Oil, energy and capitalism: An unpublished talk by Barry Commoner
“Oil companies do not operate for the purpose of producing oil. They operate for the purpose of producing maximum profit. To solve the energy crisis, we have to reorganise our economic system.”
July 30, 2013 -- Climate & Capitalism, posted at Links International Journal of Socialist Renewal with permission -- Dr Barry Commoner was the best-known ecologist in the United States in the late 1960s and 1970s. His picture appeared on the cover of Time magazine in 1970, and his 1971 book, The Closing Circle, was a best-seller and remains a classic of radical environmental analysis. As this talk shows, he was also an ecosocialist, before that word was created.
Commoner gave this talk at the Community Church of Boston on February 22, 1976, just before publication of his book, The Poverty of Power, when the “oil embargo” and energy crisis were still central political issues.
The transcript, which to our knowledge has not been published before, was found in Commoner’s papers by Philip Wight, a doctoral student at Brandeis University who is researching the origins of ecosocialism. We have corrected obvious typos and repetitions, and to improve readability we have added paragraph breaks and subtitles. -- Ian Angus, Climate & Capitalism
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Science and political power
By Barry Commoner
I’m going to talk about the relationship between science and political power. I imagine that most of you feel that science is eminently powerful and that your own relation to political power is one of weakness. The Berrigans are in jail, people who are still looking for amnesty—there aren’t many victories that the people can point to in their relation to political power. So that in certain ways there’s a sharp contrast between the two things that I’m going to talk about.
Now, let me talk for a moment about the connections between these two apparently disparate things. First, let’s look at a recent exercise of political power—a rather supreme exercise—we got rid of Mr. Nixon. I think you‘ll agree that that was a rather intense exercise of political power. He had a great deal of it, and he lost it all. He may be regaining a little in the hands of the Chinese right now, I don’t know.
How did that happen? If you think back you’ll notice that no troops surrounded the White House to get him out; it was not done by military force. It wasn’t even done by legal action. He wasn’t brought to trial. Nor was it in fact done by any riots; there weren’t many picket lines, nobody surrounded the White House, chanted.
A very simple thing happened. Some people got at the truth. Facts. Information… I think it’s clear that it was the work of the newspapers, largely the newspapers, largely Mr. Bernstein and his friend, Woodward, that really lost the power for Mr. Nixon. It was pure information. But it wasn’t just information, it wasn’t just that Mr. Bernstein and Mr. Woodward got the goods on Mr. Nixon. What happened was that information that was in Mr. Nixon’s hands, on his tapes, became known to the public. And very suddenly, he lost the exclusive possession of certain facts.
When the public had all those facts, there was no longer any argument, there was no need for any legal force, military force, he knew that he had lost.
Science versus secrecy
What I’m saying is that there is a close relation between political power and the ability to keep information to yourself. Exclusive knowledge is a source of political power. Now there’s the connection with science, because science also deals with knowledge. But it deals with it in exactly the opposite way. It deals with open knowledge, openly available to everyone. It deals with open discourse about the facts.
And … you may wonder why science is so antagonistic to secrecy. The reason is that the way in which science gets the truth is by making its mistakes in public. It’s known as publication. The reason why scientists have, I think, a justified reputation for getting at the truth better than some other professions is not that they are more truthful than other people, it’s simply that we have adopted this rule that whatever mistakes we make will be known to our fellow scientists.
And we do that simply by making the mistakes, or calculations, or theoretical statements, are put out where everyone can see, and if we’re wrong, and anyone can show that: they demonstrate it gradually, bit by bit, you get closer to the truth, as we argue back and forth.
So science really represents the kind of social action that we see in Watergate. And what I want to talk about is the way in which scientific knowledge has been related to political developments, to political action, in recent years in this country, particularly as exemplified by environmental issues and now energy issues.
Let me just remind you of a couple of examples of what might be looked on as environmental victories and some environmental defeats. What I mean by a victory is that an environmental problem was solved, just put it that way, that the pollution, the degradation of the environment, was brought to a halt.
An environmental victory: nuclear tests
The best example I know is the earliest one that many of us were involved in, and that’s the fallout from nuclear tests. You remember some years ago when we were exploding nuclear weapons in this country and in other parts of the world and radiation from that was distributed throughout the world, moving through the ecological life cycles, getting into our bodies, and raising certain very serious problems.
