SOCIALISM BY ANY OTHER NAME

Kansas commits $304M to chip plant to lure federal funds

ALL CAPITALI$M IS STATE CAPITALI$M
By JOHN HANNA

Kansas Gov. Laura Kelly discusses plans by Integra Technologies, of Wichita, Kansas, to build a new, $1.8 billion semiconductor factory, during a news conference, Thursday, Feb. 2, 2023, at the Statehouse in Topeka, Kan. The state has pledged $304 million in taxpayer-funded incentives over 10 years, but the project also needs federal funding. (AP Photo/John Hanna)

TOPEKA, Kan. (AP) — Kansas plans to give $304 million in taxpayer-funded incentives to a semiconductor company in its largest city to build a huge new factory, but the project won’t go forward without funds the U.S. government has promised for rebuilding the nation’s chip-making capacity.

Gov. Laura Kelly announced Thursday that Kansas has an agreement with Integra Technologies, based in Wichita, for a 10-year package of tax breaks and reimbursement of expenses. State officials said the new, $1.8 billion plant would cover 1 million square feet, have 2,000 employees and create 3,000 additional jobs among suppliers and other local businesses.

The announcement comes with the U.S. trying to reverse a loss of capacity for making the chips that are vital to smartphones, laptops and other modern-day conveniences, as well as automobiles and life-saving medical devices. Congress last year approved a measure that provides more than $52 billion in grants and other incentives for the semiconductor industry.

Kelly told reporters during a Statehouse news conference that the state’s incentives are crucial to attracting the federal funds and “making Kansas an essential part of our country’s national security efforts.”

“This advanced manufacturing facility is part of a national push to restore our semiconductor industry so that U.S. workers and businesses can compete and win in the race for the 21st Century,” Kelly said.

Integra CEO Brett Robinson would not say how much federal funding the company needs, only that there is “no commercially viable way” to do the project without it. He and state officials said other states were trying to attract the project, though they did not disclose the competitors.

“It’s not just critical to the United States and to security, but it’s critical to the supply chain,” said Kansas Senate President Ty Masterson, a Wichita-area Republican.

President Joe Biden pushed Congress last year to boost the U.S. semiconductor industry, because of a shortage of chips made worse by the global coronavirus pandemic and concerns about competing with international rivals, particularly China. There’s been a decades-long shift to cheaper-to-operate Asian chip plants, and the industry is now dependent on Taiwan, which China has long claimed as its own.

“If we were ever to lose, for a sustainable amount of time, access to the southeast Asian supply chain, what we just went through would pale in comparison,” Robinson said.

Integra, founded in 1983, has about 500 employees in Wichita and Silicon Valley and describes itself as the largest U.S. provider of the last two major assembly and testing steps in the chip manufacturing process. The new factory is expected to pay an average annual wage of $51,000, about 46% higher than the state’s average of roughly $35,000.

For Integra to receive its incentives, it must invest at least $1.5 billion in the new factory in the next five years and consistently provide the equivalent of 1,600 full-time jobs for 10 consecutive years.

The incentives are part of a program Kansas created last year to ramp up its efforts to compete with other states for new, large factories. Under that program, the state was allowed to offer up to $1 billion in incentives to a single company each in 2022 and 2023.

In July 2022, Kelly and other state officials announced that Panasonic Corp. plans to build a mega-factory to produce electric vehicle batteries for Tesla and other carmakers. The state lured the Japanese electronics giant’s project to the edge of the Kansas City area with incentives worth $829 million over 10 years, the most the state has ever offered.

The law allowing the incentives required top leaders of the Republican-controlled Legislature to sign off any deal between a company and the state Department of Commerce, which is led by Lt. Gov. David Toland, a Democrat like Kelly. The legislative leaders gave their approval just minutes ahead of the announcement, after meeting in private with Kelly for half an hour to review the agreement, with no opportunity for public review or input.

The law also requires Kansas to drop its corporate income tax rates by half a percentage point for each mega-deal. If the Integra project goes forward, the top rate would decline to 6% from 7%, saving all corporations roughly $100 million a year.

While both mega-projects have had bipartisan support, some lawmakers are critical of promising such big taxpayer-funded incentives to a single firm.

“We have not written the checks for this first project and they’re starting the second one without even knowing that it works,” state Senate tax committee Chair Caryn Tyson, a conservative Republican from eastern Kansas, said before Thursday’s announcement.

___

Follow John Hanna on Twitter: https://twitter.com/apjdhanna

 

Oregon’s Port of Portland Gets State Funds to Maintain Container Ops

SM Line began operations to Portland in 2020 (Port of Portland)

PUBLISHED MAY 17, 2024 5:41 PM BY THE MARITIME EXECUTIVE

 

ALL CAPITALI$M IS STATE CAPITALI$M

The Port of Portland, Oregon’s only ocean-going seaport, announced it will reverse course and not suspend container operations. The move came after the state’s governor, Tina Kotek, released a letter on Thursday reporting she would provide stop-gap funding and would include long-term funding for channel maintenance in the state’s budget. In total, she is proposing $40 million in future support to the port and its container operations.

