The generation and distribution of power (electricity) is political and economically driven. It is also surrounded by deception and falsehoods. Tristen Taylor explains why and how.

To illustrate that the energy cycle is centralised in a manner which reinforces the political domination of the few over the many, primarily through economic instruments, we now turn to South Africa and the generation and distribution of electricity.

95 per cent of electricity in South Africa is generated (and distributed) by one organisation, Eskom. The South African government owns 100 per cent of Eskom, with the Minister of Public Enterprises being the representative shareholder. In effect, this means that the South African government has total control over the conversion of energy into electricity and its subsequent distribution. Eskom generates this electricity overwhelmingly through the use of ten coal-fired power stations, producing 90 per cent of all electricity. The additional 5 per cent comes from nuclear (Koeberg) and hydro resources. This represents centralisation of energy conversion almost unheard of in human history. If we accept that the government is just one actor within our society, then it appears strange that it holds full control over one of society’s basic goods.

The South African government decides howEskom’s 208,314GWh of electricity is distributed. These are the proportions by sector: agriculture three per cent, commerce ten per cent, the transport sector two per cent. Industry is allocated a whopping 68 per cent. Residential users represent 17 per cent.

To recap - Agriculture and the business sector combined get a whopping 83 per cent of all electricity, while the citizenry must scavenge for the remaining 17 per cent. Approximately, 30 per cent of households are without electricity. And the pro-business, anti-poor bias is further illustrated in Eskom’s pricing policy. As Bryan Ashe notes:

'Soweto residents are charged 28 cents per kilowatt/hour while Sandton … residents pay 16 cents and big business pays seven cents. In rural areas, consumers are charged 48 cents per kilowatt/hour.'

How is such a distribution model justified? Mostly according to the dominant economic policy of our time, GEAR and its offspring. All of which are minor variations on the policies of the IMF and the World Bank, often termed neo-liberal economics or the Washington Consensus. The South African government gives more electricity to the business sector because, rightly or wrongly, it believes that business interests are greater than those of individual citizens, especially in a situation where demand has outstripped capacity. Given a choice between providing cheap electricity to industry and cheap electricity to the people, the Government has routinely chosen the former, as witnessed by the Alcan-Coega deal.

One may ask, if this is in the common good, this current distribution of electricity, why have so many conflicts occurred between government authorities and communities seeking access to electricity? Why do some South Africans have to make do with candles and paraffin while big business gets all the power it wants, at the price it wants?

Primarily because of the macro-economic policies adopted by our government. Incidentally, these macro-economic policies create what is currently considered a favourable investment climate for foreign capital, which is free to move anywhere it wishes (unlike people). If the government refused to create this climate, capital would not be invested and growth would not be possible, or so the argument goes. If the economic and social data are anything to go by, this macro-economic policy of the last ten years has produced an unrelenting assault upon the poor whilst facilitating fantastic levels of growth within the financial services sector. Of course, the poor and the working classes do not own shares or unit trusts. As Dale McKinley states:

'Research conducted by the Development Bank of South Africa in 2005 revealed that the number of South Africans in poverty (with the national poverty line for 2002 being benchmarked at a miserable R354 per adult per month) in all population groups increased dramatically, from 17,000,000 in 1996 to 21,000,000 in 2003…indeed, the state’s own figures for 2002 show that the poorest half of all South Africans earn just 9,7% of national income (down from 11,4% in 1995), while the richest 20% take 65% of all income.'

According to the Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa in 2002, 55 per cent of South Africans live in poverty and 60 per cent of the poor receive no social security transfers and/or grants. Making matters even worse, the Report of the South African Cities Network (2004) revealed there was a 180 per cent increase between 1996-2001 in the number of urban households with no measurable income at all.

Further, in determining its energy position, the Government did it without seeking meaningful citizen-participation. Why should it? Why does any centralised authority have to consult with what are, after all, the end consumers of an energy chain? What can citizens do? Boycott electricity?

Access to electricity is a determining factor in one’s position within society, and the withholding of access to electricity, either through refusing to provide access or through tariffs, is an act of controlling individual access. In the power relationship between the citizenry and Eskom/the South African government, those who control the generation and distribution of electricity hold all the cards. There is very little citizens can do if the price of electricity is increased (for the poor with access, a rise in price means that their access becomes further restricted) or if supply is diverted to industry.

Put another way, the individual citizen is dependent entirely upon the government to provide him/her with a basic condition of modern life. This gives the government undue power over the circumstances of the fortunes of citizens, communities, organisations, and businesses, resulting in an insidious form of patronage. Furthermore, the total centralisation of energy conversion has enabled the government to use electricity as part of its macro-economic policy; witness the pre-paid meter wars in Soweto, the staggering numbers of disconnections (10,000,000 by 2002), preferential pricing for domestic and foreign corporations, an attempt at privatising Eskom, and a continued reliance on coal. Using only coal to generate electricity provides an effective market-subsidy to the coal mining and export companies (such as Anglo Coal and TOTAL).

