Over the last three decades, money and finance, as well as power and war, have extended their grip on life. This expansion was facilitated in part by technology — new biotechnologies and artificial intelligence — but also by highly financialised market economies and their underlying principles of conquest and exploitation.
Crucial global public common goods that are vital to all human beings have experienced in the last decades a process of commodification, monetisation, and privatisation — especially water, seeds, health, and forests in the first place. More recently, the whole of nature (“the natural world”) has become treated as mere “natural capital” and submitted to systematic appropriation. Escalating conflicts are multiplying among large private multinational corporations over the ownership and control of land, water, oceans, and other natural resources. This escalation has also intensified disputes between the respective nations those corporations stem from. While the global economy is being militarised (and vice versa) in the name of “national” security (a hoax), knowledge has emerged as a key factor. This is exemplified by the “strategic” importance of patents on life — from 1980, several landmark decisions by the Supreme Court of the United States led to life patentability — and by the recent race to patents around artificial intelligence. Furthermore, the ongoing global war for world dominance currently unfolding in Ukraine over, among other factors, natural energy resources and rare earths, and the conflict between the United States and China, primarily revolving around artificial intelligence, significantly show how military security as a concept is being merged with the notion of techno-economic security. These recent developments could have an impact even more destructive than wars of the past.
Against this background, it is necessary and urgent to have a strong mobilisation of citizens taking to action on issues related to finance and ready to defend, safeguard, and promote universal rights and all the global public common goods that are vital for sustaining life, for the dominance of war’s logic has resulted in the widespread militarisation of the world, while the prevalence of the logic of money has led to the financialisation of life.
“The dominance of war’s logic has resulted in the widespread militarisation of the world, while the prevalence of the logic of money has led to the financialisation of life.”
The concept of financialisation is quite recent. As a political economist, what I mean with financialisation is not only its technical dimension, with growing recourse to financial markets rather than to the traditional banking system for any kind of financing, but also an economic dimension stemming from the increasing significance of the financial sector in national economies, and, above all, a societal dimension resulting from how the logic of financial markets and their actors influences — and even shapes — the political, economic, and social strategies of present-day societies.
As regards the societal dimension, the reduction of life elements to financial assets (i.e. to goods or credits belonging to a particular subject), is of fundamental importance.
Financialising water
The financialisation of water is recent, too. Since the 1970s, the World Bank has been instrumental in facilitating this transformation. Beginning in 1978, the World Bank made the provision of loans to “underdeveloped” nations contingent upon the privatisation of their public services (the “structural adjustment measures”). The United Kingdom played another key role under the Thatcher government by implementing the complete privatisation of the national water service in 1989. Within a short span of time, the privatisation of the water sector had become emblematic of globalisation-driven economies.
In 2000, the Swiss bank Pictet established the first private investment fund dedicated to supporting water-related activities, with a particular focus on wastewater treatment and water quality. Fast forward to 2023, numerous publicly traded investment funds specializing in water, such as Pictet-Water, Thematics Water, Lyxor, Robeco, and AllianzGI, have emerged, controlling the destiny of water across all water-related activities — and making there high profits. In addition, it is important to highlight the specific water investments made by BlackRock, Vanguard, and State Street, which are the three largest investment funds globally with investments across all sectors.[1]
So, it came as no surprise when, in December 2020, the Chicago Stock Exchange, the world’s leading commodity exchange, opened its derivatives markets, the most speculative of all, to commercial transactions on water (“water futures”). With this decision, the financial markets could extend their control and domination beyond corporate water operators to water itself.
To clarify what “water futures” are: the price on water becomes a financial asset (an asset for the seller and a liability for the buyer) on the very volatile, highly unpredictable financial markets. You can make or lose money on water by speculating on the volatility of water’s market values, without the quantity and/or quality of the water covered by the contract actually changing. Speculation focuses solely on the price of the financial product, namely the “futures contract”.
Water is not the only natural public good to fall into the hands of global, speculative private finance.
