15 September 2011

Inspiration from Bourgeois Economists: Guest Post

We’ve been doing some guest posts these days. It’s a way to broaden the conversation and to reduce our personally necessary labor time in producing this blog .... if only we could make a Critical Theory chat bot to reduce socially necessary labor time. Insurrectionists are way ahead of us on this.


Frank and Earl have each invited me to write something for this blog. I want to introduce two pieces relevant to your conversation. They have a few common features: (1) they are novel proposals — not New Deal nostalgia, nor the ‘capitalism with a conscience’ of fair trade and farmers markets, nor the Labor Party’s ‘Clause IV’ and central planning; (2) they are roughly compatible with the orientation to social theory shared by this blog’s contributors; (3) they are both formulated by unapologetic pro-market economists.

The first piece is Robert Shiller’s proposal for hedging against wage fluctuation — you can read it as a way to address the problem of an alienated social whole standing-against (Vergegenständlichung) individuals. The second is an ebook by Dean Baker, in which he affirms standard leftist goals (egalitarian distribution of wealth, freedom from labor, etc.), but suggests market-based routes to their achievement. Interestingly, aspects of both of these proposals made it into Obama’s jobs proposal.

These are two out of a very small number of innovative programs on offer to leftists. It is unfortunate that the intellectual left, such as it is, has lately neglected creative reform measures. To change this we must build our capacity to understand an unprecedentedly complex economic order. Instead of abdicating the fields of cost-benefit analysis and capital allocation, we should outdo the right-wing economists at identifying unintended consequences; assessing political proposals against our end goals, rather than our historical allegiances; and approaching economic events not as happy confirmation of some crisis theory or law of increasing organic composition of capital, but rather as constant and unremitting challenge to our analytical preconceptions. Absent this, we revert to dogmatic Communist/radical positions, or to tacit endorsement of unworkable moralistic capitalism.

I think that these comments are in the same spirit that led you to start this blog. And it is truly impressive to me that you all try to write about the economy and real politics, rather than just slugging away at your dissertations or playing around with sectarian groups. But with questions about the economy and changing it, we also need a certain humility and attention to detail. It is an interesting thought experiment to ask what kinds of knowledge we would need, and what skills we would need to master, to formulate programs like those below. We hobble ourselves when we reach too quickly for grand theories or radical gestures. At any rate, there’s hope — the bar set by the incumbent set of intellectuals and politicians could hardly be lower.

Robert Shiller
From the Introduction to Robert Shiller’s 1993 Macro Markets: Creating Institutions for Managing Society’s Largest Economic Risks:

Living standards are not fully insurable because of moral-hazard problems: if people or organizations knew that their incomes were guaranteed regardless of the amount of effort that they put in, then there would be a markedly reduced incentive to make efforts to maintain income. The effect of this moral hazard has been discovered in many times and places throughout history. It was discovered when, with the Speenhamland Law of 1795 in Britain, reformers raised workers’ income to a specified level, the difference coming out of public funds. It was discovered again when idealistic socialists under Robert Owen set up communities in the nineteenth century where incomes were pooled. It was discovered again when communists in many countries in the twentieth century made attempts to move society toward the Marxian ideal of distribution, ‘From each according to his abilities, to each according to his needs’. The humanitarian, idealistic, and revolutionary impulses that gave rise to these various social movements came up against a hard reality, the ill effects on incentives; most of these social movements were later abandoned. Moral hazard is not total: people and organizations do continue to function even if their incomes do not depend on it; but the inefficiencies created by such total insurance are so significant that they cannot be ignored.

Changes in living standards that are due to objective and quantifiable causes beyond an individual’s or organization’s control can, however, be covered by insurance policies without exposing the insurance companies to moral hazard from their policyholders. Thus, for example, the random decline in income (in the form of a decline in rents or real estate services) that a person faces because a house burns down is objective and easily measured; the risk of such decline is insurable. The moral hazard that the owner will deliberately burn down the house is small. In practice the objective fact of a fire is mostly not under the control of the homeowner. The decline in income that is caused by disability is similarly insurable; disability due to accident or illness can be objectively measured; most people will not disable themselves to collect on insurance. The decline in disposable income that is caused by medical expenditures due to health problems is also similarly insurable, as is the decline in income that is caused by the death of a family member.

