It is easier, according to the adage, to imagine the end of
the world than the end of capitalism. Judging by the muted
reaction to the raging Australian bush fires, the truth of that observation
is being borne out. But actually it may be worse than that – it is easier to
imagine the end of the world than the end of the particular version of
hyper-globalized capitalism we live under.
Over the previous decade – in spite of calamitous warnings
of what lies in store if massive cuts are not instituted – carbon emissions
have continue to rise. Except
that is for three years (2014-2016) when coincidentally world trade – but not,
strangely, global economic growth – shrank.
Look closely and 2019 follows a similar pattern. According
to first estimates, carbon emissions continued to increase last year, but the
rate of increase – at
0.6% – was smaller than before. It compares to 1.4%
in 2017 and 1.7%
in 2018, according to one means of calculation, and 1.5% and 2.1%
according to another. It should also be noted that the 0.6% estimate is
based solely on the first 9-10 months of last years and could be revised
downwards.
Coincidentally, 2019 was also a decidedly rough year for
world trade – when it faced the headwinds of a trade war between Trump’s
America and China. The imposition of unilateral tariffs on goods by both
countries undoubtedly had a dampening effect on trade levels. After the strong
rebound of 2017 and 2018, trade suffered. In October, the World Trade
Organisation revised its April estimate
of a 2.6% increase in world merchandise trade downwards to just 1.2%. But given that a – possibly temporary – truce
has been called in the trade war, rates may return to more ‘normal’ levels in
2020 – unless of course a global recession, or war, intervenes.
The conventional perception of world trade is that it
involves the one-time transport of finished goods – clothes, cars or
refrigerators for example – to the consumer. Undoubtedly that’s part of it but
not all, or even most, of the story. Most world trade now occurs within firms
during the production process. It is part of what are called ‘global value
chains’ – where multi-national corporations scour the world for the most
cost-effective and appropriate venue for making one part of a commodity – the
engineering of components in one country, assembly in another (poorer) one and
branding in yet another. The sinews of
intra-firm trade between numerous countries involved in the construction of an
iPhone illustrate the ‘new nomadism.’
But Apple is far from unique. Global value chains make up,
it is estimated, 2/3rds
of world trade. The ‘value chain’ of US vehicle manufacturer, General
Motors, comprises 20,000
businesses worldwide, while the imported parts can make up 50% of cars
ostensibly ‘made in the USA’. The World Bank
defines global value chains in the following way:
Companies used to make things primarily in one country. That has all
changed. Today, a single finished product often results from manufacturing and
assembly in multiple countries, with each step in the process adding value to
the end product.
There is a glaring contradiction
between, on the one hand, wanting to reduce the world’s carbon emissions and,
on the other, aiming to increase, or shore up, the volume of global free trade.
Yet any number of conservative, centrist, liberal and social-democratic
politicians happily exist in such a state of cognitive dissonance.
Just as it makes no sense for a consumer to proclaim a
commitment to the environment while simultaneously seeking out the cheapest
products regardless of how they were made, it makes no sense for corporations –
and their backers in the media and politics – to say arresting global warming
is their overwhelmingly priority whilst, at the same time, pursuing a
production strategy whose fundamental amoral, profit-maximising purpose ensures
that it won’t happen. Yet the latter is precisely what our political and
economic system has reified as sacrosanct and non-negotiable.
And we are talking about maximising
profit here, not the difference between profit and no profit at all. Apple, for
example, would still have an ample profit margin if its iPhones were assembled
in the US, not China. Just not quite as big.
But it is not, sadly, a question of corporations simply
pursuing their institutionally selfish aims without the public in their
domestic countries knowing or approving. They also enable us to physically and mentally outsource the problem of
global warming to other countries. They are the ones burning coal to produce
commodities flooding the global market, while we are ‘doing our bit’ by
reducing our territorial emissions (ironically largely because we have off-shored
dirty production to those very countries). It becomes a matter of out of
sight, out of mind. And that suits a lot of people just fine.
