Louis Proyect: The Unrepentant Marxist

May 7, 2008

Was Enron “Green”?

Filed under: Ecology — louisproyect @ 7:03 pm

Generally I don’t have much to say about Spiked online nowadays since the ex-members of the Revolutionary Communist Party in Great Britain have pretty much severed all their connections to the left. Although they are somewhat coy about their ideology, the impartial observer can recognize it immediately as libertarianism but without the bellicose foreign policy associated with today’s Ayn Rand supporters.

There are a few exceptions, however-most notably James Heartfield who wrote an interesting review of Rick Kuhn’s Isaac Deutscher Prize-winning biography of Henryk Grossman, a Marxist economist who had a significant influence on the RCP in the 1980s.

Apparently James has a new book out. Titled “Green Capitalism: Manufacturing Scarcity in an Age of Abundance“, it contains the kind of tirades that are the stock-in-trade of Spiked online. But where most contributors to Spiked frame their arguments in nebulous terms of “progress” and “human development”, James is more comfortable invoking Karl Marx-even if he neglects those aspects of Marx’s writings that would clash with Spike’s editorial slant. I am of course referring to Marx’s deep concern about soil fertility, which was to the 19th century what climate change is today.

While I doubt that I will have either the time or the interest to read James’s book, I was motivated to write something about an excerpt that appears on the Metamute website. I don’t know much about this Zine, except that it seems to attract bright young things from the leftwing of the academy.

James’s article is titled “Manufactured Scarcity – The Profits of Deindustrialisation.” It is focused on “Green Capitalists” and Enron in particular. The editors introduce it as follows:

‘Green capitalism’: a new paradigm of sustainable production or a license to shut down plants and print money? James Heartfield looks at the case of influential pioneer in increasing profits by cutting output, Enron

This piqued my interest. Was Enron truly “Green”? Of course, it is difficult to find a corporation today that does not have Green pretensions. In my critique of Jared Diamond’s “Collapse”, I debunked his reference to Chevron as “Green” based on the energy company’s contributions to the following distinctly anti-environmentalist outfits, as documented in Josh Karliner’s indispensable “The Corporate Planet: Ecology and Politics in the Age of Globalization.”:

1. Citizens for the Environment: advocates strict deregulation as a solution to environmental problems.

2. Oregonians for Food and Shelter: a pro-pesticide lobby.

3. Global Climate Coalition: global warming skeptics.

4. Pacific Legal Foundation: files court challenges to clean water, hazardous waste and wetlands protection laws.

5. National Wetlands Coalition: should probably be called National Anti-wetlands Coalition since its main goal is remove obstacles to oil drilling in their midst.

6. Mountain States Legal Foundation: founded by batty former Interior Secretary James Watt.

Ultimately, corporations like Enron and Chevron will spend all sorts of money on advertising and bribes to groups like World Wildlife Fund, upon whose board Diamond sits, in order to fool people into thinking that they are “Green”. That does not mean that we have to take them at their word. We should also of course take note that the six aforementioned groups are exactly the kind whose ideas are reflected in the pages of Spiked online.

According to James, Enron’s “Green” credentials were based on, among other things, its Climate Protection Award from the EPA in 1998. Since the environmental policies of the Clinton-Gore administration are viewed by most radicals as being worse than the Bush administration that preceded it, one can only wonder why this award proves that Enron was Green. If Enron gave itself an award, would anybody take that seriously? Given the cozy relationship between Enron and both bourgeois parties, the EPA award amounted to just about the same thing.

James’s main complaint is that Enron put a damper on production in compliance with Green thinking, while at the same time it boosted profits. He refers to this as “manufactured scarcity”, which took the form of “clean energy” and California’s “Negawatt Revolution”. Here’s how it worked, according to James:

Chief Executive Kenneth Lay turned Enron from a company that made its money generating power into one that made its money trading finance. Whatever else it was doing, there was no denying that Enron was cutting back its own CO2 emissions and getting rich doing it. One company memo stated that the Kyoto treaty ‘would do more to promote Enron’s business than will almost any other regulatory initiative’.

This is true as far as it goes. Enron pushed for adoption of the Kyoto Treaty since it mandated a switch from coal-burning plants to natural gas, which Enron-essentially an energy broker-supplied. However, being in favor of natural gas does not really make you “Green”, especially in light of the following:

Of Enron Corp’s many political maneuvers in Washington before its fall into bankruptcy, winning the promise of federal financing for a 390-mile pipeline from Bolivia to Brazil through the Chiquitano Dry Tropical Forest may have the most enduring consequences.

Enron built the natural-gas pipeline directly through South America’s largest remaining undeveloped swath of dry tropical forest, a region rich with endangered wildlife and plants.

