Balneus

Australian Lefty on Politics, Governance, Science and Info Management

Greens 4 Schumpeter?

Posted by Dave Bath on 2009-10-05


The financiers and uber-capitalists have long used for self-serving agenda the arguments of Schumpeter, while "Teh Left" has considered them heartless and obnoxious.

But is it time greens, even radical greens, took up Schumpeter’s most famous catchcry, "creative destruction", so often a philosophical pretext for business attacks on working conditions, to argue against the obscene coddling of Big Carbon by capitalist governments in the name of economic stability?

This is not the only slogan capitalists use to further their interests that should now be used by the left and the greens.

The key point of "creative destruction" is that economic equilibria, the conditions that entrench monopolies and oligopolies, stifle the innovation required for economic advancement, and cast entrepreneurs as heroes attacking the dragons of established plutocracies.

Of course, business groups only use the phrase "creative destruction" in the context of the labor force, arguing for "flexibility", in reality the ability to destroy the stability of working lives or throw employees to the wolves.

Yet another philosophical pretext of capitalism is the notion that nations must not live beyong their means, treated by organizations such as the International Monetary Fund and World Bank as a near moral imperative to radically decrease the social wage provided by nations with external debt, decrease the risk of defaults that would upset creditors.

Using the perspective offered by the phrase "creative destruction", how do we view the actions of right-wing parties of most nations, including all Australian governments?  Despite the labelling of patent environmental destruction as the greatest market failure of all time by Economics Professor and champion of trade liberalization Ross Garnaut, the Rudd Labor executive cossets existing Big Carbon interests with massive subsidies in the name of economic stability, while the Liberal Party pushes for even more efforts to maintain the current equilibrium of economic power.

The silence of voices from "Teh Right", the lack of calls for "creative destruction" as necessary to the development of new products and services as the means to greater economic well-being, can only be called hypocrisy, as Schumpeter’s core arguments would be against their own short-term interests.

This suggests that the use by capitalists of Schumpeter to destabilize worker’s rights and conditions never stemmed from the persuasiveness of his theses, but from its utility as an excuse.

Environmentally-responsible groups should be calling for "creative destruction" of the resource-intensive and carbon-polluting businesses, rather than billions squandered by governments in counter-productive efforts to maintain the status quo, the current equilibrium.

The other excuse used by capital to grab resources from the wider population is through the notion that massive external debts demand equally significant restructuring of national economies through catastophic reductions in social wages.  (Never mind the record-high debts of nations like Australia and the US – except for governments, debt is promoted as almost an economic virtue.)

What of the massive debt in what have traditionally been labelled "externalities", a debt to the environment that is now being called-in so clearly, with climate change and ocean acidification leading the posse of knee-capping debt collectors?

A good discussion of these externalities, with suggestions on debt limits, was recently outlined in the world’s most respected science journal, Nature, and other journals from Nature Group:

  • "Earth’s boundaries?" (Nature 461, 447-448, 2009-09-24, doi:10.1038/461447b), an editorial with the teaser heading "An attempt to quantify the limits of humanity’s load on our planet opens an important debate"
  • "A safe operating space for humanity" (Nature 461, 472-475 2009-09-24, doi:10.1038/461472a) with the teaser heading "Identifying and quantifying planetary boundaries that must not be transgressed could help prevent human activities from causing unacceptable environmental change, argue Johan Rockström and colleagues", with the following summary dot points:
    • New approach proposed for defining preconditions for human development;
    • Crossing certain biophysical thresholds could have disastrous consequences for humanity;
    • Three of nine interlinked planetary boundaries have already been overstepped.
  • Further discussion of these is found in pages associated with "Nature Reports Climate Change", including responses to the Roskström paper at "Climate Feedback: Planetary Boundaries" (2009-09-23).
  • A tentative quantitative table of these planetary boundaries is found here, while the associated scary graphic is here.
Diagram showing current (ab)use versus suggested planetary boundaries

Diagram showing current (ab)use versus suggested planetary boundaries

When we look at the "Global Financial Crisis", causing by the miracle of transubstantiation of debt into asset, the risk magically disappearing through at least misfeasance of capitalist accounting, we must see frightening parallels with the convenient failure, (convenient that is, for business and client political parties), to acknowledge the risks associated with debt to environmental externalities.

So, will "Teh Left" and green groups start using "economic rationlism" and "creative destruction" as arguments that apply on a planetary scale rather than the smaller scale of how money moves around and within nations, in order to constrain governments from pandering to those entrenched interests, the effective cartels, that now have all major parties in their pockets?

For the radical greens, aware of the broad scientific opinion that the population burden combined with contracting resource availability will lead to a "cull" of between 50% and 90% of the population by the end of this century, even with revolutionary changes in response to the crisis, it’s probably easier, as the dislocation and misery caused by economic rationalism is almost insignificant compared to the dislocation and misery that must result from the continued use of the strategies of all governments (bar very few honorable exceptions) across the world.

And how will capitalist interests respond if "Teh Green Left" says "we were wrong, you were right to push economic neoclassical notions, but you didn’t go far enough, you gave them insufficient scope, applied them to too few domains, we must let the extant economic order be creatively destroyed and encourage the growth of disruptive new enterprises, both public and private"?  I doubt that capitalist interests will shouting triumphantly about their intellectual victory… they’ll be out of breath from backpedalling so fast!


Notes:

  • Looking at the graphic from "Nature", I see a missed opportunity for a fantastic visual pun, moving the "bulls-eye" a few degrees, to centre it on the Chixulub Crater in the Yucatán Peninsula, so commonly associated with mass extinctions in the minds of scientists, if not the general public.
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2 Responses to “Greens 4 Schumpeter?”

  1. Raf said

    Dave,

    Sometimes you have to wonder why the Greens haven’t been smarter about all this. It’s such an obvious play…let the market take its course, just as nature does with feedbacks looping away :-)

    So it makes me wonder if they are smart enough, insecure about taking on the economic establishment or just worried about losing votes.

    I’d say its a combination of all 3. Certainly what I’ve found here in NZ is that the Greens just wouldn’t touch the financial crisis as it wasn’t a vote winner for them. What kind of bull is that….as well as not having the fortitude to get up and lay it all out on the table….ecological debt, monetary debt..the whole nine yards.

    Now here in NZ they have suddenly brought up some issues around the current account deficit for example and our overseas debt millstone (similar to Aus in terms of % of GDP). But it’s too late..The Blue Greens have nullified much of their green agenda and the uber left wing brigade has nowhere to go so the Greens are losing support.

    They had a great chance but perhaps something was lacking? Same over the ditch?

    Cheers

    Raf

  2. […] No, go and read what I wrote a little while back about how the Greens should be Schumpeter fans and unhypocritical economic libertarians should be baying for blood… […]

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