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Current Affairs

A Magazine of Politics and Culture

Brian Katt | Wikipedia

Exxon Admits Capitalism Created The Climate Crisis

The company’s own Washington representative admits that we cannot solve the crisis without doing away with Exxon.

An Exxon lobbyist has been caught on tape making some astonishing admissions. Astonishing not because they are implausible, but because they contradict everything Exxon has tried to convince the public it actually believes. Keith McCoy, a lobbyist and Exxon’s director of federal relations, believed he was speaking with a headhunting group looking to hire a new corporate stooge. In fact, he was talking to Greenpeace, and his admissions were soon broadcast on Britain’s Channel 4 news. 

The three most important shocking-but-not-shocking confessions from McCoy are that: 1) the company intentionally tried to manipulate the public into not understanding the science of climate change, often hiding its role by using third-party organizations 2) the company pretends to be in favor of solutions to climate change by proposing measures it knows the public will never accept, such as a carbon tax 3) the company has close relationships with Democratic politicians and has successfully made sure that infrastructure policy will not help us transition to a green economy and will instead focus solely on fossil fuel-friendly infrastructure. 

Once McCoy’s words became public, Exxon naturally panicked. “[These] comments… in no way represent the company’s position on a variety of issues, including climate policy and our firm commitment that carbon pricing is important to addressing climate change,” said a spokesperson. But this is actually consistent with what McCoy said. He admitted that the company’s stated position was that it had a firm commitment to addressing climate change, but that this public stance was a departure from what it actually does behind closed doors. Exxon hasn’t been able to cast doubt on the testimony’s authenticity, and the lobbyist’s words merely provide further factual confirmation of what we already knew to be true. (Internal documents from the company and interviews with former employees have revealed that “the company’s knowledge of climate change and their role in it dates back to July 1977, when its senior scientist delivered the “sobering” message to management that “there is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels.”) But the U.S. media will probably not give the story the attention it deserves, even though this accidental confession should lead to weeks of front-page headlines, congressional investigations, and prosecutions related to the most important issue of our time.

I want to draw attention to a critical piece of the Exxon lobbyist’s testimony because it helps provide a clear understanding of 1) why the climate crisis has arisen and 2) why it’s so difficult to do anything about it. McCoy says at one point:

Did we fight aggressively against some of the science? Yes. Did we hide our science? Absolutely not. Did we join some of these shadow groups to work against some of the early efforts? Yes, that’s true. But there’s nothing illegal about that. You know, we were looking out for our investments, we were looking out for our shareholders.

Let’s be clear what is being said here: “fighting aggressively against the science” means trying to get the public to believe falsehoods so that the company could continue activities that are known to cause catastrophic damage to the earth. McCoy says Exxon did not hide its own industry-funded research, but did work with “shadow groups” to stop efforts to combat climate change. 

His defense for all this is that it was not a crime. But since crime is that which violates the law, and he also admits Exxon tries to shape the laws themselves, this amounts to saying “the fossil fuel industry’s behavior did not violate any of the rules that we manipulated the system to put in place.” It is no defense at all.

Furthermore, McCoy’s words are a stark admission that capitalist profit-seeking can lead to sociopathic and catastrophically harmful conduct. He confesses that the company lied about the science and tried to keep the public from stepping in to prevent the calamity that the fossil fuel industry was causing. But this was all right, because they were just “looking out for our investments” and “our shareholders.” Indeed, there is a giant amount of money at stake: if we were to keep fossil fuels in the ground, it would require the industry to forgo trillions of dollars in untapped wealth. No responsible corporate executive could justify destroying trillions in potential profits for the sake of something of such secondary importance as the long-term survival of humanity. 

In fact, McCoy is just explaining how free-market economics works. Under mainstream laissez-faire theory, there is nothing wrong with a corporation seeking to maximize its profits without regard to the consequences of its actions. In 1970, Milton Friedman published an article in the New York Times called “The Social Responsibility of Business is to Increase Its Profits.” In it, he made a straightforward argument that business executives should not think about behaving “socially responsibly” in the common sense of the term. The pursuit of profit was itself socially responsible by definition, even if it ended up destroying the world. (Friedman won the Nobel Prize in Economics, which tells you a lot about the profession.) 