Insurance policies on these objective and verifiable risks of income fluctuations have long been offered by our insurance companies to the advantage of the public. But the insurance industry has not devised policies that insure against many other causes of fluctuations in incomes. It is far more likely that a property will lose economic value owing to changes in economic conditions than that it will burn down. It is far more likely that an individual will face adverse labor-income shifts because of changes in the market for that person’s labor than that that person will suffer a physical disability.

These economic causes of changes in standards of living that should be insurable without moral hazard because they are beyond individual control are still not insurable today because they are not so objective or easy to verify as fires or disabilities. The changes in the outlook for income, and the causes of these changes, are hard to describe. Economic changes may affect income only with long lags; the changes may become apparent only gradually through time, rather than catastrophically as with a fire. Insurance companies cannot verify whether an individual seeking income insurance is doing so because of private information that his or her own future income is likely to decrease; there is no medical exam that will verify that there is no pre-existing condition likely to lead to lower future income. This lack of objective evidence about the outlook for future income creates a problem for writers of insurance policies. But if we could create liquid markets for claims on aggregate income itself, then we could objectify the intangible economic causes of changes in aggregate standards of living, thereby making it possible to insure against adverse changes.

Individuals and organizations could hedge or insure themselves against risks to their standards of living if an array of risk markets — let us call them macro markets — could be established. These would be large international markets, securities, futures, options, swaps or analogous markets, for claims on major components of incomes (including service flows) shared by very many people or organizations. The settlements in these markets could be based on income aggregates, such as national income or components thereof, such as occupational incomes, or prices that value income flows, such as regional real estate prices, which are prices of claims on real estate service flows. Since the individual or organization has virtually no control over these aggregates, there is no moral hazard created by insuring the risks of these incomes.

. . .

Efforts to reduce the inequality of incomes might substantially be furthered by creating such markets to allow insurance against the major risks to income. Such efforts do not involve such politically difficult measures as taxing the rich and subsidizing the poor; it is in everyone’s interest to insure themselves against income risks.

The revolutionary social thinkers described above could not see the fulfillment of their vision for communal sharing of income uncompromised by moral hazard unless there is development of a new community spirit, a new concern among the general public for others. But efforts to create such community spirit in society at large have not been successful enough to make possible the envisioned voluntary sharing. There are some stories of successes of utopian communes that completely pool all incomes, such as the Hutterites of North America, the kibbutzim in Israel, and the Itto-En and Yamagishi-Kai of Japan, but these communes, based on a sense of group feeling and intimacy built from shared experiences, are effectively large families. Usually a commune has no more than a few hundred members. Each commune is too small to allow much of the risk sharing envisioned here. Moreover, many of these utopian communes find that their community spirit declines somewhat through time and that private property becomes more important. Established communes may, for example, allow new members to retain possession of their preexisting wealth.

We should salvage as much of the objectives of these utopian thinkers as can be really achieved on a voluntary and self-interested basis for all of human society. People ought to freely share that component of their incomes still unknown and still to be dictated by forces beyond their control. And there is no other component of income but that which is still uncertain and beyond their control that self-interested people will voluntarily share. If we are to try to introduce as much communal sharing of income as can be achieved on a basis that is completely voluntary at all times then we will have to be, odd as this may seem, merely creating hedging markets for incomes.

Dean BakerBaker’s book, The End of Loser Liberalism: Making Markets Progressive is not behind a pay wall, so I won’t copy it here. If you read the Introduction and Conclusion (both very short), you’ll have a flavor of it.


  1. The Shiller piece is a true artefact of neoliberal subjectivity. First, the ritual invocation of "incentives" as the key to human behavior across all time and space. Then the sublime faith that any and all social problems can be solved by simply creating the correct financial market for them: "large international markets, securities, futures, options, swaps or analogous markets".

    This seems like a dead end to me. The particular structuring of the world that made these ideas not just plausible but hegemonic is now disintegrating. This is to be welcomed: the incredible power that exactly these presuppositions assumed under conditions of universal integration into market society is what has emptied out the possibility of imagining something different.

