Posted by: Bruce Allen | July 3, 2019

Externalities

© Bruce Allen   July 3, 2019

As a recovering resource economics major in college, I am blessed with a vague notion of how economic things work in this world. I recall getting tripped up over the insistence that “the whole is greater than the sum of the parts,” among many other equations concerning capitalism. In conjunction with my politics at the time, I came to the conclusion that private profit is what you get when you subtract private costs from social costs. The social costs go largely unpaid by the capitalist, rather by those living and/or working at, say, a facility which would add value to components while producing identifiable, real, and, in the long term, lethal social costs in the forms of environmental degradation, health issues, mental health issues, resource depletion, etc., etc. Worldwide, examples are countless.

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This typical picture of 21st century capitalism relies, for the most part, on capitalists being able to ignore these social costs and force their payment by others. They pay vast sums to politicians to advance their interests in Washington. The overarching example of this is global warming, created by billions of people and millions of businesses who are too busy scratching out a living to worry much about wood smoke or effluent finding its way into the water supply. The “we’ll all run out at the same time” mentality supports this attitude. And, in a great swath of the human population, carbon footprints and arctic ice melt are the absolute last things on peoples’ minds.

So externalities, abusive of people, the environment, the very culture, are what prop up capitalism, for if capitalists had to pay the costs of remediation of these damages they would suddenly become not-for-profit entities. BP can’t always be cleaning up the Gulf of Mexico. As a society, we have embraced capitalism as the way to improve our own little worlds. The problem is that in doing so we virtually guarantee the continuing degradation of the ‘larger’ world, the planet, our health system, the state of marriage and childcare, poverty, warfare, genocide, on and on. The politically expedient approach, always, is to kick the can down the road and let this stuff be someone else’s problem.

The politically expedient approach is not sustainable.

Some people have argued that we have evolved as a species by adapting to and ‘conquering’ the land, having become competitive, having embraced the Western ‘more is better than less’ mentality. In the process, however, we have, as a species, lost the ability to band together as people to combat an existential crisis, one that portends, at some point in the foreseeable future, a great human die-off and thousands and thousands of square miles of shoreline becoming inundated, infiltrated, and, ultimately, uninhabitable by salt water intrusion.

Decision-makers in the world, west and east, recognize all this and find ways to stick such concerns in alexandria-ocasio-cortezsome corner of their brains where they only have to think about them when forced to by circumstance. In John Sanford’s novel about first contact with alien intelligence, the kiosk advised the heavily-armed delegation from Earth that it had been in contact with a number of different civilizations for thousands of years, and would maintain such contacts until the lesser planets invariably destroyed themselves. Which, I suppose, is the point—we are destroying ourselves as a species, and are too busy watching and talking about the Kardashians to do anything meaningful, politically-speaking, to address the problems, to acknowledge that the companies, world-wide, creating externalities will be intimately involved in paying for their remediation. There is no such thing as “government money;” it is all taxpayer money.

I read once the opinion that behind every great fortune lies a great crime. A system of political economy that values achievement and requires growth will, ultimately, sew the seeds of its own doom. People, a high number of whom are business executives, will decide, on a micro/individual scale as it were, to produce externalities of one sort or another—trucking strawberries from California to Indiana. Such practices make no economic or environmental sense and must stop or be stopped. If one were a radical environmentalist, one would want it to be a federal crime to ship strawberries from California to Indiana. In a sustainable world, it would probably be a criminal, and therefore unprofitable, act to ship the strawberries across the country. In June.

As little as mainstream Democrats care about all this stuff—please Lord let it be someone else’s problem, someone not facing a primary challenge next time around—Republicans care even less. Republicans, judging from their actions, are in cahoots with the polluters and carbon producers to keep American laws as friendly as those of other nations. Recently, the list of other nations has been expanded.

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So, we, individually, will continue to make the decisions best for our own particular situations for as long as we can, exercising our gift of free will, while the planet melts. The slowest train wreck in history is unfolding right in front of us, but the motion is so slow and sporadic that it largely fails to register. It is considered politically inexpedient, if not downright unpatriotic, to go up against global warming. A few Democratic candidates are going there, but they’re doomed, too. People are willing to give up nothing to save the planet. We still want more, more money, more mobility, more expensive toys, than what the planet can support.

Should one be prone to extrapolation and/or intellection, one would be highly concerned about our planet’s ability to maintain its viability. Malthus and Ricardo said this would happen and, by the 1950s, were fully discredited by mainstream economists, who insisted growth would lead us to the promised land, that resource development, in conjunction with Yankee ingenuity, would deliver us from those grim 19th century visions. By then, willful ignorance of externalities was firmly ingrained in government and politics. Air and water quality were a disaster. And we survived.

With global CO2 concentrations on a solidly upward trajectory, as the expression goes, this time it’s different. Global warming will, ultimately, force all politicians to become one-issue politicians. It is reasonable to expect large areas of the desert southwest to de-habitate, due to a lack of readily accessible drinking water. A migration toward the northeast, and notably around the Great Lakes, will occur, as people will never wish to be without water ever again as long as they live. The political economy will be re-shaped on the fly. A number of industries will cease to exist. This exodus will only delay the problem, it will not avoid it.

It is probably past time for thinking people on both sides of the political aisle to become single issue voters, concerned about reversing climate change first and foremost. The long-term implications of not doing so will reverberate for the rest of human history. The generation which was spawned by The Greatest Generation is on track to become The Worst Generation, boomers like me who destroyed middle management, wrecked the planet, invented student debt, and got blindsided by technology along the way. We boomers must take much of the blame for the way things are.

It’s those pesky externalities…

 

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