Towards a New Green Deal

Ashley Dawson: Let’s begin by discussing the idea of a new environmental Keynesianism you proposed in a talk sponsored by the International Forum on Globalization last September. How have subsequent developments on the economic front, particularly the bursting of the housing bubble in the US and the subsequent crisis of the global financial system, shaped your sense of the possibilities and obstacles confronting the global justice movement?
Susan George: Trends have confirmed what I said then. Even while I was writing the piece, it was clear to me that the sub-prime crisis wasn’t going to end there. Indeed, there were ramifications that were clear from before the crisis became front-page news. I already knew, for instance, that things like Collateralized Debt Obligations, Structured Investment Vehicles, and other similar recent inventions that make investments sound fancy and safe were in fact a total sham. Because of these new financial vehicles, nobody knew who owed whom, and nobody knew how much they owed, and nobody knew what these things were worth, since there wasn’t really any market for them. These funds essentially slice up sausages of different kinds of debt—mortgages, credit card, corporate bonds, what have you–and mix them together. All of the problems inherent in this were already clear in August. So when I was writing my piece I saw the oncoming crisis, and knew there’d be a recession, if not worse.
You know the old cliché about the chinese character for “crisis” containing both opportunity and danger. Well, the idea of my piece was to consider how you get out of a financial crisis if your standard instruments have already been used to the point where they are no longer effective. How do you usually do this? If you’re [John Maynard] Keynes, you use an approach of targeted government spending, creating a lot of jobs, putting people back to work, you reduce interest rates, you could devalue to make your goods more attractive overseas, and give targeted help to particular groups. But in the case of the U.S. today – I’m not an economist, mind you, but you don’t have to be a rocket scientist or Paul Krugman to set it out – [Federal Reserve Chair Ben] Bernanke has reduced the interest rates in a spectacular manner, they have devalued the dollar to the point where you wonder if they can do much more without causing a lot of grief for the country and the world, and the country has become so indebted that it cannot just print more money or borrow much more from outside, since this contributes to inflation. Other nations, even the Chinese, who have a huge stake in the US, are beginning to understand that you don’t really want to have any more dollars. So, what can you do in a case like this?
The only parallel I could see was with World War II, a period that I lived through as a child. It was a very inspiring time, although it obviously wasn’t fun to have my father go to war, but it was inspiring in that you really did feel that the whole society was pulling together. I bragged to my friends at school that my godfather was a “Dollar-a-Year Man.” He was the head of Goodyear Aircraft at a time when they were experimenting with dirigibles and rolling out all sorts of other brilliant inventions, but he was also a Dollar-a-Year Man and this was a really prestigious thing. He was someone, in other words, who was responsible for meeting the targets of the war and keeping people safe.
My idea was not to shift the country to a war footing in order to deal with the current economic crisis, but rather to trigger a new Keynesianism for the environment: a push for massive investment in conversion and eco-friendly industry; in alternative energies; in the manufacture of lightweight materials for use in new vehicles and airplanes; in clean, efficient public transport; in the green construction industry and retrofitting; and so on.
It’s not very hard to write a scenario that would mobilize people – it’s relatively easy to construct such an encompassing, unifying narrative around the environmental crisis: about the condition of the planet and why the United States needs to show leadership in dealing with global warming, and why, if we don’t do it, nobody else will. With such a mobilizing narrative, you could have a reproduction of what happened during World War II. Instead of the huge inequalities of today, the extreme amount of money accumulated by a very few, and the unwillingness to give any of this away – Bill Gates and Warren Buffett are, after all, exceptions among today’s selfish billionaires – you could motivate people by a sense of honor, through a sense of competition for something prestigious linked to quality of leadership in the environmental realm, along the lines of the Dollar-a-Year Men during World War II. This model of a new environmental Keynesianism would take us much further than the ideas for programs in alternative energy being discussed by the presidential candidates at the moment.
AD: What about the idea that environmental activism is a kind of post-scarcity effect: that it is only in societies which have trashed their environment through industrialization that we see an emergent ecological consciousness? Isn’t the danger, then, that the current economic turbulence will divert attention from the underlying and intensifying environmental crisis?
