A Green New Deal Can’t Save Us. A Planned Economy Can.

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Capitalism has put humankind and much of the Earth at the brink of catastrophe. But there is a way out. The solution isn’t a green new deal. It’s a communist, democratically run planned economy

Illustration by Ailin Rojas Bondarczuk

In November more than 200 young climate activists from across the country occupied the offices of Nancy Pelosi, the Democratic Speaker of the House. More than 100 of them were arrested. Then, in January, more than 100 more were arrested occupying the offices of New York Sen. Chuck Schumer. These activists’ demand? The creation of a Green New Deal. Like the activists who sat in outside President Obama’s White House against the Keystone XL pipeline and those who resisted the construction of the Dakota Access Pipeline in Standing Rock, these environmentalists have succeeded in bringing national attention to their cause.

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A Green New Deal (GND), activists said, would move the country off fossil fuels and toward 100% renewable energy within 12 years. This is the deadline to avoid catastrophic climate changes across the globe, according to a recent Intergovernmental Panel on Climate Change (IPCC) report1. At the same time, the plan would create millions of jobs in renewable industries, reducing poverty and inequality, they said. The organizers’ statement also demanded that Democrats refuse to accept any campaign contributions from fossil fuel companies.

The GND proposal appears to have generated excitement—a recent poll by Yale University showed that 81% of all Americans, including a majority Democrats, Republicans and independents, backed the idea.2 Most Democratic politicians have, however, reacted coolly so far. There have been a handful of 2020 Democratic presidential contenders who have come out in support of the idea, including Bernie Sanders, Elizabeth Warren and Corey Booker. Yet the majority of the party’s establishment has been reluctant to sign on. Fewer than 50 Democratic representatives in the House, and none of the party’s leadership, have signaled support for the GND. A Select Committee for a Green New Deal was created just days after Democrats took control of the House in January, but it was immediately stripped of subpoena power.

The GND’s most recognizable proponent is Alexandria Ocasio-Cortez. The self-described “democratic socialist” representative from New York took up the slogan during her primary campaign, and it played a big role in propelling her to victory. Ocasio-Cortez described the GND as

similar in scale to the mobilization efforts seen in World War II or the Marshall Plan. It will require the investment of trillions of dollars and the creation of millions of high-wage jobs. We must again invest in the development, manufacturing, deployment, and distribution of energy, but this time green energy. What we are working to accomplish would not only save our planet the ravages of climate change but would also lift millions of Americans out of poverty.3

Capitalism Takes Aim at All Life on Earth

The environmental activists who support a GND are right to tie the climate crisis to the crises of unemployment, underemployment and low wages—they are two sides of the same coin. The cause of both is capitalism. Global warming, ocean acidification, air and water pollution, deforestation, species extinction—all these are outcomes of a system that puts profits before people’s well-being. Capitalism’s need to produce ever greater numbers of commodities is fundamentally at odds with ecological sustainability. Similarly, stagnant or falling wages and a mass of unemployed or underemployed workers—what Marx called the reserve army of labor—is necessary to ensure profitability and the continued accumulation of capital.

Fossil fuels, like all the earth’s resources that can be used as raw materials, are “furnished [to the capitalist] by Nature gratis,” as Marx put it. Capitalists will never repay the earth for what they rob from the ground or the damages they cause to the water, the land or the atmosphere. They may lease the land for drilling, but the amount of oil, gas or coal they can extract depends only on the amount contained in the reserves underneath. Thus, a powerful incentive exists within capitalism to continue extraction and virtually none to phase it out. Meanwhile, trillions of dollars are being invested to extract fossil fuels that are still underground—and these investments can only be recouped if the fuel is successfully extracted. Even in the face of a catastrophe that threatens a significant portion of life on earth, the logic of capitalism leads to the continued exploitation and burning of fossil fuels.

