Climate change and capitalism

2010-07-20

in Economics, Law, Politics, The environment

A number of times, discussions on this site have questioned how the reality of climate change should affect our political philosophy, when it comes to supporting or opposing capitalism. For both practical and theoretical reasons, I have been of the view that replacing capitalism is not a sensible goal, for those deeply concerned about climate change. Capitalism has virtues that may not be present in alternative systems – and what serious alternatives really exist at this point? – and there is no reason to be confident that an alternative system will be able to address climate change, even after we have put in all the time and effort that such a major societal reorganization would require.

Capitalism also includes powerful tools that could be applied to problems like tackling climate change. By establishing a carbon price, emissions reductions can be made to occur in the places where doing so is cheapest. That has benefits in terms of how quickly and cheaply emissions can be cut. It also has benefits for liberty, since it changes the incentives that people face, without forcing them to make one choice or another.

The urgency of climate change is another major reason to focus on the changes that are absolutely necessary, while leaving grand experiments for a more relaxed period in history. Preventing temperature increase of over 2°C above pre-industrial levels requires very aggressive cuts in global emissions. They need to peak as soon as possible (the sooner, the lower total costs will be) and fall to a dramatically lower level by 2050. Given that this is the lifetime of assets being constructed right now, from highways to buildings to power plants, the need to start changing incentives is urgent. It is much more plausible that this could be achieved by incorporating carbon pricing into our existing economic and political framework than it is to think we could launch a whole alternative structure quickly and effectively enough to achieve that result.

Must capitalism be discarded in order to address climate change, or is reform sufficient? Thinking strategically, what should those who are intensely concerned about climate change work to achieve, in terms of political and economic reforms? What real alternatives to capitalism as now practiced are there, and what would the likely benefits and problems associated with them be?

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{ 68 comments… read them below or add one }

Tristan July 20, 2010 at 10:42 am

I think the notion that “either” capitalism must be discarded or reformed is a false dichotomy. Every serious thinker I’ve heard talk about a movement towards socialism talks about the need to reform existing (i.e. capitalist institutions) in the direction of serving human need – and the most pressing human need is the survival of the species.

The idea of socialism, at base, is simply the idea that the economy should serve human need, rather than the other way around.

Milan July 20, 2010 at 11:17 am

Are you advocating socialism now? Or anarchism? Or neither? Or both?

Tristan July 20, 2010 at 8:02 pm

Neither anarchism nor socialism are fully formed social systems which can simply be “put into place”. Personally, I advocate a transition to Anarcho-Communism (http://en.wikipedia.org/wiki/Anarchist_communism)

or Syndicalism
http://en.wikipedia.org/wiki/Syndicalism

But we shouldn’t do it because I think so. The transition to a post capitalist society is really not about “let’s just decide on a model and implement it”; it requires that we organize and figure out how to make federations between different community organizations. This kind of federalism is exactly what the Toronto Community Mobilization Network
http://g20.torontomobilize.org/

was trying to create, at least on a city level, and look what’s happened to them.

In short – it’s a lot more important that the transition be inclusive, democratic, and “federal”, than it be based on whatever model I or anyone else think is best. It’s not accidental that almost every “communist” revolution has resulted in enormous bloodshed – that’s how one faction gains power without support (and while eliminating) all the other factions.

Tristan July 20, 2010 at 8:09 pm

“Are you advocating socialism now? Or anarchism? Or neither? Or both?”

It’s very strange to think that someone would advocate “Socialism now! or Anarchism now!” What would that mean? How could we have socialism tomorrow? It doesn’t even make any sense. Any serious account of how we get from here to a needs-based economy is through reforming, and to some extent replacing, existing systems. There’s no reason to think we have to get rid of all privately owned capital; the first thing to do is to radically restrict the ability of large firms to externalize costs, and to obtain political influence.

There are lots of practical solutions for how to do this. One is eliminate all political funding, and give voters vouchers which they could give to the party of their choice. Another is nationalize the banks, industry, and resource firms. Those who have their property expropriated are of course entitled to renumeration. But at the same time, the asset rich and the top earners should bear a tax burden relative to their need for marginal assets/earnings.

Darrel MacLeod July 21, 2010 at 2:14 am

Capitalism has its flaws, many and large, and it needs regulation, beyond a shadow of a doubt. Socialism, which we already have, is being used as a euphemism for communism. (Ever seen so many “isms” in one sentence before?) And communism doesn’t work. It’s been tried, in many places, in several forms, and it failed. It invariably degrades to totalitarianism, indistinguishable from Nazism. Remember that? The National Socialist Party? Capitalism, for all its challenges, is the only system we’ve come up with that works.

Tristan July 21, 2010 at 1:25 pm

” And communism doesn’t work. It’s been tried.”

This is the kind of thing said about communism by people who don’t know anything about it.

If anyone’s interested in looking at post-market (which is on a continuum from a regulated market) ideas, “Parecon” by Michael Albert is available online. This guy has thought very seriously about how to do participatory economics, so he’s worth looking at if anyone’s interested in getting past cliches.

http://www.zcommunications.org/zparecon/pareconlac.htm

Tristan July 21, 2010 at 1:27 pm

To pre-empt a reactionary response: communists, socialists, or anarchists would simply say “capitalism doesn’t work”. They’d say things like “capitalism never solves its crises, it just moves them around geographically” – which is not obviously false. See this account of the crisis by David Harvey:

http://www.youtube.com/watch?v=qOP2V_np2c0

Tristan July 21, 2010 at 1:35 pm

Anyone who’s read Marx knows that Marx says very little about how communism works – mostly because he hadn’t worked it out. However, he did say that it comes about first through the proletariat seizing hold of the means of production, and then transitioning to a withering away of central control over the means of production.

