Category Archives: Economy
Media 104: The fight-back? Seriously flawed FT article on the next 30 years of fossil fuelled energy
The message from the article’s author, Nick Butler: “Loved or not, the energy companies will still be giving us products we need and they will thrive over the next three decades . . . Wind and solar power are of limited value in meeting industrial energy requirements”.
He stresses the continuing weighting of investment in favour of oil and gas against renewables and focuses on the latest long-term international outlook, which “paints a picture of the world to 2050, on the basis of current policy, reasonable expectations of economic and population growth across the world”.
Sounds good: but this report “comes from the US Energy Information Administration — an independent agency in September”. However, according to its hyperlink and Investopedia, the Energy Information Administration (EIA) is a government agency formed in 1977.
In addition to this incorrect information, the author attribution – ‘energy commentator for the FT and chair of The Policy Institute at King’s College London’ – fails to add his significant previous employment as Senior Policy Adviser in the Prime Ministers policy unit and BP’s Group Vice President for Strategy and Policy.
Not so: a scroll through the report saw no input from such companies and a word search of the report, using the names of three of the largest oil companies, found ‘no results’.
He concedes that the energy transition is indeed happening (see Bloomberg, above) but asserts that its impact is small and “on this analysis will largely remain focused on the generation of electricity”.
The report, Butler continues, gives a picture of two very different worlds.
“On the one hand, in the developed OECD countries energy demand in volume terms thanks to efficiency gains, minimal population growth and public policy — is static to falling and the supply is getting progressively cleaner. In the rapidly growing Asian economies, population increases and the desire to escape poverty are pushing up both demand and emissions shows an inherently unsustainable future. The trends it describes are a recipe for serious global warming and climate instability.”
As the website of UK Oil & Gas PLC (UKOG) reminds us, there is no alternative (TINA): oil is indispensable: it heats homes, provides fuel for water, air and road transport and is used in plastics, fertilisers, detergents, paints and medicines.
Is Butler unaware of research under way to redesign many of these products to eliminate oil use. The use of electric heating is growing and of electric road and waterway transport, mainly ferries? And though emissions will be reduced by increasing localisation of supplies, there will be some need for clean shipping; for nearly three years the first Chinese 2000-tonne electric cargo ship has been in business. Japan and Norway are also working in this sector, with Japan’s Komatsu Ltd developing its first electric-powered digger.
Many commentators see the need to phase out long-distance air travel, but there will always be the need for some air transport during emergencies and the BBC reports progress towards such a capability: July’s Paris Airshow saw the launch of the world’s first all-electric nine-passenger aircraft for which orders are now being placed
Years ago, Dave Lindorff wrote about ‘ecological cataclysm’: “it is useful to look at the hypocrisy of the energy companies when it comes to an even worse crisis threatening life itself on the planet – rapid climate change due to increasing carbon in the atmosphere”.
His advice is more reliable than Butler’s: Watch What Big Oil Does, Not What It Pays to Have Said.
An earlier post – the first in a series ‘The Corbyn Revolution: How Labour leader Jeremy Corbyn’s economic agenda would impact Britain’s economy’ – was a fairly dispassionate overview of the proposed policies ‘breathtaking in scope’, but the other titles in the series indicated that they would fall well below the standards of ‘fairness and impartiality’ which the FT’s new owners had undertaken to maintain.
The writer cravenly decided to avoid them, but Judith Martin (below, right) had more spirit and took the FT – ‘One of the business world’s most-respected platforms’ – to task for its article, UK’s Labour would seize £300bn of company shares.
Though the FT edited or removed many sentences and gave it an anodyne and misleading title: Rewarding your workers makes sound economic sense, we can now present the full text, sent by the writer.
“Raid”, “stealth tax”, “expropriation” – I don’t recall the FT using these inflammatory terms when discussing the John Lewis Partnership, which has always given annual bonuses to the staff instead of to shareholders.
Your front page headline “Labour would cost UK companies £300bn by shifting shares to staff” (2nd September 2019) is one of the most partisan I have ever seen in the FT, and more like something I would expect from the tabloid press that I don’t choose to buy.
Only later does it become clear that the suggestion is for a gradual transfer of a mere 10%. The fact that the top 20% of income earners received 6 times the disposable household income of the bottom 20% (according to the government’s own figures (Income inequality in the UK, House of Commons Library, May 2019)) doesn’t get a look-in.
