Act or Perish

The case for a carbon tax

Modern media discourages critical thinking and makes people dumber than they really are. In order to appeal to the masses, news reporting is simplified to the point of inconsequence: a story has to be brief, intelligible, and not too distressing. Most topics – war, famine, or natural disasters – are given the same 45-second time slot and sandwiched between advertising and celebrities behaving badly. We are never encouraged to pause and reflect - in fact the opposite is the case. News stories are selected for their entertainment value rather than their relevance. Television has made entertainment itself the natural format for the representation of every experience. The result is a society always expecting to be amused. A society incapable of engaging in serious discourse; unable to separate the trite from the noteworthy.

Written language started to change during the late 1970s. An unbroken trend of increasing rationality that had lasted for 120 years was precipitously reversed. Since then, written language has become increasingly emotionally charged and often verges on the irrational. So what went wrong?

The 1970s was a transformative decade. But after a promising start it ended badly. Greenpeace was founded in 1971, the Club of Rome published 'Limits to Growth' in 1972, and the UN's 'Conference on the Human Environment' was held in Stockholm the same year. Climate modeling progressed significantly, and the causes and effects of global warming were well understood by the end of the decade. The only known habitable planet in the known universe was well on the way to being saved.

It was not to be, however. Instead we got Margaret Thatcher, Ronald Reagan, climate denialism, and neoliberalism. Emboldened by economists like Friedrich Hayek, the elite owners of capital struck back, achieving an unlikely but crushing victory. Indeed this scientific counter-revolution was so complete that it managed not only to end the Age of Enlightenment but to wipe out any memory of it ever happening.

To understand what took place, we need to remember that many Western nations were struggling during the 1970s. They had recently lost control over most of their colonies, and the remaining colonial wars, like the one in Vietnam, were not going at all well. In addition, the US had just run out of cheap oil, leading to an oil crisis with a massive increase in global energy prices. This, combined with the cost of the Vietnam War, forced the US to abandon its gold-based currency and quit the Bretton Woods agreement in 1973.

This was the era of stagflation - a combination of inflation, sluggish economic growth, and unemployment. The decade was also characterized by the anti-war movement along with a number of important social developments. The economy was doing poorly, and public trust in governments was declining. Cracks had appeared in the old patriarchal world order. At this point, the capitalist class came up with a brilliant plan. Rather than trying to restore people’s faith in governments, they would undermine it entirely.

Neoliberalism was the result - an anti-democratic concept that the free market can do no wrong while governments can do no right. Since the latter had messed up, it was time to shrink government to a size where it could do no harm. Neoliberalism was essentially the deification of the free market. It introduced a set of dogmas that are beyond question. Like all religions, however, it is not evidence-based. Its basic premise, that capitalist free markets produce optimal outcomes, was never supported by the evidence.

Above all, neoliberalism is the bizarre belief that the meanest of men, for the miserly of motives, will magically use their wealth for the benefit of all. It does nothing to address the problems of pollution and resource scarcity on a finite planet because these problems don't have a solution within a capitalist machine requiring relentless growth.

Since many people — especially economists — seem confused about how the economy works, let me offer some clues. First, we must appreciate that money is nothing more than a medium of exchange. If you have one ton of steel, you can use it to build wind turbines or airplanes. The choice is political and should be based on what is best for society. No financial alchemy will allow you to build a wind turbine and an aircraft from the same piece of steel. Likewise, the workers and engineers needed to construct things can only work on one thing at a time. Somebody must decide how to allocate available resources. A market economy is controlled through money. If you want to build wind turbines, you allocate money for this purpose and use it to buy the steel and pay the workers. Obviously, this means that people with a lot of money have a lot of power and can dictate how to use the scarce resources of our planet. If there are enough billionaires, a lot of steel and manpower will be devoted to building luxury yachts and space ships.

In neoliberal economics, money treated as a scarce resource. This creates a market for money, allowing people with lots of it to engage in extortion. The money lenders do not only want to get their money back but also demand interest, which is known as capital income, or return on investment. For this to work, the total money supply has to increase, meaning that central banks need to continuously print more money. This will lead to inflation unless there's also more stuff to buy. If the economy does not grow, the supply of money (adjusted for inflation) does not increase, and capital income ceases to be relevant. When the economy stops growing, the financial sector will vanish. It is as simple as that.

'Limits to Growth' argued that unconstrained growth is impossible on a planet with finite resources. Since this is obviously true, the neoliberals had no way of countering the conclusion using objective arguments. So they initiated a fraudulent campaign to discredit the report and its authors instead. The matter of how unlimited growth is even possible on a finite planet was never answered. Rather, the question was banned from the political discourse. The mantra that there was no alternative to capitalism and economic growth was drilled into our heads through constant repetition. Anyone who dared to challenge this was mocked unmercifully.

