This was something I wrote back in October 2012 in response to the criticisms leveled against David Suzuki for criticizing economists quite some time ago. In cleaning up my computer I came across it and thought I would throw it up here.
May 21, 2013
I have a confession to make. I am not an economist. I am a political scientist commenting on economic issues. While some will undoubtedly critique me as another neophyte commenting on affairs about which I know very little, I feel as though there is an underlying disconnect between the debates currently going on between environment and the economy. In all of the debates that are swirling around concerning the relationship between the environment and the economy there seems to be a different understanding about the power of the market that has emerged. Put simply, I would argue that our collective understanding of the market has shifted over the past decade or two from a means to an end and that it is this logic which is exacerbating conflicts over the environment in drastic ways.
When the environmental movement first emerged in the 1970s, there was a strong belief in the need to have governments regulate and restrict reckless industries and companies that were perceived to have run amok. The “heavy hand of government” was required in order to teach those industries proper behaviour and earth care. In addition, many environmentalists were concerned about population growth and economic growth. They were concerned that the planet was reaching its carrying capacity and would inevitably lead to mass starvation unless drastic action was taken. This branch of environmentalists, including a few outlier economists, advocated that we needed to move to a steady state economy. Rather than continually pursuing the relentless growth of the economy, the advocates of the steady state economy suggested we needed to work to find a point of equilibrium, a point of balance with the earth’s systems, lest we over extend those systems and do irreparable damage.
Critics of the regulatory approach to environmental problems were often economists. Their critique often accepted the premise that environmental degradation was indeed a problem that needed to be dealt with, however they argued that heavy handed regulation was a highly inefficient means to go about doing so. Against the arguments of the steady state economy, these economists often argued that ‘carrying capacity’ was a misnomer as new technology would undoubtedly raise productivity which would in turn raise the ‘carrying capacity’ so to speak.
These debates culminated in 1987 with the Brundtland Commission report entitled “Our Common Future” which coined the term “sustainable development”. From this point on, the solution to environmental issues was inextricably linked with economic growth.
In some ways, this can be viewed as a victory for the advocates of the free market (often called neoliberals). In contrast to the cumbersome regulations of government, they advocated for ‘market based mechanisms’ that would allow the market to take care of the problem. Such market based mechanisms were seen as a way to harness the power of the market for some particular social good. The market, as such, was not viewed as an end in itself. These market based mechanisms were typically advocated by right-wing, free market political parties (which the Conservative party allegedly purports to be) and included such instruments as – wait for it – the carbon tax. What is important to note was that the debates at this point were between who could be trusted to effectively address environmental problems: the government or the market.
Fast forward to today and we have a multitude of debates going on concerning economic issues, from the Northern Gateway pipeline, to David Suzuki’s comments that economist’s don’t care about externalities, to debates about “net benefit” of foreign investment. What seems to underlie all these debates is a fundamental shift in how we view the market and, consequently, the economy as a whole. Rather than viewing the market as a dynamic, resilient and powerful means for efficiently distributing goods, services and wealth, the economy is now viewed as an end in itself, measured by growth, and equated with the status quo.
You’ve probably heard the line before, that the carbon tax, or any price on carbon for that matter, is a job killer. At the same time Thomas Mulcair laments the decline manufacturing jobs; whether this is merely a political ploy does not matter. What these arguments have in common is an assumption that the principle task of government’s ‘management of the economy’ is to keep it running as it did back in 1997, or some other year that had a good amount of growth. The economy in this view is an end in itself. Contrast this with a view that the economy is merely a means to an end. When the market is a means not an end the basic assumption is simple: get the prices right and let the market take care of things. But what do we mean by let the market take care of it? Institute a carbon tax and, yes, jobs will be lost. But jobs will also be created. The difference is role of government. It is not the government’s job to keep the economy from changing, stuck in 1997 as it were. The government’s job is to ease the pain of economic change and transition through such policies as employment insurance, or job re/training, and so on. Get the prices right and you align industry’s material interests with a separate social good. David Suzuki‘s problem is he confused theorists of capitalism (economists) with practitioners of capitalism (entrepreneurs, industry, etc). As long as carbon is not priced, then Shell is not going to concern itself with it. Economists on the other hand, especially those that came out united in support of Stephane Dion’s carbon tax in 2008, do in fact care about externalities. It is they that still see the market as a dynamic force that can help us achieve our social and material goals. We need to be having a debate about what those goals are for us as a nation, because a nostalgic return to the past is not possible.