Rundle: Elon Musk and the end of capitalism as we know it

When the history of the present is written, the offer by Elon Musk and Atlassian founder Mike Cannon-Brookes to solve South Australia’s energy crisis with new battery technology in 100 days, “or it’s free”, will loom far larger than it does at the moment. The offer by two cutting-edge tech companies, with a fast positive response from Labor SA Premier Jay Weatherill, should have been the sort of thing that PM Malcolm Turnbull would welcome as an expression of the new possibilities that make it an “exciting time to be an Australian, to be alive,” etc.

Instead, faced with the promise of new possibilities, the PM has scrambled for every old answer there is. Gas companies — which are pretty much the National Party moved into the private sector — would be persuaded to divert some of the product they are pumping to their Asian-oriented export plants in Gladstone, where our resources are being sold for a song overseas to prop up a disastrous failing investment. That was iconic enough, but it was nothing compared to the new Snowy River scheme, announced by the PM, a move so geared to patriotic notions he might as well have had a boombox with the theme from the 1990s TV series playing behind him. It is stirring, it is nationalistic, and it is all utter bullshit.

The fact that a Liberal PM is announcing a new Snowy River scheme — a vast process that, however much of it was tendered out to private shonks, would have to have a vast state-investment component — is a measure of how desperate and improvised this all is, and where the lines of political division lie now. What was a Labor scheme (initially opposed by the Liberals in the 1940s before they took it over) reliant on a consent to state socialism gained from the collective effort of WWII has now become the centrepiece solution of a government that was hitherto celebrating agility and the nimbleness of the atomised marketplace.

There was nothing agile about the Snowy River scheme. It was a massive quasi-military operation reliant on state command, the forced labour of “New Australian” migrants (with dozens of deaths), which screwed up the regional agricultural system and delivered less than stellar benefits at the time. The new Snowy would be that, but without even the modest achievements of the original. You know, without looking, that it would be a boondoggle sell-off of tenders to mates, with delayed delivery, vast blowouts and poor yields, presuming it ever happened at all, rather than being just another of Malcolm Turnbull’s once-a-week forehead farts from that giant brain of his.

Why has a Liberal prime minister suddenly attached himself to a statist scheme — indeed to the icon of Australian statism? Because the right and their corporate backers are so desperate to keep power generation centralised, and thus commodified, that they will adopt anything, anything at all, rather than contemplate the best and most obvious solutions: decentralised power on multiple scales, using post-grid automated free-flow networks, and bi-directional so that households, businesses and whole cities generate excess power and plug it into the network.

They’re not only willing to adopt anything at all that will avoid innovative solutions, they’re willing to junk any previous solutions offered as part of the culture wars. Notice how the talk of coal-fired power is slipping into the background? With Musk and Cannon-Brookes talking of vast battery capacity to solve the problem of variable solar and wind yield, the right’s defence has shifted to hydro power and boutique nuclear. They’re still pushing the idea of a new coal plant, but it’s in the background. Why? Because it’s absurd. Coal-fired plants are a symbol of backwardness. Coal is deader than mainstream Australian theatre, it just doesn’t know it yet.*

The political-corporate elite, and some sections of the union movement, would rather Australia go backwards for a decade in power generation than admit that the fastest solution — clean and green — is a massive roll-out of modular renewable-generation/battery storage. This is nothing less than the Chinese are already doing on a scale beyond anything we could match, which is, surprise, one reason why those gas plants at Gladstone, got up by those dozy Pitt St cockies in the Nats, can’t generate a profit. Surprise surprise. The world doesn’t want much of our coal. Now it doesn’t want our gas. Meanwhile, Asian societies, which never had book-of-the-month club intellectuals like Paul Keating to sell off national plant for a song, are surging ahead of us because they can co-ordinate state activity, scientific research, private development and individual uptake more effectively. The power crisis has shown us to be truly the “white trash of Asia” — a Little Latin American demesne, run by the latter-day corporate latifundia: Telstra, BHP Billiton, Big Gas, Big Roads, all handed control of the economy for next to nothing.

