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Tag Archives: deregulation

Small government and deregulation could be the death of us

In 1977, at a meeting in Exxon Corporation’s headquarters, a senior company scientist named James F. Black delivered his message to an audience of powerful oilmen: carbon dioxide from the world’s use of fossil fuels would warm the planet and could eventually endanger humanity.

He warned Exxon scientists and managers that independent researchers estimated a doubling of the carbon dioxide (CO2) concentration in the atmosphere would increase average global temperatures by 2 to 3 degrees Celsius, and as much as 10 degrees Celsius at the poles. Rainfall might get heavier in some regions, and other places might turn to desert.

“Some countries would benefit but others would have their agricultural output reduced or destroyed.”

“Present thinking,” he wrote in 1978, “holds that man has a time window of five to ten years before the need for hard decisions regarding changes in energy strategies might become critical.”

Exxon responded swiftly. Within months the company launched its own extraordinary research into carbon dioxide from fossil fuels and its impact on the earth. Exxon’s ambitious program included both empirical CO2 sampling and rigorous climate modeling. It assembled a brain trust that would spend more than a decade deepening the company’s understanding of an environmental problem that posed an existential threat to the oil business.

One manager at Exxon Research, Harold N. Weinberg, shared his “grandiose thoughts” about Exxon’s potential role in climate research in a March 1978 internal company memorandum that read: “This may be the kind of opportunity that we are looking for to have Exxon technology, management and leadership resources put into the context of a project aimed at benefitting mankind.”

His sentiment was echoed by Henry Shaw, the scientist leading the company’s nascent carbon dioxide research effort.

“Exxon must develop a credible scientific team that can critically evaluate the information generated on the subject and be able to carry bad news, if any, to the corporation,” Shaw wrote to his boss Edward E. David, the president of Exxon Research and Engineering in 1978. “This team must be recognized for its excellence in the scientific community, the government, and internally by Exxon management.”

Then, toward the end of the 1980s, Exxon curtailed its carbon dioxide research. In the decades that followed, Exxon worked instead at the forefront of climate denial. It put its muscle behind efforts to manufacture doubt about the reality of global warming its own scientists had once confirmed. It lobbied to block federal and international action to control greenhouse gas emissions. It helped to erect a vast edifice of misinformation that stands to this day.

This shameful history has been extensively researched and written about at InsideClimate News which details the deliberate misinformation campaign despite their full knowledge of the damage they were doing.

This type of behaviour is not isolated.

Pharmaceutical company Amgen is a significant sponsor of Tony Abbott’s pollie pedal ride. Amgen promoted the use of the drug Aranesp to treat anemia in cancer patients who were not undergoing chemotherapy, even though the drug’s approval was only for patients receiving chemotherapy. A subsequent study sponsored by Amgen showed that use of Aranesp by those nonchemotherapy cancer patients had actually increased the risk of death. In 2012 they were convicted of “pursuing profits at the risk of patient safety,” and forced to pay $762 million in criminal penalties and settlements of whistle-blower lawsuits.

These examples of deliberate duplicity, similar to that of the tobacco industry, shows why deregulation and small government are a bad idea. Governments are the only organisations that can protect us against the harm caused by those who put greed in front of the welfare of the planet and its inhabitants.

The Coalition seems to think that, if business is given a free rein, all will be well, but this is patently not the case.

In his haste to claim some sort of an achievement for the Abbott government, Andrew Robb was willing to sign away the right for us to make laws in our best interests. Instead, he agreed to protections for business profits despite the repeated examples of industries deliberately lying about the harm they are causing.

Can we really expect businesses to be ethical when their sole purpose is to make profit for their shareholders?

Why is it that every policy proposed by the Coalition is to protect and promote the very people who have been proven liars?

Why are we giving the fossil fuel industry subsidies when they, themselves, knew 40 years ago that their business was unsustainable?

Why are we reducing taxes for companies that not only do everything they can to avoid paying tax, but also falsify research knowing the potential damage they are causing?

Could it be because our government is more interested in investors’ profits than the wellbeing of its citizens?

On August 18th, the Australian Financial Review published a list of Malcolm Turnbull’s investments; they include the SPDR S&P 500 Fund, whose 3rd largest holding is Exxon Mobil, who have also been significant donors to the right wing Institute of Public Affairs who have effectively been paid to continue the misinformation about climate change.

