The Chaos of Capitalism: BP, Oil, Destruction and Profits

Words fail to fully describe the devastation in the gulf. Eleven lives lost, ecosystems destroyed, thousands of livelihoods are ruined, and the calamity continues. This will become the greatest environmental disaster in U.S. history.

[see also: leaflet of Socialist Alternative]

A year ago, BP, the oil company leasing the rig, did an environmental study of the operation. This study claimed there was almost no possibility of a severe failure which would produce a large oil spill. This incredible statement was accepted by the US government. BP at first denied the leak even existed. Next, they denied the horrific scale of the spill. Then, they denied that the oil plumes were beneath the ocean’s surface. This arrogance has fueled public outrage.

Tens of thousands of gallons of oil leak into the Gulf every day. It is difficult to get a full picture of the problem because of BP’s lies and the fact that many reporters have been blocked access. “Journalists struggling to document the impact of the oil rig explosion have repeatedly found themselves turned away from public areas affected by the spill, and not only by BP and its contractors, but by local law enforcement, the Coast Guard and government officials.” (New York Times, 6/10/10)

The cleanup will take decades, and the lawsuits will as well when the families of those killed and injured and the fishermen affected try to pry money out of BP’s hands. “There is sure to be a comprehensive settlement with BP. But if the litigation following the 1989 Exxon Valdez spill is any indication, a slow-moving legal battle lies ahead; parts of those lawsuits are still being fought in court.” (New York Times, 6/9/10)

The damage is done, and unfortunately, a BP spill was predictable. BP accounts for 97% of the energy industry’s “willful, egregious safety violations.” (reported by ABC news on (5/28/10) This drive for profits and cutting of corners helped them rack up $5.65 billion in profits through the first quarter of this year alone. BP’s cute green sunflower logo and “Beyond Petroleum” ad campaign shows the lies and cynicism of corporate “green marketing.”

Oil companies aren’t alone in showing a relentless, unflinching drive towards hundreds of billions in profits and handouts at the expense of everything else. Taxpayers were robbed by the big banks and politicians to the tune of hundreds of billions of dollars to bail out the corporate thieves that made billions in profits foreclosing homes and cynically betting against our futures while providing no meaningful public service.

William Greider described the 2008 bank bailouts as “an historic swindle of the American public – all sugar for the villains, lasting pain and damage for the victims.” With the continued job loss “recovery” and budget cuts, that pain and damage is still throbbing with misery.

Decades of Deregulation

In a report published just before the financial collapse of 1998, Timothy A. Canova, a Professor of Interational Economic Law, wrote, “by 1995, the sub-prime loan market had reached $90 billion in loan volume, and it then doubled over the next three years…Meanwhile, by March 1998, the number of sub-prime lenders grew from a small handful to more than fifty. Ten of the twenty-five largest sub-prime lenders were affiliated with federally chartered bank holding companies, but federal bank regulators remained unconcerned.”

Remember that this all occurred with Clinton as President. The financial and housing bubbles that grew to encompass the globe were expanding rapidly under the Clinton Administration. For decades, the ruling elites in the U.S. have put forward the need for the government to “stay out of the economy.” That was of course until their financial system collapsed, and they got handouts of hundreds of billions. Unfettered corporate domination, an open ideology of the Bush Administration, has actually been the policy of both political parties for decades.

Before BP and the big banks there were corporate rip-offs by big energy companies (most notably Enron.) They shifted away from providing services towards price gouging, deliberate downsizing and dishonest bookkeeping. Rolling blackouts, increased consumer costs, and corporate corruption became the norm not only for the defamed executives involved in the Enron scandal of 2002, but also for the energy industry as a whole. All for profits – at the expense of workers and the environment.

Corrupt Corporate Watchdogs

Who makes these corporate decisions? The CEOs. Yet, who elects CEOs? When did you vote for a stockholder? Ever have an election for increased wages or better benefits in the workplace? If capitalism is so efficient, then why do the terrible economic or environmental disasters keep taking place? Our society creates products designed to fail (light bulbs, cell phones), and human potential is wasted in poverty, under-funded schools and meaningless jobs. The best scientists work on bombs instead of cancer cures or environmental cleanup.