Henry Ford understood that it made sound economic sense to pay workers enough to allow them to buy the company’s products. Impoverishing your workers – even if, like Deliveroo, Uber and the rest of the gig economy crew, you claim they’re not actually employees – is not good for society, as numerous FT articles have noted in recent years. Most of our current worker protection has come from the EU.
As for the rights of tenants, I am agnostic on whether or not they should be given the right to buy but they certainly need a fair rent structure and decent protection. Not long ago there were headlines saying that a new generation of middle-aged renters was likely to face extreme poverty in old age, with resulting stresses on the health service and elsewhere. Compare this country’s attitudes to housing and landlords with Germany, where Berlin has just acquired nearly 700 flats from a private landlord, with plans for more. In March this year the FT noted approvingly that the start-up culture in Berlin was thriving. A city that protects its residents frees up initiative.
Is this really a good time to put the boot in to any policy that might suggest that capitalism was capable of improvement? The FT has spent the last three years insisting that the EU gives a better deal than the economic isolation that faces the country in November.
When Jeremy Corbyn (left, FT) has finally been dragged into co-operation with other anti-brexiters, and Boris Johnson’s Conservative Party is looking increasingly unstable, is this really a good time to put the boot in to any policy that might suggest that capitalism was capable of improvement just because it comes from the Labour party? Do you really want more of Johnson and his stated approach of “fuck business?”
(Ed) Is Jim Pickard’s language in this article – seize, confiscate, state raid, expropriate – actually adding to Project Fear, which is becoming Project Cold Hard Reality according to the Scotsman – no doubt thinking of the number of jobs and assets moving to continental Europe?
In a letter today signed by over eighty economists, including Richard Wilkinson, Guy Standing, Prem Sikka, Kate Raworth, Richard Murphy, Steve Keen, Joseph Huber, John Christensen, Dani Rodrik, Thomas Piketty and lead signatory, David Blanchflower, the FT is charged with failing to appreciate the severity of the UK’s current economic condition. The indications include:
- the country’s ‘meagre recovery’ from the 2008 banking crisis, fuelled by rising household debt,
- stagnating earnings,
- a housing market crisis,
- the wealthiest disproportionately benefiting from growth since the 1980s and
- a failure to take adequate action to prevent climate and environmental breakdown and prepare for their effects.
They point out that all political parties in the UK are proposing increases in public spending to meet these challenges – and charge the FT with reproducing a number of misconceptions:
Labour’s proposals are affordable: the FT’s source, an Office for Budget Responsibility analysis, “ignored the impact of public spending on growth, and thus on tax receipts” – a critical relationship noted by senior IMF economists in their critique of austerity.
The economists pointed out that government can borrow at negative real interest rates to fund pressing infrastructure, education and environment projects, many of which offer returns well above zero, generating higher future tax receipts to spend on social and environmental needs such as those listed above. At present, they observe, taxation levels in the UK remain lower than in most well-provided European countries.
They corrected the implication that a mechanism such as an Inclusive Ownership Fund (p.42) would require companies to pay out cash out; companies would issue new shares to be placed in a mutual fund – just as shares are now issued for executive compensation.
After being reminded that in the 1940s and 1980s, major policy changes were made in response to a failed economic model – at first seen as overly radical but later accepted across the political spectrum – the FT editor might heed the advice of the critical reader whom he invited to write a letter:
“There needs to be a revolution in the FT — not the communist type of revolution, but a revolution that turns the mindset to see the world beyond a white middle-class neo-liberal tinted lens.”
Richard House draws attention to the global campaign, World Protest Day, #No More Trump, launched on August 10th by President Nicolas Maduro.
It appeals to the peoples of the world to stand with the people of Venezuela against the economic, financial and commercial blockade imposed by U.S. President Donald Trump.
Hundreds of thousands of people in the streets of Caracas held signs that read, ‘No Mas Trump’ to protest against the U.S. president and his administration which has prevented the Venezuelan government from accessing billions of its own dollars and blocked food and medicine from entering the country.
