Would we be better off without corporations?

Following up my initial response to Lane Kenworthy, I decided to approach the question from a different direction and ask “Would we be better off without corporations?”. That is, I’d like to consider a society in which all large enterprises were publicly owned. There would still be room for owner-operated private businesses, worker-controlled co-operatives, partnerships and perhaps some other forms of business I haven’t thought about. I won’t get into disputes about whether this would constitute socialism, except to say that it would be radically different from any version of capitalism we’ve seen so far.

I’m also going to reverse the burden of proof implicit in Kenworthy’s approach. I start from the assumption that the expansion of corporate power under the neoliberal (or market liberal) policy package of privatisation, financialisation and deunionisation that has prevailed since the 1970s has been bad for most of us.

Given that neoliberalism is a term that’s often used loosely, I’ll try to be more specific about the adverse effects that can be tied specifically to the resurgence of corporate power.

The most obvious is the growth in inequality that has coincided with the rise of neoliberalism and corporate power. Virtually every aspect of neoliberal policy reform from increasing capital mobility to union-busting to flattening of tax scales has contributed to increased inequality. Moreover, they all reinforce each other.
?So, if we can do without for-profit corporations without incurring significant economic costs, we should.

I started looking at this on a sector-by-sector basis but then realised I would need to write a whole book in reply. So, over the fold, some disorganized thoughts

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Monday Message Board

Another Message Board

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’ve moved my irregular email news from Mailchimp to Substack. You can read it here. You can also follow me on Twitter @JohnQuiggin

I’m also trying out Substack as a blogging platform. For the moment, I’ll post both at this blog and on Substack.

Monday Message Board

Another Message Board

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’ve moved my irregular email news from Mailchimp to Substack. You can read it here. You can also follow me on Twitter @JohnQuiggin

I’m also trying out Substack as a blogging platform. For the moment, I’ll post both at this blog and on Substack.

Would Democratic Socialism be Better?

I’ve just received a copy of Lane Kenworthy’s latest back Would Democratic Socialism be Better (Shorter LK: “capitalism, and particularly social democratic capitalism, is better
than many democratic socialists seem to think”).

The book is a follow-up to his Social Democratic Capitalism, which made the case that the USA would be better off moving to a Nordic model of social democracy.

I’m hoping to make a longer response soon, but I thought I’d begin by summing up the argument as I see it, and the reasons I’m unconvinced.

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Now is the perfect time to increase coal royalties to fund Australia’s energy transition

The usual trade-off between maximising revenue while protecting industry’s long-term future no longer applies

That’s the headline and standfirst for my latest piece in The Guardian, looking at revenue options for the coming Queensland Budget. It’s over the fold


After dealing with multiple natural disasters, and facing the need for huge investment in an overloaded electricity system, it’s not surprising the Queensland government is in search of extra revenue ahead of next week’s budget. The obvious source, already flagged by the treasurer, Cameron Dick, is an increase in royalty rates for coal.

These rates, set on a sliding scale according to the price of coal, have been frozen for the last 10 years, as promised by the Newman LNP government after a small increase in 2012. With the 10-year freeze now expired, resources groups are lobbying intensely for no changes to the existing regime. But there is a logical case for increasing royalties on coal, which is currently trading at spectacularly high prices.

For most commodities, the high prices we are now observing would be a signal of favourable prospects. For coal, it’s the opposite. World coal consumption peaked in 2014, and is predicted to decline steadily over the next decade. Many countries have already ended the use of coal to generate electricity, or will do so in the next few years. Metallurgical coal, used in making steel, will last a bit longer. But the coal-based blast furnace technology is already facing the prospect of replacement by coal-free techniques using renewable hydrogen.

While coal demand has flattened out, new investment in coalmines has dropped far more rapidly. Investors can see that there is no long-term future in coal. Witness BHP’s inability to sell its Mt Arthur coal mine, which it announced on Thursday would close in 2030. Meanwhile, global financial institutions have abandoned the industry, pledging not to finance or support new coalmine projects.

In these circumstances, there is only limited supply response available to meet temporary increases in demand, like those arising from the strong economic recovery after Covid, followed by sanctions imposed on Russia. The result is the sharp increase in prices we have seen recently.

Coal is on the way out, but a good deal of money can be made in the meantime, while high prices last. Most major corporations, with a long-term future in mind, have abandoned the industry. Those that remain need to reap profits fast, which is why they are more determined than ever to resist any increase in taxation.

But the same analysis applies to royalties, the price paid by miners to the public as owners of the coal resource. Usually there is a trade-off in setting royalty rates, between maximising revenue while protecting the long-term future of the industry. However, this no longer applies. Investment in new coalmines is in long-term decline, whether or not royalty rates are increased.

Queensland’s focus must be on gaining additional revenue while export demand remains strong and using it to transform our energy system. The transition to a carbon-free energy system will require big capital expenditures. In particular, public investment in carbon-free energy through CleanCo needs to be greatly expanded.

As well as decarbonising our own electricity grid, the government needs to plan for the future of regions which currently rely on coal exports as a major source of employment. Many of these are well suited to produce solar, wind and hydrogen.

From the government’s viewpoint, the impending decline of coal is both a challenge and an opportunity. The challenge is the need for a transition to a future beyond coal, both as a source of energy in Australia and as a major export commodity. The opportunity is to use the current period of high coal prices to finance the transition to a decarbonised economy

Monday Message Board

Another Message Board

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’ve moved my irregular email news from Mailchimp to Substack. You can read it here. You can also follow me on Twitter @JohnQuiggin

I’m also trying out Substack as a blogging platform. For the moment, I’ll post both at this blog and on Substack.

Monday Message Board

Another Message Board

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’ve moved my irregular email news from Mailchimp to Substack. You can read it here. You can also follow me on Twitter @JohnQuiggin

I’m also trying out Substack as a blogging platform. For the moment, I’ll post both at this blog and on Substack.

The three party system in France and Australia (crosspost from Crooked Timber)

For a while now I’ve been arguing the political crises in the developed world can be understood as the breakdown of a two (dominant) party system in which power alternated between hard (Thatcher) and soft (Clinton) versions of neoliberalism (or market liberalism), with two sides drawing respectively on the votes of the racist/authoritarian right (Trumpists) and the disaffected left (environmentalists, socialists/social democrats etc) who had nowhere else to go, even if they were entirely unsympathetic to the market-liberal version of capitalism.

As the failures of neoliberalism have become more evident, there’s no longer enough support to maintain two neoliberal parties, so the natural outcome is a three-party system, with Trumpists, neoliberals and a left coalition, all of roughly equal size. In political systems set up for two parties, this creates a lot of instability.

When I looked at this in 2016, it seemed that the biggest losers were soft neoliberal parties, typically nominally socialist or social democratic, which had embraced austerity in the wake of the GFC. Prime examples were PASOK (which gave its name to the process of Pasokification), the French socialists under Hollande and the Dutch Labour party. More recently, though, hard neoliberal parties have also been replaced by the Trumpist right (as in France) or simply swallowed by Trumpism, as in the paradigm case of the US Republicans.

Following recent elections in France and Australia, I thought I’d take another look

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Sandpit

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.