Economics, Reality and Renewable Energy

I keep reading things like: “In a showdown between political ideology and economic reality … you want to be betting on economic reality,” or other statements implying that capitalism and business will save us.

That makes it seem that people do think that pro-corporate organisations like the Republicans in the US, really do believe in ‘small government’ and ‘free markets’, rather than in using those words as slogans to support action in favour of established corporate power. Republicans have already changed ‘economic reality’ to reflect their position and probably will keep doing so. This is not about respecting reality, rationality or getting the best results for ‘working people’.

The new US government can, for example, encourage companies who provide grid power to charge more for connecting to places/homes with renewable power to prevent ‘freeloading’ on profits. They can tax renewable usage, or put import tariffs on essential materials or parts for renewables. They can decide renewables are dangerous to workers, hazardous to public health (wind farm syndrome, why not a solar power syndrome?), or bad for ‘baseload’, and slap difficult regulations on them. They can put taxes on the use of land for renewables. They can use infrastructure development to subsidise coal mines, fracking and gas leaks. They can use the same monies to build, or sudsidise, new coal power stations as vital to the economy. They can pretend that they already have clean coal, or give billions to research clean coal without checking that money gets spent on research (other than market research). They can remove all anti-pollution enforcement as that hinders the economy. They can decide that protestors against these moves, are more vulnerable to jail, or police beatings, or face increased and bankrupting fines; or they can legislate that protestors are terrorists. They can decide that protest should not occur on private property as that is trespassing, and that all space is private property. I’m sure they are more ingenious than me, so they can find even more reasons to hinder and halt renewables and their supporters.

If they can ignore the reality of climate change, they can skew the economy towards fossil fuels.

In terms of Ken Mcleod’s ‘fourfold’ the mythos of capitalist economics is misleading at best, and this produces misleading understanding and action and a restricted psyche.

Not only does our economics depend on the idea of individuals primarily competing with each other, it tends to make profit the only good, and usually the profit of those who are already profiting. It therefore tends to generate a plutocracy and a ‘selfish personality’ repressing human cooperativeness, or long term interest. It pretends that economic activity is not tied in with State activity and control of the State; however, in reality economics is always a political as well as a business struggle. Hence the likely possibility of Republicans acting against renewable energy, which largely involves newer companies, to support those who have already invested in their party and who already hold power in the State.

The ideology of the free market is not interested in recognizing power differentials in the market, or everyone’s survival and cannot be, because that would be to recognize that the ideology does not work in the way it claims to work – which is not to say that reasonably free markets cannot be useful, but that they get corrupted, and that they are not the only good.

If you want renewables you may need to organize, and think about new more constructive  myths and economics.

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4 thoughts on “Economics, Reality and Renewable Energy

  1. It is probably disputable that our capitalist economy has flourished for the last 30-40 years. Certainly some people have profited by it due to transfer of wealth to the top few percent, but most people in the west may not have done, or may have done so at an extremely moderate rate. Various things I have read suggest that the social mobility common in the 50s and 60s and even 70s has gone. Society could be stratifying into the very rich and everyone else. Those who are wealthy may well have captured the State, and bought the main political parties because it is economic good sense to do so, because there is no separation between the State, business and the economy, and they might as well control it rather than risking it being controlled by others. This is not to say all the players agree all the time.

    If this has happened, then I would suggest that the 30-40 years we have had of praising free markets and businesses is part of the reason for why people have allowed it to occur. It has led to the assumption that business is the only valuable part of society and that anything which interferes with the profit of those who are already established is bad. Everything has to be judged by the bottom line – where the bottom line is a political decision in favour of particular business. Everything can supposedly be done better by business, even though this is almost always untrue. All the good personal qualities initially required by trade can get turned into economic valuations under the totalising system of business, even trust (how much did you pay for that?). I have been told that Trump pioneered a clause in his contracts which basically said that no matter what was promised in the information about his product, there was no guarantee implied that it was true…. if so then it did not seem to harm him. Truth in modern business, is whatever helps make money or protects power.

    In other words the kinds of processes which would lead to the protection of established companies, bad fuels, poisons and the continuance of climate change, are already in existence. They are already politics as normal. It is the same in most capitalist countries, even the new ones like India and China. If Trump can pass off defense of the fossil fuel industry as good for jobs, and climate change as a hoax, he will get support from corporate think tanks and other propaganda machines and that will permeate into the public. Business competition could ensure a race to the bottom and to use the most polluting form, because people believe in it and it receives regulatory incentives.

    Sure eventually it all falls down, but the hope may be that the wealthy have enough to survive, and that is the only thing that matters in the system as they are the virtuous and valued ones.

