Biding Time

On July 17^th, seated on a gold throne, dressed in ermine and velvet, and wearing the diamond-encrusted Imperial State Crown, King Charles III laid out the plans of the new Labour government.

A revealing feature of Britain’s constitutional monarchy, the King’s Speech traditionally announces the government’s policies for the upcoming parliamentary session. This year, the focus was on the “fundamental mission” of economic growth, through which every other issue is refracted. The King announced a new Industrial Strategy Council and an array of rather vague policies to “pursue sustainable growth by encouraging investment in industry, skills, and new technologies.” These would “enhance Britain’s position as a leading industrial nation” and “promote growth and wealth creation.” There are clear rhetorical echoes here of the return of industrial policy¹ That is, the shift – uneven, slow, and chaotic, but happening nonetheless – from neoliberalism to some sort of economic planning in many large economies. (The transition is so uneven that some doubt it’s really happening in full – in correspondence with us Diski notes, “I think unfortunately a lot of the world is going to be prevented from doing this.”) While heartening in some key ways (good riddance to the “free” market!), it also augurs new threats: war between the great powers, planning failures due to incompetence or inexperience, an expanded authoritarian state. We described and critiqued this crucial transition several years ago in our first issue’s political editorial. See “Socialism With an Anarchist Squint” in Strange Matters Issue One (Summer 2022). –Eds. that has animated “Bidenomics” and, in turn, economic strategy among many US allies and adversaries. After 14 years of Tory chaos and austerity, many British observers hope the new government will wield the state to undo industrial decline – but just how plausible is such a project?

In recent years, many advanced economies have resurrected industrial policy, fostering key sectors with the kind of fiscal interventionism that has been anathema throughout the neoliberal period. In this way, the thinking goes, states can turn impending climate cataclysm and global insecurity into an opportunity to stimulate green – and not-so-green – manufacturing and reverse lagging growth. The clearest expression of this is in the 2022 US Inflation Reduction Act (IRA), the Infrastructure, Investment and Jobs Act, and the CHIPS Act, which mobilize enormous public incentives for private capital to develop domestic manufacturing capacity in low-carbon industry and semiconductors. While directed squarely at China, this protectionist barrage was felt most immediately by US allies – notably the EU, which answered with its own Chips Act and Net Zero Industry Act. More recently, Mario Draghi’s EU-commissioned report called for the bloc to raise €800bn a year for a “new industrial strategy.”² Paola Tamma and Henry Foy, “Mario Draghi calls for €800bn EU investment boost.” The Financial Times, 9 September 2024.  This is a self-consciously nostalgic project, with its sights set back on an industrial golden age and, slightly more sotto voce, a world order in which everyone knew their place.

Such a pursuit is especially rose-tinted in Britain, which has not, in fact, been “a leading industrial nation” for some time. Nonetheless, there is plenty of enthusiasm on the Left for a “big green state” to reindustrialize the heartlands, make Britain a “clean energy superpower,” and rediscover its status as a “world leader.” Trade unions, business, and parts of the climate movement look enviously across the Atlantic, resolute that a version of Bidenomics could deliver the elusive prize of green growth; the main concern is that Labour’s plans are light on detail and even lighter on funds. Those hoping to emulate the US model should seriously consider the particular constraints on the British state and, more fundamentally, the contradictions of “green growth” and late capitalism embodied in the US approach itself. Most urgently, they should learn from the historic election, in which Bidenomics barely registered and the Democrats stood on a hollow platform with nothing to say about the cost of living and the increasing precarity of everyday life.

The UK Context:
A Story of Decline and Delusion

The new government has inherited a mess: a low-productivity, low-wage economy vulnerable to global shocks; crumbling physical and social infrastructure; a bloated and predatory financial sector. This reflects decades of underinvestment, especially since the 1990s when investment fell sharply compared to the rest of the G7.³ George Dibb and Carsten Jung, “Rock Bottom: Low Investment in the UK Economy.” June 2024. The ramifications are experienced daily by anyone who pays rent, uses public transport, has a child in school, or needs to access healthcare; they are evident in overcrowded prisons, proliferating food banks, and declining high streets.⁴ That’s British for “main street,” for any non-BBC-watching American readers keeping score at home. –Eds. Hastened by Brexit and global economic trends discussed below, factories have continued to close while sinister gray Amazon warehouses sprout across deindustrialized areas. It says something about the dynamism of the economy (and perhaps too about the extent of social atomization) that alongside the old stalwarts of oil and gas, finance, and big pharma, one of fastest-growing British companies is the porn site OnlyFans.

