Identifying the GDP’s limitations help find the losses the working people have to make, untold yet, due to climate crisis, although it’s the working people that bear the most. The reason that works to put the working people in this position is, in briefest way, they are chained by capital.
Nothing, but GDP? No.
Yet, to fathom performance in economic front, GDP is used widely.
John Smith tells the compelling fact: “[I]t is impossible to analyze the global economy without using data on GDP and trade, yet every time we uncritically cite this data we open the door to the core fallacies of neoclassical economics which these data project. To analyze the global economy we must decontaminate this data, or rather the concepts we use to interpret them.”16
Vikram Mansharamani says: “This doesn’t mean GDP, or GNP for that matter, is useless. Far from it. But analyzing the contours of GDP does force us to zoom out and understand its limitations.”17
Other than the GDP, there’re, now-a-days, Bhutan’s Gross National Happiness Index, which looks into governance, sustainable and equitable development, environmental conservation, and cultural preservation; the OECD’s Better Life Index that includes a work-life balance dimension, and presents a broad set of measures and allows users to weight them as they see fit; the UN’s Human Development Index, which ranks countries based not only on GDP per capita but also on factors like life expectancy, literacy, and school enrollment; the UN’s World Happiness Report that looks into people’s happiness; the Genuine Progress Indicator taking into consideration the issue of personal consumption for income inequality.
The scientists’ study mentioned at the very beginning of this article looks into GDP. It’s not the scientists’ wrong approach as they check with GDP. They had to initiate the appraisal process from a steppingstone still used widely. So, their study provides a picture of devastating reality, which is perceptible to much extent. Further studies will follow the scientists’ work.
But, the load
The GDP has its many limitations, as has been shown above by liberally citing discussions on GDP.
The GDP fails to tell about the part of climate-burning burden on people, especially the working classes.
In class divided society, benefits, advantages, accesses, entitlements18, resources concentrate in the hands of the dominant classes, and the dominated part – the people, the poor, the working classes, the exploited – is deprived of these. The same pattern is present when burden, hardship, loss, etc. are distributed; and that happens in an inverse way – the dominated parts bear the most, almost, all while the dominating parts carry nothing. This is part of the law of distribution in class divided society/society with exploitative relations.19 The force that determines this law of distribution is, in general terms, the dominating parts’ power, ranging from economy to politics, propaganda and manipulation of facts. This pattern of distribution of resources and hardships is void of equity; and this is found historically, in countries, in periods of booms and busts, crises and dangers.
As is well-recognized today that distribution of social products of a society is conditioned by modes of production and exchange in the society in a given time; and ruling classes take the biggest chunk while the subjugated classes, i.e., the exploited get nothing, as, according to Engels, distribution depends on production and exchange relations in any society in a given time.
Johan Norberg, Senior Fellow, Cato Institute, Washington, DC, tells a number of hard facts:
# “Twenty percent of the world’s population […] consumes more than 80 percent of the earth’s resources, while the other 80 percent consume less than 20 percent. Critics of globalization never tire of reminding us of this injustice.”20
# “Critics of capitalism point out that per capita GDP is more than 30 times greater in the world’s 20 richest countries than in the 20 poorest. The critics are right to say that this inequality is due to capitalism […]”21
And,
# “The world’s inequality is due to capitalism. Not to capitalism making certain groups poor, but to its making its practitioners wealthy. The uneven distribution of wealth in the world is due to the uneven distribution of capitalism.”22
On the question of inequality, there’s no disagreement irrespective of the right and left camp: Today, none denies overwhelming inequality, inequality in the distribution system in the world, although many ideologies and politics never address the question of inequality; and whenever the question is mentioned by this camp, it’s neither addressed effectively nor its source is identified, as, if that’s done, that’ll question the entire system of exploitative property relation the ideologies and politics try to defend.23
As the question of distribution is being focused in this part of the present article, let’s check the way the question stands:
1] The origin of inequality is within the system that produces only for profit, which is essentially, relations of distribution comes from the relations of production.
2] It’s the system in which capitalists own means of production and all products that creates inequality.
3] Distribution is comprised of means of production and consumer goods, the necessary product and surplus product, as it’s an aspect of relations of production connecting production and consumption, and distribution and exchange link production and consumption; and distribution’s nature, principles and forms are defined by the mode of production in a society in a given time.