Anyone who knows anything about the USSR or any other communist project knows they never got to the “withering away of the state” part, and there are various explanations for why this happens. Bolsheviks will say it’s all the West’s fault. But I think anarchists have the best explanation: “communism” is plagued by the problem of the vanguard – which perhaps inevitably becomes the elite and therefore classless society is prevented, rather than permitted, by the centralization of control.

Roughly, anarchists think you need to do a lot more work on what “communism”, i.e. the withering away of the state, is going to look like before you start doing it.

On the original question, if someone was able to convince me that capitalism will able to solve this ecological crisis, I’d be all for putting off the transition to post-capitalism. But, it seems to me that we can’t just sit in this holding ground of eroding liberal democracy – in 50 years I think there’s a good chance that either we’ll have moved towards socialism, or we’ll have moved towards a kind of Chinese style authoritarian/fascist “capitalism”, which is a kind of aristocratic oligopoly of the financial and industrial elite. In other words, what we have now but with even less democratic control.

We already see democratic control over the power of finance and industrial capital slipping away in the 20th and early 21st century – look at how controlled Obama is by the finance lobby that got him elected. That control is a real worry, and if we want to overcome it, we need to find a way to elect candidates who are genuinely not under the thumb of business. That’s true whether you want reform or revolution.

I advocate alliances between revolutionaries and reformists – I think our interests are basically the same. Certainly we have different long term priorities, but our short term differences are just questions of fact, i.e. strategy. Right?

Darrel MacLeod July 22, 2010 at 9:35 pm

My, my, isn’t political discourse fun? So, communism failed because true communism never got a chance, wasn’t implemented properly. Perhaps. Perhaps, if you could find a nation entirely populated by altruistic intellectuals who sleep with the Communist Manifesto under their pillows every night, and ingest it with their breakfast every morning, you could create a state in which the “withering away of the state” is possible and desirable. But let us step outside the ivory tower for a moment, shall we, and have a look at a little something called reality.
Communism failed because it failed to take into account basic human nature, which includes competitiveness. Evolution has dictated that those with a competitive spirit have a higher survival rate. From each according to his ability, to each according to his need, robs people of their incentive to produce. It shouldn’t, you’ll say, and you may be right, but it would. And those people with extra drive and ambition, who can’t help but produce more, would rightfully ask why their rewards should be the same as those who take advantage of the system by producing nothing. And please don’t insult anyone’s intelligence by suggesting that wouldn’t happen. It happens every day.
This competitive drive is ingrained and unstoppable. It may even cause someone on one side of a debate to call someone on the other side an ignorant, cliche-spouting reactionary. Some cliches, by the way, are aphorisms in disguise.
In the end, you can theorize until the cows come home, but those nasty Homo Sapiens will insist on acting like Homo Sapiens. If H. Sap. “A” finds a bigger, juicier bunch of bananas, he won’t share them with H. Sap. “B” unless “B” has something to trade, no matter what Uncle Karl says. As someone once said, the vanguard will inevitably become the elite. Inevitably.

Milan July 23, 2010 at 5:08 pm

A more promising approach to trying to replace capitalism with some as-yet-undefined alternative is just to work to reduce the hypocrisy in capitalism as practiced.

One way to do that is to eliminate subsidies that are not justified through the creation of positive externalities. It makes sense for general government revenues to fund things like lighthouses and GPS satellites. Using them to provide soft loans to oil and coal companies cannot be justified on those grounds.

Similarly, in order to move to a more ethical form of capitalism (and reduce the risk of dangerous or catastrophic climate change), all economic actors should be made to price the harm associated with their greenhouse gas emissions into their decision-making. The discount rate selected, in order to calculate the current value of that harm, should reflect the basic moral argument that all generations have an equal right to inherit an unspoiled planet.

That implies a low discount rate, such as the one used in the Stern Review of the economics of climate change.

Tristan July 23, 2010 at 5:47 pm

“A more promising approach to trying to replace capitalism with some as-yet-undefined alternative is just to work to reduce the hypocrisy in capitalism as practiced.”

I agree with this, and I don’t think it needs to be seen as hostile to revolutionaries. What I’d add is a need to reduce the power of economic actors, so that money doesn’t translate into political capital. Partially because I think it’s wrong, and partially because it leads to bad outcomes – i.e. corporations pressuring governments to subsidize profitable industrial practices with high negative externalities.

I recently wrote a post entitled “What’s wrong with Rawls’ defence of Capitalism”, which differentiates between the idea of capitalism (which is acceptable) and the reality of the excessive power of capital (which is not). I think that post adds this discussion in a productive manner:

http://northernsong.wordpress.com/2010/07/18/whats-wrong-with-rawls-defence-of-capitalism/

Tristan July 23, 2010 at 5:49 pm

“This competitive drive is ingrained and unstoppable.”

I’m not an expert in this field, but according to Dan Pink no one believes this anymore:

http://en.wikipedia.org/wiki/Dan_Pink
http://www.youtube.com/watch?v=u6XAPnuFjJc

Milan July 23, 2010 at 6:14 pm

People seem to be intensely concerned about how their wealth compares with that of their peers, family, and friends.