The core of Friedman’s argument is that a business executive is merely a hired agent whose sole job is to increase profits for the shareholders who own the business. If the executive is serving the shareholders, they are behaving socially responsibly. In fact, it would be irresponsible of them to think of anything other than profits, because they would be violating their duty to shareholders. Just as a lawyer’s job is to act in the best interests of their client—and in doing so is considered to be acting in the interests of society, even if there are negative social consequences to the client getting their way—the executive must not think about serving society except insofar as doing so serves the shareholders. 

It is the market that is to decide what is and is not responsible. As Friedman wrote: “the doctrine of ‘social responsibility’ involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce resources to alternative uses.” If a businessman starts thinking about something other than profits, Friedman says, he is essentially a socialist, because he is not letting the market dictate what ought to happen. 

Friedman did not discuss, or even seem to consider, the possibility that this thinking could lead to disaster. What if, for example, a weapons company whose profits depended on constant new arms sales tried to shape foreign policy? What if it was profitable for a drug manufacturer to get people hooked on drugs and then sell them treatment for their addiction? What if fossil fuels were so valuable, but so environmentally destructive, that the protection of profit would cause a global calamity? Friedman thought this was implausible because his belief in the market was essentially faith-based. He had an inspiring vision of a world in which the pursuit of private self-interest created the greatest good for all, and a kind of divine Invisible Hand would ensure justice. His article does not discuss empirical facts, examining real-world cases where the pursuit of profit can logically entail lies, theft, and murder. It tells a beautiful story of a world in which this does not happen. 

The Friedman Doctrine allows executives to justify nearly anything so long as it is good for the business, and serves as a convenient rationalization for corporate behavior that might look sociopathic when judged by ordinary human moral standards. Of course, violating the law might be out of the question, and Friedman does say that part of profit-seeking involves “conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” But he is silent on whether, if it would be profitable to change the law and ethical custom, a company ought to do it. If they follow the doctrine strictly, it is not clear whether there is any conduct they should refrain from provided there is no “rule” against it, since Friedman appears to view all values beyond profit-seeking as socialism. 

In a sane world, Friedman would have been considered a dangerous crackpot. Instead, he not only won the highest prize in his discipline, but even Democrats like Larry Summers have said that “we are now all Friedmanites.” Translated, this means that liberal economists are part of a terrifying cult that will ignore reality even if it means setting the world on fire.

These ideas did not originate with Friedman, even if he put out an unusually blunt and disturbing articulation of them. The idea that private selfishness creates the public good has been a common belief throughout the entire history of laissez-faire capitalism. Adam Smith unleashed something of a monster with his famous quote: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” That sentence has been quoted over and over by those who want to show that greed is good, because a baker can be interested in nothing but money and still put pastries on our table. 

Leftists have long argued that this doctrine has a dark underbelly, because while the unchecked pursuit of self-interest might unleash phenomenal productive forces, it can also lead to colossal destruction and cruelty. Karl Marx paid tribute to the way capitalism unleashed impressive new capacities, but also noted the built-in pressures toward exploitation and misery. The climate crisis is proof that Marx was a far more astute observer of capitalism’s realities than Friedman because he did not believe that there was a magic internal mechanism that would ensure profit-seeking aligned with the social good. The magic mechanism is something that businessmen might find convenient to believe—it is hard to get someone not to believe something when believing it will make them trillions of dollars—but it’s obvious in practice that many kinds of profit-seeking cause terrible harm.

It’s still hard for some people to see what it means to allow pathological profit-maximization. In a recent Substack article, Freddie deBoer examines the puzzlement of former New York Times writer Bari Weiss, who laments “powerful brands like Apple and Nike that market themselves as progressive but rely on forced labor.” DeBoer points out that these companies are simply following the imperatives of capitalism: if progressive marketing sells phones and shoes, they will do it, while if forced labor reduces the costs of phones and shoes, they will do that too. DeBoer concludes, correctly, that “you cannot meaningfully stand for human rights if you think that among those rights is the right for corporations to participate in unfettered capitalism.” This is for a simple reason: pursuing profit will conflict with human rights, because indentured laborers are cheaper than unionized laborers. Yet the fundamental conflict of interest between capitalism and human rights goes unacknowledged by those who claim to believe in both. 