Demonstrators in Australia, U.S., France, Aruba, South Korea, Haiti, Turkey Italy, Germany, Dominican Republic, Argentina, and Mozambique, among other nations, took part in World Protest Day
Under the hashtags, #NoMoreTrump, #NoMasTrump and #HandsOffVenezuela in support of Venezuela and the Maduro administration, they also demanded the halting of the U.S. administration’s efforts to try and install the self-declared interim president, Juan Guaido.
Their petition will be circulated globally until the end of August, and then presented to the Secretary-General of the United Nations, Antonio Guterres, in early September. It begins with the words: We, the undersigned, the peoples of the world… It is expected that millions will sign the petition at this link in Venezuela and across the globe, before August 31, 2019.
The Caracas rally was denied Thatcher’s oxygen of publicity: Hong Kong protests dominated the press and pages of Donald Trump’s tweets pervaded the twittersphere
On August 10th, President Maduro told the thousands of Venezuelans gathered at the rally in Caracas “Today, we Venezuelans have dignity and are spiritually united.” Gerald A. Perreira, an executive member of the Caribbean Chapter of the Network for the Defense of Humanity and the Caribbean Pan-African Network (CPAN) comments:” Revolutions cannot be limited to the material/ economic plane. In fact, if a revolution is to be successful, the spiritual and cultural dimensions must be central. Hugo Chavez constantly invoked liberation theology in his speeches, and was clear that his inspiration to liberate his nation came from his religious convictions”.
Perreira recalls that on August 5, Trump had expanded the sanctions against Venezuela, signing an executive order to freeze all Venezuelan State assets in the US. Economists Mark Weisbrot and Jeffrey Sachs, in a report issued by the Washington-based Centre for Economic & Political Research published earlier this year, found that as a result of the US embargo, Venezuelans were deprived of “lifesaving medicines, medical equipment, food and other essential imports”. They estimated that the sanctions against Venezuela caused at least 40,000 deaths between 2017 and 2018, and can be considered as assault on the civilian population, contravening the Geneva and Hague international conventions, of which the US is a signatory. He points out that:
“Cuba, Venezuela and Nicaragua constitute an “axis of hope, dignity and defiance”
- Unlike the US, none of these countries have ever invaded another country, or supported any form of terrorism.
- All three have been leaders for human advancement, dignity and progress in the region and worldwide, sharing human, cultural, scientific, and any other resource that could propel the rest of us forward.
- Cuba has been in the vanguard, making extraordinary contributions in the fields of healthcare and medical research.
- Despite the US’s criminal 60 year old blockade, which has been rightly described as “the longest lasting genocidal attack in history”, Cuba has developed vaccines and drugs that have saved countless lives.
The 120 member non-aligned movement (NAM) has discussed measures to counter the impact of US global sanctions, with 21 countries now included on Washington’s sanctions list. A gathering of NAM countries met in Caracas last month, together with seven observer countries, ten multilateral international organisations including the United Nations (UN) and fourteen specially invited nations. Speaking at the opening ceremony, President Nicolas Maduro (above) stressed that ending US global hegemony is a realistic goal, issuing a statement that affirmed that only Venezuela can decide its fate. It warned that US sanctions were in breach of the United Nations charter.
Perreira comments that progressive forces which stand outside the materialist tradition must take the upper hand and reclaim the revolutionary messages of the Bible and the Qur’an from ‘usurpers and hijackers’. He emphasizes that the peoples of the Global South have the natural resources and power to humble the Empire: “It is a well substantiated fact that if Europe and the US were denied access to its resources for two weeks, their economies would grind to a halt” and quotes the words of Arundhati Roy:
Remember this: We be many and they be few. They need us more than we need them…
“Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing.”
A call for building strong productive local and regional communities and new trade systems that fulfil human lives without wasting resources and energy
Today the Financial Times (paywall) reports that the number of foreign investment projects has dropped by 14% to 1,782 in the financial year ending March 2019, since the 2016 Brexit referendum. This is the lowest level in six years, according to a report published on Wednesday by the UK’s Department for International Trade.
As multinational profits continue to fly out of the country and taxes are evaded, we return to the valuable 2017 report by Victor Anderson and Rupert Read entitled ‘Brexit and Trade Moving from Globalisation to Self-reliance’, published and launched by Green MEP Molly Scott Cato.
“This report puts on to the political agenda an option for Brexit which goes with the grain of widespread worries about globalisation, and argues for greater local, regional, and national self-sufficiency, reducing international trade and boosting import substitution”.