Being richer than everyone else seems to be psychologically preferable to everybody being rich.

Milan July 23, 2010 at 6:16 pm

I remember a quotation from somewhere, along the lines of: “Being well-off means earning more than your wife’s sister’s husband.”

Tristan July 23, 2010 at 6:30 pm

According to Pink, financial incentives are remarkably irrelevant to performance in cognitive heavy tasks. You can disagree if you want, but you should reference the various studies he is using to support his claims.

I know you don’t like movies, but this is a TED talk at least –
http://www.youtube.com/watch?v=rrkrvAUbU9Y

Tristan July 23, 2010 at 6:32 pm

“Being richer than everyone else seems to be psychologically preferable to everybody being rich.”

This is probably cultural, which means it could change. From what I learned during my History degree, in the middle ages people were perfectly happy with the idea that their kids would be no better off than they were – which seems incoherent today.

Changing culture is hard, and often the wrong goal (re: “The Rebel Sell”). But, sometimes it seems to work (re: Richard Semler).

Actually that’s what I wrote about today: http://northernsong.wordpress.com/2010/07/23/democracy-and-the-end-of-metaphysics/

Milan July 23, 2010 at 6:37 pm

There is a big difference between the claim ‘paying people more doesn’t make them perform heavy cognitive tasks better’ and the claim ‘people have an irrepressible competitive drive that clashes with non-capitalist forms of social organization.’

The latter claim seems to have at least some validity, and a fair bit of social and political importance.

Admittedly, things other than money can play the same role in establishing a hierarchy of status: rank, perks, house or office size, etc. Communist societies have involved all of these.

Milan July 23, 2010 at 6:38 pm

So does the civil service, incidentally. Most departments have rules on who is allowed to have a cubicle (and who gets one with a door), who gets and office, who gets an office with a window, who gets an office with a shower, etc.

Milan July 23, 2010 at 6:40 pm

Seniority is one way to allocate social status on a basis that doesn’t necessarily have anything to do with merit or talent.

Tristan July 23, 2010 at 6:48 pm

Semco, the company reformed by Richard Semler, seems to have done away with most of what we feel to be naturally occurring institutions of authority in capitalist companies.

http://en.wikipedia.org/wiki/Ricardo_Semler

Furthermore, there really seems to be nothing natural about this “competitive drive”. For it to be natural, you’d have to find it in Greek society, Roman society, Medieval society, Indo-European nomadic society, etc…

In reality, it’s probably cultural. Which isn’t trivial – culture is deeply bred. But, it is something that can be overcome through institutional reform – some local, some national.

Incidentally, no one holds the USSR up as an example of a post-hierarchical society. the USSR was every bit as “classist” as “capitalist” societies – the capitalist class was simply replaced by a coordinator class. And actually – since what they were coordinating was the means of production, i.e. “capital”, you could just call them “capitalists” and be technically correct.

Tristan July 23, 2010 at 6:50 pm

Incidentally, no one on the left plays the “theory versus practice” defence of communism anymore. The new line of thinking involves getting to the root of why every attempt at communism ends in with a new classist society.

Badiou’s new book tackles this problem:

http://www.newleftreview.org/?view=2705

Milan July 23, 2010 at 7:09 pm

“[C]ulture is deeply bred”

It also shifts around at random, influenced by many actors and lots of pure chance.

Especially in modern states with a relatively free press, it seems difficult to imagine how a government could effectively and comprehensively shift the culture in a particular direction.

Tristan July 23, 2010 at 9:11 pm

I think one reasonable solution for shifting it is the existence of successful and sustainable examples of what you might call “cultural defiance”, i.e. Semco.

Rawls suggested that states might give subsidies to co-operatives to attempt to overcome the cultural dominance of hierarchical workplaces. Governments could be justified in doing this if there were a belief that non or differently hierarchical workplaces were more efficient, or if they were proven or believed to significantly improve the happiness of people in them (that’s a form of efficiency too).

I don’t agree that it shifts randomly – superficially this is true (i.e. something different is cool every five minutes), but deeply (i.e. the structure of “cool”) I think it shifts quite slowly. Especially because “counterculture” is actually part of the operation of mainstream culture.

“Especially in modern states with a relatively free press”

Can you say this with a straight face? Do you have any kind of analysis of the media, at all?

Milan July 24, 2010 at 1:45 pm

In this context, ‘free’ means ‘not controlled by the government.’

In states like Canada, the media is very free. As a consequence, the government doesn’t have much scope to intentionally manipulate culture. That is especially true since school curriculums are set by the provinces.

Compare that with communist states, where the state has extensive media control, as well as a firm grip on the educational system.

. July 24, 2010 at 6:37 pm

The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it

Posted Jul 15, 2010 02:25pm EDT by Michael Snyder in Recession

Editor’s note: Michael Snyder is editor of theeconomiccollapseblog.com

http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here's-the-stats-to-prove-it-520657.html?tickers=^DJI,^GSPC,SPY,MCD,WMT,XRT,DIA

“Here are the statistics to prove it:

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don’t contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.”

Tristan July 24, 2010 at 6:40 pm

These statistics are pretty scary, especially

“• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.”

“• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.”

No classical liberals would find this distribution of wealth acceptable. If you want to defend capitalism, you need a plan to fix it.

