Global Energy Crisis: Capitalist Crisis and Path to Sustainability

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Global Energy Crisis:
A Capitalist Crisis
Legitimation and a Path towards Sustainability
Jordan Marks
Global Studies Department
St. Lawrence University
Advisor: Dr. Jayantha Jayman
Reader: Dr. Grace Huang
Reader: Dr. Madeleine Wong

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Acknowledgements
I would like to thank the Global Studies department at St. Lawrence University for giving me the
tools and knowledge necessary for completing this project. Without their insight and assistance, I
would not have been able to produce this work. I would like to also specifically thank my advisor
Professor Jayantha Jayman for all the time and effort he has put into ensuring that I stayed on
track and managed to produce the quality of work required of an honors SYE within the Global
Studies department at St. Lawrence University, as well as my readers Professor Madeline Wong
of the Global Studies department and Professor Grace Huang of the Government Department. I
know that I was not the easiest student to work with at times, but their dedication and flexibility
allowed me to work to my full potential. Without their time and dedication, this work could not
have been brought to completion. Finally, I would like to acknowledge the contributions of my
friends and fellow students at St. Lawrence University, for many of the arguments I make in this
paper were refined in philosophical and ideological discussions with them. Much of the insight I
gained for this project was generated in discussions with friends and colleagues. Their
contributions are difficult to measure in tangible terms, but the effect they had on my ideas and
writing was invaluable.

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Contents
Acknowledgements ............................................................................................................................2
I. Introduction ....................................................................................................................................5
1. Reflexivity: Crisis of Legitimation and Firms ..................................................................................6
2. The Political Economics of Energy in the US, and the challenge of Germany and China....................6
3. Research Question ......................................................................................................................8
4. Organization of the Thesis ...........................................................................................................8
II. Literature Review..........................................................................................................................10
1. Identifying Sound Energy Policy .................................................................................................10
2. A Brief History of Energy............................................................................................................14
3. Domination by States or Firms?..................................................................................................19
III. Smith, List, and Marx: Domination by the Bourgeoisie....................................................................20
1. Market Imperatives of a Liberal Lens..........................................................................................20
2. Relative Power in a Statist Lens..................................................................................................22
3. Bourgeois Power and a Marxist Lens ..........................................................................................24
4. Habermas and Legitimation Crisis in the Epoch of Global Capitalism.............................................27
IV. Method.......................................................................................................................................30
1. Positionality and Reflexivity.......................................................................................................31
2. Interpretive Critique..................................................................................................................33
3. Strange and Framework.............................................................................................................34
4. Descriptive Statistics, Government Documents, New Papers........................................................39
VI. Three Models and One Lesson: Domination by Firms.....................................................................39
The American Model: Domination by Oil TNCs................................................................................40
The German Model: Domination by Manufacturing Industry and Green Energy................................46
The China Model: Shift to Domination of Production and the Need for Energy.................................49
VII. Achieving Sustainable Energy: Legitimation..................................................................................51
1. Two Policies, One Solution.........................................................................................................53
2. Energy Crisis as Capitalist Crisis..................................................................................................56
VII. Sustainable Energy and Legitimation: Avoiding Energy Crisis .........................................................58
1. Four Pillars of Energy Sustainability in a Modern Society:............................................................59
2. The Old…...............................................................................................................................63
3. …and the New...........................................................................................................................64

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VIII. Conclusion.................................................................................................................................65
1. Brief Summary..........................................................................................................................65
2. Contributions to Literature ........................................................................................................67
3. Implications..............................................................................................................................67
IX. Bibliography ................................................................................................................................69

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I. Introduction
There are, it would seem, few individuals who understand and appreciate the complexity
of energy in our world. Energy in its various forms governs the existence of all things. It makes
life itself possible. We absorb it into our bodies through eating and drinking, and incorporate it
into our very being. It powers our cars, heats our homes, and through harnessing it in its many
forms, makes modern life possible. Without the ability to utilize energy for the benefit of human
society, growth, development, and modernization would be impossible. Energy cannot be created
or destroyed, only converted. It encompasses all things, and is everywhere at once. There was a
time when I was younger when I even entertained the notion that energy may be the elusive and
omnipresent entity that is worshiped as God. I suppose on some level I still may.
Still, the enormity of the concept of energy escapes many people. I’ve asked many
individuals what they think of when they hear the word “energy”. The responses varied wildly,
eliciting imagery ranging from windmills to solar panels, from oil to electricity, even from life to
death. The importance of energy is not lost on individuals, but still we see in contemporary
society conflicting discourses on the nature of the entity. Narratives almost universally frame the
ability of mankind to harness natural energy from the world around him as an imperative for
furthering the advancement of the human race, yet they differ drastically in how they
conceptualize the means through which the benefits of harnessing energy may be maximized.
There are those who would frame energy production though a lens which interprets energy as a
good which can and should be sold or exchanged on the global market. Others see energy as a
means to an end, a tool which can be used to consolidate power. Still more interpret the
production of energy in a more holistic manner and are primarily concerned with balance in the
production of energy so as to allow for the sustainability of human society and the world in
which we live.
Today, we see many energy related issues at the forefront of the public discourse. This
highlights its perennial importance as a component necessary for the replication of society.
Energy scarcity remains one of the greatest impediments human society must overcome in order
to resolve problems related to social equity, justice, and development. The world now is standing
on the precipice of energy crisis. Rising oil prices globally have placed undue strain on global
economies and the societies in which they are embedded. Expensive energy costs have
negatively impacted nearly every aspect of modern society. In the face of economic stagnation,
individuals are often forced to make choices between necessities. How does one choose between
food and heat, or between mortgage payments and medicine? Each of these goods, critical to
both our individual and collective survival, are directly impacted by the cost of energy. We have
come to rely on forces far beyond our individual control to provide us with affordable necessities.
These forces can be readily identified in society. The firms that control the means of
production of energy and the politicians that determine their regulation are among the most
visible actors in the public discourse on energy. The news agencies report daily on the rising cost
of oil and its exorbitant profitability. Oil companies in particular have come under increased
scrutiny for their consistent ability to reap record profits as society roils in turmoil from the
effects of the rising cost of energy. The American energy system, as any system that fails to
provide for benefit to the majority in favor of a small elite, is inherently broken. Currently, many
would argue that the state of energy production in modern global society is also such a system.
The inability of existing social and economic systems to meet the needs of people demands that
dominant ideas, ideologies, and discourses be challenged. Questions on the nature of energy and

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its production must be asked if we are to objectively determine how society can maximize its
benefit from the production and distribution of energy.
1. Reflexivity: Crisis of Legitimation and Firms
This necessity for new discourses intrinsically challenges existing and well established
ideologies. It requires that new ideas be considered in order to open up a new path forward for
humanity. We must not allow for our understanding of the world to be subjected to our
observations of the world around us, nor the discourse we are fed by popular culture and the
mass media limelight. Instead, it is imperative that we analyze the world around us critically, by
constantly questioning the efficacy of established norms and customs. My American education
preached of the wonders of capitalism and the immeasurable benefits it has bestowed upon
society. Now, in the spirit of staunch commitment to critical inquiry, I must ask; is there nothing
we can learn beyond this discourse? Have we become so intently fixated on the present that we
have lost sight of improving for posterity’s sake? Has human society, as Francis Fukuyama
famously proclaimed in 1991, reached the end of history? Societies do not exist as perpetually
immutable entities once they achieve the economic status of “developed”. As such, I cannot
believe that the ideas that govern its existence can exist within this static ideological framework.
What we are seeing in the form of a global energy crisis is the onset of the
delegitimization popular notions of energy production that continue to cling to an ideological
discourse that has outlived its usefulness. Individuals and the greater societies they construct are
now questioning the principles of organization that dictate the distribution of goods. The
production of energy should not and cannot remain a tool that firms can exploit as a means of
amassing wealth. Instead, a new discourse must be formed in the idealist mindset of Adam Smith
that the greatest benefit be brought to the greatest number of individuals. This mindset must be
accompanied by a theoretical consideration of all possibilities, one which does not preemptively
exclude competing perspectives and ideologies.
We must acknowledge energy as a component of our society with which we cannot do
without. The focus of its production must be the continued sustainability of human society, not
the potential to control its production to leverage power and control its distribution as a means of
procuring profit. The discourse which we must create is one that best allows for society to grow
and prosper, and an objective consideration of all possibilities to achieve this noble end requires
us to challenge existing dominant narratives and focus on the future. The shortsightedness of our
generation cannot compromise the future of the next. This requires a comprehensive
understanding of the political economic forces of our world, for if we cannot identify the factors
that hinder the development of global society, it is impossible to determine the best path forward
towards a better future.
2. The Political Economics of Energy in the United States, and the challenge of
Germany and China
Since the onset of the Industrial Revolution, the production of energy from fossil fuels
has proven to be a great boon to the development of society. States and firms have raced to
establish control over reserves in an effort to profit from the extraction and sale of this new fuel
to other actors in society. In the United States, titanic oil firms dominate the energy sector. They
have a powerful influence in the public energy discourse, and through their access into the inner
chambers of the American government are able to affect their influence over policy so that they

