Climate Crisis, Southern Opportunity
How the end of Cheap Nature is de-stratifying the world(-system)
I don’t want to justify myself every time I write a Substack post — last time, it made sense since I had debuted this blog and then neglected it for months. And it’s also true that I surprise myself every time I decide to return to this platform. I’m in two minds about why that is — it could be narcissism (feeling like I’m above this) or it could be insecurity (about my thoughts making sense). As with so many things in my life my output is probably affected by both to some extent. But I’m a man of many contradictions, and another one is that I’m both chronically restless and cope with downtime very poorly but also have a pretty restricted range of things I enjoy doing. I guess what I’m really trying to get at is that there’s currently no plan or schedule behind when this blog gets updated. The time between entries could be a day, or it could be a year. But in those interstices between keeping up with schoolwork and struggling to keep up with other parts of life, I’ll try to siphon some of the noise inside my head into entries here. You are in luck though, reader — since if last time I really was just writing down my thoughts on something to kill time, today is one of those times I have something that I need to share because I’ve been thinking so obsessively about it.
Since being back in school I’ve had the privilege of working with the great Jason W. Moore, and today I want to connect some of his big ideas to this blog’s (loose) focus on the geopolitics of world-systemic transition. Moore has a lot of opinions on granular theoretical and political questions, many of which I agree with and some which I don’t. But his big-picture project is an absolutely fascinating synthesis of world-systems analysis with environmental history that Moore calls world-ecology. Ecological issues are simply impossible to ignore in the present conjuncture of converging climate, biodiversity, and various other crises. And world-systems analysis and anti-imperialist Marxism certainly haven’t ignored them. Imperialism and the North-South divide are themselves environmental problems, given the hugely disproportionate responsibility of the wealthy countries for carbon emissions and resource depletion. Any understanding the international division of labor provides a powerful rebuttal to fallacious notions that Northern economies have managed to “decouple” growth and consumption from ecologically destructive activities. Green imperialist narratives that countries in the South where carbon-intensive production takes place are responsible for the resulting emissions also fall apart once the ultimate beneficiary is identified. We also have no shortage of great analyses of the centrality of oil to America’s empire, and so on.
But all of this only paints a very broad picture, offering a climate and ecology addendum to the political economy of imperialism rather than a real synthesis. That is, we can see that the system is at odds with biophysical realities but without completing the dialectic of what environmental crisis means for the system. For instance, if it’s true that the world’s continued reliance on oil primarily benefits the Global North why is the most militant ongoing challenge to its power coming from a petrostate — that is, Russia? Why have socialist, anti-imperialist governments in Latin America and Africa enthusiastically embraced resource extraction to fund social gains? Offering (part of) an answer to these questions requires first clarifying a world-ecological starting-point.
Moore’s world-ecology argument, in brief, is that capitalism is not so much destructive of nature as it is a specific way of organizing nature. That is, since humans are an environment-making species an abstract “nature” independent of us does not exist. Rather:
“Everything that humans make is coproduced with the rest of nature: food, clothing, homes and workplaces, roads and railways and airports, even phones and apps. It's relatively easy to understand how something like farming mixes the work of humans and soils, and also mixes all sorts of physical processes with human knowledge. When the processes are larger in scale, it becomes easier to think about ‘social’ and ‘natural’ processes as if they were independent of each other. It is somehow easier to grasp the immediate relationship to soil and work of a farmers' market than a global financial market. But Wall Street is just as much coproduced through nature as that farmers' market. Indeed, Wall Street's global financial operations involve it in a web of planetary ecological relationships unimaginable in any previous civilization. History is made not through the separation of humans from nature but through their evolving, diverse configurations. The ‘human’ relations of power and difference, production and reproduction, not only produce nature; they are products of nature” (Patel and Moore, 2017: 20).
