Paul Mason's end of capitalism

I have recently had my attention drawn again to a seminal Guardian article by Paul Mason, which first appeared six months ago.

I'm almost a fan of Mason. He writes some thought-provoking stuff, much of which I'm inclined to agree with. I think of him as a natural political ally but not quite a kindred spirit. This is because I don't share his preoccupation with the "end of capitalism".

A number of agents and factors motivate the provision of goods and services - markets, public administrations, community spirit, the intrinsic satisfaction of productive work, sheer creativity and perhaps much else. What Mason would describe as the decline of capitalism, I would describe as a decline in the importance of markets as motivators of production.

For a variety of reasons, markets are in decline in some areas. As Mason points out, they are being undermined in the information industries and beyond as digital technology has made it cheap and easy to make and store perfect reproductions of text, software, data, pictures, sound and video. In other areas, increased government intervention is likely in response to environmental threats such as from climate change.

Further government interventions may become unavoidable in the area of banking and other financial services - if only to allow markets to function better. Growing perceptions of social injustice may generate political will to address, through government action, such issues as gross income and wealth inequality.

Let us assume that, over the world economy as a whole, these actual and potential blows to the significance of markets are unmatched by the enhancement of markets in other areas - such as a de-bureaucratisation of economic life in India. Does there come a point where we can say that the world economy, or some major part of it, is no longer "capitalist"?

Perhaps, but "frankly, my dear, I don't give a damn". I am not a Marxist but I am not a fervent economic liberal either. I see threats to individual welfare and liberty coming as much from plutocracy as from an overweening state. I think the state should be as big as it needs to be to do what we want it do and no bigger. Reversing what I see as a drift towards plutocracy is one of the things I want it to do.

If we reach a happy state where the major threats are averted, where acute suffering is much reduced and where most people have before them growing opportunities to flourish, then I won't care if we call our economic regime capitalism, post-capitalism or something else.

Airport expansion and the Paris Agreement

A couple of weeks ago I commented to a fellow blogger on a posting about airport expansion at Heathrow or Gatwick and said:-

COP21 brought a touch of reality to thinking in high places on climate change. One implication is that the UK’s commitment to 80% cuts [in greenhouse gas emissions] by 2050 can no longer be considered adequate. By 2050 we will need to be completely carbon neutral, as will the whole world shortly after. This means that by then any aviation will either need to be completely carbon neutral (running exclusively on biofuels or something not yet invented) or offset by carbon-negative activity.

The date by which we become carbon neutral is less important than what we emit in the meantime. We need to start making big cuts in emissions now and I don’t think an optimal mix of cuts could exclude aviation.

Hence the big issue is not where we site a new runway but how quickly we can reduce aviation, so turning any new investment in airport capacity into stranded assets....

Sorry – I’ve made a lot of sweeping statements here. I’ll try and justify my position in a resuscitation of my own blog.

Climate change as the paramount issue

I may have mentioned before that I participate in a local study group on sustainability which has now been running for slightly less than a year. We discuss many aspects of sustainability but so far we have tended to focus on social and economic issues. Although the issue of climate change has always been there in our minds, we have tended not to focus on it. This, I think, is because none of our early participants has a significant scientific education and so other aspects of sustainability have seemed more accessible.

I think we have to tackle the subject nevertheless. This is because I think the threat from climate change requires us to overturn a lot of generally-accepted thinking about the economy and this has profound political and social implications. Furthermore, other perceived threats to our civilisation -  such as food shortages resulting from over-population - would look manageable were they not amplified either by the effects of climate change or by action needed to tackle it. Before I elaborate, I should clarify some of my premises:-

Nasty, brutish and short?

A pregnant relation recently asked me: what does global warming really mean? I replied something along these lines: it means that if your child has a child, then global warming may render that child's life nasty, brutish and short. I wondered afterwards whether I could really justify what I had said. Everything I have read recently suggests that I was right but I want to be prepared to set out in detail why.

In my last blog post, about Tim Jackson's Prosperity without growth?, I hinted that I would be trying to update some of Jackson's figures. In fact, I have a more general project to get a better handle on the figures relevant to global warming and related issues. This familiarisation is intended as a prelude to a wider project to do more campaigning on the issue of climate change.

For some years I have been alarmed at the disconnect between what the science tells us about global warming and what politicians and the public seem prepared to contemplate by way of action. There is, for instance, much talk among politicians about returning to economic growth and hardly any discussion about whether growth is compatible with serious action to mitigate the threat from global warming.

Prosperity without growth?

I have just re-read Prosperity without growth?, by Tim Jackson, published in 2009 by the Sustainable Development Commission, which the government abolished in 2011. I skimmed through it when it first came out but, not then having  the time to study it in detail, I was left wondering whether action to tackle climate change really does mean doing without economic growth. Although in the long run (perhaps when we're all dead) growth can't continue on a finite planet, it's possible to argue in principle that growth can continue for some years or even decades while we transition towards a zero-carbon economy.

The story of solutions

The story of solutions is another fun, animated video from Annie Leonard and the Story of Stuff Project. Brief, entertaining and with a powerful message - well worth watching.

By the way, I was heartened to find Martin Wolf in the FT saying things similar to what I was saying in my last post.

Denialism isn't confined to global warming

I am an avid reader of Paul Krugman's blog. At a pinch I can call myself an economist (because I have a degree in economics) and that blog is one way I can keep in touch with my profession. (To be honest nobody has ever paid me for being an economist, so my claim to be part of the profession is a little thin.)

Krugman is an out-and-out Keynesian and has consistently raged against the imposition of austerity over these past few years of depression. But he doesn't just rage - he argues cogently and produces evidence to back up what he is saying.

To get a balanced view, I have from time to time hunted for a good exposition of the opposing view - that austerity was a necessary response to high levels of government debt and that it would create the confidence to stimulate the private sector to make up for the contraction of the public sector. I have never found such an exposition. All I have ever found is bluster or what looks like a fundamental misunderstanding of the Keynesian position. Sometimes I am tempted to conclude that, because the austerians produce such bad arguments, they can't have any good ones.

I am left with the impression that no competent and intellectually honest economist would now attempt to defend the austerity that has been imposed on Britain and Europe over the past three and a half years. The British government, rather than crowing about early signs of economic recovery, should be apologising for the three years of economic stagnation that its policies have produced.

Today, my failure to find a convincing economic justification for austerity is echoed by Krugman himself. I'm particularly struck with his final paragraphs:-

Yes, you can find economists at right-wing think tanks and some international organizations making the austerian case, but again, I’m talking about economists with big independent reputations, justified or not. And I can’t think of any. That wing of austerianism has simply dissolved.

And as far as we can tell, it makes no difference. Have Paul Ryan, George Osborne, Olli Rehn, Wolfgang Schäuble changed their tune even a bit? No, they’re busy claiming one quarter of positive growth as vindication.

For those who like to think that serious economic debates matter, it has been a humbling experience.

What has this got to do with my main pre-occupation - global warming? Quite a lot. The insights of Keynes and his followers make logical sense and appear to be supported by evidence. Yet, because the implications do not always fit well with free-market ideology or right-wing thinking in general, there seems to be a loud denial, unsupported by sound reason or evidence, of the validity and relevance of those insights.

This seems a remarkably precise parallel with the denial of the findings of mainstream science on global warming.