Friday, September 20, 2013

We have the skills needed. But what future are we building with them?

The largest ever oil and gas tension-leg platform (TLP) yet developed for the Gulf of Mexico was moved to sea from the Kiewit Offshore Services shipyard in Ingleside, TX, this past week. Named Olympus, the 406 foot tall TLP is owned by Royal Dutch Shell, and weighs 120,000s ton, more than an aircraft carrier, or the largest cruise ships.

It's too easy to think of the oil and gas industry as a malevolent monolith directed by mindless greed. The slick PR propaganda Shell is distributing about the massive Olympus TLP is therefore useful for a number of reasons. It puts a human face on the people involved -- some very highly skilled people, with an immense wealth of technical skills, and great pride in what they can build and accomplish with those skills (the instinct of workmanship). It helps to convey the enormous technological and technical complexity of modern economic activity (which should help anyone with two brain cells to rub together realize how stupendously stupid the utopian idea of post-industrialism is). 

And it should help us understand how immensely difficult it is going to be, as Jon Larson so often writes, to "put the fires out" and move the world to the next stage of industrial development, which is sustainable, clean -- and every bit as big and complex as the massive oil and gas platform in the video below.

But here are the main points I want to make. First, just imagine if the enormous amount of highly skilled talent and pride that was invested in creating and placing this oil and gas platform had been directed instead into building  solar power arrays, and 400-foot tall wind turbines, and wave and tide power systems, and massive urban rail transit systems, and cross-continent high speed rail, and doubling and tripling the energy efficiency of every physical structure in entire cities and towns. These are all huge industrial projects, and we need to build them, quickly - over the next ten to twenty years - on a scale far, far, far bigger than Royal Dutch Shell's 120,000 ton Olympus TLP. We need to build these on a scale that, when you stop and think about, makes the industrial mobilization for World War 2, or the Apollo program to put a man on the moon, look something like organizing a birthday party for one or two dozen kids. Unemployment, and underemployment will be a dim memory studied by historical economists once we get serious about building the new economy required to replace the economy based on TLPs and the oil and gas they pump out of the earth.

On this point, the inadequacy of our public discourse would be comic, were it not paralyzing us by foreclosing entire menus of policy options. On the left, the increasing numbers are allowing themselves to be seduced by Marxist and socialist critiques, willfully ignoring the surfeit of failure of those schools of political economy. Even the best, most progressive economists, such as Robert Reich, Paul Krugman, or Joseph Stiglitz, are simply not thinking in large enough terms to be truly useful. Look at the myriad postmortems of the financial collapse this past week, the fifth anniversary of the implosion of Lehman Brothers. Did Obama save us from a Second Great Depression or not? Was the $750 billion stimulus program enough, or not enough? (Or, as the hopelessly misguided wrong-wingers choose to believe, too much?) In point of fact,the International Energy Agency estimates a serious effort to combat global climate change will cost $45 trillion. And that is to meet a goal of only a 50 percent cut in emissions!  

Second, what do we have to do, politically, to shift all that wonderful talent, skill, and knowledge, from building oil and gas platforms, to building wind turbines and high speed rail systems and so on? We need a complete and ruthless rejection of the economic neo-liberalism that has dominated the world the past half century. We need to annihilate the political and financial power of Wall Street, the Chicago futures markets, and the City of London, and begin to bend the creation and allocation of money and credit to the general welfare instead of private gain. We need to terminate with extreme prejudice the idea that unfettered freedom to pursue private gain leads, through the magic of the market, to the best allocation of a society's resources. We need to revive the idea of the general welfare, and the understanding that the means we humans have developed to democratically control and direct economic forces is the social institution of government. The idea that any act of government is dangerous collectivism or statism must be unsparingly mocked and ridiculed, as Hunter did so well a few days ago on DailyKos. We must promote a widespread understanding that modern conservative and libertarian economic thinking (what professional economists unfortunately and confusingly call neo-liberalism) boils down to a rejection of the principles and tenets on which the American republic was founded.