    Our task now is to pursue a social restructuring that could restore a popular imagination of the transcendence of capital - that society is capable of something beyond the dystopian vision of completely atomized subjects perfectly coordinated by impersonal markets. I wouldn't be averse to considering a proposal like this if the case could be made that its implementation would contribute to such a project. But that case would first have to be made.

  2. Thanks for your comment, Walker. This raises something that has confused me for a while. It seems to me that people like Adorno, Postone, etc. find market organization objectionable chiefly because it constitutes—through the activities of individuals—an uncontrollable social force that stands over and against individuals. This kind of concern has its roots in Hegel--the objectified (vergegenstandlichen) social form that emerges with enlightenment and which Hegel sees the French Revolution to be a reaction against. Now, the unique claim of this strain of social thought is that the chief social problem of modernity is not alienation or anomie. It is not that society is split and we’re cut off from one another that is the problem. The problem is rather that we’re dominated by social forces that we ourselves create.

    But then when proposals like Shiller’s come up, the erstwhile followers of that Hegel-Adorno tradition veer off sharply. All of a sudden the analysis becomes a weird Polanyi/Durkheim bit about how markets keep us apart and are impersonalized. But this is precisely a great promise of market organization! That the allocation of resources might be done efficiently, according to the utility preferences of real agents, and not through personalized forms of control and coordination. Of course this does not mean that there is no role for friendships, status, love—these just should not guide the allocation of scarce resources. This is why people tend to grow out of writers like Kafka, Sartre and Dostoevsky: after adolescence, you realize that capitalism does not preclude or obviate interpersonal connection.

    Shiller’s hope is that by financializing income risk, workers would be less subject to the upheavals and movement of the global economy. In other words, it is a way of decoupling the dynamism of production—in itself often a progressive force, that allows us to produce more goods more efficiently, and in response to real changes in demand—from the individuals who participate in economic activity.

    My apologies if I’m missing something in the point you’re making, but by maligning Shiller’s proposal with adjectives like ‘ritual’ and ‘sublime faith’ you abdicate argument and engagement in favor of exaggeration and easy dismissal. And obviously Shiller does not have the arrogance to attempt to solve ‘any and all social problems’ but rather aims to address the very specific and important one of risks involved in wage levels being linked to a particular facet of the global economy.

  3. "Now, the unique claim of this strain of social thought is that the chief social problem of modernity is not alienation or anomie. It is not that society is split and we’re cut off from one another that is the problem. The problem is rather that we’re dominated by social forces that we ourselves create."

    The last sentence is rather precisely alienation in a Marxian sense. I don't think that the confusion is Postone or Adorno's.

    The problem with the market is not that it is impersonal. The problem with generalized exchange relations is that it cannot be de-linked from labor as a form of domination where relations of production are directly social relations. The market is not the source of alienation, nor is production "in itself often a progressive force". The entire point is that this view obscures the domination inherent in the point of production, which is inseparable from the worker selling her labor power.

    I am slightly stunned that after we have watched over a decade of wealth evaporate in a few years that a suggestion could be made that 'socially responsible' hedge funds are anything other than the exposure of many people to risk while a handful of casino capital's make off with billions in profit. The real next step to Shiller's proposal would be to privatize Social Security along these lines, a decision which would have had absolutely catastrophic consequences had it been done prior to 2008.

    This is in lieu of having enough space to enumerate the hidden presuppositions of this fragment.

  4. This is an interesting perspective. Chris is right, the problem of being "dominated by social forces that we ourselves create" is precisely what Marx means by alienation, and I'm not sure that Polanyi's critique is really directed against the impersonal nature of markets, but the distinction you're drawing between alienation in the Marxian sense and the impersonalization of social life is still valid. As I understood your point, you think the latter-day Marxian critique of markets targets the latter rather than the former. And that markets, correctly designed, could actual act in service to overcoming the former thru the latter.

    Against this I would first argue that alienation and impersonalization - at least the particular kind of impersonalization characteristic of modern society - both foreclose human capacities. Moreover, the two are deeply connected in a way that makes eliminating the one without eliminating the other impossible. Part of the argument I've been trying to develop on this blog is that the progress of impersonalization thru the expansion of market forces under neoliberalism is what extinguished the tentative steps toward true democratic control of the economy that emerged under Fordism (I will try to substantiate this line of reasoning in future posts, but so far I enunciated it most clearly here).