The government could of course mobilize public investment to address these multifarious challenges, but by sacralizing “fiscal responsibility” and rehabilitating the debunked “household debt” metaphor for the national economy, it has sewn and buckled its own straitjacket.⁵ For more than you ever wanted to know on why the government is not a household that can run out of its own money, see John Michael Colón & Steve Mann’s History of Chartalism series (“What Should Money Be Made From?” and “Fast Cars and Fiat Money”) in Strange Matters Issue One (Summer 2022). And for just one example of how this affects practical policy-making, see Sam Levey, “How They Paid for the War” (27 January 2023) in the magazine’s online section. –Eds. The numbers emanating from the Treasury are, according to the conservative Institute for Fiscal Studies, “tiny, going on trivial.” Labour’s anemic climate and energy proposals are preposterously mismatched to what it acknowledges is “the greatest global long-term challenge that we face.” Take its National Wealth Fund for infrastructure projects, which rests on a paltry £7.3bn over five years (for perspective, the High Speed Rail 2 project alone is likely to cost up to £66 billion): this misnomer invites comparison with Norway’s $1.6tn sovereign wealth fund, established with prodigious revenue from the 1990s North Sea oil boom and used to protect the economy and consumers from external shocks, as it did during the recent energy crisis. Labour’s fund is instead, in the words of Chancellor Rachel Reeves, a “concierge service for investors and businesses that want to invest in Britain.”⁶ Kalyeena Makortoff and Julia Kollewe, “Rachel Reeves launches £7.3bn national wealth fund. The Guardian, 9 July 2024. In finance-speak, the solution is to “crowd in” private investors, albeit with far smaller sums than its US and European counterparts. The idea of “crowding them out” through traditional public investment in what the private sector is unwilling or unable to build is not even on the table.

But is it just a question of scale? If Labour dumped its fiscal rule (requiring government debt to fall as a share of the economy by the fifth year of forecast), could it really ride the industrial policy wave to green growth? There are obviously considerable structural constraints that make a comparison with the US unfavorable: the latter occupies a uniquely powerful position atop the global financial hierarchy,⁷ Besides its overwhelming military, technological, and industrial might (which are, indeed, preconditions for what we’re about to say), the US’s position as the world’s economic hegemon is underwritten by the dollar’s position as by far the world’s leading reserve currency, i.e. the fact that the vast majority of international payments must be made in dollars. This effectively means the US does not need to worry about accumulating reserves of foreign currency (or ‘forex’) in order to secure its imports – whereas everyone else must worry about accumulating dollars, which they do not issue, in order to get anything from abroad. This question of the imperial dollar will be of permanent interest to the magazine. You can hear co-editors John Michael Colón and Steve Mann talking about it with C. Derick Varn on his YouTube talk show The Varn Vlog (“John Michael Colon and Steve Mann of Strange Matters on Forex and the Limits of MMT,” 28 February 2022). But their full investigations are forthcoming in a book manuscript tentatively entitled Forex: A Theory of Money, Power, and Socialism, much of which will be syndicated in Strange Matters when it’s ready. –Eds. has an enormous domestic market and existing dominance in certain key industries. The UK’s pretensions to being a world leader in anything except the overtly harmful finance and defence sectors belie a delusional assessment of British industrial capability and the barriers to entry in markets where big players already dominate: as David Edgerton notes, “there are already world leaders in electric vehicles” and, incidentally, in “floating offshore wind, and hydrogen and nuclear, and none of them are the UK.”⁸ Edgerton identified the forlorn hopes of the UK becoming a green manufacturing powerhouse in the story of Britishvolt, a gigafactory that was supposed to epitomize the country’s plucky entrepreneurialism in the wake of Brexit. The (last) government promised £100 million for equipment, but the company faced financial difficulties before the factory was even bought, ultimately folding in 2023 without creating the 3000 promised jobs or establishing the UK as a hub of battery technology. See David Edgerton, “The woes of startup Britishvolt should shock the UK out of its Brexit self-delusion.” The Guardian, 11 November 2022.

Replicating the US model, then, appears unrealistic. But there are also grounds to doubt the IRA & co. will work even in their own context. Admirers of the US legislation say it will usher in a green transition, bolster economic growth, and restore the industrial working class. These are lofty aims that harbor stubborn contradictions. It’s worth questioning whether the capitalist nation-state can do all, or indeed any, of these things internally, and how its efforts might affect nations elsewhere and the prospects for internationalism.

Bidenomics – An Act to Follow?

After successive attempts at climate policy were thwarted by their own party, the Democrats passed the IRA in 2022 to widespread relief and applause. This was the biggest climate bill in US history; it was also a shrunken and deformed shadow of the $3.5 trillion Build Back Better bill⁹ “Democrats Roll Out $3.5 Trillion to Fulfill Biden’s Broad Agenda”, The New York Times, 23 August 2021. from which it was pruned, let alone the transformative programmes proposed by various Green New Dealers that weren’t even considered for possible legislation. While many in Britain look longingly across the Atlantic at the relative heft of the IRA, it remains a puny response to the enormous costs required to mitigate and adapt to ecological catastrophe. $369 billion has become the more or less official estimate of the IRA’s spending on climate measures over the next decade, although because most of this is through uncapped tax credits, it could rise much higher. Still, this pales in comparison to the defense budget, which is nearly $1 trillion annually.

