The Ecological Poverty of Liberal Economics

17/09/12 0 COMMENTS

For most of us, design is invisible. Until it fails.

- Bruce Mau, 2003[1]

 Co-Author: Janet Razbadouski, First published on ZNet on August 12, 2012.

Never underestimate the propensity of sharp progressive minds to dissociate from the leading issue of “our or any time”[2] – the ecological crisis. Look, for example, at liberal economist Josh Bivens’ well-crafted study Failure By Design: The Story of America’s Broken Economy (2011). Building on decades of research by the top-drawer liberal think tank The Economic Policy Institute (EPI), the EPI-affiliated Bivens deftly analyzes a wealth of economic data to diagnose what went wrong with the U.S. economy over the last thirty plus years. 

Blaming Simple Fate Absolves Those in Power 

His thesis is simple but compelling. Call it an argument for negative anthropogenic economic change. It holds that American economic growth since the late 1970s has been slow and unequally distributed thanks to a number of regressive policy choices that have served the rich and powerful at the expense of ordinary working people and nearly everyone else. The problem has not been that that “the economy” has been broken by the supposed invisible hand of the market or other forces allegedly beyond the species’ control. The real difficulty is that the “human-made” U.S. economic system has been working precisely as designed to distribute wealth and power upward. This outcome has been achieved with the visible political hand of policy. Bivens particularly blames the following interrelated and not-so “public” policies across the neoliberal era: 

  • Letting the value of the minimum wage be eroded by inflation.
  • Slashing labor standards for overtime, safety, and health.
  • Tilting the laws governing union organizing and collective bargaining strongly in employers’ favor.
  • Weakening the social safety net.
  • Privatizing public services.
  • Accelerating the integration of the U.S. economy with the world economy without adequately protecting workers from global competition.
  • Shredding government oversight of international trade, currency, investment and lending.
  • Deregulating the financial sector and financial markets.
  • Privileging low inflation over full employment and abandoning the latter as a worthy goal of fiscal and economic policy. 

These policies increased poverty and suppressed wages at the bottom and concentrated wealth at the top. They culminated in the Great Recession, sparked by the bursting of a housing bubble that resulted from the de-regulation of the financial sector and the reliance of millions of Americans on artificially inflated real estate values and soaring household debt to compensate for poor earnings. Thanks to flat wages and weak social expenditures, the tepid expansion of the early 2000s (the weakest upward business cycle on record)[3] depended on an unsustainable upward climb of home prices. The epic collapse that followed generated millions of foreclosures and devastated savings and net worth across the working and middle classes. It brought an official unemployment rate that reached 10 percent (real unemployment went considerably higher) and the longest recession since before World War II. 

The crash was foreseen by many, including financial interests who failed to warn households on the dangers of taking out more debt to buy homes. It didn’t have to happen. As Bivens notes: 

‘Policy makers found plenty of resources to throw at tax cuts aimed disproportionately at corporations and the very rich and at wars abroad. And when partisan politics demanded it, resources were also found to enhance Medicare coverage by adding a prescription drug benefit – but only when bundled with flagrant giveaways to pharmaceutical companies and other corporations. If even a fraction of these resources had found their way into well-targeted interventions to boost the job market, the decade could have been very different, with wage growth supporting living standards instead of debt….’

But faster wage growth would have “threatened the only economic indicators that performed above-trend in the 2000s: growth in corporate profits.” And that was unacceptable to the corporate and financial elites who dominate policy by virtue of their wildly disproportionate wealth and power. 

The visible hand of neoliberal design still casts its shadow over the painfully slow, all-too jobless “recovery,” a reflection of the low demand that results from persistently flat wages and weak public expenditures. This is the long economic “rot” of regressive neoliberal policy – economic decay that caused and survived the Great Recession. 

Consistent with his argument for human and political agency, Bivens notes that these problems were predictable and in fact predicted at the time the neoliberal package was introduced. Smart observers knew that stagnation and crisis would be the unsurprising results of an economy tilted by regressive policy. Their predictions went unheard, however, thanks in part to corporate advertising, public relations, and propaganda: 

‘The economy that generated sub-par outcomes before the Great Recession and turned a housing bubble into an economic catastrophe was designed. It was designed, specifically, to guarantee that the powerful reaped a larger share of the rewards of overall economic growth…While it was designed to ensure that the already-rich claimed the lion’s share of future growth, it was marketed as guaranteeing a more efficient economy for all, so that even as the rich took a larger share, everybody would see rising living standards as economic growth accelerated.’[4] 

To illustrate his thesis, Bivens makes an analogy between the false notion that the Great Recession was the inexorable product of inviolable economic or market forces and the equally incorrect notion that the disastrous results of Hurricane Katrina reflected natural forces alone:   

‘…the scale of damage done by Katrina was not really about weather but rather the neglect of public goods and social institutions. The rain and wind didn’t manage to flood the city [of New Orleans] – the collapse of the levees protecting it did. The weather in the days before the storm didn’t prevent residents from evacuating – many people simply lacked the means or social networks that would have allowed them to leave as easily as those who could pay for a hotel room or call friends outside the city with extra rooms in their house….This mirrors important aspects of the Great Recession. Economic shocks happen – that will never change and is indeed ‘like the weather.’ But what determines how much suffering these shocks leave in their wake is driven by social and political choices about how the economy is managed…When policy makers failed to rein in a financial sector that was making bets on ever-rising [home] prices, it proved ruinous for the larger economy: poor policy choices amplified what should have been only short-lived over-exuberance among home-buyers and sellers into a full-blown economic crisis. In short, a key lesson to be taken from the aftermath of Katrina and the Great Recession is that blaming simple fate for what has happened absolves those in power far too easily. The scale of casualties of both disasters [was] determined largely by political choices, not by immutable acts of nature (emphasis added).’ [5] 

Naturally enough, Bivens concludes with a call for progressive policy remedies to reverse the regressive drift, “provide faster growth in the living standards of typical American families,” and “provide a more stable economy that is less prone to spectacular crack-ups like the Great Recession.” He advocates an appropriately updated, inflation-adjusted minimum wage, union-friendly labor law reform, guaranteed pensions and health care, globalization protections, re-regulation of the financial sector, ambitious infrastructural investments, the re-enshrining of full employment as a legitimate policy goal, and public action to shrink “troubling racial gaps in employment, wages, and net worth.” [6] 

State Policy for Whom? The Anti-Government Myth 

If human-made economic policy can be designed and implemented to serve the Few, it can also be designed and implemented to serve the Many. This might seem an elementary assertion, but it is a remarkably difficult point to advance through the fog of neoliberalism’s grip on economic discourse. Over the last generation, the dominant U.S. economic ideology has set up a fantasy struggle between the allegedly evil and capricious state on one hand and the supposedly virtuous and inexorable “free market” on the other. At the radical extremes, the ideology’s proponents have proclaimed a desire to “starve the [government] beast” and “cut government down to the size where we can drown it in the bathtub” (Grover Norquist). Then the “invisible hand” of the market is free do its ultimately welcome and benevolent work, the theory goes. 

