Ferraris for all

Few commentators seem to have noticed just how far the Labour Party went last week in its advocacy of environmental austerity (see also 25 September dispatch). For example, David Miliband, the environment minister, used his platform speech to promote what he called “one planet living”: “I propose we adopt a new goal as a country: to aim to live as a nation within the limits that the environment can tolerate, One Planet Living.” The phrase evidently comes from the oft-repeated assumption that we are currently using the resources of three planets:

“At the moment, we are living, Britons in the 21st century, as if there were three planets to support us when in fact we have only got one. We are consuming the natural resources of three planets; burning the fossil fuel of three planets; pumping out enough carbon dioxide for three planets; yet we only have one planet to live on.”

Alongside Miliband on the platform was Ken Livingstone, London’s mayor, who favoured water metering, road price charging and “green taxes” on air travel, according to an article in the Guardian. He repeated his call for people not to flush the toilet every time they use it: "You really don't need to flush the toilet when you have just had a pee."

Labels: economics, environment, footprint, sustainability

Some 1 billion people do not have access to safe water and 2.6 billion lack access to basic sanitation, according to a report by Unicef. This lack of access to clean water and sanitation contributes to the deaths of 1.5 million children under the age of five from diarrhoea every year. Young women and girls can also spend several hours a day carrying water to their communities. In sub-Saharan Africa less than half the rural population has access to safe water.

Labels: development, health

Today spiked published my article on the American Express RED card (see the link on the left). Under the initiative – one of Bono’s – at least 1% of the user’s spending goes to fighting AIDS in Africa. I argue that the appeal of the card is based on middle class conceit and the projects it supports do not represent the best way to fight the scourge of AIDS.

There is also an interesting article by Austin Williams arguing that carbon offsets stifle economic development. He will be speaking at the Battle over Nature strand at the Battle of Ideas 2006.

Labels: Africa, development, spiked

Today I debated consumer debt on the Jeremy Vine show on BBC Radio 2. The peg for the debate was a report from Datamonitor, a business research group, which estimated that the average British resident has £3,175 of unsecured borrowing. That is about twice the average in continental Europe.

I argued that debt was not a problem for most people as long as the economy was growing strongly and unemployment was low. In addition, much of the anti-debt campaign has a puritanical edge to it: a dislike for ordinary people buying luxury goods. However, this does not preclude a small minority having debt problems. Usually these are a result of changes in life circumstances such as divorce or unemployment.

My opponent was David Nellist, a former Labour MP. He presented debt as a huge problem for ordinary people; seduced by advertising and enticed by junk mail.

Labels: debt, media appearances, radio

Those who did not listen carefully to Gordon Brown’s speech at the Labour Party conference today might have got the impression he was against Western intervention in the third world. But a close reading shows the Labour chancellor is railing against affluence:

“I make this promise: tackling climate change must not be the excuse for rich countries to impose a new environmental colonialism: sheltering an unsustainable prosperity at the expense of the development of the poor.”

In other words prosperity in the rich countries is “unsustainable”. And somehow it detracts from development in the poor countries (it should also be noted that Brown’s definition of development is an exceedingly narrow one).

Earlier in the speech there is another hint that what he really wants is changing behaviour - presumably to limit consumption or at least the growth in consumption:

“let me say candidly of the environment: Yes it is about personal and collective responsibility to change our behaviour, and I know too that governments across the world have been too slow to recognise the threat of climate change.”

Labels: climate, consumption, ethics, sustainability

Philanthropy seems to be in fashion. Bill and Melinda Gates have donated huge amounts to ending global poverty. Warren Buffett has followed their lead. Bono and Bobby Shriver seem to be trying to popularise the movement further with their Product Red campaign.

The latest high profile event in London is Tuesday’s Fortune Forum dinner at Billingsgate including Bill Clinton, Michael Douglas, Deepak Chopra (spiritual guru), Zac Goldsmith (eco-toff and editor of the Ecologist), and a comeback performance by Yusuf Islam (formerly Cat Stevens). For those who are interested prices start at only £1,000 a plate.

On the face of it what could be wrong here? The wealthy are giving substantial amounts of money to worthwhile causes such as curing AIDS and malaria, tackling climate change and reducing global inequality. But closer examination shows that a dirty deal is implicit in this arrangement: the rich will give a little money to the poorest of the poor in return for the mass of the population giving up the ambition of broader development. Unpicking this arrangement will be one of my tasks over the coming months.