Financialising nature
To secure their hold on an ever-stronger foundation, and at the instigation of the world’s leading private investment firm Black Rock, the New York Stock Exchange decided in September 2021 to create a new class of financial assets encompassing all the elements of nature, called “natural assets”, together with a new category of listed companies, “Natural Asset Companies” (NAC). In other words, Nature, our Madre Terra, is no longer the existential frame of reference for all living species (including humans) but is now reduced by the capitalist market economy to the mere category of “natural capital” — along with productive capital, technological capital, financial capital and “human capital” categories. Nature has been turned into a financial asset. Its value is its price, which is set by the financial markets. That is how we come to refer to the financialisation of nature. It is a complete reversal of the concept of life itself.[2]
Such trends are strongly supported by business and finance lobbies, for example by Business For Nature, a global network of 72 major industrial, commercial, technological, and media organisations and alliances, as well as by the Natural Capital Coalition, which represents more than 400 global industrial and financial companies.
These ideas were also officially approved by the 176 States taking part in the UN COP15-Biodiversity Summit in Montreal in December 2022. Its final declaration, the “Kumming-Montreal Global Biodiversity Framework (GBF)”, if we look at it closely enough, consecrated in fact three key principles for the “financialisation” of any economic activity or sector.
Firstly, the principle of the monetisation of nature (giving nature a price tag). This principle was already enshrined in the final resolution of the Third Earth Summit (Rio+20) in 2012. Pricing natural elements is key to the creation of “nature markets” and, therefore, is needed to legitimise private processes of appropriation, sale, and purchase of natural elements.
The second principle is the participation of stock markets despite their growing detachment from the real economy. This principle disregards concerns about the universal right to water for all beings, the right of water itself to a good ecological status as a life-sustaining resource, and the preservation of water as a global public common good. The same reasoning applies, on an even broader level, to nature itself. The rights of nature remain unrecognised, analogous to the early stages of women’s rights in Europe at the beginning of the 19th century.
In the stock markets, corporate social responsibility is just façade: a game of pretend. Similarly, the recent regulations by public authorities for eco-environmental impact assessment were agreed by the world of business and finance on the condition that the new measures would be based on self-certification. Those measures are part of a communication strategy and constitute in no way a path of responsibility.
What is worse, COP15 Biodiversity endorsed — this is the third principle — the requirement for both public and private entities to incorporate financial costs and benefits into their economic calculations when assessing the ecological impact of their activities.
Therefore, two measures have emerged that align logically with these principles.
“Instead of protecting biodiversity,
they have promoted biopiracy.”
First, the COP15 Biodiversity final agreement endorsed the idea of entrusting financial market mechanisms with the management of activities aimed at restoring, conserving, and promoting 30% of the natural world, including 30% of the most degraded areas of land and water — thereby implying a reliance on stock market prices to define how much nature is worth. Second, the agreement also strongly emphasised the need for a supportive political environment for those engaged in the conservation, enhancement, and restoration of nature. This emphasis is driven by the objective of maintaining the capacity of natural capital to generate value for the financial capital that has been invested in it. By so doing, COP15 has further reinforced the subordination of states to the interests of the global market economy.
Consequently, the COP15 Biodiversity outcome met the expectations and proposals of the business and financial sectors.[3] Those had been massively represented at the COP and could influence the conference proceedings more than the States.
Under the guise of fighting for sustainable development (i.e. developing nature conservation, halting the loss of biodiversity, promoting new eco-environmental services, etc.), COP15 has in fact widely facilitated the subjugation of nature and life to the logic of power, providing a gateway for the enrichment and dominance of the major global players in private finance — the world pirates of the 21st century.
Although nature has always been perceived and experienced as the fundamental bedrock and frame of reference for life on Earth — as Mother Nature — COP15-Biodiversity aligned itself with the framework of capitalist culture, which defines the value of nature through its financial worth and reduces it to a financial asset.
This is deeply nonsense. Ecosystems and the natural elements stemming from them are inherently public common goods and are essential for the regeneration of life, not for the profitability of markets.
Instead of protecting biodiversity, they have promoted biopiracy. The hold up on nature, and on life itself, by the speculative global finance sector will continue unhindered, with no significant opposition or effective regulatory oversight from public authorities.
