Dear Readers:
This is a commentary upon Greece, the Greek drama, which affects us all, know it or not, because it is the first genuine challenge, however clumsy, to austerity at national election polls. The outcome, so far, confirms Yanis Varoufakis' fears that democracy has seen neoliberalism take the crucial policy decisions out of the hands of voters, leaving them with Mrs. Thatcher's ice cold "There is no Alternative."
Below, I weave together thoughts about the Greek situation with a review of Richard Smith's book Green Capitalism: The God that Failed. Agree with its remedies or not, its diagnosis of the failure of capitalism to address global warming is the most comprehensive I've read, and it deserves an even longer treatment than my 1200 words or so below.
This was originally posted at the Real-World Economics Review Blog, a site for dissenting professional economists where I from time to time comment. I had been urged by editors there to please review this book, but events have postponed a full review and this will have to serve in the meantime. Here is the link to David Klein's excerpt which appeared first at Truthout, under the title "Capitalism, green or otherwise, is "Ecological Suicide."
Here's the link: https://rwer.wordpress.com/...
Best,
Bill Neil
Frostburg, MD
July 22, 2015 at 2:23 pm
Posting on review of Richard Smith’s Green Capitalism: The God that Failed
Thanks David, that’s a fair review, and I’m delinquent in my own. However, I’ve been busy commenting on the Greek drama, and I’ll share a few thoughts linking the two.
I think on the whole, Richard Smith’s logic is correct, that there are many core features of capitalism that prevent it from facing this great crisis of climate and ecology. And let’s not forget, as we are seeing in the periphery of Europe, esp. Greece, but now in China, the globalized economy under neoliberalism is not by any means out of the “woods” yet, and trouble in China may be the tipping point factor that leads to another world- wide crisis.
In my mind, the great question is: can the capitalism we see before us today, especially in the West, reform itself? If not, why not? Smith’s answer is that by its very core mechanisms, growth, efficiency, consumerism…it cannot throttle back…and that pits it against nature in inescapable ways. At a time when we must come up with greater co-operative mechanisms, economic and political, at both the national (US) but transnational level too, neoliberalism (and even in a China, which should have more operating room) cannot seem to deliver.
Interestingly enough, William D. Nordhaus (whom I assume this audience needs no introduction to) addressed many of the same issues as Smith in his June 4th NY Review of Books article “A New Solution: The Climate Club,” a review and more of a new book, “Climate Shock” by two economic and ecological “moderates,” Gernot Wagner and Martin Weitzman. I have to chuckle just a bit at what Nordhaus comes up with after dodging around the question of whether capitalism can be reformed, and what exactly has prevented it from facing climate change effectively. (“Free-riding” is his answer.)
So we need a gentlemen’s club (ladies I guess, if sufficiently moderate and polite, admitted too, certainly not “the” Ms. Naomi Klein, whose work doesn’t even get mentioned, but is clearly, in my mind at least, being “obliquely” addressed – Smith’s too but doubt he’s on their radar screen at all) to set up tariff barriers against those who won’t tax carbon sufficiently. We can’t alter capitalism too greatly, along the lines Smith suggest, or we would kill the golden goose. Capitalism is causing the problem, but it’s the only system that could offer a solution, even as it has to reach out for a morality beyond the market – the carbon tax, which will then be imposed to work inside markets by pricing the bads higher than the goods. (Smith is convincing that the system cannot deliver it, or even effective carbon trading.)
It’s almost a lament, Nordhaus’ “solution,” for the appearance of someone like J.P. Morgan to bang reluctant business heads together to co-operate before the whole thing collapses, only this would be an economic-technocratic solution administered via sympatico governments, and I do detect more than a whiff of Davos…in the mechanism and “manners.”
I think there are a lot of evasions in Nordhaus’ analysis, not the least of which is that a system that stresses competition, invention, absolute freedom for entrepreneurs and efficiency above all else, now finds it can’t come up with solutions that depend upon human co-operation at many levels. This despite the fact that neoliberal globalization has knit the world together through many chains of production, supply, and transportation – and surely that requires a type of co-operation – but let’s not kid ourselves – that’s a vastly subordinate key to power still centralized in firms, despite the apparent delegation and initiative. (Thomas Frank very effectively addressed this theme in “One Market Under God.” )
So if readers want a clear eyed, no-illusions look at how even the best of green capitalists haven’t been able to pull off the needed transformations, Smith’s book is it. No one deconstructs ostensibly green businesses better than he does, because he looks at the ecological impacts from the entire chain of resource mining, production and transportation, not just the end use of the supposedly green(er) product. He’s convincing: just ask Ikea.
And yet, even as his logic seems to me to be excellent on where we have to go…democratic socialism and participatory planning, with a lot of decentralization….in his own words: “Contraction and convergence, and eco-socialism based on planning, democracy, equality and sharing are, I think, the only path to a sustainable economy and society”… I look at the political economy around me in the US, the Clinton campaign and its economic sources, Summers and Stiglitz long background documents…and I look at the European Union and Greek crisis…and I say, we’re nowhere close to getting to the station Smith arrives at…
After all, the Clinton campaign can’t even summon up FDR’s CCC and PWA, much less his Second Bill of Rights (which would need some ecological amendments by now)…and despite the logic of detailed planning called for by the Greek economic predicament, I can’t find even a game plan to get it off its 99% outside dependence on fossil fuels for its energy needs, and this, in a land of sunshine, mountains and ocean islands…an alternative energy opportunity if I’ve ever seen one…but we know now that the Greeks had no Plan B…and if you can’t see the chance to merge Smith’s views with those of Gus Speth and Gar Alperovitz, the two prominent ecological/economic decentralizers out there, into the Greek dilemmas…well, that’s how far we are from the solutions Smith drives us towards, despite his very good analysis on why capitalism can’t reform itself. (And do I detect more than a hint of shyness on the part of professional economists, even dissenters, from wading into those old historical questions – recall how Piketty danced with them in his book – about the nature of capitalism itself, its driving mechanisms…I expected David Harvey’s name to surface in Smith’s book but I didn’t see it…).
Now, having noted all this, and also taking into account the Pope’s excellent social democratic/ecological document, I remain a green new New Dealer, and reserve the right to move further to the left as circumstances and shifts in citizen feeling emerge.
If you are following the debate inside the Greek left and failures of Syriza as closely as I am, reading everything that Yanis Varoufakis is pushing out…you know that there is no guarantee that things move left, they could just as well move right, and far right…and I still think, after reading Nordhaus, Summers (Shared Prosperty) and Stiglitz (Re-Writing the Rules) and far too much of Krugman, that Smith has his finger on the great difficulty of fully integrating ecological thinking with economic thought…he has his finger on all the major textbooks’ failings, as well as the closer but still failed “green capitalist” thinkers like Hawkens, Lovins, Daly…who have tried…
And I still think Greece presents a great opportunity, built out of necessity, to try a new path, but I have to admit, it doesn’t sound like Syriza or the broader society realizes either the scope or the direction open to them…which will have enormous costs, painful ones…no illusions on that score.
Thanks.