But neoliberalism’s bourgeois advocates have never really wished to free themselves or others from state policy. Beneath quasi-libertarian discourse about an epic conflict between “stultifying government” and the “free market,” neoliberalism’s corporate sponsors and beneficiaries have always sought to wield and profit from government policy of a particular sort. Reflecting their investment in a profits system that has always relied heavily on government protection and assistance, they have only targeted some parts of the public sector for malnourishment. They wish to de-fund and de-legitimize what the French sociologist Pierre Bourdieu called “the left hand of the state”: programs and services won by past popular struggles and movements for social justice, equality, and inclusion. They do not wish to axe the “right hand of the state”: the parts that provide service and subsidy (corporate welfare) to concentrated wealth and dole out punishment (including rampant mass incarceration and felony-marking) and repression to the poor and to anyone else among the rest who dares to resist. They do not wish to dismantle America’s military-industrial and imperial complex, a form of giant public transfer to the high-tech “private sector.” [7] 

Neoliberalism’s “anti-government” rhetoric has worked to hide the actual core policy question. During the last three and a half decades as through all of American history, the real issue is NOT whether government can or should “work.” It is rather the question of who government policy should work for: the public and the common good or the nation’s leading centers of wealth and power.  

Global Warming No Longer a Future or Distant Threat 

Speaking of human agency, politics, policy, “the weather,” and “acts of nature,” and predictability, we are struck by how neatly Bevins’ thesis fits the environmental crisis that lags far behind “the economy” as an American public and election-year concern. There should be no doubting the urgency of the crisis: catastrophic climate change and a related broader environmental apocalypse that threatens a decent livable future for human and other sentient beings. According to new research released last June by the science journal Nature, humanity is now facing an imminent threat of extinction – a threat caused by its reckless exploitation of the natural environment. The report reveals that our planet’s biosphere is steadily and ever more rapidly approaching a “tipping point,” meaning that all of the planet’s ecosystems are nearing sudden and irreversible change that will not be conducive to human life. “The data suggests that there will be a reduction in biodiversity and severe impacts on much of what we depend on to sustain our quality of life, including… fisheries, agriculture, forest products and clean water. This could happen within just a few generations,” wrote lead author Anthony Barnosky, a professor of integrative biology at the University of California-Berkeley. “My colleagues who study climate-induced changes through the Earth’s history are more than pretty worried,” co-researcher Arne Mooers, a professor of biodiversity at Simon Fraser University in British Columbia, said in a statement. “In fact, some are terrified.”[8] 

The leading though hardly the sole ecological threat is climate change. Behind record-setting heat levels over recent years – we write in the hottest year yet amidst yet another hottest summer ever, after yet another of the warmest springs and warmest winters on record – the great northern ice sheet is withering ominously. The melting of Arctic ice replaces a shiny white mirror that reflects the sun’s rays back to space “with a dull blue ocean that absorbs most of those rays.” Inland glaciers and snow-packs in the Himalayas, Andes, Sierras, and Rockies are retreating, threatening local and global water and food supplies. They are “melting very fast,” the ecological writer and activist Bill McKibben noted two years ago in his chilling book Eaarth: Making Life on a Tough New Planet, “and within decades the supply of water to the billions of people living downstream may dwindle” [9] The thawing out of artic tundra and icy ocean clathrates releases massive quantities of methane, a major heat-trapping and climate warning gas. Melting northern peat moss releases carbon in large amounts. Scientists have recently reported that northern marshes and ponds are staying unfrozen over the winter because methane is gurgling up from below. 

Global warming “is no longer a philosophical threat, no longer a future threat, no longer a threat at all. It’s our reality…already wrecking thousands of lives daily.”[10] The 20th century’s last two decades were the hottest in 400 years and likely the warmest for several millennia. Twelve of the last 13 years are among the 13 warmest since 1850. The American State Department’s chief scientist has projected famines related to climate change serious enough to affect a billion people in coming decades. 

The worst consequences are being felt with special pain in the “developing” world, where masses of people are most vulnerable to escalating disease, food shortages, flooding, extreme weather, and other environmental disasters. But the costs of climate-related eco-trastrophe and the related exhaustion of global fossil fuel resources have already been heavily felt in the rich world, contributing to human disasters like Hurricane Katrina (2005) and a 2003 heat wave that killed hundreds in Europe and forcing vastly expensive infrastructure investments (e.g. giant dike improvements and other upgrades in the Netherlands and Venice) and other costs in the wealthy nations. Climate-related brush and forest fires have displaced many thousands of homeowners and apartment dwellers and killed hundreds across the rich world. New York City is already spending millions in anticipation of rising ocean levels. According to a study commissioned from the Harvard’s Center for Health and the Global Environment by Swiss Re (the world’s biggest insurance firm) seven years ago, likely near-term climate change will create an increasing number of storms and other disturbances that will, in McKibben’s words in 2010, “overwhelm the adaptive capacities of even developed nations; large areas and sectors [will] become uninsurable; major investments [will] crash; and markets [will] crash….In effect, parts of the developed world would experience developing nation conditions for prolonged periods as a result of the natural catastrophes and increased vulnerability due to the abbreviated return times of extreme events.”[11] 