Tristan July 25, 2010 at 12:58 pm

“In states like Canada, the media is very free. ”

I’m sorry, this just isn’t true. I’ll give you an example – reporters who cover police issues depend on access to the police to be able to get their stories. The police can easily make it difficult for reporters by excluding them from access to information, by not answering their questions, etc… There is therefore a motive for reporters not to be critical of the police. My media friends have witnessed and been explained these problems first hand in their experiences reporting during and after the Toronto G20 meetings.

Milan July 26, 2010 at 9:52 am

Canada’s media is still very free compared to the media elsewhere. Can you think of any country in which reporters can somehow get access to all information relating to police conduct, without having to interact with the police themselves, and without there being any opportunity for the police to exclude information from them?

In any case, this is all a bit secondary to the point about culture, and the extent to which the state can intentionally mould it.

Milan July 26, 2010 at 9:54 am

As for the inequality statistics, do you think a society with more equal distribution of wealth would be better equipped to deal with climate change?

If so, why?

Tristan July 29, 2010 at 3:37 pm

The reasons why inequality is a problem for climate change is simply that we currently have a political system which can’t make decisions in the long term, or general, interest because it is under disproportionate control by capital. I explain this in my critique of Rawls’ defence of capitalism here:

http://northernsong.wordpress.com/2010/07/18/whats-wrong-with-rawls-defence-of-capitalism/

Tristan July 29, 2010 at 3:43 pm

As for why replacing capitalism is necessary, see David Harvey’s essay, “Organizing for the Anti-Capitalist transition”:

” Three percent compound growth (generally considered the minimum satisfactory growth rate for a healthy capitalist economy) is becoming less and less feasible to sustain without resort to all manner of fictions (such as those that have characterized asset markets and financial affairs over the last two decades). There are good reasons to believe that there is no alternative to a new global order of governance that will eventually have to manage the transition to a zero growth economy. If that is to be done in an equitable way, then there is no alternative to socialism or communism. Since the late 1990s, the World Social Forum became the center for articulating the theme “another world is possible.” It must now take up the task of defining how another socialism or communism is possible and how the transition to these alternatives are to be accomplished. The current crisis offers a window of opportunity to reflect on what might be involved.”

” If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030. This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted). Real problems of finding adequate outlets for surplus capital began to emerge after 1980, even with the opening up of China and the collapse of the Soviet Bloc. The difficulties were in part resolved by creation of fictitious markets where speculation in asset values could take off unhindered. Where will all this investment go now?

Leaving aside the undisputable constraints in the relation to nature (with global warming of paramount importance), the other potential barriers of effective demand in the market place, of technologies and of geographical/ geopolitical distributions are likely to be profound, even supposing, which is unlikely, that no serious active oppositions to continuous capital accumulation and further consolidation of class power materialize. What spaces are left in the global economy for new spatial fixes for capital surplus absorption? China and the ex-Soviet bloc have already been integrated. South and SouthEast Asia is filling up fast. Africa is not yet fully integrated but there is nowhere else with the capacity to absorb all this surplus capital. What new lines of production can be opened up to absorb growth? There may be no effective long-run capitalist solutions (apart from reversion to fictitious capital manipulations) to this crisis of capitalism. At some point quantitative changes lead to qualitative shifts and we need to take seriously the idea that we may be at exactly such an inflexion point in the history of capitalism. Questioning the future of capitalism itself as an adequate social system ought, therefore, to be in the forefront of current debate.

China and India are still growing, the former by leaps and bounds. But in China’s case, the cost is a huge expansion of bank lending on risky projects (the Chinese banks were not caught up in the global speculative frenzy but now are continuing it). The overaccumulation of productive capacity proceeds a-pace and long-term infrastructural investments whose productivity will not be known for several years, are booming (even in urban property markets). And China’s burgeoning demand is entraining those economies supplying raw materials, like Australia and Chile. The likelihood of a subsequent crash in China cannot be dismissed but it may take time to discern (a long-term version of Dubai). Meanwhile the global epicenter of capitalism accelerates its shift primarily towards East Asia.”

http://davidharvey.org/2009/12/organizing-for-the-anti-capitalist-transition/

Milan July 29, 2010 at 3:46 pm

But why would reduced inequality make people care more about the long-term?

Arguably, elites that want to perpetuate their dominance have more reason to think long-term than homogenously rich and powerful people who expect their descendents to live in the same condition.

Milan July 29, 2010 at 3:50 pm

Also, it is arguable that concern about the future and understanding of issues like climate change require more leisure than people would have in a hyper-equitable society.

If everyone basically earned the mean wage ($39,668) doing various types of work in a flat society with little hierarchy, there may well be less of the kind of investigation that identifies problems and begins working on solutions to them.

Tristan July 29, 2010 at 4:00 pm

“Arguably, elites that want to perpetuate their dominance have more reason to think long-term than homogenously rich and powerful people who expect their descendents to live in the same condition.”

The problem is not the elites as individual people (most are certainly very nice), but under capital the elite’s interests are structured by the need for short term profit and externalizing costs. The examples are clear: I’m sure you believe the oil sands should be shut down, but what would happen if the CEO of RBC divested from the tar sands? I think he would be fired and replaced by someone who is willing to destroy his children’s future. Same would happen if the CEO of RBC tried to publically encourage the government to reduce the power of finance capital in Canada.

Perversely, the current structure which grants too much power to Capital – which doesn’t mean people controlling capital, because capital quite clearly controls them!