“Farmers, union members, shippers, and business leaders have all asked me what the state can do to keep this important service in place,” Governor Kotek wrote in announcing her decision. She said the port and specifically the container service provides a competitive advantage for Oregon growers and other businesses which would have been forced to truck their shipments hundreds of miles to neighboring ports.

In April, it leaked out into the media that the port authority had sent a letter to shippers informing them that it would be ending container operations at the port as of October 2024. The port reported losing $30 million from the container operations over the past three years, including a projected $14 million shortfall this year. They said talks with an independent operator had collapsed and that they had no other choice but to end container service at the T6 Terminal but would maintain the bulk, RoRo, and other operations at the port.

“The port has been working to rebuild container service since taking over the operation in 2018, following a temporary shutdown under former operator ICTSI,” the port authority writes in its response to the governor. “Without direct state support or a financially acceptable third-party lease, container operations have not been sustainable.”

The governor said it was important to send a strong signal to the state’s business partners and as such she would ask the legislature for $5 million in September to stabilize near-term operations at the port. It is part of an overall $40 million investment she said the state would be making to support the continuation of container service.

In offering the funding and support, the governor said she understands that the port’s location makes container operations economically challenging. She cites the limitations of an upriver port within a relatively small metropolitan area, saying she understands they can not fix those limitations. She however calls on the port authority to use the state’s commitment and to pursue an aggressive strategy to make the container operations sustainable for the long term.

“I expect the port to pursue all viable strategies for making T6 operations sustainable over the long-term,” writes the governor.

In addition to the stop-gap funding, she said she will include an initial investment of $15 million for dredging of the Lower Columbia River. She says the state previously committed nearly $28 million but notes the federal project is due to expire in 2025. She expects up to $70 million will be required in a new round of investment for the river. 

She also recognizes the high cost of repairing and replacing needed infrastructure at the port to support container operations. As part of the 2025-2027 recommended budget, she will also support a $20 million investment in a capital program to support container operations.

The Port of Portland has had a difficult history with container operations. They attracted ICTSI to operate the terminal but the company became embroiled in a dispute with the union that ultimately led to the company walking away and a long legal battle. The legal battle was recently settled, but the port had attempted to run the container terminal. It attracted several lines including SM Line during the pandemic offering an uncongested alternative.

Port officials came in for strong criticism from the union, elected officials, and others when they confirmed in April the decision to suspend the operation. In a press release, they said they were grateful to the governor for the declaration of support and for helping to maintain the operation.
 

New York will set aside money to help local news outlets hire and retain employees

ALL CAPITALI$M IS STATE CAPITALI$M

Maysoon Khan
Thu, May 23, 2024

The Associated Press


ALBANY, N.Y. (AP) — New York is offering up to $90 million in tax credits for news outlets to hire and retain journalists in an effort to help keep the shrinking local news industry afloat.

The U.S. newspaper industry has been in a long decline, driven by factors including a loss in advertising revenue as outlets have moved from primarily print to mostly digital. That prompted state lawmakers to help in a measure passed in the state budget.

New York’s three-year program allows some news organizations to tap into refundable tax credits each year, with a single outlet able to receive tax credits of up to $320,000 annually.

State Sen. Brad Hoylman-Sigal, a Democrat who sponsored the legislation, said preserving journalism jobs is vital for the health of democracy. As evidence, he cited the weakened New York news media's failure to research the background of George Santos, a Republican who fabricated many details of his life story, until after he had been elected to Congress.


“Some of my colleagues have dubbed this credit the ‘George Santos Prevention Act’ because many believe it was the lack of local press coverage that enabled Santos to spin his web of lies undetected,” Hoylman-Sigal said.

While it is intended to benefit small community news sites, larger media organizations could also potentially benefit. The tax credits would mostly only be available to news outlets that are not publicly traded, though there would be an exception for certain media businesses that can show a reduction in circulation.

Hoylman-Sigal said he is open to making revisions to expand the legislation to include nonprofit news organizations and digital-only media outlets, which are currently left out of the program.

“This is the first time in American history that we have created a tax credit structure to support journalism jobs,” Jon Schleuss, president of the NewsGuild-CWA, a labor union for journalists, said.

Lawmakers in several states have weighed various approaches to help struggling news organizations.

The state governments in California and New Mexico help fund local news fellowship programs.

The California Legislature is considering a bill that would require tech giants like Google, Facebook and Microsoft to pay a percentage of advertising revenue to media companies for linking to their content. Google pushed back recently by temporarily removing California news websites from some people’s search results.

In Illinois, lawmakers have proposed a journalism scholarship program, a tax credit and a requirement that news outlets notify the state of plans to sell their operations four months in advance. Bills in Connecticut and Illinois would direct that some money the state spends on advertising go to local outlets.

Most of the measures advancing this year have been in Democrat-controlled states. But Anna Brugmann, director of policy at Rebuild Local News, which advocates for government help for journalism, said there is interest in the idea in red states, too. The hang-up, she said: The initiatives can be expensive.

She noted that in Wisconsin, there were both Republican and Democratic news aid bills this year.

“We’re certainly looking at red and purple states, for the next legislative session,” Brugmann said.