Now, why is it that we have an end to testing in the atmosphere? The reason is that there was a Test Ban Treaty between the United States and the Soviet Union. Let me remind you how that came about.
It came about shortly after Mr. Kennedy came into office, and he sent his science advisor, Mr. Weisner, to Moscow, and a draft treaty was produced. Now I remember when he came back there was great consternation because everyone suddenly realized the Senate had to ratify the treaty, and the Senate at that time was rather reactionary and it was believed to be impossible to get the Senate to ratify the treaty.
Because you realize that that represented the largest change, the most dramatic change, in U.S. foreign policy, up to that time. You remember that Mr. Stevenson lost an election over the question of nuclear testing. It was clear that the government was committed to nuclear testing. Suddenly Mr. Kennedy came into office and said, “We’ll do it the other way,” and the question was, would the Senate turn around? Well, they did. Most of the Senators, about three-quarters of the Senators, voted for the treaty, and it was signed.
And a little while later it was looked into, why did this change take place?
What was discovered was the Senators got a lot of mail from their constituents. But what impressed them was not that their constituents were against nuclear testing. What really got to them was that the people who wrote the letters knew how to spell strontium 90. They had the facts. It was a complicated thing, and the people who wrote to them exemplified a condition that they would face when they returned home, namely that they would face constituents who knew the facts about nuclear testing and could compel the legislator to respond to those facts. I remember Senator Clinton Anderson, who voted one way a little earlier, switched around simply because he said he read his mail, and the people knew what they were talking about.
So that’s an example of an environmental victory, and it came about by the people understanding the problem. Now, how did they understand the problem? Well, I should tell you that I never heard of strontium 90 until 1953, and I’m fairly well-trained. I went to Harvard, and so on. Most people didn‘t know about strontium 90. Well, they learned it, and they learned it from scientists.
Many of us studied fallout, studied the physical, chemical, and biological processes, just as though we were getting ready to teach a course in it, and some of us did later on. And then we went out and appeared in churches like this, and other kinds of churches, and I assure you my knowledge of religion in St. Louis suddenly broadened enormously. I think I’ve been in almost every church in St. Louis as a result of going around talking with people.
And they began to learn. And when they learned, and the political issue came up, they told their legislators what they knew and what they wanted and they got it. So, there is a case of where knowledge about a fairly technical thing, given to the people so that they could understand it, resulted in a political change, a rather important one, and an environmental victory.
An environmental defeat: Alaska pipeline
Now, let me give you an example of an environmental defeat. The Alaska pipeline. I think most ecologists will say that was a terrible thing. The Alaska pipeline, which was built from the north shore of Alaska, down to the shipping point. And you remember there was a big battle over it, between the ecologists and the oil companies, and the ecologists lost.
And I want to ask, “Why do you think they lost?” Well, the battle was fought over what issue? I was reminded about it when you sang your song. The battle was fought not over a human issue at all, it was fought about caribou, and lichens, remember? They said the caribou would trip over the pipeline, and the lichens would be destroyed when the tractors ran over the frozen tundra.
Now, I don’t remember any arguments that were relevant to human beings. And the ecologists lost. But in a way they deserved to lose, because they were fighting the wrong battle.
Now let me explain to you, and of course this is hindsight, how that battle could have been won, hands down, not perhaps that year, but certainly one or two years later. And that would be if the environmentalists had gone in what I like to think of as hot pursuit of the truth. Now what do I mean by that? Well, there was a problem. The pipeline was going to be laid down, it intruded on the environment and on the people of Alaska, and you have to ask yourself the question, well, what’s the origin of this piece of foolishness, why is it being done? What effects would it have? And the environmentalists got to the point of understanding that it had something to do with the environment, and then said, well, here we stand our ground, the environment is going to be spoiled, and we‘ll fight it at that ground.
Now, if I were an oil company executive at that point, I would be chuckling, quietly, secretly, because that’s exactly the battle ground that the oil companies wanted to fight on. What battle ground would they have lost on? Well, if the environmentalists had gone in hot pursuit of the truth, from ecology to economics, and said, “We would like to know what the economic significance and effects of this pipeline would be. We want to see your books. We want the tapes. We want to know what’s in it for the oil companies.”