SG: Not if people can be helped to understand that getting out of the economic and the environmental crises is the same thing, that you emerge from one by paying attention to the other. I think too if we ask the flood and hurricane victims who are overwhelmingly poor, they would want attention to climate change once they understood that their plight stems from it. Still, it’s always a myth to romanticize poor people or “primitive” societies because they trash the environment like no one has done since: the Native American buffalo hunts, killing off the large mammals, deforestation – they just took the lowest-hanging fruit. You read Jared Diamond and you get a sense of the overexploitation of resources in past societies. But his book Collapse is a useful comparison because he also talks about the isolation of the elites. They can always go on consuming long after the ordinary people in their societies are being very hard hit by environmental crises. That strikes me as very true today, except on a much broader, global scale than the Mayas or Easter Island.

But I think we should remember that people aren’t very demanding, they are really quite modest in their hopes and dreams. If you have land reform, people take very good care of their land. It’s a question of not having anything that means that people will exploit resources to the hilt, but the traditional peasant farmer does not trash his holding, he selects the best seeds, he does intercropping rather than mono-cropping that exhausts the soil, he uses different kinds of fertilizer. To give you an example, Sir Albert Howard, chief agronomist of the Brits in India in the early 1900s, went into villages and researched traditional composting techniques, and then reintroduced them in areas where they’d disappeared, getting magnificent results. All this nonsense about the “tragedy of the commons” is only true when you don’t have a community; if the commons has the power to decide who belongs, use is very closely monitored and you don’t have collapse, as Michael Goldman has shown. It works whether people are Indian foresters, Maine lobster fisherman, or livestock owners in rural England in the 17th century. The condition for the commons to work is that the people themselves are able to regulate it.
I just finished a piece on water and sustainable development for the Zaragoza International Exposition in Spain. Among other things, i learned that in Valencia, there is a water tribunal that has been meeting every week for a thousand years. It’s made up of farmers and it meets every Thursday at noon to hear complaints about irrigation. They know the countryside and they know about farming and irrigation. They hear both sides of disputes and their decisions are final. That is an example of the commons working. Unfortunately, this will probably disappear because the Spanish government is introducing a very rational national grid of drip irrigation that allows monitoring of use and reduces subsidized water consumption substantially. But the Tribunal de las Aguas is still a good model. Keeping people together in a community with common interests without letting anyone’s single interests become dominant is always the central issue. People have always worked this out, though, except for us. We just let everything get more and more unequal until it explodes.
AD: The land reform problem raises the question of international relations and how to make change on a local level that is equitable. How can you push social transformation using international bodies without intensifying forms of injustice, particularly given the history of three decades or so of structural adjustment and neo-liberalism? Do you feel that your work with ATTAC might offer a model in this regard?
SG: The point is that you can’t have an international financial system that only has national regulation. We’ve just seen this again. The French regulators got together recently and said that Jérôme Kerviel, the bond trader whose illicit derivative trading helped wreck [leading French bank] Société Générale, was invisible to them because he was trading German and British derivatives. So here’s a guy in Paris and a whole bunch of French regulators, but they don’t know what he’s up to, and neither do the British or German regulators. The whole system doesn’t work. The regulators abandoned their function to the ratings agencies, which were also completely misinformed or lax, and are now being totally discredited because they were giving people triple A ratings that deserved junk bond status.
So we know from this and all kinds of other signals that the current system doesn’t work. We also know that the taxes being paid into national treasuries come from people like you and me: people who have a fixed address, people the governments can get at, and people who consume in the country. That’s where the money is coming from, as well as from businesses that are rooted in a particular place. In contrast, the share of taxes paid by transnational corporations and other businesses that can become mobile is going down significantly. This is not fair in the sense that most people would think of fairness.
The idea behind ATTAC, which was formulated ten years ago following the Asian financial crisis and the series of over 100 serious crises that preceded and followed it, is quite simple. These crises happen as speculators borrow in one currency and pay back in another in order to make piles of money. It’s always the same ones who win and always the same people who lose. Our idea is that there are various specific financial “products” that one could tax. You could tax currency flows, for example. This is what’s called the Tobin tax, although we’ve refined the ideas far beyond what [the late Yale professor James] Tobin proposed. This tax on financial transactions has had a certain success: Belgium has held hearings that have led to the government sponsoring a potential European scheme along these lines; Chirac, Lula, Zapatero, and a group of other leaders took it to the United Nations General Assembly, where over a hundred nations signed on – although not the US, UK, or any of the other important financial centers, of course.