Of course, ecological destruction is not entirely unique to capitalism. Other societies have wrecked habitats and killed off species. Several precapitalist civilizations, through deforestation, overfarming or other ecologically unsound practices, contributed to the desertification of their lands and, ultimately, the decay of their societies. Friedrich Engels describes how, in destroying their forests, the people of “Mesopotamia, Greece, Asia Minor and elsewhere [laid] the basis for the present forlorn state of those countries.”4 But until the domination of capitalism, no society had been able to radically alter the earth system as a whole, from the oceans and atmosphere to its living species. And in less than a century from now, billions of the planet’s people, millions of its species and hundreds of thousands of habitats will be in severe peril, barring a total reorganization of our society and our system of production.

A Climate Crisis Approaches Tipping Point

There can be no doubt that immediate and drastic action is needed to combat the climate emergency. The extreme weather events in recent years are testament to this. Since the Paris Agreements in 2015, we’ve seen a devastating hurricane that killed as many as 5,000 in Puerto Rico5 and left most of the island without power for nearly a year. We have witnessed severe drought and unprecedented fires in the American West, and massive flooding in the Carolinas that killed dozens. And that’s just looking at the United States. The World Health Organization6 reports that if current trends continue, due to global warming could lead to an additional quarter million deaths each year from 2030 to 2050—a conservative estimate.

But despite the severity of the situation and the many international agreements to slash greenhouse gas emissions, all signs point to a climate crisis that is deepening rather than improving. Emissions actually rose by 2.7% in 2018, the second straight year that they have done so. The United States set a new record in crude oil output last year, churning out at an average 10.88 million barrels a day, which makes it the world’s largest oil producer, surpassing both Russia and Saudi Arabia. U.S. natural gas production in soared by more than 10% from the previous year and also reached record highs, as new sources of natural gas have been discovered and new fracking technologies developed. China and India—where commodities destined for the West are increasingly produced—both reached new highs for carbon emissions, and they plan to open dozens of coal-fired energy plants in the next few years.

As last year’s IPCC report pointed out, emissions would have to be cut by 45% by 2030—in less than 12 years—to avoid passing the critical 1.5 degree Celsius warming threshold, beyond which food scarcity, sea level rise and extreme weather events would become widespread. This scenario leaves no room for a piecemeal or partial response. It is thus promising that young activists have rejected the market-based “solutions” hailed by the environmental establishment in the past, such as increased regulation, carbon taxes, emissions trading and the rest. These strategies clearly don’t stand a chance of cutting emissions in the time necessary to avoid catastrophe for tens of millions of people. But could a GND offer an alternative?

Is The Original New Deal a Model to Emulate?

The original New Deal was implemented during a period of capitalist crisis not seen before or since in the United States. Historian Jefferson Cowie notes that after the Wall Street crash of 1929,

5,000 bank failures eliminated $7 billion in depositors’ assets; hundreds of thousands of families… lost their homes; farmers staggered under the burdens of plummeting prices, drought, and debt; local and state welfare agencies lay drained of resources; and the Gross National Product (GNP) was cut in half. Farming, already in depression for the better part of a decade, shriveled like drought-stricken cotton. In Roosevelt’s own New York, un-employment approached 30%, and between one-quarter and one-third of the rest of the nation lay idle.7

Meanwhile, labor unrest was on the rise. In 1933 more than 1 million U.S. workers went on strike, quadrupling the number from the previous year. By 1934 the number had risen to 1.4 million workers. The membership of the Communist Party United States swelled to more than 65,000. Meanwhile, there was a growing communist movement in Europe, and revolutionary crises broke out in Germany and Spain. If the American bourgeoisie wished to prevent a radicalization of the entire workers movement in the United States, it would need to make major concessions.

The Keynesian policies that we associate with the New Deal and the Roosevelt administration, including the establishment of a Social Security program, which offered unemployment insurance, guaranteed retirement benefits and disability compensation, were created in this context. To spur consumer demand during a profound economic crisis, jobs were needed for the unemployed, and working people needed the right to organize and strike to improve their wages. The Wagner Act and jobs programs like the Works Progress Administration served both to combat worker radicalization and to restore the ability of the working class to consume commodities. Ultimately, however, the Keynesian program was insufficient to address the crisis. In 1938 unemployment once again spiked, reaching 10 million nationwide. Only a new world war, and the massive destruction of capital that accompanied it, could restore profitability for the capitalists and usher in a new boom period in the country.