You know what would have happened? A couple of years before the great expose of the high profits that oil companies were making, the ecologists would have revealed that to the public, because it’s now clear that the Alaska pipeline is a huge economic bonanza for the oil companies.
In other words, if the scientists had extended the pursuit of truth to the true origin of the problem, namely that oil companies were doing it to make profit, a huge profit, and had that become known to the people, I think we would have had the kind of political reaction that we saw in 1973, which was just a couple of years after the Alaska pipeline controversy, you remember, when even Mr. Jackson found it necessary to line up the presidents of the seven oil companies and shake his finger at them because they were making so much money. And when The New York Times began to publish on the front page, every other week, a graph showing the rising profits of the oil companies, and of course the oil companies responded by reporting the rising profits of The New York Times.
Get the facts to the people
Well, what I’m saying is, I use these as two case histories, when one gets at the origin of this problem and exposes it to the people, you seem to be able to get a political victory, so to speak, political action. If you fail to pursue the problem to its true source, then you’re in trouble. And you’re also in trouble if you don’t get the facts to the people.
With that as a background, I want to do an experiment here today, it‘s not a physical one, but an intellectual one.
I think you‘re all aware that there are very serious problems now regarding the willingness of the country to support environmental improvement. In New York State, Governor Carey has now issued an edict that anyone in his administration who favors the environment over the improvement of business had better get out. The Governor of New Jersey has said the same thing. Mr. Ford has acted vigorously in that direction.
I think most people think the environmental movement is in retreat. It’s in retreat because it can’t stand the force of economic priority, that jobs are more important than the environment, after all. And I should say that if there were a choice between jobs and improving employment, I personally would favor improving employment. However, that’s not the choice.
And what I want to do as an experiment is this: I want to discuss with you the interactions among three rather complicated areas of life—the question of the environment, and the use of energy, the whole business of the ecosystem and our resources, and how this relates to the production of goods, our welfare, jobs, and how this relates to the economic difficulties that we now face.
I think you’ll admit these are three very complex areas, and the experiment I want to carry out is this. I‘m going to carry on an experiment along the lines of what I’ve been talking about, about what I call sensible, political action, that represents the welfare of the people of this country on these issues, the terrible knot of issues that now troubles everybody. We will get action on that insofar as the people of the United States understand the complicated facts, and then make that known to their representatives. That’s my hypothesis.
The test is, and I think you’ll all admit, most of you, that this is not an area in which you are so well-informed that you’re ready to write, let’s say, to the Governor of New York state, and tell him how it’s possible to have both good environment and jobs. Or to explain to someone how you can save energy and still save the economic system. In other words, this is a difficult problem which I think most people are not ready to deal with, and as a result they’re rather pessimistic about being able to cope with the political power.
I was at a discussion of nuclear power over at MIT the other night and a number of the experts kept saying, well, here‘s what’s going to happen. We’ll have to have nuclear power, as though there were some external force driving us in this direction rather than ourselves making up our own minds. Many people feel weak, subject to this kind of, you know, you can’t fight City Hall, we’ve got to do something about jobs, and so let’s forget about these other things.
So the experiment I want to perform, and it‘ll be a brief one, but I think it can be done, is to share with you some of the key facts about these problems and go in hot pursuit of that truth and see where it gets us with respect to the question of what we need to do politically. Let me take a couple of exemplary problems.
As you know, we have a shortage of domestic oil in this country, we import about 35 or 40 percent of our oil, and as a result in 1973 there was an embargo. You people, particularly here in New England, had a great deal of trouble, because there was a shortage of fuel oil and gasoline. You were told at the time that the problem is we are running out of oil in the United States, because after all there’s a limited amount of oil under the ground, we’ve been using it very rapidly, and if you look at the data you’ll find that the amount of oil in the United States is falling off.
And indeed, since 1955 or so the rate of finding oil in the United States has dropped to about half of what it was. If you can’t find oil it means we’re using up the oil that is easily found and that we’re just running out, and that’s why we’re importing oil and unfortunately it led to the embargo.
I think that’s a fair summary of what most people believed—that’s what they were told. This turns out to be totally false, and let me explain it to you on scientific grounds.
It’s true that the rate of finding oil in the United States has dropped. But let me explain why it has dropped, because you have to go in hot pursuit of the truth. Well, how do you find oil? There are two things that are involved. One is, how much oil is under the ground. The less there is, as you use it up, the harder it is to find.