    Sorry I’m in a pessimistic mood today.

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    • I can understand why you are feeling pessimistic as an individual but that is not a luxury you are allowed as a philosopher and public intellectual 🙂

      I would like to suggest it is not the case that truth and reality are nothing more than what some powerful (or depowered) individuals decide they want them to be today for their own disgruntled purposes. I’m suggesting that for millennia people have known how to interact in a very clear and concrete way with each other for mutual advantage through trade and commerce and this will continue regardless of any other ideologies. If it doesn’t, a lot of these discussions would become very irrelevant, very quickly. When food becomes scarce in the shops I tip all parties will quickly reach unanimous understanding on the truth and reality of that fact.

      Of course, commerce can be used for improving people’s lives or making them worse. Markets deliver a healthy diet, more or less, to literally billions of people who would otherwise starve to death (probably including most people reading this). Markets also sell tobacco and sugar that can kill us if we choose them. People can be commodified and sold in a slave market. All rules based markets are corruptible, including political and religious ones that usually profess to higher ethical standards than colourful businessmen.

      These things have always been a pragmatic fact of life and from ancient times till now it has been dealt with by elaborating the rules of markets with regulations that are deemed to be in the public interest. If a ‘free’ market has ever existed anywhere it probably didn’t last long.

      Commerce is the foundation of every society but the extent to which it works progressively, efficiently and fairly or regressively, chaotically and corruptly, is a function of local cultural ideas about transparency and accountability for following the rules. Australia’s cultural software around honesty is better than many places but still the daily news is full of examples where we fail, from the treatment of migrant workers and 711 employees, to the dodgy business practices of major banks. These transgressions sometimes achieve a short term advantage but cannot be tolerated for long by consumers and business competitors alike. Dodgy business practices are anti-competitive and rogue activity drives up the transaction costs for everyone else. An important function of civil society is to demand that public and private institutions are transparent and ethical or otherwise subject to sanction. A diverse and vibrant media is crucial for this to happen but because of technology change its continued existence is under threat. We as individuals are crazy if we don’t get behind independent media financially.

      The other propensity of capitalism is to sell any legal product that will make a profit. When cultural norms change and slaves or opium or tobacco or coal or some other product is deemed to threaten society, governments – often following prompting from civil society – will regulate or ban those products. Not all change need come from government regulation. Cultural attitudes to car ownership among young people, for instance, or choosing to eat out versus buying in have changed the way people use their disposal income to derive relaxation and enjoyment from experiences rather than owning stuff.

      Major cultural change can occur with one person’s lifetime – we’ve seen it with tobacco, women in the workplace and attitudes to marriage equality. But so, unfortunately, can global tipping points. The biggest risk is that the planet will suddenly find it can’t wait any more for humans to adapt.

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      • There are many things I can be optimistic about, but this is not always one of them…. 🙂

        anyway, thank you for responding to my posts it is always a great thing to have some one make me think….

        I’m obviously not explaining myself that well, so its good to have an opportunity to start again. I am not arguing “that truth and reality are nothing more than what some powerful (or depowered) individuals decide they want them to be today for their own disgruntled purposes.” I am arguing that sometimes societies get stuck in a position where the prime methods of governance, power, economics and culture demand that reality is what they would like it to be. People want to impose a particular order on the world, and this imposition then creates, or magnifies, the chaos they fear.

        That reality is not what they want it to be becomes a problem for these people. The standard ways of dealing with the issue, which are likely to ensure social collapse, are:

        To impose the required order more rigorously.
        To pretend that the signs of disorder are illusionary.
        To attack those who might be trying to solve the problems.
        To stir up a distraction and get people’s attention focused elsewhere, or
        To locate a scapegoat to blame for the problems and argue everything will be well when that scapegoat is purged.

        Factions of our current society appear to be dedicated to all of these techniques:

        The economy is not working – so lets have more free markets, more power to the corporate sector, more wealth for the wealthy.
        Pretends that the climate change society generates is not a problem, is not happening, or is a communist conspiracy.
        Attacks scientists and anti-coal protestors etc..
        Focuses on the lives of celebrities, murders etc.
        Blames refugees and ‘liberals/greenies’ for everything going wrong and attempts to purge them.

        This kind of situation encourages what I call the ‘mess of information’, because the dominant cultural trend is an attempt to avoid reality. This mess is magnified by the information society, because evidence for any position can be found somewhere and recycled even when it is shown to be false, if it meets the interests of a particular information group or demonstrates group loyalty. Commercial pressures reinforce trends that make the news sketchy and inaccurate (not enough money for investigative journalism, for checking news sources, for not using company PR, attracting and not offending advertisers, satisfying owner’s ideologies to keep your job etc). This helps keep everyone confused or bemused, and cynical about everything they don’t personally adhere to.