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have greater freedom in operating and maximize their profit from the production of energy. The
narrative that dominates the American discourse on energy production is one that aligns itself
closely with the central tenets of capitalism. Firms exist to make profit, and their profitability is
something that is desirable because of its association with wealth. Greater wealth is unarguably a
goal of any society that seeks to grow and improve the welfare of its people. The system in
America has enabled large energy firms to become wildly profitable. The most profitable
company in the United States is the oil titan Exxon-Mobil, with other oil giants including
Chevron and Conoco-Phillips also among the most profitable businesses in the country.
These firms use their incredible wealth to influence public opinion and policy in order to
strengthen profit narrative. As ordinary Americans struggle under the yoke of rising energy
prices, these companies have been able to amass ever more wealth. While all individuals have a
vested interest in keeping energy cheap, energy firms are the sole actors that inherently benefit
from high prices. Oil companies can only continue to increase their profit margin as oil becomes
increasingly scarce and more expensive. Market economics would suggest that as oil becomes
scarce and more expensive, alternative sources of energy should begin to become increasingly
exploited as they become relatively cheaper. However, the rapid rise in the price of oil has
proven insufficient to trigger significant investment and production of sustainable energy
technologies in the United States. This energy crisis in America has undeniably caused economic
turmoil across the human spectrum in American. As individuals within the system begin to feel
the pain affected upon them by its very organization, they have begun to question this model.
Outside of the United States, societies in Germany and China have had much greater
success in increasing their production of energy from alternative sources. In Germany,
government policies have empowered individuals with the means to produce their own energy
through small scale solar projects. The effect on energy production in Germany has been
profound. A rapid increase in the installation of solar panels by individuals has propelled society
within the confines of the German state to become a world leader in solar energy production. The
success of this system has served to solidify a narrative of sustainability championed by the
German Green Party. German policy reflects a commitment to long term sustainability of social
and economic systems through the production of energy in a manner that is safe, secure, and
boasts lower costs in the long term. This is only highlighted by a number of progressive policies
on renewable energy and the phasing out of its nuclear program. Unlike in America, the
wealthiest and most powerful firms in Germany are not oil giants. The largest and most
influential firms in Germany are the manufacturing firms that drive the powerhouse export-
oriented economy. These companies have a vested interest in keeping costs low in order to
remain profitable. As such, they compel German society to drive down energy costs, in order to
gain a competitive edge against other firms in the global market.
The Chinese also have had incredible success relative to their American counterparts in
increasing their production of renewable energy within their country. Unable to secure sufficient
supplies of energy from fossil fuels, from either domestic sources or imports, China has been
required to move into alternative sources of energy to meet their demand. Massive infrastructure
projects are the face of renewable energy in China. Chinese renewable energy is perhaps
exemplified by the construction of the Three Gorges Dam in Hubei province, the largest dam in
the world. The CCP has poured billions of dollars into the construction of the infrastructure
needed to produce energy. Incredible rates of economic growth in China drive the green energy
revolution in Chinese society, as ever increasing supplies of energy are required to meet the
growing demand of their dynamic economy. China is similar to Germany in that it too has a

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powerhouse export-oriented economy, with powerful domestic manufacturing firms with a
strong vested interest in producing energy as cheap as possible.
3. Research Question
These three systems represent three fundamentally different models of energy production.
The American system of energy production is one that emphasizes profitability. It purports that
market forces can best distribute energy, and that the profitability of the fuel only serves to
benefit society. Small scale renewable energy is the trademark of the German model. This model
incentivizes individual citizens to produce clean and renewable energy by making it cheaper to
acquire the means of production, and also through facilitating the acquisition of these means by
the individual. The Chinese model utilizes the vast resources of the state to provide for the
investment of cleaner and more secure forms of energy. Through massive government sponsored
infrastructure projects, Chinese society seeks to develop new sources of domestic energy and
grow. If we are to objectively determine the best means of energy production that leads to the
greatest benefit for society, we must have an open mind and interpret the information available to
us critically. Only then can we answer the fundamental problem facing global society in the face
of an energy crisis. Which model of energy production allows for the greatest gains?
4. Organization of the Thesis
These reflections led me to a critical question that would serve as the basis for the
foundation of this paper. Why is it that American society, despite all of the incentives in the
United States, is not investing or producing sustainable energy as vigorously as their German or
Chinese counterparts? Solving this question required nothing less than the questioning of my
own beliefs about how society can achieve sustainability. My preexisting framework could not
explain why society was not adequately addressing issues of sustainability. My notions of
utilizing market forces to maximize growth and of the agency of states to enact policies from
which they could maximize their benefit had to be broken before I could explain how society
might best achieve sustainability.
A quick review of the literature serves to generate a better understanding of the nature of
energy production and its effects on society. There are many potential paths forward on which
progress forward, yet we cannot know which to choose without clearly identifying the future we
desire. I will develop an outline of energy sustainability using the work of existing political-
economic literature, and use this to identify energy policies that provide the greatest benefits to
society. The terms growth and sustainability in this section will be developed to clearly delineate
between sound and detrimental energy policy. This will serve as the foundation on which I will
construct a theoretical interpretation of the relationship between society and energy, allowing for
an identification of policies that augment and mitigate the effects of economic crisis in society.
This requires a theoretical interpretation of social organization. Competing ideologies
explain the nature of social sustainability and growth in different ways. The one that determines
the basis of social organization within a society therefore affects the manner in which that
society organizes to produce and distribute goods with their social system. It is this difference in
organization, production, and distribution that determines the ability of that system to self-
replicate. Three bases of thought will be covered in order to critically analyze how contemporary
discourse has evolved to explain how to best achieve growth while maintaining sustainability
from multiple theoretical perspectives; liberal, statist, and Marxist. Each will allow for a greater

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understanding of establishing sustainable practices in energy production, and explain how actors
within various systems exert their influence in the system in order to maximize their gains. This
will help establish an abstract understanding of the institutional power which actors employ, and
how through this power they develop the capacity of steering power over the entire system, in
turn allowing them to enact policy most favorable to realizing their goals. The relative strength
of various actors within the system, and the motives that determine their actions, can then
explain how certain societies have failed to pursue policies that best allow for sustainability and
growth. This critical comparison of three influential theoretical foundations grants greater
freedom in determining which ideological basis serves as the model which best addresses
concerns of both growth and sustainability.
The lens which best is able to universally explain contemporary trends in energy policy
will them be selected and operationalized by employing a proper political economic
methodological approach. This will connect the theoretical to the concrete and create a paradigm
through which we can explain the relative power of competing actors within the system as they
interact while trying to best meet their needs and goals. Of specific importance is determining a
method which allows for the identification of actors that support policy which emphasizes
energy production in a manner that does not allow for the continuation of a healthy functioning
society. Once this has been accomplished, we can apply the theory to real world case studies so
as to gain a better understanding of the workings of various systems and measure their success in
producing energy in an efficient manner. Relevant statistics on energy, government policy, and
public opinion will be utilized in order to gauge the utility of various energy policies.
Three models have been chosen for this analysis in social organization and energy
production. American society provides an excellent example of a system organized on capitalist
market principles. My concerns of the ability of the American system to pass the sustainability
stress test required to allow for continued social and economic growth will be scrutinized. The
American model will be compared side by side with two disparate models organized upon
fundamentally different principles, which currently boast much higher levels of sustainable
energy production, that of Chinese and German society. The policies enacted and their effect on
society will be analyzed theoretically based on the methodological approach developed in this
thesis. In this manner, a greater understanding of the consequences of poor policy and their
repercussions can be conceived. This allows not only for a clarification of how energy should be
produced for the benefit of all, but also an explanation of what happens if it is not.
In instances of a failure to produce energy in a manner that allows for the sustainability of
a community, crisis occurs. Crisis places undue strain on all actors in the system, as goods
necessary for their continued survival cannot be distributed to them. When a society fails to
provide enough energy to its people and economy, that society loses its ability to replicate and
enters into crisis. Authority in a system generated based on the ability of authoritative actors in
the system to distribute goods so as to meet the needs of other individuals. The ability of a
system to allow for self-legitimation requires that non-excludable goods be produced and
distributed so as to continuously meet society’s needs. The breakdown of these existing
processes leads to a decrease in standard of living, and begins the process of the delegitimization
of systemic authority and disillusionment with dominant social discourses. Models of
organization that cannot provide for this are inherently bound to crisis tendencies. By drawing on
the experiences of American, German, and Chinese society, it becomes possible to assess the
potential for sustainability and legitimation, as opposed to crisis, in societies organized under
various ideological principles. This finally allows us to once and for all outline central principles

