The green plan to make Capitalism cruel

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

A regular green claim is that, for the sake of the planet, we can’t afford any more economic growth. How many times have you heard something like the following:

The other tough reality demanding more honest business reflection is the incompatibility of further, orthodox economic growth in the OECD with the 2C target. The structure of markets relying on the shareholder model also demands that companies must grow. But the best analysis available suggests that growth in OECD countries cannot be squared with halting warming at 2C, 3C or even 4C.

Where are the companies brave enough to even ask the question of what the optimal size of a company might be, after which it should grow no further, and how that company should be governed and function with regard to investors?

money_sucking_vortex

What would a world without economic growth really be like?

At first we probably wouldn’t notice. Next year would be much the same as this year. But there would be an important but subtle difference, which would become more apparent with every passing day.

Capitalism is not a zero sum game, because of growth. It is possible for me to become wealthy, without harming anyone, because the total sum of all wealth can be expanded. If someone creates a new wonder drug which helps cure cancer, or a new educational game for your kids which dramatically improves their school results, nobody is hurt – everyone benefits. The sum of global wealth is increased, because there are fewer sick people, or because you have more leisure time to spend with your kids, rather than nagging them to do more homework. That is the essence of wealth creation.

Remove the growth, and something terrible happens. People can still become wealthy – but only at the expense of everyone else. The economy is not allowed to grow. You can’t stop people from innovating – but to suppress growth, you have to make everyone poorer, every time an innovation arises which in the normal scheme of things would have caused economic growth. An enforced zero growth economy turns achievement and success into exploitation.

How can growth be suppressed? The simplest way is to put a price on carbon.

For example, consider the EU emissions trading scheme. All businesses over a certain capitalisation were allocated a ration of carbon credits, based on their history of energy usage.

This created a myriad of perverse incentives. For example, any business which created a new product, had to pay a penalty for their achievement, by buying more carbon credits off less innovative competitors.

Thankfully these destructive practices mostly ground to a halt, when the European carbon price collapsed – in my opinion, most likely because many of the EU member states tried to cheat, to give their own national markets an unfair advantage, which resulted in an embarrassing oversupply of carbon credits across the EU.

However, even a pure auction system would in my opinion act as a growth suppressant – under an auction system, big businesses which control large pools of carbon credits get to gang up on small innovators, by forcing them to pay a premium for the carbon credits they would need, to profit from their innovations.

Some innovation, energy efficiency related innovations, might still be possible – but at the very least carbon pricing takes the focus off product improvement, and refocusses businesses on reducing energy use, by any means possible – say by switching off the heating in winter, like a fairy tale scrooge callously mistreating their workers.

An enforced zero growth economy is a cruel economy. Because when economic growth is suppressed, individual innovation, thought, humanity’s greatest asset, is turned into an instrument of pain. In an enforced zero growth economy, the ambitious only become wealthy, by making everyone else a little poorer.

CONTINUE READING –>

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2 thoughts on “The green plan to make Capitalism cruel

  1. The carbon tax was the idea of republicans to avert democrats from even more destructive non-market based solutions like caps on everyone regardless of ability to cut emissions. It wasn’t a perfect idea but it was a better idea. Democrats fell in love with the idea and it worked reasonably well. Ideally in an economy you want to take cost that people and companies impose on society and reimpose them back on them. This is both just and fair to everyone. If a company creates a cheap product but in doing so they pollute the town river then the true cost of the product is the price of the product plus the polluted river and associated harm. To correct that we have a system of lawsuits and regulations that try to make sure the true cost of the product is reflected in the price and to those that bear the burden of these cost get compensated.

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    • Yes, Republicans as well as Democrats are capable of making stupid decisions.

      The Carbon Tax – really a CO2 Tax – is a solution to a problem which has not been proven to exist, and in fact may be imaginary. The Global Warming Alarmists argument, accurately stated, is:
      *CO2 is responsible for most/all global temperature rises
      *Those temperature rises are amplified by water vapor
      *While CO2’s rise and CO2’s temperature caused rise have been wildly beneficial to the planet and the people who live here so far, the net effects will turn negative by the time that our great-great-grandchildren reach our ages
      *Those far off possible negative effects may be catastrophic (ed: or maybe not), with millions/billions of people dying as a result
      *Advancing technology and the much greater wealth of our great-great-grandchildren will not be able to handle the “expected” emergency
      *The cost of halting the CO2 today (killing our Economy) are less than the cost of adapting to the warmer weather in 100 years

      To “prove” their case, the Alarmists point to Global Climate Models which specifically DO NOT INCLUDE natural variation, have not been validated, and cannot even “forecast” the past with any reliability. If a drug company tried to get a new product onto the market using Alarmist type “science” there would be calls to lock them up.

      Our fearless leaders in Washington ought to be required to take an oath similar to what doctors do: “First, do no harm.”

      Liked by 1 person

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