As Adam Tooze has noted, the IRA was not truncated by lack of political will within the Biden administration or by a sanguine assessment of the climate crisis and capitalism’s ability to resolve it – they clearly wanted to do something about it (while we might reject many of the assumptions on which that something was based).¹⁰ Adam Tooze, “The IRA (& The Fed) Debate – Bringing Hegemony Back In.” Chartbook 221, 17 June 2023.  Rather, it was shaped as it passed through Congress by the relative power of certain political and class interests, notably Joe Manchin and the representatives of fossil capital. Of course, over many decades, and especially by crushing the movement around Bernie Sanders’ campaign, Biden and the Democratic machine bore significant responsibility for the political turbulence and balance of class power they encountered in office. But by 2021, they could not have altered this balance even if they had wanted to.

While acknowledging the remarkable organization among progressives that went into getting climate legislation on the table, we should scrutinize the green accolades of the end result. In terms of greenhouse gas emissions, the Act projects a reduction to 40% of 2005 levels by 2030.¹¹ Environment Protection Agency, “Inflation Reduction Act Overview.” January 2023. This would clearly fail to meet the Paris Agreement commitment to cut emissions by 50%¹² United States NDC, UNFCCC, April 2021. – and it’s a far cry from the 70% cut proposed by Sanders.¹³ The Green New Deal, Bernie Sanders 2020 campaign.  But even the Biden plan’s paltry target is hard to parse with the scale and dimensions of the Act. Ultimately, the IRA has facilitated investment in renewable energy; but crucially, this has represented an addition to fossil fuels rather than a transition away from them.

This follows an established historical pattern: it is unprecedented for the integration of new sources into the global energy system to cause an equivalent decline in existing sources. Globally, more energy is produced by wood-burning today – and significantly more by burning coal – than at almost any other time during the last 200 years; it’s just that those fuels have been supplemented by newer sources to meet the gargantuan increase in demand.¹⁴ Hannah Ritchie, “How have the world’s energy sources changed over the last two centuries?” Our World in Data. December 2021. The US Energy Information Administration predicts that global electricity demand could rise by up to 75% by 2050, meaning emissions will continue to grow despite the expansion of renewable energy.¹⁵ US Energy Information Administration, “EIA projections indicate global energy consumption increases through 2050, outpacing efficiency gains and driving continued emissions growth.” 11 October 2023.  Decarbonization itself – requiring the mass electrification of production, transport, heating, and cooling – has colossal implications for energy demand. At the same time, 760 million people globally remain without access to any electricity at all, presaging the obscene inequality of any energy transition that cleaves to our current trajectory.¹⁶ International Energy Agency, “Access and Affordability.” 9 September 2024.

The IRA makes no attempt to curb America’s insatiable appetite for energy, and the dealmaking involved in passing the bill ensured the continued vitality of the oil and gas industry. For example, new wind and solar installations are contingent on the Department of the Interior offering at least two million acres of public land and 60 million acres of offshore waters annually to fossil fuel projects.¹⁷ Amy Westervelt, “System Reboot.” Orion Magazine. 14 March 2023. The IRA includes massive subsidies for oil and gas companies and is projected to increase oil production by 13% and gas exports by 23% by 2035.¹⁸ C. Rees, “Biden’s Fossil Fuel Fail: How U.S. Oil & Gas Supply Rises under the Inflation Reduction Act.” Oil Change International, 20 November 2023.  Proving critics’ argument that expensive and unscaled technologies like Carbon Capture and Storage (CCS) are greenwashed gifts to fossil fuel interests, the IRA lets companies that capture carbon and then use it to drill more oil claim tax credits of $130 per ton (up from $35 pre-IRA).¹⁹ Kate Aronoff, “Why is the Fossil Fuel Industry Praising the Inflation Reduction Act?” The New Republic, March 2023.  The American Petroleum Institute even swore to defend the IRA against Trump, due to its lucrative subsidies for CCS and hydrogen, another purported “solution” preferred by the fossil fuel industry.

For the past six years, the US has produced more crude oil than any other country, ever.²⁰ Energy Information Administration, “United States produces more crude oil than any other state, ever.” March 2024.  The fracking boom has ensured a steady flow of cheap natural gas and has been a factor in protecting the US from the very high inflation rates the recent energy crisis (driven by the oil and gas geopolitics of the Russo-Ukrainian War) unleashed in Europe. Meanwhile, the high electricity demand of new data centers, manufacturing and, ironically, of electric vehicles (EVs), has driven an explosion of gas-fired power plants. The lifetime of each plant is about 40 years, making a mockery of Biden’s goal to decarbonize electricity generation by 2035. As Bloomberg has reported, many energy companies are quietly revising down their decarbonization goals to accommodate rising demand.²¹ Josh Saul, Naureen S. Malik and Mark Chediak, “AI Boom is Driving a Surprise Resurgence of US Gas-Fired Power.” Bloomberg, 16 September 2024.  All this despite the overwhelming consensus that no new fossil fuel developments are compatible with the Paris Agreement’s target of 1.5 degrees of warming, a limit that we are hurtling past. This facet of industrial policy is not just a sop to oil and gas interests – although that is certainly part of it – but a conscious strategic re-entrenchment of fossil fuels as engines of national competitiveness and guarantors of energy security, even as the state also wields industrial policy to pursue low-carbon markets.²² Jamie Merchant, “The Economic Consequences of Neo-Keynesianism.” The Brooklyn Rail, July 2023.