Clearly, the corporations can’t be trusted, and they won’t police themselves. Unfortunately, that is exactly what has been happening. The Minerals Management Service, the main watchdog in the oil industry, has been caught in a scandal including corruption, gifts, sex and drugs during their incestuous relationship with big oil corporations. (New York Times, 9/10/08)

Sensationalism aside, this reveals the complete inadequacy of the U.S. government to be an effective watchdog. Acting Inspector General Mary Kendall reported that she was particularly concerned with “the ease” with which federal inspectors “move between industry and government.” This story is only a snapshot of a bigger picture.

Tens of billions of dollars are handed from the oil barons to politicians, distributed between both major parties, every year. The figures are even more startling when considering the billions being handed from big banks to politicians. When both political parties are funded overwhelmingly by big business, we can’t expect them to effectively regulate the people pulling their strings.

Take for example the “financial regulation bill” being currently touted by Democrats. The Wall Street “reform,” like the health reform bill, has big business writing the rules for their own game. Derivatives, complicated schemes for big banks to bet billions, were the initial target of the financial reform being discussed in Congress.

Matt Taibbi, in an excellent article in the May edition of Rolling Stone magazine, pointed out: “Five of America’s biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan’s trading revenue between 2006 and 2008 came from such derivatives.”

He chronicled how these massive financial vultures then unleashed an army of lobbyists on Washington in a series of maneuvers designed to take the teeth out of the bill and keep politicians from both parties beholden to Wall Street. It worked. Derivatives remain unregulated in current legislation. Joe Nocera, business journalist for the New York Times, wrote, “There is something oh-so-reasonable about this bill, as if Congress was worried that they might do something that would – heaven forbid! – upset the banking industry. “

Systemic Failure

This is not just a failure of BP, TransOcean, Halliburton and the government; it is a bubbling, raw, staggering indictment of corporate negligence and the failure of regulation under capitalism. The Pentagon recently produced a report which points to growing oil scarcity and states that by 2015 worldwide “the shortfall in output could reach nearly 10 million barrels per day." As the world uses 90 million barrels a day now, and consumption is rising, a shortfall of 10% is bad news. So, oil companies and governments around the world are seeking oil in ever more dangerous circumstance and from more polluting sources.

Instead of a race to address climate change, under this system, where two corporte paties share power, our government is directed by the interests of big business. The “business plan” of BP and other corporations doesn’t take into account the need to provide necessary services or environmental sustainability, let alone precautions against death and destruction. Instead, business plans have only one motive: profits. The question is, how to challenge this corporate control over our society?

Immediately, BP should be taken into public ownership. Their books should be opened to reveal all safety expenses, executive salaries and potential scientific personnel. The company should be run by the public with all profitable assets seized and put towards the cleanup. The publicly-owned BP should train and put to work, at union wages and benefits, the engineers, environmentalists and scientists capable of minimizing this horror. Many influential commentators, like former U.S. Secretary of Labor in the Clinton Administration Robert Reich, are calling for some form of “seizing BP.” The mistake that Reich makes is that he then wants to hand the corporation back into private hands and doesn’t see the overall conflict of interest between people and profits.

In the cleanup, rather than putting the world’s best minds to work on this problem, one company has cornered the “market” for this tragedy. This shows the irrational chaos of the system we live under. Not just resources but also human potential is wasted by capitalism.

Short-term profits cannot address either the cleanup or the need for a sustainable planet. The long-term view of corporations and the governments they control are rarely discussed. The periodic glimpses into the future by our world’s leading lights revolve around “market share,” “capturing revenue,” and raising enough money to get elected.

The Socialist Alternative

The solutions to the urgent problems of the environment, world poverty and increased despair will not be solved by the rich and powerful; it would be utopian to think so. Instead, workers and young people need to get organized to fight for a better future. We need coalitions to demand jobs, social services and workers’ rights.

While there is colossal anger against Wall Street and BP, to change these policies we need to build mass demonstrations and a working class political alternative to counteract these continuous attacks, sellouts and watchdogs without bark or bite.

By exposing the details of corporate greed and mobilizing the public, unions and community groups, could be an effective check on corporate corruption through democratically elected committees from the grassroots subject to recall by working people.

A movement, run democratically, resisting corporate domination, running candidates without corporate funding, with an elected and accountable leadership, could stop the onslaught of environmental destruction, budget cuts and job losses. This movement could also provide a vision for a better society through both actions and program.

We need energy to be a right and a service, not an industry. The energy industry is potentially destroying our future without a plan to save the planet. Energy companies like BP should be democratically controlled, run by the workers themselves, and linked to a plan of sustainable production.

