On the Majority Report, Vox’s David Roberts gave a long argument against nationalizing utilities. In this post, I will debunk it.
In this post, I’m going to do a close-reading of statements made by Vox energy report Dave Roberts. These statements are from the 9/6/2019 episode of Majority Report, where Sam Seder interviewed Roberts about energy. Dave Roberts came out strongly against nationalizing the energy industry. I strongly support nationalization, especially of energy, so I will do my best to refute his arguments.
There was a lot leading up to his statement, so let me add context. Sam played a clip from the CNN energy Town Hall, where a man asked Elizabeth Warren if she would consider nationalizing utilities. Elizabeth Warren replies no, she won’t. She argues that we should ban carbon-based fuels by 2035, but corporations should still be able to profit from alternative fuel sources. In other words, she advocates green capitalism – no decommodification, no collectivization, etc.
Sam says (I’m paraphrasing) to Roberts that Warren is being unrealistic about the nature of profit-motive, because simply changing the energy from renewable to nonrenewable won’t change the profit-seeking, exploitative behavior inherent to private companies.
Then, Dave Roberts says:
“This is an enormously complicated question and subject probably well beyond what we can squeeze into two minutes of a podcast.”
Right off the bat, Roberts starts with a defense mechanism. He knows, based on the question Sam Seder asked, that his defense of not nationalizing utilities will not be popular here.
So his defense is to obscure the debate, purposefully making the issue out to be more complex. He presents the energy industry as esoteric knowledge, that only the enlightened or selected can access. In some way, this is true. We can imagine how much complicated infrastructure, planning, and engineering goes into energy. Even people working in the energy industry are only engaged with one small corner of it. In this sense, it’s very complicated.
But either nationalizing, or not nationalizing, industry has nothing to do with the technical stuff. He was asked an ideological question: do you think the energy industry should be nationalized, and which parts? And he answers by trying to frame it as a technical question.
The only knowledge you need to determine whether an industry should be nationalized is how private corporations functions, and the impact that profit has on an economy. If you’re pro-private profit, you’re opposed to nationalization. If you’re anti-private profit, you’re in favor of nationalization. You don’t need to know the mechanical constructs of the energy industry to have an opinion.
Dave Roberts continues:
“When we talk about energy companies, we’re talking about a lot of different kind of things, right? There’s oil and gas companies, which are one thing regulated one way. Then there are electric utilities which are responsible for electricity, and that’s what Bernie Sanders, in his plan, has sort of proposed to quasi-nationalize, although my experience is that even the Sanders fans online don’t really understand what he’s doing.”
*Sam takes long sip of coffee*
Roberts is naive to think no one on the left considered nationalizing until Sanders’ bill, and since his bill goes after utilities, then Sanders supporters are supporting the wrong thing. But, it shows how little Roberts knows about leftist thought, because a foundational element of the ideology is installing a worker’s state that eliminates private accumulation of capital. We know that the US is hypercapitalist, so nationalizing energy companies wouldn’t result in worker democracy, but, it would (theoretically) eliminate profit-motive in the energy sector.
When a company is motivated by profit, they will continue pursuing more: charging more, using the earthly material more, exploiting labor more etc. If a company operates as a capitalist organ, it seeks profit, and the profit-motivation can be, and often is, at odds with ecological preservation.
For example, when I was growing up, my parents had a friend who worked for one of the world’s largest private owners of timberlands. He told me that 98% of the trees they chopped down were planted specifically to be chopped down, and would again be replaced. 98% sounds great when you consider the slash-and-burn farming done in the Amazon (and throughout human history). But then you consider that companies like this own a lot of land, so 2% is an immense amount of former timberland, that then becomes sprawling suburban neighborhoods. That 2% of surplus forest, deforested and converted to real estate, is where the profit lies.
The difference between a private, for-profit enterprise and a nationalized one is that 2%. If the U.S. government was more involved in both the housing sector, and the logging sector, they could designate places of unused land, that doesn’t contain forests, maybe with more density and closer to public transportation, for housing. They could also plant a surplus of trees, to reforest areas with fires. That narrow 2% of forestry that isn’t replanted is the difference between profit-motive and no profit-motive.
Dave Roberts continues:
“But he’s basically going to nationalize utilities. My understanding, and I’ve studied power, utilities, for a looong time, and they are extremely complicated, and anything simplistic you want to say about them is going to end up being wrong. My impression from the experts in the field is that that’s not the main axis of the problem, right? That’s not where you’d go for a solution.”
