The Daily Bork

June 17, 2005

Green "economics"

This has to be one of the most egregious insults to intelligence I have read for a while...

Market economies have their uses. Markets do allocation well, making sure that resources are allocated in the most efficient way according to the distribution of income. A key failing of the centralised economies of the Soviet empire was poor allocation, which ended up ensuring that it was the illegal market that played that role and gave power to brigands.

No, the key failing of the Soviet empire was not a failure to allocate resources. The key failing was central planning itself. If central planners had perfect knowledge of production, demand, supply etc etc then fine, it'd work like a charm. The problem with socialists of all stripes is the inability to recognise that perfect knowledge on even a small scale does not exist, nevermind on national and supranational scales. Separating the "illegal market" out for attention is a red herring. The central planners had imperfect knowledge so could not respond to demand, supply etc even if (in a ridiculously generous view) they were trying their best to satisfy the people. Which they weren't. Thus the "illegal market" booms, it is illegal not because it is run by brigands but only because the planners have no direct control over it.

But what markets do not do at all well is ensure a fair distribution of income and what they do even more poorly is limit scale - ensuring that economic activity recognises and accounts for the finite nature of resources and ecosystems.

Of course markets do not ensure a "fair distribution" of income, or anything. The "market" is the set of all people interacting to buy, sell, exchange etc. The market cannot ensure a specified distribution of anything, whether it be fair or otherwise.

Distribution and scale go hand in hand. If resources are limited and demand is growing, how can we ensure a just society? First, by making better use of resources, by slowing the throughput of resources through the economy, slowing down the journey from raw material to land fill, by increasing utility.

If resources are limited and demand is growing, what is a fair society? If the sky is blue, what is the name of my cat?

If resources are limited, in a reductio ad absurdum case, then according to this argument there can be no fair society whether demand is growing or not. If there is demand and (crucially neglected) supply then the limited resource will be consumed, assuming by limited he means finite. Actually, it doesn't really matter if the limitation is "finiteness" or a throughput limit, since the time players in the market is limited one is effectively the same as the other (you can have a car, sure, just in 250 years).

The market has price mechanisms etc to balance throughput. Well, a free market anyway. How on earth does the market "care" if the materials come from recycling or diversifying utility? The factor that is always neglected by these dimbulbs is human ingenuity and intelligence. Joe X sees he can start up a recycling company and get some more money, employ a few people etc. Jane Y sees a new use for technology Z with a few tweaks. This happens quite naturally, imposing artificial restraints on the market discourages people from doing that. Government direction of research and development does little to aid this and by adding another layer of bureaucracy and unfair competition squeezes out the little guys and makes life difficult for the people who are almost making it. In otherwords, it has precisely the opposite effect. It is no coincidence that the more highly socialised countries struggle more in innovation.

But also, vitally, by ensuring a more just distribution of wealth. Making sure that all people have enough, but also that all people know when to say "enough".

Make sure all the people have enough. And what, pray tell, is enough? Who decides what is enough? Is it when I can afford to live on X calories per week? Is it when I can afford the government prescribed mileage on my car? Or when I can buy a car? Or the second car? Nope. I suspect it is when everyone is "equal". Regardless of the level of that equality. Like North Korea. We have a wonderfully fair distribution of income. We all starve to death at the same rate.

Even supposing for a moment that at a given instant everyone was made exactly equal, the supposed "fair distribution" was achieved. What happens tomorrow as people make their choices? Next week? The year after? Take a million people and start them out with equal "wealth", tell me exactly how you will maintain this distribution without coercion? That's right, you can't and it is sheer sophistry to say that you can.

When people *know* when to say enough? Again, pray tell, who is going to educate us on this? Some washed up stoner? Some guy in a snappy uniform goose stepping through town? The king?

Do these idiots ever stop to think that their wonderfully "fair" ideas are little better than the serfdom their precious peoples' revolutions sought to overthrow? Dictatorships, rule by divine authority, socialism, they all rely on the central planner whether that be a single person or various government committees. They all fail to produce a utopia, or even anything resembling a fair society that is also vibrant and responsive. On the contrary, they lock in class differences, requiring ever more intervention by the planners to resolve the ever growing range of unfairness. They all deny the ability of people to think for themselves. They all assume their own ability to foresee supply and demand and, more amazingly, what is "fair" and what people should "know". The truly remarkable thing is that they can never see exactly where this leads, each and every time without fail, despite the abundance of recorded history.

They will ensure a fair distribution of wealth while "educating" you on how to be happy with that and letting you what you really want. The free market is imperfect, as regards achieving their "fair distribution", but they obstinately refuse to see that their own policies are horrendously worse and are more remotely removed from "fair" in any way than people doing their own thing with each other.


  • A little weak

    First you criticise my statement that "a key failing of the centralised economies of the Soviet empire was poor allocation", and then proceed to say the REAL problem of centralised economies is that planners have imperfect knowledge and so cannot respond to supply and demand. Which is precisely what I was saying, in a less verbose way.

    In fact your whole rant is about your opposition to central planning. That is my starting point. Perhaps you need to read what I actually do and don't say rather than just launching off on an irrelevant critique of Stalinism.

    It is a classic strawman argument, explaining why totalitarianism is bad (well, um, yes), and bolstered by your devasting personal insults.

    All of which is hardly an argument against ensuring that the framework within which the market operates recognises that there are ecological limits to resource use, for example through internalising the actual cost of production / use of products. Or do you support continued subsidisation of polluting manufacturing, for example by making the taxpayer pay the cost of pollution?

    There will be little innovation for sustainability while business can continue to externalise the cost of operating in an unsustainable way. That is why some framing of the market is required - stopping people stealing our common ecological 'capital' is no different from stopping people breaking into my business and nicking the machinery. Both are theft.


    By Anonymous Anonymous, at 5:01 am  

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