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Tensions in Ukraine: A Scramble for Growth?

by James Magnus-Johnston

The situation in Ukraine is undoubtedly complex, but it may be as much about a scramble for growth and fossil fuel as it is about ethno-cultural identity.

In a statement issued last week, Ukrainian Prime Minister Arseniy Yatsenyuk focused heavily upon energy politics. He accused Russia of using energy as a “new nuclear weapon.” The cold war reference is clear: just as the former Soviet Union used its nuclear arsenal to hold the world hostage to conflict, today it’s fossil fuel that’s used as a bargaining chip in the geopolitical game.

Europe’s dependence upon Russian fossil fuel helps explain why the Russian leadership has been able to act without fear of retribution. Over 50 percent of Russian gas exports to Europe pass through Ukraine, and Europe relies on Russia for 40 percent of its imported fuel.

The energy sector drives the European economy as well as the world’s high-finance casino, in which speculative claims on fossil fuel inflate dividends to inequitable heights. Yatsenyuk acknowledges that “[the Russians] sell oil and gas mainly to the EU and then take Euros, dollars and pounds — and buy weapons [and] military equipment.” This creates a vicious cycle in which super-inflated fossil fuel dividends can be leveraged to buy even more military equipment, which is in turn used to control fossil fuel infrastructure. And voila — uneconomic growth.

Danger in Ukraine

Pursuit of cheap energy and unending growth spell danger in Ukraine and elsewhere around the world (photo credit: Trey Ratcliff).

The resulting concentration of wealth in the hands of the few appears to feed nationalist fervor at home just as it buys political favor abroad. Russia’s biggest players have been investing around the world for years, but references to Russian power and influence belie the extent of Russian inequality. Russia “has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires,” according to a 2013 report by Credit Suisse. In Russia, 110 billionaires hold a shocking 35% of all wealth; globally, billionaires collectively account for only 1-2% of total household wealth.

My intent is not to characterize Russia as the classic American villain. In fact, Ukrainian nationalists are, by some accounts, as menacing to Ukraine’s future as Putin’s Russia, and there is plenty of Western hypocrisy for a second editorial. What we need to consider is that the remaining Russian carbon should not be removed from the ground, and all of the supposed spinoff benefits — the military buildup, the further fuel extraction, the super-inflated dividends — generate harmful growth that benefits only a few.

Yet according to the outdated neoclassical script for economic success, growth is signalling to some that Russia is somehow on the right track — a display of power, progress, and innovation. Like other present-day examples, including nationalistic rhetoric surrounding tar-sands production in Canada, dogmatic support of growth is more accurately characterized as hubris, stagnation, and ill-advised development.

The planet’s life support system doesn’t have time for a rehearsal of twentieth-century nationalism fed by a rush for cheap oil; nor will the “victors” in any contemporary power struggle have the opportunity to cash in their casino winnings. Without embracing a post-growth paradigm shift, we’ll all be in for a gruesome ride. With cheap oil and the casino economy fading into history, we need to adopt a steady-state economy and give everyone a chance at winning; otherwise we’ll have to accept senseless land and resource grabs in which everyone loses.

James Magnus-Johnston is the Canadian Director of CASSE and a professor of political studies and economics at Canadian Mennonite University.

Environmental Heroes Can Inspire Economic Reformers

by Brent Blackwelder

Each year in April, the Goldman Environmental Prizes are awarded to six activists, one from each of the six inhabited continental regions. This year’s winners have overcome tremendous odds and threats to their lives to lead effective protests and carry out brilliant strategies. The inspiring winners give me hope that, on the economic front, we can energize an enormous protest movement in the United States. The Occupy movement has provided a solid start on opposing the outdated, unfair, growth-dependent economic model — a model that drives unemployment, encourages casino-style financing, enlarges the gap between the super-rich and the rest of society, and sucks the blood from the life-support systems of the planet.

This year’s prize winners hail from Russia, Argentina, China, and Kenya. Their stirring stories offer ideas for those of us who want an economic paradigm shift — we can employ the same kinds of energetic activism and protests that have worked on tough environmental problems worldwide.

In Russia Evgenia Chirikova initiated what started as a typical conservation battle to save the federally protected Khimki ancient forest near Moscow from a proposed superhighway. Notwithstanding efforts by authorities to suppress the movement, the first rally drew 5,000 people. Subsequent beatings of journalists and activists did not deter the campaign, and a year ago, the effort mushroomed into record-size protests against Vladimir Putin. Chirikova’s small, but courageous conservation battle turned into a general referendum on the Russian government and its leader.

In Argentina, Sofia Gatica, a mother whose baby died as a result of pesticide poisoning, organized a successful “Stop Spraying” campaign against the indiscriminate aerial spraying of dangerous chemicals on soybean fields. Gatica mobilized local women to tabulate the illnesses that were plaguing their communities, and they found cancer rates 41 times the national average. Their campaigns and protests against powerful companies like Monsanto and DuPont led to a big victory in the Supreme Court, which outlawed aerial spraying near homes.

The odds of one person in China successfully challenging thousands of water polluters may seem miniscule, especially given governmental suppression of protests. Yet Ma Jun exposed over 90,000 pollution violations by Chinese and multinational companies. The exposure empowered citizens to demand justice. Ma Jun then went after leading transnational corporations for refusing to clean up their supply chains. When the Apple computer company failed to respond, Ma organized a “Poison Apple” campaign that, after a year and a half of organized protest, forced the company to clean up the polluting components of its supply chains.

 The world’s largest desert lake in Kenya is under threat from a massive dam upstream in Ethiopia. Ikal Angelei, a brave woman using the slogan “We won’t be silenced,” has led the effort to save Lake Turkana, a World Heritage Site. This effort also seeks to provide protection and justice for the more than 100,000 people who depend on the lake. The fate of this boondoggle has not been determined, but the protests have convinced major banks to refrain from funding this mega-dam.

The economic transformation agenda of the Center for the Advancement of the Steady State Economy is connected to the battles just described because the global economy facilitates and finances these environmental debacles. Current economic institutions largely disregard the destruction of natural resources and the depletion of fisheries, neglect the rights of the poor and tribal peoples, undervalue the natural world, fail to exercise precaution when dealing with toxic materials, and undermine the well-being of future generations. The grow-at-all-costs mentality that dominates in both the halls of government and the boardrooms of businesses is distorting the way we value human life, our own communities, and natural ecosystems around the world.

To hasten the switch to a steady state economy, we need to emulate the Goldman Prize winners and generate effective protests and mobilizations. For those times when it seems overwhelming to overhaul the economy, we can look to people like Evgenia Chirikova, Sofia Gatica, Ma Jun, and Ikal Angelei. They have shown us that the biggest changes in society can originate from humble beginnings.