why capitalism is about to get burnt

Diverting and constraining the, ahem, 'proven' organisational and technological ability of Germans is the central European project of the 20th century. Anti-trust is a crucial part of this, because it restricts bureaucratic and industrial forces within the liberal, disciplining strictures of the market. This is why Walter Eucken was listened to so carefully by the allies in the late 1940s - along with Hayek, he viewed cartellisation as a contributing factor to Fascism, and helped design an aggressive regime to prevent industial concentration. In this respect neo-liberalism begins in late '40s Germany.

Now what to make of this article:

Twenty blue chip German companies are pooling their resources with the aim of harnessing solar power in the deserts of north Africa and transporting the clean electricity to Europe. The businesses, which include some of the biggest names in European energy, finance and manufacturing, will form a consortium next month. If successful, the highly ambitious plan could see Europe fuelled by solar energy within a decade.

This is a startlingly ambitious engineering project, which quite clearly is not something that is going to be achieved through market competition. Yet market liberals will surely experience a tremor of apprehension when they confront the scale of such environmental challenges and the organisational entities that will be required to confront them. A couple of thoughts or questions.

Firstly, if the next 'phase' of capitalism is oriented around renewable energy, what implications does this have for industrial organisation and monopolisation? Regulationists focus heavily on the shift from Fordist to flexible production that occurred during the crisis of the 1970s, but the problem that this was responding to was largely a cultural one of responding to 1960s individualism. The key philosophical entities that moved to the centre of capitalism were desire, me, identity, self, expression, meaning. By contrast, we now face a comparatively primitive economic problem concerning nature. The next phase of capitalism will be having to deal with entities such as power, exploitation, harnessing, generation, construction. The organisations that serve these purposes will be anything but 'flexible' or 'weightless'.

Secondly, part of this primitive problem is very primitive indeed, concerning the original source of all economic value - the sun. The sun, as Bataille points out, is typical of all economic problems, in that its function is to overflow. The sun creates too much energy, the spare energy creates too many plants, the plants feed too many animals... and we're now reaching the end of this chain, so we return to the start all over again (with the help of a little vorsprung durch technik).

For the time being, I think anyone with the ambition to buy up chunks of the Sahara, pave it with solar panels, and lay a multi-billion euro cable under the Mediterranean will probably be thanked. But I wonder if controversy will arise ever. Who owns the sun? The sun is - in the neo-classical vernacular - a market failure, or more specifically a public good problem. In fact its the original public good problem, upon which all subsequent acts of privatisation are based.

But once we return to the sun, late on in our economic history, are we still innocent enough to view it this way? The sun isn't so very different from the Beatles back catalogue - there's a lot of it around, you can't control it, we value it highly, it's a 'public good problem' - but the Beatles are subject to various legal and political protections, most recently retrospective copyright extension. If EMI are allowed to profit from music that they didn't create, might not North Africa have some right to profit from energy that it didn't create? Equally, it sounds risky for a project with billions of euros of sunk costs to be exploiting a resource that is so difficult to privatise (it's not as if there is no 'weather' in Europe). What happens when capital's demand to retain surplus goes head to head with the sun's insistence on distributing it?

So here's how capitalism ends eventually. An economic system condemned to expand through privatising the commons and extracting surpluses finally turns its attention to the ultimate commons, the ultimate surplus, from where all economic questions begin, and seeks to privatise and extract surpluses from it. In an anti-oedipal act, the sun murders this troublesome child. I can't quite work out the details yet, but I'm pretty sure of it. Marx thought capital was a vampire. I reckon it's Icarus.

Comments

[Etienne Pollard]

"Who owns the sun?"

The question, surely, is "who owns the land?". The answer in this case is, broadly, the Algerian, Tunisian and Morrocan states, plus Qadaffi.

"If EMI are allowed to profit from music that they didn't create, might not North Africa have some right to profit from energy that it didn't create? Equally, it sounds risky for a project with billions of euros of sunk costs to be exploiting a resource that is so difficult to privatise (it's not as if there is no 'weather' in Europe). What happens when capital's demand to retain surplus goes head to head with the sun's insistence on distributing it?"

Loosely translated, I think that you're asking 1) will the North African countries get a cut of the revenue, and 2) what happens when there's more solar power available than demand for this power. The answer to 1) is surely "yes" - after all, these are the same guys who have been taking a cut from all the oil and (mostly) gas underneath their land, so it's not like this is new territory for them, and as for 2) I seriously doubt that will be a problem for a few centuries to come.

Finally, the overall subtext seems to be that the Desertec consortium will be an anti-competitive, anti-democratic energy cartel. Ironically, the only entity that could really stop this happening is the European Commission.

[Will Davies]

Oh, my attempt to think more broadly about the nature of economic value appears to have been ungratefully received.

So, yes - existing property and competition regimes will have to do.

[dk.au]

Excellent post, though I suspect those pesky 'energy security' issues will (always?) trump the general/restricted dichotomy. Shades of nuclear optimism of the early 1950s in your conclusion there - too cheap to meter etc.

We've had similarly ambitious proposals floated in Australia. I'm not holding my breath.

German climate change+industrial policy is based on the ('expensive' according the neoclassicists) large scale deployment of solar PV through a feed-in tariff. The idea is that, through an ongoing public experiment (promoted through a 'best practice' discourse thoroughly within the bounds of the 'restricted' economy), other countries will purchase their technology.

As satisfying as thinking through breakages and ruptures in the discourse of utility may be, I'm not at all convinced that gratuitous expenditure could be the death knell of capitalism, I'd be more inclined to say (via Veblen's Leisure Class) that it's front and centre of its dynamic - the question being who wastes.