When sheer stupidity becomes a governing principle

One of my favorite moments in human history was when Alan Greenspan, the legendary chairman of the Federal Reserve, had to admit in front of a congressional committee that he never really understood how the economy works (you can find the quote and the reference here). BTW, if you are under any illusion that mainstream economists learn from their mistakes, I encourage you to google the word bitcoin. Or read this article by Paul Krugman.

There is no wealth on a dead planet. Cartoon by the brilliant Patrick Chappatte.

Another person who apparently never understood anything is William T. Nordhaus, recipient of the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2018. The point is not that his conclusions about managing climate change were all wrong. The real outrage is that they were based on completely ridiculous assumptions, as pointed about by Professor Steve Keen in a paper appropriately titled “The appallingly bad neoclassical economics of climate change”.

Anyway, it turns out that the reason for why we almost lost the only habitable planet in the known universe is down to a most unfortunate accounting error by mainstream economists. Professor Keen recently gave a short interview with CNBC (‘War’ footing needed to correct economists’ miscalculations on climate change, says professor), which is well worth watching.

I will try to be more polite in my choice of words than professor Keen, but my conclusion is the same: Classical economic theory cannot be applied to climate change, because we are facing a situation where all societal structures could break down. If you believe that I am exaggerating, I encourage you to read “Some Questions of Moral Philosophy” by Hannah Arendt. Her starting point is a quote by Winston Churchill: “Scarcely anything, material or established, which I was brought up to believe was permanent and vital, has lasted. Everything I was sure, or was taught to be sure, was impossible, has happened.” She then points out that “We – at least the older ones among us – have witnessed the total collapse of all established moral standards in public and private life during the 1930s and 40s.” My father was already alive the last time society collapsed. There is no reason to be believe that this could not happen again. As a matter of fact, it is already happening in many parts of the world.

Only if we are prepared to accept the magnitude of the challenges facing us, will we have any chance of responding in an appropriate fashion. Basing our decisions on an already discredited theory does not seem very clever.

Furthermore, I believe that Global Climate Compensation is a realistic proposition for halting climate destruction, ensuring global stability, and alleviating poverty.

5 thoughts on “When sheer stupidity becomes a governing principle

  1. I think you are right in the physics of the climate change problem, but politics and sociology are much different fields, and in the study of power dynamics of human social systems, there is to be found no “realistic proposition for halting climate destruction, ensuring global stability, and alleviating poverty.”
    Oil companies will not become non-profit partners in “sustainability” just because a few of us propose that they shapeshift into benevolent entities.
    If you think this is entirely too pessimistic or nihilistic, check out r/collapse. The comments there are relentlessly full of truth, unfortunately.

    1. Trust me, I am not naïve. The collapse of society as we know it has already begun. However, as Winston Churchill put it: “I am always an optimist, because it does not make much sense to be anything else”. He was right. Pointing out the the obvious is not really very helpful. Do you have a better idea than Global Climate Compensation? If so, I am happy to listen. Otherwise, I simply do not have time. In my experience, being a pessimist is often just a symptom of laziness or cowardice. I have children, we have one planet, and we only have a couple of years to save. This means that we need to be very focused.

      1. Did Churchill say that as he was killing four million Bengalis through enforced famine?
        Anyone who associates pessimism with “cowardice” and “laziness” is as deluded as any religious fanatic. Who are you to deride people who express any form of skepticism?
        If you don’t want to examine the human enterprise with any sort of realistic understanding, then be prepared to be ignored.
        What on earth can we be focused on? All of us have been enmeshed in global industrial civilization, and we have been saying “It’s Time!’ for at least 50 years now, and – extraction and production have only increased.
        Is that simply a truth you cannot handle?

      2. Short question: What is your suggestion for averting the climate crisis? I would be very interested in hearing your constructive thoughts.

      3. Since the climate crisis is a product of humanity’s emergent supersystem, the short answer for averting the climate crisis is a very constructive one. Two words- luck and death.
        This two-word solution can applied to individuals only, however. On the macro scale, only futilism accords with the data.

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