Labels: debt, development, ethics, health, inequality

Monitoring the alleged sins of modern life

Evidently pets can be unethical too. So today’s Guardian includes a helpful article on how to reduce your pet’s environmental pawprint. One key task in relation to dogs is to make sure faeces is bagged and binned – preferably with a biodegradable poop bag. Cat litter should be made of recycled material rather than clay. Natural flea repellent should be used. And of course food should be organic.

Today is not 1 April.

Labels: sin tracker

Will Wilkinson, a policy analyst at the Cato Institute in Washington DC and author of the Happiness & Public Policy blog (see link on the left), has an article in the October issue of Prospect (the start of the article is available here ). In it he argues that GDP per head does have a significant impact on happiness over time. He also cites the argument by Benjamin Friedman, a professor of economics at Harvard, that economic growth may be necessary to maintain happiness at a reasonable level (see review link on the left).

To me such arguements are unnecessarily defensive. Economic growth is beneficial whether or not it bolsters happiness. And unhappiness is not necessarily a bad thing – it can be positive if it is an incentive for humans to create a better society.

Labels: growth, happiness

I hesitate to write too much on climate change because it could easily become a full-time preoccupation. But given it is increasingly used as the ultimate argument against affluence it is difficult to avoid devoting time to it.

George Monbiot’s new book on climate change, serialised in three parts in the Guardian, provides a model of how not to conduct the debate. Yesterday there was an article on 'the denial industry' which focused on ExxonMobil. He made a similar film for the BBC Newsnight programme which was broadcast this evening. The main point of both was that ExxonMobil is financing “climate change deniers” – including the Competitive Enterprise Institute, the Cato Institute, the Heritage Foundation, the Hudson Institute, the Frontiers of Freedom Institute, the Reason Foundation and the Independent Institute – to misrepresent the truth on climate change in order to protect its profits.

There are two reasons why this argument is flawed. First, the fact that anyone receives finance from a particular source, even one with a vested interest, does not prove that an argument is wrong. I could be paid by the Devil Inc to produce this website but that does not invalidate my arguments (as it happens I am entirely self-financed). Second, it is misleading to talk to climate change “denial”. Only a lunatic would deny that the climate is changing and most specialists seem to accept that humans have played a role in warming. What needs to be debated is the character of the change (a scientific question) and how best to respond to it (a political question).

Monbiot cites a website with the sole aim of exposing Exxon . He has also set up a new website of his own , along with Mark Lynas and Joss Garman, to argue solely on climate change. There is also a speaking tour on the book.

Labels: book, climate, corporations, environment, film, television

Spiked has today published my review of An Inconvenient Truth. In it I argue that Al Gore’s dogmatic documentary embodies the worst possible response to climate change. It can be found by clicking on the appropriate link in the reviews section on the bar on the left hand side of this site.

However, as a critique of Gore’s pretentious style it is hard to do better than South Park. An Inconvenient Truth was ruthlessly lampooned in its episode on ManBearPig.

Labels: climate, film, review, spiked, television

Some interesting views from the oil industry on why the world is unlikely to run out of crude. Abdallah S Jum’ah, the president and chief executive of Saudi Aramco, gave several reasons why oil supplies are likely to last another 140 years at present rates of consumption. In a speech to the third international seminar of the Organisation of Petroleum Exporting Countries (Opec) on 13 September he outlined how technological development is bolstering oil production:

• Computer power is increasing rapidly. This makes the exploration and production of oil more efficient.
• Oil recovery rates from known fields are improving.
• Exploration and production costs are falling. It is becoming easier for oil companies to operate in deep-water, extreme cold and other difficult conditions.
• Unconventional oil resources are being developed including extra-heavy oil, tar sands and bitumen.
• Advanced technology is lowering the environmental costs of oil production.

Similar points were made by Rex W Tillerson, the chairman and chief executive of Exxon Mobil, in a speech on the same day.

Labels: economics, energy, environment

Here is the good news. The world economy is growing at its most rapid rate since the early 1970s. Emerging economies – home to about 5.5 billion of the world’s 6.5 billion population – are growing particularly fast.

The news comes from the International Monetary Fund’s twice-yearly
World Economic Outlook. Sadly it has received little publicity. But the Outlook includes an interactive database which is easy to use and extremely useful.

One publication which has picked up the story is the Economist. Its comment this week makes the point that for the first time the emerging world made up more than half of global output last year (at purchasing power parity, 30% at market exchange rates). The magazine welcomes this development and explores it in more detail in an accompanying survey. Sadly it reaches the conventional conclusion that the world does not have sufficient resources for everyone to adopt current American lifestyles.