People have started noticing it because these days we get a power blackout not in a once-in-a-generation storm but because of an Adele concert. Everyone can see that that is more redolent of Zaire, or West Virginia, than it is of a modern, efficient nation. So people from all walks of life are now open to more innovative solutions, and the government must scramble to catch up to them. Both major parties would prefer to leave Big Power undisturbed so its tow wings can fund their parties and remove the need for a membership base, or a genuine mass politics. Cursing their luck, they now have to adopt as their own policies that the Greens have been advocating for more than a decade. The “left” and “right” of Green politics — full post-grid centralisation versus a mixed model of modular and concentrated generation — is now the “left” and “right” of real debate about power generation in the mainstream. The Greens may always struggle to get above 10-15% of the vote, but they will, as before, set the political agenda for exhausted parties, run by exhausted people, out of ideas, and with a barely disguised hatred of both their base and the vocation of politics that they chose decades ago.

Why such concerted resistance to innovative solutions to power generation? Because the new technologies — the combination of wind, solar, battery, kinetics (you can part-power a driverless car simply by feeding back into it some of the energy it expends through the “non-forward” motion of its parts, i.e. the shaking) — are so capable of leaping ahead of existing modes of generation that they undermine the possibility of commodifying power. Battery technology working at the atomic and sub-atomic level takes advantage of the benefit of Moore’s Law — the deep root of which is that any non-mechanical, i.e. chemical/atomic/sub-atomic technological process has the power to expand exponentially in capacity, whereas electro-mechanical processes have a linear progression (one reason why, for example, DVD players, with minimal mechanics, went down to $30 new by the end of their reign, while VCRs, with tape heads and motors, never got much below $150 at the end of theirs).

What is thus happening in the crucible of corporations like Musk’s is a process first described by Marx, and elaborated on by writers after him such as Engels and Hilferding: capitalism produces the technology that creates its own crisis, because its cheapness and automated quality no longer allows for profit by accumulation, i.e. by running a firm and selling goods. Any individual firm, like Musk’s Tesla, gains an initial advantage from introducing a new technology. As it spreads through the sector, the sector is advantaged in comparison to other sectors (i.e. poor old King Coal, and Lord Gas). Eventually, the accumulative power of the system as a whole comes into peril. As that begins to occur, capitalism ceases to earn profit from innovation and market sale, and turns to profit-through-rent — enforced monopolies, cartelised pricing, intellectual property squatting and all the rest. The state is essential to this, which is why we saw the absurd spectacle last year of people saying straight-faced that the green energy bank might be used for coal power. Of course it would. Coal profits are now rent, as m’colleague Keane gestured towards yesterday.

That’s why Musk and Cannon-Brookes’ suggestion of “100 days or it’s free” is so important. I suspect if they’re offering that, then they could probably roll it out in about 30 days, and they’ve left some elbow room. But even if they didn’t make that deadline, they could obviously afford it. And that is the second part of what Engels, Hilferding and others argued: eventually, in the transition to a post-capitalist economy, there may be no need for a “revolution”, per se, at all. Capital will have so developed the productive forces that there will be no option other than to hand them over to socialised management. That is what the “100 days” thing is a tiny gesture towards.

Possibly. The other explanation is that tech companies are so desperate for markets they are offering free prizes! In order to gain huge state contracts. Perish the thought. Yes, one should be wary of billionaires bearing gifts. But you know what? It doesn’t matter. Our path to creating post-capitalist poles and foci within the existing economy is made clear by Musk/Cannon-Brookes’ offer, but is not dependent on it. We should be bypassing the big state as much as the market. Unions, community groups, green corporations, forward-thinking cities can simply begin to proof themselves against the crisis of energy — which is the crisis of capitalism at its very essence — by developing autonomous post-grid networks on a variety of scales, and dealing among themselves, with intra-network transfer costs approaching zero as the networks grow. Eventually the power companies will have to be socialised because they will have no value (the threatened sudden sale of Western Power in WA was because it is approaching zero value faster than any other outfit).

You think this is science fiction? No, this is five or 10 years. These currents are moving faster than a mountain river — and with all the hazards of their rapids to be fair. But they will go where they go, and we will ride them, if we’re smart — and a government like Weatherill’s could really leap ahead of everyone in the West in this matter — while the rent-seekers are still arguing about who gets the contract to build the dam that would allow them to sell it back to the rest of us.

*neither does mainstream Australian theatre, which spends so much time talking about “holding up a mirror to Australia’s middle classes” it might as well be a hair salon in Double Bay. Funny how there’s one thing they never hold a mirror up to.