The evidence of change and peril has only deepened in the last two years. We have experienced record-setting summer heat waves in 2011 and 2012, record snowfalls in 2010 and 2011, epic droughts (Oklahoma and Texas in 2011 and the entire Midwest and much of the nation in 2012), increased numbers and intensity of tornadoes, a remarkable straight line windstorm (a “derecho”) that wreaked havoc from Illinois to the eastern seaboard and an epidemic and drought- and heat-related western wildfires this summer. No less 222,356 daily high temperature records were set across the country by early July, when New York Times columnist Timothy Egan wrote the following in an essay titled “The Fires This Time”:

‘The pines flame and hiss, shooting sparks on the house next door, a fortress no more. The oaks tumble and crush roofs. Almost 350 homes burn to the ground, and nearly 5 million people lose all electricity in sweltering heat….So it went the first 10 days of summer, another extraordinary chapter in a weather year of living dangerously. At one point, 113 million Americans were under an extreme heat advisory. It was 109 degrees in Nashville, 104 in Washington, D.C., and much of the West was aflame…In the West…the fire danger will only grow, as 40 million acres of ghost forests — standing trees killed by an epidemic of bark beetles that metastasize in warmer winters — are ready to burn…Summer is barely two weeks old and two-thirds of the country is in the grip of a severe drought. More crops will die. More forests will burn….It sounds biblical…’[12]

Given the dramatically altered weather and the spate of climate- and extreme weather-related disasters in the U.S. over recent years, it is unsurprising that a rising majority of Americans see global warming as a reality, as the reason for “the crazy weather,” and as a relevant negative factor in their own lives – not just something “about polar bears or maybe Bangladesh.”[13] As sociologist Eric Klinenberg recently noted in the Times, “Americans, long cynical about global warming, are confronting the facts.” Klinenberg cites a July 2012 University of Texas survey showing that 70 percent of Americans now think the climate is changing, up 5 points from last March. More than half (53 percent) of Republicans now agree, as do 87 percent of Democrats and 72 percent of Independents.[14] 

A Predicted Result of Human Hands  

Why is climate change happening? The propaganda and public relations arms of the corporate carbon industrial complex has long insisted that global warming is a reflection of unalterable natural forces that operate independently of human control. But the preponderant majority of the climate-sentient world agrees with the overwhelming consensus finding of contemporary earth scientists that global warming is anthropogenic (“human made”) – that it reflects the visible hand of human practice, politics, and policy. It knows that the story of the world’s broken ecology is about the human release of greenhouse gases resulting from the uncontrolled extraction and use of carbon-based fossil fuels.[15] Reflecting its duty to provide its elite readers with reasonably candid and accurate information, even the neoliberal, arch-capitalist Anglo-American Economist magazine acknowledges the dominant role of human agency in a recent special supplemental report on “The Vanishing North.” According to The Economist, “The shrinkage of the sea ice is no less a result of human hands than the ploughing of the prairies. The cause is global pollution, and the risks it carries are likewise global. The Arctic, no longer distant or inviolable, has emerged, almost overnight, as a powerful symbol of the age of man.”[16] 

So contemporary weather is itself unlike “the weather” understood merely as a reflection of “immutable forces of nature.” Along with much more that has undergone perilous alteration in the natural environment, it also if more controversially reflects human design. 

And just as the slowed and unjust economic growth of the last 30-plus years and the Great Recession were both predictable and predicted by smart economists and others, smart scientists have been predicting global warming – as the clear “greenhouse effect” consequence of excessive carbon emissions – for some time. The current environmental crisis was foreseen by astute environmental thinkers around the same time that progressive economists and others were predicting that the neoliberal shift in U.S. politics and policy would produce economic disaster. The environmentalists saw a deep underlying, human-made ecological rot leading to a spectacular environmental crack-up in the not-so-distant future.[17] 

Another parallel with Bivens’ analysis is that the human designs, actions and policies that created this rot and collapse have been marketed under the false pretence of concern for the public good. Environmental polluters have long engaged in deceptive public relations claiming that their ecologically destructive practices are beneficial to humanity, most commonly in terms of increased employment, consumption, and convenience of life. The marketing claims include the assertion that themselves are environmentally progressive friends of the Earth. “Greenwashing” is a major and ongoing corporate advertising undertaking 

Neoliberal Policy Overlap  

“Okay fine,” one might say: “very interesting. Analogies and parallels are nice but what does any of this have to do with Bivens’ book and thesis in a way that is relevant to an ecological critique of liberal economics?” 

Let us count the ways – five by our measure. First, we observe a more than merely coincidental policy overlap when it comes to understanding the human and political agency behind the latest and ongoing economic crisis and the deepening ecological crises. To be sure, the environmental catastrophe has been more than 150 years in the human making. Still, the refusal of U.S. and Western policymakers to act on environmentalists’ dire warnings in the 1970s – something that would likely have averted our current passage into the ecological “tipping point” – is intimately related to the neoliberal mindset that overtook Western economic policy (and politics and culture) by the end of that decade. A critical link between the realms of economic policy and environmental policy was the new faith in “Deregulation – the relentless [if disingenuous – see above] notion that government was the problem and that freed from its strictures the economy would grow” (McKibben).[18] 

The same elite world view that fed the privatization of social services, the rollback of social protections and minimum wages, and the deregulation of trade and finance has also worked to undo and pre-empt meaningful government policies to protect livable ecology. This was captured nicely three years ago in a New York Times column by Bivens’ fellow liberal economist Paul Krugman. “In a rational world,” Krugman noted in September of 2009, “the looming climate disaster would be our dominant political and policy concern. But it manifestly isn’t,” Krugman noted, because “responding to climate change with the vigor that the threat deserves would…hurt some powerful vested interests” with “armies of lobbyists” and violate the “dominant political ideology in America” that “has extolled private enterprise and denigrated government.” [19] 

That ideology is partly responsible, we think, for a curious conjuncture this last Fourth of July. On one hand, numerous reporters and bloggers commented ironically on the fact that most of the American flags flown and most of the fireworks purchased for the nation’s “Independence Day” were made in China – a reflection of capital’s unregulated flight from the U.S. to the low wage “communist” country. On the other hand, fireworks were cancelled and prohibited throughout much of the nation because of the heat waves and drought resulting from the environmental de-regulation linked to an economic world view that justifies the relentless out-sourcing of U.S. manufacturing. 

