February 15, 2005

Georges Monbiot: Blithering Idiot.

As promised earlier I am returning to the subject of the Moonbat’s column today in the Guardian. As you may have guessed from the title I’m not all that enamoured of his logic but it will take a little time to explain why, so, please, get that glass of wine, cup of tea, loosen the trews and relax while I explain a little bit of basic economics to dear Georges and his cohort of lunatic ignorants. Quite why it has to fall to me to explain all of this is found here:

Another reason is that there is a well-funded industry whose purpose is to reassure us, and it is granted constant access to the media. We flatter its practitioners with the label "sceptics". If this is what they were, they would be welcome. Scepticism (the Latin word means "inquiring" or "reflective") is the means by which science advances. Without it we would still be rubbing sticks together. But most of those we call sceptics are nothing of the kind. They are PR people, the loyalists of Exxon Mobil (by whom most of them are paid), commissioned to begin with a conclusion and then devise arguments to justify it.

Well, I write at Techcentralstation, a site that is part funded by the dread Exxon via, at minimum, advertising. I am also paid a modest sum for my scribblings there so, yes, I do take cash backhanders from those despicable rapers of Gaia, polluters of our grandchildren’s world, Big Oil. In fact each and every one of the senior management of that company, including all of the board members, has sent via private courier a request that I deal with this Moonbat nonsense, put the issue to rest so as to make the world safe for current profits...even if it is at the expense of our own grandchildren as well as those of others.

Oddly, when writing there I have repeatedly (search for the articles yourselves!) stated that I am actually roughly in the Lomborg position. Climate change is happening, partly as a result of human activities, one of which is fossil fuel use (the other being land use changes). I’ve had no problems, no disagreements with the editor, no rejections of articles for not toeing the party line. A rather different experience I imagine than if I tried to put free market arguments into The Ecologist or Mother Jones.

Still, enough blathering. I will go further, and use only science to argue my point. It’s a piece of science that Dear Georges is blatantly ignorant of, indeed, a field where, whenever he enters, he has an unerring instinct for going face down in the first cow pat. Yes, Economics, the bugbear of his life and most of his arguments. He thinks he gets it, thinks he has a handle on what people are trying to tell him, but just cannot quite get that there is a touch more sublety to the subject than the fact that capitalist oppressors are not quite the types you want to share the organic tofu with.

But there's a much bigger problem here. The denial of climate change, while out of tune with the science, is consistent with, even necessary for, the outlook of almost all the world's economists. Modern economics, whether informed by Marx or Keynes or Hayek, is premised on the notion that the planet has an infinite capacity to supply us with wealth and absorb our pollution. The cure to all ills is endless growth. Yet endless growth, in a finite world, is impossible. Pull this rug from under the economic theories, and the whole system of thought collapses.

This is the root of his entire worldview, that we must stop economic growth, stop capitalism in its tracks, otherwise we’re all going to boil or drown (well, depending on which side of the bed he got out of in the morning, could be freezing or dying of thirst that he uses to scare the faecal matter out of us) by the latest, next Thursday week. I find it a slightly odd view to be frank, this idea that any economist  thinks there is an infinite capacity....the science is based on the allocation of scarce resources, after all. Pollution is a well studied field, externalities and all that, and as has been noted, rich countries tend to be cleaner than poor ones.

Certainly many economists are interested in how to promote growth, for two reasons. The first being that that is what is difficult, the wealth that it brings being the thing that is odd about the modern world not the destitution and poverty which has been humanity’s lot until that growth. The second is that we already know how to stop economic growth, a Communist Government does that very well indeed, as the experience of the Soviet Union showed. Doesn’t do much to stop the pollution of course, as anyone who’s ever been there can attest.

But let us narrow ourselves down, right down, to just one sentence:

Yet endless growth, in a finite world, is impossible

Unfortunately, Mr Monbiot, you are incorrect, at least in so far as you are talking about economic growth. This very finite planet is entirely capable of supporting permanent economic growth, for it is not, as you assume, the existence of raw materials or physical resources that limits growth (constrains it in certain directions, certainly, but does not limit it in essence).

The origin of that phrase is a quote from Kenneth Boulding, a famous and very good economist of the last century:

"Anyone who believes       exponential growth can go on forever in a finite world is either a madman or an economist."

Before we simply take this at face value we should note that he also said, in a CBS TV show in 1974 (sorry, can’t find the reference) that the rough doubling of wealth every generation has finished....go look up GDP per capita figures in constant dollars for 1974 and 2004 to see if he got that one right.

OK, let’s go further on down this path of looking at whether economic growth can continue shall we? Look at whether Georgie Porgie might in fact be correct, that we simply cannot continue to have growth?

