Length Estimate: Long (words > 1000)
I was poised to write a piece on the linkage between present-day veneration of duplicitous political elites and the crisis of national identity when I found the following op-ed in the Guardian:
It is subtitled “Given the right information, investors will deliver the best climate solutions” and co-written by Michael Bloomberg and Mark Carney, two of the most powerful persons in the world today. The former is the sixth-richest man in the United States and former mayor of New York City, and the latter is the current Governor of the English Central Bank. So when we discuss this article, remember that this isn’t the work of rubes at the margins of mainstream discourse; these are the people that define the mainstream discourse and hence, whatever they say should be taken as being representative of the thought that predominates in elite circles.
A Neoliberalism Interlude
I have written about the impact of ‘incentivization’ of hitherto moral sentiments in “Marketworld”, my earlier post on Uber. One of the central tenets of neoliberal thinking is that traditional moral sentiments – altruism, honor, solidarity – are unreliable and duplicitous; they should be replaced by ‘incentives’ to ensure optimal outcomes for all involved.
For example, politicians can’t be trusted to pursue the public good if elected to office, but they can be held accountable for not meeting quantifiable targets (such as reducing the deficit by x% or improving the country’s ease-of-doing-business rating). Policy statements are superior because they represent an investment of time, money and effort to produce something ‘serious’ – they are intentions with a college degree, work experience, a bulletproof resumé and a prim suit.
Politics and democracy are reduced to a policy marketplace, where you choose those leaders that offer the bundle of policies that most resemble your own preferences. The similarity of this construct to the job market is not incidental; it is by design.
What this idea misses is the dialectic between the market and the ‘product’: when sellers of ideas or labor realize they are competing in a marketplace, they automatically tweak their product in response to changes in buyer preferences, as conveyed through the market. If job candidates realize that a history of social work is prized by their prospective employers, they will rush to get credentialed for it on their resumés or LinkedIn profiles. Politicians will respond to angry, inchoate calls for greater socio-economic justice by flogging think tank-generated redistributive policies.
The discrepancy between motivation – employment prospects, electoral victory – and action – social work, redistributive campaign promises – doesn’t matter as long the desired outcomes are achieved. Fake it till you make it. However, the discrepancy does not go away; in fact, it inevitably manifests as buyer’s remorse when the employer and the public realize that they have been duped into taking the form for the essence. The way neoliberalism handles this contradiction is instructive: it advocates for more neoliberalism, not less. Better credentials, better policies, better incentives will help reduce the ‘information asymmetry’ further and ensure better market outcomes.
To Hell with Neoliberal Environmentalism
After that not-so-brief theoretical interlude on neoliberal incentivization, let us now turn our attention to the Guardian article by Messrs Bloomberg and Carney. It should now be unsurprising that the most frequent word in this short essay is ‘market’, appearing 10 times. This is twice the frequency of ‘climate change’, which is ostensibly the subject of this article.
The gist of this article, which I suggest you read in full, is to introduce “voluntary, consistent [climate-related] disclosures” as market-based climate solutions. These disclosures will provide information about “the likely future cost of doing business, of paying for emissions, and of changing processes to avoid both those charges and tighter regulation”. The end-goal is to create a “properly functioning market [that] will price in the risks associated with climate change and reward firms that mitigate them”. The rest of the article is standard neoliberal cant about the heroism of entrepreneurs and the infallibility of markets, which we can safely ignore.
The idea is to price in the risk of climate change and the possible costs, regulatory or otherwise, associated with. If a business voluntarily (hahahaha) discloses how much of its profitability is dependent on fossil fuels or climate change regulation, investors will be able to take that information into account and adjust their capital accordingly.
Under this paradigm, if firms are to retain investor confidence or attract funds in the first place, they will have to adopt more climate-friendly business models and avoid financial calamity due to regulation. This makes a lot of sense. After all, companies have no reason to mitigate their carbon footprint unless it hits their bottom line. Now that markets can factor in the material costs of climate change, we are moving to a future where profit motives align with climate change concern: the best of both worlds.
Aaaaannnndd… we have already lost.
First, and least, of all it is worth noticing that this is the classic neoliberal one-two punch when it comes to dealing with issues that threaten its ideological approach to world problems. The first move is to deny the problem exists (consider: frantic claims after the 2008 crisis that it was just a business cycle thing and astroturfed denial of climate change), which is followed by a typically neoliberal solution (better incentives for banks, incentivizing lower carbon footprints) that paradoxically gains legitimacy from the initial denial – because at least they are acknowledging and ‘solving’ the problem!
Second, there is no mention here of how it has been precisely the last thirty years – the period of neoliberal ascendancy – that has coincided with the manic pace of economic activity that has not only depleted energy resources but released massive amounts of carbon into the atmosphere. The neoliberal dismissal of government intervention to solve public issues in favor of private sector actions has lead to a shrinking public sector, absolute corporate control over government policy and a race to the bottom for cheap manufactured goods. Hyper-globalization and the Washington Consensus have exported the uniquely energy-intensive model of American production and consumption to all corners of the world, with the most successful imitators – China and India – sandwiching the US at the top of the carbon emissions ladder.