        I agree, trade of some kind or other is universal. However, the trade we have today is probably very specific and unusual. People do not trade with other people, most of the time: trade is mediated and mostly with big businesses – most trade is between big businesses or inside businesses. Generally we recognize differences in type of trade and that is helpful. It is also helpful to realise that the official ideology of ‘free markets alone!’ does not work and is not truthful…

        In a society in which only one class is considered important, that class usually ends up trying to structure society, the State and reality to correspond with what it sees as its interest. In a military society, violence, obedience and strategy will be rewarded, war will be sought and the military will seek to rule. In a religious society the appearance of piety and obedience will be rewarded, everything will be directed at the sacred and priests will seek to rule. In a business society everything will be directed at profit for the already wealthy, plutocracy and obedience to the power of money.

        The question for us is, “is anyone left to regulate the market on behalf of the people, or will it be regulated on behalf of, say, the fossil fuel industry?” It appears that Trump is certainly going to attempt the latter position – and there is little to stop him – certainly not the supposed ‘economic realities’. He can make the regulations and markets favour coal and fossil fuels for a while at least. That might even destroy renewable companies and that will prove his point.

        Who will protest? Democrats? unlikely, but even if they do will they risk an election based on climate change? I think the answer has already been seen to be no. And as Obama has shown, Trump can just use regulation to benefit coal.

        The workers? “all corrupt free loaders – unions are terrible things which need more regulation. Employers are wonderful bringing hope to people, who cares if they don’t pay the wages they are supposed to?” Certainly not our government for example. These low wages may drive up the transaction costs for everyone else, or everyone else can decide to participate in the race to the bottom. If there are no consequences because business is good by definition, then that is the sensible thing to do, just as it is sensible to support coal mines that bring almost no jobs. Forget this could have overall economic consequences…

        The issue I’m trying to get at is, will Trump and Turnbull and so on manage to delay the process of change long enough for the change to be violently disruptive, or not? Given the apparent time limits we have, and the ease of disrupting orderly planned change, then I suspect they will, and while the fossil fuel companies may eventually be unhappy, they will have made more money than they would have done otherwise (unless they changed), and Trump will have recouped his financial investments.

        So I return to my original point “If you want renewables you may need to organize, and think about new more constructive myths and economics.” All trade is not capitalism might be a good starting point. Plutocracy distorts markets is another. Knowledge needs work and checking might be another.

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  2. On the other hand, small government is not a precondition for capitalism to flourish, as we see in the rise and rise of China. But economic efficiency and the ability to compete in global markets is absolutely necessary for any capitalist economy to continue to flourish.

    If the US, and Australia, continue to subsidise fossil fuelled energy systems when new energy systems are cheaper and cause less environmental damage, and if they continue to run down their knowledge industries in the name of “small government”, their economies will be outperformed by countries such as China, India, Germany and others. The electoral cycle will turn again.

    Capitalists deserving of the label (as distinct to the rent-seeking spivs that have captured the GOP and the LNP/NP) fully get this. More than 360 US companies such as Starbucks, General Mills, Hewlett Packard, DuPont, eBay, Nike, Unilever, Levi Strauss & Co. and Hilton and individual investors have recently released an open letter to Trump at COP22 in Marrakech urging follow through on U.S. commitments to combat climate change. They argue it’s good for business and called on him to “continue U.S. participation in the Paris agreement,” and invest in the “low carbon economy at home and abroad.” (This is not to endorse the ethics of any of the above companies!)

    That large segments of our globalised information economy (as described in your analysis of Trump and the magic of information) are living in parallel cognitive universes with their own truths and realities, is certainly a huge obstacle to any efforts at concerted action to tackle the planet’s large, common challenges. How can we pull together when we are more than ever criss-crossed by racial, religious, political and economic boundaries and living under vastly different social conditions. At the same time the globe has shrunk due to overpopulation, mass transport and globalisation.

    One good thing that can be said about small c capitalism – but let’s call it ‘commerce’ – is that it has stood the test of time. The basic assumptions and rules of trade and commerce which require the exercise of individual qualities such as imagination, curiosity, education, openess, communication, tact, cooperation, understanding, ethics, trust, honesty and industry etc. are probably closer to a truly positive and enduring philosopical lingua franca, a universal human reality framework, than any other belief system that has come and gone over the last 50,000 years.

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