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John Passant

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June 2011
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The carbon tax: a battle for the future of capitalism?

Over 45000 people marched at the weekend around Australia for action on climate change.

However, given the current political environment, everyone understood it to really be a rally for a carbon tax.

That current environment is dominated by the Gillard Government’s proposal for a carbon tax to apply for 3 years from mid 2012 and then, if an international emissions trading scheme is in place, to morph into an Emissions Trading Scheme in 2015. An international emissions trading scheme won’t be in place then so the softly softly carbon tax will continue after 2015.

The majority of people oppose a carbon tax. The latest polling puts the figure at 60 percent.

Capitalism is an exploitative system in which the value workers create is expropriated by those who own the factories and workshops, the offices, the mines, the banks and the like.  The state too fights with other elements of the parasite class for its share of that value, mainly through taxation.

All sections of the ruling elite depend on the productive process for that value to be created. They thus all have a material interest in it continuing.

Labor in government manages capitalism with capital accumulation as its guiding principle, its essence, its raison d’etre, its grundnorm.

Climate change long term threatens the profit process. Yet capitalism is about short term profit. Long term systemic planning is anathema to capitalists. The state often performs that role.

The nature of the Labor Party, based as it is one the trade union bureaucracy, has traditionally made the ALP the party best able to rise above sectional interests of capital and impose long term solutions for the system at the expense of sectional interests. 

The capitulation of Labor to the mining companies’ campaign against the Resource Super Profits Tax , its dumping of the Prime Minister at the time and the replacement of Rudd with a more mining company compliant leader show that ‘stand above the fray’ role for Labor may be under serious challenge.

Some sections of the ruling class understand the threat climate change poses to their system. A destroyed nature cannot yield up extensive profits. Unsurprisingly they see solutions through the prism of profit.

Indeed some of them understand the problem but can do nothing about it because their position in the system traps them into the immediacy of profit making at the expense of addressing climate change.

‘We must do something, but we must remain competitive.’ Competitive in this context means not only internationally competitive but sectorally competitive within Australia. 

This contradiction stands at the heart of the bourgeoisie’s dispute over action on climate change. It means that any action on climate change will and must reinforce capital accumulation  and accommodate to it, not challenge it.

The carbon tax attempts to solve the contradiction by giving the appearance of doing something but at the same time shifting any cost of addressing climate change on to the working class.

It is a pricing mechanism to force consumption changes on workers and make renewable energy more efficient (that is, more cost effective in the market).

In fact the likely impact of a carbon tax at say $40 a tonne is to make gas fired power stations possibly competitive.  It replaces one form of CO2 emission with another.

The Government is talking of a price between $20 and $30 a tonne, so even this shift to gas is unlikely to occur until some time in the future, if at all.

I say if at all because the investment needed to generate electricity from gas is going to be so huge that capitalists will want guarantees about returns. They won’t commit to investing in gas if that is merely a stepping stone to renewable energy. So even a $40 per tonne carbon tax mightn’t work in shifting investment.

Capital accumulation is paramount. Indeed it is sacrosanct, and the current level of the debate in Australia and the destruction of Labor’s traditional role of ruling for capital, not capitalists, means that the current capitalist groupings dependent for profit on carbon will not be challenged. There will be no effective systemic solution imposed on the system at the expense of the polluters of profit.

Marx once wrote that the ruling ideas are the ideas of the ruling class. At the ideological and political level the debate is being played out in exclusively capitalist terms.

Those who marched last weekend want real change to address a real and existential challenge.

But because no mass left wing current exists in Australia to challenge the dominant ideas of either faction of capital, and to express working class solutions outside the framework of the system, the working class is torn between the snake oil of a carbon tax and the inaction of action man, reactionary Tony Abbott.

Our task is to build that left wing current in Australia out of the contradictions of capitalism and thus to challenge both factions of capital. Our goal is to eventually build a society based on cooperation not competition, democracy not dictatorship, freedom not fraud. 

Part of our task is to explain patiently why capitalism cannot solve the systemic problems of the system, why the market is not the solution to the problems of the market and to offer a vision of a new society where action to address climate change is decided upon democratically and driven by the need to protect humanity, not profit.



