We have to tighten our belts! Winter is just around the corner and the prices for natural gas are exploding. Germany’s economy and climate minister, Robert Habeck, is calling on everyone to turn down the thermostat and take shorter showers. We are all going to have to shiver a bit — a common sacrifice to stop Putin’s brutal war.
Starting on October 1, every consumer is going to have to pay a Gasumlage, a contribution for natural gas. The amount hasn’t been decided yet, but it will certainly be several hundred euros for an average household, and perhaps up to €500 or €1000. German energy companies are facing huge bills to replace natural gas that they used to get from Russia. One such company, Uniper, just got a government bailout of €15 billion.
This “contribution” is coming on top of an explosion in heating prices. According to one calculation, the bill for an average family will go from €1,236 last year to €3,199 this year. With an additional €400 for the bailout, that means costs will have tripled.
While Uniper was near bankruptcy, other energy giants have figured out how to make the crisis work for them. Shell made €18 billion in the second quarter of this year — five times more than they did one year ago. Among the German companies, RWE has announced it expects to make €5.5 billion in 2022. Burning coal is profitable! But these are no exceptions — around the world, fossil capital is making record profits.
We have to pay for their losses anyway — shouldn’t we have some say over what they do?
All these extra costs are supposed to stop the Russian war machine. Except: Russia’s state-owned Gazprom is also making record profits, taking in an estimated €100 million per day from gas and oil exports. Saudi Arabia’s state oil company, meanwhile, made €39 billion in the first quarter — money that is financing an even more horrific war in Yemen.
The rules of the so-called “free market” are on display here. If a company makes money, that goes entirely to the shareholders. If it loses money, then we all bail them out. Profits are privatized, losses are socialized.
Christian Lindner, Germany’s finance minister, has promised relief in the form of tax cuts. But most of the benefits will go to wealthy people like Lindner. Up to 70% of people, the ones who really need it, will get next to nothing.
In a time of “common sacrifice,” we would expect the war profiteers to make a contribution as well. But an excess profits tax, which many countries have, is off the table. Lindner says it’s impossible to draw a line between “normal” and “excessive” profits. Now, I’m not a tax expert, but I would say that there are thousands of regulations which distinguish between “good” and “bad” ways to earn money. Both El Chapo and the Sackler family flooded the United States with opioids. But while the former is in federal prison, the latter gets to keep billions of dollars.
We are being asked to freeze for the common good, but do you think any of Germany’s oligarchs will turn down the temperatures in their swimming pools? Lindner wants us to save energy, but refuses to accept a speed limit on the Autobahn, which would save huge amounts of petroleum. I don’t expect to see any of these ministers on the S-Bahn, though they could easily sacrifice their limousines.
Profits are privatized, losses are socialized.
I’m in favor of a tax on war profiteers. But the real solution would be to expropriate the energy companies, and put them under democratic control. We have to pay for their losses anyway — shouldn’t we have some say over what they do?
Annalena Baerbock, the foreign minister, said that she’s worried that natural gas shortages will lead to “popular revolts.” Personally, I hope she’s right. As a historian, I have to think about the last time people in Germany were freezing to finance a war. If we want to stop the war, handing over billions to energy companies is clearly not working. Back in 1917-18, all people needed was a couple of good ol’ Volksaufstände to stop the slaughter.
You can read more about the revolution of 1918 in Nathaniel’s new book, Revolutionary Berlin, available from Pluto Press and wherever books are sold.