Nuclear War and Environmental Catastrophe

^5. China and the Green Revolution

Laray Polk: In researching the cutting-edge innovations in energy in the US, it’s pretty much the same players: GE; IBM; Raytheon; the DOE, they’re funding fusion research; and a whole new department called ARPA-E based on DARPA, but with a focus on energy. Soldiers are currently using solar cells in the field and the navy is testing algae-based fuel.[64]

Noam Chomsky: Got to keep the military going, doesn’t matter about the rest of us. Profits and the military: those are the two things that matter. And the military, of course, is not unrelated to profit.[65]

It’s discouraging to see who is developing what. I can’t see any of those entities marketing energy any differently than from the past.

It’s even true of very simple things just take weatherization of homes. That’s not high technology. It could put huge numbers of people to work, it would be a great stimulus for the economy, and it would be quite effective in retarding the effects of climate change. It’s not a solution to the problem, but at least it provides more time to do something about it.

Recently there was a company in England that does weatherization that announced it had essentially done about everything you can in England. Almost everybody had it and they wanted to shift to the United States with a huge untapped market, but they’re not sure it’s going to be economically feasible here because they don’t get any assistance.[66]

And, in fact, that’s what’s happening with the green technology. China provides a support system for development of green technology.[67] The United States does too, but a lot is for the support of military technology. That’s actually a change from the past, a regression from the past. The actual US economy since the colonies has relied quite substantially on government intervention. That goes right back to the earliest days of independence, and for advanced industry in the latter part of the nineteenth century. The American system of mass production, interchangeable parts, quality control, and so on—which kind of astonished the world—was largely designed in government armories. The railroad system, which was the biggest capital investment and, of course, extremely significant for economic development and expansion, was managed by the Army Corps of Engineers. It was too complicated for private business.

Taylorism, the management technique that essentially turns workers into robots, came out of government and military production. The same was true of radio in the 1920s, but the big upsurge was in the postwar period—right where we are, in fact. Down below where we’re sitting, there used to be a Second World War temporary building, where I was for many years, where they were developing—this was the 1950s, and then on through the ’60s and beyond—computers, the beginnings of the Internet, information technology, software, everything that became the modern high-tech revolution. Almost all of it was on Pentagon funding—ARPA, it was then, now it’s DARPA—or just the three armed services, and that laid the basis for the US high-tech industries, very substantially, and, in fact, often with a long delay. Even computers, the core of the modern economy, were being developed from around the early 1950s, mostly with government funding. They weren’t commercially viable for about thirty years.

IBM, by the early ’60s, was finally able to produce its own computer. They had learned enough at the government-funded laboratories to do it. It was the world’s fastest computer at the time, but it was way too expensive for business, they couldn’t buy it, so the government purchased it—I think it was for Los Alamos. In fact, procurement—and not just for computers, but also over the whole economy—has been a huge form of subsidy and it continues.[68]

That’s the way the economy developed. Now we’re screaming at China because they’re doing much the same with green technology, and we’re not doing it. We’ve regressed to the extent that this isn’t done very much anymore, although it still is plenty. If you take a walk around MIT, you’ll see big buildings of drug companies and genetic engineering. The reason is they’re feeding off the government-funded ideas, technology, and development that’s being done at the research labs and research universities like MIT. If you strolled around campus fifty years ago, you’d see small start-ups of electronic firms. Actually, on what’s now Route 128, that became Raytheon, and a high-tech corridor.[69]

There’s nothing new about this. This is the way economies develop. If there is an exception, I haven’t come across it. British development was like this, based on huge state intervention from the early eighteenth century. The same is true for the US, Germany, France, Japan, the East Asian miracles—all of them—China, of course. Market systems don’t yield fundamental innovation and development for obvious reasons. Innovation and development are long-term projects. They don’t give you profits tomorrow. In fact, they give you costs. So the state takes it over; the taxpayer, in other words, pays for it. It’s a system of essentially public subsidy, private profit. And it’s called capitalism, but has little resemblance to capitalism.

And Koch Industries?

You can look right out the window, that’s the Koch building.

So taxpayers’ money goes in, and there’s a mingling of industrial interests with university resources—resources meaning the intellectual capital—

And that’s publicly funded, substantially—

Then innovation goes out but it’s filtered through intellectual property rights—

Which is another form of government subsidy, and a major form. Take a look at the World Trade Organization rules. They’ve imposed patent conditions for the developing countries, which would have killed off industrial development in the rich countries if they had ever had to adhere to them.[70] The United States, for example, relied substantially on technology transfer—what’s now called piracy—from England, which was more advanced. In fact, England did the same for more advanced technology from India and Ireland, and from more skilled workers from the Lowlands, Belgium, and Holland. We did it then to England, and other countries are trying to do it too, but they’re barred from it by what are called free-trade rules, meaning: we protect what we want and we impose a market rigor on you.

There have been some good studies of this. Among the main beneficiaries of the World Trade Organization’s rigorous patent restrictions are the pharmaceutical corporations. They claim that they need it for research and development. This was investigated carefully by, among others, Dean Baker, a very good economist. He went through the records and found that the corporations themselves fund only a minority of their own R&D, and that’s misleading because it tends to be oriented toward the marketing side, copycat drugs, and so on. The basic funding comes from either the government or from foundations. He calculated that if funding for R&D for the big pharmaceutical corporations was raised to 100 percent public, and they were then compelled to sell their goods on the market, there’d be a colossal saving to consumers and no patent rights.[71] But that’s unthinkable; anything that interferes with profit is unthinkable. It can’t be discussed.

What role do politicians play in the distribution of federal funding for R&D, subsidy, and procurement?

Congress of course provides the funds, and the executive is deeply involved in decisions and implementation, with close involvement of industry lobbyists throughout. That aside, the decision makers in government have intimate ties with the corporate beneficiaries of subsidy and procurement in many other ways, ranging from campaign funding to privileged positions in the private sector if they play the game by the corporate rules.[72]

What factors in addition to massive investment have put China in the lead in green technology?

The business press and technology journals describe many factors, among them providing the required infrastructure. In the case of green technology, China began fairly modestly, and has been steadily advancing.

Take solar panels. China began manufacturing them in conventional ways and gained a large market share. A good deal of innovation and development comes directly out of manufacturing experience. This is not labor-intensive industry, so low labor costs were apparently not a major factor. Over time China has taken the lead in advanced solar panel technology, and now substantially dominates the international market. To illustrate how the US is falling behind in advanced manufacturing, US Secretary of Energy Steven Chu described Suntech power, after an on-site investigation, as a high-tech, automated factory that has developed a type of solar cell with world-record efficiencies. That is the result of careful planning in a framework of state industrial policy. It has its failures, but also real successes.[73]