The pipeline, completed late last year, and its service roads have opened the forest to the kind of damage environmental groups had predicted: Poachers travel service roads to log old-growth trees. Hunters prey on wild game and cattle graze illegally. An abandoned gold mine reopened and its workers camp along the pipeline right-of-way.

–Washington Post, May 6, 2002

James continues:

Amory Lovins’ negawatt revolution in California was Enron’s wet dream. Having shut down its own generation capacity, PG&E was at the mercy of Enron’s market manipulation. Buying surplus electricity on the open market PG&E was royally fleeced, losing $12 billion. Utility bills rose by nine times. Enron took advantage of the restricted market and cut electricity to California. They even invented reasons to take power plants offline while California was blacked out. Enron official joked that they were stealing one million dollars a day from California. The PG&E that Lovins held up as a model went bankrupt and had to be bailed out by the state of California.

More than anything, Enron was about deregulation, a word that does not appear once in James’s article. Enron was supposedly an alternative to traditional public utilities, using the marketplace to satisfy demands for electricity. It manipulated the supply in order to drive up prices. If it used environmental rhetoric to mask its true intentions, one should not blame environmentalism for this. We must blame capitalism.

For an alternative analysis of Enron’s “environmentalism”, one can turn to the Center for Media and Democracy, also known as PRWatch. In a 2003 article titled “How Environmentalists Sold Out to Help Enron“, the excellent Sharon Beder detailed how mainstream environmentalists, not much different from Jared Diamond, sold out to the thieves at Enron.

According to Beder, the Natural Resources Defense Council was the main culprit.

NRDC received $3.1 million from the Energy Foundation between 1991 and 1997 and $1.13 million from the Pew Foundation between 1993 and 1995. Both foundations were set up with corporate money made in oil and other industries. These foundations dominated the funding for activist groups, ensuring that their lobbying on energy issues took a pro-business, pro-deregulation and pro-private utility stance. According to Ralph Nader, “the network of funders has become a network of enforcers. And these guys are all on a first-name basis with these corporate [utility] executives.” The Energy Foundation ran conferences where environmentalists and consumer activists could hob nob with utility executives and get on their wavelength.

Now the best way to describe the collusion between PG&E and NRDC is anti-environmentalist. No matter the utility company’s advertising on television, which stressed “Conversations with the Earth” and “Smarter Energy for a Better World”, it was nothing but PR. This, I should add, is a matter that Spiked online has some familiarity with as an occasional co-sponsor of hi-falutin’ conferences with Hill and Knowlton, the sleaziest PR firm in the world best known for its campaign in the first Gulf War around Kuwaiti babies being thrown on a cold hospital floor by Iraqi troops.

NRDC was a key player in pushing for deregulation in California during the 1990s. Supposedly, the profit motive would persuade utility companies to expand production. The deregulation bill that the California legislature passed included some sops to the Green movement like a small budget for energy efficiency. But mostly it was in keeping with assaults on public ownership occurring everywhere in the world.

Ironically, the same myopia that prevented James Heartfield from understanding the importance of deregulation in the California/Enron fiasco also prevents him from understanding the situation in South Africa:

California’s ‘negawatt revolution’ is only one of the more extreme versions of the way that green priorities work in tandem with profiting by manufacturing scarcity. South African radical Dominic Tweedie argues that recent electricity blackouts there happened because of ‘a campaign to impose artificial scarcity’. The failure to build power stations to meet the growing demand from South Africa’s black townships was not recognised as a problem by activists there because they bought into the green prejudice that social aspirations could be met by redistribution alone, at the expense of increased output. Now supply companies are hiking up prices to the people who can least afford them.

To be sure, South Africa’s power company (ESKOM) was manipulating supplies in order to enjoy super-profits just like Enron, but the primary problem facing poor Blacks is privatization, a phenomenon that goes hand in hand with deregulation. When ESKOM began putting power meters in the slums of Soweto, the understandable reaction was to use direct action to challenge and remove them. To raise the slogan “Build More Power Stations Now!” might appeal to the libertarians grouped around Spiked online but would have little traction in the townships.

Finally, a word about the conclusion to James’s article. He writes:

Setting caps on energy production, industrial output, car transport and house-building in the name of saving the environment all have the effect of damaging people’s standard of living. But as we have seen, that does not stop individual businesses from making big profits out of those caps. Trading in carbon rights, making windmills, carbon offsetting schemes, and organic food are all ways of making profits out of artificial limits set upon growth.