But finding oil also depends on looking for it. And it turns out that there were measures of looking. So, for example, there are statistics on the number and depth of exploratory wells which are drilled in the United States each year. The more you look, obviously, the more you’ll find. So an interesting question arises. What has happened to the intensity of looking since 1955? And what you’ll find is that it has dropped by 50 percent.
Well, this tells us right away, a very simple fact. That the reason why we are not finding oil is that the oil companies are not looking for it. That seems rather simple. Well, let’s not stop there. Let’s go in hot pursuit of the truth. Why are they not looking for it? Well, what you do then is do what I did in getting ready to write a book about this recently, I went to the library, and I looked up, I simply went to the section on geophysical exploration of oil, and what I did literally was pull them all off the shelf and sit down with them. I’m no expert in this area and I didn’t know where to start, I just looked.
I found an article written by a man named Blauvelt who is now President of the Continental Oil Company, he was at that time I guess executive vice—president, and you’ll see why he was promoted in a moment. Mr. Blauvelt gave a paper before a geophysical conference in Texas. His paper was entitled, and I’m quoting, “How to Become a Foreign Oil Company.”
The paper was given in 1966, and he was very proud to report that the Continental Oil Company, which for many years operated solely within the confines of the United States, in the 1950s made up their mind to go foreign, to produce oil outside the United States, and they were very successful in doing that, and he was proud to report how it was done and why it was done.
I want to read to you two statements from his paper which explains why the Continental Oil Company became foreign. He said, and I’m quoting now,
First, there was the need to maintain and increase our sources of low-cost oil. Only the low-cost operator can survive and earn a reasonable profit. The cost of finding and developing a barrel of crude oil in the United States was revealing a stubborn upward trend. The discovery of prolific reserves in the Middle East beginning prior to World War II had made it evident where the large fields of low-cost oil can be found.
And then he continued,
A major consideration important in our decision was the apparent profitability of foreign oil operations. As overseas crude output rose, profits also grew rapidly, and the rates of return earned by U.S. companies from their international operations proved considerably higher than the returns from their U.S. operations alone.
And he had a graph in the paper which showed the rise and fall of profits from domestic operations and foreign operations for U.S. oil companies, and what he showed was that whereas between roughly the 50s and the middle 60s the profitability of oil produced in the United States dropped from 15 percent return on equity to 14 percent, and it rose from 15 percent to 28 percent for foreign operations.
And at the time he was speaking, the profitability of foreign oil operations was just about twice the profitability of domestic oil operations, and what he said was that Continental Oil, this rational, intelligent company, went where the profits were greater. And as a result it closed down much of its oil exploration activity in the United States. Why look for oil that isn’t profitable? And went abroad.
So as part of the experiment, do you agree with me that the explanation for the shortage of domestic oil that has troubled us is what? It’s the fact that oil companies do not operate for the purpose of producing oil. They operate for the purpose of producing oil at a maximum profit. At a profit greater than the one that they have now. In fact, they’re not even interested in producing oil.
I now quote something else for you, again from an oil company executive. This is John J. Dorgan, senior vice-president of the Occidental Oil Corporation. He said, this is quoted from an interview in Newsweek magazine,
It doesn’t mean a thing to say to a private company that there’s a great need for oil. You have to have incentive. If it turns out that phosphate rock is more profitable, we’ll put our money there.
In other words, an oil company is in the business of producing profit, not oil.
That explains it. Because clearly in this country all corporations operate according to that precept, that‘s well known, it’s known as the bottom line. You do that which maximizes your profit: in this case it was to go abroad. The consequences were the huge results of the embargo, a very rapid escalation in the price of fuel, the price of fuel had been very constant for about 20 to 25 years and suddenly in 1973 it began to shoot up, and incidentally was the driving force in inflation.
It is the most rapidly rising sector of our prices, and it’s carrying up the price of fertilizer for the farmer, carrying up the price of food for everyone else, and what we have here is a social disorder created by the normal, natural operation of the private enterprise system.
You notice I have just made a statement about social disorder, private enterprise, and economics, and I started from a geophysical question. Right? Well, I went in hot pursuit from the geophysical behavior in the ecosystem all the way to what I think is the locus of the problem, namely, the design of the economic system.