Understand Australia, if you vote for the Liberal Party you are voting for people who not only facilitate this behaviour, they personally profit from it. It’s time to stand up and say enough is enough!

 

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Profit before people

The Abbott government’s economic policy is predicated on the assumption that any increase in the boss’s profits equals a corresponding increase in the workers’ wages – “a rising tide will lift all boats.” This assumes that the ratio between the share of GDP going to labour and that going to capital always remains constant, something that is not the case as we see the proportion of GDP going to wages dropping around the world.

In the USA, the last 30 years has seen a reduction from 70% to 64% of GDP taken by wages. Meanwhile Norway and Sweden, held up as models of “responsible” capitalism, have seen labour’s share fall from 64% to 55% of GDP and 74% to 65% of GDP respectively since the 1980s.

Wages and profit are closely interlinked because they are both paid out of the same pot – the nation’s GDP. This means that for a boss to increase his profit, the workers must lose out on wages, and vice versa. It’s not possible to increase profits without decreasing wages, and it’s not possible to increase wages without decreasing profit.

Corporations, pushed by their constant hunt for profit and their own internal competition, will always attempt to expand their share. This can be done through direct attacks on wages or by cutting welfare, increasing wages below the inflation rate etc. The workers on the other hand, have an interest in struggling to defend and expand their working conditions and standard of living in the face of constant attacks. The result is trade unions and workers’ movements that fight for the minimum/living wage etc, and bosses who fight for less regulation of employment conditions, and smaller pay increases.

Trade unions have lost a lot of the power that they once had 30-40 years ago, a direct result of the sustained attacks on unions by the powerful elite and media over that period. The result is that economic power has shifted in favour of capital, and away from labour.

Bosses, desperate to drive down wages to make bigger profits, turn to cheaper and less regulated labour in the developing world as a method for raking in higher profits and putting pressure on workers in developed countries to accept a lower wage. As Gina warns we beer drinking, cigarette smoking bludgers, Africans are happy to work for $2 a day in the mines.

By pursuing ever greater profits they inevitably drive down wages through automation and by access to new sources of cheap labour on the world market. The problem is that wages also make up the demand which keeps businesses afloat. With less money in the pockets of wage-earners, fewer commodities can be purchased and so less profit can be made.

The short-sightedness of capitalists trying to make as much money as possible out of each investment with no thought for the future is a fundamental feature of the system. If one business passes up an opportunity to make loads of money through greater exploitation of workers or the environment, another would seize the chance to make the profit and put its competitor out of business. This is the nature of capitalist competition – they cannot afford a long-term perspective.

Coalition governments are advocates of increased privatisation of public services. It’s true that privatisation often brings profit to the new private owners and those rich enough to afford shares in the business, but it is also true that privatisation brings worse wages and conditions for the employees of the newly privatised business. The reason why private ownership of businesses increases profit is because these owners curtail services and force down the wages of all the workers in order to pay the handful of people at the top obscene salaries and bonuses.

Developments in technology and innovation have automated huge numbers of jobs thus leaving correspondingly huge numbers without work or with a lower wage. If businesses were to invest in the education and training of highly-skilled workers they would be able to increase productivity, design new products and machinery and boost productive capacity overall. This, after all, is the point of any investment in a business. Instead we see sackings, closures and restructuring as business tries to produce less in order to maintain their profits.

Over 160 years ago, Karl Marx said that the “bourgeoisie is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him.“

Capitalism has developed to a point where technology and globalisation, phenomena that have the potential to improve the lives of all people hundreds of times over, are actually making the lives of wage-earners worse. It has reached a stage where we have the capacity to educate and train people, produce and build everything we need, and give everyone a decent standard of living. But we’re not able to realise this potential because of the unrelenting pursuit of profit.

The impoverishment of the masses and the concentration of wealth and capital in the hands of a small minority is a growing problem and as long as the right of private ownership to the means of production exists, and governments move further away from regulation, this process will prevail.

Tony Abbott’s entire approach to governing is textbook Capitalism, from his attack on penalty rates, the minimum wage, and unemployment benefits, his refusal to give industry assistance (unless you are a fossil fuel producer), privatisation of public assets, deregulation and removal of “green tape” (aka environmental protections) – every aspect is a short term grab for cash dictated and ruled by the “market”.

Oh for a government that had the courage to protect its people with a long term plan for general prosperity and well-being instead of a smash and grab raid for your rich friends.

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