Now, a return to the GDP question will find:
1] GDP’s growth or loss isn’t awarded equally to all – it’s unequal depending on ownership of means of production, which is actually class power, where the powerful classes reap the entire yield and the powerless return to their shanties empty handed – an unequal distribution. This happens due to the distribution system in exploitative system.
2] As long as the economy is based on exploitative relations, there’s a single one-way avenue of climate loss – the working people, the commoners, the people bear the burden, suffer from the loss, as the powerful, the exploiters control all instruments and mechanisms of and arrangements for exploiting the nature including the climate and people, and all the power to shift all burdens of climate loss. These include economic, political and propaganda power. The loss that capital incurs due to climate loss is also shifted onto the shoulder of the working people.
3] In terms of capacity, the working people, the poor, the exploited have no power and scope to adjust to situations due to climate catastrophe other than getting entangled more tightly and more haplessly into chains of exploitation while the rich, the exploiters have all the power, scope and space to continue with their business of profit making and with life of luxury, indulgence, over-spending and thievery. While the bargaining capacity of the working classes dwindles with climate cataclysm, the exploiters enjoy the opposite, which is more appropriation of surplus value, more exploitation.
4] With climate crisis, the loss of the commons increases. It’s a net loss of the working people. The loss of the commons has two aspects: Capitals occupied/exploited/demolished the commons in the process of profit making; and, contrarily, the working people lost their commons, but paid for the loss, and due to the commons lost, the working people’s scope for leaning on the commons for mere survival, which is actually a survival mode without having the scope of getting necessary value from capital, shortens/weakens, which make their livelihood harder.
5] With control over state machine, capitals make gains through policies related to taxation, subsidies, etc. while the working people have the opposite. In facing climate crisis, this pattern/tact prevails. Taxes, main source of income of bourgeois state machine, in capitalist economy are instrument of domination of the bourgeoisie. While facing climate crisis, the working people are/will be burdened with this instrument and the exploiters, reapers of profit through taxes, will gain.
6] In the face of climate crisis, capital shifts geographically, area of activity, technology. This shift puts the working people in a hapless condition, as it’s not capital’s character to look at labor unless compelled either by thrust for regeneration of capital or by labor; and the shifting capital secures itself, digs in new areas of exploitation, increases its bargaining power, which in net result is loss/increased hardship of the working people.24 In facing climate crisis, capital’s centralization and concentration, whenever it happens, increases exploitation, as centralization and concentration of capital are, other than enlargement25 of capital, and accumulation and capitalization of surplus value, increases and intensifies exploitation of the working people.
7] The question of imperialist/imperialism organized wars gets missed in most of the time while the issue of climate crisis is discussed by the mainstream, although the principal culprit is the imperialism/imperialist capital. These wars increase suffering of peoples in war ravaged lands that have already turned victims of climate crisis. There are two aspects of these sufferings: (aspect i) two types of devastations – one, due to climate crisis and the other, due to war – the peoples face; and (aspect ii) because of (ii.i) war, (ii.ii) devastation, and (ii.iii) failure/absence of governance or engagement of governing authority with war/facing war leads to no scope for taking mitigation and adaptation measures in the face of climate crisis. Such situation, other than creating loss of lives, health, shelter, education and wage, keeps no space and scope for organizations of and struggles by the working people, although organizations including trade unions are among the most important and essential tools/arms of people, the working people, the exploited. It’s now well-recognized that a people, a working people, an exploited people without their organization have nothing – it’s a people unarmed. Minimum power to protest withers away in this condition of no-organization. In reality, this condition is, in reality, a demobilized working people; and demobilized condition of the working people does nothing but increases suffering, silently bearing on all burdens capital puts on shoulder of the working people. Imperialist war may show increase in GDP in a certain land, but devastation of the working people’s life goes unnoticed and unaccounted.
Missing of these aspects related to the exploited, the working people while considering the issues of the climate crisis and GDP is ignoring the most important question related to the climate crisis – life, human, and with persistence of the crisis life turns lifeless, humanity is dehumanized, a situation that is never to be accepted.
Note:
- op. cit.
- op. cit.