Profiteers of Subsidized Pollution 

Second, one of the human policy “choices” that has produced the dangerous over-concentration of wealth and power that Bivens deplores for sound economic, moral and political reasons is environmental non- and de-regulation. Both before and since the onset of the neoliberal era, corporations and their financiers have reaped a massive profits windfall from their all-too-unfettered capacity to pollute, pillage, and otherwise exploit the natural environment. 

It’s worse than just non- and de-regulation, of course. Also problematic are the widespread subsidies that local, state, and federal .government grant to corporate polluters. The destroyers of the Earth have received untold trillions of taxpayer dollars in corporate welfare[20] – subsidies, tax-breaks, and much more – by the “public sector.” 

The environmental and related social opportunity price has been born by society at large and most especially by those without great wealth and the influence that goes along with riches.[21].It what the economics textbooks calls “externalization of costs,” as if big business’ contamination of our air, water, bodies, and climate have been inflicted on some distant, other world or galaxy. 

The Growth Ideology  

Third, deepening economic inequality is intimately linked to the exploitation and pollution of the natural environment in a more subtle but no less important way. The holy grail of “growth” has long been western capitalism’s false and environmentally lethal “solution” for the inequality that capitalism creates. “A rising tide lifts all boats,” the conventional western growth ideology proclaims, supposedly rendering irrelevant popular anger over the fact that an opulent minority sails in luxurious yachts while millions struggle on rickety dinghies and leaking rowboats. As the liberal economist Henry Wallich explained in 1972, “Growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable.” 

As Le Monde’s ecological editor Herve Kempf noted five years ago, “the oligarchy” sees the pursuit of material growth as “the solution to the social crisis,” the “sole means of fighting poverty and unemployment,” and the “only means of getting societies to accept extreme inequalities without questioning them….Growth,” Kempf explainsed, “would allow the overall level of wealth to arise and consequently improve the lot of the poor without – and this part is never spelled out [by the economic elite] – by any need to modify the distribution of wealth.” [22]

“Governments love growth,” British environmental writer and activist George Monbiot noted in the fall of 2007, “because it excuses them from dealing with inequality…. Growth is a political sedative, snuffing out protest, permitting governments to avoid confrontation with the rich, preventing the construction of a just and sustainable economy.” [23]

When growth stops, William Grieder notes, “the political system loses its cover. The safety valve is off. The comforting mythology about growth loses its power to distract the public from anger and to discourage critical inquiry into how the system actually functions.” [24]

 The pressure on business and political elites to keep the safety valve on comes at an unsustainable price, setting up a devil’s choice between jobs and income for proletarianized masses on one hand and livable ecology for humanity (and other living things) on the other. The wealthy Few’s reliance on growth to cloak inequality and keep dangerous “populist” sentiments at bay is at the heart of How, to use the title of Kempf’s most recent book, The Rich Are Destroying the Earth

The Rot Beneath “The Golden Age” 

Fourth, Bivens himself gets caught up to some degree in the environmentally lethal growth addiction. Along with the rest of EPI and many other liberal economists, he argues that polices designed to more equitably distribute wealth and income would provide a basis for more durable and larger-scale economic growth. The great historical example cited by Bivens and other liberal-progressive neo-Keynesian economists (most notably Paul Krugman[25]) on behalf of this connection is of course the long and largely uninterrupted “golden age” expansion of the U.S. and Western economies between 1947 and 1973. Thanks to the more social democratic and business-regulatory policies of those years, Bivens argues, “economic growth was both rapid and distributed equally across income classes. The poorest 20% of families saw growth at least as rapid as the richest 20% of families, and everybody in-between experienced similar rates of living standards’ growth.” The rising tide lifted all boats – equally

That’s all true enough, and something that created historically remarkable employment levels and wages for many millions of rich-state inhabitants. But we are uncomfortable with the use of the “golden age” as anything remotely like a design model for future policy two reasons. First, the remarkable and comparatively broadly shared (if still highly unequal[26]) rich-state expansion and prosperity of the post-WWII period was an anomaly within the broader regressive history of capitalism. It reflected a very distinctive conjuncture of trends and events – including an astonishing destruction of nations, people, and means of production between 1939 and 1945 – that could and should never be repeated.[27] 

Second, and more important for the purposes of this essay, the terrible fact remains that that tremendous and more evenly distributed growth of the post-WWII American and global economy accelerated pollution, natural resource over-use, climate change and broad environmental decline to the point where serious investigators began to warn of an ecological crisis on the not-so-distant horizon. There was grave environmental peril looming beneath “the golden age” that finds such favor among liberal critics of the neoliberal turn. The danger was grasped by (among others) a group of European industrialists and scientists who met in Italy during the late 1960s and called themselves the Club of Rome. They commissioned an exhaustive report from Massachusetts Institute of Technology system analysts. The resulting study, a slim book titled The Limits to Growth, published in 1972 (on the eve of the collapse of the postwar boom and at the dawn of the neoliberal era) prophesized catastrophe as economic expansion exhausted the environment’s capacity to sustain decent life “sometime within the next 100 years.”[28]

As “golden age” prosperity peaked, the radical ecologist Barry Commoner was penning The Closing Circle: Nature, Man, and Technology – a widely read 1971 book warning that humanity was already in an environmental crisis. “If there is one book that the next President of the United States had time to read,” William Shannon pronounced in the New York Times, “The Closing Circle should be that book.”[29]

The warnings of the Club of Rome, Commoner and other environmental critics from the late “golden age” time have been so richly validated[30] that it is irresponsible to talk anymore about any kind of growth – even the more equitable sort that Bivens, Krugman, and other liberal economists advocate – without also and at the same calling for new ecologically sustainable models of development. Policies designed to reduce inequality and poverty obviously belong at the heart of any worthy progressive alternative to the current neoliberal regime. At the same time, however, we should heed the leading American left intellectual Noam Chomsky’s warning last year. “If the [environmental] catastrophe isn’t…averted,” Chomsky argued last year, in a widely read speech to Occupy Boston, “[then] in a generation or two, everything else we’re talking about won’t matter.”[31] What good is it to inherit a toxic Earth from the wealthy few? What’s the point of more equally sharing out a poisoned pie? Who wants to turn the world upside down to find that it is irredeemably riddled with disease and decay?

