What’s wrong with the Green “New Deal”?

Submitted by Anon on 4 December, 2008 - 12:12 Author: Paul Vernadsky

In recent months the idea of a “Green New Deal” has become an ubiquitous answer to the current economic and environmental crises. Barack Obama has alluded to it. The TUC has backed the idea. The United Nations Environment Programme (UNEP) has come out for it, endorsed by UK Environment Minister Hilary Benn.

A self-selected Green New Deal Group includes Caroline Lucas MEP, Guardian economics editor Larry Elliott, Friends of the Earth director Tony Juniper and others. In July this year the group published its first report.

According to its proponents, the Green New Deal consists of two main strands: “First, it outlines a structural transformation of the regulation of national and international financial systems, and major changes to taxation systems. And, second, it calls for a sustained programme to invest in and deploy energy conservation and renewable energies, coupled with effective demand management.”

The publicity for the report stated that such a policy was “designed to power a renewables revolution, create thousands of green-collar jobs and rein in the distorting power of the finance sector while making more low-cost capital available for pressing priorities”.

Finance

The Green New Deal says: “Finance will have to be returned to its role as servant, not master, of the global economy.” Elsewhere they suggest that the cause of the last Great Depression (and by implication this one) was “a greedy and feckless financial sector”.

This implies that the financial sector is merely an aberration, an epiphenomenon that can be detached, rearranged and reinserted without disrupting the system. But in the modern capitalist economy finance is central; it is a necessary and integral part of modern capitalism. The globally hypertrophied credit system was only one aspect of the globalised system of production and trade that has burgeoned over the era of neoliberalism, built up over thirty years. And a century ago finance capital was recognised by Marxists and others as occupying a pivotal position within capitalism.

The authors not only err in detaching finance from capital; they compound their mistake by the demand to break up of financial institutions. The Green New Deal report calls for “the forced demerger of large banking and finance groups”. It says that the demerged units “should then be split into smaller banks. Mega banks make mega mistakes that affect us all. Instead of institutions that are ‘too big to fail’, we need institutions that are small enough to fail without creating problems for depositors and the wider public”.

This is the fetish of small is beautiful. It seeks to wind the clock back to the early days of banking, a bygone period superseded by the concentration and centralisation of banking capital. It implies that somehow lots of small banks competing (no doubt for “ethical” investments) will restore sanity and stability to the market. It won’t.

Small business is just as anarchic, perhaps more so than oligopoly. And in the current banking crisis, what is required is more centralisation, not less. A state-owned national bank, responsible for savings, mortgages and pensions, and run by the workers who operate it and community representatives for savers is what is needed.

This applies across the whole of the economy. The Green New Deal doesn’t raise the issue of public ownership, or the idea of a democratic, centrally planned economy. It doesn’t raise the issue of workers’ democratic control over production, as a transition step towards workers’ self management. As such it is a puny reform programme, leaving most of the key levers of the capitalist economy intact.

The Green New Deal also calls for “Re-regulating and restricting the international finance sector to transform national economies and the global economy”. However it says nothing about the character of the state (or states) that would carry out such “re-regulation”. Presumably they mean the existing neoliberal states will do the job, though it is difficult to see how with the current global governance architecture and with existing circuits of capital.

Climate change

The second aspect of the manifesto is derived from the problems of climate change and from peak oil.

On one level, the demands seem little different from most governments around the globe.

The Green New Deal report states that: “Our Government’s objectives” should include “setting a formal international target for atmospheric greenhouse gas concentrations that keeps future temperature rises as far below 2°C as possible” and “delivering a fair and equitable international climate agreement to succeed the Kyoto Protocol in 2012.”

The extent of their conception of “fair and equitable” is measured by demands that ignore class. The worst is the call to ensure “more realistic fossil fuel prices that include the cost to the environment, and are high enough to tackle climate change effectively by creating the economic incentive to drive efficiency and bring alternative fuels to market.” Who will “ensure” this? And to what end? Have these authors forgotten about fuel poverty, or merely that the dramatic rise in fuel prices this year will hit working class people hardest? Higher prices are the market “solution”; not the progressive, working class solution to crises.

The only sop towards workers is the promise of “Creating and training a ‘carbon army’ of workers to provide the human resources for a vast environmental reconstruction programme. We want to see hundreds of thousands of these new high- and lower-skilled jobs created in the UK. It will be part of a wider shift from an economy narrowly focused on financial services and shopping to one that is an engine of environmental transformation.”

Of course new jobs in renewables would be a boon. The government said over the summer that 160,000 new jobs would be created to meeting its targets and obligations on the environment. And state-funded retrofitting of homes, successfully implemented in recent years in Germany, would be better than the current pick and mix approach in the UK.

However some sober realism is needed. Last month the British Wind Energy Association estimated that the UK would have at least 23,000 new jobs in the wind, wave and tidal sector by 2020, and at best might have around 57,000. This is nowhere near enough jobs to account for the additional unemployment in the last few months, never mind for what is expected over the next year.

The Green New Deal report also begs many questions which simply do not get answered. Who will invest, and what profit margin will they expect? Will be it be left to the privatised utilities and to their more ethical competitors to invest the necessary funds? How will safety standards and pay and conditions be guaranteed in these sectors? How will these jobs be unionised?

Both transport and energy in the UK are effectively private oligopolies. The UK waste industry, which includes recycling, currently has low rates of pay and accident rates ten times the national average. The advocates of the Green New Deal cannot even bring themselves to advocate public ownership of these vital sectors, never mind any reference to workers’ control. Their demands are so limited that workplace environmental reps, and certainly unionised eco-reps, don’t even warrant a mention. Yet any really radical strategy would put the labour movement at the centre of its concerns, not tagged on as an afterthought.

Manifesto for green capitalism

The politics of the Green New Deal are little more than a mild, reformed green capitalism on the model of… Norway. The only other model is a wacky reference to “the Cuban experiment” as perhaps holding “many of the keys to the future survival of civilisation”. A shame then that it’s not possible to organise a free labour movement or even publish a socialist newspaper on the island, which make a big difference if you want workers to organise themselves.

The perspective is clear from the foreword, which points to previous “oversights”. These include “the ways in which environmentalists have tended to neglect the role of the finance sector and economic policy; how those involved in industry, broadly defined, have failed to grasp the malign effects of the finance sector on the overall economy; and how trade unionists have for too long ignored financial and environmental concerns”.

Not to be put off, the authors hope that the publication of this report “will help bring these diverse social and industrial forces together, leading to a new progressive movement. We believe that our joint signatories point to an exciting possibility of a new political alliance: an alliance between the labour movement and the green movement, between those engaged in manufacturing and the public sector, between civil society and academia, industry, agriculture and those working productively in the service industries.”

Such an alliance is not new: it is precisely the kind of “popular”, cross-class (better class collaborationist) “front” that first received its articulation in the 1930s, promoted by Stalinist Parties on the orders of Moscow. It was the politics that led the French labour movement into disarray, and helped bring about the defeat of the Spanish workers revolution. It led directly into the wartime “allied” alliance that tied workers to their own imperialist states.

The myth of Roosevelt's New Deal

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