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in energy production that stave off the burdens of crisis through the legitimation of the system.
The manner in which we can produce energy can lead us in two directions. We can proceed
along a path of crisis and social chaos, or a path of legitimation and social cohesion. Different
means of producing energy will be compared and contrasted in this section in order to determine
their relative cost to society, and to determine from which sources of energy we find the ability
to provide the greatest benefits to society as a whole.
By recognizing the factors that contribute to crisis and legitimation, we can then
determine a means of moving forward by producing energy in a manner that allows for not just
social stability, but also growth. The challenges of overcoming structurally embedded policies
and norms that hinder the development of energy resources in a manner that allows for the
continued replication of society is by no means simple. However, through a clear identification
of the means of energy production that are unsustainable and lead to social crisis and the
breakdown of the system, we can focus on encouraging the production of energy in a manner
consistent with social sustainability and growth by forwarding policies that best serve the
interests of humanity.
II. Literature Review
The stars in the sky could hardly be more numerous than the voices seeking to affect the
popular discourse on energy. Every actor in the system has a vested interest in energy. The
varied nature of that interest is what provides for the multiplicity of information available on
energy and the relative popularity of competing narratives and discourses. It has become
somewhat difficult in this day and age to go long without seeing an advertisement for clean coal,
hear a debate on one oil project or another, or witness individuals campaigning for more
environmentally friendly means of energy production. It would seem as though every side has
experts affirming that their discourse is indeed the most theoretically sound, and that their ideas
hold the key to bringing out economic and social prosperity. In order to truly understand the
nature of the production of energy and its place in society, we have to sift through all of this
information. What place does energy truly have in this modern world?
1. Identifying Sound Energy Policy
Identifying the need for sound energy policy is reflective of the fact that energy is a vital
component of our social, political, and economic systems. Energy powers our cars, heats our
homes, and fuels our economy. It forwards our communities and drives our world. Modern
capitalist society in particular relies heavily on fossil fuels to produce energy for their economies
and maintain social reproduction for generations. With the intensity of its use rising coupled with
its spread globally, stores of fossil energy are slowly running out. Increasing demand from
industrialized and developing countries alike has pushed us to the brink of a new era of energy.
Around the world, societies are struggling to find sufficient alternatives to fossil fuels in order to
ensure their own future success. Oil and gas prices continue to rise, yet many societies find
themselves unable to shake their addiction to fossil fuels. The extent to which various societies
have been able to begin a larger shift into more sustainable means of producing energy has
varied significantly. Certain societies, including within Germany and China, have seen very high
levels of investment in and development of renewable energy technologies. Other societies with

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similar needs and imperatives, such as in the United States, have been far less adept at prompting
this shift.
The factors that have affected this relative gap in this fundamental shift towards
sustainable energy production are not readily apparent. Each of these countries is reliant on the
importation of fuels from abroad to augment their own energy production. Each requires a
constant supply of energy to meet their social and economic needs, and in each there exists a
rising demand for cheap and reliable energy. The simple fact that we have seen greater
sustainable energy production in Germany and China than the United States begs an equally
simple question. What about these societies and their circumstances have allowed for an increase
in the research and production of environmentally sustainable fuels, and what can be changed in
America that could lead to an increase in the production of clean domestic energy?
This fundamental question can by no means be answered simply. It requires a rigorous
analysis of the varied means of energy production. The means through which this energy has
been produced is critical to understanding issues of stability. Germany and China have both seen
massive increases in production of renewable energy, yet the manner in which this energy is
produced varies drastically. Nearly all of the capital used in the development of renewable
energies in China has come from the government. Massive government infrastructure projects
are the hallmark of green energy in China. The Germans in contrast has seen the majority of their
increase in the production of sustainable fuels to come from growing small distributed capacity.
The implications of large and small scale development of renewable forms of energy will have to
be understood in order to determine which method provides for greater sustainability of society.
Energy sustainability wasn’t center stage on the global agenda until the 1970’s, when
access to sufficient supplies of oil imports to the developed nations of the West. The Brundtland
Report in 1987 popularized the notion of sustainable development, which it defined as “meeting
the needs of the present without compromising the ability of future generations to meet their own
needs.”1 It is important to first elaborate on the goals of sustainability before we consider the
ramifications of failing to develop sustainably. The Brundtland Report was significant because
its definition of sustainability did not identify the slowing of economic growth as being a
necessary prerequisite of achieving sustainability or slow the process of globalization. Growth
and sustainability cannot be portrayed as contradictory if we are to allow for improving the
social and economic standing of the poor and disenfranchised while also ensuring the ability of
future generations to live better than the current. Achieving social sustainability is pertinent for
both allowing social, economic, and environmental stability and maintaining constant growth.
There is little debate between scholars and politicians of the important role energy plays
in modern society. We can all agree, negative externalities from their theoretical production
nonwithstanding, that more energy is better. Energy surplus fuels growth. The contention in the
discourse is on the nature of energy production and sustainability, as different groups believe that
different methods of producing this surplus are inherently superior to options. Especially in the
American discourse, there is significant resistance to the idea of energy conservation and
sustainability because of a narrative which has developed over time in that society which
discounts the importance of the environment and equates energy consumption with economic
1 United Nations Commission on Sustainable Development. "Framing Sustainable Development: The Brundtland
Report- 20 Years On." Sustainable Development in Action.
www.un.org/esa/sustdev/csd/csd15/media/backgrounder_brundtland.pdf(accessed May 4, 2012), 1.

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success.2 This discourse, based on principles of market liberalism, supports the extraction of
fossil fuels, as it highlights the historic ability of this fuel to meet the needs of the economy
without excessive intervention in the market. Politicians and scholars that adhere to this ideology
see energy efficiency and renewable energy technologies as a threat to this traditional means of
energy production.3 In the global discourse, conservation is often equated with a conservative
philosophy. The two words even use the same etymological root. Yet in the present day, the
American Republican Party, self-stylized defenders of conservative ideology, continue to support
energy production that degrades the environment and wastes energy.4 Vice President Dick
Cheney was quoted in 2001 as saying that conservation was only “a sign of personal virtue… not
a sufficient basis for a sound, comprehensive energy policy.”5 Instead, they argue that the forces
of energy production should be left to the markets because markets inherently produce growth.
Firms will meet the demands of the market and keep the energy flowing. If energy firms find that
the burning of oil is the best means of producing energy, we must defend their interests. This
discourse emphasizes the need to protect strategic energy resources abroad, by force if
necessary.6
Social greens stand in opposition to the liberal discourse through their adherence to
principles of conservation, energy efficiency, and social sustainability.7 They emphasize the
waste of the current system, and highlight that increased efficiency provides the same economic
benefit as increasing energy supply. The current global energy production system, in their eyes,
leads to excessive accumulation in the hands of oil firms and their executives. They see market
liberalism as a problem, as those who adhere to that ideology believe that globalization and
development inherently bring about environmental and social benefits.8 In fact, they argue that
globalization has only served to increase the rate of global environmental degradation, due in
large part because of the increase in the carbon emissions associated with the burning of fossil
fuels that comes with industrialization. Instead of fossil fuels, social greens support harnessing
the power of nature to produce energy. They claim that the sun, as the producer of the majority
of energy in our world, provides society with the means of achieving energy and social
sustainability.9
Beyond the war of narratives and ideology, there has been substantial literature on the
goals of energy policy. Ensuring that sufficient energy so as to sustain society is produced,
sustainable energy must focus on mitigating the harmful externalities associated with the
production of energy from fossil fuels while also encouraging growth. The ideal means of energy
production is one which produces energy at the lowest cost with no negative externalities of any
2 Freeman, S. David. Winning our Energy Independence: an Energy Insider Shows How. Layton, Utah: Gibbs Smith,
Publisher, 2007, 96.
6 Spretnak, Charlene, and Fritjof Capra. Green politics.Rev. ed. Santa Fe, N.M.: Bear, 1986, 209.
7 Clapp, Jennifer A., and Peter Dauvergne. Paths to a Green World: the Political Economy of the Global
Environment. 2nd ed. Cambridge, MA: MIT Press, 2011, 12.
Publisher, 2007, 4.