When we proposed this taxation scheme the amount of currency being traded on financial markets was around $1.2 trillion a day; now it’s up past $3 trillion. So these are huge markets. There’s been a lot of technical work done on how to set up a tax and it’s really not difficult to do. You simply stick in a few lines of software code; the central banks basically know where their money is and you don’t have to have every jurisdiction pass a law because it’s based on the money itself, not on different jurisdictions of money and there are mechanisms you can use to do this. In other words, the argument that it’s technically unfeasible despite being a lovely idea is simply wrong.
So that was one of the basic ideas of ATTAC: a tax of ten basis points, which is 1/10th of one percent. Various estimates have been made of how much this could raise, but it’s clear that it could raise a lot of money, particularly with $3 trillion being traded. If you look at the Herald Tribune, you’ll see that the dollar is currently trading at around 1.4647 to the euro, and what we want is 1.4646; just 1/10th of a centime going into a pot. We could then have a discussion about how this money should be used. And there are already models for this. For example, there’s an agency at the United Nations that is collecting and distributing the air flight tax. That’s all ATTAC got for its efforts so far; it’s a symbolic victory since it is an international tax, so it’s a step in the right direction. Chirac got cold feet pushing the currency tax so he proposed the airplane tax. If you buy a ticket from Air France it will tell you the price of the ticket and the taxes; sometimes the taxes are more than the fare. But, okay, people who want to fly should have to pay in order to do so. The UN agency that’s collecting these funds is supposedly using it on malaria, tuberculosis, and AIDS. So, we could discuss how this money is going to be distributed. What about the country where the money is collected? Should the country with 40% of the trade get some portion of the tax or should it all go to the South – let’s discuss that. But the point is that we could use this tax to begin equalizing not only the huge disparities that exist between countries, but also within countries.
There’s also an idea for a unitary profits tax on transnational corporations. This is being circulated by the Tax Justice Network (TNJ), which is run by John Christiansen. He’s a former employee in the banking industry in [the island of] Jersey, the offshore banking center, so he knows how things work from the inside. Of course, the transnationals are fighting tooth and nail against the TNJ proposals. One of the main problems is that this all seems so technical to most people that they can’t think about it. I mean, if I mention the International Accounting Standards Board (IASB), you’re asleep before I’ve finished. But the IASB is a group of private people who belong to Price Waterhouse and other big accounting and auditing companies, and they’re setting the global accounting standards. They’ve done it for Europe and the EU Commission, which loves anything neo-liberal, is delighted to let the fox guard the henhouse. The problem is that their standards are such that you can’t tell where a company made its money. It can simply report “home country” or “all of Europe” or “all of Africa,” etcetera. The idea, though, is that you have to know what a corporation’s turnover in any particular country is, and then apply a small unitary tax to that. Again, this isn’t difficult to do.
And then of course ATTAC also fights to cancel poor countries’ debts. That campaign has been going on for twenty years, long before ATTAC was thought of. And then there’s the issue of tax havens, which have been thrown into the limelight by a big scandal between Germany and Lichtenstein. There are about a thousand people in Germany, very rich heads of corporations and such, who set up foundations in Lichtenstein to escape taxes in Germany. It’s been a huge scandal in Germany; people are up in arms because the rich are escaping taxes while average people pay. Lichtenstein is hanging on to the information and the German government had to pay someone in Lichtenstein 5 million euros to get a disk with the information about these tax evaders. So, this shows that we really need to get rid of the tax havens.
AD: Is there an American branch of ATTAC?
SG: People in Europe ask me that all the time. They say, “Why doesn’t it take in Anglo-Saxon countries?” I tell them, first, that the country is enormous. And, in addition, the U.S. is still very much caught up in single-issue politics. Lots of good people are either helping immigrants, or they’re doing something ecological, or something else progressive, but they tend not to cooperate across their differences. And people there are still very much hung up in identity politics: racial or gender or religious or sexual orientation politics. This kind of thing bores me to death and I get very impatient with it. I think that you should stop focusing on who you are and figure out what you can do, preferably together. But then one can’t dictate to people.
