Crashing the Economy for Climate Change

It's interesting that people who speak against action on climate change base their rationale on the impact doing something about climate change will have on the economy, yet the US economy crashed in 2008 in ways that were far more devastating than any carbon reducing actions would have been. Our economy crashed not because we took action to stop climate change, but because there were a bunch of greedy bankers getting rich in the absence of regulations, leading to the loss of trillions from our economy.  Poof! Trillions gone in the course of a year or so. If we had instead spent these trillions on action to prevent climate change, we probably could have made our economy nearly carbon neutral.  Instead, these trillions of dollars vaporized or ended up in the hands of the super rich while the greater part of the population suffered. Not an investment in the future, but a loss we all are still feeling the effects of now, so many years later.
 

I wonder why it's so easy to say we can't take action to stop something that will clearly devastate our society, not to mention our economy, in the near future, yet we don't bat an eye at the fact that our economy crashed because of the greed of a bunch of rich people. And what's worse is that we are allowing the same system responsible for the crash to rebuild itself so that it can do the same thing in a couple decades—provided climate change hasn't done it already by then. Why not just take the chance of doing something about climate change and risk the economic collapse?  At least then the money will have been spent for some good, and not just for the benefit of a bunch of economic leeches on society.

This just in: The US has spent $3 TRILLION on the war and reconstruction in Iraq.  We have plenty of resources to destroy a country, kill hundreds of thousands of people, and rebuild it again, leaving it in worse shape than it was before, but we don't have money for dealing with climate change.  We could have probably just handed over the $3 TRILLION to the fossil fuel industry to convert them all to alternative energy industries and been done with it.  Of course, then they would have just walked off with it like the contractors in Iraq.  But really, you don't think we could have completely changed our economy around to be carbon neutral with $3 TRILLION?  Thanks politicians!

The Road to Serfdom

If you haven't heard of it, The Road to Serfdom is an essay by economist Friedrich A. Hayek and it was first published in 1944. It is Hayek's warning against the potential of centrally planned economies to be easily taken over by dictators and oligarchies.  Hayek felt that the free market could do a much better job in shaping society for the best than any government.  He is often thought of as a sort of nemesis of the economist John Maynard Keynes, whose theories were based in using government to influence and direct the economy. It's been a long road for me to understanding how this essay has been used by the Right as propaganda to influence public opinion about the Obama administration's handling of the economic crisis of recent years.

A couple years ago, I heard an irate teenager in the diner of the conservative bible belt town where I live “educating” a few elderly women about what was being perpetrated by the Obama administration. I listened in with astonishment as the boy told these women, who had been alive since before WWII, about how the world worked. He said that Obama was a socialist and that socialism was one step away from dictatorship. The elderly women listened politely, but though they were probably conservative too, seemed to look with knowing pity on the kid. They probably weren't as politically minded as he was, but a lifetime of experience had made them wise enough to be skeptical. I didn't understand where the kid's logic was coming from, but he sounded like someone who had just been made aware of some great “truth” by an idol, and by the ignorance of the kid's claims, I figured it had to have been a conservative pundit, likely someone like Glenn Beck.

Months later I was listening to a Planet Money podcast where Hayek was compared to Keynes in light of the battle going on in Washington about how to best go about solving the country's economic problems. They mentioned The Road to Serfdom, so wanting to better understand the views of Hayek, I looked up the essay and read it. What I was immediately struck by was how dated it was. It was obviously written at the height of the Nazi regime and would have served well as anti-Nazi propaganda, but was likely meant to be something different. Democratic countries with leanings towards socialist policies,in other words, countries that had government control of certain sectors of the economy, were compared and likened to the Nazi regime. He predicted that these governments were only steps away from authoritarian regimes like the Nazis. The reason the essay seems dated to me is that history has shown his predictions to be wrong.

Do We Want More Humans or Less?

The number of humans on earth just passed the 7 billion mark. To mark the occasion, there was a Planet Money podcast about countries whose populations are declining.   Some of the countries experiencing declines in population are affluent, places like Japan and Germany, where every new baby is, in terms of resource consumption, equivalent to dozens of babies in poor countries. But the podcast was not about how great it is to see this decline in population. Oddly, in rich countries the lack of population growth is seen as a problem, and governments are actually giving many incentives to people to have more babies. It's a strange paradox that though the world cannot survive overrun with humans as it is, some countries feel they cannot survive without a continually growing population. The notion that rich countries need a continuously growing population is linked to the belief that we need a continuously growing economy. The problem with both of these concepts is that the earth can sustain neither.

I've often thought there was an integral connection between population growth and economic growth. Though I don't have a background in economics, my knowledge about environmental issues and my interest in the way they relate to other disciplines such as economics, have helped me understand this connection better. In this Planet Money podcast, they explain this connection that is obvious to many economists. Each new baby is not just another mouth to feed, it is another consumer, another worker. In an unsustainable capitalist economy like ours in the US, each new kid is an excuse to tap more resources from the planet. The extraction of more resources is required to grow the economy at such a rapid rate. So when populations slow, as is explained in this podcast, economies stagnate. There aren't as many people buying stuff, there aren't as many people to work the jobs that contribute to the wealth of the economy. As well, there are fewer taxpayers and less revenue to sustain government programs.