MARKETS

Rebooting capitalism as a response to climate change

DON’T get sucked into an ideological climate battle over the virtues or evils of capitalism. It’s just an operating system that needs a big software upgrade, writes <b>Murray Hogarth</b>.

Murray Hogarth
Rebooting capitalism as a response to climate change

Opponents of climate action are painting it as creeping socialism threatening a 21st century ultimate triumph for the enemies of the “free market”. This is a politically savvy honey trap for everyone who wants a decisive, economy-wide response to climate change.

This “communist plot”, it seems, is to bring down the industrial economy by curtailing the freedom to pollute the atmosphere. From this perspective, it’s a dastardly extreme green conspiracy, worthy of an Austin Powers screenplay, with villains aplenty.

In Australia, this manifests itself most clearly via attacks on the Labor Party for allegedly dancing to the tune of the Greens, derided by conservative critics as the watermelons of Australian politics, green on the outside and red on the inside.

The underlying subversive intent of the carbon tax, its most virulent critics accuse, is to hurt consumers and make the fossil fuel-heavy Australian economy uncompetitive, all in the name of “an odourless, colourless gas”

The temptation with such arrant nonsense is to respond in kind, and get counter-ideological about the evils of the capitalist system, blaming it for having delivered the world into the clear and present danger of irreversible climate change.

For mine, this temptation should be resisted completely. There’s a “come in sucker” element to the wacky conservative position that is just begging advocates of climate action to make it a ding-dong, 20th century-style battle of ideologies.

The best way to neuter this rope-a-dope attack is to refuse to treat capitalism – aka the market-based economy – as an ideology at all. It’s not one, really, given how it’s now used with modifications as the basic economic model for everyone from the nominally communist China, to the avowedly free enterprise US, to the welfare statist Swedes, to “middle path” Australia.

Better to think of capitalism in the 2010s as an operating system, kind of like what Microsoft and Apple make. It’s better than alternative operating systems we’ve tried, especially controlled economies, but it’s still just a “platform’ and it’s not steady-state perfect. It needs to be upgraded from time to time as circumstances change and new functionality emerges.

Far from being an ideology, it’s more just common sense. Capitalism may well be the least bad economic platform for human society, just as democracy was Winston Churchill’s least bad political one, but it also is vulnerable to system (market) failure, and files do get corrupted. In fact the platform is equally capable of delivering good, bad or indifferent outcomes depending on how it is programmed, any malfunctions, and whether you've got the right apps.

Getting the programming right changes over time. When natural resources were vast and people relatively few, then incentives and subsidies to go out and conquer new lands, dam water and to dig up, catch, grow, and chop down stuff was the right programming because the “end of growth” on a finite planet was genuinely a very long way away.

Now the operating environment is reversing, so the programming and the apps need to be adjusted to match the needs of the times. That’s what we’re doing with the carbon price, renewable energy target, clean-tech incentives, energy-saving schemes, water trading, bio-banking, waste levies and much more.

It’s fine to think about this as more socio-economic than ecological, if you accept the reality that human programming will continue to be overwhelmingly people-centric versus eco-centric. But as natural value becomes an increasingly rare commodity, a well-programmed market-based operating system can be adjusted to increase its value and ensure its success.

This must be done, but won’t just happen because of some inherent ideological superiority of capitalism. The platform is devoid of sentiment, but can support better environmental outcomes instead of perpetuating bad ones. This isn’t ideological, nor a matter of any faith. It’s just a matter of writing new software to correct faults.

The big mistake is to imbue capitalism with virtues or evils it simply doesn’t have, and allow ourselves to be sucked back into the destructive ideological conflicts of the 20th century. Listen to the science, rewrite the software for the changed outcomes we need, and reject any self-serving claptrap that the market will correct itself.

Oh, and make sure your vested interest protection is up to date, keep the climate denier hackers out, and beware of political malware.

Murray Hogarth - @TheWattwatcher on Twitter - is a strategic adviser and regular commentator specialising in sustainability. He is Senior Adviser to Green Capital, the business sustainability arm of the Total Environment Centre, and is a director of energy-saving technology company Wattwatchers. His opinions are his alone.

This article courtesy of BEN Global

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production

editions

Mining Magazine Intelligence Automation Report 2023

An in-depth review of operations using autonomous solutions in every region and sector, including analysis of the factors driving investment decisions

editions

Mining Magazine Intelligence Exploration Report 2023 (feat. Opaxe data)

A comprehensive review of current exploration rates, trending exploration technologies, a ranking of top drill intercepts and a catalogue of 2022 Initial Resource Estimates and recent discovery successes.