You may have noticed I skipped past Roberts’ claim that Bernie Sanders “sort of proposed to quasi-nationalize” utilities earlier, and his fans don’t understand it. I skipped it because it was dubious rhetoric. And this part confirms that. If he’s not actually nationalizing utilities, then why is this guy so up in arms about it? He’s arguing that nationalizing utilities is bad and Bernie Sanders wants to nationalize. At the same time, he argues that Sanders doesn’t want to nationalize, and his fans are too dumb to get it.
It’s all rhetorical maneuvering that doesn’t amount to an argument. I won’t spend more on it though, because I don’t know Sanders’ actual proposal, and don’t care (for the sake of this post) that much either.
He also evokes the “experts in the field” – but who is that supposed to be? Either he was talking to heads of industry, which in an American context, means people with capitalistic investment in the industry. The experts in the field could also be scientists and engineers (then why didn’t he mention that?). But scientist or engineer would surely know how to do specific things in the field of energy, but that doesn’t mean they’re authorities on economic distribution. This makes me think his experts are just capitalists.
“Utility companies are not just in a free market, pursuing the private motive, they are regulated out the wazoo. We set up the system that now incentivizes them to want to build more stuff. That’s how they make more money, they build more power lines, build more power plants, build, build, build. And then they get a guaranteed rate of return on these investments.”
Roberts is talking out of both sides of his mouth here. First, he claims that utility companies aren’t pursuing profit motive. Then, he says the government incentivizes the utility companies with investment. These companies then “get a guaranteed rate of return on these investments.”
Anarchists and leftcoms love throwing around “state capitalism” at the Soviet Union, to suggest the Soviet Union wasn’t actually socialist. So, I will use the phrase “state capitalism” here, but in a completely different context than the anarcho-smear.
Our utility industry are state capitalist enterprises. This is common for industries in the US, that are nationalized in other countries, like Amtrak and student loan companies.
Let me break down Roberts’ statement. First he says utility industries aren’t pursuing private motive. By this, he presumably means that utility companies aren’t profiting from the sales of commodities. They’re instead profiting from investment provided by the government.
If the “private motive” means anything, it means profit motive. Roberts presumes profit is only accumulated on the sales side, ie, from producing a surplus of something, and then selling those things for more than the value of their labor and material, to collect the extra money (profit) from it. This is the conventional formulation of capitalist enterprise.
However, the model proposed by Dave Roberts is still capitalist, and still burdened by the profit-motive in capitalist enterprise.
He’s suggesting that the way it works, and should continue to work, is the government incentivizes utility companies to build stuff. Roberts’ implication is that, by incentivizing the building of infrastructure, the US government no longer incentivizes profit, or at least, mitigates profit motive.
But there’s a very important phrase: “guaranteed rate of return on these investments”. Investment is just another word for capital – more specifically, an investment is the use of a source of capital. For utility companies, the government is their source of capital. The capital is then deployed in the form of investment. These investments have a “guaranteed rate of return,” ie, guaranteed profit.
One thing Roberts presupposes, which is true, is that if a private company is incentivized solely by profit, then this profit-motivation will be at conflict with the public interest. If a company is motivated by profit, they will exclude people who don’t generate profit from their product. For example, car companies are motivated by profit, and because of that, they can’t just give everyone a car at “name-your-own-price”. Car companies need to charge enough to pay for labor, material, overhead, and then even more than that, so they can accumulate profit. Again, this is presupposed by Roberts, and its absolutely true.
However, the error that Roberts makes, is he assumes that if the government incentivizes the pursuit of profit in a specific way, then the profit motive is good for us. But profit motive in itself relies on extracting value from people, so it’s a completely flaccid half-measure to make precise adjustments to how companies can accumulate profit. The only way to truly stop this extraction of value is the complete decommodification of utilities, which in itself can only be done in a capitalist context if it’s first nationalized.
“We can set up the system differently so they’re incentivized to pursue energy efficiency, so they’re incentivized to pursue electric vehicles, infrastructure. We can set it up so the profit motive is working to our advantage.”
