If Only George Monbiot Understood The Basics Of Economics
Mind-gargling ignorance just doesn't aid in saving the planet
George Monbiot has <a href="
little video out</a> in which he explains - a part at least - of what he perceives to be the problem. The world's falling apart and we've got to do something. Or, more accurately, we've got this stable environment of the Holocene which is increasingly vibrating at the edges, that vibration being the harbinger of a chaotic switch to another and, for extant life, worse state.
No, I don't agree but so what.
So, we've got to do something.
At which point George makes the analogy with the banks. When in extremis governments would and did print trillions of $ to support the banks. Well, yes, they did. So, we need to do the same again to save the climate.
If the call is simply that we'll do big things when big problems arise, this is a big problem, so let's do a big thing well, fair enough. I still disagree but there's no internal problem with the Monbiot argument.
If though that argument is that governments have to deploy trillions to beat the environmental problem then that is wrong. Within its own confines that argument is wrong. Because the environmental problem, as defined by George, isn't something amenable to the deployment of money.
Think back to the banks. 2008 was a wholesale run within the banking system. We know from the basics of fractional reserve banking that runs can, even do, happen. The solution is to flood such a system with liquidity. Print money and lend it out in vast volumes. At interest of course. Which is what was done and it was profitable to do so. Both on the large scale which is that we retained a financial system instead of a smoking hole in the ground, also on the smaller scale in that the central banks received back more in repayments and interest than they sent out. TARP made a profit for the Feds that is - well, as long as we exclude the non-banking parts of it like GM.
The climate crisis, the environmental one? It's not actually amenable to the deployment of trillions of $.
For consider what Monbiot insists is that problem. Simply that the economy is too large and certainly can't be allowed to get larger. We as a species abstract too much from nature for there to be room left for sufficient nature. I'm not being unfair about Monbiot's views here, this shines through his writings. He insists, when folk like me talk about GDP being value added not things, that that's all very well but to get to Daly's steady state economy we've got to dematerialise GDP. Which we show no signs of doing and which Monbiot insists is impossible.
OK, I disagree again. But that is still Monbiot's insistence. Not only have we got to have no further growth we've got to shrink back our abstraction from nature.
This is not a problem amenable to money.
Think what that really means. There’re about 1 billion folk we might call "rich" in the world. Roughly, without me looking this up, on $100 or more a day PPP adjusted. These folks have to - in the Monbiot vision - dial back their lifestyles. There're about 1 billion folks still absolutely poor (about 700 million below the $1.90 a day PPP but extend that up a tad to $2.50 and we probably do have a billion). We might be able to make room for their lives to get better.
Then there're the other 5 billion of the global "middle class", in between those two numbers. If we're to have no more economic growth then for them it's currently about as good as it gets. They don’t get to join the billion on top living as high on the hog as we do.
Do note this is derived from Monbiot's own analysis. It's the size of the economy, Stupid. So, we've got to cap that, possibly manage it down, almost certainly redistribute it. That's not a problem susceptible to trillions of $ in spending.
There's the obvious Keynesian point that such spending would grow the economy in itself. But very much more importantly, you're telling 7 billion people that they've got to change their behaviour. The 1 billion rich have to have less in future. The 5 billion don't get to have more. The last 1 billion don't get to aspire to be rich. But capping the size of the economy - that's the statement you're making. This even before the problems of making sure that folk are willing to give up stuff so that others might rise.
That is, you've got to change human nature. Which is to like having a richer physical life. This isn't something invented by capitalism nor is it created by advertising or anything else. It's just a part of being human. We like having more. A larger economy is that more, by definition. So, if we're to not be allowed more then we've got to stop the folks striving for more - we've got to change human nature.
Changing human nature isn't amenable to the government printing of money. So, printing money in however many trillions won't solve the Monbiot diagnosis of what ails the planet.
We’re at the Douglas Adams point of moving bits of pieces of paper when it’s not the pieces of paper that are unhappy. Monbiot’s diagnosis is that human nature has to change. That’s not something to be solved by printing more money - so, printing more money won’t solve the problem, will it?