We need an economic plan to meet the needs of all. Enough food could be sustainably produced to feed the planet multiple times over; yet, millions starve (New Scientist, 6/27/09). There is the basis and technology for renewable energy and public transportation, yet oil spills and climate change continue. Human means of communication jave reached astonishing levels, and we could harness that towards democratic involvement in the economy and decision-making through a voluntary socialist federation of North America and eventually the world. Economic and environmental devastation knows no borders, and our struggle against corporate control must be international as well.

Capitalism is about maximizing profits at all costs, creating new markets, searching for the cheapest labor force and cutting corners for stockholders. We are told constantly in the media and by politicians that capitalism is efficient and democratic.

Instead, we have unelected CEOs and overlapping stockholders for corporations making the key decisions that affect our lives. The business interests don’t just ignore our best interests; they actively fight against our need for jobs, services, good wages and a sustainable future. That’s why need to build a socialist society, which can end the domination of our society by corporate interests. Then, decisions would be made by ordinary people through democratic discussion and decision-making. Then, an environmentally sound world to meet the needs of all would be possible. But we have to get organized and fight for it!

Obama’s Energy Policy

On March 30th of this year, the New York Times reported “the Obama administration is proposing to open vast expanses of water along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska to oil and natural gas drilling, much of it for the first time.” Three weeks later, disaster hit Deepwater Horizon.

Obama’s plans to drastically expand offshore drilling may have been thwarted, but government permits were granted by the Obama administration for new drilling as late as a month after the spill.

While BP has done everything to try to clean an image slathered in slimy oil, they have handled the actual clean-up of the gulf with far from the sense of urgency needed. Instead of seizing BP’s assets in the gulf and using them for the clean-up, the Obama Administration has let BP handle the failed stop-gap attempts to alleviate the damage. BP has used a toxic dispersant in their botched clean-up, and they are funneling thousands of barrels of spilled oil onto the world market.

Despite a few tough words from Obama, the White House has done very little. In addition, Obama’s energy policy beyond this spill is inadequate at best. President Obama touted the benefits of coal and nuclear energy on the campaign trail; it should come as no surprise that he received big campaign contributions from executives and big shareholders tied to these companies. (

This administration has taken its advisors from the big corporations that dominate the key industries. Matt Taibbi writes: “President Obama has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway… Obama gave key economic positions in the White House to the very people who caused the economic crisis in the first place.”

Beyond Oil

Nuclear energy is no alternative. The environmental effects of a nuclear disaster wouldn’t be measured in years but millennia. Even short of disaster, toxic dumping and uranium exposure have resulted in increased cancer rates and other health problems for populations exposed to uranium from Puerto Rico to Iraq. (Yes Magazine, 3/13/03)

Internationally, the Obama Administration has been a barrier to sufficiently addressing climate change as the U.S. blocked any meaningful agreement from being reached at last year’s summit in Copenhagen. As the summit approached last December, Scientific American ran a striking cover story titled A Plan for a Sustainable Future. This showed how wind, water and solar power could supply the entire world’s energy needs by 2030. Citing the massive rapid shift in production during World War Two, the study shows the possibility for a better world. Yet, there are no advocates for it in Washington.

A massive increase in solar, wind power and public transportation would both provide jobs and environmental benefits. However, these projects wouldn’t be as profitable to big business as oil, cars, gas, coal or nuclear power. To get green jobs, we need to fight for them rather than depend on politicians or business plans. A mass campaign for green jobs could unite union members, community groups and environmental activists; in order to take on the behemoth energy industry, the movement would need to run candidates as well.

We Demand:

  • Ban Offshore Drilling.
  • Create green jobs for cleanup, wind power, solar power and mass public transporation.
  • Re-training for workers in polluting industries for sustainable development with union wages and full benefits.
  • Build a coalition of union workers, community groups and environmental activists to organize pickets, protests and direct action for green jobs and against corporate greed.
  • Committees of energy oversight by workers and consumers, democratically elected and accountable to communities.
  • Take the profit out of energy. For public ownership of the top energy companies with democratic working class control and management to develop a sustainable environment.
  • For people and the planet, not profits. For a democratic plan of production taking the top corporations into public ownership in order to meet the needs of workers, communities and the environment.
  • End Corporate Domination. For a democratic socialist USA as part of a democratic socialist world!
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