If you are willing to forego democracy, then many political systems would be adequate to solving global warming. Any dictatorial system where power does not come from economic growth would be fine. Crucial would be keeping the boyars/aristocrats/elites down – so think of Vlad Tepes, Peter the Great, or Catherine the Great as model leaders.

Tristan July 29, 2010 at 4:02 pm

“If everyone basically earned the mean wage ($39,668) doing various types of work in a flat society with little hierarchy, there may well be less of the kind of investigation that identifies problems and begins working on solutions to them.”

Do you think science progresses mostly because of the high wages earned by Scientists? Sure, much of the funding is motivated by the profits which patents can produce, but I always understood that the motivations of the scientists had more to do with prestige and mastery than earning a higher wage.

Remember – in highly cognitive tasks, monetary rewards negatively correlate with performance.

Milan July 29, 2010 at 4:05 pm

We need to get to a place where ignoring long-term impacts becomes socially and legally unacceptable. It needs to become abhorrent to us, to a degree that makes it impossible to become politically or economically powerful by concentrating only on the short-term.

That is, of course, a very ambitious target – and one that it may be impossible to reach. That is one reason why we need to try to deal with climate change through existing market and political mechanisms, to the greatest possible extent. Going directly and exclusively for the ambitious goal increases the chances of failure.

It is also worth remembering that, at a bare minimum, we only really need to think long-term when it comes to things that could potentially destroy humanity. Tautologically, we can keep behaving stupidly in other areas without destroying humanity.

Milan July 29, 2010 at 4:06 pm

Of course, prestige and mastery are just other forms of inequality (like the fancier apartments enjoyed by those close to various communist parties).

Milan July 29, 2010 at 4:07 pm

Imagine what would happen to the academic environment if it was radically equitable.

If all undergrads got no grades, I am sure standards would slip enormously. Most people would enjoy the excellent social atmosphere of university, while largely ignoring tests and assignments.

The same goes for faculty, and the various perks they compete for. The tenure system may be ruthless, but it certainly drives research.

Tristan July 29, 2010 at 4:34 pm

The way you are using “equality” is deceptive and equivocating. I argued that a specific form of inequality is a problem for specific reasons, and you’ve countered by making assertions that grasp equality much more widely, and criticize your own hypothesis about “egalitarianism” as meaning no differences between people. This line of argument is of the same style as critiques of feminism on the basis that it encourages man-hatred.

Tristan July 29, 2010 at 5:03 pm

“The tenure system may be ruthless, but it certainly drives research.”

How does the tenure system drive research? In my understanding, tenured professors are under no obligation to do research. In order to supervise graduate students, however, they must demonstrate to be engaged in contemporary research.

. July 29, 2010 at 5:12 pm

DAVID HARVEY

THE RIGHT TO THE CITY

“Unlike the fiscal system, however, the urban and peri-urban social movements of opposition, of which there are many around the world, are not tightly coupled; indeed most have no connection to each other. If they somehow did come together, what should they demand?

The answer to the last question is simple enough in principle: greater democratic control over the production and utilization of the surplus. Since the urban process is a major channel of surplus use, establishing democratic management over its urban deployment constitutes the right to the city. Throughout capitalist history, some of the surplus value has been taxed, and in social-democratic phases the proportion at the state’s disposal rose significantly. The neoliberal project over the last thirty years has been oriented towards privatizing that control. The data for all OECD countries show, however, that the state’s portion of gross output has been roughly constant since the 1970s. [17] The main achievement of the neoliberal assault, then, has been to prevent the public share from expanding as it did in the 1960s. Neoliberalism has also created new systems of governance that integrate state and corporate interests, and through the application of money power, it has ensured that the disbursement of the surplus through the state apparatus favours corporate capital and the upper classes in shaping the urban process. Raising the proportion of the surplus held by the state will only have a positive impact if the state itself is brought back under democratic control.”

http://www.newleftreview.org/?view=2740

Milan July 29, 2010 at 5:13 pm

We agree that preventing dangerous or catastrophic climate change requires that humanity collectively act in a way that shows more concern for the future.

The questions that arise from that are:

1) What is the minimum level of societal change that would allow us to achieve the narrow goal of avoiding catastrophic climate change?

2) Practically speaking, what would be the most effective mechanism for producing that change?

Right now, the willingness to abandon capitalism with general population – as well as business and political elites – is essentially zero. You won’t get elected promising it, and you certainly won’t get a policy document though government suggesting it.

Furthermore, as I have repeated endlessly, I see no reason to believe an alternative system would do better. Capitalism has a strong ability to drive people to act in particular ways – namely, those encouraged by its internal operations. The promising route forward seems to be changing those internal dynamics to encourage a rapid transition towards carbon neutrality.

Quite probably, such a transition is more likely to succeed if it will make some people rich. Indeed, it may be the process of people getting rich off zero carbon forms of energy overpowering those staying rich off of fossil fuels that actually sits at the heart of the transition.

Milan July 29, 2010 at 5:19 pm

Aside on tenure: Tenure is one of those weird incentive systems where there is a very sharp threshold. It is a bit like having a criminal record. Being on one side or the other of the divide is very important. The trouble with such arrangements is that they lose their bite as soon as you cross the threshold. That can certainly be problematic. That is why, if I were designing the universe, I would set it up on the basis of karma, not heaven and hell.

The karma incentive never stops affecting behaviour, whereas heaven and hell cease to do so as soon as you are definitively assigned to one or the other.