 No Alien Invasions (or George Jetsons) Required 

Last but not at least, we are convinced that the struggle to save and preserve livable ecology is a big and essential part of the answer to the question of how to design a governmental and infrastructural stimulus of the sort that Bivens and other liberals advocate. And here we confront the droll, tongue-in-cheek reflections of contemporary U.S. liberalism’s most well-known liberal economist – the Nobel Prize-winning Krugman, also an influential columnist at the New York Times. According to a Huffington Post report earlier this year: 

‘Paul Krugman proposes an interesting idea for wresting the country from economic doldrums: boosting spending as if aliens were a threat….Krugman has a simple solution to America’s economic woes: Prepare for an alien invasion….Arguing that the United States successfully ended the Great Depression with government spending, he provided an interesting idea about how to replicate that economic feat on Tuesday at the Take Back the American Dream conference in Washington, D.C. ‘

‘ “If you actually look at what took us out of the Great Depression,” the Princeton University professor said in an interview with Chris Hayes of MSNBC. “It was Europe’s entry into World War II and the U.S. buildup that began in advance.”’

‘ “So if we could get something that could cause the government to say, ‘Oh, never mind those budget things; let’s just spend and do a bunch of stuff.’ So my fake threat from space aliens is the other route,” Krugman said before a laughing crowd. “I’ve been proposing that.” ’
’The Princeton professor and New York Times columnist is a well-known fan of science fiction, which might explain his imaginative plan to spur an economic recovery. Krugman has offered up his space alien proposal before. Last year he told CNN about a “Twilight Zone” episode in which “scientists fake an alien threat in order to achieve world peace.” He told CNN, “Well, this time … we need it in order to get some fiscal stimulus.” ’ [32]

We chuckled along with others the first time we read this story, but our amusement did not last long. It is disturbing that Krugman feels compelled to half-humorously concoct the fantastic and futuristic imagery of an Alien Space Invasion to make the case for replicating the governmental stimulus that World War II military spending provided to end the Great Depression. Science fiction metaphors do not seem necessary when it comes to finding good reasons to “just spend and do a bunch of stuff.” Home- and (to use Bivens’ phrase) human-made existential threats to survival seem sufficient to the stimulatory task. How about saving the planet for livable habitation? 

Happily enough, there’ a big Keynesian jobs and effective demand dividend to be garnered from a serious and substantive approach to the environmental crisis, including the climate catastrophe that Krugman says would be “the dominant political and policy concern” of “a rational world.” Tackling the Earth-bound threat of anthropogenic climate change and other environmental ills in a meaningful way means putting many millions of people to work to design, implement, coordinate and construct the environmental retro-fitting of economy and society – the ecological re-conversion of production, transportation, office space, homes, agriculture, and public space.

 What kind of work? To start, hundreds of thousands of “green collar jobs” involved in weatherizing and energy-retrofitting every building in the U.S. and overhauling the nation’s sprawling automobile-dependent transportation system. We must also replace our wasteful, toxic, and dangerous manufacturing and land-use practices with sustainable closed-loop industrial, agricultural, and mining processes that conserve water, energy, and natural resources. There will be plenty of work for college-educated engineers, architects and planners but even more work for people without college degrees. These include good-paying jobs for the skilled trades – electricians, pipe-fitters, carpenters, glaziers, and insulators – and construction laborers. Green jobs activist Van Jones describes the remarkable employment opportunities in his bestselling 2007 book The Green Collar Economy

‘When you think about the…green economy, don’t think of George Jetson with a jet pack. Think of Joe Sixpack with a hard hat and a lunch bucket, sleeves rolled up, going off to fix America. Think of Rosie the Riveter, manufacturing parts for hybrid buses or wind turbines…If we are going to beat global warming, we are going to have to weatherize millions of buildings. Install millions of solar panels, manufacture millions of wind turbine parts, plant and care for millions of trees, build millions of plug-in hybrid vehicles, and construct thousands of solar farms, wind farms, and wave farms. This will require…millions of jobs… And don’t think of green collar workers as laboring only in the energy sector…we will also need [well-paid] workers in a range of green industries: materials reuse and recycling, water management, local and organic food production, mass transportation and more.’ 

Critically important, much of the work involved in seriously “greening” economy and society can’t be out-sourced since, as Jones noted “it involves making over the sites where we work and live and altering how we move around. That sort of work is difficult or impossible to send abroad.” You can’t pick up an office building, send it to China to have solar panels installed, and have it shipped back.[33] 

It isn’t just the interrelated economic problems of under-employment, poverty, globalization, and weak demand that would be alleviated by a major public investment in environmental conversion. As demand goes up for labor thanks to a boom of green collar jobs, workers’ rights and union power will improve. The vicious circle of arrest, felony-branding, and incarceration recedes as millions of inner city and suburban ring blacks and Latinos and rural whites are employed in the ecological retrofitting of ghettoes and barrios and the broader society. Former prison guards and ex-cops join ex-auto-workers in the making and maintenance of local, regional and national high-speed solar- and wind-powered light rail systems and wind towers and wind turbines. The Pentagon’s global petroleum protection service loses some of its imperial sting as distant and declining oil and gas reserves cease to hold the keys to development. 

But above all there’s an added and superior benefit: people working together to save humanity from environmental self-destruction. Let us never forget Chomsky’s warning: everything else progressives are talking about – including the reduction of poverty and inequality – won’t matter if the accelerating drift into anthropogenic eco-cide isn’t halted.  

This warning seems unheard in Krugman’s latest book End This Depression Now (New York: WW Norton, 2012). The environmental crisis and the role that addressing it might play in economic policy and recovery is absent from his reflections in that volume. The climate problem does not even merit an index entry.

Too Little, Too Late

Krugman is not the only widely read and esteemed liberal economist who seems oddly indifferent to the combined stimulus and Earth-savings potential of a green jobs and infrastructure program. The ecological crisis is essentially non-existent in the liberal British economist Ha Joon Chang’s bestselling critique of neoliberal economics 23 Things They Don’t Tell You About Capitalism (New York: Bloomsbury, 2011)[34] – a book dedicated largely to the restoration of growth through policies that distribute wealth and income more equitably. 

