Wednesday, April 26, 2006

Wired / environment

The cover story in the new Wired is titled "The Next Green Revolution". Author Alex Nikolai Steffen acknowledges that "green-minded activists" were right about the problem, but wrong because the solutions they offered people were "unappealing" since they called for sacrifice: turn down the heat, give up the car, eat less meat, etc. Now,

With climate change hard upon us, a new green movement is taking shape, one that embraces environmentalism's concerns but rejects its worn-out answers. Technology can be a font of endlessly creative solutions. Business can be a vehicle for change. Prosperity can help us build the kind of world we want. Scientific exploration, innovative design, and cultural evolution are the most powerful tools we have. Entrepreneurial zeal and market forces, guided by sustainable policies, can propel the world into a bright green future.

The inane naïveté of it all. "The industrial system we've devised" is the problem the article says. First, I'm not sure who "we" is in this case. The industrial system grew out of fossil fuel-powered technology operating within the law system of capitalism. Capitalism was, and is, driven by the maximization of profit, which has included the externalization of environmental costs. The result is an economic system that has plundered the planet and shat where it lives.

But now, capitalism as a system is faced with a dilemma. It cannot continue the process of accumulation -- that is, the making and selling of stuff to amass more profit -- without natural resources and healthy consumers. The environment is becoming an internal cost. As with every social crisis, the challenge for capitalism as a system, and its agents, like the "resurrected Al Gore" featured on the cover, is how to resolve the problem within the constraints of capitalism -- to turn lemons into lemonade.

The traditional solution proposed by the environmentalist movement has been the regulation of capital, going back to the early 1970s: the Environmental Protection Agency, the Clean Water Act, the Endangered Species Act, the Clean Air Act, etc. This inside the beltway strategy is failing now in the neoliberal political climate of zero government and market-based solutions. It was this three-step strategy (isolate an issue; design a technical fix; sell the technical fix to legislators) that Michael Shellenberger and Ted Nordhaus challenged in their "Death of Environmentalism" article, the failing strategy of working within existing economic and political structures. According to Shellenberger and Nordhaus, "modern environmentalism is no longer capable of dealing with the world's most serious ecological crisis [climate change - jd]"; and "[w]hat the environmental movement needs more than anything else right now is to take a collective step back to rethink everything." The political climate has changed, in terms of how people get information, who they trust, how they act. The "left" and "progressives" must connect with people where they are, not where one wishes they were. The masterminds of the New Right capitalize on the general anxiety churned up by globalization, and package that into an anti-choice, anti-science, anti-human agenda. No effective vision has been articulated to counter it. Part of the problem for many "progressives" is that the solution to this problem cannot be found within the framework of capitalism, and rather than sink capitalism, they blunder on with blind and un-inspiring solutions.

As a result, the emerging solution for "neo-greens" is to see capitalism itself as the solution. Maybe private property and profit maximization and the market really can solve the environmental mess that it ... umm ... created.

Capitalism is a remarkably flexible and adaptable system. Some corporations are realizing that they must address things like climate change, because they also are on lifeboat Earth, and climate change is an objective, happening thing. They must confront environmental catastrophe if they are to continue as enterprises. Their solution is to make "green" an investment opportunity, to turn it into a site of accumulation, a place to make profits. British Petroleum looks for alternative energy sources because because "peak oil" may be a real thing, and ultimately, it doesn't matter what the source of the energy they package and sell is, as long as they package and sell it. If General Motors can make and sell cars that run on ethanol, why not? The manufacturers that make smokestack scrubbers for coal plants are a site of profitability, as will be some of the alternative energy companies that venture capital firms are now pumping money into. The Wilderhill Clean Energy Index, which tracks the stock prices of companies involved in the alternative energy business, has almost doubled in price in the past year. Speculative capital finds profit opportunities in carbon emissions trading and weather derivatives.

Looming behind "green capitalism" as the way out of the environmental crisis is the long-standing question of "is capitalism sustainable?" As James O'Connor pointed out in an essay that appears in his collection Natural causes: Essays in ecological Marxism, Guilford Press, 1998), "sustainable for whom?" Capitalism conceivably (maybe) could manufacture a franken-world ecosystem that sustains profit-maximization. It could create the conditions to sustain capitalism, and never address the polarization of wealth and the total immiseration of 3/5ths of the world's population.

Another concept of "sustainable" implies a system that sustains the non-human environment as well as the health and well-being of the human part of it, too. This can't be done within the context of capitalism. The polarization of wealth is an emergent property of capitalism. General Motors, no matter what color it is, green or otherwise, cannot help but destroy the lives of its workers and retirees -- that's what it (GM) does -- it maximizes profit for shareholders. Capitalism means alienation -- from production, from people, from nature. Everything (if not now, soon) is routed through the commodity relationship, the price tag and the toll.

An environmental movement that figures out a way to accommodate itself with globalization and capitalism may succeed in some narrow way, along some narrow issues. But it will ultimately fail in achieving a world that sustains the people on it in any meaningful way. And the environment also will be the poorer, in the same way that the "Rainforest Cafe" is not a rainforest (or Lincoln Park zoo an African savannah or a tree plantation a jungle, etc. etc.).


