The year 2016 signaled a historic shift in US political consciousness. In prior election cycles, a Democratic Party loss was interpreted by most as reflecting the need to tack more toward the Republicans. But the fact that Hillary Clinton, the candidate of the establishment status quo, could not defeat Donald Trump, combined with Bernie Sanders openly embracing the word socialism, has convinced many workers and youth of the need for a break with the politics of endless concessions to capitalist pragmatism. A significant indication of this shift has been the rise of the Democratic Socialists of America (DSA), from a moribund organization of several thousand paper members to a membership of 55,000 with active chapters around the country. Nearly 50 DSA-endorsed candidates have been elected at all levels including two members of Congress, Alexandria Ocasio-Cortez of New York and Rashida Tlaib of Michigan.
The signal policy proposal arising from this shift is the “Green New Deal,” a broad agenda for using the federal government to radically reduce carbon emissions by investing in renewable energy generation and energy efficiency throughout the economy. The most prominent version of this idea is found in the Congressional Resolution introduced by Ocasio-Cortez, “Recognizing the Duty of the Federal Government to Create a Green New Deal.”
The most important contribution of the “Green New Deal” is in recognizing the scope of the problem we face and the necessity of planned action to confront it. The earth is currently 1.1°C warmer than in pre-industrial times. The Intergovernmental Panel on Climate change estimates that we can afford to reach 1.5°C if net emissions are rapidly reduced to zero and new carbon capture technologies are developed. However, we are currently on course to blow well past 2°C, possibly creating an irreversible cycle of warming as rising temperatures release stored methane, leading to more warming. In recent years, policy has rarely advanced beyond market-based solutions like “cap-and-trade” and carbon taxes, which are grossly insufficient to the task at hand.
The “Green New Deal” proposes a complete overhaul of all sectors of the economy, not only power generation, but manufacturing, transportation, construction, agriculture, and housing. It promises to use this massive federal investment to generate full employment with living-wage jobs, healthcare, and affordable housing, and to reverse historic economic discrimination based on race and sex. These goals are necessary, and without a doubt, society has the productive capacity to achieve them.
The problem is how this public investment will contend with private ownership. The idea that all this can be accomplished under capitalism is a fantasy. Some of the new infrastructure, particularly in power generation, could be retained as public utilities. However, nearly all of the existing capital to be overhauled is held privately. Moreover, the condition for the participation of those private owners will be profitability. Were this investment profitable on a market basis, private capital would already be doing the job. The alternative is that the state would shoulder the burden of investment and then transfer the benefits to private owners.
This is the model ultimately envisioned when the authors of the FAQ accompanying the resolution cite the internet, the Defense Advanced Research Projects Agency, and the interstate highway system as models. Public investment in the furtherance of private capital has been commonplace in the history of capitalism, but the size and scope of the “Green New Deal” would mean an unprecedented public expansion of private wealth. The resolution speaks airily of ensuring “the use of democratic and participatory processes,” and “that the public receives appropriate ownership stakes and returns on investment.” However, under capitalism, the capital owners hold the keys to the economy and their interest in private profit will override all other concerns. For an economic transformation of this magnitude, what could possibly be an “appropriate ownership stake” short of full, public, democratic ownership and control?
Reducing carbon emissions requires not only building alternative energy sources and energy-efficient infrastructure but phasing out the use of fossil fuels. As long as carbon reserves and the capital infrastructure for production, processing, and delivery remain in private hands, fossil fuels will be produced and sold, even if clean energy generation is massively increased. Capital owners in the carbon economy will have an incentive to produce and sell before they are pushed out, even at a reduced profit. At some point, with green energy sufficiently cheap and prolific, new investment in fossil fuel production will become uneconomical. However, a vast amount of coal, oil, and gas will be burned before we reach that point.
The political calculus of the Green New Deal is to marry the costs of combating climate change with the benefit of using that investment to create a more “just” economy. However, the Green New Deal misunderstands how reforms have been won in the past as well as the limits of reform under capitalism. Ironically, the history of F.D. Roosevelt’s original “New Deal” illustrates these points. To the extent that reforms are won, it is always as a result of open class struggle, not merely electing representatives who favor reforms. Further, the capitalist state does not have free rein to design a prosperous economy outside the laws of capitalism. The postwar boom rested on a set of convergences for new capital accumulation that no longer exist and cannot be replicated at will.