The Nobel Prize-winning liberal economist Joseph Stiglitz might be expected to be something of an exception. Speaking on the left news show “Democracy Now” more than two years ago, Stiglitz told Amy Goodman of his disappointment with the failure of the December 2009 Copenhagen climate summit to “rais[e]…the price of carbon…If we had succeeded in doing that,” Stiglitz argued, “that would have provided a market signal. It would have told firms, you have to invest to reduce your carbon emissions. There would have been this retrofitting of the global economy to meet the needs of global warming. That would have stimulated an enormous level of investment and stimulated a lot of spending. And that would have been the critical thing that could have gotten us out of the current Great Recession.”[35]

It was an interesting argument but one that lacked an appropriate sense of environmental urgency. We cannot wait for indirect policy- created “market signals” to undertake the desperately required ecological conversion. It was good to hear Stiglitz speaking of environmentally “retrofitting…the global economy” and to connect that to economic recovery. But in an interview on the “Tavis Smiley Show” last June, Stiglitz had nothing to say about ecology or climate when asked to suggest some of the areas in which he’d like to see government invest to stimulate the economy.[36] In a similar vein, his new book The Price of Inequality: How Today’s Divided Society Endangers Our Future (2012) treats ecology as a largely secondary consideration. His concluding plan for recovery and enhanced economic equity contain only some brief calls for tax credits for “investments that save [natural] resources and preserve jobs” and for “forcing firms to pay for their full environmental damage.” [37] Like Krugman’s latest volume, Stiglitz’s most recent tome contains no index entries for “climate” or “green jobs.”

This lack of attention to the leading issue “of our or any time” does not befit the status accorded these two heralded “men of the left.”

The last two pages of Bivens’ Failure by Design contain an interesting, ecologically welcome recommendation. “Ambitious investments – many public – should be made in the country’s infrastructure, especially for education and meeting the needs of a greener economy,” Bivens writes. This very brief statement strikes us as understated and as far too little and too late. What exactly are “the needs of a greener economy?” That seems a rather weak and dissociated reference to the real problem: the pressing need of humanity to develop a radically new relationship with Nature and an intimately related re-structuring of relations between and among people – to overcome what the eco-Marxists John Bellamy Foster, Brett Clark, and Richard York call “the social rift” that “lies beneath…the ecological rift.”[38]

 The Obvious Analogy, The Obvious Demand 

A positive historical analogy is staring us in the face. Consistent with Van Jones’ reference to “Rosie the Riveter,” it is – yes, professor Krugman – World War II, when the United States, still reeling from the Great Depression, taxed its rich like never before, reconverted its economy, and put millions to socially useful work producing what the country and the world needed at the time: weapons and other goods to defeat fascism. Chomsky put things rather well two years ago in our estimation: 

‘It is finally dawning on the last holdouts in the business sector that the growing environmental crisis is severe…Even the Wall Street Journal, one of the most stalwart deniers, ran a supplement with dire warnings about the “climate disaster,’ urging that none of the options being considered may be sufficient and that it may be necessary to undertake more radical measures of geo-engineering, “cooling the planet” in some fashion. Many also understand that it will be necessary to reverse the vast state-corporate-social engineering programs since World War II, designed to promote an energy-wasting and environmentally destructive fossil fuel-based economy….Surely the US manufacturing industries could be reconstructed to produce what the country needs, using its highly skilled work force–and what the world needs, and soon, if we are to have some hope of averting major catastrophe. It has been done before, after all. During World War II, industry was converted to wartime production and the semi-command economy….ended the Depression.’[39] 

Crippled now by another systemic depression, the first true crisis of capitalism in its neoliberal phase,[40]America can and must do it again. We can and must re-convert our entire economy, including but hardly limited to manufacturing. We can and must reorient our society to produce what the country and the world needs: a sweeping ecological re-conversion. There is, to repeat, no mythical extraterrestrial menace required. “Spaceship Earth” presents its own social and ecological justifications for massive green public works programs and investments. 

The “good war” analogy comes, we think, with a very basic demand that progressive activists should put at the heart and soul of popular movements in the current period of massive and interrelated inequality, structural unemployment, and eco-cide. The demand, informed by rage over the scandalous absurdity of mass unemployment in a world of hugely unmet social need, and by anger and fear over the imminent capitalist extermination of our and other species, is the right to socially useful and environmentally necessary work. The policy expression of the demand is to tax the rich with extreme prejudice to pay for giant, many-sided public works programs dedicated to the ecological retrofitting of the American and global economy along post-carbon, post-nuclear, and post eco-cidal lines. 

Red and Green

Can this retro-fitting be carried out under the profits system? Not likely. The ruination of livable ecology seems to be an institutional imperative for the capitalist elite, which spends untold billions of dollars on a propaganda war against modern science’s consensus findings on the existence and causes of climate change. The same systemic imperatives that drive capitalism into recurrent cycles of boom and bust turn it into a machine of ecological extermination.

Full anthropogenic truth deeply told, both economic inequality and the ecological crisis are ultimately rooted in the human-made, class-based, and 500-year old social system called capitalism. With its inherent privileging of private profit and exchange value over the common good and social use value, its intrinsic insistence on private management, its inbuilt privileging of the short-term bottom line over the long-term fate of the species, its deep sunk-cost investment in the old carbon-addicted way of life and death, its attachment to the division of the world into competing nations and empires that are incapable of common action for collective human good, and its competitive reliance on constant expansion and accumulation, [41] capitalism is a great generator both of savage inequality and environmental ruin. Thus, it would appear that saving ourselves from ecological devastation poses what Dr. Martin Luther King Jr. referred to in 1968 as “the real question to be faced…the radical reconstruction of society itself.”[42] To prioritize ecology and green issues is not to demote or delay the left and “red” project. It means rather the elevation and escalation of that project, with a major green turn.

