John Buell

Exxon: A Villain with Plenty of Company

Paul Krugman is incensed at Exxon’s duplicity. “Exxon has been spending millions of dollars to prevent public action against a slow-motion catastrophe it itself was well aware was on its way. ... If we fail to grapple with climate change in time to avoid catastrophe — which seems ever more likely — it won’t be because we didn’t have the knowledge to realize the problem, or the tools to fix it. It will because of cynicism and greed that, given the stakes, rise to the level of evil.” What Krugman is not recognizing or at least not acknowledging is that Exxon’s behavior is not that unusual. It is a symptom of an economic theory and a particular set of institutional arrangements that have become dominant in contemporary capitalism.

The unregulated market has always been the default standard of economic theory or at least of what is presented in intro courses. But in its most recent incarnations, theorists and policy makers accept a powerful government role — not to ease the burdens of the system but to impose market freedoms and to bail out or support the privileged when they do screw up. And with the use of ruthless power has gone an orientation to markets and the world that can only make actions like Exxon’s common.

Contemporary capitalism is replete with examples as reprehensible as the Exxon story. On a moral level, Exxon’s actions are surely no worse than US actions at the behest of multinational corporations to overthrow Salvadore Allende.

Dean Baker provides an ongoing domestic example. “In addition to creating access problems, outrageous patent-protected prices give the drug companies an enormous incentive to misrepresent the safety and effectiveness of their drugs in order to maximize sales. And they act just as economic theory predicts. It’s rare for a month to pass without a new story about a company concealing or misrepresenting its research findings in order to increase sales.”

Big Pharma has many companions. Think asbestos, the National Football League and concussions, fast food processors who discovered an addictive combination of fat and sugar, guaranteeing a whole generation of obese children and adults, cigarette manufacturers fighting for rights to advertise and sell their lethal products abroad.

Notre Dame historian of economics Philip Mirowski points out that with the birth of neoliberal capitalism came a three part strategy to deal with any threat to its intellectual and political hegemony. Climate science is a perfect example. First, deny the existence of the problem. Secondly, once denial is no longer feasible, suggest that market approaches can solve the problem. Thus we have elaborate cap and trade strategies the efficacy of which is limited. The final recourse, still only at the discussion stage, is geoengineering, with its expectation that major technological breakthroughs will resolve the crisis.

The liberal wing of the current economics profession more often than conservatives recognizes that markets sometimes have specific failures. It then advocates changes in incentive structures to correct these failures. Nonetheless, the assumption is that markets will basically work to deliver then needed changes despite a history of instability and dangerous market-based priorities. The emergence of a healthy middle class in the ’50s required a dynamic — albeit shifting and often overly exclusive — combination of tax policy, massive infrastructure spending, urban and suburban planning solidarity narratives, and a robust union movement that helped to alter corporate priorities. Rather than count on markets as a panaceas, far better to rely on a democratic politics to frame priorities and open itself to voices of dissent.

In addition, as one Naked Capitalism blogger perceptively commented: “Such incentive schemes also tend to result in sacrificing long-term or substantive success in favor of superficial short-term gain.” Worse still, incentive schemes and the theories that go with them help to frame as much as reflect a conception of human nature as always in quest of short term material gains.

Along with the institutions and policies of neoliberal capitalism has gone a shared spirituality. The markets and their winners are deemed morally superior. Yet even as they play a predominant role in our political and economic life, these elites treat any criticism as though they are oppressed.

Such a sense of superiority, often combined with deeper insecurities, issues in a willingness to do anything to advance one’s economic interest and contempt for those who do not play the game with the same success.

The great inequalities the system grows from and encourages have implications that also touch Krugman’s story. Where there are great inequalities and a sense of moral superiority, the wealthy can believe that they will — and deserve to — escape any of the burdens climate change may impose. Krugman is right to take offense at Exxon’s duplicity, with its horrendous consequences. Nonetheless, Exxon is hardly alone, and the greater ethical issue lies in the deification of markets that permeates so much of our economic lives and in one degree or another is so widely shared in this society. Many of Exxon’s customers — at least vaguely believing in the magic of markets and the self-made man — are unwilling to act on the implications of climate change and may remain immobilized. Countering acceptance of the status quo will require movements on behalf of new technologies, non-statist alternatives to current corporate governance, and values and lifestyles that motivate at least as much as consumerism often has. Painting Exxon as a unique villain — satisfying as it may be — will not serve these ends.

John Buell lives in Southwest Harbor, Maine and writes on labor and environmental issues. His books include Politics, Religion, and Culture in an Anxious Age (Palgrave MacMillan, 2011). Email Jbuell@acadia.net.

From The Progressive Populist, June 15, 2016

Populist.com