About 203 counties across the U.S. do not have any local news outlets, according to a report last year from Northwestern University’s Medill School of Journalism. More than 1,500 – nearly half the counties – have only one.

New York's program, which would start in 2025, will divide tax breaks into two pots, with about $4 million worth of credits available to help newsrooms hire staff and about $26 million in credits to help with staff retention.

Newsrooms could receive $5,000 worth of tax credits for each new hire, with a cap at $20,000, or four new positions. Newsrooms could get up to $300,000 worth of tax credits to help retain staff.

“In a day and age where there’s so much information, having trained journalists who can ask the tough questions and hold elected officials and other public figures accountable is critical to our democracy as a country,” said state Sen. Jeremy Cooney, a Democrat who represents parts of the Rochester area in western New York.

News businesses applying for the tax credit wouldn’t be evaluated based on whether government officials like their coverage, state officials said.

Zachary Richner, the founder of Empire State Local News Coalition, said he hopes regulations for the program will be drafted in a way that prioritizes tax credits for “the news outlets that need it the most.”

Tom Wiley, publisher at The Buffalo News, said the tax credit will help them invest in frontline journalism.

“We think the tax credit will help us continue to be the key source for local news in western New York," Wiley said. “Our work is what sustains an informed electorate in our environment of misinformation and falsehoods.”

___

Associated Press writer Geoff Mulvihill in Cherry Hill, New Jersey, contributed to this report.

Maysoon Khan is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

Maysoon Khan, The Associated Press

Canada’s Seymour lithium project secures $69.5m in financing from EDC

ALL CAPITALI$M IS STATE CAPITALI$M

The non-binding letter of interest (LOI) could lead to a direct lending debt funding package of up to C$100m ($69.5m) 

Credit: BJP7images / Shutterstock. · Mining Technology · BJP7images / Shutterstock.

GlobalData
Mon, December 23, 2024 


Green Technology Metals (GTM) has received a non-binding letter of interest (LOI) from Export Development Canada (EDC) to finance the company’s Seymour lithium project in northwestern Ontario, Canada.

The LOI could lead to a direct lending debt funding package of up to C$100m ($69.5m), bolstering the project's development within Canada's critical minerals supply chain.


GTM has been in discussions with EDC since September 2024, providing key project details and preliminary financial models.

The project’s permitting approvals and final investment decision are expected to be completed in 2025.

The project is expected to start production in 2026 as Ontario’s first mine for battery metal.

Green Technology Metals managing director Cameron Henry said: “This marks the first step in our financing strategy for the Seymour project development and we’re pleased to have achieved this milestone in 2024. EDC’s support potentially increases sourcing flexibility, allows greater access to low-cost direct lending and is non-dilutive to GT1 shareholders.

“We continue to engage with global commercial lenders as part of our broader financing efforts, but the strong indication of interest from EDC validates the robustness of the Seymour Project and further reinforces our strategy to become Ontario’s first lithium producer.”

EDC's support is expected to offer flexible sourcing options and access to low-cost lending, and will not dilute the value for current shareholders.


The financing from EDC is subject to a thorough due diligence process, internal approvals, and standard project finance conditions, including an environmental and social review in line with EDC’s framework.

Following the appointment of financial adviser Endeavour Financial, the Seymour Project has attracted global commercial lenders, enhancing the project's financial structure.

As a financial Crown corporation, EDC focuses on financing solutions for Canadian exporters and has completed over 540 transactions across various sectors, including mining.

"Canada’s Seymour lithium project secures $69.5m in financing from EDC" was originally created and published by Mining Technology, a GlobalData owned brand.

NOCs, Not Big Oil, Are Responsible For Most Emissions

THE OLD STATE CAPITALI$M VS MONOPOLY CAPITALI$M TROPE

By Haley Zaremba 

- Jul 31, 2022

Big Oil has caught a lot of flack for its slow decarbonization efforts, but much of the criticism may be misguided.

Emissions from National Oil Companies far outpace those of Big Oil.

Not only do National Oil Companies emit more, but they also rake in more profit and receive much less attention than their private counterparts.


While much of the global pressure toward decarbonization has been directed toward privately owned and operated oil supermajors like BP, ExxonMobil, and Shell, a new report from the Economist suggests that much of this pressure and blame is misguided. It’s not that Big Oil doesn’t need to change its focus, strategy, and commitments in order to cut greenhouse gas emissions quickly and significantly enough to avoid the worst impacts of climate change – it does. The thing is, the emissions of privately owned oil companies pale in comparison to the enormity of state-owned oil enterprises, which are producing most of the oil, emitting most of the greenhouse gases, raking in most of the profits, and receiving much less attention. In fact, the Economist article, titled “State-run oil giants will make or break the energy transition,” says that in comparison to Big Oil, national oil companies (NOCs) are “enormous oil.” Together, NOCs represent three-fifths of the world’s crude oil production, half of global natural gas production, and two-thirds of the world’s remaining proven oil and gas reserves. “Four—Adnoc of the United Arab Emirates (UAE), Saudi Aramco, pdvsa of Venezuela and QatarEnergy—possess enough hydrocarbons to continue producing at current rates for over four decades.”