While the IRA prolongs the life of fossil capital, the hue of its low-carbon investments should itself be questioned. The Act has reportedly fostered 646 new “clean energy” projects in its first two years, over half of which are in battery and EV manufacture.²³ Climate Power, “Two Years of the Biden-Harris Clean Energy Boom.” 9 August 2024. Plans for mass electrification without reducing consumption have driven insatiable demand for rare earth metals like lithium, cobalt, and nickel.²⁴” See the Climate and Community Institute’s work on the cost of green extractivism and the case for mass transit rather than a transition based on EVs. Thea Riofrancos et al, “Achieving Zero Emissions with More Mobility and Less Mining”. January 2023. Mining is itself energy- and water-intensive and tends to be concentrated in the Global South, where the expropriation and exploitation of land and labor for sought-after minerals constitutes a new frontier of what David Harvey has called accumulation by dispossession. This dynamic has led both to protests by Indigenous groups whose lands and livelihoods are affected, and a countervailing resource nationalism from governments desperate to leverage their mineral base for a more secure place in the global hierarchy.²⁵ Thea Riofrancos, Resource Radicals: From Petro-Nationalism to Post-Extractivism in Ecuador. Duke University Press (2020.) Exemplifying the perverse fall-out of the “green” energy drive, some Pacific Island states, among the most vulnerable to climate and ecological breakdown, are now supporting extremely harmful deep-sea mining in the hopes of claiming a short-lived (and presumably vanishingly small) piece of the pie.

Beyond batteries, the replacement of internal combustion engines by individual EVs means more steel, aluminium, glass, and rubber. Auto producers have shown no sign of deviating from what we could call the long-term tendency of the size of cars to grow. And while the production process itself is environmentally costly, EVs are far from guaranteed to stop emissions once on the road: they need to be charged, after all, meaning that so long as a country’s electricity is generated significantly by fossil fuels, as in the US, EVs will continue to contribute carbon to the atmosphere throughout their life cycle. In Germany, where coal remains a key source of electricity generation, it’s estimated that EVs are only 20% less carbon-intensive than their petrol counterparts.²⁶A. Katharina Keil and Julia K. Steinberger, “Cars, capitalism and ecological crises: understanding systemic barriers to a sustainability transition in the German car industry.” New Political Economy 29:1, (2023) pp.90-110.

Just as support for EV manufacture hopes to prolong the automotive sector, in other areas the IRA also embodies the logic of continued mass consumption rather than acknowledging the need to rethink what and how much material and energy is needed for human wellbeing.²⁷ In other words, something like a degrowth perspective – for an excellent introduction to which, see Matthias Schmelzer, Aaron Vansintjan & Andrea Vetter, “The Ideology of Growth and its Origins” (4 May 2023) in the online section of the magazine. Note, however, that there are a number of competing economic perspectives among socialists surrounding the economics of the green transition, of which degrowth is one of the most influential at the moment. –Eds. One of the more flagrant examples here is the plan to decarbonize aviation through the oxymoron of “sustainable aviation fuels.” These are the aviation industry’s favored route to achieving “net zero” emissions while inexorably increasing the number of flights. Under industry pressure, the IRA grants tax credits for biofuels, most often produced from corn ethanol. This is despite evidence that such fuels are highly inefficient and actually increase net emissions by driving deforestation, as well as diverting land needed for food production in an era of growing food insecurity.²⁸ World Resources Institute, “Under New Guidance, “Sustainable” Aviation Fuel in the US Could Be Anything But.” 9 May 2024. 

The compromise embodied in the IRA involves the state “derisking” investments for private finance, guaranteeing returns through generous tax breaks, subsidies, and public-private partnerships – or, as economist Daniela Gabor puts it less euphemistically, a bribe.²⁹ Interview with Ted Fertik, Daniela Gabor, and Tim Sahay, “Defining Bidenomics.” Phenomenal World, September 2023.  This gives capital a say not just in determining which investable activities will make up the green transition – hence EVs over mass transit – but also how these will unfold.