For example, Anglo Coal produced 56.900,000 tons of coal in 2005 in South Africa, of which Eskom bought 34.300,000 tons. Furthermore, Anglo Coal is currently seeking new deals with Eskom for additional long-term purchasing arrangements to the tune of an additional 25,000,000 tons of coal per annum.

From global profits in excess of US$1 billion for Anglo Coal, US$439,000,000 came from South Africa. With such a huge amount of money at stake, it is in Anglo Coal’s own interest that Eskom continues its love affair with coal and, by necessity, that South Africa’s electricity generation remains centralised. TOTAL is the ninth largest oil and gas company in the world and the fourth largest coal exporter in South Africa, representing a major consolidation of local and global energy resources in private hands.

Perhaps one of the greatest and most tragic ironies of the current Eskom policy of pro-business generation and distribution of electricity is that the technology used was paid for by the citizenry as a whole, mostly through foreign and odious debt incurred during apartheid. Eskom was one of the prime beneficiaries of foreign loans during the apartheid era. For example, in 1974 Barclays participated in a US$15,000,000 Eskom Eurobond issue; in 1976 (after the Soweto uprising) Citibank, along with three other US banks and Barclays, provided credit of US$200,000,000 for Eskom. In 1980 Credit Suisse was the managing bank in loans worth CHF,000,000 million to Eskom. And so on. 16 per cent of all foreign debt in 1990 was the result of loans to Eskom. These loans became the obligation, post-1994, of the victims of apartheid to pay back via taxes. It is these same victims that are being discriminated against in Eskom’s current energy policy.

The feudal lords with their watermills were thinking small

But what does this social and economic problem have to do with the environment? In one sense, all social and economic issues are environmental. Human beings and all their artefacts are part of the global ecology. True that may be, but it sidesteps the real concern. Addressing the situation described above – that the centralised energy conversion system of South Africa is anti-poor – does not mean having to revert to traditional environmental issues such as dirty coal, global warming, renewable energy, cute and fuzzy bunnies. The answer would be to change the distribution policy of Eskom and the government, reduce cut-offs, lower residential tariffs, increase 'lifeboat' allowances, and build more transmission lines and bigger power stations.

This approach is fundamentally flawed in that it ignores two key factors. First, it ignores the fact that electricity generation (like all energy conversion systems) underscores a political power relationship. Within a centralised and tightly controlled system as South Africa’s, the citizenry already gets as much electricity as it needs, according to the system. Because the South African energy cycle is controlled entirely by an elite class, electricity is granted to non-elites in accordance with their ability to serve the elite class. By way of example, middle class individuals receive a fair amount of electricity because: 1) They provide a means of subsidisation for industry through the payment of tariffs, and a form of revenue for Eskom; 2) They need a fair amount of electricity to fulfil their roles as the technicians of the modern economy. One cannot be an effective engineer or doctor if one does not have electricity. The poor receive a more limited amount (or none at all) precisely because the system does not require them to be electricity-rich. In fact, the value of the poor for the system, besides the role of consumers, is to depress wages.

The current lack of capacity within Eskom to generate additional electricity is being addressed only because the dominant interest group (business) is demanding more and cheaper electricity. This demand is virtually unlimited, and additional increases in generating capacity (more power stations) will be absorbed and used by industry. To radically alter this equation to truly favour the poor would require a complete change of the economic and social paradigm of the economy itself. This would require a transition to a democratic socialist regime and a degree of central planning to the economy. Only after this has happened, after the power of capital has been broken, can the policy of Eskom be changed.

Any move towards a democratic socialist South Africa will not happen overnight, for such a move will be strongly (if not violently) resisted by current elite groups and capital in general, and could take generations to achieve. There is no time to wait for such a transition, both in terms of human suffering and external factors. Nor is it evident that the populace as a whole wants a socialist South Africa.

Further, even a socialist South Africa will not remove the underlying power dynamic between the citizenry and centralised energy conversion. As long as the generation and distribution of electricity remains in the hands of a single entity or the few, the entire citizenry will remain at the mercy of the few. Electricity and other forms of energy, petrol, for example, are not luxury items. An individual requires constant access to them in order simply to survive in the modern world.

The second factor, which renders much of the previous factor mute, is that external factors will force a change in the current energy cycle. Coal is not an unlimited resource, and South Africa’s coal reserves will run out. Current reserves are at about 34 billion metric tons, and by 2040 South Africa could have only 7 billion metric tons. 8 Yet these statistics are not the whole story. The demand for coal is growing on a global scale and will continue to do so, despite diminishing reserves. Simple economics means that the price of coal will keep on increasing, making coal-generated electricity increasingly expensive. There are already signs of this happening. For example, China is concerned that it does not have enough coal to fuel its industrial expansion:

'This year, China's domestic demand for coal is expected to reach 1.78 billion tons. Taken together, the four major industrial sectors of power generation, metallurgy, building materials manufacture and fertilizers will consume 1.58 billion tons, up 12.9 percent on the previous year. Meanwhile exports will exceed the 80 million ton mark. Energy expert, Han Xiaoping, says, ‘The fundamental reason for China to slash its coke export quota lies in China's deepening energy crisis. China's current coal reserves and rates of exploitation are just not sufficient to continue to sustain the rapid development of the Chinese economy.'