Under capitalism, nature is Cheap Nature, that is a source of work/energy inputs that can be had at little or no cost. The system constantly searches out new frontiers of Cheap Nature in order to keep the endless accumulation of capital from grinding to a halt (Patel and Moore, 2017: 18-22). Frontiers can be in the literal sense, like settler-colonization in the American West, but they can just as easily be new oil reserves or locales for cost-cutting outsourcing. Moore’s conception of cheapness is wonderfully dynamic in that it refers to devaluation in both a money-price sense (allowing for theories of super-exploitation, unequal exchange, etc.) and a moral-political sense (allowing for critiques of racism, anthropocentrism, etc.). He thus overcomes binaries like Man/Nature, Nature/Society and is able to place historical capitalism’s environmental strategy at the center of its present crisis:
“By 2003, the world-ecological surplus stopped rising, and began to decline. Registered by the slow-, then fast-moving, commodity boom, this was the signal crisis of neoliberalism as a way of organizing nature. This expression of crisis signals the beginning of a cyclical contraction of the ecological surplus; its clearest indicator was the rising price of metals, energy, and food commodity prices. But this was not just any commodity boom, not least because of its unusual durability—although past its peak in terms of prices (at least for now), it remains a ‘boom; in the sense that prices remain considerably above their 1980–2000 averages. What does this seemingly endless commodity boom indicate? At a minimum, the peculiar character of this boom—which included more primary commodities, lasted longer, and saw more price volatility than any previous commodity boom in modern world history—indicates an exhaustion of neoliberalism’s Cheap Nature strategy” (Moore, 2015: 235-236).
Why has Cheap Nature broken down at this point in history? As seen above, Moore updates Wallerstein’s (2005: 1269-1273) theory of capitalist crisis as one of rising costs by situating it within ongoing planetary shifts. We face a whole host of converging ecological crises that appear discrete from one another. This is why the intellectually lazy idea that humanity-as-a-whole is the problem is so convenient for the dominant discourse — because de-historicizing ecological breakdown means we don’t see it as also part of systemic breakdown. If we seem to be hitting quite a lot of planetary limits at once that’s because capitalism is running out of ecological surplus to be profitably extracted. It’s not just in the sense of resources becoming increasingly exhausted, although that is one aspect. The rapid urbanization of the world is raising labor costs system-wide, by decreasing the number of semi-proletarians. Agricultural productivity is already stagnating under the weight of climate change — and will soon begin to decline for the first time in the history of the modern world-system (Moore, 2015: 305). And relevant to what we are about to discuss:
“During the 1980s and 1990s, the costs of bringing a new barrel of oil to the market grew by just under 1 percent a year. That shifted-dramatically-at the end of the century. Between 1999 and 2013, those costs climbed nearly 11 percent every year. In the most expensive oil fields-the top tenth of production, which often predicts future price trends-production costs increased tenfold between 1991 and 2007 and by another two-thirds since. Cheap oil is coming to an end even as climate change is on its way to killing one hundred million people by 2030” (Patel and Moore, 2017: 177).
But what really inspired this post is something that struck me reading an excellent piece by Peter Frankopan. There’s another trend happening at the same time as the end of Cheap Nature:
“In its most blunt terms, the war [in Ukraine] has served as a moment of one of the greatest transfers of wealth in history, with energy-rich states harvesting giant cash bonuses that, in turn, have further accelerated the changing of the world order” (Frankopan, 2023).
But this second trend didn’t start with the war in Ukraine. The twenty-first century has seen the best times for states in the Global South since the 1970s, at least if they are resource-rich. As Nicholas Jepson notes in his detailed study of the commodities super-cycle:
“Ballooning Chinese import demand for a range of metals and minerals was the primary driver behind a boom in prices, which presented Southern resource exporters with access to significant new flows of revenue, largely under the discretionary control of their governments. In turn, this loosened the disciplinary power exercised by the international financial institutions (IFIs) and global capital markets and provided states with a level of policy autonomy that allowed (but did not compel) them to substantively break with neoliberal economic orthodoxy for the first time in a generation” (Jepson, 2020: 2).