There is nothing in Bidenomics to ensure a just transition for the workers most affected by industrial restructuring, or to protect consumers from the vicissitudes of privately owned energy infrastructure. In fact, as financiers strive to extract every last drop of profit from state-subsidized projects, the result is likely to be expensive and unfairly distributed, with asset managers as some of the largest beneficiaries. This in turn could undermine the popular support sorely needed for climate policy and fuel a backlash that is already infusing far-right and authoritarian politics throughout much of the world.³⁰ Daniela Gabor, “Labour is putting its plans for Britain in the hands of private finance. It could end badly.” The Guardian, 2 July 2024.   Furthermore, the dearth of investment in the basic services that would improve people’s lives, as well as the actually existing effects of spiralling climate breakdown, is glaring. While $18 billion can be found to support Israel’s genocidal regime,³¹ For an authoritative critique of the long history of Israel’s genocidal ambitions against Palestinians, see Mason Herson-Hord, “The Second Nakba and the Road to Genocide” (17 November 2023) in the online section of the magazine. –Eds. the disaster response budget is perilously underfunded – a dissonance baldly on display as large parts of the southeast were battered by two successive hurricanes in October 2024.

The Prospects for Growth Amid Economic Stagnation

For the Biden administration, as well as its critics on the Left, the greenness of any growth appears subordinate to the imperative of growth itself.

Bidenomics is a self-conscious attempt to restore the industry-based growth and associated jobs that typified post-war US development. But it’s not clear that such a recipe can address the structural malaise of late capitalism. Since the 1970s, economic growth and investment in the Global North have followed a downward, if uneven, trajectory, with sporadic bursts of fossil-fuelled, credit-based, and often jobless growth. The global recovery from the 2008 financial crisis and the COVID-19 pandemic – itself the product of a major ecological rift – has been sluggish, with GDP growth of 1.7% in the OECD in 2023 and 3.1% globally – the latter being skewed upwards by disproportionately higher rates in India and China, which are themselves, nonetheless, tailing off. This is without even considering the effects on growth of climate change itself, which a recent study in Nature found has already baked in at least a 19% reduction in global income over the next 26 years.³² Maximilian Kotz, Anders Levermann and Leonie Wenz, “The economic commitment of climate change.” Nature 628 (2024) pp.551-557.

The periodization and causes of global deceleration are subject to lively debate among Marxists, notably around Robert Brenner’s “long downturn” thesis and his more recent collaboration with Dylan Riley on the “Seven Theses on American Capitalism” in the New Left Review.³³Lola Seaton brilliantly synthesizes this debate and its political implications in “Reflections on ‘Political Capitalism,’ ” New Left Review 142 (July/August 2023.) Brenner’s original account attributed global stagnation from the 1970s to increased competition, which generated overcapacity, driving down prices, profits, and ultimately undermining productive investment. Brenner’s is not the theoretical claim of the inherent tendency of the rate of profit to fall as capitalism develops,³⁴ That has been used generatively to assess the prospects of “decarbonizing the downturn” by Jack Copley in “Decarbonizing the downturn: Addressing climate change in an age of stagnation.” Competition & Change, 27(3-4), (2023) pp. 429-448. and, Jack Copley, Ilias Alami and Alexis Moraitis, “The “wicked trinity” of late capitalism: Governing in an era of stagnation, surplus humanity, and environmental breakdown.” Geoforum 153 (2024.) but rather a historical argument that the sunk costs involved in manufacturing put economies on particular paths that are then difficult to deviate from: the significant capital investment required to build and equip a factory, as well as the skills, relationships, and networks involved, mean firms are reluctant to abandon this line of production. Instead, as new competitors enter the market, the incumbents accept lower profits, further disincentivizing new investment. This presents a formidable obstacle to green industrial policy: firms must be forced to abandon carbon-intensive production, and the sunk costs entailed, in favor of expensive low-carbon alternatives which are themselves subject to the same dynamics of increased competition and falling profitability.

The IRA barely attempts to achieve the first half of this equation, and it can only do the second at great expense and with a protectionist cocktail of tariffs and domestic subsidies. While rhetorically declaring a “race to the top”, the Biden administration deliberately aims to prevent others from developing advanced manufacturing capabilities and accessing particular markets. Growth is a definitionally national affair: fiscal stimulus can provide a boost to domestic economies, but this is done principally by eating into other countries’ market share. This was the case in the US recovery of the 1980s and early 1990s, at Japan and Germany’s expense, which was nonetheless unable to restore previous rates of growth. As Jamie Merchant has pointed out, the IRA’s neo-mercantilism has already inspired retaliatory protectionism among its rivals and allies alike, resulting in a “fragmented, state-capitalist hellscape.”³⁵ Merchant, “The Economic Consequences of Neo-Keynesianism” in the Brooklyn Rail (July/August 2023)

Economic nationalism is the real animus of the IRA, and, to an even greater extent, the CHIPS Act. The ground for the “techno-security manufacturing program” had, in fact, already been laid in the waning months of the previous Trump administration, as corporate lobbyists rallied to shape the increasing appetite for government spending.³⁶ Andrew Yamakawa Elrod, “What Was Bidenomics?” Phenomenal World. 26 September 2024. Shorn of most of the social infrastructure spending and tax increases that the social-democratic Left had pushed for, Bidenomics is firmly ensconced in a national security framework, with China at its core. The emergence of Jake Sullivan, Biden’s powerful National Security Adviser, as a key director of and spokesperson for the US economy represents this fusion of industrial and geopolitical strategy. Leaders elsewhere took note, with the European Commission’s Ursula von der Leyen lauding the EU’s “strategy on economic security” and Rachel Reeves suddenly framing Labour’s approach as “securonomics”. 

