Energy Profits soar while living standards collapse
The energy behemoth Shell has recorded profits of $40 billion for 2022, double its profits for 2021 and the highest recorded profits since it was founded 115 years ago. Well done to its executive team and all its shareholders, a shining example to us all of the effectiveness of private ownership of the means of production, distribution and exchange.
The naked profiteering and price gouging has however not been well received by a population living through an economic crisis, forcing states across Europe to take action. In Britain last year Shell initially planned to pay no tax at all as it is able to offset new investments against tax liabilities, but the British governments windfall tax forced it to shake its coffers and see if any pennies might fall out, and you know, trickle down. The results were stark. It paid out £134 million or 0.67% of its profits. Oh the humanity, won’t someone think of the shareholders? This year their tax contribution is expected to increase to 2%.
Shell has argued that the more it pays in tax to the state the less it has to invest in renewable energy, however someone pointed out that Shell paid out more to its shareholders than it spent on renewable investments last year. In fact it is now relatively common for companies to pay dividends that exceed profits. In the last few months of 2022 Shell paid out $6.3bn to its shareholders and also stated it was planning to spend another $4bn on share buybacks.
Share buy backs are class. They represent the kind of innovative and entrepreneurial risk-taking that separates out the masters of the universe from you muppets. Share buybacks occur when companies repurchase shares of their own stock resulting in the remaining shareholders having a bigger chunk of the company and therefore an increase in earnings per share. More money basically. This then improves the share price because the company ‘appears’ more successful. Unsurprisingly buybacks were illegal until 1982 as they were rightly considered to be stock market manipulation, largely because they are. Thankfully the neo-liberal focus on deregulation has rid us of this kind of restrictive red tape and let us all benefit from a capitalism red in tooth and claw. Coincidentally one of the features of modern corporations is that executive management compensation packages include shares. Everyone’s a winner! Well, except you.
Meanwhile Leinster rugby dads, home county racists and libertarians everywhere defend these obscene profits by reminding us that they are justified because they pay for our pensions which are invested in the stock market (40% of Irish workers and 20% of British workers have no pension). Like most Leinster rugby dad arguments, it is of course bollocks, because research shows that there is a minimal and diminishing link between the fortunes of the FTSE 100 companies and the pensions of working people.
The response in Britain from opposition parties is of course as useful as a British opposition party. There are few calls for nationalisation of energy distribution and none for the nationalisation of its production; all we hear is for greater subsidies for the already super wealthy and powerful monopolies that control our access to the very means of life, from energy to food and water.
The reality is that there is no capitalist way out of these multiple crises, there are no market solutions to problems created by the market The only long term solution to the crisis in energy and climate, is democratic ownership.