    I think your reference to "the utility preferences of real agents" is a revealing phrasing. The bourgeois economic tradition (and the postmodern theorists who are an adjunct of it) generally view demand as emerging from the preferences of autonomous individuals, the source of which they usually decline to investigate. In contrast, the Marxian tradition understands demand as socially generated by the capitalist system as a whole and fundamentally driven by the needs of capital to realize value. Contemporary consumerism is what now integrates most people into the system of domination by labor. So ending the domination of the individual by the need to labor as well as by the alienated social totality would entail the abolition of the market. Not because the market is the source of these forms of domination, but because it is one form of organizing the production of value thru the real source of domination, labor.

    A more immediate argument that I'm still developing (here, here, and here) is that the neoliberal structures of accumulation have decisively broken down. The financialization of all aspects of life that was one feature of these structures is no longer viable, so I suspect that even if Shiller's proposal were desirable, it is now anyway unworkable.

  5. Walker, point of clarification: what do you mean by democratic control of the economy? My apologies if the answer is in one of the blog posts you linked to. Basically, assuming that there are scarce resources, how do you decide which goods to produce (and how) with these resources, and to whom to distribute them? Or, do you assume that all goods are abundant?

  6. I don't think there's any problem in principle with impersonal forms of collective decision-making, but there is a problem when impersonal forces escape conscious control. Yet conscious control of the economy can itself become a form of mediation for the domination of labor over people, as we saw in Soviet-type economies.

    Where that leaves us in imagining a socialist (ie authentically democratic) economy is unclear. Participatory economics is one proposal that would institutionalize conscious control over the economy under conditions of scarcity, but would not transcend the value form as Marx understood it. It would undoubtedly be a huge advance over both market and centrally planned economies, but might not escape the central compulsions that distinguish modern society.

    We may also be closer to overcoming the many dilemmas that accompany scarcity than people generally believe. In particular, if fusion becomes a viable source of energy - which it may in our lifetimes - then most of the physical and ecological constraints on production we now face would fall aside. But as long as society were organized thru the value form, this incredibly liberating development would instead produce no end of perversities and disasters.

  7. Dear fdj;

    Why should we assume that the issue at hand is scarce economic resources? This is the starting point for contemporary economics which allows it to read its profession back into all of human history, but I would suggest such a starting point is inherently false.

    For most of human history, decisions on production and distribution of stuff was directed by overt social relations. In late medieval Europe, serfs typically had about 210 days off a year (Saints Days and other religious days being the majority of that time.) The organization of the manorial economy was closer to the Greek oikos than what we understand as an economy.

    However, abundance is certainly a possibility at this point. Now this does not entail abundance in some hoarding stuff kind of way, but the attainment of a high degree of comfort, education, mobility, etc. entailing very, very little human labor overall. The issue is expanding freely disposable human time while granting access to all human beings to the full range of human cultural achievement, and without relations of domination, direct (slavery, serfdom) or indirect (wage labor, commodity society).

  8. Here here Chris. This is also my problem with Participatory Economics, it takes scarcity as its starting point. The myth of scarcity has in fact trapped much of the left. The Anarchist tradition wants to retreat from the social scale Capitalism has achieved and in some forms wants to retreat for industrial production entirely (in favor of essentially non-hierarchical peasant living). It also frames much of the discourse around "markets" vs "planning," which is a debate about means of distribution. When you take scarcity as a starting point the question is about justice and/or efficiency of distribution of those scarce goods. But in order to break out of the critique of distribution and articulate a critique of production we have to see scarcity as the very thing we are trying to overcome. If we imagine a society that rationally produces goods to satisfy human need (and desire) in such a way that one does not have to worry about how much milk there is, it's hard to imagine the question of distribution being more complicated than the question of transportation.

    Sidenote: as a former physics student I want to add that Fusion is a looong way away. They can't make stable fusion reactors and don't know how they'll make electricity with them once they do. sorry.

  9. At least some physicists disagree with you, Earl. And the timetable could presumably be advanced if research funding were higher than the current paltry level.