Shortages in coal supply will be further exacerbated by declining petroleum reserves and rising petroleum prices. As the price of oil per barrel increases, the viability of transforming coal into oil increases. This is what SASOL does, and it is a technology in which China has heavily invested in. This makes coal an even more useful resource thereby increasing demand, price and rate of extraction. This will mean greater pressure on the poor and working classes for, as energy prices increase, more and more people will be unable to afford access to energy, leading to negative social implications such as the further entrenchment of poverty, poor/minimal education, disease, and social conflict.

Recent moves in the biofuels sector (ethanol and biodiesel are now economically viable alternatives and additives to petrol and diesel) are showing a similar trajectory. The production and distribution of biofuels is rapidly becoming consolidated in a nexus of agribusiness and traditional oil companies, often with generous state subsidies. Once again, the only role for the individual in this system is as the consumer. Further, as ethanol and biodiesel become the cash crops of the 21st century, good land will be used for them, contributing to the increasing driving out of small-scale farmers to ever more marginal soil.

Simply speaking, the odds are that the coal and petroleum global economy will be abandoned or it will collapse before it can be shifted to a pro-poor approach. There is an ecological limit on our current growth trajectory and method, and this is applied to capitalist, communist, and socialist economies alike.

The other external factor that will force a change in the global energy conversion cycle is climate change. The overwhelming body of scientific evidence states that the current use of petroleum and coal is the primary reason why the climate is warming. As the climate warms, weather and oceanic patterns will change, causing massive disruption to ecologies. We can expect longer droughts, rising sea levels, increasing extinctions, reduced food supplies (especially marine food sources), and unhealthy weather. Most likely, you will be cursed to live long enough to see this happen.

Climate change is not only an environmental issue. It is a social issue, and will have profound social implications. Those with access to resources (capital) will be better equipped to deal with the negative effects of climate change; those without access to capital will suffer the most. Hurricane Katrina has been an abject lesson on how social, economic and political relationships will be played out as climate changes increase.

Just before Hurricane Katrina hit New Orleans in August 2005, the rich and middle classes deserted the city - they simply drove or flew away. They had the access to capital required to move themselves out of harm’s way. The poor (and black) were left behind to face the storm. The white guys left town and watched the show on CNN, the black folks drowned. Welcome to the future.

In the coming decades the world will either make the transition away from a fossil fuel economy or it will suffer the negative consequences of climate change. And, because this change is imminent (assuming we don’t 'choose' to drown instead), there is a great danger that the transition towards an alternative energy system will ignore the social and economic relationships that exist in energy conversion, especially within the minerals-energy complex.

If the negative affects of global warming and air pollution are temporarily excluded from the equation, it makes no difference in terms of societal power relationships if the system for producing electricity comes from a centralised coal-based system or a centralised renewable energy (or nuclear) system. Both systems will produce the same kind of socio-economic relationships that currently exist. And the environmental movement seems to have forgotten, ignored, or is unaware of this fact. Replacing one system that bolsters domination with another that also bolsters domination does not advance the cause of human justice one bit.

The only long-term solution that will address both the environmental and human justice concerns is one that addresses the political economy of power. Moreover, addressing the political economy of power is a necessary step towards a better, brighter world for all of us.

I’ll keep my remarks on how to address the political economy of power to the generation of electricity; no alternatives for petroleum, unfortunately. To begin, we must remember that there is no shortage of energy. The only limit that exists is our ability to tap into that energy, and this is a technological problem.

Fortunately, there do exist alternative technologies - such as solar, wind, biogas - and there are also methods of using energy with greater efficiency, that have the potential to change the political economy of power. Some of these technologies will require state subsidy, others need further research and development, but neither of these two factors are prohibitive. Technologically speaking, we are close to the point of having a carbon-based paint that can be applied to a wall and generate electricity using solar radiation.

What needs to be done is to decentralise the generation of electricity to the level of municipalities, towns, villages, and, most importantly, individual households. The goal is that each household should be able to generate enough electricity for its own use, as well as generate excess electricity that can be fed back into the national grid. This goal is not impossible to achieve. The laws of physics do not prevent it, and it is not beyond current engineering capacity. This can be achieved. It is not science fiction. The technology will have to be renewable and use materials available at a local level. Wind and solar provide two potential sources for such a system, and, because they are free to all, cannot be controlled by the few.