At any rate, I’m not sure why there isn’t more consciousness of inequality in the U.S. and why there isn’t a branch of ATTAC there. I remember that there was a poll which asked Americans if they were in the top 1% income bracket, and 19% said “yes,” and another 20% said “no, I’m not now but I will be in another five years.” That’s where all this gender/sexual stuff has been brilliant. I put that in my Lugano Report [a satirical book that sets out a program for maintaining elite power in the 21st century]. In my fake report, the commission I’ve invented tells the right wing, the horrible Davos people, how they can make capitalism victorious throughout the 21st century. One of the things they must do is to finance all this gender and racial and sexual stuff, native this and native that. They finance these movements so that they’ll be fighting against each other and not focusing on the enemy. I mean, of course I’m against lack of equity and equality for blacks and women, etcetera, but once you’ve said “equality before the law,” well, now let’s change the laws and concentrate on the real adversaries without letting individualism run riot.
AD: What about Europe? From an American perspective, there seems to be a great deal of exciting emphasis on changing cities and countries and making them more sustainable. Small steps in the grand scheme of things, it’s true, but nevertheless so much more than one sees on a quotidian basis in the US. I’m wondering if we could come back to the idea of a Keynesian project. Is this something that could fly in Europe?
SG: Well, of course, although we’re very neoliberal here these days, we’ve never really abandoned, at least in France, the notion of public spending and public services. The [European] Commission is doing everything it can to destroy all of this. That is one of the aspects of the Lisbon Treaty which will reinforce the long march to neoliberalism and the destruction of community and social cohesion and make sure everybody has to pay for everything. But so far, we’ve never really abandoned the notion of the public good, although most of the struggles now are about trying to defend the gains from the 1930s and the postwar period. All the big fights we’ve had about retirement pensions, hiring and firing practices, jobs, health benefits and so on, they’ve all been struggles not about getting something better – which is what happened in the 1960s and ’70s – but rather about not going backwards. I think this treaty [the Lisbon Treaty for a new version of the EU constitution] is a complete disaster and the way they’ve done it shows that they’re not interested at all in democracy. I think it’s the end of democracy really. One mustn’t give up hope, but still… The French and the Dutch fought against the neo-liberal constitution, so now they [European elites] fix it so the people can’t vote. Sarkozy himself said last November that if there were a referendum, the treaty would be defeated. And so they’re just not letting people vote. In fact, only the Irish can vote.
How is this engineered? Very legally. In order to put a new treaty in place in France you have to change the constitution, which said until the beginning of this month that France participates in the EU under the terms of the treaty of such and such a date. Now it has to say, “under the terms of the Lisbon Treaty.” To change the constitution, all of the senators and deputies have to be brought together. So, they went to Versailles, they probably had an excellent lunch, and then they voted. But you need a 3/5ths majority to change the constitution. We could have won, except that the bloody Socialists are so mealy-mouthed that they said they’d abstain. Some voted “yes,” since they were already in favor of the treaty – I have more respect for them than for those who abstained. And some voted “no,” the ones who were already against the neo-liberal constitution 2 1/2 years ago. In the end, Sarkozy got his 3/5ths majority, and then he could decide that he would submit the treaty either to parliamentary approval or to a popular referendum. And obviously he did not opt for the latter. So, the Socialists caused us to lose our chance.
We went to Versailles to protest, but the media didn’t pay much attention, except for a few snide comments here and there. You see, the media were for the constitution in 2005, so they were discredited just like the elites and the official Socialists who were all for the yes to the constitution in 2005. The people voted no by 55 percent and this victory was intolerable. Our rulers don’t really care about democracy. After the French and Dutch votes were cast two years ago, the vice-president of the commission, a German neoliberal named Gunter Verheugen, said, “We must not give in to blackmail.” That’s his idea of popular sovereignty, right? Blackmail?
I was asked to be a token radical at a huge dinner in Brussels for Etienne Davignon, Viscount Davignon. It was his 75th birthday. We were supposed to talk about Europe during intervals between the lobster bisque and the next dish, and my little group included the ex-President of Latvia. She said that she was president for two terms and you just have to understand that politics is a métier, a job that people who are driving trains or working in hospitals and baking bread, and doing other mundane things just can’t understand. They are simply not equipped to make these decisions. It’s much better to leave these decisions, according to her, to the people who know about them. She’s been living in Canada most of her life, so it’s not that she doesn’t know about democracy, it’s just her idea that normal people should leave decision-making to the elites.