    I think scarcity actually is a significant issue. Perhaps 1/3 of the global population has access to an adequate material standard of living right now, and we've already passed the ecological limits of the planet. Of course there's huge amounts of waste - no need for most cars, for meat eating, for a significant amount of production, and much energy is wasted thru inefficient buildings and the like. Yet until we have viable fusion energy or a similarly revolutionary breakthru, it's hard to imagine a sustainable production system that transcends scarcity for all.

    Now rationing could be carried out democratically rather than thru the alienated force of the market, but it would rest on those advocating this approach to explain how that's possible at the global scale we're discussing (unless you're one of those deeply deluded anarchists Earl mentions, who apparently have no idea how miserable peasant life is).

    Scarcity is not only an issue of distribution. The possibility of emancipation from labor has been opened above all by automation. Yet environmentally sustainable forms of automation will necessarily remain limited until far more sustainable forms of energy production are developed.

  10. Walker, I think ParEcon and Albert are useful, but largely because they make systematic and explicit what much of the activist left blithely relies on for an 'alternative' to the market. But, it also seems a pretty clear failure to me. Why would it be emancipation if we had to increase the amount of collective time spent managing the economy? Why would people want to spend time debating and reporting the minutiae of production and distribution? But even if this dreary fate is appealing (which to me it is not; it lacks all charm as social imaginary), it would trade the problems of the market for altogether more pernicious ones. You swap the (unevenly distributed) consumer 'dollar vote' for the (also unevenly distributed) 'status, charisma, lobbying, guile vote', which involves endowments that it are far harder to redistribute through progressive taxation. And, this sort of power is codified in the very determination of methods of production. It would give crony capitalism a whole new meaning, and likely destroy the small progress we've made at effective collective coordination.

    But, this is armchair, speculative sociology. I could be wrong about how these interpersonal dynamics would play out in a complex society--maybe we'd have an ideal speech situation. My bigger problem with it gets back to a point I made in my original post--our politics need to be shaped by our end goals. I think it is much more promising to focus on policies that direct market organization toward the goals of a reduction in the working day (Walker is exactly right that this is not such a simple task--the primary substitute input for human labor has been fossil fuel); more egalitarian distribution of wealth; a less disruptive relationship between economic change and individual lives; the separation of artistic endeavor from elite and commercial funding sources; real ecological sustainability; and increasing room for what Mills calls 'experiments in living'. These are the goals that I (and, I think, we) actually care about. My wager is that the careful study of economic possibilities and the various consequences of different proposed changes, in light of the most rigorous possible analysis of the contemporary economy, is far more likely to achieve these goals than is adding further epicycles on a ptolemaic schema involving crises inherent to capitalism and collective control of the means of production. The choice to pursue the latter, with no substantive political vision in hand, raises the specter of Weber's biting comment about socialists who, emotionally unfit for the demands of everyday life, secretly pine for the day that even they will be in power.

  11. It goes without saying that I agree with Walker on the question of 'considering scarcity (and moral hazard, and imperfect knowledge, and opportunity cost and scale/hierarchy, etc.)' vs. 'theorizing in zany Star Trek land'. The first chapter of Alec Nove's book on Feasible Socialism makes this point well in relation to New Left Marxists. And, regarding the pot shots at anarchists, I actually think that primitivists have a far more coherent and realistic view of non-capitalist life than does the contemporary Marxian left. The vision has nothing to do with peasants. It is the abolition of agricultural production as much as the abolition of industrial production--people like John Zerzan pull no punches when it comes to their intentions. There would likely be a die off, a dramatic reduction in standards of living and life expectancy, and the (more or less rapid) abandonment of all civilizational apparatus--machines are never labor saving, for them, but rather 'labor masking'. Now, whether this return to the dirt would be a mode of existence that is more or less 'happy' than industrial society is a difficult question. But the point of comparison should not be medieval Europe, but rather the nomadic gatherers (I think these anarchists tend to be vegetarians) that Sahlins describes in Stone Age Economics.

    Also, this is Nathan--I just cannot figure out how to change my moniker (or why it is 'fdj;' to begin with)

  12. I think the conversation on this blog has been very interested in concrete solutions to the current social malaise. We've also been very open to the idea that the next step will not be "beyond capitalism." I for one am very interested in articulating concrete and realistic proposals for reviving economic growth in a way that is more humane and sustainable.