Arguably, the tenure system is meant to serve different purposes before and after the threshold. Before, it makes you publish like a fiend. After, it prevents you from getting fired even if you become annoying to the university administration. This is a bit like appointing judges for life.

mekrith July 29, 2010 at 5:51 pm

And like appointing judges for life, there are pretty good reasons for doing so. Judges and professors are rendered politically invulnerable, so can freely express their opinions without fear of reprisal, and opining is integral to the job. After all, they were (in theory) granted the job due to the quality of their opinions and analysis in the first place.

The reasoning behind tenure is easily forgotten in progressive countries, but perhaps another decade of Harper will teach us its true value again.

Tristan July 29, 2010 at 7:25 pm

“1) What is the minimum level of societal change that would allow us to achieve the narrow goal of avoiding catastrophic climate change?

2) Practically speaking, what would be the most effective mechanism for producing that change?”

1 – The surplus cannot continue to be re-invested at a 2.25% return. So, the economy must transition towards a no-growth economy where the surplus is not expected to earn a return. We can either transition control of the surplus to the state or the community (if we move towards anarcho-federalism). Capitalists can not not invest the surplus to achieve a return – it’s right there in capitalism’s essence. If we want to preserve an aristocratic society, capitalism will need to be replaced by a new feudalism. We might find a partial model for this in China and Singapore – where capitalism is perfectly happy not bringing about democratic reforms.

2 – For the second solution, a group of elites will likely institute this on their own. At some point, the instability of a growth economy since the 70s will be seen as a liability, and the powerful will find other ways of institutionalizing their power. For a solution which does not move us back towards authoritarian feudalism, we need to make a revolution towards the liberal ideals of equal opportunity, free labour, and anti-poverty. David Harvey describes how we might see this already happening in the essay I liked above, “Organizing for the anti-capitalist transition”.

Tristan July 29, 2010 at 7:27 pm

* It’s perfectly possible the elites are not well enough organized to re-institute their power in a no-growth economy before the extinction of the species becomes inevitable. Their structures are set up against them. Most importantly, the dogma they promote – that we can’t think beyond capitalism – prevents them from re-thinking authoritarian aristocratic society as a solution for the current epoch of repetitive economic crises/impending ecological collapse.

Milan July 29, 2010 at 7:32 pm

Growth is not a problem, as long as it is sustainable.

We just need to deal with the processes that are a slow drain on natural capital – including climate change, soil depletion, habitat loss, etc.

If we deal with those, we can keep increasing standards of living through capital investment and technological development.

Tristan July 29, 2010 at 7:39 pm

Growth is a problem because as the world fills up, it becomes more and more difficult to find enough investments to satisfy the safe-money which needs being invested.

That’s a major cause behind the current economic collapse: there was a huge demand for safe investments, but the supply had run out. So mortgage companies invented fancy financial products to give the appearance of more “safe” investments (the strange derivatives on sub prime mortgages, to be specific).

Why should we believe that we will continue to find enough investments in which to put the 3% surplus value capitalism needs to re-invest to keep the system going?

I liked an article above explaining this:

” If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030. This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted). Real problems of finding adequate outlets for surplus capital began to emerge after 1980, even with the opening up of China and the collapse of the Soviet Bloc. The difficulties were in part resolved by creation of fictitious markets where speculation in asset values could take off unhindered. Where will all this investment go now?”

Tristan July 29, 2010 at 7:40 pm

NPR did a special on the “giant pool of money” and the perverse mortgage lending situation it led to:

http://www.npr.org/blogs/ombudsman/2008/05/the_giant_pool_of_money.html

Tristan July 29, 2010 at 7:44 pm

This is essential:

“To explain why a $70 trillion (yes, trillion) global pool of money shunned investing in the safe U.S. government and went instead into risky mortgages, Davidson and Blumberg played a clip from former Federal Reserve Board chairman Alan Greenspan that would go over the heads of most of us. They even apologize for quoting the inscrutable Greenspan.

Then Davidson translates. What Greenspan is really saying is, Davidson tell us, is: “Hey global pool of money, screw you. You are not going to make any money on U.S. Treasury bonds for a very long time. Go somewhere else!””

What’s going on is that states (or at least the US) are not willing to pay treasury bond rates that exceed the forecasted rate of inflation, and are therefore lousy investments. However, trying to find alternative investments is lousy because they don’t exist in the quantities demanded.

There is just too much money.

Tristan July 29, 2010 at 7:49 pm

“we can keep increasing standards of living through capital investment and technological development.”

?

Standards of living go up when wages go up, specifically when wages as a proportion of GDP go up. In fact, David Harvey claims wages as proportion of GDP have gone down since the 70’s, even in China. Institutions that actually try to measure quality of life find that many indicators have been declining in the US since the 70s.

Milan July 29, 2010 at 7:52 pm

“In the end, the prescription for humanity seems to resemble a cheesy grocery store magazine diet: avoid carbon-intensive fuels, manage resource use and waste flows, and feel free to use all the renewable energy and carbon- and resource-neutral technological advancement as you can manage.”

Tristan August 6, 2010 at 2:01 am

“a relatively free press”

That’s why we’ve read about the toxic legacy of Fallujah in Canadian and American newspapers, right?

Milan August 11, 2010 at 4:32 pm

I clearly defined what I meant above – a state has a free press if the government doesn’t have much influence over what they print.

It is not defined by the extent to which the media emphasizes causes that you personally feel are important. The press can be very free and also fixated on trivial issues, or very free and dominated by analysis based on ideologies you oppose.