The terrible rush towards profit – that most sacred of all neoliberal idols – has depleted fisheries allover the world, encouraged a fracking ‘boom’, degraded large swathes of topsoil in cultivable ares, polluted rivers and oceans with non-degradable refuse and oil, and displaced millions of indigenous people from their native lands for the establishment of Special Economic Zones. Widespread cash crop cultivation and the rise of GMO corporations has caused food shortages and droughts, whilst planned obsolescence has piled layer after layer on towering landfills.
But since neoliberals can’t countenance the idea that their favored mode of production – market capitalism – is the driving force behind all this environmental degradation, they proceed ever more forcefully in denying the nakedness of their Emperor.
Bloomberg and Carney’s proposal is supported by “major companies, large investors, global banks and insurers” – the same institutions that have profited immensely from treating the earth as just one big reservoir of raw materials to be exploited at will. The tragedy is that because this short-sighted rapacious profit-making has been effectively marketed to us as instances of great entrepreneurial genius, we won’t let this cognitive dissonance logically extend to a complete dismissal of the system. It is infinitely more likely for us to find the sudden environmental concern of these ‘winners’ admirable than regard it as simply continuation of their ruinous profit pathology.
Let’s be clear: if we are to salvage some vestige of normal life on this planet in the future, we have to emphatically reject the neoliberal gospel of market incentives and profitability. Our survival on this earth cannot depend on the veracity of corporations’ claims of fossil fuel dependency; it is far more likely that they will spend insane amounts of money lobbying to reduce regulation or evading them entirely (“credit ratings are opinions expressed under the First Amendment!”).
The only takeaway from this neoliberal solution should be that climate change is now a grave enough threat that even the transcendental, omniscient financial markets need human intervention in the form of voluntary disclosures to understand the risks.
If we don’t consign neoliberal environmentalism to hell now, it will take us there with it.
This doctrine of Fake It Till You Make It and incentives is so deeply embedded in present-day society that it feels absurd to question it. However, the political events of 2016 have, in a way, demonstrated the constructed-ness (I am sure there is a better word) of this seemingly natural human behavior. Adam Curtis’s BBC Documentaries The Trap and Hypernormalization and Philip Mirowski’s Never Let a Serious Crisis Go To Waste are invaluable aids in understanding how our current Weltanschaung was painstakingly constructed and in no way follows naturally or logically from any general understanding of human nature.
See: Mirowski, Philip. Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown. London: Verso, 2013. Print.
Update: Possible Solutions
After thinking about this post a little bit, I realize that I have perhaps glossed over how exactly neoliberal thinking undermines true solutions to climate change and what some alternative solutions could look like.
First, it is necessary to realize what possible solutions should not look like. Let’s take agriculture as an example. As Raul ‘Ilargi’ Meijer at Automatic Earth points out, the current mode of food production in the US is incredibly wasteful, using ten calories of energy to produce one calorie of food , because it is profit-maximizing. It is a huge source of carbon, a significant sink of energy and uses land in a way that destroys the topsoil and wreaks havoc on the hydrological and nitrogen balance. The food thus produced is then transported over vast distances and finally dispensed from supermarkets that can often be only accessed by car.
The best alternative to this almost intentionally wasteful system is small-scale neighborhood farms that use minimal fossil fuel-based inputs and produce only the quantities required by the community, with any remaining surplus sold on common local markets. But this type of agriculture is geared towards satisfying the nutrition needs of a community, not producing market surplus, i.e., maximizing profit. This solution will be rejected out of hand by neoliberals, with any amount of references to “market imperfections”, “inefficiencies”, “economies of scale” etc.
What would be suggested instead is some sort of pricing system that incorporates information about “sustainable agricultural practices” – perhaps quantified as an index by a government-sponsored study/think thank – to provide incentives to farms. For example, if organic produces fetches higher prices at the grocery store, farmers would be compelled by the logic of the market to produce organically. While this framework has the logical inevitability of tautology, it disguises major flaws: who enforces sustainable agricultural practices, and are they truly addressing the problem? The debacles of information-pricing such as Fair Trade Coffee and Credit Ratings, and regulatory agencies like the FDA and the SEC are legion. Yet these solutions are never debunked for the snake oil they truly are.
Second, the only way such solutions can be implemented on any meaningful scale is through active governmental intervention. This again is anathema to neoliberals, who consider any form of state intervention in “private” affairs as an abrogation of individual freedom. This must be exposed for the blatant falsehood it is, for an affirmative strong state is central to the notion of neoliberal freedom. Without government backing of corporate subsidies, market-based ‘solutions’ to public problems like healthcare and bail-outs for ailing corporations and banks, neoliberal ideas would remain academic in nature. The unlinking of government from the global forces of finance and corporate power is no easy task, and anyone who attempts that will be decried as “protectionist”. The current insurgency of right- and left-wing populism in the developed world offers a significant opportunity to accomplish just that, with the caveat that there is no reason for power lying in the streets to be picked up by those who are truly serious about addressing the problems they profess to care about.
The complexity of the problems we face today is intentionally exaggerated in order to suppress agency and analysis; this must be transcended. The past thirty years have provided ample evidence that our salvation will not be the incidental byproduct of the profit motive. Only by dismantling seemingly obvious neoliberal pathologies, some of which were highlighted above, can we open a space for ideas that strive for an alternative vision of the world – a world where we laugh at the absurdity of making profit from mitigating existential climate change.