- A section of philosophers-economists-theoreticians, and non-governmental organizations zealously talk about access, entitlements, and similar terms. While loudly talking about these, they pose as for the poor/the poor’s friend/concerned with the poor’s interests. The fundamental issue being hid with these terms and postures are their effort (1) to maintain and secure status quo – existing exploitative relations in economy-politics-society-idea; (2) blunt class contradictions; and (3) ensure regeneration of capital. The amazing part of this “game” is that a section of the progressive/left camp gets mesmerized with the sweet-coated words and forget the fundamental and essential questions related to capital, labor, class contradiction, and radical change in property relations.
- Every society, and some parts of some societies, yet today, have not developed as full-fledged capitalist society, and capitalist relations related to production and exchange are not in full play in those societies/parts. Yet, those societies operate with exploitative relations, where the exploiters dominate.
- “An unequal distribution — of capitalism”, September 22, 2003, commentary, https://www.cato.org/commentary/unequal-distribution-capitalism.
Johan Norberg explains the reasons behind inequality that includes:
“The critics make it sound as though the poor are poor because the rich are rich, as if the richest 20 percent had somehow stolen those resources from the other 80 percent. That is wrong.”
“The main reason for that 20 percent consuming 80 percent of the resources is that they produce 80 percent of resources. The 80 percent consume only 20 percent because they produce only 20 percent of resources. [….] The problem is that many people are poor, not that certain people are rich.” (emphasis in the original)
The reasons presented by Johan Norberg above are not discussed/debated in this article as that’s not the area the present article is trying to cover, although the reasons presented expose the error in the arguments, as for example, “produce”.
- ibid.
- ibid., emphasis in the original.
- With this identification, the requirement of smashing down of the exploitative property relation will emerge, which the forces paying lip service to the question of inequality don’t like, as that would nullify their core interests.
- The following reports are recent among many such reports that tell about people’s suffering, shifts, and capitals moves.
A Nicosia, September 6, 2022 datelined AP report (“Eastern Mediterranean, Middle East warming almost twice as fast as global average, report finds”) said:
“The eastern Mediterranean and Middle East are warming almost twice as fast as the global average, with temperatures projected to rise up to 5 degrees Celsius […] by the end of the century if no action is taken to reverse the trend, a new report says.
“The region will experience ‘unprecedented’ heat waves, more severe and longer-lasting droughts and dust storms and rainfall shortages that will ‘compromise water and food security’ for the region’s 400 million people, according to a summary of the report released Tuesday [September 6, 2022].
“The eastern Mediterranean and the Middle East are more susceptible to warming trends because of their unique natural characteristics, like large desert expanses and lower water levels, the study said.
“The report was prepared by an international group of scientists overseen by The Cyprus Institute’s Climate and Atmosphere Research Center and the Max Planck Institute for Chemistry. Originally published in June in the journal Reviews of Geophysics, it aims to underscore the impact of climate change in the region ahead of the United Nations climate summit in Egypt this November.
“Arid climate zones will expand northward and snow-capped mountains in more northern climes will diminish during this century, said Dr. George Zittis, who co-authored the report. Although the sea level in the region is projected to rise at a pace similar with other global estimates, many Mediterranean countries are unprepared to deal with it, he said.
“‘This would imply severe challenges for coastal infrastructure and agriculture and can lead to the salinization of coastal aquifers’ warned Zittis. Saltier water from rising sea levels and low rainfall can severely damage crops and fisheries.
“[….]
“The study’s projections for the region are in line with other scientific studies, including a major report published by the Intergovernmental Panel on Climate Change earlier this year. The U.N.’s climate report termed the Mediterranean as a climate change ‘hotspot’ which is vulnerable to droughts, coastal erosion and heat waves.”
Referring to the same study report a September 12, 2022 OilPrice.com report (“Is the Middle East becoming unhabitable?”) said:
“A climate report released ahead of the UN’s COP27 climate summit in Egypt in November has revealed that the Middle East and Eastern Mediterranean are heating at nearly twice the global average, threatening potentially devastating impacts on its 400 million residents and economies. [….] The study covers the region stretching from Greece and Egypt in the west through to Lebanon, Syria and Iraq, and the Gulf states of Bahrain, Kuwait and the United Arab Emirates as well as Iran in the east.
“[….]
