Via Naked Capitalism

By Juliet Schor, professor of sociology at Boston College and author of numerous books, including The Overworked American (1991), The Overspent American (1997), and True Wealth (2011). From the text of a speech presented at the 45th anniversary celebration for Dollars & Sense, which maintains Triple Crisis blog, on November 14 at the Nonprofit Center in Boston, Mass. Originally published at Triple Crisis

We are in the midst of a terrifying climate emergency. Whether it’s the record-challenging cold of this week, devastating wildfires, Category 5 hurricanes, flooding on Morrissey Boulevard in Dorchester, Mass., when it’s not raining, the permanent disappearance of glaciers, intensifying drought and climate migration, or the relentless upward march of average temperatures, signs of climate disruption are all around us. This is partly due to the power of neoliberal economics.  Naomi Klein has made an interesting observation about the relation between the two, which is that it was bad luck that neoliberalism surged just as we figured out the need to do something about greenhouse gas emissions. I’m not convinced that the fossil fuel industry wouldn’t have done just what it did and been as successful even if we were still, in the famous words of Richard Nixon, “all Keynesians now” but that’s something we’ll never know. In any case, evidence of the ability of a now discredited economic approach (neoliberalism) to hang on long past its sell-by date is all around us.

One sign is last year’s Nobel Prize—starting with the exclusion from the prize of Martin Weitzman, whose work on fat tails (i.e., catastrophic climate impacts) was a truly pioneering contribution in a subfield that has lagged far behind on incorporating theoretical innovation from elsewhere in the discipline. I should add that this approach formed the basis of Frank Ackerman’s last, excellent book, Worst Case Economics: Extreme Events in Climate and Finance (Anthem Press, 2017). The omission of Weitzman contrasts with the awarding of the prize to William Nordhaus. Nordhaus’ work has been central in stalling effective climate progress. His position was epitomized by his Nobel lecture. One of his slides labeled 4° Celsius of warming as “optimal,” rather than the truly devastating increase scientists have determined it will be. The levels of ecosystem and human disruption that will prevail with a  4° increase are massive, and whether humans would even be able to “adapt” to that level of increase is questionable. Furthermore, the likelihood of tipping points that lead the climate system to spiral out of control are much greater with an increase of 4°. Only a truly deranged economic paradigm could label such a pathway as “optimal.”

READ ALSO  Lannett: Market Is Pricing The Worst Scenario, Why We Remain Invested (NYSE:LCI)

What accounts for such a result? The ostensible rationale for go-slow climate policy is that income today is worth more than income in the future. But aside from the patent immorality of that view, it doesn’t even make sense on its own terms. That’s because growth today is mainly yielding increases in the incomes and wealth of the already wealthy. While the standard models such as Nordhaus’s Dynamic Integrated Climate-Economy (DICE) model, don’t incorporate this distortion of the growth process, it is now well-documented that business-as-usual growth is yielding increased concentration of wealth at the very top. So the neoliberal approach to the climate crisis essentially says that we should destroy the planet to further enrich a tiny sliver of humanity that already has an obscene amount of wealth.

Years ago a group of French graduate students in economics started a movement called “post-autistic” economics. They were rightly criticized for their use of the term autistic, and the contributions of Greta Thunberg show how wrong they were about neuro-atypical people—and their ability to see what’s really going on. They changed the name of their journal from Post-Autistic Economics Review to Real-World Economics Review. In that they also faltered, failing to acknowledge that Dollars & Sense already had that franchise. Perhaps they should have called their movement “post-sociopathic” or “post-ecopathic” economics.

So what would an alternative approach, embodied so well in 45 years of analysis from D&S, suggest as a response to the climate crisis?

First, carbon taxes in the range that have been suggested ($40–$50 a ton) are inadequate. It’s too late for the market-based, go-slow approach. Indeed, roughly a decade ago Frank Ackerman and his co-author Elizabeth A. Stanton did estimates of how high a carbon tax might need to be under various assumptions, including lower discount rates than mainstream economists assumed at the time, and Weitzman-like analysis aimed at avoiding catastrophe. These assumptions all yielded far higher estimates than the “politically feasible” carbon tax range, and even went as high as $1,500 a ton under the most stringent assumptions. It’s notable that the Intergovernmental Panel on Climate Change is now also coming up with top-end estimates broadly in that range. A key thing about a tax in that vicinity is that it is so disruptive of the market that it has to be accompanied by a robust and comprehensive role for the state. And that of course is the point of the galvanizing, if still not fully elaborated, Green New Deal. Furthermore, the current Green New Deal, unlike those that have been proposed by progressive economists for decades now, is notable in putting equity and justice at its core. Although there is plenty of debate about the wisdom of this approach in the climate community (with a fair amount of skepticism coming from privileged participants), there’s little doubt that thisGreen New Deal has mobilized people in an unprecedented way.

READ ALSO  Gold Prices See Best Month In 8 Years

This brings me to a related point. In order to fully confront climate change, we need to address other structures of the economy than just the price of carbon. In my own research I’ve worked on two key drivers of carbon emissions, both of which are very much in the spirit of D&S’s approach to economics. The first is hours of work. In a series of papers at both the national and subnational scale, my colleagues and I find that average hours of work are strongly correlated with emissions. Countries with long hours are high emission countries, holding other factors constant. The same is true for states. And short hour countries have low emissions. We find that this is true for two reasons. First, longer hours result in more output, which has associated emissions. But even controlling for this effect, higher hours are still associated with more emissions. We suspect this is an affect at the household level—more work correlates with more commuting, and more carbon-intensive lifestyles.

A second area of work is domestic income and wealth concentration. While most of the research on climate and inequality focuses on North-South inequities, or disproportionate impact on vulnerable populations wherever they live, my colleagues and I have been analyzing another dimension of inequality. We look at how the concentration of income and wealth at the top of the distribution (the top 10%, 5% and 1%) is associated with higher emissions. We believe this is due to two factors—the very high carbon footprints of people at the top and a political economy effect, in which the wealthy have outsized political impact and are able to forestall effective climate responses.

READ ALSO  CFIUS Gives Microsoft 45 Days For TikTok Deal Talks As ByteDance Shifts HQ To London

I want to end with a few reflections about my experience with D&S. I had the great privilege to work there (not for pay, but for many hours per week) back in 1976. I was just 20 years old, had left my first graduate program because it didn’t offer a critical perspective, and I was waiting to matriculate at UMass. Arthur, Frank, and others were extremely welcoming as I showed up on their doorstep with nothing more than eagerness and eight months to spare before the fall semester began. For me, it was the beginning of a lifetime of popular writing.

In those days, articles were fully collectively written, which included wrangling over every word. It was a great learning experience, both about economics, but also about collective process, political commitment, and real world politics. This was a time when racial tensions were high and the fight to desegregate Boston was raging. The collective volunteered to help protect a black family who had moved onto a “white” block in Dorchester and was being threatened and attacked by white vigilantes. I remember sitting on that family’s porch, baseball bat in hand, with others from the group. I’m not sure what I could or would have done with that bat had an attack come, but it was a powerful experience. And as much as I learned about economics in those eight months, I suspect that I learned even more about solidarity and political commitment. Congratulations to D&S on a brilliant nearly half century.

Print Friendly, PDF & Email