Thursday, September 27, 2007

Reinventing the State Chapter 3: Liberal Environmentalism

Ed Randall writes a sound survey of some different strands of environmental thought, although it is a little difficult at times to see which he is advocating and which he is opposing. I think if I were writing a chapter like this I would be a little more polemical and I wouldn't necessarily credit many greens with the coherence that Randall does. I think for many greens, abstract questions of political philosophy should not stand in the way of whatever might work - that the debates between socialism, conservatism, liberalism, anarchism and so on have paled into insignificance in face of impending ecological catastrophe. But of course this seemingly eminently practical approach tends to encourage dirigiste thinking - which is a big mistake, IMHO, you do not make further progress by throwing away centuries of progress.

This said, there are some valuable questions and insights here and I will look at two of them.

Randall begins with JS Mill's prediction that economic advancement would end, but that this would not mean the end of improvement of the human condition. This obviously resembles the demand by many greens that economic growth should stop. I am more attracted to the point made by some greens and many economists that economic growth is just a statistic, and not nearly as informative a one as it might seem. With the relative decline of manufacturing, growth seems to suggest an increase in how much we value the things we do for each other. What could be more benign?

It is worth remembering that the the anti-growth position predates knowledge of global warming and was in fact driven by a concern that resources would run out. Now, if anything, we should hope that fossil fuels run out soon enough. The resource issue is, rightly, almost forgotten although a flavour of its rhetoric can be found in advocacy for recycling. But while economic growth might be a reasonable proxy for levels of resource use - if manufacturing were not in relative decline - it is obviously a terrible proxy for levels of carbon emissions. GDP is a statstic, aggregating many diverse activities. If some of those activities are a problem then aggregate them separately - don't try to manage them with the bluntest instrument imaginable.

Another theme Randall picks up is the possibility of expanding business goals to include a wider range of social, and in this case environmental goals, rather than simply focussing on the bottom line. On one level, this is pure apple pie, and nobody could possibly object. We read phrases such as "the war of money against life". "A Britain that is able to maintain a fiscal environment that is attractive to private equity firms should also be capable of developing tax policies that favour co-operators who work in businesses that make sustainability an integral part of their corporate culture and mission."

While I am clear that businesses doing this should be praised not mocked, I would like to refer to an earlier blog post of mine inspired by Adair Turner's book Just Capital which is highly skeptical of the power of this kind of stakeholderism to make much difference.

If we see the sustainable co-operators as the good guys, what could be more natural than changing the rules to favour those good guys? One thing: changing the rules to favour more sustainable behaviour by everybody. The good guys are those who will go the extra mile whatever the rules say. But you can't make people good like this with rules; a rule cannot say "do more than the rules demand". Furthermore, all these diverse goals aside from the bottom line are good intentions, not good actions. You can try to legislate for intentions, but you will fail. Read the other post for more on this point.

The corresponding chapter of the Orange Book sought to show that the environment can be protected in an economically liberal way and this chapter does the same job for social liberalism. There is of course no contradiction between these positions, and they might serve to reassure different people. This chapter is probably more significant because it attempts to engage with the bulk of the environmental movement which is to be found on the left.


Tom Papworth said...

I agree that the Greens are too keen to throw away progress – both material and political. Those (c.f. the comment
on one of my posts to which you have already responded) who believe that global warming is an inevitable consequence of economic growth are wrong and those who want to halt or reverse that growth are deluded.

I can’t agree that growth is just a statistic, however. It is true that growth statistics are not very useful, but there is no doubt that over time one can see that we live better lives as our economy expands (Layardian happiness research not withstanding). As for the shift from manufacturing to services, it may be a more benign form of growth but not all of it is pollution free: transport is a service industry, and one that is grown rapidly. The solution is more environmentally friendly transport, however, rather than less travel. This is the difference between the liberal belief that mankind can shape a better future and the Green nihilism that sees humanity as a negative influence upon the planet.

Interestingly, the argument often made that the UK (and others) concentrates on the “bottom line” to the detriment of everything else is pure guff. Taxes are inherently harmful to business and to economic growth, yet we tax profits and labour very heavily; this is because we put short-term welfare gains above long-term welfare gains. Similarly, we burden businesses with regulation because we consider other factors (notably but not solely environmental ones) to be of importance as well. As you know, I believe we over-regulate and over-tax, but neither I nor anyone I know suggests we should have no regulation and no tax; profit is only one driver in society.

Your point about setting rules for all rather than rewarding those who go the extra mile (or, presumably, one less mile) is well made. Rules need to be clear and apply equally to all. However, even more important is the point made about protecting the environment in a liberal way. One can attempt to save the planet by dictating to people how they lead their lives, or by factoring into the cost of what they do the environmental externalities (I used that expression on Friday and promptly lost my audience!). The former will inevitably lead to arbitrary decision making that will be partisan and will miss the target (e.g. penalising those who buy big cars even if they don’t drive them very much). The latter will enable government to reduce overall emissions, while allowing individuals to decide how much emitting is worth to them. That ensures that those who value emissions most can keep emitting, while those who value it less will emit less. Everybody is then free to pursue a better life but not at the expense of others.

Surely that’s a liberalism on which we can all agree!

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