For FDR’s first campaign against Herbert Hoover in 1932, the New Deal was little more than a slogan. He entered office committed to balanced budgets, not massive spending to reboot the economy. He was pushed to enact relief programs and labor rights by the depth of the economic crisis and the rise of militant labor organizing and strikes, the extent of which threatened the entire system. Granting collective bargaining, first under the National Industrial Recovery Act and then the National Labor Relations Act (NLRA), was intended to turn working class struggle into safer channels. The forms of economic management adopted were not an attack on capital, but rather an attempt to save it, using models proposed by private industry, including the Swope Plan submitted by the CEO of General Electric. Moreover, New Deal spending, despite the litany of program acronyms from the Civilian Conservation Corps to the Public Works Administration, was minimal compared to the crying need and was advanced more as palliative charity than as a method of increasing aggregate demand. It also failed to prevent a renewed economic downturn in 1937–38.
“Green New Deal” proponents are aware of this problem and include the federal spending during World War II as part of their model for a full economic mobilization to combat global warming. The 30–40% of GDP spent by the federal government to retool for war production dwarfed the New Deal and was the key element in ending the depression. Business leaders were willing to go along with this “interference in the free market” due to the immediate existential threat of Germany and Japan to US commercial interests, not to mention the hefty profits built into government contracts. In the aftermath of the incendiary labor militancy of the 1930s, the combination of conscription and war production created unprecedented bargaining power for labor. Far from being “gifts” to the working class, the National War Labor Board and the Office of Price Administration ensured the profitability of capital under these conditions. The union leadership, both liberal and Communist, scandalously collaborated in maintaining profits and holding down wages by enforcing a no-strike pledge for the duration of the war.
With the end of the war, the pent-up energy of the working class exploded in the largest strike wave in US history. More than six million workers were out on strike in 1946 with massive mobilizations in all major industries and a handful of city-wide general strikes. However, the class-collaborationist labor leadership could not see beyond attempting to make a deal with the capitalists. The passage of the Taft-Hartley Act, which hamstrung the legal rights gained under the NLRA, signaled the end of pretensions to capital-labor corporatism. The capitalists also began in earnest to move their capital out of the unionized northern cities, eventually leading to the deindustrialization and urban crises of the late 1960s–80s, accompanied by the prolonged numerical decline of organized labor. These were the conditions that gave rise to the New Deal and its inherent limitations. It is utopian to think that the beneficent capitalism imagined by the “Green New Deal” is achievable through conventional politics.
The postwar economic boom did create a measure of relatively shared prosperity for a limited period. However, this economic growth was not simply the result of higher taxes on the rich and higher government spending. Rather, the massive destruction of capital during the Great Depression and World War II cleared the way for a new round of capital accumulation. Added to this was the expansion of capitalist investment around the world. The limits of this period were reached in the economic crises of the 1970s. The revanchist “neoliberal” capitalism we have lived through since then was not a policy “choice,” but necessitated for the maintenance of profitability by the only means available—increased exploitation. Today, in an era of slow growth and low investment, there is no space for the scale of investment imagined by the “Green New Deal.”
Proponents of the Green New Deal imagine a capitalism tamed for the benefit of all. However, the very nature of the system is that only a handful at the top fully benefit, while the rest of us are left to scrape by. Green New Deal supporters also imagine they can convert the existing state into a tool for defending the interest of the working class. However, under capitalism, the state is not a neutral arbiter, but an agent of capitalist rule.
As socialists, we must put forward a program that highlights not only what is necessary and possible, but also explains what stands in the way: the system of economic exploitation based on private ownership for private profit—capitalism. We cannot afford to waste time on conventional politics and policy. The clock is ticking, and the historic task of overthrowing capitalism is quite literally a life and death question for humanity. At this late stage, a “Green New Deal” constrained by the profit motive is simply not enough to save us. What we need is a new kind of politics, a new party, and a new economic system.