Labels: development, economics, growth

Sadly it seems that JG Ballard’s new novel, Kingdom Come (Published in Britain by Fourth Estate), portrays consumerism as a form of fascism. An article in today’s Independent quotes one of Ballard’s characters saying: "Consumerism creates huge unconscious needs that only fascism can satisfy. If anything, fascism is the form that consumerism takes when it opts for elective madness."

Judging by the rest of the article, which is partly based on an interview with Ballard, the novelist shares the opinions of his character. For instance, he boasts of his modest semi-detached house in Shepperton: "My three children were brought up in this house and it hasn't changed at all. Nothing has been moved for 30 years."

Labels: book, consumption

An astute point on the downside of relying on local food sources from the unexpected source of the International Monetary Fund’s World Economic Outlook. Its chapter on commodity prices (PDF) makes as an aside the point that:

“the volatility of food and raw agricultural material prices seems to have fallen on average over the past couple of decades, as growing geographical diversification of production and technological advances have reduced the sensitivity of food prices to supply shocks, such as bad weather or natural disasters.”

In other words global food production and high technology can help prevent food shortages and even starvation. If there are problems in one part of the world then food can be transported in from other regions of the globe. The original source is a 2004 report on the state of agricultural commodity markets by the Food and Agriculture Organisation.

The same chapter makes the point that the supply of base metals is practically unlimited. Aluminum, for example, accounts for 8% of the earth’s crust and iron 5%. The original source is a 2003 study by John Tilton.

Labels: food, technology, trade

My review of Deepak Lal’s Reviving the Invisible Hand from the 4 September issue of Fund Strategy magazine:

Deepak Lal, professor of international development studies at the University of California, Los Angeles, is an intellectual rarity nowadays. He understands society according to consistent principles - in his case adherence to what he calls "classical liberalism" - rather than examining each question on pragmatic grounds. This approach is both his strength and his weakness.

By classical liberalism he means that he supports both laissez faire and unilateral free trade. Laissez faire refers to a society in which the state provides essential public goods - for example, armed services, police, property rights, transport infrastructure - at the least cost from taxes. Lal rejects the idea that this conception necessarily means a minimal state as a caricature.

Unilateral free trade means not only that open trade is seen as beneficial but countries should welcome it even if other nations do not. Even if a country allows free trade while its competitors reject it the trading nation should, in Lal's view, gain. His model is 19th century Britain, a unilateral free trader, whereas contemporary America will only trade freely with countries that accept reciprocal arrangements.

Lal mentions as an aside that he is in favour of empires - a subject on which he has written another book. He says they provide the public good of order from which everyone can benefit.

From these premises he launches an attack on what he calls the "dirigiste dogma". He sees the state as being essentially predatory and rejects the view that it should play an extensive role in the economy. Lal also makes a useful distinction between traditional dirigisme - old-style socialism - and new dirigisme - new forms of state regulation. Advocates of the second form of dirigisme include cultural nationalists, environmentalists and non-governmental organisations (NGOs).

Lal is at his strongest when he shows how the more recent form of dirigisme involve new forms of regulation. For example, he shows those who support "capitalism with a human face" can hurt the poor. Even campaigns against child labour - which have an obvious emotional appeal - tend to be counter-productive. It is usually the most impoverished who send their children to work. Depriving them of their income is likely to worsen their plight. The real solution to child labour is economic development. Studies show it tends to disappear when GDP per head exceeds $5,000 (£2,600).

Another of Lal's strong points is his attack on environmentalism. He quite rightly portrays it as a misanthropic ideology with a hostility to development that condemns the mass of the world's population to poverty.

The fundamental flaw in Lal's argument is his lack of sufficient historical perspective. His hatred of dirigisme is so great he underestimates the significance of key differences between the two forms he identifies.
Old-style dirigisme was based on the idea, however flawed, that state intervention could help create a better society. Its forms varied enormously from radical socialism to the New Deal in 1930s America. The state was seen as a benign institution that could improve the lives of its citizens. It may not have lived up to its promise, but there was a positive impetus to state intervention.

Contemporary state intervention, in contrast, is entirely misanthropic. It is rooted in Margaret Thatcher's idea that "There is No Alternative" to the way contemporary society is organised. Instead, its main aim is to restrain human activity - whether by business or individuals. For example, the enormous emphasis on regulating individual behaviour in contemporary politics. Behaviour previously seen as in the private domain - such as drinking, smoking or eating fatty foods - has become seen as a fit area for state regulation. Although the days of old-style nationalisation have gone, the state is far more extensively involved in our everyday lives than ever before.