Today, this approach is all too well known. The American invasion of Iraq in 2003 was justified by Saddam Hussein’s secret weapons program that did not exist. People who dared to question the sanity of the war were quickly silenced. The Western empire is a plutocracy. A small number of very wealthy people have all the power, and they are prepared to commit murder to keep it that way.

To Edward Bernays, the so-called father of Public Relations, propaganda was simply a tool that could be used to influence thought. It mattered not whether the purpose was to market and sell a product or to promote a political idea, or even whether the cause was good or evil. Convinced of the need to influence society, Bernays even complained that politicians were too slow in applying the latest techniques of mass manipulation which had been invented by the private sector.

If we combine the insights of Bernays about the need for the elite to manufacture mass consent through narrative management and propaganda, the conclusion from 'Limits to Growth' (1972), and a remark by Neil Postman in his book 'Amusing Ourselves to Death' (1982) that television can be used to make people stupid, we understand what happened to written language at the end of the 1970s: the people in power had both the motivation and the tools required to turn the population of the Western world into mindless consumers.  

This approach was inordinately successful because we were essentially told what we wanted to hear. The narrative presented to us by the plutocrats was 'bread and circuses' on steroids and the ultimate Faustian bargain: if we give the capitalists free reign to subdue nature and conquer the world, a decree to be found in the scriptures of all monotheistic religions incidentally, they will deliver a veritable cornucopia of goods and services, a pleasurable pseudo-reality of material abundance, in return.

In effect we designed a facade of prosperity to satisfy our cravings without requiring us to interact with the real world or to understand the consequences of our actions in any form. To some extent, this is not new. The advanced lifestyle of ancient Rome was made possible by a constant influx of food, treasures, exotic animals, and slaves plundered from all corners of the Roman Empire. Even today when you travel to any of the capitals of former colonial powers – London, Paris, Madrid, Vienna, Lisbon, St Petersburg – you can still be awestruck by all the stolen goods on display. Empires exist because they manage to subjugate other countries and steal their resources. There has never been a sustainable empire, nor will there ever be one. Yet the people living in the imperial capitals were encouraged to disregard the atrocities required to acquire the wealth, focusing instead on revelling in the idle trivialities related to affluent life.

Today, the role of the Roman Empire is played by the United States of America. It is the only nation with a truly global military presence, with between 750-800 bases in some 80 countries, and it regularly uses that power to ensure access to valuable resources and to suppress any opposition.

The Global North has less than 14% of the world’s population, 56% of global GDP, and almost two-thirds of all military spending. The excessive consumption of the rich countries not only destroys the planet but also needs a massive inflow of natural resources from all over the world and an outflow of waste that is either disposed of in poorer countries or in the atmosphere through waste incineration. The large military spending is necessary to force poorer countries to hand over their resources and labour without asking too much in return and, frankly, to give the impression of omnipotence.

Even if we were to believe that the purpose of NATO is to ensure peace and stability, we ought to fire its leadership for incompetence. Should we not expect more peace and stability for $1,341 billion per year? Anyone who truly believes the Global North fights for freedom and democracy rather than protecting the business interests of large corporations has watched too many Hollywood movies. War is a racket, and a profitable one at that. The US empire is neither virtuous nor moral. It's a society built on colonialism, wars, slavery, genocide and fossil fuels.

The combination of modern technology and industrialized mass production made European armies invincible from the middle of the 19th century onwards. This allowed the Global North (i.e. the colonial powers) to engage in extractivism on an unprecedented scale, consuming natural resources and exploiting people all over the world. This was never going to end well. As the planet is finite, we will either run out of resources or poison ourselves within the foreseeable future, just as predicted by 'Limits to Growth'. And in a world of increasing resource scarcity, the fact that a small part of the population is consuming far too much is morally unacceptable. It's bound to result in violence and war.

Today, the world is again marching down the road to war. Military spending is exploding. Many Western nations are discussing reintroducing compulsory military service. The major powers are again investing in nuclear arms. Why? If nuclear weapons were only considered a deterrent, we have more than enough of them. Are some people crazy enough to believe that nuclear wars can be won? More importantly, do we actually believe that governments who are so eager to introduce mandatory military service and spend trillions on weapons of mass destruction to protect corporate interests really care about biodiversity and the future of our children? If they are fine with sending young people off to die in needless wars, they are probably fine with allowing them to die of heat stroke.

Governments lie all the time. They are compelled to do so as they don't represent the people who elect them. Propaganda is not only about disinformation. It's about creating a narrative, and sustaining an illusion, that is more appealing to our senses than the truth. Juvenal hit the nail on the head some 2000 years ago when he coined the term 'bread and circuses.' Today, the 'circuses' consist of modern media, starting with television and continuing with the internet, streaming services, and social networks. The 'bread' is provided by industrialized mass production, allowing us to live in a world of unprecedented material affluence.