Colin Hines comments: It details the need for an environmentally sustainable future involving constraints to trade and the rebuilding of local economies. On page 14, the report calls for ‘Progressive Protectionism’:
“Reducing dependence on international trade implies reducing both imports and exports. It is very different from the traditional protectionism of seeking to limit imports whilst expanding exports. It should therefore meet with less hostility from other countries, as it has a very different aim from simply improving the UK’s balance of payments. It could be described as ‘progressive protectionism’, or ‘green protectionism’“.
The report’s recommendations are summarised under three headings: the environment, globalisation and localisation (below):
- Change trade agreements to allow governments to promote greater national, regional, and local resilience.
- Shift taxes, subsidies, and public expenditure on infrastructure, away from unfairly favouring large and global companies, and redirect them to help build up local economies.
- Link banking directly to local and regional economies rather than to the international financial system.
- Boost the number of places for skills training in sectors where UK production can substitute for imports.
- bring in short-term government subsidies to invest in and develop economic sectors where UK production can be expected to substitute for imports as part of the new strategy. These would not necessarily be ‘infant industries’: they might be old sectors being revived and renewed.
- Introduce or increase tariffs on imports of goods and services, especially those where domestic production is a viable and environmentally sustainable option.
- Democratise English sub-regional devolution arrangements and reform local government finance, so as to provide for effective decentralisation of power.
The globalisation of recent decades has been very one-sided. There have been enormous benefits for large business corporations, financial institutions, and the super-rich. As smaller companies have found it difficult to compete, the multinationals have used a worldwide network of tax havens to escape from taxation and regulation.
‘Brexit and Trade’ sets put a new option for Britain. Instead of removing protective regulations against environmental threats it advocates establishing high Green standards and practical localisation measures. It would address the very real social, economic and environmental problems of globalisation, serving present and future generations well.
On Tuesday, the Institute for Public Policy Research launches its Environmental Justice Commission (EJC) and people are coming together across Conservative, Labour and Green parties to serve on it – leading figures from business, academia, civil society, trade unions, youth and climate activism.
Ed Miliband, Labour MP for Doncaster North and a former leader of the Labour party; Caroline Lucas, Green MP for Brighton Pavilion and Laura Sandys, a former Conservative MP for South Thanet, have written about this and many readers’ comments are well worth reading. Important points made are summarised below
Too often the issue of climate change seems marginal to the public’s concerns, when it is in fact central.
This will be done by committing to a Green New Deal (GND), with an unprecedented mobilisation and deployment of resources to tackle the accelerating climate crisis and transform our economy and society for all. Read more on the Green New Deal website.
Its aims are to:
- mobilise a carbon army of workers to retrofit and insulate homes, cutting bills, reducing emissions and making people’s lives better
- move to sustainable forms of transport and zero-carbon vehicles as quickly as possible, saving thousands of lives from air pollution
- end the opposition to onshore wind power and position ourselves as a global centre of excellence for renewable manufacturing
- protect and restore threatened habitats and
- secure major transitions in agriculture and diets that are essential if we are to meet our obligations.
People have been asking how we can revive communities that have been left out of prosperity. They ask whether they and their children will be able to get work and also what the quality of that work will be and what skills will be needed. ECJ believes GND has the potential to do this.
The areas of policy mentioned above answer the immediate economic concerns of people for jobs and hope. Green jobs must be secure and decently paid, with a central role for trade unions in a just transition for all workers and communities affected.
The commission will aim to help the UK to take a lead, believing that there is economic and societal advantage in doing so. An increasing number of people, young and old, see that the way we run our economy is damaging our climate, our environment and our society, but that, crucially, it is within our power to change it for the better. And change it we must.
The cartoon by Joel Pett (above), Pulitzer Prize-winning editorial cartoonist for the Lexington Herald-Leader, states that whether global warming is real or not, the proposed measures are beneficial to everyone.
On the left of the cartoon a man asks, “What if it’s a big hoax and we create a better world for nothing?” On the right the question is answered in the form of a list on a screen, showing what would be gained:
- energy independence,
- preserve rainforest,
- green jobs,
- livable cities,
- clean water and air,
- healthy children, etc., etc.
When discussing how society should respond to climate change, consensus might well be achieved by presenting this cartoon’s message.
