Climate Catastrophe and the Second Coming
by L. Randall Wray
Back in the early 2000s, financial market participants would wisecrack that unlikely events that should happen once in 10,000 years were occurring every month. We know where that led—to the Global Financial Crisis. Everything crashed. The Fed had to spend and lend $29 trillion to bail out the world’s financial system. It took economies a decade to recover.
Today we read in the press that the frequencies of floods, droughts, glaciers melting, coral bleaching, heat records, severe hurricanes, and tornadoes have all jumped outside several standard deviations of the possible. Even aside from the threat to life and limb, the risk to property is becoming uninsurable and the coming hit to finance is unbearable. The evidence that we face immense and complex challenges related to climate catastrophe is overwhelming.
Not in the near future, but now.
And, yet, with the second coming of Trump, the USA is undoing the few positive steps that have been taken over the past couple of decades. There is no need to recount the details here—Trump’s attack on anything that smells of greening is in the news every day. Any talk of “environmental sustainability” is subversive, cancelled, and scrubbed off government and corporate websites.
The reception that Trump received on his recent trip to Scotland reminded me of a documentary that I reviewed back in 2012 as it sheds some light on the hostility he met. The film was You’ve Been Trumped, (2011) directed by Anthony Baxter.[1] In my review I noted the film shows Trump promising
that he would spend a billion pounds to build the biggest golf course in the world. Unfortunately, that meant destroying one of the most pristine and fragile complexes of coastal sand dunes in the world. This moving documentary follows the efforts of the ordinary folk to preserve a fishing and farming community that stands in the way. Even Trump admits that he does not need their property to finish his development scheme, but he worries that the “piglike environment” of a traditional Scottish village will spoil the view for the well-heeled American golfers he plans to fly over to stay in his high-rise hotel and time-share apartments. His unremitting disgust for the “99%” is evident in every press conference he holds, in which he attacks the locals as “pigs” even as his earthmoving equipment builds mountainous berms to isolate the villagers from the dunes and ocean they had enjoyed for generations. This documentary is essential viewing for developing an understanding of the issues surrounding unchecked development and its impact on environmental sustainability, the unholy alliance of big money and public policy, and the consequences of excessive inequality that have divided our modern world between the 99% “have-nots” and the one per-centers who’ve got it all.
Well, he’s baaaaack. The Scots were not very welcoming.
Bullfrog Productions, the studio behind the documentary on Trump is releasing another excellent film, Outgrow the System (Directed by Cecilia Paulsson and Anders Nilsson)[2], that asks all the right questions: Why can’t we stop the destruction of planet earth? Why do we have so much poverty in the midst of plenty? Why can’t we prioritize well-being over corporate profits? Why hasn’t economic growth allowed us to shorten the workweek?
The film notes that the term, economics, is derived from “household management” and has long been interpreted as the study of the efficient use and production of resources to improve living standards. If economics is all about managing scarce resources, why aren’t we economizing on resource use? If it is all about provisioning, why are billions of people on earth falling short of the essentials of life? And why are we destroying the planet’s ability to support life rather than economizing—that is, using fewer and fewer resources to satisfy our needs?
The film details alternative approaches to economics that face up to the immense and complex challenges humanity faces: donut economics, degrowth, economic democracy, participatory democracy, and moving to a not-for-profit world. I won’t go into the fundamentals of each, but what they share is the view that the climate changes needed cannot be tackled within the current economic system. It is the economic system that must be changed. For that reason, all of these reject the notion that “greener growth” is the answer.
There are nine main planetary boundaries, and we are overshooting many of them already. Green growth presumes that we can continue to grow, but without continuing to over-exploit the environment—all of these alternative approaches reject that premise.
Survival will require that the economy operates within the environmental ceiling but also that the social foundation must satisfy the needs of all human beings. Instead, we are subordinating everything—including the environment as well as social wellbeing—to “the economy”—that is, an economy based on the profit motive and controlled by multi-nationals.
It has long been thought that there are only two possible economic systems from which we can choose: free market capitalism or communism. The film offers alternatives that prioritize well-being over corporate profits. Some advocate coops and not for profits to replace capitalist production. Some advocate moving to a sustainable steady state, with a transition to a 20-hour—or even 10-hour—work week. Some emphasize the political capture in the current system and want to replace that with a participatory economy and economic democracy.
Other focuses are also briefly discussed: community well-being, the collaborative economy, economics for the common good, the solidarity economy, and the regenerative economy.
To this reviewer, the most interesting takeaway is that, while mainstream economics justifies perpetual growth by invoking Keynes’s aggregate demand solution to the Great Depression, what all of these alternatives share is Keynes’s optimistic Economic Possibilities for our Grandchildren vision of a future of shared prosperity where “the love of money is detestable” and the workweek would be 15 hours—Keynes predicted this might happen by the year 2030! Only five years left to get us there.
It is remarkable that postwar economists have taken us so far down the wrong path. Keynes had correctly predicted that innovations and technological change would lead to a vast increase of productivity, making it easy to raise living standards for all. That happened. But along the way, it came at the cost of destruction of the environment and the planetary systems needed for regeneration.
Further, the benefits of growth went disproportionately to the top—to the richest families in the richest nations. There’s no need to recount the share of income and wealth held by the top half dozen Americans—it is obscene. Increasingly, a handful of the rich consume an ever higher percentage of the output of consumer goods and produce a larger and larger share of planet-killing waste of all types.
Keynes missed all that; perhaps he simply could not conceive of the level of greed that modern capitalism would create. Perhaps he forced himself to hold his fellow humans in higher regard. Perhaps he thought we would produce better leaders than Donald Trump.
I agree with the ultimate goals of the approaches examined in the film, but I think that green growth is dismissed too easily, based on the past correlation between nominal GDP growth and exploitation of earth’s resources. This resulted from choices made—from the kind of system that we created. Capitalism is a system based on exploitation—not only of the workers and their families but also of the environment. What orthodox economists call “externalities”—such as toxic waste dumps, polluted air, and the exhaustion of Earth’s regenerative capacity—is no different from the exploitation of slaves on sugar plantations or workers in sweat shops. Capitalists will exploit wherever they can get away with it.
We let them get away with it. We created that system. We can change it.
If we are going to permit for-profit production in the future we do need to constrain it. I support the goal of taking the provision of most basic necessities out of the for-profit sector, including housing, medical care, education, basic food, and mass transit (including planes, trains, trucks, and automobiles). Other sectors, especially finance (and related activities such as insurance, crypto, “tech,” and derivatives) should be sharply downsized or eliminated entirely.
Whatever remains of the capitalist, for profit, sector must be allowed to grow—it is the nature of capitalism to begin with money and end up with more money, as Marx, Veblen and Keynes all recognized. This does not mean that resource use should increase—the alternative perspectives are correct that resource use must decline. But just because there has been a correlation between economic growth (as usually measured) and resource use in the past does not mean that link must be maintained in the future.
A combination of shrinking the size of the for-profit sector, taking production of most necessities out of the for-profit sector, and increasing regulation can break the link. As the alternative approaches suggest, there will still be some room for the market, but it will become less important.
We can then look forward to Keynes’s prognostication:
The love of money as a possession—as distinguished from the love of money as a means to the enjoyments and realities of life—will be recognised for what it is, a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease. All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard.[3]
[1] https://www.bullfrogfilms.com/catalog/ytrump.html