When I read something like this from somebody who obviously has an excellent grasp of Henryk Grossman’s economic theory, I can only shake my head in wonderment. “Growth” is not something that happens by removing environmental limits, like a cork from a bottle. Growth occurs as part of the business cycle as Grossman explains in chapter two of “The Law of Accumulation and Collapse of the Capitalist System”. During the 1930s, there was no growth because the capitalist system had entered a monumental crisis that no amount of Keynesian fiddling could resolve. It took WWII to bring prosperity.

Today, the world is facing what some experts regard as the biggest economic crisis since the 1930s. It is quite sad to see somebody obviously so well trained in Marxist economics, as James Heartfield clearly is, to be wasting his time and our time shadow-boxing with “Green Capitalists”. Today, it takes real audacity to challenge liberal and conservative orthodoxy alike and proclaim that nothing less than socialist revolution can resolve both stagnation and ecological degradation. It is too bad that some comrades no longer have the will to challenge the system. Let us hope that as the crisis deepens, some of them will be inspired to respond to 21st century capitalism in its dotage, a threat to civilization potentially greater than fascism in the 1930s.


  1. Comrade Louis,

    Come out of your cave, man; as your brother James has … Marxism is dead as dead gets! Move on Bro! We have evolved to higher levels of enlightenment! Be wise … move on and join us!!

    Comment by Tom — May 7, 2008 @ 10:10 pm

  2. leftists, radical or not, fail to see that what they witness as stagnation is really overdevelopment. “Radicals” who believe Clinton-Core was more anti-environmentalist than the Bushies are just plain wrong. As for the ties of the foundations to the enviro sell outs, no argument here.

    Comment by don — May 8, 2008 @ 3:58 am

  3. […] of the Revolutionary Communist Party in Great Britain have pretty much severed all their connhttps://louisproyect.wordpress.com/2008/05/07/was-enron-green/Darrell Delamaide’s Political Capital: Of oil and obliteration, the world is watching our votes […]

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  4. Louis,

    I understand that you would disagree with Al Gore’s views, but I think it is reasonable to say that he is the more plausible representative of mainstream environmentalism than you are.

    On Enron, I think you make my case. Enron’s capitalist imperative was all packaged up in green ideology. Environmentalism was the justification for California’s reduced energy generation which allowed Enron to charge monopoly prices.

    On Eskom, the evidence is clear. Up until this year, environmentalists were demanding that Eskom reduce its output, which conveniently matched the company’s own plans.

    In 2003 the environmentalist campaign, the International Rivers Network congratulated Eskom on its programme of reducing output

    “Conservation and techniques to reduce demand offer huge opportunities for Eskom. In 2002, Eskom announced that demand–side management (DSM) could reduce South Africa’s power demand by up to 11,000MW.”


    ‘Socialism From Below’ shows what the environmental imperative means in class terms:

    ‘In the late 1990s Eskom had spare capacity but instead of extending the network into the homes of the disadvantaged people they mothballed power stations … From 1985 to 2004 Eskom threw out some 35000 people over half its workforce.’

    March 2008

    Click to access sfb-march-2008.pdf

    It was rading Henryk Grossmann that taught me that growth did not have to be synonymous with capital accumulation (which is the meaning of the passage of my review you so kindly quoted in this blog).

    Lastly, Marx’s supposed interest in soil erosion is a bit of a legend. In the fifty volumes of his collected works, it amounts to a few pages of notes on Liebig. He wrote around ten times as much rubbishing the Ricardian idea that capitalism found its limits in ‘organo-chemistry’.


    James Heartfield

    Comment by James Heartfield — May 10, 2008 @ 8:17 am

  5. Responding to James Heartfield:

    JH: I understand that you would disagree with Al Gore’s views, but I think it is reasonable to say that he is the more plausible representative of mainstream environmentalism than you are.

    Me: Of course. I am a more plausible representative of socialist environmentalism.

    JH: On Enron, I think you make my case. Enron’s capitalist imperative was all packaged up in green ideology.

    Me: But I am not interested in “green ideology”. I am interested in anti-capitalist initiatives on behalf of working people that ultimately result in the abolition of private property. WWII was fought on behalf of “democratic ideology”. Is that any excuse to reject democracy (understood in terms of what Marx wrote about the Paris Commune).

    JH: In 2003 the environmentalist campaign, the International Rivers Network congratulated Eskom on its programme of reducing output

    Me: And so? The real struggle in South Africa is over the rotten ANC’s privatization of electricity and water. This is what the left should be involved with, not silly propagandizing on behalf of power plant construction. The bourgeoisie in South Africa will expand power plants in accord with its need to expand profits. It doesn’t need help from the left on this. The left needs to organize the assault on metering, etc.

    JH: He wrote around ten times as much rubbishing the Ricardian idea that capitalism found its limits in ‘organo-chemistry’.

    Me: Citation?

    Comment by louisproyect — May 10, 2008 @ 12:58 pm

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