Corbyn smears escalate
Yesterday came a warning: “With a general election possibly afoot, we must all be alert to the orchestrated dirty tricks and the ferocity of the propaganda assault that will inevitably be launched against Jeremy Corbyn and Labour by the terrified establishment”. It was issued by Richard House, after replying to ‘absurd views’ in the Independent alleging that Jeremy Corbyn would usher in ‘a communist government’ of a brutal nature.
Articles in the Murdoch Times today bore these headlines
- MPs launch angry revolt over leaders’ Brexit talks: Breakthrough hopes fade after May meets Corbyn
- Brexit talks: Dark clouds gather as Theresa May and Jeremy Corbyn work out what to do next
- The PM, as we must still call her, was numb — perhaps past caring
- Two-party cartel would regret an election now: The electorate is more volatile than ever and many will be looking for a home beyond the Conservatives and Labour.
Jeremy Corbyn’s popularity with Europe’s socialist leaders was highlighted some time ago with a standing ovation noted in the Financial Times:
“UK Labour leader Jeremy Corbyn was given a rapturous reception by his Socialist allies in Brussels on Thursday, as he warned that leaving the EU without a Brexit deal would be “catastrophic” for the UK economy. Mr Corbyn was met with a standing ovation by Europe’s centre-left parties as he addressed delegates at the Europe Together conference, just hours before prime minister Theresa May was scheduled to meet her EU counterparts at a European leaders’ summit”. We omit the description of Ms May’s very cool reception.
Corbyn’s negotiating skills are appreciated by senior EU figures, including Michel Barnier.
EU Brexit negotiator Michel Barnier (R) and British Labour Party leader Jeremy Corbyn walk prior to a meeting on July 13, 2017 in Brussels.
Another perspective: Jeremy Corbyn is a mainstream [Scandinavian] social democrat
“From his style to his policies Mr Corbyn would, in Norway, be an unremarkably mainstream, run-of-the-mill social-democrat. His policy-platform places him squarely in the Norwegian Labour Party from which the last leader is such a widely respected establishment figure that upon resignation he became the current Secretary-General of NATO.
“Yet, here in the United Kingdom a politician who makes similar policy-proposals, indeed those that form the very bedrock of the Nordic-model, is brandished as an extremist of the hard-left and a danger to society”.
British media’s portrayal of Corbyn, and by extent his policies are somewhat exaggerated and verging on the realm of character assassination rather than objective analysis and journalism.
Mr Corbyn’s policy-platform, particularly in regard to his domestic policies are largely identical with the Norwegian Labour Party manifesto. They enjoy near universal support among the Norwegian electorate and, in fact, they are so mainstream that not even the most right-wing of Norwegian political parties would challenge them. They include:
- railway nationalisation,
- partial or full state ownership of key companies or sectors,
- universal healthcare provisions,
- state-funded house-building,
- no tuition fee education,
- education grants and loans
Jonas (right) adds that such policies have been integral to the social-democratic post-war consensus in all the Nordic countries, which. enjoy some of the world’s highest living standards and presumably should be a model to be emulated rather than avoided, and continues:
The whole controversy surrounding Mr Corbyn probably betrays more about Britain’s class divisions and how far the UK’s political spectrum has shifted to the right since the early-1980s, than it does of the practicality of his policy-proposals.
Reflecting this is British media whose ownership is highly concentrated: 70% of national newspapers are owned by just three companies and a third are owned by Rupert Murdoch’s News UK . . . the British media has focused its reporting on the personal characteristics of Mr Corbyn, usually in rather unflattering terms, and shown scant or shallow regard to his policy-agenda.
He notes that a direct comparison of Britain with other similar European states would reveal both the dire condition of British living-standards for populations, particularly outside London and how conventionally social-democratic are Mr Corbyn’s policies.
Jonas Fossli Gjersø ends: “You might agree or disagree with his political position, but it is still far too early to discount Mr Corbyn’s potential success at the next general election – particularly if he manages to mobilise support from the circa 40% of the electorate who regularly fail to cast their ballot in elections…
“(J)ust as few recognised the socio-economic and ideological structural changes which converged to underpin Margaret Thatcher’s meteoric rise in the early-1980s, we cannot exclude the possibility that we are witnessing the social-democratic mirror image of that process today, with a prevailing wind from the left rather than the right”.