As others have noted, the most efficient route to decarbonization – though politically and socially unpalatable – would be through massive imports of Chinese low-carbon technology.³⁷ Alyssa Battistoni and Geoff Mann, “Climate Bidenomics.” New Left Review 143. (September/October 2023).  Instead, the US hopes to reshore manufacturing with a combination of enticements to private capital and tariffs on imports, both explicitly aimed at undercutting China’s impressive rise. Given China’s imbrication with the US economy and its established primacy in crucial low-carbon technologies and inputs – it produces 60%  of rare earth metals and 80% of solar PV units – it’s unlikely that US salvos will erode Chinese dominance in these markets; but such protectionism undoubtedly inflames tensions in an era of revanchist nationalism. The biggest losers will be low-income countries, excluded from high-value markets by the new tariffs of the Global North, confined to their traditional role as reservoirs of cheap resources and labor, and hampered in their own energy transition by their subordination in the global financial hierarchy.³⁸ Merchant, “The Economic Consequences of Neo-Keynesianism.” ³⁹ For a highly illustrative case study of the Global South’s precarious position in the era of the green transition, see Andrew Mambondiyani’s international reporting on Mozambique for the magazine’s online section in “Between Flood and Famine” (8 October 2024). –Eds. But it is also delusional to imagine that relatively wealthy states like the UK can follow the US model from their position of comparative impotence. 

This does not bode well for international cooperation on climate mitigation; but it also undermines the prospects of a green transition within nation-states, which are not obviously compatible with the pursuit of growth. As the newly mobilized state goes to ever greater lengths to guarantee profits, the more expendable of its declared aims, such as decarbonization or unionized jobs, risk being eclipsed. As we have seen, this is already evident in the kind of energy and resource-intensive activities that ostensibly green industrial policy supports: CCS to facilitate “enhanced oil recovery”; EVs to prop up an ailing car industry; nuclear energy, eye-wateringly expensive and deeply enmeshed with the military industry.⁴⁰ The civil use of nuclear energy emerged from nuclear weapons programmes and the industries remain enmeshed, although governments tend to obscure this link and military production is shrouded in secrecy. The process of enriching uranium is used to produce both nuclear energy and weapons and the waste product plutonium is also still used by some countries in weapons. The UK’s first nuclear power stations were built to produce weapons-grade plutonium, principally at Sellafield, the site of the world’s largest stockpile of plutonium, which has a half-life of 24,000 years and for which there is no long-term disposal plan. Given the interdependence of civil and military nuclear industries (through common funding, skills, technology, and supply chains), the geopolitical pressure to maintain nuclear capabilities, and the general hardening of national security positions, it seems clear that expansion of nuclear power is likely to increase the risk of nuclear weapons proliferation. For more on the links between military and civil nuclear power, focusing on the UK, see Andy Stirling and Phil Johnstone, “Irreversible Disarmament: Illuminating the ‘UK Nuclear Complex’.” University of York. March 2024. In fact, arms production – itself a massive driver of ecological as well as human devastation – remains one of the most vibrant sectors of many advanced economies, notably the US and the UK, and will only thrive more on the shifting terrain of heightened economic nationalism.⁴¹ The US military is the world’s single largest producer of GHG emissions, with a larger carbon footprint than whole industrialised countries like Portugal and Denmark. Globally, the military sector contributes at least 5.5% of CO2 emissions, although these are excluded from international climate frameworks such as the Paris Agreement. A just ecological transition would necessarily extend to retraining workers in the military industry as well as reparative solutions to communities devastated by military expansion.

But even within objectively (if imperfectly) green sectors, such as solar PV, the cycle of overcapacity, falling profits, and under-investment is already underway, and globally developers have struggled to maintain profitability absent the state subsidies of the 2010s.⁴² See Alami et al for a Simon Clarke-inspired analysis of the “contradictions of the solar miracle” and the importance of the Big Green State. Renewable electricity generation faces an additional contradiction due to the highly competitive and diffuse nature of renewables markets when compared to the monopolies in oil and gas. The advent of cheap wind and solar has not delivered the price-regulated transition away from fossil fuels long promised by neoliberal logic; instead, falling prices have stifled profits and deterred investment. This dynamic exposes the acute unsuitability of electricity for commodification and bolsters the case for public ownership of this sector, excising the need to subordinate public good to private profit.⁴³ Brett Christophers, The Price is Wrong: why capitalism won’t save the planet (2024.) Verso.