Taking into consideration the sheer scale of NOCs’ production power, it does make the global attention to these institutions’ climate actions (or rather non-actions) particularly stark and worrying. Especially when you take a look at just how bad most NOCs’ track records are when it comes to going green. To be clear, Big Oil’s track record isn’t stellar either, especially west of the Atlantic, but the greenhouse gas emissions of most supermajors have already stabilized or peaked. By contrast, just two NOCs can say the same: Brazil’s Petrobras and Colombia’s Ecopetrol.

So why aren’t we going after the big fish? The answer, of course, is complicated. Decarbonization is political no matter how you slice it, but pressuring governments themselves to divest of the very industry keeping their state economies afloat and their politicians in office is tricky and divisive business. Many countries with state-run oil companies are volatile nations with monopolized economies and no contingency plan if oil was to go the way of the dodo. What’s more, all too often, petrostates make for oil autocrats with itchy trigger fingers. “No matter how you define a petrostate – whether you look at a state’s oil-derived wealth, its dependence on oil revenues, or its exports and relative importance to world markets – there is strong evidence that petrostates are more likely than other countries to start wars,” Foreign Policy reported last month.

Not all NOCs are created equal, of course. They are as diverse as the nations that house them. Unsurprisingly, richer countries tend to have better run, more ecologically responsible outfits. They also often happen to have more geologically advantageous oil reserves – part of what made them rich in the first place. By contrast, many poor nations’ NOCs are poorly run, with tendencies toward inefficient and dirty practices. “The Algerian and Venezuelan companies emit three to four times as much carbon in oil production as do the more geologically blessed and better-managed firms such as [the United Arab Emirates’] Adnoc and Saudi Aramco, and flare seven to ten times as much methane, another potent greenhouse gas, per barrel as does QatarEnergy,” the Economist reports.

Ultimately, the “easy” tactics of boycotting, protesting, and naming and shaming that have some impact in the private sphere are effectively toothless strategies when it comes to state-run oil companies. Again, many of the NOCs with the dirtiest operations are operating in some of the world’s poorest countries, and no amount of public pressure will change their economic reality. Ultimately, it comes down to climate finance and holding the world’s richest nations accountable for their pledges to financially support the costly decarbonization efforts of the world’s poorest countries – a promise which has so far proven to be an empty one.

By Haley Zaremba for Oilprice.com

ALL CAPITALI$M IS STATE CAPITALI$M
North African sun offers green hope but state role key

Issued on: 01/09/2021 - 

This handout satellite imagery released by Maxar Technologies on May 20, 2021 shows a view of the Noor Ouarzazate solar complex in Morocco - 

Satellite image ©2021 Maxar Technologies/AFP


Cairo (AFP)

Blessed with year-round sunshine, North Africa has enormous potential for solar energy, but the huge investment and state subsidies required for large-scale projects are a challenge for cash-strapped regional governments.

The region boasts a few marquee projects that are among the largest in the world but renewable energy entrepreneurs say the focus should be at community level, helping whole villages to operate off the national grid and without using diesel fuel.

Egypt, the most populous Arab country, with more than 100 million people, has made solar power a priority in its quest to source 42 percent of its electricity from renewables by 2035.


In the western desert, about 40 kilometres (25 miles) north of the southern city of Aswan stands the Benban Solar Park. Visible from space, the $4 billion World Bank-funded project is the fourth largest solar park in the world, stretching over 37 square kilometres (14 square miles).

With six million solar panels, Benban was connected to Egypt's national grid in 2019 and currently produces 930 gigawatt hours a year, which is enough to light up 420,000 households, according to the UN.

Egypt's 42 percent target is an ambitious one. In 2016, just nine percent of its power needs came from renewable sources, according to official figures.

- Incentives -

But experts say the state will need to provide incentives if it expects much help from consumers, few of whom have the means or space to switch to solar energy for their household needs.

"In Cairo, it's a bit difficult to install solar panels because you need a lot of space on top of buildings plus it doesn't cover all your electricity needs like powering an air conditioner during summer," said Mohamed Abdel Raouf, an expert on green economies in the region.

]This handout satellite imagery released by Maxar Technologies on May 20, 2021 shows a view of the power substation at the Benban Solar Park in Egypt. The $4 billion World Bank-funded project is the fourth largest solar park in the world - 

Satellite image ©2021 Maxar Technologies/AFP

He said tourist resorts on the Red Sea and Mediterranean coasts as well as rural centres offered more fertile ground.

"The state needs to incentivise it for the average consumer because it would cost me around 60,000 pounds ($3,800) to switch over to solar energy for my home in urban Cairo," he said.

"Why would I invest in environmentally friendly technology that's expensive? The state really needs to take the lead in making it attractive."

The International Energy Agency said over the past decade North Africa has managed to increase its renewable energy production by 40 percent. But that does not mean that addiction to fossil fuels has waned.

In oil-rich Algeria, which receives around 3,600 hours of sun per year, renewable energy only represents a paltry 1.8 percent of the country's consumption.

- 'Monstrous projects' -

In Morocco, the gaps in its green strategy are embodied by the gigantic Noor Ouarzazate solar complex -- the world's largest multi-technology solar installation.