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type, including pollution and security concerns.10 Free locally produced clean energy can then be
identified as the goal towards which society must endeavor. If actors in society were able to gain
access to energy without cost, they would have more resources to spend on other goods. This
would free up a substantial amount of capital for demanding other goods and services. Locally
produced energy from renewable sources decreases the security threat, as it insulates the
community from the wildly fluctuating supply of oil on world markets and forcibly keeping
foreign resource markets open if necessary.11 The only relatively infinite sources of energy
available to society are those which harness the natural power of the environment. The limits on
the capacity to produce energy from solar and wind are only our ability to tap into those
resources. Technology promises to increase the efficiency with which we harness these
energies.12 Fossil fuels have additional tangible limits; global reserves of fossil fuels and
therefore supplies available to us are limited. Declining global reserves only serve to highlight
their inability to provide for cheap energy. They are additionally unsustainable because of the
negative impact they have on the environment. Renewable energy can be identified as the only
source of energy that holds the potential to be produced free of cost and can be produced cleanly.
Constructing a path towards the goal of providing free energy in order to maximize
growth requires outlining policy that meets the goals of sustainable production. This requires
comparing and contrasting the relative experiences of various societies in energy production.
Their relative success in achieving sustainability can be understood in more concrete terms from
a comprehensive elucidation of the very nature of energy production and social replication. This
will allow for a more inclusive understanding of the distribution of power in society, and serve to
identify the actors that wield the power and influence necessary set energy policy. These
processes and developments are historically embedded within society, and can only be
understood from a perspective that acknowledges and understands these historical patterns and
the contemporary processes that stem from them. In analyzing the history of energy usage
current energy practices and production strategies become clarified, and it becomes possible to
understand the workings of the system and the actors that influence it.
Explaining the localized growth of green energy globally first requires an understanding
of the historical importance of energy to the replication of societies. It is undeniable that the
acquisition of energy is vital for the continued success of any actor or community. Energy is a
necessary component of modern societies. It’s needed to power our cars, light our homes, and
grow our businesses, etc. In this section, I will first explain how the development of new
methods and technologies that have increased our capacity to harness energy from the world
around them has historically fueled the growth of human social and economic processes.
Understanding how surplus energy supplies fuel the growth of economies and societies makes it
easier to conceptualize the complex nature of the relationship between society and energy, and
can provide for greater insight into imperatives in sustainability in the modern world.
Sustainability itself cannot be clearly enough defined in the context of this paper, as it has
lost much of its meaning and depth in the popular discourse. It is incorrect to label it as an
antonym of growth. Decline exists in opposition to growth. Sustainability is not a state of being,
it is a threshold; the state of being beyond the point delineating growth and decline. When we
10 Stagliano, Vito. A Policy of Discontent: the Making of a National Energy Strategy.Tulsa, OK: Pennwell Corp.,
2001, 308.
11 Spretnak, Charlene, and Fritjof Capra. Green politics.Rev. ed. Santa Fe, N.M.: Bear, 1986, 209.
12 Freeman, S. David. Winning ourEnergy Independence:an Energy Insider Shows How. Layton, Utah: Gibbs
Smith, Publisher, 2007, 4.

14
speak of achieving sustainability, we are speaking of nothing short of preventing the fall of our
civilization. Advances in producing a surplus of energy available to human society for
consumption has always fueled economic and population growth. The surplus of food energy can
be credited as the first major development in human society that provided for a sufficient surplus
in energy that it allowed for the first time large scale population growth, which led to the rise of
cities and enabled the genesis of civilization. An inability by these primitive societies to provide
enough food resources to meet the needs of their populations produced the opposite effect. It led
to systemic crisis wherein starvation occurred, and existing social and economic systems broke
down.
In returning to the history of the production and distribution of goods needed for the
production of energy, it allows for a historically situated analysis of social systems. This analysis
facilitates the identification of actors within society that possess adequate agency in the system to
effectively steer public discourse and policy, and have an incentive to deviate from the
production of energy in a sustainable manner. Through singling out these actors and vested
interests that hinder the development of a stable means of energy production, it becomes possible
to prescribe changes necessary to fix the system.
2. A Brief History of Energy
Historically, the energy harnessed by humans was organic in nature. Fittingly, many
primitive peoples worshipped the sun. Even without the ability to scientifically and logically
conceptualize its importance, these peoples recognized it as a supreme power in their world. The
energy of the sun was harvested by plants through the process of photosynthesis, and this energy
was in turn consumed by other organisms, working its way up the food chain to larger species
such as humans. In early human society, this food energy was the primary need for their
sustainable replication. Unsustainable policy and procedures in procuring energy from food led
to crisis in the system in the form of starvation. In these systems, individuals relied on their own
power to transport them from place to place in search of food. As society developed, so too did
society develop more efficient means of using the energy available to them, crafting tools and
weapons to more easily hunt game and prepare food for consumption. In this time period,
humans had not yet learned how to tap into the power of nature to produce energy for their
societies. They had to constantly move in order to secure more food energy, and maintain the
existence of their community.
This early stage in human development ended when societies began to first understand
the nature of the production of energy, and more efficiently manage its use. Through the
development of farming, mankind first harnessed the power of nature for his own devices.
Through the organized production of energy by farming, mankind no longer relied on nomadic
excursions to find sufficient food resources to sustain their society. Farming in a single location
allowed mankind to finally began to create a sufficient surplus of food so that human society had
sufficient energy resources so as to expand. Human societies adapted accordingly to these new
technologies, settling down in fertile river valleys wherein crops could easily be planted and
animals easily be raised. The most fertile lands gave rise to powerful early civilizations. Egypt,
Babylon, and all the worlds other first great civilizations emerged on the banks of the world’s
great rivers. With prosperity came conflict. Many wars have been fought over fertile terrain, as
various groups entered into conflict for sufficient energy resources to ensure their continued
existence.

15
At this stage, humanity relied primarily on the energy generated within their own bodies
through the consumption of food to acquire more resources and produce goods. Farming allowed
for control over the production of food stores which allowed for greater food security and a
generation of surplus food, allowing for the expansion in terms of population. However, this
alone cannot explain the continued development of society. Ancient Egypt may have built the
pyramids, but their construction took decades and required the lifelong dedication of thousands
of men. Advances in harnessing energy over time made it easier for mankind to build and
produce without such reliance on their own bodies as a source of power. Domestication provided
a great step forward in human development, as the powers of animals with strength far superior
to humans was harnessed to revolutionize processes of transportation and farming. The sail
harnessed the energy of the wind to propel humans much further than they could under their own
strength. Kilns harnessed the power of fire to facilitate the production of pottery and metal
working. Advancements in the distribution of goods necessary for the replication of societies
helped spur growth even without new means of harnessing energy. The advent of the wheel
greatly reduced the amount of energy a human needed to expend in his labors and in the
transportation of goods. The advent of the plow greatly increased the productivity of a farmer,
increasing the amount of surplus food. The construction of road networks meant that less energy
was expended through the processes of distributing goods. Aqueducts helped move water into
large cities, ensuring the distribution of a good so basic to the survival of a society.
Society saw another leap forward with the discovery of the burning of coal as a means of
harnessing vast quantities of energy. Before the Industrial Revolution, 85 percent of energy used
across the entirety of the world came from human muscles or their pack animals used for
transportation and agriculture13. The boost gained by the use of fossil fuels, namely coal,
increased productivity to allow for rapid urbanization and industrialization. Coal became the
primary source of energy for Europe and became a coveted resource. States with ample access to
coal flourished. Those without it floundered. Italy, which had been the wealthiest and most
prosperous area of Europe in the 15th century, lacked coal and failed to rapidly industrialize.14
Even within the confines of state boundaries, regions with local sources of coal industrialized
while regions lacking coal did not.15 Not since the advent of farming had society changed so
drastically due to an increased capacity to control energy. Before the industrial revolution,
population levels across the world had held more or less stable. However, industrialization
spurred on by production of energy from sources of fossil fuels generated a massive spike in
population growth across the world. The wealth of nations began to accumulate on an
unprecedented scale. Technology advanced rapidly, and societies were forever altered. Social
organization shifted drastically at this time, leading to the wholesale collapse of feudal forms of
organization in favor of a capitalistic class based model. Agriculture was revolutionized,
increasing the productivity of a single individual to such an extent that millions of rural workers
became surplus labor, fueling industrialization.
Firms became primary actors in the oil industry around the time of the First World War.16
With the demise of the Ottoman Empire in the wake of the conflict, the oil rich territories of their
former domain became mandates which fell under the jurisdiction of the victors of the war, the
Western powers and Russia. The British and French divided Ottoman possessions themselves in
13 Strange, Susan. Statesand Markets.2nd ed. London: Pinter Publishers ;, 1994, 190.

