Note: please do not shoot economists. The title is a metaphor.
Soon to be released research from the United Nations is expected to place species loss, a/k/a mass extinction, as an environmental threat equal to or greater than climate change. Industrial agriculture— vast expanses of monoculture crops managed with chemical fertilizers, herbicides and pesticides, will feature prominently as a cause. This plant agriculture supplies people with increasingly toxic and processed food and antibiotic and hormone dependent factory farms with animal feed. Together, these link the model of capitalist efficiency economists have been selling for the last two centuries to environmental crisis.
Understanding the theoretical precepts of Western economics is crucial to understanding these crises. Capitalism is scientific economic production, a method in search of applications. Its object is to maximize profits, not to growth nutritious food sustainably. As industrial agriculture has demonstrated, these objectives are antithetical. Crop yields have increased as the nutritional value of the food produced has declined. But far more troublingly, the narrow focus on profits has led to a form of environmental imperialism where interrelated ecosystems are viewed atomistically.
Mass extinction is largely attributable to the drive for economic control— the expansion of industrial agriculture to feed factory farm animals has been both geographic and intensive. The annihilation of insects through pesticide use on crops has led in turn to the annihilation of the species that feed on them. Interrelated ecosystems are systematically destroyed through a logic that does not ‘work’ otherwise. Leaving ecosystems intact upends it. When value is granted to what is destroyed, industrial agriculture ceases to earn a profit. In a broader sense, this means that it never earned a profit in the first place.
Unlike the narrow technocratic fixes being put forward to resolve global warming, mass extinction points to the systemic problems within capitalist logic. Within it, reconfiguring pieces of the world has a limited impact— so small in fact that the impact is considered ‘external’ to production processes. In an interrelated world, reconfiguring pieces— including annihilating or favoring them, impacts the broader relationships within the system. Were capitalist production not rapidly killing the planet, such esoterica could have remained within the purview of academia.
But it is killing the planet, suggesting that the organizing logic of capitalism is fundamentally flawed. Mass extinction and climate change are related through it to capitalist production. Theory here ties quite precisely to actual practice. Through the production of so-called goods, capitalist industries put greenhouse gases into the atmosphere and the greenhouse effect began. Industrial agriculture used herbicides and pesticides to kill unwanted species and catastrophic species loss began. These problems are of both type and degree. This is why more capitalism won’t solve them.
Recognizing 1) that capitalist production is deeply integrated into how people get by in the world and 2) that abruptly ending these practices would put billions of lives and livelihoods at risk, young socialists in congress have proposed a transition program. A Green New Deal would assure that people’s basic needs are met as a planned transition to a sustainable economy is undertaken. With climate change and mass extinction already well underway, the alternative is an unplanned transition in which the lives of billions of people are put at risk.
Not content with having acted as apologists for rapidly accumulating environmental crises, economists are now coming out of the woodwork to give their advice on the limitations of any transition program. In the first, the claim is that ‘we’ can’t afford one. In the second, it is that even if we could afford such a program, it would cause inflation. Both assertions proceed from the premise that Western capitalism is a neutral basis from which to proceed. Phrased differently, were doing nothing to result in the loss of lives and livelihoods for a billion or more people, the fault would lie with nature.
Were environmental destruction truly ‘external’ to capitalist production, its solution would be simple: stop producing it. For instance, if greenhouse gas emissions are external to fossil fuel production and consumption, they could be foregone. However, were doing so economically viable while maintaining profitability, they never would have been produced in the first place. The social impact of this sleight-of-hand has been to allow capitalists to claim profits based on 1) costs necessary to capitalist production but 2) that would reduce or eliminate profits if they (capitalists) were forced to bear them.
(With apologies, a bit of economic arithmetic is needed to fill out this point:
Profits = Revenues minus Costs), or P = R – C. C = (Cd + Ce); where Cd is direct costs and Ce is externalized costs. This can be rewritten as: P + Ce = R – Cd. Then define Pt = Pd + Ce, where Pd is the direct profit and Pt is the total profit to producers. Here environmental destruction is a direct benefit to the capitalists who produce it through costs not borne by them).
The affordability argument is a canard: capitalists have already absconded with the “profits” that make a Green New Deal necessary. These profits are either equal to or greater than the cost of cleaning up the environmental mess they created, or the totality of profits is less than their cost in terms of environmental destruction. In the prior, the Green New Deal is affordable. Capitalists have already proven it is by putting its costs in their own pockets. In the latter, three centuries of capitalist production have been a net loser once environmental costs are considered.
The question then is not affordability— paying for a Green New Deal is a political problem, not an economic one. Proponents of MMT (Modern Monetary Theory) have argued 1) that government spending is independent of tax revenues, therefore 2) the Federal government could create the resources needed to fund the program. As far as it goes, the Federal government spends resources into existence quite regularly. Challenges from ‘economists’ are 1) whether this could be done on the scale of a GND and 2) whether doing so would be inflationary?
In more intuitive terms, George W. Bush launched his multi-trillion-dollar war against Iraq without any apparent concern for how to pay for it. Both Mr. Bush and Barack Obama committed trillions of dollars in public resources to bail out Wall Street and the auto industry in the 2008 economic meltdown without any publicly stated plan for how to pay for them. More broadly, the Pentagon is the bedrock of the American economy, doling out hundreds of billions of dollars each year to private military contractors, many with profit guarantees (‘cost-plus’), to fight wars with no known enemy, largely for nominally ‘private’ interests. The Pentagon is also the largest domestic consumer of fossil fuels.