Milan August 11, 2010 at 4:35 pm

Standards of living go up when wages go up, specifically when wages as a proportion of GDP go up.

Obviously, this isn’t the only way in which standards of living rise. To assert so is to show even more inappropriate faith in abstract economic figures than people who think GDP = human welfare do.

Standards of living rise when technology improves, when tedious and dangerous tasks get automated, when polluting processes are replaced with cleaner ones, and in many other ways that have nothing to do directly with wages as a proportion of GDP.

Those are some of the reasons why standards of living could continue to rise within an economy that is in a steady state, in terms of the biophysical impact it has on the planet.

Milan August 12, 2010 at 2:03 pm

The tenure discussion above was a bit of a side note, but this is a nice counterargument to Mekrith’s view, which is certainly partially correct, that tenure is valuable because it protects academic freedom:

The most common pro-tenure argument is that it protects academic freedom. Once a professor gains tenure, the thinking goes, he or she can say anything without fear of being fired. Academia thrives on the circulation of dangerous ideas. The problem is, for every tenured professor who’s liberated at age 40 to speak his mind, there are dozens of junior professors terrified to say anything the least bit controversial, lest they lose their one shot at job security for life. Academia relies on young scholars to shake things up. Yet tenure incentivizes them not to. Instead, it rewards students who follow in the footsteps of the elders whose favor they will require when the day of judgment arrives.

Suppressing what young academics can say doesn’t seem like an ideal approach. After all, they are the most likely people to have important novel ideas.

Milan August 12, 2010 at 2:12 pm

I farmed off the tenure discussion into a dedicated thread.

susan August 16, 2010 at 2:09 pm

“Arguably, the tenure system is meant to serve different purposes before and after the threshold. Before, it makes you publish like a fiend. After, it prevents you from getting fired even if you become annoying to the university administration. This is a bit like appointing judges for life.”

Sometimes when people get too annoying, a way is found to dismiss them.

http://en.wikipedia.org/wiki/Denis_Rancourt
http://www.academicfreedom.ca/

R.K. August 16, 2010 at 2:31 pm

There are several ways in which it seems capitalism could be compatible with dealing with climate change.

For one thing, jobs and tax revenues are necessary for getting communities and politicians on side for renewable energy projects.

For another, once some proper incentives have been put in place with carbon prices, markets should be quite efficient at re-orienting investment away from fossil fuel driven enterprises and towards those that have become relatively less costly.

Finally, when it is working properly capitalism is based around people placing bets on the future, using their own money. When politicians just dictate how climate change should be addressed, they are effectively forcing other people to spend in certain ways which are likely to be less well thought out and justified than the options that would be chosen in response to an impartial incentive, like a carbon tax.

. September 8, 2010 at 11:23 am

Historical detection
Who killed the Soviet economy?
A brilliant detective story asks what went wrong

Aug 19th 2010

Red Plenty: Industry! Progress! Abundance! Inside the Fifties’ Soviet Dream. By Francis Spufford. Faber & Faber; 434 pages; £16.99. Buy from Amazon.co.uk

“In the 1950s the Soviet economy was growing at around 5% a year, faster than the United States. But productivity was low and stagnant. For that extra output, the Soviet Union was burning capital. That, in a nutshell, is Mr Spufford’s story of what went wrong—and was bound to go wrong.

Mr Spufford’s “pre-history of perestroika”, as he calls it, is clear in its judgment that the Soviet Union was in most ways an awful place. But he has done something better than repeat the obvious. He has shown in human detail how and why the system was believable. Such sympathy saves the book from sneering. One way the author makes his characters come alive is by not crediting them with more than they knew or letting them see further than they could have done. When you are in a system, any system, it is hard to imagine yourself in another. Mr Spufford, who has turned the trick, knows how hard. He has no need to hammer the point—but “Red Plenty” is also a lesson against any Western smugness.”

. September 13, 2010 at 3:18 pm

Why create a market for GHG emissions, when markets – in general – are subject to manipulation and have failed terribly?

With the U.S. economy experiencing its worst recession since the Great Depression, amidst corporate scandals, pyramid schemes, and a series of government bailouts, some members of the public as well as elected officials have come to question the ability of markets to perform their basic functions. Despite the past successes of market mechanisms to address environmental problems such as acid rain, leaded gasoline, and stratospheric ozone depletion, this growing distrust of markets has led some to question whether market-based approaches are appropriate instruments to help tackle the exceptionally challenging problem of global climate change.

The storyline goes roughly like this: establishing a “carbon market” for greenhouse gas emissions opens the door for financial intermediaries – banks and brokers – to be involved. Since we know that they cannot be trusted, and only care about making profits (and not about reducing emissions), how could any approach that involves them be part of an effective solution?

In reality, of course, our recent economic turmoil does not mean that “markets” in any general sense do not work; only that markets require appropriate oversight. Our economy fundamentally is a market-based system, but oversight – including, where appropriate, effective rules and regulations – can be essential to ensure transparency and prevent manipulation.

With appropriate rules and oversight, markets have been shown to work exceptionally well to address environmental problems. They provide key flexibility to regulated entities to adopt least-cost approaches to emission reductions, while providing powerful incentives for technological innovation and diffusion, which serve to reduce costs over time. Real world experiences with using market-based instruments for environmental protection include CFC trading under the Montreal Protocol (to protect the ozone layer); SO2 allowance trading under the U.S. Clean Air Act Amendments of 1990 (to curb acid rain); NOx trading (to control regional smog in the eastern U.S.); and eliminating lead from gasoline in the 1980s.

