Tuesday, 30 August 2016

The Mistakes We Make

Lately I have been on a thematic killing spree, publishing controversial material enclosed in antagonizing language left and right: harsh words over feminism (with more coming Thursday), state crimes and environmentalism. In complete lack of humility I'll follow up with the Climate Change debate as it should be.

I'm also thinking a lot about signalling. Once you start analyse things through the lens of signalling, most incomprehensible and sacrosanct behaviour becomes understandable - like climate activists. The prime example of short-term, economically illiterate social signalling.

Ok. Climate Change. The standard portrayal of "97% of scientists believe Global Warming is real" which somehow ultimately means that all us free-marketers are nutheads (since obviously only government can solve it) is laughably boring. Yes, yes, there's a few "climate sceptics" around, a bunch of conspiratory theories, and some virtue signalling through Lukewarmers to spice things up, but most people overlook the great lesson here. Why? They ask the wrong questions. Especially, say, U.S. Senator Barbara Boxer, clearly seeing climate change as a scientific dispute - not primarily political, not at all economic or philosophical. Wrong.

In most climate activists' minds, the argument is the single-issue thinking I talked about recently: something is bad, we have to do x to improve it. Renewable energy is morally just - we must built them. If people suffer - we must give them money. If people have "low" wages - we must pass a law banning low wages. In this case: carbon dioxide is bad for the planet - we must reduce it. By every mean necessary. Such thinking ignores all the relevant and interesting question: how much? At what cost? And what kind of unintended consequences are likely to result from it?

What really matters is not what nature or the climate is doing: what matters is econ.
The enviro-left of course ignores that, since their grasp on econ has always been shady - and clouded in mistrust. Their fancy buzzwords "2 degrees", "unsustainable" or "greatest threat to human civilization" sound cool, but are mostly irrelevant. The actual question is the function of how aspects of society interrelate.

Look. The outcomes for human civilization can be given by this formula:

Read that again. And let me explain by using my Scandinavian heritage.

150 years ago, my Swedish ancestors froze, starved and died at 45. My great-great-great-grandpa had to work incredibly long hours on back-breaking fields and basically suffer through the cold winters and harsh climates, hoping not to catch a fatal disease.
If he did, he died;
if his harvest failed, he died;
if he couldn't save enough seeds for next year, he died next year.

Most families had at least one child dying before its first birthday - even among the wealthiest of us.

The innovations to keep warm, and the economic ability for normal people to purchase heat, were almost entirely lacking. Fastforward 150 years of economic development, and very few people suffer from the icy winters; instead, we sit inside our heated homes.
If we catch diseases, we can afford to have amazingly knowledgeable doctors cure us.
If the harvest fails, rather than starvation, prices rise by like a dollar, effectively redirecting production to more urgently-required goods.
If it's cold outside, we turn up the heat inside.
No biggie.

The force of nature matters very little, because our ability to prevent them outstrip the damage nature can potentially cause. The cold and the wind and the seasons don't matter anymore, because economic development and innovation and human capital allows us to counteract them. Deny them. Efficiently clean up afterwards.

Same goes with climate change. The climate can do basically whatever it wants. Imagine the horror stories of the enviro-left come true: 2-3-4 degrees average global temperature rise, sea oceans rise 10m, stuff change dramatically. Who cares? A lot of things will be different; crop production move north (or south), houses and cities move uphill, transportation chains alter; we build some new roads or planes or harbours; we may use some new sun/rain-diverting technology. No biggie.

As long as we (as McCloskey says) have our wits with us and allow markets to work, there is no reason to believe climate change will be anything but a minor nuisance for human civilization. When harvests failed two centuries ago, my people starved. Today, thanks to capitalism, trade-tested innovation and betterments, the price of bread goes up 10%.

That's the real discussion. That's why econ is much more important than petty climate threats.

And we should be fine regardless. That is, unless climate activists convince states to intervene in the marketplace, kill growth and hamper the economy into oblivion. That's the real mistake we must avoid.

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