During WW II the U.S. economy submitted to central planning by the War Production Board (WPB). On February 22, 1942, for example, all automobile production in the United States ceased. Nearly overnight, all these industrial capacities shifted to building tanks and airplanes. Today, the private auto manufacturers say they will need decades to switch away from fossil fuels. These are decades we simply don’t have. Production needs to be radically changed immediately, under societal control. All the automakers’ capacities, for example, need to put at the service of creating clean public transport.

The IPCC report says we need “rapid, far-reaching and unprecedented changes in all aspects of society.” But in fact there are some historical precedents for this kind of change. Besides the war economy in the 1940s, we can also look at the Soviet Union during the Five Year Plan. After the October Revolution liberated the country from the rule of capital, a once largely agrarian country was, within 40 years, able to send the first human being into space.

The fight against climate change requires similar encroachments on private property and the free market. Of course, planning during World War II was needed so that the American capitalists could beat their German competitors. The industries subject to planning remained under private ownership, and the war profits went to the capitalists. The kind of planning we need to fight climate change is planning by working people. It means workers in every sector of the economy getting together to decide what they need and what they can contribute. It means workers electing representatives who coordinate the economy at local, regional, continental and world levels. This kind of economy would serve the needs of the many instead of producing profit for the few.

Who Pays and Who Benefits Under the GND Plan?

Ocasio-Cortez along with Sen. Jeff Markley and other Democrats, recently introduced a congressional resolution in support of a Green New Deal.  The plan is, so far, short on concrete details about just how it would be financed and implemented. Still, it includes proposals worth examining. The GND, it states, would allow the U.S. to transition to 100 percent renewable energy within 10 years and keep fossil fuels in the ground. The plan would build of a nationwide, energy-efficient grid driven by renewables. It would upgrade all existing buildings to maximize energy efficiency. And it would create a high-speed rail system and affordable, public transportations among other proposals for slashing carbon emissions. The resolution also contains proposals to create “millions of good, high-wage jobs” and provide reparations for historical injustices against “frontline and vulnerable communities” like people of color, women and indigenous people.

Certainly, the initiatives described in the resolution — and more — will be required to confront the climate emergency. A fossil fuel-based economy is not compatible with a future for humankind. But an important question we must ask is: who will control the new “green” infrastructure? Will the GND challenge the existing wage-labor relations or will a new era of green capitalism be ushered in? Although Ocasio-Cortez’s plan would “provide opportunities [!] … for public ownership,” and “the majority of financing of the Plan shall be accomplished by the federal government,” it nowhere stipulates that the newly created renewable energy infrastructure would be entirely publicly owned. There is no mention of nationalizing the fossil fuel industries or the existing energy monopolies like Duke, Dominion, Exelon and so on. Rather, it points to the creation of public-private partnerships in the green sector and state subsidies for privately owned enterprises in renewable industries. In other words, the public would fund new corporate welfare programs, but this time benefiting the “green” 1 percent.

Writing in support of the GND in the Intercept, Kate Aronoff reiterates the idea that public funding could be used to incentivize private enterprises to go green:

While winding down fossil fuel production and scaling up renewables will of course be a considerable part of any Green New Deal, so too will investing in the research, development, and manufacturing capacities to get especially difficult-to-decarbonize sectors, like airlines and steel, off fossil fuels over the next several decades, as Ocasio-Cortez’s proposal notes. The latter requires a still largely experimental process called electrolysis, which targeted investments could subsidize research into. 8

According to Aronoff, corporations could be persuaded to “go green” if taxpayer funded investments were offered to help them develop the technology. In other words, the same billion-dollar corporations that are responsible for our ecological crisis would be the ones tasked with pulling us out of the crisis by developing our country’s renewable-energy infrastructure—and would receive generous public subsidies for doing so. The biggest enemies of our planet could suddenly become its saviors.