16
the Middle East, purposefully partitioning them so as to create artificially weak states and
divided societies. For example, three separate provinces of the Ottoman Empire; Mosul,
Baghdad, and Basra, were combined into a single Iraq. To keep this new state artificially weak,
its coastline was nearly entirely stripped away as the British formed their new protectorate of
Kuwait out of the coastal region of Basra province. Iraq was left without a deep water harbor,
leaving the country reliant on the British to sell their wares on global markets.17 Germany’s
primary vested financial interest in the region was taken from her possession in the wake of the
War. As part of the reparations agreement, Germany’s Deutsche Bank’s 25% stake in the
Turkish Petroleum Company was stripped and the company collapsed. It was quickly reformed
as the Iraq Petroleum Company, a company in which American companies gained control of the
majority of Deutsche Bank’s former possessions.18
In the pre-WWI period, American policy makers feared the growing strength of foreign
oil companies and their expansive domination across markets in developing economies around
the world. The strategic importance of controlling oil cannot be overlooked in the historical
context of the time period. Before the widespread use of oil to power the economies of the world,
coal was of central importance. Wars were fought between competing nations over access to coal
fields, and the promise of access to ample sources of energy to power their growing economies.
The victors stripped coal rich territories from the control of the losers. Coal was seen as so
important to the economies of the time that in the wake of WWI, France and Britain saw
stripping Germany of the rich coal fields in the Saarland’s as a means of preventing that nation
from rising to power and challenging her neighbors again through war.
However, coal was far from the perfect fuel. The transportation of coal was a difficult
obstacle to overcome. Certainly it could be shipped by rail, but the prohibitively high costs in
terms both monetary and in energy required to transport the fuel to cities and towns far from coal
fields limited the utility of coal as a fuel for societies and industries which did not exist near a
coal field. As a result, nations without access to ample supplies of coal saw their economic
growth dwarfed by their neighbors with sufficient supplies. Oil had the advantage over coal in
that it is easily transported over long distances at a fraction of the cost. This is important because
other factors of production were far less mobile.19 Land is immobile, and labor was largely
immobile as well.2021 Tankers can easily ship the fuel across the world, and pipelines can be
constructed over incredibly long distances between energy starved cities and oil fields, creating
the potential for a reliable and constant production of energy almost anywhere in the world there
was a demand. In this time period, oil also became an important consideration for states due to
the critical need to power a modern army. The 20th century saw the use of horses in militaries for
carrying supplies and troops be rendered obsolete. Tanks, planes, and troop vehicles required oil
to defend the country and to attack her enemies. A state without the ability to maintain an
adequate supply of oil to her military would invariably be in a weaker position politically and
militarily relative to their neighbors.
Before the end of WWI, several prominent politicians in the United States were already
voicing their concern about the inability of America to produce sufficient supplies of oil to
sustain itself. It was widely believed in 1920’s America that domestic reserves would soon be
17 Zalloum, Abdulhay Y.. Oil Crusades: America through Arab Eyes. London: Pluto Press, 2007, 30.
18 Zalloum, Abdulhay Y.. Oil Crusades: America through Arab Eyes. London: Pluto Press, 2007, 32.
21 With the exceptions being slavery, cheap indentured servitude, and immigration

17
depleted. This fear was compounded by the expansion of British oil companies into foreign
markets. Royal Dutch Shell and the Anglo-Persian oil company (today BP) were believed to be
attempting to bring the entirety of important foreign oil reserves under their control.22 In the
wake of WWI, Britain and France attempted divided up the rights to the extraction of oil in the
former Ottoman Empire on the terms the Turkish Petroleum Company had accepted, without
parliamentary approval. The Dutch worked to block the expansion of American oil companies in
the Dutch East Indies, the location of the most important operations of Shell.23 Firms began
gather concessions on the part of weak local governments which lacked the means to extract the
resources themselves for a paltry sum. Large western firms, especially those seven which came
to be known as the “Seven Sisters” controlled the majority of the world’s oil sources.24
Persistence by American politicians to make available oil fields to exploration and
extraction paid off in the end. While Britain remained the global hegemonic power in the
aftermath of WWI, the country was unable to dictate global affairs without the aid of American
capital. They needed American money to rebuild from the destruction of the First World War,
and eventually they relented to American pressure. In addition, Britain politically supported an
Open Door policy, in that Britain supported the freedom of investment globally. As the global
hegemonic power, Britain had long ago dropped her protectionist trade policies in favor of
supporting global free trade, allowing her native industries with advantages in production and
trade dominate foreign firms and industry that could not compete with their level of development.
American politicians were socio-politically aligned similarly with British politicians at this time,
and used ideological arguments to convince the British to allow for the investment by American
companies in lands the British controlled special trade and resource extraction rights. The Dutch
government was less susceptible to the ideological argument of free investment put forth by the
United States, and the government of the United States had to apply pressure in a different
manner to gain access to markets dominated by the Dutch.
The American march into global energy markets was not forwarded simply by the
American state alone. Domestic oil companies and their investors were keen on expanding the
reach of their firms. American oil companies and political interests formed the American
Petroleum Institute in 1919 to call support for the investment in the extraction of oil from foreign
countries. Krasner points out that in this instance, the joint actions of the oil industry in the
United States and the government of the United States of America converged to create a united
front in establishing a foreign policy in energy that allowed for the expansion of US oil
companies abroad.25 It was in this context that American politicians saw the need to empower
domestic oil companies. America has a long history of oil giants, starting with the rise of several
rich and powerful oil and gas companies in the United States as part of the seven sisters in the
1940’s. Prior to the oil crisis of 1973, the seven sisters controlled roughly 85% of the world’s
known petroleum reserves. These seven companies were comprised entirely of Anglo-Saxon
entities, with only the Anglo-Persian Oil Company, a British giant now known by its moniker BP,
and Royal Dutch Shell, a company based jointly out of the UK and the Netherlands, not being
22 Krasner, Stephen D.. Defending the National Interest:Raw Materials Investments and U.S. Foreign Policy.
Princeton, N.J.: Princeton University Press, 1978, 108.
24 The Seven Sisters included several offshoots ofthe Standard Oil trust; Standard Oil of California, Standard Oil of
New Jersey, and Standard Oil of New York; Texaco; Gulf Oil; Royal Dutch Shell; and Anglo-Persian Oil Company.

18
based out of the United States.26 These companies grew and developed in the manner they did
with the support of the governments of the United States and Great Britain for several preceding
decades. America has a long history of supporting the expansion of the oil industry.
Security issues continued to plague the state after the Second World War. The United
States Department of the Interior responded to a ceasing of production in Abadan, Iran through
forming the Foreign Petroleum Supply Committee.27 This committee consisted of entirely oil
industry representatives, and after being granted anti-trust immunity from Congress assumed
virtual control of international oil markets.28 At this time, foreign and commercial energy policy
was set almost entirely by oil companies. By 1950, this committee came under investigation by
the FTC, and slowly saw a decline in their power in the American system.29 However, this did
not mark the end of influential oil firms in the United States. It perhaps was more representative
of a blip along the spectrum of influence in shaping American energy policy. Oil firms reaped
massive profits at the outset of the 1973 energy crisis in the United States, as an OPEC embargo
greatly decreased the amount of oil accessible to America. President Carter attempted to reign in
the profits made by the oil industry through the passage of the Windfall Profits Tax in 1980.30
The tax was largely unsuccessful; post-crisis oil profits by the oil industry were significantly
lower than during the years of the embargo, and the government spent almost as much money
collecting the tax as it gained from its issuance. Reagan won the presidency in 1980 campaigning
to repeal the tax, and managed to do so during his tenure. Advancements in the generation of
sound energy policy also died with the termination of the discourse established under President
Carter. Carter’s call for America to produce 20% of its energy needs with solar power by the
year 2000 fell on deaf ears by the year 1980, as no presidential or congressional action was taken
that would have allowed for solar to become a part of American energy production.31 Without a
coherent public discourse on energy policy, energy firms regained significant influence in the
system.
Lacking enough secure oil to keep us moving forward, societies around the world have
begun moving to alternative sources of energy, increasingly so since the middle of the last
century. At first, light water reactors using uranium to generate energy were considered the
energy of the future. Developed countries raced to construct these nuclear reactors. The
technology was billed as safe, clean, and too cheap to meter. Soon the true cost of nuclear energy
revealed the severe drawbacks to nuclear energy production. Too cheap to meter nuclear energy
in the 60’s became too costly to produce by the 1980’s. The risks associated with the production
of nuclear energy were simply too high to warrant the continued construction of nuclear plants.
In the United States, no nuclear plant has been approved for construction since 1973 for this very
reason.32 No private insurance company is able to insure against the potential billions of dollars
27 Stagliano, Vito. A Policy of Discontent: the Making ofa National Energy Strategy.Tulsa, OK: Pennwell Corp.,
2001, 6.
2001, 6.
2001, 7.
30 Kash, Don E., and Robert W. Rycroft. U.S. Energy Policy: Crisis and Complacency. Norman: University of
Oklahoma Press, 1984, 196.
31 Kash, Don E., and Robert W. Rycroft. U.S. Energy Policy: Crisis and Complacency. Norman: University of
Oklahoma Press, 1984, 232.
32 Freeman, S. David. Winning ourEnergy Independence:an Energy Insider Shows How. Layton, Utah: Gibbs
Smith, Publisher, 2007, 27.

