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Saturday, May 3, 2014
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I was driving to work the other day, and morning person that I am, I had the radio tuned to the Bloomberg financial station. By 7 AM, I’m ready for some insightful and stimulating comment on the state of business, the markets and the world economy. (Bloomberg is after all about money, but Bloomberg media does do a pretty good job of covering politics and social trends in addition to its primary focus on the business of making money).

As I rolled down Ridgewood Avenue in Glen Ridge, it was time for Bloomberg View, and this day it was Megan McArdle‘s turn. Ah yes, good old Megan (she’s actually rather young), the rising star of economics-oriented punditry. I remember back when she cut her teeth writing an occasional “rational economic thinking” piece for The Atlantic. I find that Ms. McArdle’s thoughts have generally been worth a read or listen, and I take my hat off for her being one of the few female pundits embracing market theory and financial trends.

During my ride to work, Ms. McArdle was taking on Chris Hayes of MSNBC, specifically a recent article he published in the uber-liberal Nation magazine which compared and in some ways equated global warming with slavery. Mr. Hayes’ bottom line was that slavery was such a crime against humankind that society had to eviscerate billions of dollars worth of economic value (i.e., the investment of the plantation owners in their armies of slaves, and the huge profits that they earned by using them) . . . despite the fact that this radical seizure of economic value would have a tremendously disruptive effect on the regional economies of the South (and secondarily on the industrialized North, too). In the same fashion, society would now have to destroy a tremendous amount of economic value by prematurely ending the use of fossil fuels, because of the great crimes that global warming will soon have (and possibly is already having) on the human race (to say nothing of the many other living species and the overall living ecology of planet earth).

Ms. McArdle found this logic to be a bit “inapposite” – i.e., Mr. Haynes did not hit the nail on the head, after all. Slavery was a horribly exploitative way of expropriating cheap labor; the end product was economic, but the production means involved robbing a person of almost all of their natural rights. It was carried out by those in a relatively strong and privileged position against those who, under the particular circumstances, were physically and economically weaker. There weren’t many shades of gray to it. By comparison, the utilization of fossil fuels is a more complex situation. The long-term effects of widespread industrial use of fossil fuels certainly will affect the poor more than the rich. But then again, much of the present increase in greenhouse gasses stems from poor people expropriating their chance to leave behind their poverty, i.e. in China and India. And to abruptly stop using fossil fuels would impact poor people almost as much as it would the rich. The exploiters and the exploited, and the winners and losers from ending the wrongdoing, clearly aren’t lined up as neatly as they were in slavery.

As such, the “answers” to climate change aren’t going to be as simple as “leave the carbon in the ground”. They are going to involve a messy mix of carbon usage taxes, “cap and trade” credits, geo-engineering, migrations (hopefully pre-planned as to minimize social disruption, but some unplanned), and eventual technological development that significantly reduces the economic need for fossil fuels (i.e., development of solar and wind power and other alternative non-carbon energy sources). Mr. Haynes is a clever writer, and his point is worth considering – but in the end, it doesn’t stick.

Still, it is interesting to take the opportunity that Mr. Hayes created to ponder the further historical connections between slavery and fossil fuels, the the eventual wages of societal sins. In the big, big economic picture, slavery and fossil fuels are in two different sectors of the production economy, i.e. labor and capital. The long-term historical trend has been for capital to grow in importance due to technology (including better and more efficient ways over time of using fossil fuels), while labor simultaneously diminishes in importance for the most part (a small portion of the labor pool however becomes greatly important, i.e. the technology class that drives the technology revolution, along with the educated managers who exploit it for the benefit of capital owners). Actually, that topic has also been in the news lately with all the hub-bub about Thomas Piketty’s “Capital in the 21st Century” and its exploitation of all but the super-rich.

Be that as it may, one good thing about the growth of big-capital is that it ultimately makes slavery irrelevant and unnecessary (although the technology-driven capital improvement called the cotton gin ironically gave American slavery a new lease on life in the early-1800s). You can find interesting and not-unintelligent discussions on the internet as to how long slavery would have persisted in North America had the South won the US Civil War and the Confederacy permanently established itself. An interesting comparison is made with Brazil, where slavery was ended in 1888, due largely to economic reasons including immigration of cheap labor from Europe and the change to coffee growing. By 1900, the need for farm labor in the US began declining sharply, as farm machinery driven by fossil fuels could tend the crops more cheaply than humans. If the Civil War had been avoided, slavery would eventually have died an economic death; but that may have been nearly 4 decades later than when it was abolished here. The cost was a terrible war and decades of national stagnation as the reconstruction distracted political attention and used up investment capital that would otherwise have built up and helped expand an existing economy. Not to mention that the reconstruction opened a lot of new social wounds (e.g. the re-institution of white supremacy) that would continue to fester into the 20th Century.