Lal also fails to see the fundamental change in what is considered radical. The traditional left-wing critique of society attacked capitalism on the grounds that it did not provide sufficient wealth for the mass of the population. Typically it was conservatives who were suspicious of mass affluence. Today, in contrast, it is environmentalism, with its hostility to mass consumption, that tends to be seen as radical. Yesterday's conservative ideas have become embodied in today's radicalism.

Lal misses this key distinction as he simply sees dirigiste ideas as part of a romantic reaction to the 18th century Enlightenment. For him there is little substantial difference between 19th century Marxism, America's New Deal of the 1930s and contemporary ecofundamentalism. He exaggerates the similarities between these outlooks and downplays the differences.

He also fails to explain convincingly why it is that new dirigisme has taken hold. For example, he is right to argue that environmentalism is more like a religion than a political outlook in that it is based on faith rather than reason. But he fails to explain why it is that the environmentalist dogma has attracted so many followers, including national governments.

Similarly, he describes well the growing power of NGOs, but not how they have come to play such a prominent role in international organisations.
Ultimately, then, Reviving the Invisible Hand fails as a critique of the new dirigisme. It is generally good at describing the main shifts that have taken place in relation to international economics and the role of the state over the past two centuries. But it does not provide an adequate explanation of why such changes have taken place.

Nevertheless, it would be wrong to be too harsh on Lal. His work embodies immense intellectual ambition - a quality that is rare today. Equally importantly, he tries to examine key questions from a rational perspective rather than rely on superficial impressions of events. His book is a useful start for those trying to understand the modern world, particularly third world development, but it should not be its end point.

Labels: book, development, economics, Fund Strategy, review

This week’s Economist includes a survey on climate change which is certainly worth reading. But the two measures proposed in the comment section of the main magazine are thoroughly mainstream. The Economist proposes an economic tool to put a price on the emission of greenhouse cases – it could be a carbon tax or a cap and trade system. It also supports government spending on new technologies such as carbon sequestration. The Economist argues that the Bush administration, until now weak on the issue, should heed an increasing number of Americans by taking a decisive lead on the issue

“California's state assembly has just passed tough Kyoto-style targets. Many businesses, fearing that they will end up having to deal with a patchwork of state-level measures, now want federal controls. And conservative America, once solidly sceptical, is now split over the issue, as Christians concerned about mankind's stewardship of the Earth, neo-cons keen to reduce America's dependency on the Middle East and farmers who see alternative energy as a new potential source of energy come round to the idea of cutting down on carbon.”

Interesting that American opinion is shifting but sad that bolder measures, such as adaptation and geo-engineering, do not figure in the Economist’s discussion. Mitigation – cutting carbon emissions – is certainly not the only and arguably not the best way of tackling climate change.

Labels: America, climate, environment

Monitoring the alleged sins of modern life

It turns out the humble Bacon, Lettuce and Tomato (BLT) sandwich is a Weapon of Mass Destruction (WMD). This month’s Ecologist magazine has a 10 page cover story on the subject plus an editorial by Zac Goldsmith. Among other things the BLT pollutes rivers because of pig faeces from intensive farms, destroys biodiversity through the production of soya to make fodder for the pigs, involves the use of dams to irrigate horticulture, uses pesticides, fertiliser and energy. All this for a food item which, the Ecologist claims, has no nutritional value.

Goldsmith suggests two solutions to deal with this apparent threat to humanity. First, “honest accounting” by which he means more taxes so the average BLT costs a lot more than the current average of about £1.80. Second, individuals should eat BLTs that are local and organic.

It does not take a close read to realise that what the Ecologist really objects to is modern agriculture. As Goldsmith argues in his editorial: “The BLT itself is not the problem, the global food system is the problem.” The issue also contains an award-winning essay by Clive W Dennis on “Humanity’s worst invention: Agriculture.” The essay is reminiscent of the 1987 piece by Jared Diamond, a leading American environmentalist, on agriculture as “The Worst Mistake in the History of the Human Race” (also see my 1 August dispatch). So it seems that environmentalists are not only hostile to the Industrial Revolution but to the Agricultural Revolution as well.

A quick postscript I cannot resist. This issue of the Ecologist also includes an insert from the Vegetarian & Vegan Foundation with a picture of an unhappy looking woman drinking a glass of milk. The main caption: “Up to 100 million pus cells in every glass …”. Delightful!