Still, there is no reason to delay starting on the path towards environmental healing where we are, in the present moment, living under capitalism. Perhaps we and other radicals are mistaken to doubt that ecological salvation can occur under the profits system. We would be happy to be proven wrong since there’s not much appetizing about the egalitarian distribution and management of a polluted pie. If we are right to posit capitalism’s ultimate incompatibility with livable ecology, moreover, then that too is a case that will have to be proved to awakened and mobilized citizens and there is no such proving without the development of a movement for combined social and ecological change as such. Along the way, radicals would do well also to heed Kempf’s warning half a decade ago: “the left will be reborn by uniting the causes of inequality and the environment – or, unfit, it will disappear in the general disorder that will sweep it and everything else away.”[43] 

Paul Street is the author of numerous books, including most recently, The Empire’s New Clothes: Barack Obama in the Real World of Power (2010) and (co-authored with Anthony DiMaggio) Crashing the Tea Party (2011).

 Janet Razbadouski is a public sector energy efficiency and sustainability expert in Iowa.

[1] Bruce Mau, Massive Change (London: Phaidon, 2003, 3), cited in Stephen Graham, Cities Under Siege: The New Military Urbanism (London: Verso, 2011, 263. 

[2] To quote the radical philosopher John Sanbonmatsu from a private communication last year. 

[3] “Typical family incomes expanded by less than half a percent between 2000 and 2007 – only about one tenth as fast as the next worst business cycle on record.” Josh Bivens, Failure By Design: The Story of America’s Broken Economy (Ithaca, NY: Cornell University Press, 2011). 

[4] Bivens, Failure By Design, 9. 

[5] Bivens, Failure by Design, 7. 

[6] Bivens, Failure by Design, 95-97. 

[7] Pierre Bourdieu, Acts of Resistance (New York, NY: Free Press, 1998), 2, 24-44; John Pilger, The New Rulers of the World (London: Verso, 2002), 5, 116; Paul Street, Empire and Inequality: America and the World Since 9/11 (Boulder, CO: Paradigm Publishers, 2004), xiii-xiv. 

[8] Common Dreams Staff, “Earth Facing Imminent Environmental Tipping Point: Report,” Common Dreams (June 7, 2012) at https://www.commondreams.org/headline/2012/06/07-3. On the current grave and deepening environmental crisis, see John Bellamy Foster, Brett Clark, and Richard York, The Ecological Rift: Capitalism’s War on the Planet (New York: Monthly Review, 2010); Massachusetts Institute of Technology, “Climate Change Odds Much Worse Than Thought: New Analysis Shows Warming Could Be Double Previous Estimates,” MIT News, May 19, 2009, at http://web.mit.edu/newsoffice/2009/roulette-0519.html#.; Bill McKibben, Eaarth: Making Life on a Tough New Planet (New York: Times Books, 2010); Mark Lynas, Six Degrees: Our Future on a Hotter Planet (London: Fourth Estate, 2007); Chris Williams, Ecology and Socialism: Solutions to Capitalist Ecological Crisis (Chicago: Haymarket, 2010); James Gustav Speth, The Bridge at the End of the World: Capitalism, The Environment, and Crossing from Crisis to Sustainability (New Haven, CT: Yale University Press, 2008), Herve Kempf, How the Rich Are Destroying the Earth (White River Junction, VT: Chelsea Green, 2007). 

[9] Bill McKibben, Eaarth: Making Life on a Tough New Planet (New York: Times Books, 2010), 45. 

[10] McKibben, Eaarth, xiii-xiv. 

[11] McKibben, Eaarth, 67. 

[12] Timothy Egan, “The Fires This Time,” New York Times, July 5, 2012. 

[13].According to New York Times correspondent Justin Gillis, reporting on two important polls carried out last spring, “Scientists may hesitate to link some of the weather extremes of recent years to global warming — but the public, it seems, is already there. A poll due for release on Wednesday shows that a large majority of Americans believe that this year’s unusually warm winter, last year’s blistering summer and some other weather disasters were probably made worse by global warming….The survey, the most detailed to date on the public response to weather extremes, comes atop other polling showing a recent uptick in concern about climate change. Read together, the polls suggest that direct experience of erratic weather may be convincing some people that the problem is no longer just a vague and distant threat. ‘Most people in the country are looking at everything that’s happened; it just seems to be one disaster after another after another,’ said Anthony A. Leiserowitz of Yale University, one of the researchers who commissioned the new poll. ‘People are starting to connect the dots..’ …. Dr. Leiserowitz said that recent events might be puncturing the public’s “very simplistic mental model of what global warming is supposed to be: “Past survey work had suggested, he said, that people tended to see the climate change problem as ‘distant in time and space — that this is an issue about polar bears or maybe Bangladesh, but not my community, not the United States, not my friends and family’ ” Justin Gill, “In Poll, Many Link Weather Extremes to Climate Change,” New York Times, April 17, 2012. 

[14] Eric Klinenberg, “Is it Hot Enough for Ya?” New York Times, August 5, 2012, Sunday Review section, 4. 

[15] Julie Ray and Anita Pugliese, “Worldwide, Blame for Climate Change Falls on Humans,” Gallup (April 22, 211) at http://www.gallup.com/poll/147242/worldwide-blame-climate-change-falls-humans.aspx  

[16] “The Vanishing North: What the Melting of the Arctic Means for Trade, Energy and the Environment,” The Economist, June 16, 2012. 

[17] McKibben, Eaarth, 90-99. Here is an interesting paragraph from the left biologist Barry Commoner’s widely read 1971 book The Closing Circle: Nature, Man, and Technology (New York: Bantam, 1971): “Thus, the higher the carbon dioxide concentration in the air, the larger the proportion of solar radiation that is retained by the earth as heat. This explains why on the early earth, when the carbon dioxide concentration was high, the average temperature of the earth approached the tropical. Then, as great masses of plants converted much of the carbon dioxide to vegetation – which became fossilized to coal, oil, and gas – the earth became cooler. Now that we have been burning these fossil fuels and reconverting them to carbon dioxide, the carbon dioxide concentration of the atmosphere has been rising; what effect this might be having on the earth’s temperature is now under intense scientific discussion [emphasis added].” Commoner, The Closing Circle, 27. 

[18] McKibben, Eaarth, 94. 

[19] Paul Krugman, “Cassandras of Climate,” New York Times, September 27, 2009. 

[20] Joseph E. Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York, W.W. Norton, 2011), 179, 180, 189, 367. 