The basis of the electricity conversion system needs to be at the grassroots level. Individual citizens and communities must have the ability not only to set their own electricity requirements but also to meet their own needs. If this can be achieved, it will provide adequate electricity and will also alter the political economy of power. No longer would communities have to beg from the State for an extra couple of kilowatts a month; the State would not be able to use electricity as a means of control and oppression, and as a vehicle for implanting its own desires. To use a slightly different terminology, the means of the production of electricity would be in the hands of the users themselves.

The social and economic implications of such a system are clear – in at least one important sector of modern life, the people would have direct and clear ownership of the electricity sector. The corrosive and dominating relationship with regard to electricity would be dissolved and replaced with a situation of community and individual level self-sufficiency, providing a basis for advances in other areas such as economics, liberty, human rights, and real education.

Quite often in the struggle for human and environmental justice, we see ourselves fighting a rearguard action while hoping to survive until some future date when things will, miraculously, be better. Salvation is at a distant point, for the conditions for change are not yet right. Current struggles often seek to enable the foundations for change, not the change itself.

Breaking the political economy of power and decentralising electricity generation needs not wait for some far off event. The time for change is now. The current system has systemically failed both the poor and the environment, and has just about reached its ecological limits. Coal and oil are running out. The continued use of fossil fuels is producing an ecological response (climate change) that is already having widespread and negative effects. A change must happen, the historical moment of change has arrived. Just as Europe and China shifted to coal as wood supplies dwindled, so Africa will shift from fossil fuels to alternative sources of energy.

For the past 250 years we have had the feudal lords and their watermills. Time for some windmills and freedom.

* Part 1 was published in Pambazuka News 293
* Tristen Taylor is the energy policy officer at Earthlife Africa Jhb. The views expressed in this work are not necessarily those of Earthlife Africa Jhb.

* Please send comments to [email protected] or comment online at http://www.pambazuka.org

1 David A. McDonald, “The Bell Tolls For Thee: Cost Recovery, Cutoffs, and the Affordability of Municipal Services in South Africa”, Municipal Services Project, March 2002, pg. 5
2 Bryan Ashe, “South Africa's Mammoth Electric Company Leads the Way in Utility Privatisation while Touting Sustainable Development”, 16 August 2002, http://www.corpwatch.org/article.php?id=3528 Bold added
3 Dale T. McKinley, “The Making of a Myth: South Africa’s Neo-Liberal Journey”, 22 March 2006
4 David A. McDonald, “The Bell Tolls For Thee: Cost Recovery, Cutoffs, and the Affordability of Municipal Services in South Africa”, Municipal Services Project, March 2002, pg. 3
5 Currently on hold, but which would result in a centralising of energy conversion in the hands of business, a far smaller and less accountable group than Government.
6 Brendan Ryan, “Anglo Coal pitches for Eskom”, MiningMX, 21 December 2005, http://www.miningmx.com/energy/531028.htm
7 For more on the role played by multinational banks in propping up Apartheid, see Tristen Taylor, “Funding Repression”, 2005.
8 Note estimates vary widely. Source used: http://www.mbendi.co.za/indy/ming/coal/af/sa/p0005.htm
9 Tang Fuchun, “Call for Coal Reserve in Energy Security Strategy”, China.org.cn, 17 June 2004.

The generation and distribution of power (electricity) is politically and economically driven. It is also surrounded by deception and falsehoods. Tristen Taylor explains why and how.

For too long the issue of energy has been set aside, treated as if it had no influence on how South African society is shaped. And there has been a somewhat valid stereotype that within civil society, energy has been the domain of white environmentalists - aging hippies in sandals going shoo-wah over the teachings of the Dalai Lama and speaking about how we all must conserve electricity, how we all must make sacrifices, whilst black children die in shack fires caused from having to use a paraffin stove because the household electricity lifeline was used up weeks before.

The generation and distribution of power (primarily electricity) does not happen in a political vacuum; it cannot be divorced from the social and economic conditions under which most South Africans labour and starve. In fact, as I will attempt to explain, the generation and distribution of power is informed by social, economic and political realms.

The generation and distribution of energy is a murky topic. Omission, falsehood and deception surround the use of light switches, refrigerators, irrigation pumps and industrial smelters. Mis-information is pumping out faster and harder than a 'six-pack' power station spews out SO2 and CO2.

Who, then, is deceiving us? There are the usual suspects: coal mining companies, government, oil cartels, Eskom (power companies of South Africa), and other assorted free-market robber barons. There are also the traditional flag-carriers of the centrally planned economy. Then there is the environmental movement, which has traditionally refused to see beyond the forest to glimpse human misery and suffering. Without fail, the one lie that all of the above seem to propagate is that there is an energy shortage. It goes like this:

Since we can only generate x amount of power and the practical demand of each and every user is greater than x, x will have to be allocated. Of course, someone will have to make this allocation, and this someone is the state. The state, as a supposed neutral actor and invested with, to quote Max Weber, "a successful claim on monopoly of the legitimate use of force", will decide that industry will get so much power, agriculture so much, and residential users so much. The best allocation of resources will be on the basis of what is deemed in the best interest of the common good. It may be unfortunate that not all of us get the power we want, but that’s life and sacrifices have to be made.