At the gateway to the Sahara, the enormous complex has four power plants with an installed capacity of 530 megawatts.

Blessed with year-round sunshine, North Africa has enormous potential for solar energy Ludovic MARIN AFP

"From the start, it was clear that the strategy was unbalanced. The strategic error was to want to invest in monstrous projects that are difficult to finance," Said Guemra, a specialist in energy management, told AFP.

Rabat sells its green energy at a loss with the generating costs double the price it is sold at to the national grid.

Concentrated solar power (CSP) stations produce energy costing between 1.6 and 1.4 dirhams (18 cents to 16 cents) per kilowatt hour, which is sold to the National Electricity Office (ONEE) at 0.8 dirhams.

The strategy has not paid off and the privately-owned, publicly-funded Moroccan Agency for Sustainable Energy (Masen), which runs the Noor complex, is more than $100 million in debt.

The CEO of Cairo-based start-up Karm Solar, Ahmed Zahran, says it is time to move away from the model of selling electricity to the state in a private public partnership like Benban.

"The business model... is pretty abusive and... not comprehensive. Companies are focusing on selling electricity to one offtaker (the state) and they're not interested in participating in the infrastructure of the countries they're operating in," Zahran told AFP.

"So they're always viewed as opportunistic investors, who are trying to get specific contracts in place, preferably with the government and that's it."

Zahran's company designs solar-powered buildings and water pumping systems to help whole villages operate off the national grid and without using diesel fuel.

It was the first private solar company to obtain a power distribution licence in Egypt.

"We realised that our future is not in being a solar developer but in being a utility-scale solar firm... We're working on the entire infrastructure from building the power plant, building the distribution network, we're doing the tower management, the power mix, everything," Zahran said.

His firm says it has saved 2.3 million litres (608,000 gallons) of diesel and offset 10,000 tonnes of carbon dioxide annually in the process of installing solar plant projects with over 71 MW capacity.

© 2021 AFP

LONG LIVE THE BOURGEOIS DEMOCRATIC REVOLUTION
China Warns US Against Imposing Democratic Ideals After Biden Speech
By AFP News on April 29 2021 

China warned the United States on Thursday against imposing its democratic ideals, while criticising trade sanctions and military moves in Beijing's backyard just hours after President Biden's speech on American geopolitical priorities.

The remarks came after Biden's first address to Congress, in which the US leader placed a renewed focus on diplomacy and said the country was in competition with China and others to win the 21st century.

Biden added that "autocrats think democracies can't compete", while noting the US welcomes competition and is not looking for conflict.

Asked about the speech, Chinese foreign ministry spokesman Wang Wenbin said it was normal for the US and China to compete in some areas.

"But this kind of competition should be a track and field race, not a duel to the death," he told a regular press briefing on Thursday.

Wang also warned that "forcing other countries to accept one's democratic system... will only create divisions, intensify tension, and undermine stability."

China on Thursday warned the US against imposing its democratic ideals just hours after President Biden's speech on the US' geopolitical priorities POOL / JIM WATSON

In his speech, President Biden also said the US would stand up to unfair trade practices such as subsidies for state-owned enterprises and intellectual property theft.

COMMUNIST CAPITALI$M
But China lashed out a day later at the US for "violating the market principle of fair competition" and "politicising" issues such as the economy, trade and technology, in reference to the trade war between both countries in recent years.

YES VIRGINIA ALL CAPITALI$M IS STATE CAPITALI$M 

TO A VARYING DEGREE

"China is committed to developing a relationship with the US based on non-conflict and non-confrontation," Wang said.

While Biden said he told Chinese President Xi Jinping the US would maintain a strong military presence in the Indo-Pacific to prevent conflict -- just as it did with NATO in Europe -- China highlighted issues with US deployments in the region.

China's defence ministry spokesman Wu Qian added in a separate statement Thursday that, since the inauguration of the current US government, the frequency of US warships sent to China's maritime territory increased by 20 percent from last year.

The frequency of reconnaissance aircraft activity in the region also increased by 40 percent, Wu added, saying that China "resolutely opposes this".

"The US frequently sends warships and planes to carry out activities in maritime waters and airspace near China, advancing regional militarisation and threatening regional peace and stability," he said.

Tianqi appeals Chile ruling on SQM-Codelco lithium deal

CHINESE STATE CAPITALI$M

 VS

CHILEAN STATE CAPITALI$M

Reuters | July 27, 2024 | 

Credit: SQM

Chinese lithium miner Tianqi has appealed a ruling by Chilean financial regulator CMF that shareholder approval is not needed to proceed with a major tie-up set to boost state control over the country’s lithium sector, it said on Saturday.


Tianqi has repeatedly called for the planned partnership between state miner Codelco and SQM, the world’s No. 2 lithium producer, to be put to a shareholders’ vote. Tianqi owns about a fifth of SQM.


The partnership would grant SQM the ability to extract lithium in the prized Atacama salt flat through 2060, while giving Codelco, the copper miner, a major role in the lithium industry in Chile, the world’s second-biggest supplier of the key battery metal after Australia.