So, I take a very dim view of what’s going on right now in Europe. I’m writing a piece for Red Pepper on Tony Blair as president of the Commission. He’s really perfect for this job: he’s against the public sector and he opted out of the charter of fundamental rights that’s attached to the treaty - a very meek and mild charter that’s not up to the standards of the French constitution or other national constitutions. The thing is, no matter how weak it is, you can get out of the social charter. The implication is that the free market, free and undistorted competition and the unhindered movement of capital, goods, services, and people, that’s important, but once you get to rights, you can opt out of that. That’s what Blair’s about, and so he’s perfect. he’s also surely happy with the provisions that make NATO the basis of European defense and commit us to higher military spending.
AD: What about the notion advanced by some futurists that new forms of energy production are going to be localized and are going to play an important role in fostering new, more responsive forms of democracy? If it’s hard to make change at a national level and, as you’ve just described, at a transnational level like the EU, what about at a local level?
SG: Those kinds of initiatives are good. I’m all for re-localizing the economy. For instance, it’s great if you can buy your food locally. But I think it’s an illusion, and a pernicious one at that, to think that if we change our behavior, everything will change. This is simply not true. It’s a question of scale. If you could get all Europeans to change their light bulbs, which is already a mammoth task, it really wouldn’t make that much difference. We must not allow people to think that by consuming different things, they can change the world. I’m all for fair trade, but everything is a question of scale now. Local change is one of the scales, and sometimes these things can be scaled up, but we really need to be thinking in terms of the large flows.
I’m always very careful not to discourage people from getting involved at whatever level they can. Life is very long and sometimes you can start at the local level. For example, if you participate in a local food purchasing collective, it’s great. All such things are good. Sometimes later, when you don’t have three children to take care of any more, as I did for example, then you can go beyond such efforts. This is how you learn and, sometimes, how you win, which is important to do. So I’m not trashing these kinds of things.
But if we are thinking seriously about the scale of these problems, we really have to take a much broader point of view, from Jupiter or something. It has to be done through law, through something that is binding. And of course economic incentives will be part of that, but how do you get economic incentives? You get them through law, through government saying, at least at the beginning, that we’ll subsidize solar, wave, biopower, etcetera. And it also involves a lot more democracy, because you have to figure out how to get people on board with the program, which is why I mentioned the Dollar-a-Year Man program earlier. You have to figure out how to get the builders involved, for example. You know, in Britain a group of ecologically responsible builders asked Tony Blair to set national standards for the building industry, because at the moment ecological construction techniques cost about 10% more than traditional ones up front, even though you recoup the costs in energy savings over a fairly short period and certainly over the lifetime of the building. Blair refused. So it takes national leadership, although the approach really isn’t that complicated. You simply tax what you want less of and you don’t tax and rather subsidize what you want more of.
AD: Yet we’re faced with an overwhelming scenario in environmental terms, one whose gravity even scientists don’t seem to have yet fathomed. How do we avoid pessimism as we listen to news reports about melting polar icecaps, mass extinctions, and the like?
SG: People ask all the time, “are you optimistic or pessimistic,” it’s standard. I explain that I just don’t deal with the categories of optimism and pessimism, except maybe for the famous Gramsci quotation, “optimism of the will, pessimism of the mind.” We simply don’t know what the future is going to be, after all, at least in political terms and one should never insult the future. I say that the first thing is hope, which is different from optimism. And the second thing is the scientific notion of self-organized criticality. This is simply the idea that there are phase changes in physical systems, that something, at an unpredictable moment, can change the structure of a system. Ilya Prigogine got the Nobel Prize for sorting this out in chemistry, and there are various people at the Santa Fe Institute working on the concept at the moment. The simplest example is the sand pile on which there is a grain of sand falling at regular intervals; you don’t know when the structure is going to collapse, but at some point a grain is going to change the entire shape of the pile. In something as complex as a social system, which is a system of stocks and flows like any other system, like the human body, they are interacting all the time with their environments, you just don’t know what the input element is that can change the system; nor can you predict the time when the system will mutate. It’s all unpredictable.
Therefore, you cannot give up the political fight with a good conscience. You can’t simply say that everything is too desperate and I’m going to throw in the towel and go read novels or play bridge or whatever, because you simply don’t know if something that you do or write or say might become a system-changing element. That is a rational way of looking at one’s role in society that doesn’t involve any metaphysics. The question of how do you keep going? My friend Teddy Goldsmith says when people ask him how he keeps going, he replies, “What else is there to do?” I think he’s right. What else is there to do?

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