This story is sly and deceiving. To start with, there is no energy shortage in the universe. The universe is awash with energy (all there is, after all, is energy and matter), and energy can neither be destroyed nor created. For the purposes of the human race, there is a virtual limitless amount of energy for the species to tap. And, therein lies the problem. It is not easy to convert energy into power, and part of the struggle of human history has been various attempts to tap into the energy of the universe. This has primarily been achieved through conversion of solar energy into plant and animal energy. This energy chain, like all energy chains, is never 100 per cent efficient. Each time energy is converted there is a certain amount of energy loss. Humans have then eaten plant and animal materials, converting these to human bio-chemical energy. Humans have then used that energy for labour to hunt more animals, grow more crops, build dwellings, and contest for resources - war and conflict. For most of history, the primary source of useable energy has been human muscle and intellect.

This was the case during the eras of the ancient Greek, Persian and Egyptian societies. It was certainly true during the Roman Empire. All these societies were based upon slave labour as the primary source of energy conversion. Since human beings were the most efficient sources of energy (human beings have the ability for rational thought; they can solve problems; are fairly durable; and can be taught to do things with greater efficiency than a cow or a horse), elite groups used slave labour to build, manufacture and grow the materials needed for those societies to function. The elite classes functioned as managers and grew rich from their exploitation of the labour of others.

Things began to change during the Middle Ages in Europe. During this time, while human power still remained supreme, animal power began to be used more and more frequently in agriculture; wood (plant energy) was beginning to be more and more important, especially in the production of iron and other metals; and water was used in mills for the production of flour, although, slightly later, windmills were used for this purpose. One notable consequence of this ‘new’ strategy of converting energy for human use was the complete and utter destruction of Europe’s forests. This led to what is called an energy crisis and forced European society into a potentially painful situation: find another source of power or undergo an economic collapse and a return to the dark ages. The ultimate solution was coal.

However, the most important lesson that should be learnt from this era, with regard to current energy conversion practices, was the political situation regarding water and windmills. But these two different energy sources were used in two different manners despite having the same primary technological function, grinding grain into flour (Debeir, Deléage, and Hémery). Watermills required access to flowing water and were relatively expensive to build. As the feudal structure of the day controlled access to watercourses and held a great deal of society’s capital, the aristocracy was able to own and control the watermills, thus, locking down an important part of agricultural production for its sole benefit. The peasantry had no access to the watermills, and had to compete in the processing of flour with older, less efficient methods of production. Quite clearly, we can see the link between ownership of energy conversion and socio-economic relationships. As Debeir has stated, "[water] mills were not only a good deal for some, but also tended to bolster an oppressive social structure".

Windmills were another story. Not only was wind part of the commons, and thus a renewable resource accessible to all social classes, it was cheaper to build windmills than watermills. The increasing use of windmills enabled the burghers, cities and peasantry to compete favourably in the production of flour, for which the market was growing as bread became more and more part of the general diet. Windmills also also encouraged competition with the aristocracy in the important realm of agricultural production. This began to have a significant impact in political relations, especially in the contest between free cities and feudal landowners, one of the central conflicts of the Middle Ages. Once again, Debier states:

"Thus windmills were established in the conditions of freedom that opened with the growth of cities, and established a further breach in the lords’ energy monopolies. Although feudal reaction against the new facilities persisted - "The windmill was the commoners’ mill which feudal law tried to take over" - it proved unable to stop the irresistible movement which continued until the dawn of the nineteenth century."

The dawn of the 19th century brought about a major technological, social and economic revolution: the industrial revolution. While the social, political and economic effects of the industrial revolution are well documented, the roles of new sources of energy conversion are often overlooked. Coal was at the heart of the industrial revolution. Basically, coal is plant matter that has decomposed, chemically altered, compressed and hardened over millions of years. Coal is made up of carbon, sulphur, methane, water and various other materials. Essentially, coal is the storage of chemical energy produced via long dead plant photosynthesis. Most of the coal used today was formed during the Carboniferous era (280 to 345 million years ago).