Because the basic problem we have right now is that our society's mechanism for controlling economic forces has been corrupted and short-circuited by people who simply are unable to see beyond their own immediate economic interests, but who have much, much more financial resources than the mass of ordinary citizens This is not a new problem, nor was it unforeseen at the time the United States was created. Not widely known today -- because it is not part of general civics education -- is that, besides a standing army, the rich were understood to be the greatest threat to a republic.

In The Federalist No. 10, Madison argues that economic inequality will arise because of "different and unequal faculties of acquiring property", but the price of preventing economic inequality  -- ending liberty -- is too high. Madison’s discussion here implies a crucial point that most people, including scholars, pass over. Madison is not arguing that economic inequality is desirable or even acceptable. Rather, he is arguing that it is inevitable, and, moreover, economic inequality is so dangerous and so pernicious, that the entire framework of government is being erected with an eye toward checking and corralling its political effects.  Just look at the first words of the last sentence from this passage:
So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts. But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.
The rich, in our time, have formed and funded a vast complex of institutions and think tanks that effectively undermine Madison's idea by promoting economic neo-liberalsm and conservative / libertarian nostrums -- the idea that the more "freedom" given to "capitalists," the greater freedom and prosperity society will enjoy. But our rich today are not capitalists, they are rentiers, and speculators, and usurers. The United States is becoming less capital intense. It is becoming, in other words, less capitalistic. Almost all the positive growth in capital expenditures is accounted for by one, huge industry - oil and gas. I.e., Olympus TLPs. All other manufacturing industries except primary metals, chemicals, and food and beverage products show negative rates of capital investment. From a UBS investment report earlier this year:

xtZJ0_pEQoU/UjxusBGTQhI/AAAAAAAAACw/Ksud79KfyHY/s1600/Capital+Intensity+of+US+Profits.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;">

So, in case you missed Madison's point: "The regulation of these various and interfering interests forms the principal task of modern legislation." We have entities today like the American Legislative Exchange Council which are waging open war on federal and state programs and policies which promote clean energy technologies. By a proper understanding of the Constitution, the efforts of the Koch family, ALEC, and similar organizations are, if not treasonous, at the very least, seditious. We need to generate, allocate, and distribute something on the order of $100 trillion in credit and financing to build the new, sustainable economy we need over the next ten to twenty years - in addition to and while maintaining present levels of financing of day-to-day economic activity. Yet the screech monkeys on the conservative side assert we're already spending too much?!?!  Given the proper understanding of the technological and environmental crises confronting us, promoting the general welfare absolutely requires we find the means to spend that kind of money.

But try to explain that to the 1,400 welders, and pipe fitters, and machinists, and engineers, and supervisors, who proudly built Shell's Olympus TLP. They are not evil people; they do not have malevolent intentions; they do not consciously -- or even sub-consciously -- desire to bestow their children with a planet irreversibly damaged by climate change and wracked by wars over supplies of oil, gas, water, uncontaminated arable land, and God knows what else. These are people who a willing to work hard, to do a good job, to provide a dignified life for themselves and their families -- and do all that within the confines of the system of political economy in which they find themselves, without much questioning the underlying philosophy and intent of that system, or its major beliefs in shaping the system of laws, regulations, and market relationships that comprise our economy. It's a good bet that no more than a handful of them have ever read Madison, or this blog.

But it's also a good bet that if it became generally understood that what the Koch family, and ALEC, and the Roberts Supreme Court, and the whole panoply of institutions and people who "manufacture consent" were doing, was destroying the republic from within -- not necessarily through intent, but just gross stupidity, ignorance, and mental laxity -- these welders, and pipe fitters, and machinists, and engineers, and supervisors would be willing to take up arms in defense of their country.