Studies that have evaluated the performance of these market-based approaches to environmental protection have found that they have achieved their environmental objectives and have done so at lower cost than conventional, command-and-control approaches. Estimates of cost savings range from 7 percent to 96 percent, with more than half of studies showing that market-based programs cut the cost of regulation by well over 50% compared with command-and-control options. For example, the SO2 allowance trading program resulted in 33 percent cost savings — on the order of $1 billion annually, while reducing power-sector emissions from 15.7 million tons in 1990 to 7.6 million tons million tons in 2008. The phase-down of leaded gasoline in the 1980s, which employed trading of environmental credits, was also successful in meeting its environmental targets, while yielding cost savings of about $250 million per year.

The evidence is incontrovertible – market-based approach to environmental protection can work, effectively achieving environmental targets and keeping costs to a minimum. These approaches are not deregulation, but reformed and improved regulation. And like all markets, these environmental markets need rules and oversight.

. September 15, 2010 at 11:43 am

Fidel: ‘Cuban Model Doesn’t Even Work For Us Anymore’

Sep 8 2010, 12:00 PM ET

But during the generally lighthearted conversation (we had just spent three hours talking about Iran and the Middle East), I asked him if he believed the Cuban model was still something worth exporting.

“The Cuban model doesn’t even work for us anymore,” he said.

This struck me as the mother of all Emily Litella moments. Did the leader of the Revolution just say, in essence, “Never mind”?

I asked Julia to interpret this stunning statement for me. She said, “He wasn’t rejecting the ideas of the Revolution. I took it to be an acknowledgment that under ‘the Cuban model’ the state has much too big a role in the economic life of the country.”

Julia pointed out that one effect of such a sentiment might be to create space for his brother, Raul, who is now president, to enact the necessary reforms in the face of what will surely be push-back from orthodox communists within the Party and the bureaucracy. Raul Castro is already loosening the state’s hold on the economy. He recently announced, in fact, that small businesses can now operate and that foreign investors could now buy Cuban real estate. (The joke of this new announcement, of course, is that Americans are not allowed to invest in Cuba, not because of Cuban policy, but because of American policy. In other words, Cuba is beginning to adopt the sort of economic ideas that America has long-demanded it adopt, but Americans are not allowed to participate in this free-market experiment because of our government’s hypocritical and stupidly self-defeating embargo policy. We’ll regret this, of course, when Cubans partner with Europeans and Brazilians to buy up all the best hotels).

Milan October 6, 2010 at 9:37 am

The matter of what people want and the matter of how capital is allocated are not unconnected. Apple is swimming in capital because they came up with ways to significantly improve computers: serving the desires that people developed for elegant machines that work reliably. Capital chases successful companies, and companies are successful because they serve human needs. In a very real way, the free market is a mechanism through which consumers are able to make their desires manifest.

Yes, those desires are partially constructed by capitalist entities themselves (via advertising, etc). The problem of ‘real’ versus ‘artificial’ desires is a tricky one that would take us into a lot of theoretical territory. My argument is just that the market is less a force unto itself and more an aggregator and server of general desires. What needs to be achieved is a transition in which it comes to serve those purposes without profoundly threatening future generations.

Milan October 6, 2010 at 9:43 am

With climate change, it’s more complicated – but I think people, real people with values and kids, have a better chance at desiring a future where humans still exist, than business leaders who will be fired if they fail to make the best return given current conditions. I.e. will be fired if they divest from the oil sands.

This hints at an important element of market capitalism: the operation of the market as an agent to do people’s dirty work.

Nobody wants to fund the autocratic Saudi regime or devastate Albertan boreal forest, per se. But they do want to visit Berlin, water ski, and go on road trips. By treating corporations as entitites that operate for their own mysterious purposes – rather than to serve our needs and desires – we insulate ourselves from the consequences of our choices. Your wedding band may be made from gold that was mined in a way that exposed a whole village to lead poisoning, but the treatment of corporations as independent entities allows consumers to condemn that unwanted outcome while not giving up the personal choice that is its ultimate cause.

Arguably, the open recognition that corporations just do what people in general pay them to do could bring some more ethical reasoning back to the person making the original choice. Once they are confronted with the consequences of consumer demand – their own included – they can start considering responses like abstinence and resistance.

. October 13, 2010 at 11:26 am
John Steinsvold April 13, 2011 at 11:33 pm

An Alternative to Capitalism (which we need here in the USA)

Several decades ago, Margaret Thatcher claimed: “There is no alternative”. She was referring to capitalism. Today, this negative attitude still prevails.

I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:

http://evans-experientialism.freewebspace.com/steinsvold.htm

John Steinsvold

Perhaps in time the so-called dark ages will be thought of as including our own.
–Georg C. Lichtenberg

. January 18, 2012 at 10:03 am

“Even in favourable political circumstances, many of the goals of environmentalism are inherently difficult to achieve. The truth few people wish to acknowledge is that environmental aims run counter to the primary goal of governments and business, which is to enhance economic growth. However many black swans take flight, more economic activity is likely to exert greater pressure on planetary systems. Yet achieving a steady-state economy of the kind proposed by the thinkers Herman Daly and Tim Jackson is a goal shared by no one outside the environmental movement, even though it could spare us from the catastrophic ebb and flow of the growth-based system.”

. October 25, 2015 at 1:20 pm

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