19
of damage that can come from the failure of a nuclear plant. Without support from the state, the
production of nuclear power becomes prohibitively expensive. Even in France, the nuclear nation,
the power of the atom has been unable to meet the growing demand for energy. In 2007, while
nuclear fuel accounted for 76.8 percent of French electricity, it only accounted for 17.5 percent
of the total consumer energy consumption in the country, while fossil fuels comprised over 70
percent of the total.33
Many individuals have also voiced concerns over the safety of nuclear reactors and the
byproducts they produce. Nuclear meltdowns such as the Three Mile Island meltdown in 1979,
the Chernobyl incident in the Ukraine in 1986, and at Fukushima Daiichi in 2011, have caused a
public outcry against the dangers of nuclear energy. The most recent disaster in Japan of this
year prompted Germany and Switzerland to announce a phasing out of their nuclear programs,
and caused China to place a hold on the construction of new reactors within the country. With
nuclear fuel falling into disfavor around the globe, more environmentally friendly and
sustainable means of producing energy are gaining traction. As environmentalists are quick to
point out, the production of energy through both the burning of fossil fuels and through nuclear
fission produce many negative externalities. Burning fossil fuels leads to high levels of pollution
and increased carbon dioxide in the atmosphere, a contributing factor to global warming. Nuclear
reactors do not release pollutants into the air, but the risks of the radiation damage from a nuclear
meltdown are high, and the production of nuclear energy creates a radioactive byproduct for
which few countries have a safe means of disposal.34
Still, society relies on energy. It demands that it be produced at a constant rate and at an
affordable price. Energy is a vital factor of production. Without a continuous and ample supply
of energy, modern society would grind to a halt. Looking to the future, societies around the
world have begun to plan out a means for the production of energy in a post-oil world. Green
technologies are now being considered the fuel of the future, with increased production rates in
terms of infrastructure and energy production around the world. With the rising price of oil, these
sustainable fuels are now becoming a more economically viable means of producing energy.
3. Domination by States or Firms?
The question we are now faced with is who determines what type of energy to produce?
We see clearly that states have fought for control over energy resources throughout history, but
who determines the actions of the state? This is a theoretical question that many people answer in
a variety of ways based on their own ideological beliefs. What we now need to determine is
which actors have the power to steer society. Power relations in the global system are highly
complicated. What we must focus on to true determine power in the global system is a
fundamental question which we must always ask. Who benefits? The history books show us that
different states competed for access to energy, but they do not tell us clearly in whose interest
they acted. A number of theoretical lenses purport the primary agency of different actors in the
system. Without this analysis, the question of whose interests are being served is difficult to
answer. It could be that states are sovereign actors with an objective agenda in self-preservation.
33 Metz, Bert. Controlling climate change.Cambridge, UK: Cambridge University Press, 2010, 118.
34 The United States has spent billions of dollars planning to construct permanent radioactive materials storage
facility, most recently beneath Yucca Mountain, but to this point has still failed to actually construct any such type
of facility. As of today,only Finland has a long term plan for the safe disposalof expended nuclear fuel.

20
States alternatively could be a platform for discourse on determining the best means of
development for society. They could still further be an arm of a powerful elite, that dominates
the political machinations of society, and influence the state to protect their own interests. An
objective theoretical analysis of the historical situation is required in order to determine the
actors that control the system.
III.Smith, List, and Marx: Dominationby the Bourgeoisie
Finding an ideology that best explains the true nature of social organization is a
prerequisite of explaining how sustainability in society is achieved. Society has undergone many
major evolutions in determining how goods are produced and distributed as it has grown and
developed over time. They reflect the intellectual discourse on the nature of society that has
developed throughout history. Each reflects a different approach for maximizing benefits within
the constructs of the system, as actors work within existing frameworks for meeting their goals
and needs. A modern society cannot be described as a simple cultural and political monolith.
Within any given modern society, there are a plethora of actors which hold competing values and
goals. These competing agendas vie for attention, and the actors pushing them are constantly
attempting to gain enough power within the system to enact policy and establish a public
discourse that is favorable to meeting their goals and needs. These actors take advantage of the
structures present in the system to gain relative power vis-à-vis other actors that have structurally
incompatible needs or goals. To gain a complete understanding of energy, we must conduct a
theoretical analysis of the political organization of society to explain how resources are produced
and distributed in order to meet these goals and needs. The next section will employ the
theoretical lenses of Smith and List in providing the basis for a market and state level
explanation for how energy could be provided. The use of Marx and Habermas will provide the
critical insight needed on the organization of a society to explain the distribution of power
effectively determines the means through which society acts to meet its needs.
1. Market Imperatives of a Liberal Lens
Adam Smith shook the world in 1776 with the publication of An Inquiry into the Causes
of the Wealth of Nations. Smith showed us a world wherein the best of all things were possible,
through man’s greedy pursuit of his rational self-interest.35 For Smith, it was evident that true
power in society resided with the individual. It was the citizen that effectively decided the course
of society through the demand of goods and services. If there were a demand for a good or
service, then markets would rise to meet that demand as individuals and organizations stood to
profit by meeting that demand.36 This liberal lens is still often deployed today to understand the
forces of the market at work in contemporary society, and can readily identified in the neo-liberal
policies of international institutions such as the IMF and the World Bank.37 On the surface,
Smith’s economic theories certainly make sense. The individual is the most basic unit within
35 Heilbroner, Robert L.. The Worldly Philosophers:the Lives, Times, and Ideas of the Great Economic Thinkers.
Rev. 7th ed. New York: Simon & Schuster,1999, 56.

21
society. Each person is unique, with a set of needs, desires, and skills which is somewhat
different from the next. Smith understood the power of the consumer. If a desired good is
demanded, then a producer stands to make a profit by producing that good. If any single
producer refrains from the production of that good, another will swoop in, produce the good that
is demanded by an individual, and claim the profits. In Smith’s eyes, it is in this way that the
direction of a people is decided. For Smith, it was apparent that people were guided by a rational
self-interest. Their actions were predictable, as people sought to maximize their gains in order to
better their lives. Smith further believed that the when individuals acted according to their own
rational self-interest society inherently benefited. He explained market processes as being guided
by an “invisible hand” that encouraged men to rationally pursue a course of action which was
invariably the most beneficial for themselves and society.
Contemporary scholars that apply a liberal lens to analyze the world believe that free
markets and capitalism provide the answer to solving the world’s energy problems. If left alone,
they believe that energy production will extend to more sustainable means when it becomes cost
effective to do so. Declining reserves of fossil fuels can only push the cost of energy higher as
fossil fuels become more expensive to extract and scarcity excludes certain actors from access to
them. They believe that maximizing the amount of wealth produced is of the greatest benefit to
the greatest number of individuals in that society. The generation of wealth takes on new
imperatives for these capitalist societies, and the amassing of wealth by companies becomes seen
as inherently desirable. Capitalism dictates that companies be profitable. Profit is the goal of
their existence. Through their materialistic greed, these institutions are believed by liberals to
produce goods in a manner that maximizes efficiency and productive capabilities. This is
believed to maximize the productive capacity of a society, generating the highest potential
growth. The effects of negative externalities associated with the production of energy from the
burning of fossil fuels will become mitigated as the burdens they cause become amply stressful
as to warrant a change.38 Unsustainable practices will be phased out over time as it becomes cost
effective to do so. It is believed that so long as market principles are upheld, economic
development will lead to environmentally sound policies.39
The fundamental problem with an analysis of social processes through this lens is the
illusion that the markets are governed simply by the demand of individuals rationally pursuing
their interests. An analysis from this theoretical perspective fails to account for the relative
power of individuals within a society compared to that of larger vested interests. While we as
humans all have relatively similar basic needs, it cannot be said that we inherently all have the
same goals, objectives, or desires. It cannot be said that the political, social, and economic goals
of a rural farmer align themselves closely with that of a wealthy banker. The liberal ideological
framework fails to account for instances when actors with the power to steer society in a
direction that does not allow for distribution of goods needed to sustain existing social and
economic systems. Powerful vested interests can exert their influence over that system in order
to enact policy that maximizes their own benefit without allowing for social and economic
sustainability, leading to economic and social crisis. A poignant example can be found in the
global south, where the people produce many of the luxury agricultural products that are a
common sight in Western markets. It is not uncommon for these communities that specialize in