As Klauswitz so famously and shrewdly observed, war is the continuation of politics by other means. One could hope that the Kochs and ALEC and so on would stop and think about that, and perhaps be moved to cease and desist. But it is only a hope. And likely to remain only a hope.

And so the challenge before us is clear and unambiguous. Restore an understanding of the political economy of a democratic representative republic, and of how the self-interest of the rich and powerful always, always, destroys a republic from within.

So we can get on with the job of building a wonderful, new future for which our children and children's children will thank us, not curse us.


  1. Thanks for this thought-provoking posting. I'll snip a few statements that resonated--
    "...the inadequacy of our public discourse would be comic, were it not paralyzing us...."

    "...problem we have right now is that our society's mechanism for controlling economic forces has been corrupted and short-circuited...."

    They also connected with Jonathan's posting on Kant--
    "...the main maxims of the categorical imperative..., "And what would it be like if everyone misbehaved as you just did?" (Maxim one-universality.)...emphasis on leading a truthful life (Maxim two—one must never lie because people should never be treated as a means to an end.)...reminders that you were always responsible for your own actions (Maxim three—everyone is his own moral agent.)"

    What throttles our world is the capture of the wealth, which serves as our global means of survival, the resources needed to improve our systems that keep us alive.

    We all are captured by elites holding the financial means for changes the globe needs, but they lack the vision or the heart to 'risk' those means to help their fellow man. They are austerity ghouls, we are collateral damage.

    They have allowed the world's wealth to be placed into three investments that swallow wealth with no return to the general welfare--
    --financial derivatives casino
    --military-industrial complex

    All while downplaying investment potential in any industry that increases the general welfare.

    Review the lessons of Kant--
    --responsibly for your actions
    ...while you ponder today's financial instruments, today's run-up to the next war, and waste in our healthcare.

    At a high level, every generation in each era of all history faces similar corruption of their institutions of control.

    Luther created a whole religion because of the corruption of the Catholic church, but what made that movement great was it allowed entire regions to escape the corrupting influences and establish a better foundation of leaders who through time created regions of social welfare that are arguably still superior today.

    Similarly with political revolutions, they are revolts against tyranny of the political elites of that country. If done using Kant's principles, have their chance to create institutions founded on the goal of providing for the general welfare. Yes, with time men will rise up into power who uncaring capture control and power thus corrupting the institutions, until again the people must decide to rise up for the general welfare against their era's evil.

    Skipping ahead to today, with modern globalization, it is obvious our strings are pulled by a global elite. They create political groups to put forward--
    --G8, G20, UN...
    --then semi-public institutions--
    --IMF, World Bank, Fed...
    Behind those two curtains there are a couple dozen wealthy families who rule the world. They are not having a good rule.

    But they never do, each generation must confront their human faults. While they have lessons of the greatest minds of history to frame their foundation, they just can't ever get it right.

    They fall prey to too many competing entrenched interests, surrounded by too many weak-minded rich people who--
    --can't stop ripping off resources,
    --can't stop from triggering wars to gain more,
    --can't embrace change and
    --can't lead us through uncertainty while avoiding the snipers in their midst.

    In summary, this is less a public debate, no? To me, this is personal. Each person has their own fight, and it is within themselves.

    Yes, a rich person controls more consequenses, but the ultimate consequence is with one's own soul.

    And there are too many Kings, too few King Jrs; too many Lex Luthors, too few Martin Luthers.

    Too much can't, not enough Kant...and that needs to be what takes the individual into the public debate.

    1. Great comment! Thank You!

      I especially enjoyed this post because sometimes I lose sight of the big message. I just assume that if I cover the details, the big picture will be obvious. Well, it's not. So when Tony writes something like this, it is VERY welcome.

      I also liked that you enjoyed my post on Kant. Truthfully, that was pure self-indulgence—being an accidental Kantian and all. But the way I see it, being an accidental Kantian beats being an Aristotelian by miles. "Too much can't, not enough Kant" is absolutely wonderful.