Monday, August 09, 2010

Spirit Level: Christopher Snowdon's fundamental delusion

I am reading The Spirit Level Delusion  (TSLD), which is a critique of The Spirit Level. Wilkinson and Pickett (W&P) have responded to TSLD here (.pdf), but I will be responding to my reading in the next few blogs.

The author Christopher Snowdon is an historian, working with the Democracy Institute, which is associated with the right-wing Cato Institute, a libertarian free-market group who are man-made global warming sceptics.

I'm going to start in the middle of TSLD, with the chapter on economic growth. He attacks not just Wilkinson and Pickett (W&P), authors of the Spirit Level, but also books by Oliver James (Affluenza) Naomi Klein, Richard Layard, Michael Marmot and Neal Lawson.

Snowdon's basic position is to criticise their position on consumerism, arguing that to try to reduce people's level of consumption is (a) anti-freedom and (b) politically impossible. He presents anti-consumerism as hypocritical and envy-driven, suggesting that its motivation is simply the desire for a Big Government and Big State, and taxation for its own sake.

Remarkably, Snowdon makes no mention of the root problem of perpetual economic growth as a precondition of economic prosperity. So let's state it clearly and unambiguously in terms of two self-evident truths:
  1. It is impossible to expand forever into a finite space
  2. It is impossible to take forever from a finite resource.
The dogma of the necessity and rightness of perpetual economic growth violates these two axioms. Greens have been saying this for some 40 years, and have been rewarded with either ignoral or general derision from orthodox commentators, although recently, two respected economists have murmured that humanity should start reconsidering the logic of perpetual economic growth. 

The doctrine of economic growth is relatively recent, as shown by Richard Douthwaite in The Growth  Illusion.  It should be noted that continual growth is also required to sustain a Ponzi Scheme.

To be precise, it is the growth in throughput of materials that is impossible - the economic hardware, as it were. A perpetual growth in economic software, such as knowledge, ideas, and culture is theortically possible in a finite planet, and at present we are in the happy position of being able to use Green Growth as a means of making a transition from the present unsustainable economy to the truly steady state economy that is the only reasonable objective of economics.

The modern economy is a linear process that hoovers up materials, fashions them into consumables, then spits them out as waste. We mine metals, minerals, and fossil fuels, use them for a short time and then emit mountains of plastic, metals and toxic compounds. This is stupid enough, but the crowning glory of our folly is to destroy intrinsically renewable resources, such as fisheries, forests and soil. Forty years of study have detailed our actions in destroying the biological systems which sustain our present way of life, and I do not need to review the depressing facts here. We only need to note that free market fundamentalists (FMFs) (aka neo-liberals - a term that some may consider unfair to liberty) in general, and Snowdon in particular simply turn a blind eye to these facts. They are mere market externalities  - "A consequence of an economic activity that is experienced by unrelated third parties."   - to FMFs.

It is this huge, all encompassing blindness to the real world beyond the narrow consideration of the "Market" that underlies the clash between the FMFs  and the new economics, the emerging way of looking at economics that is known by many names: new, green, ecological and even post-autistic.

FMF is an idealism, a pure, fact-free thought construct that insists that happiness can come only if the market is left alone, free of regulation and free of any information about negative externalities. Is there any wonder that it clashes with the new green economics that begins with consideration of the living biological system that provides our water, food, shelter, energy and absorbs (or not, as the case may be) our wastes?

Snowdon is totally and absolutely wrong to ignore the realities that lie behind the critique of economic growth. 

Having said that, some of his criticisms of W&P's are interesting, and add to our fuller understanding of the impact of economics on human societal and individual well-being, as later entries on this blog will detail.


Tim Worstall said...

"To be precise, it is the growth in throughput of materials that is impossible - the economic hardware, as it were. A perpetual growth in economic software, such as knowledge, ideas, and culture is theortically possible in a finite planet,"

Nearly but not quite.

Economic production is defined by GDP...which is "the value of all goods and services produced as measured by market prices".

You're right that we cannot use more copper atoms than there are copper atoms on the planet. But that doesn't say anything at all about whether we can increase the value we add to those atoms we do use.

We can indeed have continual economic growth while still having a finite physical world: precisely because value is subjective, not a function of the physcial world, and we can continue to increase that.

DocRichard said...

Hello Tim

Interesting. I could have completed the matter of throughput by adding "The sustainable (=steady state) economy will be cyclical, not linear, with a manufacture/use/repair/reuse/recycle pattern. Sadly, there will still be an unsustainable element to this, because of inefficiencies and losses from the system.

By "adding value", I immediately read green taxation that adds value to mined materials so that recycling becomes more profitable. However, I would be surprised if that is what you have in mind. If it is, this would be a great cause for celebration as an agreement between the Green Party and UKIP.

Or did you mean that as copper becomes increasingly scarce, the market itself will drive up the price?

Your last paragraph suggests some form of value inflation to me, but if your happiness is absolutely wedded to economic growth, I can live with ever increasing GDP so long as it is virtual growth, in subjective qualities, and puts an end to our raiding and intoxication of our life support system.

Gwenhwyfaer said...

"We can indeed have continual economic growth while still having a finite physical world: precisely because value is subjective, not a function of the physcial world, and we can continue to increase that."

Value isn't just "subjective", though, is it? Implicit in subjectivity is that it's relative. It's all a great big circle jerk. You essentially admit that the only way we can have perpetual economic growth is to disconnect it from any absolute measure of value... at which point, since we're no longer talking about objective reality, we can make our value graphs look like little chewy spirals if we define value in an amenable way.

And yet in itself, that's fine. The problem with market fundies is that they then superimpose this relative (illusory) value back onto the world as though it has any absolute meaning, and then claim "look! we can have real growth forever! our resources are eternal!" Er - no, they're not. Indeed, the very fact that finite resources have to be shared amongst a few million more people every day will mean that their relative value will necessarily increase; that doesn't mean there are more of them, of course!

Sarah Murison said...

I would add to your list of emerging ways of looking at economics, the Human Development Report, which seeks to measure and track improvements (or otherwise) in human well-being, in a number of areas, in addition to traditional economic measures which, while important in some respects, give only limited indication of actual quality of life.

DocRichard said...

Thanks Sarah. The UN Report is here: and it's very important. If you cannot measure something, you cannot manage it.

Thanks Gwenhwyfaer too. Though I am not familiar of the concept of a "circle jerk" it seems that Tim is so wedded to the idea of everlasting economic growth that he could accept a steady state economy so long as it can be *said* to be growing. Which is fine.

Instancia said...

Well said Gwenhwyfaer. Mr Worstall has exposed himself as a high grade relativist.

I'm really looking forward to Tim and friends putting their money where their mouths are on his "value is subjective, not a function of the physcial world" assertion.

After all, there's plenty of water in the world, so doubtless they'll be happy drinking out of the sea.

And as for food, well, I'm sure that any old combinations of hydrogen and carbon that are knocking around will do just as well as that steak.