The re-emergence of socialist and anti-imperialist politics in the Global South, particularly in the form of Latin America’s “Pink Tide,” was thus no accident. Venezuelan oil, Bolivian gas and lithium, and Argentinian soybeans made possible Chávez, Morales, and Kirchner respectively. The end of Cheap Nature has created both ecological crisis and a particularly advantageous set of world-systemic conditions for resource-exporting peripheries. And if we turn to the dramatic challenge by Putin’s Russia to the world hierarchy of wealth and power, Adam Tooze sees it being made possible by that:
“Moscow, unlike some major oil and gas exporters, has proven capable of accumulating a substantial share of the fossil fuel proceeds. Since the struggles of the early 2000s, the Kremlin has asserted its control. In the alliance with the oligarchs it calls the shots and has brokered a deal that provides strategic resources for the state and stability and an acceptable standard of living for the bulk of the population. According to the WID-er data after the giant surge in inequality in the 1990s, Russia’s social structure has broadly stabilized. Putin’s regime has managed this whilst operating a conservative fiscal and monetary policy. Currently, the Russian budget is set to balance at an oil price of only $44. That enables the accumulation of considerable reserves. If you want a single variable that sums up Russia’s position as a strategic petrostate, it is Russia’s foreign exchange reserve … Hovering between $400 and $600 billion they are amongst the largest in the world, after those of China, Japan and Switzerland. This is what gives Putin his freedom of strategic maneuver. Crucially, foreign exchange reserves give the regime the capacity to withstand sanctions on the rest of the economy” (Tooze, 2022).
Russia’s commodities windfall has not only allowed it to wage grinding war with relatively minimal disruption to domestic society. Backed by vast Chinese and Indian markets, Russia has to a remarkable degree been able to shrug off becoming the most sanctioned country in history. Russia’s strength as a commodities exporter will probably be part of any future de-dollarization story. Sanctions ultimately boomeranged back on the United States by increasing the price of Russian commodities exports — causing the ruble to appreciate while the dollar depreciated (Patnaik, 2023). It’s not just oil and gas either, since Russia is a commodities superpower that exports a vast range of metals and minerals — whose importance may only increase as the world moves towards greener energy. Although the degree of influence he has over Kremlin policymaking is unclear, it’s interesting that Sergey Glazyev views the best source of backing for a future non-dollar currency to be:
“a pool of currency reserves of BRICS countries, which all interested countries will be able to join … In addition, the basket could contain an index of prices of main exchange- traded commodities: gold and other precious metals, key industrial metals, hydrocarbons, grains, sugar, as well as water and other natural resources” (Escobar and Glazyev, 2022)
I mentioned the thoughts outlined here to Moore a few days back and his reaction was one of skepticism that “socialism can be built on the back of a commodity boom.” Maybe not, if for no other reason than that there are obvious biophysical limits to relying on the extractive-sector piggybank indefinitely. The more oil we burn, the more severe climactic disruptions will be down the line. Poorer, hotter countries are the most at risk of literally becoming uninhabitable. But even semi-peripheries at higher latitudes, namely Russia, will be badly affected if the permafrost softens — and cities and infrastructure are swallowed by mud. Ultimately, the nations that will best adapt to a warming world are those with the most wealth to do so, which means that the inequalities of the present world-system would be entrenched — in the long term. This is an empirical truth, just as it is true that in the short- and medium-term there has been a fascinating trend for non-core states to benefit from the end of Cheap Nature. The true unknown is whether the redistributive windfall they are getting from the end of the capitalist world-ecology can be used to build something better.
References:
Escobar, Pepe and Sergey Glazyev. “Russia’s Sergey Glazyev Introduces the New Global Financial System | MR Online,” April 16, 2022. https://mronline.org/2022/04/16/russias-sergey-glazyev-introduces-the-new-global-financial-system/.
Frankopan, Peter. “Is Putin Winning? The World Order Is Changing in His Favour | The Spectator.” Accessed March 24, 2023. https://www.spectator.co.uk/article/is-putin-winning-the-world-order-is-changing-in-his-favour/.
Jepson, Nicholas. In China’s Wake: How the Commodity Boom Transformed Development Strategies in the Global South. New York, NY: Columbia University Press, 2020.
Moore, Jason W. Capitalism in the Web of Life: Ecology and the Accumulation of Capital. 1st edition. New York: Verso, 2015.
Patel, Raj, and Jason W. Moore. A history of the world in seven cheap things: A guide to capitalism, nature, and the future of the planet. Univ of California Press, 2017.
Patnaik, Prahbat. “Imperialism and Natural Resources | MR Online,” March 13, 2023. https://mronline.org/2023/03/13/imperialism-and-natural-resources/.
Tooze, Adam. “Chartbook #68 Putin’s Challenge to Western Hegemony - the 2022 Edition.” Substack newsletter. Chartbook (blog), January 12, 2022.
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Wallerstein, Immanuel. "After developmentalism and globalization, what?." Social forces 83, no. 3 (2005): 1263-1278.