the Washington consensus-- has done far more to damage the environment than Exxon’s lies about climate change.

Consider the infamous cap and trade. As Mirowski, points out, most neoliberals never believed in their own denialism. It was a strategy to fight off regulation and to find a market-oriented approach to the problem. A market in transferable permits for allowable levels of carbon emission seemed the ideal neoliberal solution. From the start the market has been dogged by the failure of enforcement mechanisms. More fundamentally markets for carbon permits interact in destructive ways with security and consumer markets. When the world financial market collapsed, coal prices and the price of carbon permits declined, thus removing any incentive to move out of this noxious fuel. Finally, when such dangerous and uncertain programs as cap and trade, financial deregulation, or off shore oil production blow up, as they inevitably will, clean up costs are largely dumped on the public. Then when government debt grows, this phenomenon is taken as proof of government’s overreach.

Shareholder value and the deification of the market thus are only one of neoliberalism’s inegalitarian thrusts. These would include a commitment to fiscal austerity, and privatization of key state resources.

Implicit in these concepts of market fundamentalism, austerity, and privatization is a dangerous contempt for democracy and the role of the state in markets.  In the marketplace of ideas, dollars vote. Some ideas are therefore more equal than others. In this regard Mirowski cites one of the central esoteric tenets of the neoliberals: This is Friedrich Hayek on the popular will: “if we proceed on the assumption that only the exercises of freedom that the majority will practice are important, we would be certain to create a stagnant society with all the characteristics of unfreedom.”

Taken together, austerity, privatization, and periodic financial bubbles and crises and the hollowing out of democracy have driven a fierce turn toward socioeconomic inequality.  Inequality in turn places pressure on the environment along several pathways. Inequality isolates the rich.. The poorest—and especially minority groups--are virtually disenfranchised and left vulnerable to accepting the blandishments of the oil giants. To paraphrase Rousseau, inequality has reached the point where a substantial part of the population no longer has the resources to participate effectively whereas a tiny minority thinks it has the affluence and power to escape social problems.

What about those in the shrinking middle? Workers face longer hours in highly inegalitarian work places, exacerbating pressures to keep up with the higher ups Here is Connolly from a prescient passage in a 1995 book, The Ethos of Pluralization: “The American Political Economy is built around the illusory promise of universalizing exclusionary goods. As it becomes increasingly clear to a variety of constituencies that they are losing ground in this elusive quest, they either drop out of institutional politics or vent their anger on the most vulnerable scapegoats available.”

Despite these chronic problems, shareholder value, austerity, and the magic of the market are so common today that they are taken as axioms of modern societies. Mirowski calls this phenomenon everyday neoliberalism. Yet neither law nor economic history affirms the validity of the neoliberal creed.  A corporation’s obligations are to its consumers, workers, and the larger community. Corporations are granted special privileges—by governments-- but accompanying these privileges are obligations. The shareholder is owed corporate honesty but only residual earnings after responsibility to workers. Consumers, and the community are met.

Adequately addressing Exxon’s lies involves more than punishment of the perpetrators. Market fundamentalism must be challenged, and the finance industry curbed. That sector breeds instability and sucks away talent and resources from the productive economy. Safety nets, including especially unemployment compensation, must be preserved and strengthened, precautions against at least some of the volatility of modern society. Proactively ambitious spending is required to meet a climate emergency.  Declaration of a climate emergency should also include recognition that many poor and minority communities have been treated as sacrifice zones that must bear the burdens of what Naomi Klein calls the extractive economy. Proper attention to this phenomenon—including disproportionately generous funding-- and recognition of the role that these communities have played in resisting extraction’s excesses might blunt some of the racial antagonisms that have bedeviled progressive politics.

In this connection progressive must consider some fundamental dilemmas of coalition building. University of Texas Economist James Galbraith spoke of a “Keynesian devolution,” a set of policies that combined public spending, tax incentives, planning and regulations, and private investment in transit and suburban housing. This combination brought us the relative prosperity of the post World War II era. We need comparable programs to revamp transportation, urban planning, and the energy infrastructure to meet our current crisis.

Meeting these needs, however, requires addressing a persistent paradox. An ambitious progressive agenda might reduce social tensions and the inclination to demonize, but current racial and religious divisions impede enactment of such a program.

Some progressive Democrats are aware of this tension, but their approach is at so high a level of abstraction as to leave as many questions as answers. Consider this section from the party’s environmental platform.

- Democrats believe that cooperation is better than conflict, unity is better than division, empowerment is better than resentment, and bridges are better than walls.
It’s a simple but powerful idea: we are stronger together.

Unfortunately, many social conservatives would also endorse these terms—and been ready to impose their interpretation of unity on us. Their unities are fostered and sustained by denigration and demonization of a foreign or domestic dissident. Is unity sustained by commitment to one core principle? Could that principle subtly reflect values that exclude some segments and interests and thus be a tool to secure particular identities? Might more unity be possible through recognizing and cultivating difference?

There are expansive movements across ethnic, religious, and national boundaries to build coalitions in support of programs to promote environmental health. In an earlier post, Connolly has provided a close reading of Pope Francis’ recent encyclical on social justice and the environment. The Pope has acknowledged the reasonable contestability of his core creed.  This is especially important if, as Connolly would argue, the traditional views of nature that have sustained and been sustained by socialist, capitalist, and feudal and Catholic regimes are deficient. Nature has been conceived as an organic totality, an orderly hierarchy with God and man at the top or as a mechanistic domain fully comprehensible and manipulable for human purposes. In one way or another nature exists for us. This “ontological narcissism” thus provides the conditions for confidence in at least the eventual unity of core beliefs. But if, as Connolly argues in The Fragility of Things, " the cosmos is composed of innumerable, interacting open systems with differential capacities of self-organization set on different scales of time, agency, viscosity, and speed,” such a world is unlikely ever to establish and sustain unanimity of core beliefs. To his great credit, Francis is willing to encourage breaths of some fresh air into this stalemated conversation.

Unlike some of his predecessors Francis does not denigrate atheists. He has invited participants from multiple religious backgrounds to debate the differing convictions as to the ultimate nature of the cosmos even as they converge on some common measures and become more responsive to “unknown unknowns” in our attempt to save the planet.  Different motives and ideals will lead different groups to participate in such coalitions, but the willingness to debate core convictions and to acknowledge gaps in one’s own world view strengthens and is strengthened by such pluralistic politics. Connolly recognizes that “many will refuse his or similar invitations,” but a positive spirituality—just as hateful and vindictive ones—can be contagious.  Even sporadic and partial local successes in a world so linked by social media can by their example change the character of politics. Rather than wonder whether we have time to act we must proceed now.