While the use of coal had been around for thousands of years, the industrial revolution mined and used coal to a degree never seen before. A new energy cycle was born with coal (and its offspring, steam), the fossil fuel cycle. Coal was used to drive steam engines, railways, furnaces (purified coal (coke) replaced wood as the primary source of heat for metallurgy), shipping and household heating. It provided such an intense and useful source of energy that the industrial revolution was entirely dependent on the mining, distribution, and burning of coal. It should come as no surprise that this valuable energy resource was not in the hands of the common people although it was they who died of Black Lung, but instead in the hands of the burgeoning, to borrow a phrase from Tom Wolfe, 'masters of the universe' - the capitalist class. While perhaps not of conscious design, there was no way that the windmill story (commoner power equivalent to that owned by the feudal lords) would be repeated with coal. Coal quickly became a privately owned commodity to be sold and traded as necessary, and fortunes were made. This, in turn, meant that the majority of the populace were precluded from control of the energy chain and that the power (both economic and political) of the newly formed capitalist class was further increased. The conflict between the bourgeoisie and the proletariat that has consumed human history since provides the basis of entire branches of philosophy, history and political analysis.

To highlight the point, the US was built on the private use of coal. It fuelled the beginnings of an industrial expansion that has lasted until today. Corporations have their origins in the rapid industrialisation brought about through the use of coal and the blood that was shed in producing it. As The Ukrainian Weekly points out:

"In the 19th century, America's industrialisation and dramatic economic development was fuelled, literally, by coal. Coal fuelled the expansion of the railroad into America's undeveloped western states, and in Pennsylvania it fuelled the mighty American steel industry. But extracting coal was dangerous work. Illness, injury and death were common. Several hundred coal miners a year died from methane gas explosions in the mines of the Pennsylvania anthracite region - the same type of explosion that recently killed the miners in Ukraine. Annually, tens of thousands of miners were maimed."

Coal has not disappeared from society as a valuable source of energy conversion. Quite the opposite. About 40 per cent of all electricity generated globally comes from coal-fired power stations with an efficiency of between 30 to 40 per cent; i.e. of one kilogramme of coal used in a power station, 300 grams is used to produce electricity and the remaining 700 grams produces waste heat. Coal is not only an important part of our power generation system, it remains, through its method of use, an important factor in how our societies are controlled and organised. The production and distribution of electricity in South Africa will be discussed later.

While coal remains an important part of the global energy cycle, another fossil fuel has eclipsed it: petroleum or crude oil, also called black gold. Petroleum became increasingly important in terms of the global energy chain throughout the 20th century, reaching a point where our economy is based entirely upon petroleum. About 84 per cent of petroleum extracted is refined into fuels (petrol, diesel, fuel oil, jet fuel, kerosene, and liquid petroleum gas (LPG)), the other 16 per cent is used in the manufacture of material, plastic being the most common. Like coal, petroleum is a finite fossil fuel comprised of decayed organic matter. Furthermore, petroleum is a cheap and effective source of energy.

To understand the extent to which we operate within a petroleum economy, take a look around you. The paper this is written on comes from trees cut down with machinery using petroleum; the wood is transported to the mills via trucks (petroleum again), from the mills to the stores, and from the stores to your office and home. Without petroleum, modern agriculture could not exist. There would be no cars or airplanes, no computers, no modern medicine, no electricity. There would be no plastic materials. There would be no modern economy. We would all be riding horses and to and from our subsistence farms. All of us who are alive now, owe that to the 20th century growth in population made possible by petroleum. Quite simply, if the supply of petroleum dried up tomorrow the world would enter a period of such utter economic collapse; the term 'apocalypse' could be considered an understatement. Many of us would starve to death within weeks.

The petroleum industry is vital to the life of every human being in the modern economy, and, yet, it is a tightly controlled industry with only a handful of key players divided amongst state and private control. Of the ten biggest corporations in the world (as ranked by Fortune 500), five are oil and gas companies with a combined annual revenue of US$$ 1.271 trillion. By way of comparison, South Africa’s Gross Domestic Product is US$215.5 billion. In the global market economy, this translates into an unequal balance of political power.

Not a great deal has changed in the petroleum market since 1900 when Standard Oil controlled 50 per cent of global sales.

Further, control over petroleum resources is vital not only for what is often termed the 'national interest', which actually means the interests of a thin elite class controlling any particular country, but for a country’s economic well-being. Anyone who thinks that America’s current military operations in the Middle East have nothing to with securing America’s long-term supply of petroleum is insane. A recent article in the (UK) Independent on a proposed law to allow multinational companies to drill Iraqi oil states:

"The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday. It would give big oil companies such as BP, Shell and Exxon 30-year contracts to extract Iraqi crude oil, and allow the first large-scale operation of foreign oil interests in the country since the industry was nationalised in 1972."

Globally speaking, the energy cycle of modern life is dependent on petroleum, natural gas and coal. The global economy is a fossil fuel economy chasing after diminishing reserves with no alternative in mind. The control of this energy cycle is centralised in the hands of the few, with the majority of the world population reduced to mere consumers of energy, at best. Today, there are watermills everywhere and not a windmill in sight.

Part 2 will be published next week and Part 3 on 5th April

* Tristen Taylor is the Energy Policy Officer at Earthlife Africa Jhb. The views expressed in this work are not necessarily those of Earthlife Africa Jhb.