GND proponents will call this assessment unfair. After all, they are also calling for cooperative ownership, public-private partnerships, and even some publicly owned enterprises. But when have cooperatives been able to compete with multinational corporations, with virtually unlimited capital at their disposal for improving their productivity and efficiency? In fact, hasn’t this pattern in which big businesses outcompete cooperatives—along with small and medium-sized businesses—occurred in virtually every industry?

In the New Left Review, another supporter of GND, Robert Pollin, also proposes public investment in private enterprises as a solution:

The core feature of the Green New Deal needs to be a worldwide programme to invest between 1.5 and 2 per cent of global GDP every year to raise energy-efficiency standards and expand clean renewable-energy supplies. … Governments will need to deploy a combination of policy instruments, including research and development support, preferential tax treatment for clean-energy investments and stable long-term market arrangements through government-procurement contracts. Clean-energy industrial policies also need to include emission standards for utilities and transport, and price regulation for both fossil fuel and clean energy…. Clean-energy investments will nevertheless create major new opportunities for alternative ownership forms, including various combinations of smaller-scale public, private and cooperative ownership.9

In fact, offering public subsidies to private businesses in the renewable sector is not a new idea. The electric car manufacturer Tesla, which Aronoff admits is an example of green investment gone wrong, has received billions in federal subsidies since it launched. The LA Times estimates that nearly $5 billion in public funding has already been directed toward the auto company and its related ventures, SolarCity and SpaceX, through “grants, tax breaks, factory construction, discounted loans and environmental credits, that Tesla can sell.” Like all forms of government investment in the private sector, the aim is to socialize the risk (or “startup costs,” to use the industry term) while privatizing the benefits. CEO Elon Musk, already worth an estimated $20 billion, is set to increase his wealth by as much as another $55.8 billion if the company meets its established targets. Meanwhile, Tesla recently laid off 7% of its workforce—over 3,000 workers—in an effort to maintain profitability. The company has always been staunchly anti-union, even firing several workers for attempting to unionize Tesla plants.

Tesla is far from the only example of a company receiving public support for “green” projects. The major energy company NRG received hundreds of millions in federal loans and cash grants for its solar energy projects, all while continuing to source the vast majority of energy for its power plants from fossil fuels like natural gas, oil and even coal. Even companies like Google have cashed in opportunities for federal support of green energy projects. The New York Times reports that the Silicon Valley giant has built a solar plant and wind farm “in part to get federal tax breaks that it can use to offset its profits from Web advertising”.10 The beneficiaries of these incentives include not just the energy providers themselves, but also their investors, often Wall Street banks like Goldman Sachs and Morgan Stanley.

Further, the GND plan notably includes no proposals that would ensure that the fossil fuel companies pay for the destruction they have caused. It is estimated that the cost of environmental damage from the oil, coal and gas industries amounts to $700 billion annually, and this figure will only increase as the effects of global warming worsen. In fact, the plan would leave open the door for the world’s biggest polluters—corporations like ExxonMobil, Shell and BP—to receive public subsidies for transitioning to green energy production. Meanwhile, those who truly pay for the decades of pollution and environmental degradation by these companies and others continue to be poor communities and communities of color, communities like Flint, Michigan or Standing Rock, North Dakota.

The young people who today believe in the Green New Deal are right to demand an end to fossil fuel extraction and the fastest possible transition to renewable energy. But rather than creating new “green” megacorporations, we should demand an energy sector that is 100% publicly owned and fully managed and overseen by committees of consumers and workers. Only under these conditions would energy firms be capable of truly acting in the public interest, that is, producing and distributing energy in the most ecologically responsible way while making energy free to working-class and poor communities. A state-owned and democratically operated energy industry would also demonstrate the possibilities of a fully planned economy and open the door to nationalizations in other sectors, like the health care industry, higher education system and transport system.

Public-private partnerships can never represent an ecologically sustainable alternative since as long as the profit motive remains operative, ecological and health concerns will be sacrificed for the company’s bottom line. It is sufficient to recall that Norway’s Statoil, the country’s biggest oil company, and one of the world’s biggest as well, is a public-private venture. Far from scaling back oil production in the face of the current climate emergency, Statoil has steadily increased production in recent years, emitting billions of tons of greenhouse gasses annually. Meanwhile, the company has continued to ensure high returns to its shareholders while its CEO earns a $1 million annual salary.

