Economics is stuck.
Is economics stuck because it cannot reform what it has defined as outside its scope? Things like
- Real quality of life in the developing world (developing for the benefit, not of the people who live there, but for globalized business operations and profit seeking). The facts on the ground are having a profound effect on the normal “globalized” economy, through migrations and revolutions, but are not much discussed. “Per-capita GDP” does not reach these realties.
- “Economics is unwilling to allow conversation about things like Armenia, the Middle Eastern struggles for oil, money, naval ports and coping with increasing and unlivable global heating, the interplay among the Turks, Russians, Catholic Church and Islam are the geopolitics of the region..”
(See the fascinating historical novel Persona Non Grata: End of the Great Game, by Avery Mann)
Economics acts as though it is a description of a system complete unto itself, but it more realistically is a part of a larger system and is very dependent on what lies outside its normal definition of itself.
The hard part for the future of economics is that the jobs for economists mostly consist in keeping the machine of the narrowly defined economy going. But the contradictions are increasingly breaking to the surface of daily life and conversations. When will economics join these conversations?
-Can we avoid 2 degrees C?
-What happens if we stop the construction of all new fossil fuel production facilities? Fracking, refining, mining,?
-What would be the way to get the economy on a 400ppm trajectory? Could it be done?
-What are the details of job loss with severe restrictions in fuel use??
-How can we get to a green economy without actually increasing the use of fossil fuels?
-Can capitalism function without growth?
-Is growth possible without increasing the use of fossil fuels?
How long will it be before these question are forced on economics?
Last week I posted four serious attempts to deal with these.
Andreas Malm Fossil Capital
Naomi Klein This Changes Everything
And I add one more that takes the conversation to the next uncomfortable level.
Climate Leviathan: a Political Theory of our Planetary Future, Joel Wainwright and Geoff Mann.
If the task for us all is the strategic management of society, resources, and people toward a livable future, economics is absent from the task.
There is some discussion. For example
Trajectories of the Earth System in the Anthropocene by Steffan and others.
Recent thinking suggests that “anthropocene” blames humanity, not the corporations. Malm’s Fossil Capital, shows the inadequacy of “anthropocene” because it blames human nature, not the few who turned to fossil fuels, not to meet scarcity in wood and water power, but to control workers.
The taboo on questioning profit is left untouched. The paper is serious but leaves out much that needs to be discussed.
The transition to green would be very costly. You can’t just look at the energy scenario when green is achieved and compare the costs then of energy to the costs of energy in the current energy regime, but at the process that would have to occur to build it. New factories are built with old technologies. Lots of co2 produced in the process.
Who has the task of putting the argument in normal english and other languages?
In the Eno paper
“Combining e and c gives a global average for the carbon intensity of GDP. The two
isoquants display all combinations of e and c that result in the global mean carbon intensity of
GDP (c/y) in 1990-92 and 2013-15.”
“Based on our arguably optimistic assumptions, climate-constrained growth of global per %yr-
1capita income cannot exceed 0.4
during the next three decades. If global carbon emissions are cut by 90% (rather than by 85%) relative to their 1990 level, warming constrainedgrowth turns negative”
There is no discussion of how people would cope with this. We need narratives that cut down from the height of the formal to the reality of lives as lived.
What is striking in the Eno paper and also in its references, is the level of abstraction. Most of the story presented in abstract and formalistic and sometimes mathematical, parallel clearer statements that are close to journalism and narratives already shared by non economists as they discuss the world state of affairs. It is good to have these corroborations, but we also need good economic writing on what would happen if we tried some of the proposed solutions, or, even what will likely happen if we don’t do much.
The level of abstraction implies that experts rule and the ideas and preferences of the population are treated as in a deeply paternalistic way, or perhaps worse, condescending way.
The green new deal. Pretty good, but what would it look like? Some think it is just an addition of new green biz to the current arrangement, Others think it is new and requiring a shift, but there are no details. Who stops doing what, what new things are started, and where?
Naomi Kline asks for regulated capitalism, not for something different from capitalism Socialism as the only alternative is a failure of economic imagination – or also a ploy by capitalists to , through media, making sure that the only alternative to capitalism is ugly old bureaucratic industrial socialism.