Monday, 4 June 2012

Re-designing Russel’s “green” economics [update 2]

"The whole aim of practical politics is to keep the populace
alarmed - and hence clamorous to be led to safety - by menacing
it with an endless series of hobgoblins, all of them imaginary."
H.L. Mencken

_RussellInteresting to see Greens’s co-leader Russel Norman getting back at his party’s weekend conference to talking about the impending demise of the environment”—the alleged reason for the party’s existence, and for them the ultimate imaginary hobgoblin.

Mind you, while he’s talked up by the usual useful idiots as if he’s saying something new (“New Zealand needs to redesign its economy to live within nature's limits”) he’s still peddling the same warmed-over nonsense we’ve been hearing since his first leader’s speech   the 1970s   the 186os   basically forever:

You must know that the world has grown old, and does not remain in its former vigour. It bears witness to its own decline. The rainfall and the sun’s warmth are both diminishing; the metals are nearly exhausted; the husbandman is failing in the fields, the sailor on the seas, the soldier in the camp, honesty in the market, justice in the courts, concord in friendships, skill in the arts, discipline in morals. This is the sentence passed upon the world, that everything which has a beginning should perish, that things which have reached maturity should grow old, the strong weak, the great small, and that after weakness and shrinkage should come dissolution.

No, that’s not Russel Norman on the weekend. That’s a quote from third century doom merchants, hoeing the same row then as the Ginger Whinger now.

sky-not-fallingThe fact is that ever since mankind starting putting one stone on top of another there’s been scare story after scare story about the so-called “limits to growth.”   But there are no natural limits to growth. The Stone Age for example didn’t end because it ran out of stones—it ended with the discovery of Bronze and Iron and agriculture and beer. 

Which is the way human beings survive: not by hunkering down in fear crying “Woe is me,” but realising “man must produce the goods on which his life depends; he must produce homes, automobiles, computers, electricity, and the like; he must seize nature and use it to his advantage.” Which is to say (and on this fact lies the fundamental refutation of Russel’s woe-betide-us environmentalism) man must create the very resources on which he depends.

The resources provided by nature, such as iron, aluminum, coal, petroleum and so on, are by no means automatically goods. Their goods-character must be created by man, by discovering knowledge of their respective properties that enable them to satisfy human needs and then by establishing command over them sufficient to direct them to the satisfaction of human needs.
    For example, iron, which has been present in the earth since the formation of the planet and throughout the entire presence of man on earth, did not become a good until well after the Stone Age had ended. Petroleum, which has been present in the ground for millions of years, did not become a good until the middle of the nineteenth century, when uses for it were discovered. Aluminum, radium, and uranium also became goods only within the last century or century and a half.

The ultimate creator of goods character is man’s mind. In fact,

nature’s contribution to natural resources is much less than what is usually assumed. What nature has provided…is the material stuff  and the physical properties of the deposits in these mines and wells, but it has not provided the goods-character of any of them. Indeed, there was a time when none of them were goods.
    The goods-character of natural resources… is created by man, when he discovers the properties they possess that render them capable of satisfying human needs and when he gains command over them sufficient to direct them to the satisfaction of human needs…
    And this brings me to what I consider to be a revolutionary view of natural resources... Namely, not only does man create the goods- character of natural resources—by obtaining knowledge of their useful properties and then creating their useability and accessibility by virtue of establishing the necessary command over them—but he also has the ability to go on indefinitely increasing the supply of natural resources possessing goods-character. He enlarges the supply of useable, accessible natural resources—that is, natural resources possessing goods-character—as he expands his knowledge of and physical power over nature.

Which means, when you think about it, that the ultimate resource is not what we find in the ground but the ideas we produce in our heads. Which means the only “limits to growth” that existed in the Stone Age, and exist  now, are either in the heads of human beings who refuse to think—or in the legislation dreamed up by the likes of Russel to stop the exploitation and creation of new and existing resources.

Russel however continues to talk about "a smart, green economy.” But the fact is, no such thing exists—at least not in the terms he means, with bans on power producers and subsidies for so-called “green tech.” The failure of any “green stimulus to get off the ground—in Spain, in Germany, in the US—even with huge motivation and billions of dollars in subsidies is just another clue that Russel is talking nonsense.

If any “smart, green economy” were to exist, it would be the result of improvements brought about by property-rights protections—which is the simplest, most principled and most successful means of protecting both individual rights and the environment yet devised.

And if Russel really does want some lessons from economics for his environmentalism, he might reflect that the whole of economic activity consists in creating new values and, new goods and new resources, and moving them and transforming them to the place(s) and the state in which they are most valued.  In other words,

all of economic activity has as its sole purpose the improvement of the environment—it aims exclusively at the improvement of the external, material conditions of human life. Production and economic activity are precisely the means by which man adapts his environment to himself and thereby improves it.

But this fact continues to elude Russel and his followers, who continue to cry wolf while remaining blind to the incredible results all around him.