And I can tell, since I‘m a very experienced teacher of freshmen, that most of you understood what I said — so, so far the experiment is a success, and I dare say that you could, if you wanted to now, write to your Congressman and say there is something wrong in the way in which the oil companies are behaving, having to do with the fact that they produce for profit rather than for the social needs of the country. I don’t advise you to do it, but I think you could.
Well, let me continue with the experiment. This is an example of one of the features of the energy problem, namely, how much is there? And it exemplifies the kind of thing that we face as we use more and more energy. Now the other side of energy is using it, and I want to take an example now of the use of energy, and see if we can understand how it relates to the question of jobs and the economic system, and so on.
Well, I have to inform you that there is a rather detailed and complicated science of energy called thermodynamics. I also have to inform you that although I was very carefully trained in thermodynamics at Harvard, I really don’t understand it, and I speak for many scientists—it’s a very tricky field, very tricky. There are a few physicists and physical chemists who understand thermodynamics. Most of us know how to use it, but the minute we start to use it, everything else gets sort of vague and fuzzy, so we don’t really know exactly what it’s about.
If you give me, say, four minutes, I’ll explain it to you.
I can explain it because, as I wrote in my new book, I confronted this very difficult problem; I want to talk about energy, and if we’re going to talk about energy we have to know the facts, and even though I didn’t understand thermodynamics, I knew somebody had to. So I learned it. Well, obviously we’re not going to do it all in four minutes, but let me give you a couple salient features of thermodynamics that we need to understand in order to come to grips with the energy problem.
There are two main laws of thermodynamics. One of them is that energy cannot be destroyed or created. And cleverly enough, that’s known as the First Law of Thermodynamics, Energy is Constant, in and out. That’s a very interesting law, because it suddenly makes everything look kind of crazy. If energy can’t be created or destroyed, what’s the fuss about? How come we’re running out of energy? Try that out on some oil company executive. It’s a very interesting thing.
It turns out that whereas the First Law is an important statement, it reveals that you need to know more about energy than how much you have. You have to ask yourself, “What is energy good for? What do you do with energy?” It turns out that what you do with energy is get work out of it. Work has a physical meaning, but you all know what work is. Moving around is work, doing things is work. Making something happen that otherwise wouldn’t happen is work.
That’s a pretty accurate thermodynamic definition of work, incidentally. If you want me to put it in fancy terms, I will say that any spontaneous action can only be reversed by using work. That’s the fancy way of saying it. But what you know is if you want something to happen that won‘t happen by itself.
For example, if I let go of this, it goes down by itself. No problem. Right? I don‘t have to do any work for that. But if I want to pick it up, obviously it won’t happen spontaneously; I can’t hold my hand here and say up. It won’t happen. It will lie there forever. I can wish all I want, it’ll stay there, it’s an absolutely sort of eternal thing. And yet I can—I shouldn’t say this here in church—I can reverse eternity just by bending down and picking it up. That means work. I have to use energy to do it. The energy I use is what I had for breakfast, and so forth. Alright? So energy is a way of achieving work, and in fact, it‘s the only value that energy has. The only meaning of energy is that you can get work out of it.
Now, then you have to ask yourself, “How do we get work out of energy, and how much do we get out?” Okay? There are various ways of using energy, and I’m going to skip over a lot of thermodynamics. Most of thermodynamics tells you the efficiency with which you can get work out of energy. Sometimes you can‘t get any work out of it, sometimes you can get a certain amount.
Wasting energy with bad design
It turns out that one of the laws of thermodynamics is that you can never get all of the energy converted to work. A Frenchman named Carnot discovered that in 1824. That whenever you try to run a steam engine, for example, a steam engine works, goes around, you can only get at most about 40 percent of the energy that’s in the fuel in the form of work. The rest of it goes off as heat. The engine gets hot.
And so every power plant we have, the most efficient power plant we have, converts the energy that is in fuel to the mechanical motion of the generator which produces electricity, and electricity is really sort of mechanical motion, it happens to be electrons. That generator can only turn about 35 percent of the fuel’s energy into electricity. The rest goes off as heat, and that’s what’s called heat pollution. That’s the warming up of the river, the cooling water goes through and it warms up the river.
