The economy of nature and the case for big government

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Poster from the WPA

I am an economist. As a professional ecologist I have been trained in the economy of nature. It is only those economists that service the financial industry who treat the human economy as if it is separate from the economy of nature. Since the time of Adam Smith the evidence has been overwhelming that they are tragically wrong.

I continue to be impressed by the twisted economic logic that has been applied to the mitigation of climate change and now to the management of COVID-19. In both cases governments and the financial industry have acted on the assumption that growing the economy, or in the case of COVID-19 rebuilding it, will fix these problems. Yet in both cases it obvious to most scientists that failure to address the underlying dysfunction makes it impossible to maintain a healthy economy, or for that matter, a functioning civilization.

In the case of climate change, the neoliberal capitalist argument is that economic growth will ameliorate or even obviate the damages from climate change. Of course, economists say, we will simultaneously pursue some measures to reduce emissions (e.g., clean coal through CCS), although the evidence is clear that continued additions to the greenhouse gas burden of the atmosphere will hasten the wholesale transformation of the Earth System. We are already on the happy road to hell and ecologists know that we are out of time.

As evidenced by a recent poll at Davos, economists and big businesses have not gotten the message. They argue that with a big enough economy, climate change will not matter….well, at least not matter so much for wealthy nations. Thus, we drill baby drill in Ecuador, Federal lands in the US West, in Siberia, and in the Arctic while mining increasingly hard to get oil from tar sands and through fracking.

COVID-19 represents the same failure of clear thinking by many of the world leaders, but its damage is unfolding much more rapidly. This is especially true in the US. After a chaotic and weakly effective national strategy for control, the government has decided that the cure is worse than disease. The Trump administration and many state and local governments are opening the economy without the necessary controls to manage the disease (see Sweden for how to get it right). This is especially, but not exclusively, underway for those governments dominated by the GOP.

All respected scientific groups in the world predict that this will result in tens of thousands more deaths and massive morbidity that will afflict perhaps millions for the remainder of their lives. There is much that we don’t know about COVID-19 pathology. With such a half-assed strategy in several Western democracies and especially in the United States, COVID-19 will continue to cripple the global economy and it is unlikely that some sectors such as air travel will ever recover.

For both climate change and COVID-19 we need systemic change that can only be managed through massive government intervention. This requires WWII-level investments of cash and management of resources on a global scale. In the case of climate change, millions of people must be put to work to restore the biosphere and the burning of fossil fuels for energy must be outlawed. For COVID-19, billions or perhaps trillions of dollars must be spent to save and restore the health of those afflicted. Treatment and long term care must be separated from the mercenary pharmaceutical and so-called health insurance industries. The health insurance industry should be so heavily regulated that it will be forced to abandon its present business model.

Addressing climate change and COVID-19 must be achieved through strategic transformation of the global economy. Such a transformation will entail rapid transition to renewable energy and net zero carbon emissions as soon as possible. Millions of people could be put to work in a transformed energy sector. Through creative financing the economy of nature could be partially monetized by creating value for elements of a restored biosphere. Addressing COVID-19 would require much more than an infusion of a trivial $1200 per month per person. Long term financial support of citizenry is necessary and restoration of the biosphere is a means of connecting the needed labor to government payments. Corporations should be supported only to the extent that they are willing to participate in the large scale retraining of workers and the overall transformation of the economy to a sustainable model. They should be required by law to actively participate in achieving net zero emissions.

Liberal democracy is founded on the understanding that good government is necessary for the preservation of civilization and the well being of citizens. As conservative elements have fully embraced neoliberal capitalism we have progressively crippled and dismantled the means of recovery from climate change and COVID-19 through good government. If there was ever a time in history when we need good, big government, it is now.

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