22
agricultural production to suffer from malnutrition and starvation. The power of the beneficiaries
of the cash crop system, wealthy landowners and corrupt politicians, is high enough relative to
other actors in the system to allow for the continuation of the production of profitable goods for
export while poor workers cannot afford to feed their families.
These market guided principles alone cannot explain the growth of green energy
technologies in various locations around the world. If it were a simple matter of demand by
individuals in the society, then one would expect to see a similar growth in sustainable energy
technologies emerge in other countries where the demand is also high. Across the industrialized
world there exists a demand for more ecologically sound means of producing energy, because
the traditional means of energy production place undue and unsustainable stress on the
environment, in which all of human society is inherently embedded. Clean energy production is
beneficial for all individuals. A comparison of Germany and the United Kingdom helps show
flaws in the assumptions Smith makes about the power individuals have in directing a nation.
Demographically, Germany and England are very similar. Both the individual in England and
Germany have a similar buying power and similar needs.404142 However, Germany has among
the highest investment in green energy in the world, and England lags far behind most other
developed countries. A liberal lens might note the high instance of individually installed
production of solar panels in Germany as evidence of the choice of the individual in powering
the new German green revolution. In fact, the majority of the solar growth in Germany has come
from individuals installing solar panels on their homes.43 This, they might point to, highlights the
power of individuals to guide society through their power of demand. However, there are several
flaws with this analysis. It does not show what forces enabled the Germans to have the capacity
to install solar panels on their homes in such high numbers. A closer look at the information will
reveal that government subsidies have made it easier and more affordable for German
individuals to produce their own energy.
The inability of the capitalist lens to account for powerful actors to steer a system into
crisis renders it inadequate to provide for a solution to the energy crisis. In a free market system,
powerful firms and interest groups can leverage their powerful wealth and influence to enact
policies that enrich themselves at the expense of society as a whole. It cannot account for
instances of incompatibility between the needs of firms and greater society. A lens that accounts
for powerful actors in the global system to forward agendas that hurt society is necessary to
understand how to safeguard social and economic processes from undue strain caused by poor
policy.
2. Relative Power in a Statist Lens
It is difficult to understand the nature of the power of a state in the modern era. There are
those who believe in the final authority of the state and believe that an analysis based on the unit
40 CIA Factbook lists Germany with a GDP of 36,081 and the United Kingdom with a GDP of 35,059
41 Central Intelligence Agency."Germany." The World Factbook. https://www.cia.gov/library/publications/the-
world-factbook/geos/gm.html (accessed December 13, 2011).
42 Central Intelligence Agency."United Kingdom." The World Factbook.
https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html (accessed December 13, 2011).
43 Whitlock, Craig. "Cloudy Germany a Powerhouse in Solar Energy." Washington Post: Breaking News, World, US,
DC News & Analysis. http://www.washingtonpost.com/wp-dyn/content/article/2007/05/04/AR2007050402466.html
(accessed December 13, 2011).

23
of the state is the best means of understanding the global system we live in today would. A state
centric lens provides for an interpretation of social organization that accounts for safeguarding
domestic interests from external threat. These theories have given us the ability to analyze social
organization from yet another angle. Freidrich List was an individual who believed that the
economy and society should be primarily concerned with the empowerment of the state. It was
through a nationalist lens that he viewed the workings of the world economy. List believed that a
state needed to safeguard its fledgling industries from domination and destruction from more
powerful foreign entities. In his eyes, the needs of the state were of ultimate importance, and the
state controlled the means to direct society for its greatest benefit. Free trade was beneficial to a
society that traded with others which competed on a similar level of development. If two
societies on a dissimilar level of development engaged in free trade, the weaker would surely be
quashed, and the state invariably weakened.44 His ideas and theories about political economy can
prove more helpful insight into the nature of the political economic and social systems
interacting within the confines of a state than those of Smith. List argued for the existence of a
system wherein individuals act accordingly for the benefit of their nation whenever possible.45
According to List, trade should be used to benefit the expansion of the power and influence of
the state. A state must protect its fledgling industries from foreign competition through the use of
protectionist policies until domestic industries are strong enough to compete on par with foreign
firms. Only then will free trade bring a benefit to the state.
List contrasted the interests of the individual and the state, and realized that the two are
not the same. He placed great emphasis on the role of the state in the economy, while being
careful to remind us that the state may not regulate the markets too much without causing harm.
List argues that a state must protect its interests, and that its agricultural sector and
manufacturing sector must be safeguarded in order to maintain the distribution of goods needed
to strengthen the power of the state. According to him, these are the foundations for the strength
of a state, and if a state is to pursue its rational self-interest, it must have this as a secure
foundation46. Contemporary scholars have also aligned themselves with a Listian interpretation
of power in the global system. Stephen D. Krasner published a series of influential political texts
in the latter half of the 20th century that furthered the claim that the state has sovereignty in the
global system. According to Krasner, the state acts without the interest of any other group in
mind, and the benefit of one group from the actions of the state is in fact a coincidental
alignment of that groups own interest and that of the state.47 Instead, the state must be conceived
of as a set of rules and institutions that are unique and uncharacteristic of any particular societal
group.48 Krasner is quick to point out that the state’s objective is intricately intertwined with that
of society, as the state relies on a satisfied population and functioning economic and social
systems as a source of its power.49
44 List, Friedrich. The National System of Political Economy. New York: A.M. Kelley, 1966.
45 This position is less valid today, as states have gradually lost strength to other actors in the global system. Firms
have greatly increased their power relative to states in the centuries since List first wrote.
46 China today has adapted many Listian policies economically, and has been able to use a Listian model to fuse
capitalism and authoritarianism to protect and grow key industries,especially manufacturing and fuel the
development of renewable energy technologies.

24
At a glance, it would seem on the surface that the development of sustainable energies in
Germany and China presents a clear and concrete example of state mechanisms and influence
steering society. In Germany, subsidies placed on renewable energy allowed for individuals to
increase their production of this energy. In China, the government funds massive renewable
energy projects. A state centric lens on the government’s actions would assert that the state took
this action because of the benefits that it gains from having cleaner fuel, a more contented
population, and greater energy security. The two states gains immeasurably from being able to
produce energy domestically and both countries strong manufacturing sectors are well suited to
produce the necessary components required for green energy production. However, this alone
cannot explain the massive increase in government support of the renewable energy sector. Other
states have similar incentives for increasing their capacity of green energy, but have not followed
in line with the implementation of similar policies. The United States has a similar need for
energy security and clean, desirable fuel, but has not seen the same sort of government support
renewables. The foreign policy of the United States is indisputably restrained by the reliance of
American society on imports of fossil fuels for energy production. If state power was really the
motive for Germany and China to enact policies that increased the production of sustainable
fuels domestically, then we would expect that other states with a similar demographic and
economic power would seek to enact similar policies to reap the same benefit.
A state centric lens thusly also fails to account for the relative strength of actors within
the system to determine policy that negatively weakens or impoverishes society as a whole. If we
are to consider states as autonomous actors in the global system that determine their own course
of action according to their own rational self-interest, then we cannot explain how some societies
have enacted policies that weaken the power and authority of the state. Yet another lens is
needed to account for the ability of powerful actors to steer the system in a direction that leads to
unfavorable conditions of organization and production for society as a whole.
3. Bourgeois Power and a Marxist Lens
The inability of the theoretical perspectives of statism and liberalism to explain the
sporadic rise in the production of energy through sustainable means requires the utilization of
another lens to provide a theoretical explanation for this phenomenon. In order to understand
power and agency in society from a Marxist perspective, we need to consider yet another
theoretical interpretation of social organization. Marxist ideology purports that the state is not an
actor which has true autonomy in the global system, but instead a platform for dialogue and
negotiation through which various groups and interests within society compete to define an
optimal social organization as one which aligns well with achieving ones objectives within the
system. States do not hold autonomy in the global system. The policies enacted institutional
boundaries of a state are not viewed as a function of the autonomy of the state in Marxist thought,
but are instead reflective of goals of various actors within society.50 In recognizing the influence
and power of actors within society to control the direction of a society, we can understand more
clearly how certain vested interests from within a society have influenced that society in a
manner which has threatened the replication of the community. This view allows us to step back
and calculate the gains and losses caused by state policy of both different vested interests within

