Monday, May 03, 2004

Knickers to Capitalism!

The Moonbat

I've just stumbled across the collected articles of George Monbiot on the web, which has provided me with a few hours of innocent amusement. This article in particular, in which our hero takes a swipe at the logic of capitalism, is definitely well-worth a read if you're concerned about whether capitalism can survive. If this is the calibre of the criticism, then the future is unlikely to be troubled by much intelligent criticism.

Take a look. Anyway, I would like to try to scratch some graffiti onto the impressive edifice of the great man's thoughts with my blunt pen.

The article, "Deliver Us from Finity", is subtitled "Capitalism is not even mathematically possible.." I will take that as the null hypothesis.

With the turning of every year, we expect our lives to improve. As long as the economy continues to grow, we imagine, the world will become a more congenial place in which to live. There is no basis for this belief. If we take into account such factors as pollution and the depletion of natural capital, we see that the quality of life peaked in the United Kingdom in 1974 and in the United States in 1968, and has been falling ever since. We are going backwards.

Ahh, when would you prefer to live? Unless you're Bill Clinton or some other drooping boomer nostalgic for lost youth, I don't quite know what's so attractive about being alive at that particular date in American history. As for Britain, how the hell was 1974, the year of the three-day-week a highlight? Here there is obviously some sort of "adjusted" economic wealth calculation going on; the lack of sourcing might make it less open to any fact-checking.

Given that environmental policy really only started seriously in the early seventies when Nixon set up the EPA, I find it very hard to believe that there was continued worsening of environmental degradation. I'll go out on a limb and cite Lomborg, who reports, using statistics from the EPA, UNDP, other government statistics and scientific literature showing longer life expectancy, higher income, more free time, less pollution of air and water... what exactly is it about prosperity and good health that's so disagreeable?

Resource depletion? There's certainly a hell of a lot more oil now than then, and other minerals are cheaper and in greater supply. This is worth a more detailed study; without him citing his sources - which he tends to misquote anyway - I'm not inclined to wet myself.

The reason should not be hard to grasp. Our economic system depends upon never-ending growth, yet we live in a world with finite resources. Our expectation of progress is, as a result, a delusion.

Well, here we have the Old Mother Hubbard model of the economy appearing. Yes, we live in a world of finite amounts of minerals. Natural resources are scarce, therefore when they are treated as private property, they have positive prices. However, in Sheik Yamani's famous words, "The Stone Age didn't end for lack of stones; neither will the Oil Age end for lack of oil." Yorkshire mining villages have plenty of coal to hand, while Hong Kong has to import all raw materials, even its drinking water. Which is richer? Which is likely to stay richer? It's human ingenuity in manipulating the environment that's the key resource.

Like Marx, George ignores the effect of the price system in driving innovation. Capitalism has proved a self-licking ice cream cone: It's the profit motive that has driven the more efficient use of and substitution for scarcer and more expensive resources.

The survival of humanity has been displaced in the newspapers by the quarterly results of companies selling tableware and knickers.

Victoria's Secret

Come to think of it, knickers probably illustrate the essential truth quite well: Using less material, but more skill over time, we produce a product much better than the huge M&S underpants the typical English female of 30+ needs to cover her massive behind.

Speak this truth in public and you are dismissed as a crank, a prig, a lunatic.

And justifyably so, it seems!

Judging by this article, in which he progresses from the reasonable, but probably mistaken, arguments of the Malthusians to sheer lunacy, I think those labels are perfectly accurate.

On the other hand, if he's correct, then he has performed an original piece of economic logic that has remained hidden from the worldly philosophers from Plato to Adam Smith, Keynes and Marx. In the two years since its publication, I haven't heard of this proof appearing in Econometrica. Maybe Greg Mankiw is surpressing it because he fears George will take his job.

Peter 笔德