    That's not very precise a project though, and I think my and other folks inclination to add epicycles to our circuits of capital that lead up to this crisis, and constitute this crisis as epochal, is trying to specify the project. Without an adequate understanding of the structural issues that lead to this crisis we cannot judge the various proposals. That being said there is no sense to ascribe priority to either task. Looking for proposals and attempting to judge them (using whatever methods are necessary including econometric analysis, though I for one don't know enough to take that task on), can be just as helpful to understanding the causes and contours of the current historical moment as that understanding can help us judge proposals.

    As far as market oriented solutions go, I for one am not entirely closed to them. I'm suspicious mostly because "privitazation" and "markets" where rhetorically such a big part of neoliberalism. And that I was raised a good government liberal. But I think if there are compelling reasons why they should be considered I'm down.

    That being said, I for one still think I'm part of the larger project of overcoming capitalism. Therefore in judging different proposals to revive accumulation it's not only a matter of what will work, but also a question of what will be conducive to building a revolutionary movement. An important question then, and one we've talked about a bunch, is what our position should be in relation to the revival of accumulation. Do we dive in head first and start writing white papers, or do we try to be a little more indirect with our influence and focus on organizing an opposition to impact things. As with any time however when we come to a fork in the road like this we need to be thinking of ways to overcome the very opposition between the two.

  13. There is a difference between saying that the foundation of human allocation of gods is the treatment of resources as scarce and the problem that a large portion of the world goes without many basic necessities, and crucial to this, that trying to provide a high quality of life on the U.S. model would actually be catastrophic.

    The question however is exactly the U.S. model: personal automobiles powered by fossil fuels, low-density, highly inefficient utilization of land and housing, a dearth of mass intra-city and inter-city transit, failure to utilize a layered approach to energy production not dependent on fossil and nuclear, and all of the resulting ecological destruction that pertains to these. This does not take into account the waste associated with marketing, multiple branding of like products, poor resource utilization, etc.

    A lot of this could be overcome in the relatively near terms, but it would require drastic policy changes and a broad political movement.

    For example, a national transportation policy which created a truly national system of high-speed rail linking cities. Restriction of regional air travel where a direct high-speed rail line was available. Replacing the current air traffic control system with GPS-based systems for greater safety and efficiency in air traffic management.

    A national housing and urban development program which reversed suburbanization and invested not in subsidizing private home ownership and highway expansion, but greater densification, a general program of national mass transit in the cities. Re-forestation, elimination of most non-municipal golf courses (they are an ecological nightmare and a source of water contamination and top soil loss), expansion of wet lands protection (Katrina was such a disaster for New Orleans in part because of suburbanization which drained the wetlands that traditionally absorbed a lot of the water surge.) Without a stop to suburbanization in the Southwest, that area will continue to be a massive ecological problem and cause upstream issues for the entire west coast and mountain region, especially in relation to water supplies. Urban design towards pedestrian and cycling friendly cities rather than submitting cities to automotive traffic. Multi-unit residential designs around mixed-use areas, not the rigidly zoned model of suburbanism.

  14. A national energy policy which re-wired the grid with the latest low-latency/high-efficiency cabling in order to ensure low-loss electrical transmission up to 1,000 miles in any direction. Adoption of a combination of solar thermal and geo-thermal energy production facilities using the latest, already-available technology (for example, see Desert-Tek for and example of the potentials of solar thermal steam facilities.)

    A national agricultural production policy which moved away from current models towards more sustainable models, both in soil management and in food quality. No subsidization for corn production. Developing alternative, renewable methods of pulp production for paper goods (e.g. hemp produces 4x the paper-grade pulp per acre as trees and is easily renewable on a yearly basis and works well with crop rotation methods.) Changes in logging policy and forestry management. Move away from GMOs to diverse breed production to protect us from a single disease destroying effectively and entire line of foods (see the modern banana for a case in point.) Take R&D and intellectual property out of the hands of agro-corps oligopolies and allow farmers to harvest their own seed.