Without taking another 5,000 words to get to the point I’ll just cut to the quick. Monbiot seems to think that growth is driven by the consumption of resources. If this is true then of course he is right. At some point, arguably last year (the EO Wilson view) or in 7 billion years (roughly the Julian Simon view) we’ll be out of resources and so no more growth.

Unfortunately that is not what growth actually is (as Simon knew very well), to the detriment of the doom mongering. Let’s take the way in which we measure economic growth, GDP. There’s a lot of problems with it as a measure (should be net, not gross, national not domestic, should account for resource use but does not etc) but it is the one everyone means. What Moonbat is decrying and what we all want is an increase in GDP per capita. So, is this limited by the physical world around us? No. GDP measures the value added in an economy. It does not measure the resources used it measures the value added to those resources.

To show what I mean think about computer chips. No, this isn’t the story about turning sand into something more valuable. Think about what actually goes into a chip. Gold, silicon, aluminium oxide, maybe some copper, gallium, germanium....OK, we’ll call these our irreplaceable natural resources. So, we take about $15 of these and turn them into a chip worth $300. That’s a $285 increase in GDP (these figures are made up, but they roughly reflect reality back in the days of the 80286 chip). But not every chip can be used.....some fail in some manner during the manufacturing process. So at times, we are using $15 of resources (please note I’m ignoring capital, human and financial) to create $5 worth of scrap.....that $5 being almost entirely the value of the gold in it, something very easy to extract.

Hey, wait a minute! We’ve just shown that we can use exactly the same resources, exactly the same number of atoms of carefully prepared materials and dependent upon the success of our process, we’ve added $285 to GDP or subtracted $10 from it! Could it be that GDP is not dependent, at least solely, upon resource use?

Hhhmm. Delinking resource use from GDP growth opens up the possibility (at present the possibility only, of course,) that in fact, it is not the attributes of the physical world that determine whether growth can continue. Interesting thought eh? Sooo, let’s leap to the extreme. Let’s set up a world in which we do not abstract any more resources other than  those that are renewable for the entire period that the sun is going to keep shining. We’re going to magic a couple of machines into existence...well, not really, for we can do both of these things already, just not at any price we wish to pay. The first is that all of our energy comes from solar power. There’s plenty of that around, easily fuel a culture on it. The second is that we’re going to only use the stock of minerals we’ve already extracted, with a very minor addition of extraction from sea water (which we can do already, again, not at a price we want to pay, it’s easier blowing up a hill) of that portion that gets lost to weathering. Everything will be recycled, our extraction from sea water being just long-term recycling of those atoms that have been washed into it.

Ok, with me so far? We’re in Georges’ wet dream of a world, one where we are indeed careful guardians of Gaia. OK, so, now, do we expect to see growth in GDP? We’re not polluting, not extracting, not raping the world, how can we have growth?

Think of our resident of Tinker’s Bottom, farming turnips. One of the odd things about humans is that we are curious bastards, inquisitive little apes. A life time of hoeing root vegetables in the Somerset fields will lead to experimentation as to the best way of doing that very weeding. At some point (as has happened in the past) a revolutionary new turnip weeding technique will arise, one that allows our Rutabaga lover to do his work in half an hour less than previously. Let us invent further, and say that this free time will be used singing down at the pub over a jar of organic scrumpy. Now, is this economc growth, a rise in GDP? We are using exactly the same renewable resources, land and labour, all we have changed is technique. We have exactly the same output of turnips, but we also have singing and cider consumption.

It is one of the faults of GDP measurements that if our Swede chopper gets his cider for his singing this does not show up in the statistics. If, however, he is paid a silver groat or two for his yodelling,
(unfortunately, in that part of the world, likely to have lines that end in "tiddly I O"and such horrors, sung over a background of phrases such as "So oi sez to ’im, "Get Orf moi Land" snigger") and why not, if someone is living like a medieaval peasant why should he not be paid in such coin, then we have a rise in GDP.

So, we seem to have reached a point where we have completely de-linked economic growth from the use of natural resources, managing to find that it is instead a function of the value added by humans. Even in a world with no net extraction of natural resources, economic growth could (Please note not would. There is nothing that cannot be screwed up by an incompetent government.)go on for ever, or at least until we have invented everything.

Indeed, I would argue that such growth, such invention of new technologies, is part of what makes us human. So it will continue until we stop being human (given the average for a species, about 4.8 million years from now but I find it difficult to think of us being replaced by one less curious) or the sun goes out....or for those of you with a more religious bent, until Gabriel sounds the Last Trump.

So, sorry Georges, you’re talking bollocks. Beautifully written, as always, pushing your worldview very well, as always, but, as nearly always, 24 karat gold, pure and unadulterated bollocks.

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February 15, 2005 in Economic Myths and Ecologic Facts. | Permalink | Comments (7) | TrackBack