Labels: food, sin tracker

Joseph Stiglitz, a Nobel laureate in economics, is one of the high priests of growth scepticism. The former economic adviser to President Bill Clinton and chief economist of the World Bank is also a leading influence on the anti-globalisation “movement”. In today’s Financial Times he argues that economic growth in the developed world may not be beneficial because it could lead to widening inequality:

“Unfettered globalisation actually has the potential to make many people in advanced countries worse off, even if economic growth increases.”

Not an original argument but a powerful one. The counter-argument is the need for even more growth so that everyone can benefit. Inequality should not be used as a justification for restraint on growth.

Stiglitz’s new book, Making Globalization Work, is published in Britain this month by Penguin.

Labels: book, economics, globalisation, growth, inequality

It is a pity that so few people look at the masses of material published at this time of year by the International Monetary Fund (IMF) and World Bank. For example, the new edition of the IMF’s twice-yearly World Economic Outlook includes a chapter on patterns of economic development and growth in Asia (PDF). It points out that from 1981-2001 the number of people living in extreme poverty in East Asia declined dramatically with a fall of 400 million in China alone (using the meagre one dollar a day standard). Asia’s real income per head grew sevenfold from 1950-2005.

However, not all the news is good. Latin America and other developing economies lagged behind Asia. Also 700 million Asians, many of them in rural areas, still live in extreme poverty. The later statistic is from a study by Shahua Chen and Martin Ravallion in The World Bank Research Observer 9 (2) Fall 2004 but it does not appear to be available on the internet.

Labels: Asia, development, growth

I have a short article on Spiked on how hostility to modernity has become embedded in Western society (pasted below). It is part of a collection of articles looking at the fifth anniversary of the September 11 terrorist attacks:

What strikes me as most odd about the response to the 9/11 attacks was their representation as a specifically Islamic fundamentalist reaction to modernity. They were seen as mainly rooted in the caves of Afghanistan, the madrassas (Islamic schools) of Pakistan, and the desert sheikdom of Saudi Arabia. Hardly anyone seemed to notice that hostility to modernity has become mainstream in Western culture.

The enormous gains of civilisation are constantly being called into question. What were once, rightly, seen as huge benefits to humanity are now viewed with anxiety. The water that we drink and use to clean ourselves is seen as a scarce resource. Cheap food – which has liberated us from the curse of constantly living on the edge of starvation – is blamed for causing obesity. Long-distance travel is stigmatised. Cars are blamed for causing pollution and contributing to global warming. Aircraft are also accused of damaging the environment and the passengers they carry are criticised for undermining local cultures.

Attacks on modernity have their origins in the West rather than the Middle East. If a war is to be fought it should be against the ideology of anti-modernism emanating from Western societies.

Labels: modernity, spiked, transport

Frances Cairncross, the president of the British Association for the Advancement of Science, has said that there should be more of an emphasis on adaptation in tackling climate change. An article on the BBC website says she believes the Kyoto protocol will not work. Instead “She will urge countries to consider measures such as developing new crops, constructing flood defences, and banning building close to sea level.”

Labels: climate, economics

Let’s Build!, a new book by James Heartfield, is about to be published. As its title suggests it puts the case for a massive building programme for new homes in Britain. To quote the book’s publicity:

“This book explains why Britain stopped building homes for its citizens to live in. For too long government policy has been in the grip of officials who want to stop new building.

“Let’s Build! explains why all the reasons for not building new homes - the scare stories about the environment, about suburbia, about social cohesion - are just excuses.”

Heartfield is also talking at a conference at Kingston University on the suburbs on 23 September.

Labels: cities

A useful reminder of the limitations of the free market critique of growth scepticism. Prakash Loungani, the chief of policy communications in the external relations department of the International Monetary Fund, has written a review of William Easterly’s The White Man’s Burden in the Cato Journal 26 (2) Spring / Summer 2006. Easterly and indeed Loungani are worth reading as they often make astute criticisms of the development orthodoxy represented by the likes of Jeffrey Sachs. But the essential thrust of their criticism is that Sachs and his followers are too ambitious. In fact the opposite is true: the problem with the contemporary development orthodoxy is that it is not nearly ambitious enough.

Labels: development, economics, growth

A reminder from Sight Savers , a British-based charity, that most blindness can be cured or prevented. This month the charity is running an exhibition at the BA London Eye on “my favourite sight” by celebrities and Bangladeshi children. Most of the pictures are not to my taste but some of the background information on the organisation's website is useful. For example:

“Globally, there are 37 million people who are blind. 90 percent of blindness occurs in the developing world. Three quarters of all blindness is preventable or curable.”

Labels: progress, technology