* Please send comments to or comment online at pambazuka.org

Global banking group Barclays has just paid 33 billion rand (£2.9 billion or $5.5 billion) for a controlling stake in South African bank Absa, a cash injection that supporters of the deal have hailed as good news for Africa’s largest economy. Critics have slammed the deal as likely to benefit mainly foreign shareholders and lobby group Jubilee South Africa have called for Barclays to pay reparations for doing business with the apartheid regime. In the context of overwhelming corporate power devoid of ethics and based on the primacy of profits, this article charts the strong moral case to be made for reparations from corporations who cause suffering because of their actions.

Let's not kid ourselves. This world's socio-economic engine runs on capitalism, and corporations are driving the bus. Ever since the end of the Second World War, the power of transnational corporations has been in the ascendancy while that of organised labour, civil society, and the State has declined.

This rise - the spreading reach of financiers and businessmen into every corner of the globe, with no place free from a Coca-Cola sign and a marketing team - of corporate power in the latter half of the 20th Century has been well documented, starting with Dwight Eisenhower's prophetic warning in 1961 about the domination of America by an military-industrial complex. The fact that Eisenhower only warned the American people after serving as President hints at, even back then, the dark power of corporations to muzzle 'elected' politicians. Noam Chomsky, Gore Vidal and others have since charted the rise of the corporate (and branded) sun, an ascent yet to reach its apex.

The fall of the Berlin Wall and the subsequent end of an alternative to Yankee-style capitalism - known for its neo-liberal, trickle-down theories of economic nirvana and pushed, punted and rammed home by IMF and World Bank bureaucrats - marked the beginning of a sustained process of hyper-consolidation of corporate power and the total integration of each local economy into one financial system. We've noted and tagged this process. We've given it a name, globalization.

And it is a process accountable only to a specific minority, the shareholders of the transnational corporations that are leading the global economy. Shareholders, it might be pointed out, are almost always interested in one thing, the maximisation of profit in the shortest period of time possible.

The 1990s saw not only the opening of virgin markets in Eastern Europe, Russia and elsewhere, but also the increasing use of stock options as an incentive for corporate management. Whether by design or by accident, stock options for management has resulted in an alignment of the interests of corporate brass and of shareholders -profit. Neither God nor glory factors into today's equation. The days of the wise chairman of the board, the old man who had built the company up from two pots and a piece of string, looking after the community that had spawned his company are lost in legend and myth. At most, modern transnational corporations have only the faintest of ties to geographical locations or people. They have become divorced from communities, economically, politically and ethically.

An ethical transnational corporation is an oxymoron. When risk analysts sit down at conference tables, the end result of any corporate action is assessed according to profitability factors. If it does not make a profit (or a small profit at high risk), an action is deemed unworthy of pursuit. The converse is also true; highly profitable actions at the lowest possible risk are extremely attractive. The ethical component of an action is not considered, and, if it is, it is usually weighed in as a risk factor (i.e. the bad press and damage to a brand that an unethical action (like using sweatshop labour) can cause). In all cases, the determining factor is profit.

Not all organisations or groups of human beings act in this manner. In fact, most don't. The ethical considerations of actions are at the fundamentals of a lot of decision-making. For example, societies often try to build legal codes on their moral codes. Aristotelian ethics and politics are quite explicit on this point; the reason behind legislation is to make men and women moral. At the very least, it is hoped that laws reflect society's morals (what those morals are is at the heart of most major disputes within communities), although this is often subverted by the vested interests of politicians and their backers.

Philosophers and religious leaders for millennia have been promoting the primacy of morals; one should do A because A is the morally correct thing to do. While it is very hard to implement morally right actions all of the time, most people make an honest attempt at a near instinctive level.

Transnational corporations do not subscribe to this primacy of morals. They believe in the primacy of profits, and that is why we see, over and over again, transnational corporations working with immoral regimes and engaged in shady practises. From no-bid contracts in Iraq, to oil for the Burmese junta and its tanks, to sweatshops in Central America stitching branded sneakers together for First World teenagers, corporations are engaged in immoral activities, working in collusion with unethical parties. Why? Because it is profitable to do so.

The abolition of transnational corporations is not an achievable goal in the short or even medium-term. Not only will this not occur any time soon, the likely outcome of globalization is, ironically enough, the withering away of the State. The signs are in contracts and budgets across the world. Governments have been increasingly outsourcing their traditional activities - those actions which seek to achieve the public good - to corporations; social services, such as healthcare and rubbish collection, have been outsourced to private companies on the economic argument that the private sector is more efficient (read cost-effective) than the State. Even the core of the State and its monopoly on legitimate force, is slowly being outsourced. The cutting edge of penal theory deals with how best to outsource the prison system, in its entirety, to private firms that transport, house and discipline inmates. The world's most powerful military moves these days with a critical baggage train of private companies that do everything from transport and cooking of food, to maintenance of military equipment, to the provision of ‘security consultants’.