25
the society and society as a whole. In doing so, it becomes possible to see the influence that
various actors have on determining the path on which a society embarks.
Explaining the beneficiaries of a given system in these terms requires the deployment of
Marxist theory. Vested interests in oil are the clear primary beneficiaries of the continued
reliance of a society on fossil fuels to produce energy. Through a Marxist ideological framework,
the actors which benefit most from maintaining the status quo in terms of energy production can
be identified as energy firms, and the political and economic elite which have an investment in
their success, monetary and otherwise. Marx identifies class interests as central to the
development of human society. Within society, divergent social interests invariably led to
conflict in Marx’s eyes.51 By his time, capitalism had begun to wreak social havoc where it had
taken a firm hold ideologically. Many of Marx’s works were written in England, which was the
epicenter of the capitalistic revolution.52 The poor in England had suffered terribly under
capitalist organization for decades. To him, it was clear that such a society could not endure.
Marx saw a historical progression of society, from feudalism to capitalism and eventually to
socialism.
For Marx, the organization of society depended on the means of production. Those who
control the means of production gain enough power so as to control the system. In capitalism, it
was the bourgeoisie. The bourgeoisie gained an incredible amount of wealth in the system
through the exploitation of the working class, who toiled in the sweat shops and factories of
Marx’s world for an ever smaller wage. To make matters worse, Marx believed that capitalism
was not only an unfair system. In his eyes, capitalism was also a dangerously volatile system. He
predicted that capitalism was capable of producing a short economic boom, which would be
followed by a sharp decline in economic capabilities.5354 Capitalism relies on the ability of a
given society to consume the goods which are produced by the market. If the society cannot
afford to purchase the goods produced by the market, then no profit will be made. As firms are in
perpetual competition with each other to cut costs so as to provide their products for the lowest
costs possible, companies seek to cut labor costs. This leads to lower wages and unemployment,
leaving less money in the system to produce demand. This cycle is perpetuated by a working
class with increasingly less buying power because of decreasing real wages, and an upper class
which is accumulating wealth faster than they can spend it. Without a sufficient consumer
market, production crashes. Ironically enough, it is competition between firms to lower costs that
becomes the bane of capitalism by weakening demand.
In looking at the world through a Marxist lens, one comes to see firms dominate. Firms
control the means of production, and through doing so manage to amass wealth and power in
society.55 This is equally true in the energy sector. Firms control the means of producing energy.
They control the wells and refineries that bring us petroleum products. They own the mines full
of coal and the plants that burn it. They control the trade of uranium and the nuclear reactors
used to convert that fuel into energy. Through the exploitation of the labor of the working class,
53 Marx’s hypothesis was in fact proven to a large degree by the Great Depression in the 1930’s.

26
the bourgeoisie manages to syphon off value, increasingly their wealth without contributing to
production in society. This process is exacerbated as firms seek to lower labor costs in order to
gain a competitive edge against competing firms. The actions of the state in a Marxist framework
are explained as being an extension of the will and desires of the upper class. They use their
wealth in order to gain government support for their aims. For Marx, power in society came from
the ability to produce. Without access to the means of production, the lower classes were unable
to improve their economic and societal status. This is equally true to the production of energy.
Capitalists and firms are also interested in the accumulation of wealth in order to out-compete
their competitors. The only way they can compete against other firms is by ensuring they have
more wealth, eventually by cutting back on labor costs at the expense of workers.56
A Marxist lens grants us insight into the means by which a group of wealthy individuals
and firms can come to dominate the creation of policy in a society and gain the capacity to steer
the system along a path of development that does not allow for the sustainability of society. In
applying this theory, we are able to comprehend the motives of various actors within the system,
and are able to anticipate their actions according to their desire to maximize benefits. Firms
inherently seek profit. The accumulation of capital is the primary reason for the existence of
these institutions. Oil TNC’s seek to generate profit from their control over the means of
production of energy vital to the replication of societies. It is in there interest for there to exist a
popular discourse in energy production that argues that the profits derived from market forces
and trade inherently benefit society through the creation of new wealth, such as one akin to the
narrative supported by a liberal interpretation of society. Crisis in energy markets only stands to
encourage these companies to maintain a reliance on fossil fuels to meet the energy needs of
society, as it is during times of crisis that firms are able to make the most profit. Economic stress
only serves to shift a greater percentage of capital from the hands of workers into the hands of
the ruling capitalist class, the bourgeoisie.
Without sufficient access to capital, individuals in German society would have been
unable to afford the means of producing energy. Solar panels are expensive and may take years
to pay back on their investment. In the case of German society, the government has helped cut
the costs associated with the production of renewable energies through subsidies. This manner of
support for the sustainable production of energy has not been replicated in many other societies.
If Marxist theory is correct about the power of firms, then it would suggest there is a possible
incompatibility between the optimal success of domestic firms and broader German society. In
the case of the subdued response to market crisis and unsustainability of the means of energy
production in American society, Marx would argue that the optimal outcomes for the most
powerful firms in that system and the needs of broader American society are incompatible.
Even as the effects of rising fuel costs hamper economic growth in society as a whole, in
the form of the disruption of economic and social systems within the society that these firms are
inherently embedded, the profits these firms generate in the process outweigh the costs. Firms in
society that do not have a vested interest in procuring profit from the energy sector only feel the
brunt of rising energy costs and the many additional costs associated with system crisis and the
disruption of existing social and economic processes. It can then be interpreted that the interests
of firms without a vested interest in profiting from the sale of energy are incompatible with
energy firms. The large and powerful manufacturing firms in German and Chinese society
benefit from cheap energy. A decrease in the costs associated with the manufacturing of goods

27
means that these goods will be available to provide to society goods for consumption at a lower
cost. These same firms also stand to benefit when consumers face lower energy costs. When
individuals in society spend less money on energy, it frees up capital to be spent on other goods.
A Marxist analysis of global energy markets can explain in a theoretical manner how firms are
the dominant actors in determining the energy policy of a society. Oil firms and their vested
interest in maintaining reliance on fossil fuels as a primary means of energy production
necessary to sustain modern society stand to benefit from the exclusion of alternative means of
energy production from public discourse. Manufacturing firms lack a vested interest in profit
driven energy markets, and instead has a strong vested interest in keeping energy costs down in
order to maximize profits in the long term. One would expect that these firms would use the
considerable wealth they amass through the control of the means of production to use their
massive structural power in society relative to that of other actors in the system to effect a policy
that allows them to increase their profits. Therefore, if the relative power of energy firms is
greater than that of actors in the system which have a vested interest in cheap energy, then we
would expect that the primary fuel used in that society will be both the most profitable and one
which the means of its production can be controlled by energy firms.
It has been established clearly that TNC’s and powerful firms are the primary
beneficiaries of systemic crisis. The increase in the level of capital flow from greater society to
firms during times of crisis further empowers firms in two ways, allowing for them to exert more
control over the system. The first comes from the generation of massive capital reserves,
allowing them to exert more structural power over the system. The second is a shift in the
relative power between greater society and firms as society loses structural power in the system
due to a relative decline in capital resources. In this manner, firms are able to use their influence
to impose a discourse on society that disregards narratives of economic, environmental, and
social sustainability if other narratives and discourses allows for greater profit. The discourse is
additionally reinforced in modern capitalist societies by the dominance of the liberal and
neoliberal ideologies at in both the public sphere within smaller societies as well as at the global
level.
In essence, the process through which firms consolidate their power at the expense of
other actors in society through the intrinsic market forces of accumulation and crisis are initially
self-reinforcing. Insofar as firms are able to continue to produce an adequate supply of goods so
as to allow for the successful continuation of social and economic processes, they remain able to
allow for stability within the social system. What we then see is a failure by society as a whole to
successfully organize according to principles of sustainability because of a deficiency of
economic and social incentives for individuals within society to break down the self-deprecating
discourse that allows for the cyclical occurrence of crisis. The eventual breakdown of this
process can be understood in terms of the inability of market forces to be able to distribute public
goods to individuals in society. Modernization brought on by the industrial revolution marked a
profound shift in the nature of necessity surrounding the distribution of non-excludable goods.
As declining supply on global markets grows more severe, we are able to see observe a process
through which crisis tendencies in advanced capitalistic societies render markets unable to
produce enough goods to allow for sustainability and growth. These systematic and periodic
capitalist crisis increase in severity as profit motive becomes insufficient alone to provide for
enough incentive to ensure the production and distribution of public goods in society.
4. Habermas and Legitimation Crisis in the Epoch of Global Capitalism

Global Energy Crisis: Capitalist Crisis and Path to Sustainability

Global Energy Crisis: Capitalist Crisis and Path to Sustainability

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