MMT emerged from two branches of economics that are quite distinct from the more implausible fantasies that inform mainstream theories— chartalism and institutional economics. Mainstream studies ‘proving’ that sovereign governments can’t stray too far from balanced budgets assume institutional equivalence between the U.S. in the present and say, Croatia. The MMT people of whom I am aware seem bright. I doubt this is their contention. But even if it were, it has no bearing on what the Federal government of the U.S. can do in present circumstances.
However, the political problems are more vexing. One need not be a Marxist to accept that Western governments serve the interests of the rich. Political scientist Thomas Ferguson and his colleagues have spent their careers collecting and interpreting empirical evidence that supports this conclusion. Given this relationship of economic to political power, a logical leap can be made that those whose wealth derives from destroying the environment will use their political power head off a Green New Deal. And more particularly, to keep themselves from paying for it.
MMT is useful in that it provides options. Either 1) the rich can be made to pay for a Green New Deal, 2) the Federal government can fund it or 3) some combination thereof. In any of these cases, the problem with not politically sidelining the rich is that their wealth and political power comes from environmental destruction. Even if they wrangled out of paying for the transition and cleanup, the survival of the planet depends on shutting down the source of their wealth and power. The liberal theory that this could be achieved through electoral politics usually proceeds from radically understating the problem.
To the extent that maintenance of the status quo can be used to represent a generic ‘moderate’ position, any substantive challenge to the status quo would be extreme by the quantum of the challenge. So, how about doing nothing— no challenge. The planet cooks, mass extinction accelerates, and billions of lives are put at risk. How about implementing only politically feasible solutions given the current distribution of political power. Tweaks could be made as environmental crisis accelerates until survival dictates that more radical measures than would have been needed in the first place are implemented. Moderation in the face of crisis isn’t moderate.
But are climate change and mass extinction really crises worthy of radical and far-reaching action yet? The separate silos of climate and biology emerged from the modular premise of capitalism, the one where the world is an accumulation of smaller pieces, rather than an interrelated whole. However, the causal bases of both in capitalist production suggest they are interrelated, and that the environmental crises already underway are symptoms of a radically dysfunctional relationship with the world based on a fundamentally flawed conception of it.
The IPCC says we’ve got twelve years from six months ago to cut carbon emissions in half or climate chaos will ensue. Sixty percent of the mammals, birds, fish and reptiles on the planet have been wiped out in the last fifty years. Given 1) that these crises are already well underway and 2) the lead-time needed to keep them from becoming apocalyptic for even the human chairwarmers in Congress is a matter of a few years at most, the time for radical and far-reaching action is now. A transition will take place. The choices are whether it will be planned or unplanned. An unplanned transition would indicate complete political failure, with the social consequences that entails.
The problem with moderation is that it implies, against the evidence, that current circumstances will persist into the future. The analytical starting point to solving a crisis is to define the problem. The problems of climate change and mass extinction have been defined. The next step is to develop solutions. If what is politically feasible falls short of what is needed to solve the problems, then the problems as they are currently defined aren’t solvable. Partial solutions leave the problems to be redefined in possibly far more dire circumstances in the future. Regardless of whether action is taken, current circumstances will not persist.
More fundamentally, capitalism is revolutionary, not evolutionary. It doesn’t simply produce new iterations of old technologies. Monoculture planting using chemical fertilizers, pesticides and herbicides is an integrated technology that replaced smaller scale, but more environmentally integrated and sustainable methods. The same is true of building technologies once mechanical heating and cooling systems and electric lights were made ubiquitous. Existing technologies were replaced, not ‘improved.’ This is part of what makes transition away from capitalist technologies so challenging— no fallback plan was left once the old technologies were discarded.
The risk of inflation from a Green New Deal, raised by MMTers and a few lefties, deserves some attention. The basic idea is that there is an existing relationship between demand for goods and the quantity of goods produced at relatively stable prices. A Green New Deal would require resources that will initially add to this demand, thereby raising the general price level. A rising price level acts as a regressive tax, burdening those with the fewest resources the most. Having the government fund the GND entirely would be the most inflationary, funding it partially would be less so, and taking the entire funding from the rich would be the least inflationary.
Without going too far into the weeds, this construction 1) narrowly defines inflation in terms that benefit the rich, 2) gives credence to the conspicuously failed capitalist conception of market pricing and 3) assumes that the form and function of political economy that would emerge from a GND would resemble its starting point. In the first, asset price inflation, a/k/a the wealth of the rich, goes very far in explaining why the rich are rich and the rest of us aren’t. This isn’t simply a matter of rising stock prices. Relative to corporate earnings and a host of other measures, stock prices are about as inflated as they have ever been. Why isn’t this inflation considered problematic?
Next, the relation of environmental crises to capitalist production implies that market prices are already wildly unrelated to the real costs of capitalist production. One way of measuring this distance is to add back the cost of a Green New Deal needed to clean up the mess. With a robust GND and luck, life on the planet continues. Without them, sayonara cruel world. In a narrow sense the MMTers and a few lefties have a point. If existing market relations remain intact and a GND increases demand for goods, goods price inflation will likely result. But market prices that reflect the true costs of production would mean the end of capitalism. Inflation is a relatively small part of the larger problem.
Given the relationship of capitalist economic theories to potentially world-ending environmental crisis, capitalist economists have little to offer related to a Green New Deal. In defense of their realm, their practice has been to serially understate environmental problems and then offer the same canned ideology they were indoctrinated with decades ago as cautionary tales. The question for a GND should be: what is needed to transition from the environmentally apocalyptic path we are on to long-term sustainability while insuring that everyone— every last person, has their material and social needs met?
Again, please do not shoot economists. Love them for their humanity. The title is a metaphor.