This is a clearer formulation of Roberts’ position. He argues that profit motive can be good, if we give companies a dual-motive. For instance, fracking may generate more profit than solar energy, but if the government added a guaranteed rate of return on government investment for soolar, then the profit-motive and the public interest-motive will align.
But is this an effective way to approach policy? To placate profit-seeking ventures, while finger wagging them? To efficiently do this, it requires the government constantly poking and prodding private industry.
This requires much more energy and effort than simple nationalization. This type of liberal “referee” style politics has to constantly re-litigate every bit of minute tinkering. Not only that, but when profit-motive is only kept in check by specific, targeted policies, those policies can be dissolved easily by conservatives, and they can be worked around. Nationalization requires much more effort to reverse.
“I’m not a market absolutist on either end. To me, markets are just tools, there’s some places where they work and some places where they don’t. Some places where you want them, some places where you don’t. But in an area where there’s tons of innovation and uncertainty, which is very much the electricity industry right now, there’s tons of stuff going on, tons of new tech, tons of new models emerging. It’s precisely in an area like that where you want to get the market working for you…”
The first part is pretty silly. You can’t be opposed to nationalizing utilities, and claim not to be a market absolutist. It’s one of the most common, foundational, and non-controversial industries to nationalize. Only in the US can you claim you aren’t a market absolutist, but then talk about how profit-motive helps the common person. The truth is, in most countries, keeping utilities privatized would be considered “market absolutist”, if that phrase is to mean anything.
Another thing – and Sam Seder touched on this himself, after Roberts got off the phone – is how much innovation could there really be in the electricity industry? Yes, energy tech is constantly being innovated and developed. But is the utility infrastructure – ie the method of distributing that energy – being innovated? Does it need to be innovated?
I see this as a purposeful obfuscation by Roberts. For one, he presents the energy industry as unfathomably complicated, then picks and chooses elements from the complicated mess, depending on his argument.
Roberts relies on the is by using mainstream ideology as a crutch, to assume things about market forces. He has no intention of warranting his claims about market forces, but instead depends on readily accepted, common sentiment.
The idea that the public can make “the market works for” us is ideological and unwarranted. It shows a fundamental misunderstanding of profit. Profit, by its nature, works for the capitalist class. It’s what motivates the capitalist class. The capitalist class interest (profit-motive) often doesn’t align with commoner class interest (fulfillment of needs). But even when it does, a capitalist market still, necessarily, depends on exploitation of labor.
“The distributed innovation of a market is perfect for that kind of area. Obviously you want guard rails, obviously you want everyone taken care of, obviously you set baseline standards for emissions and everything, but getting the profit motive working for you I think is very important in the electricity industry right now.”
Roberts seems to think that the electricity industry will languish in bygone technology if there’s no profit-motive.
First, Roberts argues that, in order to mitigate climate change, the government needs to dictate energy (he goes more specific into this later too). But he also argues that having private, profit-motivated companies is good. He doesn’t warrant why or how they’re good though.
Government-dictated energy and private industry are two things that are hard to make compatible. The function of capitalist market forces, ie profit seeking, is to find a new thing to commodify, thereby creating a profit stream. Profit motive leads to seeking the most profitable way of generating value. In the industry sector, this often means seeking things with tremendous environmental impact, like fracking.
So if we take Roberts seriously, his position on profit and his position on green energy are antithetical. The point of nationalizing an industry is dictating how they should do business. The point of privatizing an industry is letting corporations dictate how they should do business.
The only reason to both dictate how the energy industry should do business, while also allowing them to accumulate profit, is to ensure that some people still exploit the labor of others, while mitigating the damage caused by that exploitation.
Not only that, but Roberts doesn’t give any explanation why having a profit-motive even helps us. He doesn’t even say how it helps us.
We can presume he thinks market competition leads to increased research and development. However, if there’s no market competition, then we save a lot of money on R&D. Let’s say there’s three massive energy corporations. They’re all spendin money on R&D. A lot of, or most, of this research will realistically overlap. Isn’t it more effective to nationalize the industry, and consequently the R&D, to prevent this excessive spending? Not only that, but if the industry isn’t nationalized, this R&D will—using history as a precedent—often lead to even less sustainable methods of energy.
“This notion that if you nationalize everything, it’ll be okay, I just think people have to think about that a lot more before they jump on that bandwagon. Especially as some sort of lefty gatekeeper issue, like you’re not pure and good unless you jump on this bandwagon. It’s just really not that simple.”