The problem with mass production is that it also requires mass consumption. As soon as the fundamental material demands of the population have been met, the economy can only grow by convincing people to buy stuff they don't actually need. In an affluent society, companies don't develop products just to meet existing demand. Instead, they first have to create the demand using clever marketing strategies. Anyone with a brain will instantly understand that this breaks the classic model of the market as an equilibrium of supply and demand, since the same corporations are responsible for providing both. Unfortunately classic economic theory fails to take this into account.

Of even more concern are the psychological consequences of affluence and the avoidance of austerity. Enthusiasm for material growth creates an illusion. It is designed to partially satisfy our desires, but not completely. We are left wanting more. To keep the economy going, corporations have a license to appeal to our basest desire: mindless envy. Once this scheme was in place, constructive political discourse was no longer possible. After all, people who believe unlimited economic growth is possible on a finite planet have a very loose grip on reality. It is not surprising that they are confused on other issues. They have all become spoiled, pampered, and clueless.

The problem is that this has been going on for at least 50 years, meaning that the current generation of politicians and business leaders were brainwashed already as children. The people in suits and ties who like to complain about our misguided youth are at least as confused themselves. Politicians have always lied to the people, but I have a strong feeling that Bismarck or Churchill knew when they were lying. The same might still be true for Putin and Xi Jinping. I am not so sure about Western politicians.

Generations of politicians and business leaders have been mired in bullshit and bombast for so long that they have lost touch with reality. It will be difficult for them to change their tune, even if they can be made to see the light. To get out of this mess, we must accept that we have been lied to, even though it's painful, and start reconstructing the truth.

How can we know the truth? People tend to believe that something is true because it's been published in a peer-reviewed journal, or because it's been stated by a person of authority. Sadly, both answers are wrong. The editor of The Lancet, one of the most prestigious medical journals in the world, believes that more than 50% of published science is questionable if not downright misleading.

In fact hypotheses become established theories once they have been tested often enough and passed all those tests. In other words when many independent groups have failed to falsify them. If two scientists disagree on something, they are supposed to collaborate by designing an experiment to find out who is right. Otherwise, no knowledge is generated. Unfortunately, this does not seem to happen anymore.

When it comes to the energy transition, some scientists are convinced that it will be possible to replace fossil fuels with renewables, while others argue that this will not work because we are running out of raw materials. Both sides publish in peer-reviewed journals, but their views do not seem to converge. Thus, no knowledge is generated, and we simply do not know to what extent the energy transition is possible. Likewise, whenever there is a recession, some economists argue for austerity and others for deficit spending. Again, no consensus can be found, as they simply do not know. If you do not know, you either have to conduct an experiment or play it safe.

Climate scientists fell into a trap of their own making by overselling the accuracy of their models in their efforts to convince politicians of the seriousness of the situation. This created the impression that climate change is a manageable problem. However, eminent climatologists like James Hansen argue that current climate models severely underestimate the consequences of climate change. I am not saying that James Hansen is right. The point is that since we only have one planet and there are uncertainties in the models, surely it's best to play it safe and reduce emissions as quickly as possible.

The best option available to us at the moment is a cap and dividend carbon tax. Cap and dividend is a market-based trading system which retains the original method of cap and trade, but additionally includes compensation for energy consumers. This compensation is to offset the cost of products produced by companies that raise prices to consumers as a result of this policy. We are currently conducting an uncontrollable, irreversible, high-risk experiment with the only habitable planet in the known universe, even though we know the consequences will be disastrous. What is the problem with conducting a controllable, reversible, low-risk experiment with the economy instead?

Let's assume the we introduce a global carbon tax of $100 per ton of CO2 and distribute the revenue equally among the people of the world. The total revenue would be $3,800 billion. That compares well to global military spending of around $2,400 billion. This is enough money to give every person on the planet a universal income of $478 per year, alleviating hunger and poverty in many poorer countries.

Next, we look at the global money flows using data from the World Bank. Every country would have to cope with higher energy prices, but they would also receive money from the fund. If we assume the carbon footprint of a country to be proportional to the GDP, the Global North would be the sole net contributor with $1,619 billion per year. All other countries in the world would benefit, as the payouts from the fund would easily cover the higher energy costs.

The plutocrats of the Global North would not be happy of course as they expect the money to flow in the other direction. Indeed, they can be expected to do everything in their power to stop such an initiative. But what about the rest of us? There can be no healing without remorse. The Global North has wrecked the planet and became rich and powerful in the process. At the moment it simply refuses to pay for the damage done. Unless this changes, we will have to cope with the ongoing destruction from countless wars in addition to the droughts, heat waves, and severe weather resulting from global heating. We must either act or perish.