Think Planetization Not Nationalization

By Stefan Pedersen - 01 May 2019
Think Planetization Not Nationalization

Talk is rife about the prospects of limited nationalization should Labour win the next election in the United Kingdom. Coupled with the recent Extinction Rebellion, it has been suggested that nationalization could work against global warming. It is here argued that if combating global warming is the primary goal, we should instead start thinking in terms of planetization.

Corbyn supporter and regular Guardian columnist Owen Jones recently wrote that as the Extinction Rebellion protests ‘winds down, the demands must radicalise. With capitalism itself rightly being challenged, the focus must shift to the fossil fuel companies and the banks. As long as they remain under private ownership on a global scale, humanity’s future will be threatened’. If we take this assumption at face value and agree that the private ownership of fossil fuel companies and banks form part of the root cause of global warming then this surely has to be dealt with in one way or another as part of a comprehensive solution.

But Jones, who goes far beyond the current Labour leadership, have come up with a distinctly 20th Century way of solving this conundrum, namely the (re-) nationalization of industry and financial institutions. I here instead introduce the argument that what really is needed to tackle global heating at the planetary level – where it actually counts for something in the big picture – is more likely to be something akin to planetization. This is a distinctly post-national and sufficiently radical global solution that fits our 21st Century conditions better.

Nationalization has worked well for national economies that wanted to centralize economic control and exercise economic independence while they made the most out of selling the natural resources found within their territories on the global market. The decision to in large part nationalize mining operations in Sweden and oil extraction from Norwegian depths in the post-war era have since brought untold billions in revenue into the coffers of these Scandinavian governments that otherwise would have ended up in either private or foreign accounts. China’s decision to keep the commanding heights of its economy state controlled, while only opening some of it to foreign investment, is one of the key reasons behind the economic success that country has experienced in recent decades.

Considering how well these countries have done from nationalization – and how poorly countries that instead have massively privatized its assets have done from that option (think Russia in the 1990s) – it is no wonder that Labour wants to emulate these success stories. But while Labour currently suggests re-nationalising utilities, railways, Royal Mail, and maybe a bank in the United Kingdom, Jones’s suggestion is substantially more radical. But if we were first to go to the lengths he suggests and repurpose both energy firms and banks by putting them in public hands, the question is if nationalization could do the work here required of it and help secure, rather than continue to threaten, humanity’s future.

Nationalization, like everything else done within the national paradigm of thinking, is primarily a means to heighten the strategic position of the country doing the nationalization vis-à-vis its other economic competitors by monopolizing the profits derived from key assets. In a global economy with a legal framework which is broadly, though far from exclusively, constructed along the lines of the reciprocal opening of markets, suddenly nationalizing domestically might backfire on a country doing so. Because if other states reciprocate with banning access to their markets or resources in return, foreign investment opportunities for e.g. now state-owned British ‘fossil-fuel companies and banks’ will be drastically diminished.

But companies from other countries, who agree to keep their domestic economies open for private investments, might be allowed to expand their possibly ecologically harmful operations in less developed countries that have now barred British entry. If the newcomer that ‘gets’ the resource base a British company or bank earlier controlled exercises less stringent environmental oversight than the Brits did earlier – both the environment and the British economy loses.

Planetization, on the other hand, is as I here suggest a governmental strategy similar to nationalization but carried out at an appropriate scale for comprehensively ending environmentally harmful practices globally. It involves a comprehensive program for ensuring regulatory compliance by corporations and finance institutions through making their right to domicile and carrying out business domestically contingent on following a set of what would be universally best practices both domestically and in their foreign operations. Aggravated noncompliance could lead to ‘planetization’ where the entire firm is taken over by a global trust which ensures not just that the applicable environmental rules are followed but also that the profits derived from its operation are invested in e.g. green technologies or reforestation where that will be most effective to hinder further environmental degradation.

The countries who first agree to ‘planetize’ their economies could for instance implement the same stringent rules on what their corporations now threatened with planetization could be allowed to do against the environment both domestically and in foreign lands.

Such a program of planetization, if enforced as a global rule, would either lead to a global trust being in control of all resource extraction and finance or alternatively near universal adaptation of environmental best practices by the world’s multinationals and finance institutions. Both results would be great for the environment but the continuation of a competitive economic order at the level of e.g. resource extracting corporations would be dependent on the realization of the latter scenario. It would be no use to simply relocate to another domicile for a firm that still wanted to do business in a particular country that was both willing and capable of enforcing planetization. Once a sufficient body of planetized corporations and banks had been accumulated, the same countries could pool their economic resources and intensify their efforts to alleviate e.g. global warming. Rules about preferential trading with other planetized economies could incentivize reluctant countries to join the same  framework. States working within the planetization framework could also commit to offsetting the environmental damage deemed necessary for the furtherance of technological civilization by creating nature sanctuaries of ten- or hundredfold size nearby to the area that will be damaged by e.g. a mining operation.

What makes planetization initially trickier than nationalization is that it will only work if a series of major governments commit to it. It could begin with Labour doing so in their program and winning a future UK election. But a US administration might then have to follow suit before it becomes a viable strategy globally. The point is that nationalization is not a naturally green strategy but that planetization would be. Planetization of some kind, once thoroughly theorized, might be the answer to neoliberalization in the 21st Century.



Stefan Pedersen, Visiting Research Fellow, University of Leeds.

Image credit: Julia Hawkins via Flickr (CC BY 2.0)

Disqus comments