Friday, April 14, 2006

Faster computers and speculative capital

Today's (4/14/06) Wall Street Journal reports more evidence of the connection between speculative capital and electronics. An article titled "Supercomputers Speed Up Game" by Edward Taylor, Aaron Lucchetti and Alistair Macdonald reports on how faster computers are contributing the swelling of automated stock trades and consolidation among the world's stock exchanges.

The use of computers in trading of course is nothing new. In fact, modern speculative capital (post-Bretton Woods, started with the advent of money markets) only exists because of networked computers. But the march of technology -- faster, smaller, cheaper -- continually changes the game. The trend allows smaller players into the game:

Buyers and sellers have been matching up electronically since the 1980s. But an increase in computer capacity readily available to even small hedge funds -- investment pools for institutional investors and wealthy individuals -- has changed the game. "With four people and 50 computers that have the power roughly equivalent to a Cray supercomputer, we can achieve what someone else would need one trader and 100 analysts to accomplish," says Jonathan Kinlay, chief executive of Proteom Capital Management Ltd., a Bermuda-based hedge fund with about $100 million under management.

Nasser Saber, in his excellent and unique book Speculative Capital described how speculative capital tends to more and faster trades to take advantage of increasingly smaller price differences in different markets or (what amounts to the same thing) different derivative configurations, the practice called arbitrage. Proteom, mentioned above, exploits differences in the S&P 500 Index and the individual stocks that make up the index (if I am reading the article correctly):

Proteom uses computers to execute complex trading strategies based mainly on stocks in the Standard & Poor's 500-stock index and their tendency to rise or fall sharply and quickly, a measure known as volatility.

Testifying as the importance in electronics in this practice:

"This business could not have existed 10 years ago [because] the computational power was not available," Mr. Kinlay adds. "The execution of a trade, the analysis of the live data, the updating of databases and the construction of portfolios of stocks are all automated."

The technology has also reduced trading transaction costs, make more trades financially feasible. The article cites the growth in transaction volume at many exchanges, as well as the growth in the share prices of the exchanges themselves.

Of course, one good turn deserves another, driving the process forward: "'There is an arms race [among exchanges] to be the fastest,' says Steve Swanson, president of brokerage firm Automated Trading Desk LLC."

Here's a link to a paper I did on speculative capital.


Thursday, April 13, 2006

Global Studies Association conference 2006

The Global Studies Association will be having its North American conference on May 12-14, 2006 at DePaul University in Chicago. The theme of this year's conference is "Alternative globalizations". The International Studies Program at DePaul is co-sponsoring the conference.

For more information see the conference web site.


Monday, April 10, 2006

Draft of a project idea

The world is in a bad [okay, need to clarify] state. An effective effort to change this state requires an accurate assessment of the problem. While current responses have been very creative organizationally [network form], the response has suffered from a theoretical poverty [in terms of fundamental processes at work, nature of process, where we are in the process]. The absence of a clear, coherent understanding of historical roots and current state has resulted in a scattered and generally ineffective response.

"Globalization" as a total umbrella of current period.

Confusion over what "globalization" is. Is it something different? If not, old strategies and tactics should work. Is it something new? Then new strategies and tactics are required.

If it is something new, what is it?

The answer to this last question should determine the political response.

-- globalization as something distinct is in dispute
-- idea of stages seems to be in some dispute
-- [proceed on assumption that there are stages] determining an appropriate political response requires an accurate assessment of current stage. If globalization is a distinct stage, it requires a distinct political response.

Research will explore concept of globalization as a stage, by exploring one aspect of globalization -- speculative capital -- and its relationship to the environment.

-- capital is a social relation -- describes a particular kind of relationship between people in act of production/reproduction.
-- through production and reproduction, this relationship extends to the environment as foundation of economy; also source of well-being (reproduction)

Look at three contemporary financial structures.

First, examine these structures

(a) in terms of infrastructure necessary to make them possible
(b) in terms of demands, needs, opportunities that make them possible

Are these structures possible under other conditions? Or, if there are historical precedents, how are they the same, and how different, if at all? So could they arise in their current form under other conditions, or are they specific to current conditions? If they cannot arise under other conditions, then they are evidence of something distinctive about Capital today [part of a general category I call speculative capital] and therefore globalization [which is capitalism today].

[Use Carolyn Merchant's "ecological revolutions" as a framework, although will need to fill out areas where I think that it is lacking. use other environmental historians, e.g. William Cronon. Basic concept is that changes in mode of production (although will need to break this into smalled chunks, to look at at level of stages of capitalism) result in different ecologies]

Second, examine the financial structures

(a) in terms of property ownership
(b) connection between immediate participants [investors mainly] and the environment; agents of the participants and the environment.

What are the features of these relationships to the environment? [These relationships are mediated throug property relations.] Are these relations to Nature the same as in the past? If they are similar, in what ways? If not, how are they different? If the relationships are different, that is, they describe a different ecology, how do we characterize it based on the cases? [Or, to use "ecology" in a more traditional or narrow way, how are the ecosystems different?]

If the relationships are different, they are evidence again of something distinctive about capital today.