All the mechanisms proposed by the GND and supporters like Pollin and Aronoff, while adding a state intervention to the equation, still rely on market mechanisms to effect a transition to renewable energy. As previous attempts show, capitalism’s own dynamic and thrust for profit destroys everything that stands in its way, including the planet. To have a production and distribution system that is compatible with the humanity’s survival, the driving force in the economy needs to be radically shifted—away from profit-seeking.

The demand of young GND activists for guaranteed jobs at a living wage to all who want to work is a highly progressive demand and should be taken up by all socialists. But the logic of capitalism dictates that, in the face of new technologies and increasing competition between businesses, profits can be maintained only by shedding the “surplus” workforce. That is why all businesses insist on the right to lay off their employees at will. A job guarantee, then, cannot be implemented simply by creating new job centers around the country, as GND proponents suggest. Rather, we must demand the reduction of the workday and the distribution of working hours among the employed and unemployed. Businesses like Tesla that lay off their workers in the name of profitability should be immediately nationalized.

Of course, these demands directly challenge the capitalist framework. That is the point. A program for combating the climate crisis and lifting millions of working class and poor people out of poverty, debt and misery requires that we look beyond the “possibilities” capitalism offers. We need democratic control of our economy right now. Climate change will strengthen capitalism’s inherent tendencies toward barbarism. There is simply no time to put our hopes on small reforms and “market-based” solutions that accomplish nothing. In fact, it is precisely the “green” capitalists like Musk who are directing most of their attention to getting to Mars. Capitalism has become a ticking time bomb that threatens the vast majority of the earth’s population. Working people can save the planet and ourselves—but we need to act fast!

As we write these lines, students in Australia and Europe have been going on strike. With the motto #FightForFuture, they are refusing to go to class once a week to demand climate action from their governments. These young people are showing the way forward. The working class needs to use its unstoppable social power to lead the fight for our future.

Notes

1. “Global Warming of 1.5°C: Summary for Policymakers,” Intergovernmental Panel on Climate Change, October 8, 2018.

2. Abel Gustafson, Seth Rosenthal, Anthony Leiserowitz, Edward Maibach, John Kotcher, Matthew Ballew and Matthew Goldberg, “The Green New Deal has Strong Bipartisan Support,” Yale Program on Climate Change Communication, December 14, 2018.

3. Alexander C. Kaufman, “Alexandria Ocasio-Cortez Will Be The Leading Democrat On Climate Change,” HuffPost, June 27, 2018.

4. Frederick Engels, The Part Played By Labour in the Transition From Ape to Man (Moscow: Progress Publishers, 1934).

5. Richard Harris, “Study Puts Puerto Rico Death Toll From Hurricane Maria Near 5,000,” NPR, May 29, 2018.

6. “Fact Sheet on Climate Change and Health,” World Health Organization, February 1, 2018.

7. Jefferson Cowie, The Great Exception: The New Deal and the Limits of American Politics (Princeton, NJ: Princeton University Press, 2016), 98.

8. Kate Aronoff, “With a Green New Deal, Here’s What the World Could Look Like for the Next Generation,” The Intercept, December 5, 2018.

9. Robert Pollin, “De-Growth vs a Green New Deal,” New Left Review no. 112, (July-August 2018).

10. Eric Lipton and Clifford Krauss, “A Gold Rush of Subsidies in Clean Energy Search,” The New York Times, November 11, 2011.

About author

Robert Belano

Robert Belano

Robert Belano is a writer and editor for Left Voice. He lives in the Washington, DC area.

Nathaniel Flakin

Nathaniel Flakin

Nathaniel is a freelance journalist and historian from New York City. He is on the editorial board of Left Voice and our German sister site Klasse Gegen Klasse. Nathaniel, also known by the nickname Wladek, has written a biography of Martin Monath, a Trotskyist resistance fighter in France during World War II, which appeared last year in German and will be published in English by Pluto Press in October 2019. He is on the autism spectrum.