The simple truth is, energy nationalization is a “lefty gatekeeper” issue. Roberts argues us commoners don’t know what we’re talking about, with an issue that has long been a considered a left-right economic measuring stick. But traditionally, if you’re on the left, that means you’d be in favor of changing a profit-seeking corporation into a public one. And especially for an industry that is so often nationalized like energy, then it does feel like a “gatekeeper issue” to me.
The democratic party, especially since the 90s, and the country as a whole, especially since the 70s, has shifted rightward economically. Democrats are usually pro-capitalist but progressive socially. They’re in favor of gay marriage and legalizing weed, but still are, as Obama put it, “moderate Republican(s)” in the 80s. They’ll then say “Why do you hate me with your dumb purity tests? We agree on 99.9% of things.”
But, being opposed to nationalizing signifies such a fundamental rift in ideology and worldview. His argument shows how the notion of a “gatekeeper issue” is silly. No one is obligated to consider someone else a political ally. I’m in favor of nationalizing all energy. Does that mean I’m gatekeeping Roberts? No, it means he’s my political opponent. He wants the opposite of what I want.
“There are public utilities out there and some of them are good and some of them are terrible. There’s no guarantee. Look at the government now. Do you want this government completely in charge of the electricity industry from top to bottom? The notion that public will yield good results is not necessarily comfortable either.”
Here’s another example of Roberts conflating the economic distribution model of an industry, and the qualitative labor and value created within that industry.
There are public utilities that are terrible, because nationalization in itself doesn’t remove the profit-motive. People advocate for nationalized utilities because presumably it would remove the profit-motive, even if doesn’t have to. Public utilities can be terrible when they retain characteristics of private utilities.
As for his argument about “this administration” Donald Trump, running the utilities: yes, I would want even the Trump administration running nationalized utilities.
The US government is designed to preserve capitalist class interests. By nationalizing utilities, or any industry, it limits the scope of potential exploitation available to the capitalist class. If the utility industry was nationalized, that would limit the exploitation of capital, although not nearly on a revolutionary scale.
Now think about the ways in which Donald Trump is bad, or at least, makes a bad president. For one, he’s super-rich. He made that money from stereotypically exploitative ways, like real estate and gambling. The money he used to fund these ventures was inherited. He’s the face of American Psycho-style capitalism.
Not every bad thing Trump has done goes back to capitalist interests. For example, his misogyny and racism don’t necessarily have to do with capitalism. However, at the same time they do, because capitalism is the main ideological engine that informs Trump’s worldview.
My point is, the main reason Trump is bad is because he has power to exert control over society. He got that power, first, by utilizing capital. He is president because he’s a capitalist. If the utilities industry was nationalized, and wasn’t operating as a profit-seeking venture, then the Trump administration would have no way to manipulate it negatively, except if they made it a nationally owned, profit-seeking venture. So for me, the perceived worse case scenario of the Trump administration controlling utilities would probably actually be better than the private sector Roberts argues for, and currently exists.
“So I would just encourage people, if you’re looking for a litmus test issue, a bottom line issue, this is not the one. There are other policies that are more important I think. For instance, Bernie wants to ban fracking and some of the other candidates want a slower phase-out of fracking. That’s a real policy issue. I think that’s something Bernie Sanders fans can reasonably pressure the other candidates about. I would rather them do that then get on this nationalization bandwagon. I just don’t think it’s the appropriate vehicle for their kind of ambitions. If you want the private market to work for you, just say US utilities have to reach net zero carbon emissions by 2030. Just put that rule in place and then all of a sudden, the innovation will serve you. That’s well short of nationalization but it would be perfectly effective.”
What Roberts doesn’t realize is that it’s much easier to ban fracking when energy is a nationalized industry. He also suggests profits can “work for” us. This rhetoric works for most Americans, because Americans just take “market = good”, or at least “market = potentially good” as a truism. But there isn’t aan argument here. Our economic system allows people to seek profit through private enterprise. When a company is privately owned this way, it becomes much harder to tell these companies what to do.
That’s the whole premise of private capitalist enterprise: that they will privately be able to seek streams of profit. And as long as fracking is profitable, it will be something the energy industry will do.
If the government keeps energy industries private, they, of course, could ban fracking. However, the private sector will fight tooth and nail, and will likely succeed in the mid-to-long term with the tenuous nature of the U.S. government in general. Banning fracking in the private sector is not a long-term policy, but nationalization is.