    A national healthcare policy, including socialization of healthcare and a complete review of the model of medical practice which today is organized around big pharma and high tech designed to accommodate a population that it is assumed will get diseases related to high physical stress, anxiety, and a high sugar, high fat diet tending towards heart disease, cancer, and various diseases related to hyperinsulinemia. I’m not saying give everyone acupuncture, but I am saying that our medical model is designed to accommodate the model of capitalist accumulation currently in play.

    Much of this could be done right away and it would result in getting more from less, but it would also likely be catastrophic from the point of view of profits. Energy production would become a near-profitless sector. Agricultural prices would probably collapse. None of this is a model that could not be replicated globally, with a reasonable utilization of resources and a high quality of life, but it would certainly not be the model that has arisen in which I refer to as suburbanism. If you want to reproduce that model, then no doubt one has to start from scarcity since it is a model which induces scarcity in a never ending chase for more stuff.

    Please keep in mind that I am also not even suggesting what would be entailed if we stopped building the instruments of war, recreational ocean liners, malls, fast-food chains, abolished the FIRE industries, the marketing and advertising industry, etc.

    The problem is only scarce resources if the solution you have in mind is an Arlington Heights-Schaumburg-Woodfield Mall model of development.

  15. Chris concisely spells out the extraordinary waste of the American way of life (I would only add the devastating environmental impact of meat, which globally produces more greenhouse gases than transportation). This waste produces roughly nothing in terms of increased human welfare. But I still want to insist on my point.

    I'll do this very quickly because I'm pressed for time, and using decade-old data, which, sadly, actually makes the figures conservative. If all Chris's proposed reforms were somehow realized in the US (excluding those changes that would require the end of capitalism or at least the market, but including significant reductions in military production), we could get per capita greenhouse gas emissions down roughly to the same level as Japan's, where most people use public transit, high speed trains dominate intercity transportation, cities are all extremely dense and walkable, much less meat is eaten, production is extremely energy efficient, and much electricity (even after Fukushima) is produced with emissionless nuclear reactors.

    In 2000, per capita emissions in Japan were 10.7 tons of CO2 equivalent. In the US it was 24.3 tons. The average for Europe was 10.5 tons. So it would be easy to more than halve US emissions with no impact on standard of living, which is of course higher in Europe and Japan. But here's the problem: the world average was 5.6 tons, and that already exceeded the ecological limits of the planet. (I used the figures that exclude changes in land use, like felling forests, much of which is driven by increasing meat consumption.)

    In other words, to bring everyone up to the level of Japan or Europe using existing forms of technology and social organization, even if we managed to bring the gluttons down to the same level (which we should!), would require nearly doubling total human induced greenhouse gas emissions. This figure could be somewhat reduced by an overall increase in the labor intensivity of production (which would be good for capital but bad for human freedom) or by a reduction in unecessary consumption (bad for capital, good for human freedom). But these numbers are far too large to escape. There will have to be huge technological advances before scarcity can be overcome.

  16. Again, I would simply note that given the highly viable technology existing today in solar thermal (solar used to generate heat to create steam to turn a turbine as is the essential method in high-yield coal and nuclear plants and many natural gas facilities as well), geo-thermal and a mix of other still-no-fully-developed technologies to supplement these, we could make great strides towards lowering that 10-11 number. The elimination of carbon-based energy is central, and achievable. Also, I cannot emphasize the importance of reversing deforrestation, as we are essentially following two paths towards crisis: increasing the emissions load and decreasing the natural means of processing that emissions load.

    That said, I intentionally did not mention anything that could not be found in the current reform literature or which has been mentioned on that tepid pool of stale water, National Public Radio.

    Also, Japan and Europe are not adequate models either. Desert-Tek, one of the companies developing and deploying solar thermal technology, is targeting Europe (the Mediterranean, especially the North African and Asian rim, is exceptionally strong for deploying this technology.) Clearly, rapidly shrinking carbon-based emissions in Europe and Japan is also key. Japan is notorious for its manufacturing and automotive pollution and smog issues.

    The real problem is that I can no more imagine such reformatory steps in the U.S. than I can a revolution. What is left of U.S. economic power is predicated on this tremendously destructive path (to do the U.S. model on a global scale would require approx. 4-5 earths worth of resources.)