The Chinese firm said in a statement it had made a formal request to Santiago’s Court of Appeals. It asked that the CMF ruling be suspended until a final resolution is reached, an action that could halt the deal from moving forward.

SQM and Codelco predicted that final regulatory approvals will come in the first few months of 2025 and plan to begin the partnership the same year.

“The CMF ruling we are appealing represents not just one particular case, but implies negative influences for future operations,” Tianqi said, adding it would continue to take “all legal measures necessary” to defend its interests.

“The events surrounding the Codelco-SQM deal sets a major precedent of great gravity that has throughout the process exposed a lack of the most minimal transparency standards and respect for the rights of minority shareholders,” it added.

The SQM-Codelco deal was finalized in May and Tianqi had until Saturday to file the appeal.

CMF made the ruling in June, saying the decision was not appropriate for a shareholder vote and should instead be resolved by SQM’s board of directors.

Though companies have scrambled for control over the metal used to build batteries fueling electric vehicles, prices that rose rapidly through 2022 have since slumped over a supply glut and weaker-than-expected demand.

(By Daina Beth Solomon and Sarah Morland; Editing by Daniel Wallis and Rod Nickel)

Read More: Chile’s lower house of Congress asks Boric to void Codelco-SQM deal

Deconstructing State Capitalism

David S. D’Amato

 November 15, 2024
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The term state capitalism does not have a single definition that is used with consistency and uniformity. The definitions that have been used depend on the context of the discussion, both historically and in terms of discipline or field, and the ideological commitments of the speaker or author. To understand state capitalism, it is necessary to survey the ways the state has shaped and participated in economic life within capitalist frameworks. Today, state actors around the world are adopting an aggressive economic strategy, investing heavily across sectors to position themselves optimally within the global capitalist system. State-owned enterprises (SOEs) have proliferated dramatically in recent years, growing in number and increasingly occupying positions as some of the top companies in the world. In the twenty-first century, SOEs have “evolved from national monopolist[s] to global players,” expanding their reach and increasingly “operating in strategic sectors – such as energy, transport, infrastructure and logistics, banking and high-tech.” As just one example, sovereign wealth funds (SWFs) have grown significantly in recent years and are now some of the largest and most important investment funds in the world. “As of February 2023, assets under management of sovereign wealth funds globally stood at $11.3 trillion, up more than tenfold in the last decade.” Governments can generally mobilize much larger sums of capital than private companies—and more quickly and easily. Governments have a range of powers that make them unique among institutional investors; they can do things like tax people, control natural resources (like oil, gas, and minerals), print and disseminate money, adjust interest rates for the entire national financial system, and apply foreign exchange reserves. With their incredible masses of capital, states exert enormous and unmatched power as investors in the global market. Their actions can impact whole industry sectors and national economies. Within the current context, the term state capitalism has been deployed as a kind of smear against China and others, to differentiate their supposedly exotic, statist-authoritarian practice of capitalism from a purer and truer Western version. It is undoubtedly true that for cultural and political reasons, China does not feel the same need to obscure or euphemize its participation in the economy. But it has become necessary to mount a critical challenge to the reproduction of “extremely problematic Eurocentric imaginaries” that present a misleading picture of a supposed contest between the “vile, authoritarian state capitalism” of the East and “a more virtuous liberal-democratic form of free-market allegedly prevailing in the West.”

The idea of state capitalism has long been associated with Marxist discourse. Notably, for Vladimir Lenin, state capitalism was promoted as an intermediate phase in which the state would participate in the capitalist system under the supervision and control of the working class. Lenin believed that the consolidation associated with monopoly capitalism would prepare the way for the socialization of production through the state. Indeed, he goes so far as to argue that under “[t]he objective process of development” it is “impossible to advance from monopolies (and the war has magnified their number, role and importance tenfold) without advancing towards socialism.” To Lenin, socialism must proceed directly from state-capitalist monopoly as the inevitable “next step forward.” “Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly.” Ironically, then, were he alive today, Lenin could be expected to see current concentrations of wealth under global state capitalism as an auspicious indicator, the condition precedent to the advent of socialism under state administration. Many of Lenin’s socialist and communist contemporaries shared his conviction that capitalist monopolies were the path to state ownership and thus to an eventual full socialist state. At this point, some will ask: what are we to make of the fact that so many influential socialists saw socialism as monopoly capitalism perfected? At the very least, it shows that there were and are many visions of socialism—and of the paths thereto. During Lenin’s lifetime, several social, technological, and ideological developments contributed to his understanding of state monopoly capitalism as the immediate precursor to socialism. Whether or not they were actually implemented in the early Soviet Union, Lenin was influenced by ideas associated with Frederick Winslow Taylor and his Principles of Scientific Management. Taylorism emphasized the centralization and standardization of production processes, which Lenin believed would rationalize and optimize the allocation of labor resources. Lenin thought that under the control and direction of the state, these new methods and practices could be implemented to overcome the chaos and inefficiency of capitalism, creating a streamlined planned economy that would work for all. In line with the economic thinking of the time, Lenin saw gigantic scale as necessary for both attaining economies and making it possible for qualified experts in the state to manage the economy from the top down. It is important to understand Lenin’s point of view because it helps to explain the trajectory of twentieth century communism and to highlight, by contrast, some of the libertarian socialist and anarchist criticisms of state capitalism. Both the state capitalism of the West and the communism of the Soviet Union and China during the 20th century created morphologically similar structural and organizational patterns—centralized, hierarchical, bureaucratic, and ruled from the top down. Lenin’s phased framework notwithstanding, the mere fact of its ownership by the state does not make a corporate entity less hierarchical or exploitative per se. Nor does state ownership, on its own, mean management and control resides in the hands of the workers. Conditions for the workers seem to depend much less on institutional names and formalities than they do on the embodied material facts of centralized power and rigid hierarchical control.

