It’s Supercapitalism, Lubricated By Oil
The reason why I liked Robert Reich’s Supercapitalism more than any of the big liberal political economy books that have come out recently (namely Conscience of a Liberal or Squandering of America) is that it recognized what is the central liberal dilemma about the changes in the economy since the 60s. Namely, that while corporate profits and power have soared, inequality has increased and the median wage has stagnated, our lives as consumers have gotten much, much better. Most people can now buy more and better stuff for less money than in any time in history. Companies are more efficient than ever (though the recent shenanigans in the financial industry cast some doubt on that hypothesis) and workers have gotten more productive.
In Reich’s view, it doesn’t make sense to go after corporations are particularly nefarious in producing this state of things, they’re just doing their job. The responsibility for creating a more just political economy instead comes from citizens working in a public role to do things like increase income taxes on the wealthy, establish a national health care system, improve education and so on and so forth. So we shouldn’t look for “corporate social responsibility” or for corporations to take on governmental responsibilities, like providing health care. Corporations aren’t governments, they’re lean, mean money-making machines. So where am I going with all this. Because, once again, the fact that high prices for a commodity are leading to massive profits for those that extract and sell said commodity is causing some commotion in Congress:
— Top executives of the five biggest U.S. oil companies were pressed Tuesday to explain the soaring fuel prices amid huge industry profits and why they weren’t investing more to develop renewable energy source such as wind and solar.
The executives, peppered with questions from skeptical lawmakers, said they understood that high energy costs are hurting consumers, but deflected blame, arguing that their profits — $123 billion last year — were in line with other industries.
“On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” Rep. Edward Markey, D-Mass., said as his committee began hearing from the oil company executives.
With motorists paying a national average of $3.29 a gallon at the pump and global oil prices remaining above $100 a barrel, the executives were hard pressed by lawmakers to defend their profits.
Seeing outright demagoguery like this is annoying on two levels. The first level is that it’s just pointless. Oil companies have one, and only one purpose, that is to increase the value for their shareholders. And that’s what they do, and they do it very well. I would be more concerned if oil companies weren’t making money with oil prices at such a high level, because their shareholders would be getting totally screwed. But it’s more important on a second level.
Markey and the congressmen needlessly grilling oil company CEOs are right about something – we need more investment in alternative energy. But we shouldn’t expect oil companies to do so, we should expect the government, the polity, the collective to do so. Because ultimately, it’s a political/societal decision how much oil we consume and how much CO2 we spew into the air. It’s also a societal decision whether or not we want to invest in alternative energy. Wouldn’t Ed Markey and Jane Harman be better off trying to build support in congress for a carbon tax or cap-and-trade instead that could actually raise revenue for alternative energy investment instead of demagoguery directed at oil companies?