Comment from Calligula
Time June 7, 2011 at 11:22 pm

John –
A superbly well composed article.
I assume it is based on research of information before you.

If you were pleading a case in a court of law you would have blown it merely because you have once again presented far too much information in one go for any jury to comprehend.
That is an observation and not a criticism.
I know what you are driving at.
Arrogant prick that I am.

Back to the jury.
Fairly constituted and composed, any proceeding devolving to the ‘balance of probability’ could be swung toward a positive verdict for a carbon tax or whatever confection might arise in the next few months.
People are easily gulled.
Especially under the influence of actresses and the like pretending to be acting for our unions and our federal government.
At 60 against and 40 for – it could be if the jurors succumbed to personal interest or untoward persuasion.

But this is an issue that has to be settled ‘beyond reasonable doubt’.
This is no issue about the destiny of an individual.

We are talking about the future of all life on earth according to a small percentage of climate change believers.
On the other hand there are a high percentage of those being labeled as climate change deniers who are as concerned about the environment as those perceived as their opposition.

On that basis I’d humbly suggest that about 80 percent of the population want this show sorted out properly (if you want to call it that, extra-constitutionally)and without causing any of us unwarranted detriment or unjust, unnecessary, financial impost.

But you are a lawyer and I would expect you would agree that no court holds jurisdiction over that.
But these decisions are being made neither by any court nor mere tribunal.
These decisions about our fate are being made by what I call raffle winners.

You may be more polite but in my view they are not qualified in any way to make such decisions.

In short your ‘grundnorm’ (well chosen, John) in its actual denial, by these dweebs, outside process, by their all encompassing ignorance, could so easily result in our collective ‘Gotterdammerung’.

Comment from Ben Courtice
Time June 8, 2011 at 8:06 am

The rallies were understood as being for the carbon price by all present, I’m sure. But they were also for renewable energy and climate action broadly, in terms of why people were there. I held up a banner that said “build renewable energy – don’t reward the big polluters” which got a lot of support, for example. There are avenues to draw people’s consciousness along and keep climate activism going should a weak carbon price be enacted.

There’s also scope under a carbon tax for the government to manage its impact on the poor through various forms of compensation from the revenue and I suspect they will do this fairly carefully, at least until the next election. The problem they have is that any other rise in prices is likely to be blamed on the carbon price, by Abott etc.

I put up an explanation from Sharon Beder on my blog as to why economic measures like cap-and-trade are incapable of decarbonising:

Comment from Tony
Time June 9, 2011 at 10:55 am

Calligula: It would seem the financial capitalists are now using smear, in the form of an alleged illegal trade (in principle, the whole story linked to below could be a honeypot planted to help set a pretext, just waiting for someone trying to buy illegal goods through the disclosed source) to attack a challenge to the ‘status quo’ medium of exchange, the private bank backed paper currencies.

We simply don’t know exactly what is behind this sudden ‘interest’ in BitCoins. However, in the banker controlled system the “anonymizing network” that horrifies the senators, as is widely reported by investigative journalists, has long been bundles of cash.

So, US senators are attempting to discredit the BitCoin alternative currency recently discussed. Like the carbon tax, if this didn’t make the ‘status quo’ faction anxious (particularly before they identified a means to make the workers bear the burden), they wouldn’t be making the effort.

Comment from Kevin Cox
Time June 13, 2011 at 10:58 am

John you make sense. Once we have the idea that “the community should get the benefit from capital accumulation” and not just a select few then we can find many ways to achieve it within the existing financial system. I have outlined a few ideas at and we have built and deployed one of the critical components to make the system a reality. That component is to give individuals control over their online information.

Comment from Kevin Cox
Time June 13, 2011 at 11:00 am

John you make sense. Once we have the idea that “the community should get the benefit from capital accumulation” and not just a select few then we can find many ways to achieve it within the existing financial system. I have outlined a few ideas on my website and we have built and deployed one of the critical components to make the system a reality. That component is to give individuals control over their online information.