“Jos Lelieveld of the Max Planck Institute for Chemistry and the Cyprus Institute, which both provided support for the research, has written that people in these regions ‘will face major health challenges and risks of livelihood, especially underprivileged communities, the elderly, children and pregnant women.’” [emphasis in the original]
This is not the only region facing such a “fate”. All around the world, and not only in the “unfortunate” South, the metropolitan North areas/regions are also facing/going to face similar uncertainties.
- Investments in new areas related to energy are not new news today; and this investment is happening with an eye on higher profit. Chunks of capital are moving to the new areas. The above mentioned Oilprice.com report (note 24) said:
Saudi Arabia, the Middle East’s biggest oil exporter, is developing green solutions. Two years ago, Saudi Arabia’s national oil company Saudi Aramco announced that it was kicking off the biggest shale gas development outside of the US. Saudi Aramco plans to spend $110 billion over the next couple of years to develop the Jafurah gas field, which is estimated to hold 200 trillion cubic feet of gas. The state-owned company hopes to start natural gas production from Jafurah in 2024 and reach 2.2 Bcf/d of sales gas by 2036 with an associated 425 million cubic feet per day of ethane. […] Aramco sprung another surprise after announcing that instead of chilling that gas and exporting it as LNG, it will instead use it to make much cleaner fuel: Blue hydrogen. Saudi Aramco CEO told investors that Aramco had abandoned immediate plans to develop its LNG sector in favor of hydrogen. The kingdom’s immediate plan is to produce enough natural gas for domestic use to stop burning oil in its power plants and convert the remainder into hydrogen. Blue hydrogen is made from natural gas either by Steam Methane Reforming (SMR) or Auto Thermal Reforming (ATR) with the CO2 generated captured and then stored. Back in 2020, Aramco made the world’s first blue ammonia shipment – from Saudi Arabia to Japan. Japan – a country whose mountainous terrain and extreme seismic activity render it unsuitable for the development of sustainable renewable energy – is looking for dependable suppliers of hydrogen fuel with Saudi Arabia and Australia on its shortlist. Germany is gunning for massive amounts of green hydrogen, which it is hoping to obtain from the Saudis first and foremost. To that end, Germany has committed to invest €9B in hydrogen technology in a bid to decarbonize the economy and cut CO2 emissions. The government has proposed to build an electrolysis capacity of 5,000MW by 2030 and another 5,000MW by 2040 over the following decade to produce fuel hydrogen. Saudi Arabia is now developing the biggest green hydrogen plant in the world. The Saudi government is building a $5 billion green hydrogen plant that will power the planned megacity of Neom when it opens in 2025. Dubbed Helios Green Fuels, the hydrogen plant will use solar and wind energy to generate 4GW of clean energy that will be used to produce hydrogen. And its current claim to fame is that it thinks it could produce hydrogen that is cheaper than oil. Bloomberg New Energy Finance (BNEF) estimates that Helios’ costs could reach $1.50 per kilogram by 2030, way cheaper than the average cost of green hydrogen at $5 per kilogram and even cheaper than gray hydrogen made from cracking natural gas.
Another area, as for example, that can be checked with is the renewable energy. “Global new investment in renewable power and fuels (not including hydropower projects larger than 50 MW) reached an estimated US$ 366 billion in 2021, a record high. [….] Renewable power installations continued to attract far more investment than did fossil fuel or nuclear generating plants. Maintaining the shares of the past few years, investment in new renewable power capacity accounted for 69% of the total investment committed to new power generating capacity in 2021. The divestment trend continued in 2021 with more than 1,400 institutional investors and institutions worth more than US$ 39 trillion in assets committing to partially or fully divesting from fossil fuels.” (United Nations Environment Programme, REN21. 2022. Renewables 2022 Global Status Report, Paris: REN21 Secretariat, ISBN 978-3-948393-04-5)
There’re, according to the report mentioned above, drives for decarbonise steelmaking by replacing coking coal with hydrogen for ore-based steel production that aims to produce steel without using fossil fuels, and thereby reduce CO2 emissions, and thus create entirely fossil-free value chain (from mine to steel), use renewable hydrogen to produce sponge iron for steel, attempt to produce green steel, etc.
The report said: “Between 2018 and 2020, more than US$ 18 trillion in subsidies was dedicated to fossil fuels, with the 2020 spending of around US$ 5.9 trillion equivalent to roughly 7% of global GDP”, which is equivalent to US$ 11 million per minute.