Citizens’ opposition
In 2021, the petition titled “Let’s free water from the stock markets” was launched on Change.org in France and Italy by the activist network Agora des Habitants de la Terre and received more than 120,000 signatures. However, public authorities in France and Italy paid no attention whatsoever. This is unsurprising, as it mirrors similar instances in recent past. For example, in June 2011, 27 million Italian citizens had voted in a national referendum against the inclusion of capital remuneration (profit) in drinking water tariffs. Despite the referendum outcome, subsequent Italian governments have maintained, and in some cases even reinforced, the practice of profit-based tariffs. Similarly, in 2015, 1.8 million European citizens signed the European Citizens’ Initiative (ECI) urging the Union to enshrine the universal right in the EU Treaties to water and acknowledge water as a common public good. However, the European Commission chose not to act on the proposal, using the deceptive pretext that its existing policies already respected the right to water and already regarded water as a common good.
Citizen oppositions to these attacks on nature and to the very destruction of the natural world have arisen everywhere over the last 50 years. But although these oppositions have been multiple, massive, and global, their main outcome to date is that we now talk about sustainable development —, that is it, talking. Countless promises were made to fight global warming and CO2 emissions, but they were rarely kept. There has been a small “Paris Agreement”; the creation of tens of thousands of public and private organisations and initiatives for sustainable development; hundreds of huge international conferences, attended by hundreds of thousands of participants; countless videos, TV and radio programmes, plans, agendas, articles, books, films… Nevertheless, we can still witness only very few structural changes in the dominant system.
The latest IPCC report on life’s survival on Earth has confirmed that our way out has become extremely narrow. Moreover, the civil society’s capability to act and its will to fight back have gradually weakened, giving the impression of an ever-growing crowd of resigned people. Obviously, the power of the dominant forces has been such that they were able to stifle and marginalise opposition movements. Today, global war itself seems inescapable. New forms of resistance, revolt and action are still emerging though, such as the Scientists Rebellion or the initiative by Lula’s Brazil and other South Centre countries to stop the global war in Ukraine. We must not stop the citizens’ opposition and resistance, nor their commitment to create alternative proposals[4]. The future remains to be written.
This article by Riccardo Petrella, Professor Emeritus of the University of Leuven and member of the network Agora des Habitants de la Terre, has first been published on Pressenza.com in French.
References
[1] For instance, BlackRock’s top ten holdings in companies in the water sector are: 1. American Water Works Co. Inc. 9.7% 2. Xylem Inc. 6.4% 3. Ferguson PLC 5.2% 4. Geberit AG 5.2% 5. Veolia Environnement SA 5.1% 6. Halma PLC 5.1% 7. Severn Trent PLC 5.0% 8. United Utilities Group PLC 4.9% 9. Essential Utilities Inc. 4.7% 10. Tetra Tech Inc. 3.8%. Source: https://www.blackrock.com/fr/intermediaries/products/251913/ishares-global-water-ucits-etf0011111
[2] For more details see Riccardo Petrella, La COP15-Biodiversité et la financiarisation de la nature, Pressenza, 17.02.2023, https://www.pressenza.com/fr/2023/02/cop15-biodiversite-et-financiarisation-de-la-nature/
[3] See the self-congratulatory statements from the business world, https://www.reuters.com/business/sustainable-business/how-business-helped-drive-historic-agreement-nature-cop15-2022-12-21/, and from the European Commission, “COP 15: Historic global deal for nature and people”, https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7834
[4] In March 2023, Agora des Habitants de la Terre and other NGOs launched a new petition/demand in French (“Free nature from the domination of finance”). The public response was weak. The petition is having trouble getting off the ground. In addition to other explanatory factors, this is probably the first international petition to focus on outlawing the current financial system at a time when finance seems to be triumphing everywhere as an exciting game, due in particular to the impressive and “exciting” feats achieved in the utilitarian management of money and financial affairs in everyday life (smartphones, computers, mobile banking, cryptocurrencies, intelligent finance, etc.).
Related Articles