[21] As Herve Kempf noted five years ago, “environmental destitution” is “the forgotten poverty.” “Poverty,” Kempf observed, “is linked to environmental degradation. The poor live in the most polluted areas, in proximity to industrial areas, close to transport lines, in neighborhoods poorly serviced in water supply or garbage collection, One way of apprehending poverty in other than monetary terms would thus be through a description of the environmental conditions of existence….it is the poor who primarily suffer the impact of the environmental crisis.” Herve Kempf, How the Rich Are Destroying the Earth (White River Junction, VT: Chelsea Green, 2007),41. 

[22] Kempf, How the Rich Are Destroying the Earth, 70, 73. 

[23] Wallich and Monbiot are quoted in William Greider, Come Home America: The Rise and Fall (and Redeeming Promise) of Our Country (New York: Rodale, 2009), 202. As a Federal Reserve governor, Wallich was defending western capitalism against ecological economists who warned about the environmental limits of unchecked growth. 

[24] Greider, Come Home America, 202. 

[25] See Paul Krugman, The Conscience of a Liberal (New York: W.W. Norton, 2007), 37-56. 

[26] Melvyn Dubofsky and Athan Theoharis, Imperial Democracy: The United States Since 1945 (Englewood Cliffs, NJ: Prentice-Hall, 1988), 59-82. 

[27] Useful reflections include Eric Hobsbawm, The Age of Extremes: A History of the World, 1914-1991 (New York: Pantheon, 1994), 257-286; Charles S. Maier, Among Empires: American Ascendancy and Its Predecessors (Cambridge University Press, 2006), chap.5. 

[28] McKibben, Eaarth, 92. 

[29] The quoted material is from the back cover of the second edition of The Closing Circle. 

[30] “And here’s a taunting add, circa 2002, from Exxon Mobil, which funded the fight against action on global warming: ‘In 1972, the Club of Rome published Limits to Growth, questioning the sustainability of economic and population growth…The Club of Growth was wrong.’…Not wrong, as it turned out. Just ahead of the curve. You can ignore environmental problems for a long time, but when they catch up to you, they catch up fast.” Mckibben, Eaarth, 95. 

[31] Noam Chomsky, “Plutonomy and the Precariat,” Huffington Post (May 8, 2012), read online at http://www.huffingtonpost.com/noam-chomsky/plutonomy-and-the-precari_b_1499246.html 

[32] http://www.huffingtonpost.com/2012/06/19/paul-krugman-alien-invasion_n_1609805.html 

[33] Van Jones, The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems (New York: Harper, 2009), 10-11. 

[34] For an ecology-informed Left critique of Chang’s widely read book, see Paul Street, “Some Big Things Ha Joon Chang Doesn’t Tell You About Capitalism,” Dissident Voice (June 14, 2011),.read at http://dissidentvoice.org/2011/06/some-big-things-ha-joon-chang-doesn%E2%80%99t-tell-you-about-capitalism/ 

[35] http://www.democracynow.org/2010/2/18/nobel_economist_joseph_stiglitz_on_obamas 

[36] http://www.pbs.org/wnet/tavissmiley/interviews/economist-joseph-stiglitz/ 

[37] Stiglitz, The Price of Inequality, 268-286. Quoted passages from 283.

[38] John Bellamy Foster, Brett Clark, and Richard York, The Ecological Rift: Capitalism’s War on the Earth (New York: Monthly Review, 2010), 164: “Overcoming the ecological rift (and the social rift that lies beneath it)…demands the transcendence of capitalism and the development of a genuine socialist alternative associated with substantive equality and socioeconomic-ecological planning.” 

[39] Noam Chomsky, Hopes and Prospects (Chicago: Haymarket, 2010), 96. It is clear that Chomsky does not wish to see the replication of the ecologically toxic form of growth that emerged after World War II. Chomsky, Hopes and Prospects, 95-97. 

[40] David McNally, Global Slump: The Economics and Politics of Crisis and Resistance (PM Press, 2011). 

[41] As the Marxist environmental John Bellamy Foster noted seventeen years ago, the profits system yokes humanity to the environmentally disastrous logic of “the global ‘treadmill of production.’” As Foster elaborated: “The logic of this treadmill can be broken down into six elements. First, built into this global system, and constituting its central rationale, is the increasing accumulation of wealth by a relatively small section of the population at the top of the social pyramid. Second, there is a long-term movement of workers away from self-employment and into wage jobs that are contingent on the continual expansion of production. Third, the competitive struggle between businesses necessitates on pain of extinction of the allocation of accumulated wealth to new, revolutionary technologies that serve to expand production. Fourth, wants are manufactured in a manner that creates an insatiable hunger for more. Fifth, government becomes increasingly responsible for promoting national economic development, while ensuring some degree of ‘social security’ for a least a portion of its citizens. Sixth, the dominant means of communication and education are part of the treadmill, serving to reinforce its priorities and values…A defining trait of the system is that it is a kind of giant squirrel cage. Everyone, or nearly everyone, is part of this treadmill and is unable or unwilling to get off. Investors and managers are driven by the need to accumulate wealth and to expand the scale of their operations in order to prosper within a globally competitive milieu. For the vast majority the commitment to the treadmill is more limited and indirect: they simply need to obtain jobs at livable wages. But to retain those jobs and to maintain a given standard of living in these circumstances it is necessary, like the Red Queen in Through the Looking Glass, to run faster and faster in order to stay in the same place.” John Bellamy Foster, “Global Ecology and the Common Good,” Monthly Review 46/9 (1995), 2. 

[42] Martin Luther King Jr, “A Testament of Hope” (1968), reproduced in Martin Luther King, Jr., A Testament of Hope: The Essential Writings and Speeches of Martin Luther King Jr. (San Francisco: HarperCollins, 1986), 315. 

[43] Kempf, How The Rich Are Destroying the Earth, 100. It isn’t just liberals who have tended to come up short on the ecology issue, of course. Putting aside the noxious eco-exterminism of the U.S. right (many in the “Tea Party” wing of the Republican Party think that global warming in an international socialist hoax meant to deny Americans of their God-iven right to extract and use as many raw materials as possible in as short a time as possible), Herve Kempf’s judgment five years ago remains all too germane today: “the left displays an almost cartoonish refusal to truly engross itself in environmental issues.” Kempf, How The Rich Are Destroying the Earth, 99.

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