So, what we’ve learned so far is that if you want to get mechanical motion, work, out of a source of fuel, inevitably you divide it into two pieces. One is, let’s say, electricity, which is easily translated into work, you just run a motor, and the other is low-temperature heat. The waste heat. Two outputs. Okay?
That’s enough thermodynamics, that’s about five minutes, now let’s ask a very interesting question. We want to conserve energy—or conserve fuel, let’s put it that way. We now know that we have a private enterprise system, so that we can’t seem to be able to produce all the fuel that’s available in the United States, and therefore for the moment we have to conserve it until we do something about the economic system. So, meanwhile we’re going to have conservation.
And I want to ask the question, “How should we conserve?” Well, now suppose we have a task, keeping this room at 70 degrees while it’s cold outside. I don’t suppose this building is heated electrically, but some of your homes are. And therefore, what you are doing is plugging your heater into the electric outlet at the power plant, right? You’ll notice that there is another outlet of energy at the power plant, the heat waste. And the waste heat is just right for warming up the room. It’s low temperature heat.
And in fact in New York, in a few parts of New York, the electric generators distribute steam, low-temperature heat, to buildings. You see steam coming out of the ground in various places, that’s the steam lines which are using the waste heat from the power plant to do just what you should with waste heat, which is to warm up places. Most of Moscow is heated that way.
So we have a very interesting situation. A power plant has two energy outlets. One outlet is good for doing things like driving your washing machine, because that’s mechanical, takes work, and you need the electricity to do it. But if you want to warm up the water for the washing machine it would be much more efficient to use the waste heat from the power plant rather than electricity. As you know, that’s not the way it works. For example, dishwashers have an electric heater in them to heat up the hot water.
So we have a bad arrangement between the power plant and our homes. We’re not plugged in the right way. The vacuum cleaner should be plugged into the electric outlet, but the hot water heater should be plugged into the waste heat outlet. But that’s not the way things are arranged.
Incidentally, let me tell you now what the thermodynamic efficiency of producing hot water is. What that means is—what’s the value of energy? Work. So, if we want to ask what’s the thermodynamic efficiency, how much work are you using relative to the amount that you need to use, the minimum amount you need to use, to accomplish a work-requiring task. Let’s take the task of producing hot water in your home. That takes work, you‘ve got to get it done. Well, this computation’s been done, very recently, and it turns out that the thermodynamic efficiency is about two percent. Just about two percent. We are using fifty times more work to heat our hot water in the United States than we need to. And the reason is that we haven’t got good arrangements between the sources of power and the uses of power.
Wasting energy with inefficient transport
Well, I can give you many more examples. The thermodynamic efficiency of our transport system is 10 percent. And the reason is that we put little engines in vehicles and since Mr. Carnot tells us that only a small part of the energy in an engine can be converted to motion, the rest goes off as heat. And when you drive down the street, you are putting most of the energy in the gasoline into heating the air. Meanwhile, you’re driving past somebody’s home who would love to have that heat to warm up their home. That seems simple. And it can be done.
The way you do it is by having this split between mechanical motion and heat. A [power plant] is not something that flits about, but sits still. And then you can recapture the heat, and what you do is take the electricity and use it to run a train. So, mass transit, using electric trains, would allow us to make proper thermodynamic use of the energy and would be much more efficient.
Well, let’s pursue this a little further. A beautifully thermodynamic efficient way of moving about the city is an electrified trolley. Do you have any trolleys in Boston? No. We don’t have any in St. Louis, and we have to ask why.
Did they get sick and die? No, they were killed. They were killed by a corporation made up of General Motors, Firestone Rubber Company, and the Standard Oil Company of California. A man named Bradford Snell, a couple of years ago did a beautiful analysis of the destruction of the trolley systems of the United States—the best thermodynamically efficient way to have urban transport.
It was done by this company, it was called I think the American Transit Company. What they did was go into a city, they did in St. Louis, buy up the trolley company, tear down the wires, junk the trolleys, and buy buses, and Firestone tires, and Standard Oil gasoline. Then this company, apparently not really interested in running transportation, sold the company to somebody who wanted to run buses and took their money and went to another city, bought up another trolley line and destroyed the trolleys and the electric wires.
They were brought into court in the Chicago Federal District and fined $5,000. The vice-president of the company, who had single-handedly, apparently, participated in the destruction of a hundred million dollar trolley system in Los Angeles, was fined $1.
