Can't Buy Our Way Out of This One


There’s nothing like watching a neo-liberal ditch their misgivings about government hand outs the instant they hit electoral trouble. The latest to grab for the bag of giveaways is French President Nicolas Sarkozy, who has suggested government assistance to aid French fishermen furious at rising oil prices.

Of course, one-off hand outs are very different to the kind of structured social program based on fairness favored by social democrats. Australia got used to neo-liberalism with a cash-filled envelope as government business-as-usual throughout the Howard years. The result, as Treasury has reported, was extraordinary fiscal profligacy with limited public gain.

What George Megalogenis has dubbed "the Howard handout machine" was consistent with the neo-liberal spirit to the extent that it promoted a culture of individual entitlement. Howard’s implicit riff on JFK was to encourage Australians to ask only what their country could do for them.

Petrol prices were an issue in the Australian Federal poll last year and fuel is now an electoral issue the world over. Increased global demand has placed pressure on supply, causing prices to reach unprecedented levels. Oil is above $US130 per barrel, with no relief in sight.

So far, political responses have sought to tackle the prices being paid by consumers as an immediate electoral difficulty. But the problem with this strategy is that there are deep structural issues associated with rising fuel costs.

In the short-term, it is possible that worldwide oil extraction and distribution might increase, but sooner or later the world will hit the moment of "peak oil", when the maximum rate of global petroleum production is reached, after which it begins terminal decline. We can’t put a precise time on it, but the planet’s oil wells are running dry and competition for the remaining reserves is becoming ever more desperate.

In the long term, politically panic-stricken neo-liberals can’t buy their way out of that kind of trouble.

Then again, as we urgently scramble (or should be urgently scrambling) to reduce carbon emissions and move to a low greenhouse gas society, rising fuel prices are no bad thing. If individuals motivated by rising petrol costs choose to purchase and drive more fuel efficient cars, take public transport, walk and cycle more, it will assist in meeting necessary greenhouse targets.

But for individual consumers, the sharp edge of these issues is measured in the price per litre at the petrol station. For the poor, the working class and the small business owner in particular, rising fuel costs can make a grievous difference to wellbeing, regardless of how good decreases in oil use might be for the planet.

Given the social consequences of rising fuel prices, government assistance to citizens is not a bad thing. But rather than the bag of sweets approach, government efforts should be grounded in regular administration, fairness and long-term planning. We urgently need to decrease our fossil fuel dependency, but the burden of change should be fairly distributed.

Petrol prices are the very tip of the surface of the big debate of our times: how do we make the necessary changes to respond to the limits on current growth posed by climate change, peak oil and rapidly declining eco-systems and do so in a way that allocates the costs of reform fairly?

In the French case, there is another ecological limit in question. French fishermen would need less fuel if around 80 per cent of Europe’s fish stocks were not outside safe biological limits. The collapse of European fish stocks means that French boats have to travel further and work harder for ever-diminishing returns. More financial aid to the sector will not put the fish back in the sea.

In Australia, commentators have been most interested in the politics of Fuelwatch, while too little attention has been given to the broader underlying issues. A national consumer watch dog for petrol may well be a good idea, but it will not stop the world heating up or put more oil in the ground.

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