Pipeline Capitalism

I know very little about the proposed Keystone Pipeline project, and perhaps even less about political economy. But of course this does not prevent me from commenting on it as I do understand it. It seems to me a perfect illustration my understanding of the operation of capitalism.

First, as I think I understand things, there are basically only two ways to generate profit (capital in the form of money): the exploitation of labor (human behavior) and the exploitation of land (the environment).

As far as the pipeline itself goes, there are huge corporations who, having discovered resources in Alberta than can be exploited, wish to build a gigantic pipeline to bring those resources eventually all the way from Alberta, through Montana, Nebraska, and other states, to ports in the Southern United States, where they can be sold to consumers both in the United States and Overseas. If this gigantic project is approved, Corporations that deal primarily in oil will get bids from various contractors to build this pipeline. They, in turn, will hire laborers of various kinds to perform the actual work (labor), careful to hire the least amount of labor necessary and pay the least amount they can in order to assure their profits, thus exploiting labor to increase their profits (capital in the form of money). When the pipeline is completed most of this labor will be dismissed as no longer necessary and a relatively small number of workers will be required to maintain and repair the line.

Similarly, the project depends upon using methods and techniques that must, in the nature of the case, be environmentally destructive, at least in two different ways: the “fracking” (or other methods) involved in actually procuring the commodity, and the inevitable damage resulting from the building of the pipeline itself over environmentally sensitive areas. Thus the earth and its resources will be permanently damaged by the pursuit of this particular commodity (oil). This can be, and no doubt will be, described and promoted as providing a commodity the public both needs and wants. But in fact the primary motivation will be to convert land and labor into profit (capital) for the corporations involved by providing a product to a public too stupid to realize they will have lost forever some of the resources of the earth and wasted much of the labor of our citizens. That is, rather than convert to a system of renewable resources that does not involve such irreparable destruction, and attempting to provide more permanent and favorable positions for labor, we will continue along the same disastrous course of waste and destruction we always have, unable to break our addiction to oil, a dirty and not renewable resource.

Now, speaking more abstractly, and following the insights of Karl Marx, probably our most brilliant and insightful political and economic philosopher, “capital” most fundamentally represents dead labor. That is to say, one of the main ways to make a profit (in the form of money capital) is by the exploitation of labor, and once that labor has been expended and used, it is, for all intents and purposes, used, finished, dead. I don’t know if Marx said the same thing about land or not, but the same thing is true of the exploitation of land, once the land and its various resources are used and converted into profit, that land is essentially dead, at least in respect to that particular resource. And so, upon the completion of a project like this proposed pipeline, profit has been achieved by the exploitation of labor and land, now both dead. Capitalism has now achieved another “success” at the cost of both labor and land (environment).

But wait, don’t turn that dial, there is more. Not content to sit idly on the capital they have acquired through dead labor and land, that very same capital will be turned over to what might well be called “Priests of Finance” who know how to manipulate it in ways that will produce even more capital. Thus using dead labor and land, it is possible to acquire more capital (also originally produced by dead labor and land), by the simple fact of moving it around in ways that produce absolutely nothing but more profit for those who manipulate it. This is, I suppose the veritable apex of exploitation, that no doubt explains why these “Priests,” with the help of suitably bribed Congresspersons, can themselves acquire more capital in a single season than anyone else in a lifetime, and without actually having engaged in what might rightly be described as “productive work.” Similarly, those who possess capital can increase it by essentially doing nothing but investing it and sitting back to clip coupons and bank dividends. Thus we have developed over time a political/economic system that makes Alice in Wonderland look reasonably sane by comparison.

Marx was, I believe, a genius, but even he was not infallible. He failed to realize that Communism was doomed to fail because it was incompatible with human nature, but he did apparently realize that Capitalism, without adequate regulations and restrictions, would eventually fail for precisely the opposite reason. Unregulated capitalism is nothing more than a license for greed, and that seems to have emerged as our most important product.

It is probably true that business corrupts everything it touches. It corrupts politics, sports, literature, art, labor unions and so on. but business also corrupts and undermines monolithic totalitarianism. Capitalism is at its liberating best in a noncapitalist environment.

Eric Hoffer