Citizen pay taxes in return for protection and various social goods (healthcare, education, etc.) from the State. The State now pays the private sector to deliver these social goods and protective services. Sooner or later, someone will decide to cut the middleman out of this equation.

Further, governments are rapidly losing the ability to set their own economic policies, except within pre-determined limits. Economic policies that are unfriendly to corporations (living wage, perhaps) can provoke massive capital flight in the short-term and disinvestment in the longer-term. As many jobs have become tied (often through contractors and other such middlemen) to the activities of corporations, capital flight and disinvestment means job losses and, possibly, economic collapse. This economic threat has resulted in countries throughout the developing world scrambling over each other to provide the cheapest labour with the kindest corporate tax system. This is George Monbiot's infamous race to the bottom, and it is a direct result of the economic power that corporations hold over governments. In attempts to change the behaviour of corporations, civil society and organised labour are often lashed with a variant of this argument; if you don't stop criticising corporation X, it will leave these shores, the global business community will lose confidence, foreign investment will dry up, and the whole country will descend into an economic crisis of dust bowl proportions.

Corporations, on this analysis, are entities 1) with a overriding concern for the maximisation of profit in shortest possible time frame, 2) that do not believe in the primacy of morals, and 3) are so exceedingly powerful that it is possible to conceive of them replacing the State, let alone influencing government policy.

Enter the issue of reparations.

The concept of reparations is rather simple. It states that if damage (suffering) occurred because of an entity's actions, that entity should pay reparations to those who suffered. Various civil society groups across the globe have applied this concept in several different contexts: Creditor countries should pay reparations for imposing odious and crippling debt on debtor nations. Colonial powers should pay reparations for colonialism, slavery, plundering of national wealth, etc.. Polluters should pay reparations to those who suffered from their pollution (for example, victims of groundwater contamination). The concept of reparations is not an economic or political concept; it is a moral concept; the perpetrator of suffering inflicted on others needs to make amends. This is a basic moral precept: If you do something wrong, take responsibility and, if possible, try to correct the situation.

The case for reparations from corporations has many angles, but one of the most current is that corporations must pay reparations for their support (direct or indirect) of illegitimate regimes. The case is, perhaps, strongest in terms of direct support.

Corporations that support illegitimate regimes are committing fairly serious moral violations. For example, an oil company pays royalties to a military dictatorship. The revenue from these royalties is then used to purchase guns and tanks, which are then used to suppress the population. Why is this an example of a moral violation? After all, the corporation wasn't (via its employees) doing the actual suppressing, and it was doing nothing illegal. It was operating within the law of a sovereign nation.

The latter objection falls away quite quickly. The case for reparations is a moral case, and is independent of the law. Throughout history, including the modern era, there have been a variety of laws that make some of the most immoral acts legal; the Apartheid system was one such legal framework. The concept of reparations relies on a primacy of morals, not that of law.

It is the former objection that has more strength, and it is here that the relative power of corporations comes in. Countries cannot easily force transnational corporations to purchase a particular bond. Countries, especially in the developing world, have a hard time telling transnational corporations what to do in general. Corporations can move domiciles, threaten to disinvest, choose not to deal with illegitimate regimes. When corporations deal with illegitimate regimes that commit human rights abuses, they do so willingly and knowingly. They are like gun stores that sell weapons to the enraged husbands of cheating wives; there's only one reason why such individuals want to buy 9mm pistols and fistfuls of hollow-point rounds; there's only one reason why the South African Defence Force issued bonds in 1976.

Corporations that continue to support illegitimate regimes do so in full knowledge of the ramifications of their support, and do so despite having the ability to do otherwise. And, for this, they must pay. This demand for reparations from corporations is a part of wider attempts worldwide to impose morality on corporations. This will be resisted, mostly due to their non-acceptance of the primacy of morals; business, as they are fond of telling us, is war, and all's fair in love and war.

They are wrong. This world does not belong to them. It does not move according to the dictates of currency traders in New York, London and Tokyo. This is our world. It is for all human beings equally, and what makes us special is not that we crawled to the top of the food chain or that we can travel to the moon and back again or that we can bet on the futures market. What makes us special is that we are the only form of life we know of that can differentiate between good and bad, between the virtuous and the wicked, and then act accordingly. Without this, we would be nothing more than a bunch of particularly vicious apes. The belief that human inventions such as corporations and capital are different, are immune to moral judgment and action, is the great public relations trick of our times.

* Tristen Taylor is the Apartheid Debt and Reparations Campaign Coordinator at Jubilee South Africa, which is currently embroiled in a campaign to force Barclays National Bank Ltd to address and pay reparations for its Apartheid past. The views in the article above are his and are not necessarily those of Jubilee South Africa.

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