Economic Life on a Melting Planet

In 2008 I had the opportunity to chat with Noam Chomsky in his office at MIT. Our discussion was free ranging and at one point the conversation turned to Naomi Klein’s book ‘Disaster Capitalism’. Chomsky’s take was as follows. “The facts in her book are correct but the problem is not disaster capitalism but capitalism itself.” He went further to state that the problem is markets. The underlying support for this assertion was that all markets operate on the principle of externalizing costs. He pointed out, correctly, that even in the case of the corner grocer many of the costs of this activity are borne by us all collectively while he/she pockets the surplus.

It is of course at MIT that the ‘Limits to Growth’ model was formulated in the early 1970’s. This work was humanity’s first effort at modeling the effects of industrial civilization on the biosphere. The framework of their model was delineated by three categories: Throughputs, emissions and sinks. To put it in more familiar vernacular. Raw materials, pollution, and the planet. I.e. At what rate are we using up raw materials and how much of them do we have? What are the byproducts resulting from this conversion of raw materials into goods and services? What are the effects on the planet of being forced to absorb these byproducts?

This kind of information would be the bedrock on which a rational world would base the policies required for the satisfaction of human needs and wants. We do not live in that world. Instead we live in a world that has largely accepted the idea that the ‘best of all possible worlds’ arises if we allow “markets to decide”. The intellectual justifications for this hypothesis have become more widespread than the Gospels but no better supported by empirical data.

To name just a few of the ways that the above statement is true. The theory of markets assumes rational consumers making informed decisions. This requires that we ignore the multi-billion dollar industry of advertising that is dedicated to creating irrational consumers making uninformed decisions. The theory of markets fails to account for the massive subsidy to private industry by public spending. E.g. Military spending and public education, Finally and most important to our current moment in history the theory of markets relies on the principle of substitution which fails to properly account for finitude.

It is perhaps understandable that we came to believe that human ingenuity could overcome every limitation. Understandable that during the Golden Quarter Century of economics – 1947 to 1971 – we embraced the idea of a “Jetson’s'” future for all. Facts however matter and nature as the saying goes bats last. The realms of economics, politics and geopolitics commingled over the last century to deliver a binary question. Capitalism or Communism? Free Markets or Social Engineering? Who should control the Commanding Heights of the economy? With the collapse of the USSR those in the possession of capital decreed the argument over. The intervening quarter century since has however thrown a new combatant into the arena. That combatant is science and the questions it poses bring us back to the model first generated at MIT in 1972.

All these years later we now know many things we did not then. Not least among them is that the most important sink of all is the atmosphere. No longer is the question capitalism or socialism. Neither generates the right answer. The question today is how do we transition to a society that enhances the fecundity of the natural world? How do we eradicate the activities that destroy biodiversity? How do we satisfy human needs and wants in such a way as to leave to our children a planet that is richer than we found it?

For all of these questions the answers do not lie between the poles espoused by liberals or conservatives – be they neo or paleo. Instead for the first time in human history our economic answers are to be found in the realms of science. How much carbon can the oceans and the atmosphere absorb? Science can tell us. How do we fish, forest and farm sustainably? Science can tell us. What chemicals are causing cancer and killing our pollinators? Science can tell us.

The question is no longer what incentives are needed to enhance human productivity. The question now is how to channel the power of our near limitless ability to produce and extract so that it can coexist with the increasingly obvious limits of our biosphere. The lure of private fortune has long been used throughout history to inspire the conquer of geography. Be that conquer of near or distant lands. Be it through the ingenuity of engineers or the exploration of adventurers. Today we have all the ingenuity required to conquer every human need. Today we know the ends of the earth are to be found by simply turning around.

Again it is understandable that the incentives that have proven tried and true over thousands of years of experimentation are still with us. It is understandable that we still see the attainment of personal fortune as a sign of cosmic favour. However it is no longer sustainable. Today’s ‘great man’ cannot be a conqueror of nature or our neighbours. Neither can be subjugated without irreparable harm to ourselves. For the first time ever we are all truly in this together.

Thatcher proclaimed that “there is no such thing as society”. Simultaneously, even she recognized the existential nature of the threat posed by climate change. Perhaps nothing better expresses the complexity of the changes required by humanity at this moment in our history. Science cannot tell us how to implement the changes required for humans to live in a way that enhances life. But it can tell us in what ways we are destroying it.