The challenge of decarbonizing steel offers another instructive example: on a global scale, the sector is characterized by overcapacity, with production exceeding demand by 500 million tons in 2023. Steel is generally produced in blast-iron furnaces using coking coal, making it a highly carbon-intensive sector responsible for about 7% of global emissions. Past technological innovations increased the rate of productivity, but these were often adopted gradually, due to high costs, meagre profit margins, and the longevity of existing plants. It was often simply not worth making the investment, given the low returns. Decarbonizing the sector globally would cost an estimated $1.4 trillion, without necessarily increasing productivity – so states hoping to both maintain and green their domestic steel industry must make extraordinary interventions to protect profits. It’s not yet clear whether governments are willing or able to do this, and at what political cost. The early impact of the IRA suggests that the barriers to decarbonization in this sector as elsewhere remain daunting: despite federal support available for low-carbon technology, Nippon Steel, which hopes to buy US Steel, has announced it would spend $300 million on rehabilitating an old coal-fired blast furnace in Gary, Indiana, rather than replacing it with a greener alternative. 

As Jack Copley has observed, decarbonizing while keeping profit intact would involve shutting down old plants to deal with excess capacity and result in painful global restructuring. This is, in fact, a feature of the steel industry even without the green imperative. High costs and broader deindustrialization have already seen significant steel production relocate from the Global North. Outside of the US, low-productivity economies like the UK’s have been particularly exposed: the recent decision to close the blast furnaces at Port Talbot steelworks in Wales was principally motivated by the relative un-competitiveness of British steel. The plant’s owner Tata Steel had been hemorrhaging money and had threatened to close UK operations completely; the government committed £500 million to replace the blast furnaces with a cheaper, greener, and less labor-intensive electric arc furnace; but this new process can only produce lower-grade steel from recycled scrap. This maintains a vestige of the industry but falls far short of the intervention required for a workable transition to low-carbon steel, all while cutting 2,800 jobs and undermining public support for climate policy. Meanwhile, as the steel unions pointed out, Tata is also building one of the world’s largest blast furnaces at Kalinganagar, India. Once the UK stops producing virgin steel, it will import it from emissions-intensive sites like Kalinganagar, which have caused monumental ecological damage and displacement. 

The Role of Labour – Defending Jobs and Growth?

British unions are understandably dismayed by the government’s failure to protect jobs in their negotiations with Tata Steel and point to the more muscular US policy as a model. But the early impact of US protectionism is not spectacular. 

Estimates of new clean energy jobs range up to 330,000 – but these are largely projected from announced investments, and even if they all materialize, a significant proportion will only last as long as it takes to build facilities.⁴⁴ Climate Power proclaims that 334,565 clean energy jobs have been created since 2022 but this is extrapolated from projects that have “been announced or moved forward with”, and a third of these are restricted to the construction period. “Two Years of the Biden-Harris Clean Energy Boom.” August 2024. Overall, US manufacturing is steadily contracting and the new investments – especially in semiconductor production – are much more capital- than labor-intensive.⁴⁵ That is, they produce workplaces whose production processes depend far more on machines than on human labor – which is measurable whenever firms spend far more of their financial resources on acquiring and maintaining machines than on wages. –Eds. As Jake Werner has noted, American workers feature in the rhetoric on trade and technology, but “the substance of the policy is focused on the profitability of domestic manufacturers, their access to critical raw materials, and defending the U.S. stranglehold on advanced technologies.”⁴⁶ Jake Werner, “A Program for Progressive China Policy.” Quincy Institute for Responsible Statecraft. July 2024.

While the IRA offers some financial incentives related to labor standards, there is no guarantee that any new jobs will be good jobs. Most are concentrated in Right-to-Work states⁴⁷ The decision to site most of the planned factories in Republican states was a strategic misstep that has not generated the hoped-for swing towards Democrats: the beneficiaries are likely to be incumbent Republican governors.  with considerable barriers to union organizing. While the United Auto Workers union’s (UAW) herculean effort to organise Volkswagen autoworkers in Tennessee demonstrated that these barriers could be breached, its subsequent defeat at Mercedes in Alabama in May 2024 proved the enduring hostility and political power of anti-union interests in the South. Organizing in the new advanced manufacturing factories may encounter more diverse obstacles, with companies planning to recoup on enormous capital outlays. In Arizona, where Taiwan Semiconductor Manufacturing Corporation’s project represents the state’s largest-ever direct investment and the flagship of the CHIPS Act, half of the construction workers have been brought over from Taiwan. 

Carbon-intensive workers are recruited into the zero-sum game predicated by economic nationalism: their militancy is confined to protesting the offshoring of industrial jobs – as at Port Talbot – or, at best, claiming a stake in the onshoring of new low-carbon industry, as the UAW has done so impressively in US EV production. The UAW’s victory at the “big three” automakers includes historic wage increases for workers at General Motors, Stellantis, and Ford, as well as investment in EV manufacturing across sites. 