“Another thing worth pointing out here, is there’s an element of ridiculous cosplay about this. You’re never going to get the US congress to pass a law that nationalizes the electricity sector. Honestly Sam, the electricity sector, we need working for us, and finding innovative solutions. That’s when markets are good. But you know who we need to just shut down and phase out, is oil and gas companies. So I don’t know why the nationalizers aren’t going after them, right? If you just want to take over an industry, explicitly to phase it out, that’s who I’d go after.”
At this point, Sam has had a lot of restraint, but he seemed bristled by this last rhetorical tactic:
“Oh I would start first with the refineries. We nationalize every refinery. We keep hearing about how it’s so important to our national security. Good. We’ll take control of that. Dave Roberts, always a pleasure.”
To go back to Roberts points though, he kind of blows his load at the end. He spends the whole time concern-trolling leftists against nationalization. But then he resorts to the “cosplay” line. This is a classic propaganda line to smear the other side. I know because I’ve used it against the alt-right a lot, and I know this technique is just a smear.
He resorts to the main capitalist realist argument to shut down any change: “come on guys, are you so naive to actually think the US government is going to nationalize utilities? Get a grip LARPers.” For Roberts, it’s easier to imagine the end of the world (and for capitalist Americans, that really just means “it’s easier to imagine the end of the US Empire”) than it is to imagine the end of capitalism.
Sorry to go here, but, this is David Hume’s “is-ought fallacy”. He’s arguing that things are one way, and because they are that way, they ought to be that way. He would argue that he’s not doing that, he’s simply saying nationalizing energy is unrealistic. However, we all know that. Everyone knows it’s unrealistic, especially people who are pro-nationalization. He isn’t saying anything revelatory, he’s simply saying “it won’t work.”
He then, I think, realizes he showed his hand too much, and tries to backpeddle with a concession. He says that we should, and could nationalize the actual powerplants, instead of nationalizing the utilities distribution.
The reason I feel like this is a backpeddle, is because it makes no sense with everything else Roberts said. Those powerplants would be the main places that Roberts’ purported profit-driven innovation would happen. There’s no innovation in terms of delivering power. Sure, some places have better infrastructure than others, but it doesn’t take innovation to figure out why. So what was the point of his wordy monologue on this? Yes man, we want to nationalize the powerplants, and I thought that’s what you’ve been arguing against the whole time.
Not only that, but nationalizing the actual powerplants is way more unrealistic, and would be way more impactful, than nationalizing the utility distribution. All of this leads me to believe Roberts threw that out there to not seem like a finger-waggy establishment hack, because he realized that’s exactly how he came across.
To conclude, I will elaborate on some impacts from this situation. I’ve argued as best I can against some of Roberts’ more specific points, so I’ll pull out to a broader picture.
Ultimately, Roberts’ argument loses some of its legitimacy when you’re not under an American capitalist paradigm. Roberts feels comfortable presupposing that market forces are good. He doesn’t really explain why, and he doesn’t need to. Even I, someone who’s 100% critical of capitalism, didn’t notice how little he was warranting his pro-market claims, when I first listened to this interview.
The main thing I take away from this interview is that, if you’re a communist, socialist, or leftist, you don’t have to accept presuppositions laid out by capitalists. Capitalists have the advantage of hundreds of years of history and the mainstream ideological consensus on their side. Because of that, they can make unwarranted arguments that justify themselves simply by being mainstream thought.
If you encounter a Dave Roberts type, and they make an argument like “we want to get the profit-motive working for us,” that idea needs to be interrogated and dissected. Because it doesn’t stand up to scrutiny.
Also, if someone tries to chase you away from a truly left-wing position, especially if they argue that it’s “too complicated”, be very suspicious of them. The simple truth is, some things are very complicated. But common people are capable of grasping complicated things. “It’s too complicated,” isn’t an attempt to help explain something complicated, it’s an attempt to shut you up, and force you to “listen to the experts” (capitalists).
And finally, don’t let people get away with the idea of “gatekeeping”, or “purity tests”. There’s no such thing as gatekeeping, because there’s no such thing as political gates. If leftists don’t consider someone’s position leftist, they aren’t closing the gate, or performing a test on that person. They’re simply disagreeing with you.