Here we are. We enjoy an incredibly marvelous industrial civilization, whose nature is indicated by the fact that because of it vast numbers of human beings can travel at breathtaking speeds for hundreds of miles at a stretch in their own personal automobiles, listening to symphony orchestras as they go—indeed, can fly over whole continents in a matter of hours in jet planes, while watching movies and drinking martinis; can walk into darkened rooms and flood them with light by the flick of a switch; can open a refrigerator door and enjoy delicious, healthful food brought from all over the world; can do all this and so much more. This is what we have. This, and much, much more, is what people everywhere could have if they were intelligent enough to establish economic freedom and capitalism. 
But all this counts for virtually nothing as far as the environmentalists are concerned. They are ready to throw it all away because, they allege, it causes global warming and ozone depletion, i.e., bad weather. [Or because, they allege, there are “limits” to such pleasures.] And the best way, they say, for us to avoid such bad weather [or confronting such limits], and thus to control nature more to our advantage, is to abandon modern, industrial civilization and capitalism.

In other words, to stop our depletion of so-called “finite” resources, Russel would have us exploiting them altogether, and would shut down the system of (already-well-shackled) economic freedom that produced them all.

Russel et al refuse to see any of the benefits in the present of any of these wonderful achievements. And to the extent their sky-is-falling doom-saying is successful in creating sentiment and legislation banning or hindering new achievements, the future we face will be all the worse for it.

The great irony here really is that while Russel decries the running out of resources, it is his own brand of politics that has stopped resources being used and created—on the West Coast, in the Coromandel, in Northland. In fact, the truly great irony is that  the only way we would ever truly run out of resources would be if we ever did fully follow Russel down the path of abandoning our industrial civilisation.  Only then would he be proved right.

The fear that Russel rests on is a fear of the future.

But since he and his arguments are so widely accepted, it’s worth answering and understanding the questions: Why are so many so gosh-darned afraid of the future?

And why are there so many votes in pandering to this fear?

UPDATE 1:  Right on cue:

The Decline And Fall Of The Green Empire?

“It was interesting while it lasted. But it looks as if the ‘green revolution’ has entered the long slide into ‘What was all that about?’

“In January, the Spanish government ended absurdly lavish subsidies for its renewable-energy industry, and the renewable-energy industry all but imploded. You could say it was never a renewable-energy industry at all. It was a government-subsidy industry where in exchange for creating conscience-soothing but otherwise inefficient windmills and solar panels, the government gave the makers piles of cash consumers never would have.”

“At the beginning of his administration, President Obama insisted that if we didn’t follow their lead, we would surrender the hugely profitable renewable-energy sector to those sagacious Spaniards.”

"In 2009, researchers at King Juan Carlos University found that Spain had destroyed 2.2 jobs in other industries for every green job it had created. The researchers also calculated that the Spanish government had spent more than half a million euros for each green job created since 2000, and wind-industry jobs cost more than 1 million euros apiece."

“The reason the Spanish example is so important is that it demonstrates how the whole green-energy ‘revolution’ was really an ideologically driven green boondoggle from the start.

UPDATE 2: Russel bashes the increase in “dirty dairying.” Like virtually everything else he says, not true:

The number of convictions [for unlawful discharge] fell from 51 in 2008-09 to 18 in the year to date. Abatement notices and infringement notices have also decreased, from 537 to 329 and 500 to 330. 

Further, the number due to dairying is falling. The number due to council sewage treatment however is rising


  1. Do you know how many generations of humans have experienced what we know of as 'perpetual growth'? 8 generations.

    What caused this growth that we take for granted? The net energy gained from the exploitation of coal then oil and natural gas deposits, a finite resource which was developed over millions of years and burnt in a mere fraction of the time in order to extract resources such as iron ore concentrated by hydrological processes again over millions of years.

    If you doubt the quantity of energy embedded in something as mundane as oil you can do one of two things, either walk a mile as your cars shoes or set yourself on fire with petrol. Personally I suggest the former. Now I want you to bask in the glow of the truth that there isn't a battery on this planet which even comes an order of magnitude close to that petrol in your car and that is with 'billions' spent in development. Yes that means a $50 gas tank and $50 worth of petrol pre-tax outperforms $15,000 worth of batteries in any car.

    Now ask yourself one question. Why are Shell spending all that Capex in the Arctic? Because they cannot replace their reserve base otherwise. This is what the oil industry calls the reserve replacement question whereas you might call it peak oil. If you can't replace the oil burnt with batteries nor can you replace the reserves that are consumed easily then the sky is indeed falling because our society relies upon that energy source. You may disdain upon the Green parties ideas, however they are the only ones who are asking the question 'can we sustain what we already have' let alone actually grow from what is a shrinking base of resources.

  2. @ Richard Watts

    First of all, if you would take oil exploration restrictions away we are not even close to running out of oil.

    But... So what if we are? Oil price goes up and other forms of energy will become viable.

    Research into other forms of energy becomes attractive too. I think Peters point is that humans are capable to harness the energy that is around us in abundance. Limiting your view to oil is not helpful.

  3. Yes Dinther I agree with your comment, I have always (50 odd years) held the belief that "man" will find slutions to problems on an as needed basis.

    This happens in most other fields of scientific endeavour, and will and is happening in the energy field also, as we speak.

    "Man" has always been & will remain adventurous, courageous, and answer seeking.

    "Man" also has an inherant desire to succed to ensure the continuation of the species, that answers will always be found.

    Me...optomistic much...

    We are an exciting lifeform, and we own the planet!

  4. Julian Simon wrote a great book in the '90s called "The Ultimate Resource". His central thesis is simply that the only resource that is genuinely and consistently in short supply is human intellectual capacity. This position is supported by the long term rise in wages of the general populace. Although nearly 20 years old, this book is well worth a read. PeppyKiwi


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