It is ahistorical to present the state as merely a neutral rule-giver and enforcer, refereeing fair play in the free market. The twenty-first century state is not passingly interested in the economy. Indeed, the state regards itself as responsible for fundamental measures of economic health such as the GDP, employment levels, inflation, and the balance of trade. The GDP is its GDP, etc. Sovereign states participate directly in the capitalist market in a wide variety of ways. They are much more active players in the capitalist “free market” than many suppose. States often compete in the market directly, with governments owning and operating firms in sectors ranging from airlines and oil and gas to telecommunications, investing, mining, agribusiness, pharmaceuticals, and infrastructure construction. Perhaps least surprisingly, some of the largest energy companies in the world belong to governments, including the largest in Saudi Aramco, one of the most valuable companies in the world, with a market cap of $1.9 trillion (just 6 companies have a market cap over $1 trillion). Russia owns the world’s largest natural gas company by production volume, Gazprom, “with a 10% worldwide share of the market in 2023, followed, just as in the previous year, by PetroChina.” Any real understanding of the way corporate power operates in the world today requires us to “understand the inextricable interrelation between the state and the corporation.” It is common for the mainstream conversation to treat corporate influence on policy making and the political process as a kind of breakdown of the system, a glitch or deviation. But as a historical and empirical matter, this is not at all accurate. The state is itself a corporation in the sense that it is a discrete legal entity, an artificial person separate from the group of people it represents. The first modern companies were created explicitly as the conduits of anti-competitive monopoly privileges and imperialism. The charters that created them were readily acknowledged as favors from sovereigns, granting special rights to particular spheres defined geographically and commercially. Abstract or philosophical notions about economic freedom and fair competition were of course not driving the creation of the proto-corporate economy.

Scholarly interest in the institutions, phenomena, and ideological systems often associated with state capitalism has increased over the past decade in response to aggressive government strategies to play an active and direct role within the global market. In their book The Spectre of State Capitalism, published earlier this year (the full book is available for free here), Ilias Alami and Adam D. Dixon provide a comprehensive and interdisciplinary picture of the “material, discursive, and ideological dimensions” of present-day state capitalism, with they discuss as “the new state capitalism.” Alami and Dixon hope to correct the record in part by pointing out that vigorous state intervention has been anything but an aberration in the history of capitalism:

First, we submit that state capitalism must not be seen as an anomaly or a deviance from liberal, market-based capitalism, but as a particular modality of expression of the capitalist state, including in its liberal form. State capitalism is an immanent potentiality, an impulse which is contained in the form of the capitalist state and built into its DNA.

Alami and Dixon stress that the modern state and capitalism arise together and evolve in a sophisticated and highly intertwined relationship with each other. And as they note, historically, there is no capitalism without deliberate and sustained state intervention to create it. Relatedly, in their analysis of the private sector, Alami and Dixon want to remove it from a privileged position whereby it is simply assumed a priori that private companies are necessarily more efficient, innovative, and driven. Their work encourages us to look behind a state-market, public-private dichotomy that does not accurately describe the real-world relationship between the state and the economy. The authors also want to understand the relationship between the rise of state capitalism and “secular capitalist trends of economic stagnation and the centralization and concentration of capital.” Today, global capital is extremely concentrated and centralized, with inequality soaring in recent years and a relatively small number of companies controlling each major sector. Among the major economic trends of the past several decades is “the unprecedented centralization and concentration of capital on a planetary scale.” In the United States, there are about 40 percent fewer companies today than there were 30 years ago. “In the mid-1990s, there were nearly 8,000 public companies listed in the U.S. Today, there are half as many, and at the current rate, we’ll see that number halved again by 2044.” This has led and will continue to lead to major crises. Among the fundamental contradictions of capitalism is that it expects growth in revenues and profits even as it concentrates the benefits of that growth—and all wealth—in fewer and fewer hands. Unsurprisingly, in capitalism, this phenomenon of wealth and power concentration also appears within the firm, as the size of the firm increases. Quite contrary to popular belief, the growth of state power and a modern state more willing to participate directly in economic competition have not translated to weaker corporations or a more diverse and competitive economy. Indeed, a more active and powerful state seems to lead almost ineluctably to a more centralized and oligopolistic political and economic system. Perhaps surprisingly, then, in a recent interview with Geoffrey Gordon for the New Books Network, Dixon notes that libertarian and classical liberal types could find themselves agreeing with many of the book’s core claims. The book shows that as a political and economic system, state capitalism depends on the active interventions of governments in market economies, the kinds of interventions libertarians frequently criticize. This is another of many areas of fruitful dialogue between libertarian and leftist modes of criticism.