This has rightly been welcomed as an important step towards shaping, rather than opposing, a transition. But it is not yet the ecologically radical labor politics that the climate crisis demands. Essentially, it recreates the compromise with capital through which workers, at the peak of their strength in the postwar period, were able to extract a greater share of the value they produced. It is not clear how long this arrangement will last if, as suggested above, the new industrial policy does not create the runaway growth that sustained full employment and high wages in the past. More likely, firms will continue to slough off labor to raise productivity rates and to protect profits by depressing wages.

Defensive campaigns – though understandable – are therefore unlikely to work, except in very contingent scenarios, and, moreover, undermine the kind of international solidarity that could potentially take on the multifarious crises of late capitalism. The main industrial unions in the Global North have long been inculcated into the project of national growth, and international solidarity tends to be expressed rhetorically rather than through leveraging industrial power (with notable exceptions). The AFL-CIO  applauded Biden for “standing up for American workers” by placing extraordinary tariffs to counteract China’s “unfair trade practices” – the very same trade practices of industrial planning and heavy state subsidies that characterize the IRA and CHIPS Act. Lining up to support an agenda overtly aimed at kneecapping development elsewhere, and claiming every loss as a theft of jobs by foreign companies, will only kindle the flames of the exclusionary nationalism already ripping its way across the world. 

The contradictory demands of green industrial overhaul, pallid growth, and unions’ primordial resistance to labor restructuring makes it difficult to resist the pull of economic nationalism. This connection between industrial policy and nationalist (or even reactionary) politics has a long pedigree going back to the nineteenth century. And indeed, Adam Tooze went as far as to say that  the defining industrial policy of the past fifty years came not from Biden’s tinkering but from Trump’s aggressive vaccine push: “if any industrial policy can claim to have helped revive the economy and improve ordinary life for the average American, it is Operation Warp Speed not the CHIPS Act or the IRA.”⁴⁸ See Adam Tooze, “Great Power Politics” in London Review of Books Vol. 46, No. 21 (7 November 2024). Though the extent to which Operation Warp Speed was benign can certainly be questioned: one major effect of the Global North’s vaccine project was to massively enrich Big Pharma while denying vaccines to the Global South. As we move into a second Trump administration, it’s worth considering how the same impetus can serve a panoply of militarist, chauvinist, and imperialist goals, undergirded by fossil capital and palpably incompatible with an ecological transition.

The path out of this dilemma is not clear, but it seems obvious that the key wrecker is the profit imperative. As Lola Seaton notes, this is also possibly an exploitable crack in the revivified alliance of state and capital: as profits are increasingly ensured by public subsidy, rather than private accumulation, the tenuous link between profitable firms and general welfare is severed, potentially forcing a crisis of legitimacy for capitalist elites and making room for more democratic demands on the state.⁴⁹ Seaton, “Reflections on ‘Political Capitalism.’” The question is what shape the class struggle needed to force this pressure might take.

Some insist on the traditional Marxian subject – the industrial worker – as the key agent in this struggle: through radicalized and re-energized unions, workers would leverage their position at the point of production to cast off capital’s chains and force a transition in the interests of proletariat and planet.⁵⁰ Matt Huber, Climate Change as Class War (2022.) Verso. Certainly, the democratization and reinvigoration of the traditional unions is long overdue. While the renewed militancy of the UAW in particular is encouraging in this respect (itself stimulated in large part by the influx of 100,000 graduate students), the main industrial unions do not appear poised to break their compromise with capital and eschew the profit motive.

To do this, they would have to move far beyond the beleaguered jobs-and-growth paradigm. Shedding this stricture might enable them to think ahead, to what work might look like in an overheated world; to envisage their own role in reorganizing production around low-impact and reparative activities; to expand their remit beyond the immediate interests of specific members to consider the wider working class, whose wellbeing is inarguably tethered to the health of the planet as a whole; to transcend the divisions that capitalism so expertly sows among workers and develop a practical solidarity across national and sectoral borders. 

Such a project would require a green industrial policy of its own – and given the critiques outlined above, it would look nothing like Bidenomics. It would, instead, entail a genuinely just transition for the workers and communities affected – both those whose jobs depend on burning fossil energy and those whose lands and livelihoods have been devastated by that roaring conflagration. There is no shortage of material to furnish our vision of the end result: public investment in low-carbon and labor-intensive social infrastructure; mass transit and active travel; shorter working hours; subsidized energy efficiency measures; public luxury; restored nature; technology transfer; debt forgiveness. This vision may be contested, but it does not stretch the bounds of the imagination; the subjects and strategy of such a project, however, remain elusive. Configuring a genuinely ecosocialist political coalition is our most urgent challenge, against which are arrayed a formidable constellation of forces. A habitable future looks increasingly implausible – but, as Mike Davis warned,⁵¹ Mike Davis, “Who Will Build the Ark.” New Left Review 61 (Jan/Feb 2010.) “either we fight for ‘impossible’ solutions…or [we] become ourselves complicit in a de facto triage of humanity.” ~