The climate crisis is worsening around us. Temperatures have already hit 116 degrees this summer in the Pacific Northwest, and things are only going to get worse. It is not all driven by classic laissez-faire capitalism—a state-owned oil company in Mexico just caused a horrifying undersea fire. But having artificial legal structures that are devoted to maximizing private interests over public ones (which is what corporations are) makes it much, much harder to deal with a problem like climate change, for reasons that come out in McCoy’s confession. Exxon is a powerful entity that must lie in order to fulfill its institutional mandate. It would certainly be easier to deal with this problem if Exxon were taken into public ownership and stripped of this mandate. Again, this would not solve climate change altogether; fossil fuels themselves must be phased out of use, a situation that is impossible when private entities are permitted to do whatever they like in the name of maximizing profit. 

McCoy concedes not only that Exxon helped destroy the planet to protect its profits, but that it is continuing to do so. He talks about how senators like Joe Manchin and Krysten Sinema are bought, and compares capturing legislators to catching fish. We can see here why there has not been meaningful climate action by Democrats, even though ostensibly the national Democratic Party believes that the climate crisis is urgent. McCoy explains that Exxon itself has helped to make sure Biden’s infrastructure proposals focus on “roads and bridges” (i.e. the fossil fuel-friendly stuff) rather than building out our electric infrastructure. He says they try to get people to ask “Why would you put in something on emissions reductions to oil refineries in a highway bill?” and then emissions-reducing measures come out of the bill. Of course, there’s an answer to that question, which is that our infrastructure priority should not be a mere “highway bill” but should be about building the new, sustainable public works necessary to power the next century’s green economy (a Green New Deal, if you will). But Exxon works hard to make its talking points catch on, and it has a louder megaphone and vastly more money than, for example, the Sunrise Movement. 

In a rational world, Exxon would be treated as a criminal enterprise. It should be very clear that the fossil fuel industry needs to be taken into public ownership and wound down, transitioning over completely to different fuel sources. Those who conspired to get rich even if it meant making parts of the world uninhabitable should be prosecuted.1 This should not even be a radical notion: climate catastrophe is an act of theft and murder, which even a libertarian should theoretically oppose. (The fact that real-world libertarians do not believe in meaningful accountability for corporate crime should indicate that perhaps libertarian ideology is less about principles of freedom than the defense of rich people.)

Yet Democrats have not even used their power in Congress and the presidency to try to get a Green New Deal, aka the bare minimum necessary to respond to the unfolding crisis. We know why, because Exxon told us directly that they are buying off Democrats and manipulating the system so that it is utterly ineffectual, proposing measures that will never happen in order to look like they are interested in doing something about climate change when they aren’t. (Exxon pronounced themselves “shocked” at McCoy’s interview, but it’s clear that they were only shocked that their private stance had become public.) 

Those of us who care about each other—and do not want those we love to die in ever-worsening heat waves and droughts—have to do everything we can to change the political situation and eliminate the barriers to action. The job of leftists is to help people connect the dots between the 116-degree temperatures in Portland and the Exxon official who says the company has manipulated the public’s understanding of climate. Then, once people have that understanding, we must mobilize the public and weaponize its anger so that it is politically impossible to do what the current Congress is doing (aka sitting there idle as the fire spreads). We cannot resign ourselves to doom and despair. When we see Exxon admitting what is going on, we need to make sure everybody knows it, and knows that there are actions we can still take to remove these criminals from spheres of influence, which will give us a chance to save the planet before it’s too late.

Image courtesy of Brian Katt, licensed under a CC BY-SA 3.0 license.

  1. As a prison abolitionist I believe the correct outcome out of such a prosecution is to seize the executives’ wealth and make them spend the rest of their lives planting trees for $15 an hour. 

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