Alami and Dixon note that quantifying state capitalism presents many practical difficulties, but using the example of the United States, we find enormous levels of government intervention and participation in the economy. Whether they admit it or not, the political establishment across both major parties in the U.S. has long been comfortable with strong and sustained federal government intervention in the economy. A certain level of positive intervention is taken for granted at the political level, and that level is extremely high under any plausible empirical approach. The United States is home to the top two state-owned enterprises by total assets, Fannie Mae and Freddie Mac, which are both currently under government conservatorship; though they are not technically owned by the U.S. government, they highlight one of the fundamental characteristics of the state capitalist paradigm: they were included in the list presumably because, formal ownership notwithstanding, the state holds the incidents of ownership, as is often the case in partnerships between the state and normally private corporations. The state is shrewd and sophisticated as a commercial actor and does not invest without holding the strings. Whatever its rhetorical pretensions, the United States has not adopted a light-touch approach to the economy. Over the past several years, the United States government’s interventions in the economy have totaled in the multiple trillions of dollars, far beyond the level of state involvement we would expect in a hypothetical free and competitive economic system (importantly, this is even without including spending associated with responses to the pandemic). Most such interventions were undertaken to benefit and prop up giant multinational companies, with, for example, several trillions going directly to defense contractors (read: war profiteers) over the past 5 years alone. As an insurance provider, the United States government manages millions of policies to the tune of trillions of dollars. The U.S. government provides grants and subsidies for domestic companies and industries, bails out banks and other financially troubled domestic industries, offers credit lines, and purchases billions of dollars worth of securities. Today, it is considered impolite to point out that the United States is an empire; it wants its vassals—particularly its first-tier ones—to feel that they are masters of their own destiny. But the United States has the power to dictate the parameters of their economic policy, and it is not at all shy about exercising this power. The United States also increasingly tries its best to police and control who can participate in the global market, through an ever-increasing list of sanctions. The idea that the United States should assume this role is asinine and would be hilarious were it not so costly in human terms: to show how serious it is about punishing its enemies and controlling the world economy, Washington will sentence millions of innocent people to entirely unnecessary death.

As observers have long acknowledged, the U.S. incarnation of state capitalism is a version of fascist political economy. In a fascist system, the economy is not centrally planned, but it is monitored, controlled, and directed toward the aims of the state, with any liberal notion of economic rights subordinated to the demands of national greatness and unity. Private ownership is permitted, but corporate power collaborates with the state as junior partner; corporations may operate and compete freely within limited commercial spheres, but they must operate as extensions of the state when called upon and must align their efforts with the goals of the state. Americans of many political stripes have begun to see such features in the visage of our government (if you’ll forgive our here). Though we are led to believe bigger is always better, large scale is integral to the systems of domination and human suffering we see around us. Capitalism has been able to absorb and overcome its critics— “it has become much more immune to social movements, much more immune to critique and judgment. A hundred years ago, it would’ve been probably a lot easier to overturn and topple the system than it is today; it’s so much more rooted in our everyday life, and the values are so taken for granted and a priori …” And speaking of absorbing its critics, just as there is no real free market in the United States, there isn’t much communism going on in China these days. From Mao’s 1938 call for the “Sinification of Marxism” to Deng’s Socialism with Chinese Characteristics to today, China has become comfortable with state capitalism. The Chinese Communist Party has long emphasized the distinctiveness of their socialist vision. And it is no doubt a distinctive form of socialism that unites the full state embrace of capitalism with promises of a return to national greatness, and that preserves the unquestioned political dominance of a single party.

As a social system, state capitalism is a dramatic failure, engendering a crisis of hopelessness, isolation, and dissociation, “because the society seems inalterable, unchangeable, unresponsive to our needs, and it’s crushingly—let’s be honest—meaningless.” If we were to caricature an oligarchical empire ruled by global finance capital, that system might look similar to the one we actually have in 2024. The existing system is a social illness. We have left behind our skepticism of the gargantuan and forgotten that what is giant must be dangerous—and hard to move from an ill course. We may not like the task and we may not be up to the task, but the task is clear: we must dramatically relocalize our political and economic institutions, cultivating active and direct resistance to the dominance of capital and the state over human life. We can only meaningfully counter their dominance by understanding their interrelatedness and history. The dominant system—choose your preferred name: state capitalism, monopoly capitalism, state monopoly capitalism, fascism—seems to us inevitable, but it is far from being so. Other ways of life exist, even now alongside our supposedly inevitable system, all around the world, at the still unreached boundaries of the state capitalist order. Even as the state and capital grow in power together, they have not dominated everything yet.

David S. D’Amato is an attorney, businessman, and independent researcher. He is a Policy Advisor to the Future of Freedom Foundation and a regular opinion contributor to The Hill. His writing has appeared in Forbes, Newsweek, Investor’s Business Daily, RealClearPolitics, The Washington Examiner, and many other publications, both popular and scholarly. His work has been cited by the ACLU and Human Rights Watch, among others.

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