It said: “Most renewable power technologies, notably solar PV and wind power, experienced significant cost declines during the decade. This largely was the result of a maturing industry, economies of scale, technological improvements, more competitive supply chains and increased competition.”
The issues that have come up in the paragraphs mentioned above carry implications/areas for capital. The renewables include hydro power, geothermal power, wind power, bio power, solar PV, concentrating solar thermal power, ocean power, which carry potential areas for profit by capital. Similarly, there’re markets for renewable heating and cooling technologies. At the same time, there’re issues of pricing policies, e.g., carbon pricing, emissions trading and taxation, financial support policies, e.g., subsidies and rebates, and regulatory policies, all of which are concerned with capital’s gains.
Another example is from Australia: “In coming decades, Australia will invest around A$66 billion in large-scale renewables and $27 billion in rooftop solar and battery storage. This creates openings for industry development like the $7.4 billion market opportunity for an integrated battery supply chain and manufacturing which builds on our strengths, such as wind towers.” (The Conversation, “To hit 82% renewables in 8 years, we need skilled workers – and labour markets are already overstretched”, August 17, 2022, https://theconversation.com/to-hit-82-renewables-in-8-years-we-need-skilled-workers-and-labour-markets-are-already-overstretched-188811)
However, the most important part of the story is the labor.
The above mentioned UNEP, REN21. 2022. Renewables 2022 report said:
“The renewable energy sector employed around 12 million people worldwide in 2020, both directly and indirectly. This was up from 11.5 million in 2019, indicating that renewable generally withstood the effects of the COVID-19 pandemic […]
“Several factors shape how much employment is generated in renewables, and where. Declining costs translate into growing competitiveness and more installations, and thus jobs. [….] The physical location of the jobs depends on national markets, technological leadership, industrial policy, domestic content requirements, skills training efforts, and the resulting depth and strength of supply chains in countries.”
“Solar PV was the largest employer among all renewable energy industries in 2020, with around 4 million jobs, followed by biofuels, hydropower, wind power, and solar heating and cooling. [….] The share of women in US solar employment increased from 26% to 30%. [….]
“[…] the International Renewable Energy Agency (IRENA) estimates that worldwide biofuels employment declined in 2020, to 2.4 million. Brazil had the largest number of jobs, some 871,000. Indonesia and other South-East Asian countries also have large biofuels workforces, given their labour-intensive feedstock operations. Indonesia’s biodiesel employment remained virtually unchanged in 2020 at around 475,000. The United States and the EU are large biofuel producers but have more-mechanised operations that require fewer people.”
The figures mentioned above are not simply figures related to muscles producing surplus value. They also tell about wages, bargaining capacity/incapacity of the labor there in the areas cited, variable capital, competition in the related market, an increasing/decreasing reserve army of labor, etc., which impact the working people’s life.
Similar examples are many in the mainstream literature.
RenewableEnergyWorld.com said in a Washington DC datelined report (“Labor organizers focus on renewable energy jobs”): A report, entitled High Road or Low Road, Job Quality in the New Green Economy, says that green jobs must comply with standards that can sustain families and fuel the economy as well as protect the environment. But conditions vary widely for workers at ‘green’ manufacturers in the United States, says Philip Mattera, research director for the nonprofit Good Jobs First and lead author of the report. “We found examples of very well-paying middle class jobs in areas such as green construction and manufacturing of components for wind and solar energy and even recycling, but we also found examples of companies that are providing substandard wages, inadequate benefits and overall poor working conditions,” he says. “A green job is not always a good job,” says labor leader Terrance O’Sullivan, speaking at the release of the report. (Renewable Energy World, https://www.renewableenergyworld.com/baseload/labor-organizers-focus-on-renewable-energy-jobs/, reprinted from Voice of America, 2.11.2009)
When jobs in the wind and solar energy industry are exported to sources of cheap labor, that carries a meaning: more exploitation of labor in country “A”, and keeping a reserve army of labor in country “B”, and that’s more profit for capital and more precarious condition of life for labor.
It shouldn’t be confused that renewables is the only area for investment by capital in the face of climate crisis. Other areas including industry, agriculture and transportation are there also. Facts of exploitation in those areas are harsher, more brute.