Similarly, fossil fuel use, at least at the levels that threatened continued increases in global temperatures, may eventually pass due to “the magic of the market”. But once again, I suspect that this could be up to a half-century after climate change starts inflicting harm upon the human race. And during and after this half century, a lot of damage will be done that will take further generations to erase. Human-kind could be in for a longer, more serious, world-wide stagnation, akin to a hang-over after centuries of fossil-fuel driven partying.

The Civil War cost the lives of about 600,000 people, but it did finally resolve the issue of slavery in America (but of course, it did not end all forms of injustice to those who were slaves, or to their descendents). I doubt that global warming will engender such a dramatic and bloody resolution; it will be more a matter of “muddling through” over many years. But as with the Civil War, there could be a resulting social and economic stagnation. This time it will occur on a world-wide basis after years of rapid human advancement in the 20th and early 21st Centuries. I don’t think the historians of the 22nd and 23rd Centuries will call it “the New Dark Ages”, but they may well note the end of what we have come to expect in America since the 1950’s, I.e. that things are going to keep on getting better and better for American, for the industrialized nations, and ultimately, for all humankind.

Despite our focus on linear trends, ultimately things do run in cycles (including the weather; at some point, perhaps several centuries in the future, the earth’s more typical cold climates over the past 800 million years will return). When times are good, we tend to forget just how lucky we are. Only when the bad times return do we ruefully see that. For now, I give Chris Hayes and the whole climate change issue credit for unintentionally reminding us that one way or another, despite human progress (and despite the inherent differences between global warming and slavery, as Megan McArdle points out), the circle won’t ever be completely broken.

◊   posted by Jim G @ 11:27 pm      

  1. Jim, I don’t know if it’s just me or what; but this whole “connection” (or comparison) between slavery and fossil fuels and global warming somehow or other manages to have my mind boggled. First, I found myself trying to get some kind of *real* connection between slavery and fossil fuels; and then before I could manage that connection to make any kind of comparison in my mind, I find a discussion about global warming. (Yes, I understand it’s the fossil fuels that cause global warming – but somehow it still all boggles my mind.) Indeed, there’s a massive amount about economics (and fossil fuels) that Chris Hayes and Megan McArdle know that I have no clue about; yet, it seems to me that somewhere in all this I should be able to find some kind of solid connection.

    Yes, I can understand and empathize with the upset in who made/lost what money when slavery ended and how and why it caused a massive economic upset. In fact it seems that lately there have been one or two people wishing to return to the “good ole days” of slavery when all the black people smiled nicely at the white people (and were happy, according to white people). Yet, I doubt that these same individuals would actually want to return to doing without fossil fuels; what they probably want to see is a lot of people doing all the work for free, while they benefit from others’ labor.

    Maybe it’s just me but somehow I tend to think that Capitalism has begun to reach the end of its rope, so to speak. That is, Capitalism has come to the inevitable end of what happens when Capitalism reaches its peak. It seems to me that eventually, following the “rules” of capitalism, it’s inevitable that you’ll have the 1% and the 99%; isn’t that what Capitalism basically works toward? It’s true, nobody has ever tho’t of it that way, least of all me.

    But lately, the more I think about it all, the more I come to the conclusion that perhaps a new form of economy has to be developed that includes a better distribution of wealth. As I’ve read recently (and here I paraphrase wildly, I realize, but the idea is this): It seems Pope Francis himself has begun to realize something’s wrong with Capitalism as he has said that Capitalists should “be nice” to each other, i.e., spread the wealth and not hoard it all in the 1%.

    With all due respect to Pope Francis and his good will toward the 99%, I doubt that the 1% will “play nice” and help out the 99% just because they know it’s the right and good thing to do.

    More likely what will be needed is some other form of economy that allows for a more just, better distribution of wealth among humanity.

    I have no clue what a new and different form of economy might look like that would allow for a more humane (in every regard) distribution of wealth; but I’m sure there must be some really intelligent economists who could figure out a new economic system that would do just that. (But, then again, I find myself wondering if any economists actually understand why there should be an economy that works to distribute wealth more humanely; but surely, there must be one or two such economists around who might earn a Nobel in economics for such a contribution.)

    But I can see the “trick” of it all would be implementing such new form of economy. One can already hear the cries for return to the “good ole days” when the rich were rich and the poor were poor and each one knew his/her place.

    But perhaps with enough “push” from the worry about fossil fuels and global warming, even one or two individuals in economics will become interested so that they might manage to implement a change – perhaps slowly, but, hopefully, steadily to minimize the “hurt” on everybody involved. MCS

    Comment by Mary S. — May 4, 2014 @ 1:58 pm

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