Capitalism’s Crises. Alfredo Saad-Filho
placing low-lying areas and islands in jeopardy. It is expected that as ocean warming increases, circulation patterns will be affected, aggravating climatic shifts. Moreover, the knock-on effects of climate change are beginning to be expressed in extreme weather activity. As the planetary environment changes, more extreme weather events have been recorded, such as heatwaves, droughts, floods and cyclones.8 These are becoming increasingly intense and reveal the extreme vulnerability of ecosystems, and many human systems, to climate variability. The poor and working class are likely to be worst affected by the climate crisis and will bear the brunt of capitalism’s logic towards species extinction.
Linked to the climate crisis is the historical tendency towards peak oil, which further reveals the destructive logic at the heart of capitalism today.
Peak oil
In the Industrial Revolution, coal became crucial for driving industrialisation by means of steam power. However, by the middle of the nineteenth century, oil had become increasingly important to meet energy needs, particularly to drive the combustion engine. More importantly, oil became a strategic resource for capital accumulation and this necessitated its extraction and geopolitical control to secure supply to Western industrial economies during colonial imperialism. After World War II, during the Pax Americana, the US became central in organising the geopolitics of oil to advance its interests in line with the reproduction of the global capitalist system. With the rise of national independence movements in the Middle East, and the US drive to open markets through decolonisation, the US played a crucial role in the emergence of the Middle Eastern oil-producing sovereign states and ensured its supply through an Anglo-American axis (Van der Pijl 2006).
By the 1970s global oil supply was threatened with the formation of the Organization of Petroleum Exporting Countries (OPEC). Oil-price shocks reverberated through the international economy. The US in this context also had to contend with the economic rise of Europe and Japan since World War II, and this led to the tighter incorporation of these countries into a US-led bloc, including numerous oil-producing states as clients. Countries such as Saudi Arabia and, initially, Iran, were crucial clients for US geo-strategic control of global oil supplies during this period.
By the 1970s the US also faced peak oil in terms of its own domestic production. The notion of peak oil had been advocated by geologist M King Hubbert decades before to determine the output of an oil well (Greer 2008). The bell-shaped Hubbert Curve is one of the basic tools of petroleum geology. Ahmed (2010: 64) sets out Hubbert’s basic principles as follows:
Firstly, production begins at zero. Secondly, production increases until it reaches a peak which cannot be surpassed. This peak tends to occur at or around the point when fifty per cent of total petroleum reserves are depleted. Thirdly, subsequent to this peak, production declines at an increasing rate, until finally the resource is completely exhausted.
The peak-oil model applies to oil wells, oil-producing regions, national output and even global supply. With global capitalism addicted to oil, the rapid depletion of oil reserves and resources poses a major systemic limit on global accumulation. It also causes cost pressures as supply dwindles, which further constrains growth and accumulation.
According to studies conducted by oil corporations, global oil production peaked in the early 2000s, with some reports suggesting as early as 2000 or as late as 2005 (Ahmed 2010). Moreover, the International Energy Agency (IEA 2007) conducted a systematic analysis of the world’s leading oil reservoirs in 2007 that contained proven or probable reserves in excess of 500 million barrels. According to Klare (2012), this study affirmed two crucial findings. First, production is declining more than suspected and, secondly, the rate of decline is increasing each year. So, all of the major oil wells that have driven industrialisation and accumulation over the past few decades have now peaked and are rapidly depleting.
This crisis-inducing tendency has two major implications for global accumulation. First, buoyant demand from countries such as China and India has led to a scramble for the last remaining oil resources on the planet, which, in turn, has sparked a shallow resource boom (Klare 2012). At the vanguard of new frontiers of extractivism, oil, coal and gas companies are extracting hydrocarbons from tar sands, shale gas and oil, and from deep-water drilling – all referred to as unconventional hydrocarbons (Yergin 2012). In the US alone there are 800 000 oil and gas fracking wells, with a target of 1 million to be achieved by the end of 2015. Unconventional hydrocarbons are expensive, their extraction has serious environmental impacts, they are increasingly implicated in geopolitical conflicts and are difficult to source. Currently, with overproduction of oil due to fracking in the US, and Saudi Arabia’s continued output and reluctance to push up the price of oil, global oil prices are declining. However, this is not sustainable given supply constraints in the medium to long term. Petro-state economies are not only hit badly by declining oil prices in the short term, but the shallow resource boom also means that oil-price volatility is likely to continue, with ramifications through the global economy in the medium to long term. In the end, peak oil and the fact that oil is a finite resource will also limit the future of unconventional hydrocarbons.
The second implication of the hydrocarbons boom is its undermining of efforts to mitigate climate change. The interests at stake are powerful – not only the interests of the top oil-producing countries (such as the US, ranked third by the IEA), but also those of some of the most powerful corporations in the world. These include the world’s most valuable company, unlisted state-owned oil producer Saudi Aramco, with annual revenue of at least US$150 billion; the world’s top-10 oil companies, ranked by their reserves of oil and gas, which are all state-run corporations; and, ranked by revenue, five of the world’s top-six listed companies, which are oil majors – Royal Dutch Shell, ExxonMobil, BP, Sinopec and PetroChina (Hiscock 2012).
To ensure we mitigate the effects of climate change, such as slowing down the rate of the Antarctic’s destruction, reducing the rate at which sea levels are rising and generally lowering greenhouse-gas emission levels to prevent runaway global warming, current fossil-fuel extraction and usage has to be abandoned. Yet this solution is not on the agenda (Klein 2014). In short, the close relationship between the oil-peak-driven resource boom and the climate crisis vividly demonstrates the logic of ecocide at work within contemporary capitalism.
Food-system crisis
In the first half of the twentieth century, the US agricultural system underwent a dramatic shift with the adoption of Fordist mass production and consumption systems. This increasingly tended to remake the international division of labour and food systems inherited from colonialism in the peripheries of capitalism (McMichael and Raynolds 1994). After World War II, monoculture production and fossil-fuel-driven, chemical-based, mass-scale agriculture became the norm in the US. This system also became part of the country’s international response to the cold war, the end of British hegemony and the need to reconstruct Europe through the Marshall Plan (Friedmann 2004). This model was therefore exported to various parts of the world as part of the Pax Americana, and had implications for family farms in Europe and peasant agriculture in Latin America and Asia as the Green Revolution, as it was known, was rolled out. This process has continued with neoliberal globalisation over the past three decades, through structural-adjustment programmes, through pressure brought to bear by the World Trade Organization to liberalise agriculture and promote the patenting