Now I think it’s clear we’ve gone from thermodynamics to power plants to Carnot to what? To the understanding that the reason why we haven’t got a thermodynamically efficient urban transport system is that the profit arrangements are such that it is entirely expected of a company that wants to sell buses to destroy its competition so that it can make a better profit.
Well, I could go on, but I’ll put in a plug. You can buy my new book, which is called The Poverty of Power. It’ll be out in May, but in it I’ve gone through a series of discussions of this sort, all of which lead to the conclusion that the problems that we have derived from the operation of the private enterprise economic system. And, what the problems show, what the analysis shows is that the reason why we are wasting energy is that we are supplanting human labor with machines.
Wasting energy with synthetics
Let me give you a quick example—am I running terribly over my time? Alright… Let me give you one example of the way in which we’re meeting our needs that I think exemplifies it. We‘ve talked about the human need of having a room at 70° and moving from here to there, and we found that we were using energy wastefully. Let’s talk about another human need, and I’m going to focus on that purse down there, that handbag.
Now there are two ways of making a handbag, generally, you can make it out of leather, or you can make it out of plastic. And as you know, plastic has displaced leather. Many more handbags are made out of plastic now than used to be. And I will assert that the end use of a handbag made of leather and plastic is about the same. Now I know there are all sorts of aesthetic differences, but as a first approximation we’ll say that a handbag is a handbag, whether made of leather or plastic. That’s the social use value of a handbag.
Now I’m going to ask a question: What does it cost society to produce the two alternative handbags? The numbers are available. What are the costs? Well, to make the handbag you need to use energy and other resources. You also need to use machinery, which has to be bought by capital. Well, so there’s the efficiency of the use of capital, and then there’s the efficiency of the use of labor. Let me quickly give you a rough picture of the figures. If you ask how many handbags you can produce out of a unit of energy, you’ll find out you can produce about five or ten times as many handbags out of leather per unit of energy as you can plastic. It takes much more plastic, much more energy to make plastic than leather.
The reason is that plastics are made of petroleum, and various kinds of chemical reactions have to be carried out. So, plastics consume a lot more energy per unit output than leather. So every time you buy a plastic bag or synthetic shirt it takes about ten times as much energy to make the fiber for a synthetic shirt, nylon or what have you, as it does to make cotton. You’re using more energy. It turns out that you also use about three or four times as much capital, because the petrochemical plants are very big, with an awful lot of machinery and capital in it. So, producing a plastic bag is wasteful of energy, wasteful of capital, but it uses much less labor.
The petrochemical industry, which is petroleum, chemicals, and if you add transportation in, represents companies which produce about 20 percent of our gross national product. They employ a little over two percent of the work force. So that’s been going on, and this is typical of what’s been happening in the country, is that energy is being used to drive the machines that displace labor. The result is that we’re heading towards a shortage of energy, a shortage of capital, and an excess of labor, or a shortage of jobs. So that if we were to really save energy, we could create jobs, for example, by cutting back on the petrochemical industry.
The solution is socialism
And again, we’re right back where we were before. The decisions that are made in this country about how we produce goods are based on what maximizes profit, not human need. And as far as I can tell the answer to Governor Carey and the answer to the pessimistic view that we can’t have a good environment and jobs is that there’s something wrong with the way in which we’re using our resources.
We’re using the profit motive to make elaborate decisions about thermodynamics, about chemicals, about natural materials, when clearly we ought to be asking what’s good for people.
And it would have been a blooming miracle if the thousands of decisions made in this country that have transformed shirts from cotton into plastic, from soap into detergents, from leather to plastics, all of these changes, all of which were made according to one criterion, increasing profitability — it would have been a fantastic miracle if out of that came a beautiful, sensible way to use our resources efficiently without fouling the environment and giving people lots of jobs. It didn‘t work.
Well, I think the answer is then that we have to reorganize the way in which we run our economic system.
You see, I’ve described for you what was described most precisely and initially by a scholar of the capitalist system named Karl Marx.
I’ve described exactly what Marx talked about, the displacement of labor by capital and the resulting inefficiency of the operation, so that people are now forced to lose jobs in order to avoid polluting the environment.
There’s something wrong, and I think the answer is that we have to now begin to think about replacing the capitalist organization of the economic system by a system which is governed by human need, by social need, and of course, with a small s, that’s socialism.