How capitalist free markets can be used to save the environment

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The Great Hippo
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Re: How capitalist free markets can be used to save the environment

Postby The Great Hippo » Fri Jun 07, 2019 7:32 pm UTC

Zamfir wrote:Hippo, I think you are overstating your case here. "Making money for a company" is not the same thing as "making the world a better place", but there is some overlap between the areas. And quite some genuinely valuable innovation came and comes out of that overlap.
I mean, I agree -- "making money for a company" can overlap with "making the world a better place" -- but that overlap is entirely coincidental.

Maybe I'm overstating my case by I'm implying that capitalism is incapable of technological innovation, but what I mean is that capitalism is incapable of innovating in any direction outside of profitability. Our only hope with capitalism is to forcibly map profitability to progressive innovation. We try to do this through regulation, but capitalism innovates ways to work around regulation, and ultimately even take control of the very institutions we created to regulate it. The last two heads of the EPA (Scott Pruitt and Anthony Wheeler) both worked for the fossil fuel industry (and are both "climate change skeptics"). Because capitalism wants to transform the EPA into a marketing firm for the fossil-fuel industry -- and it looks like they've succeeded!

I think "capitalism doesn't drive technological innovation, it drives the capitalization of innovation" is, at least, a fair summary of this sentiment -- in so much that it is far more accurate. Capitalism drives innovation only by trying to make a profit from innovation, and thus is only interested in the types of innovation that are profitable (with no regard to how destructive they might be).
Zamfir wrote:I think you you are mostly wrong. Some people innovate out of passion, but even those passionate people mostly want a comfortable paycheck as well. Plus a lot of innovation isn't overly passionate at all, not more than other work. And a lot of innovation is not really invention either. A main part of innovation is adoption, scaling (and deciding what is and what is not worth adopting). That is arguably the core strength of capitalism, one that other institutions can't match.
When I said 'innovation', I unintentionally ignored the low-key day-to-day definition (improving a small bit of code, figuring out a more optimal scheme for cars in parking lots, building a toaster that uses less electricity). I was thinking more dramatic, transformative sort of stuff (say, the idea of natural selection, or the theory of modern computing). So, yeah, this is a fair point. That being said, while capitalism can quickly decide "what is and what is not worth adopting", it only can do so because it selects based on nothing but profitability. It will adopt horrible, confusing, and ultimately regressive practices whenever those practices are more profitable than simple, sane, progressive ones (see: mortgage systems, protection of proprietary technology, the complexities and insanities of America's health provision system, taxation...).

Aside: It's also really, really good at misinforming people. Marketing is a product of capitalism (or, at least, has been thoroughly refined and "weaponized" by it). One of the things that capitalism has learned to market is capitalism itself -- selling itself as the source for technology, progress, and positive change -- rather than merely a system by which technology is made profitable. Look at the recent spat of "progressive" commercials. I mean, it was cool when Gillette included transgender people in its ad campaign! But everyone seems to forget that the reason Gillette did this isn't because it wanted to be progressive; it's because it knew outraged blowhards would respond by giving it free advertising. Meanwhile, Gillette's parent company (Proctor and Gamble) continue to profit directly from the exploitation of workers.

I feel increasingly like people keep forgetting that capitalism is not on our side. We keep thinking it's something we can control. It's not; not in its current form. Climate change demonstrates just how little control we actually have. People have been talking about this problem for decades, and even now we're still having debates over whether or not it "exists". Why?

Because capitalism has spent an inordinate amount of time shutting down the discourse. Because actually addressing a looming global catastrophe is far less profitable than ignoring its existence.

Until, of course, it actually happens -- then it won't be profitable at all! But if one thing capitalism has taught us, it's that it's incredibly good at pretending something isn't poisonous -- up until the very instant you ask them to drink it.
Zamfir wrote:Take universities as comparison - these are a prime example of non-capitalist institutions in our world, and they are pretty good at invention (among other things). Arguably, they are overall better at invention than capitalist firms, or passionate amateurs, or government labs, etc. But they do have a notorious adoption problem. They generate lots of seemingly useful ideas, but they have trouble deciding which ones to push (and when to stop), how to organize the resources for large scale rollouts, how to connect to the wider world. Their organizational structure, the whole mindset they encourage, all of it starts to work against them at some point. It's not uncommon to find academic researchers begging the outer world to make use of their findings.
Right, but why do they have to do that? Because, in the context of capitalism, the only actual importance of a discovery is how profitable it might be. This is a problem when you come up with a great idea that capitalism can't monetize -- or, even worse, a terrible idea that it can.

I don't know enough about capitalism (or alternative systems) to say whether or not we could junk it in its entirety -- I certainly don't support state monopolies that end up just being capitalism in practice (except now the state is your corporation). But given how immensely powerful and caustic capitalism's influence is, I do think we need to stop thinking about it as a positive influence.

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Re: How capitalist free markets can be used to save the environment

Postby Zamfir » Mon Jun 10, 2019 11:12 am UTC

Lots of points to respond to...let's see how far we get.

If you want to improve on or restrict on capitalism, I think it's crucial to get sharp which parts are working, and also which problems are not unique to it.

For example, I suspect that greenhouse gas emissions are a wider problem, and that any "modern world" system would struggle with it. Electricity production is not exactly the most capitalist endeavour even in very capitalist places, and its heavily polluting everywhere.

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Re: How capitalist free markets can be used to save the environment

Postby ucim » Mon Jun 10, 2019 3:38 pm UTC

The Great Hippo wrote:...what I mean is that capitalism is incapable of innovating in any direction outside of profitability.
Captialism doesn't innovate. People innovate. Capitalism is a framework, not a thing-with-purpose. It is a set of incentives that map well to individual human desires, especially at a large scale. This makes it a good engine.
Spoiler:
In short it maps (roughly) to greed. Communism maps (roughly) to compassion. Compassion tends to dissolve when groups get too big, but greed is an individual thing, and is not subject to this effect.
Capitalism (and each of the other -isms too) is destructive if unrestrained. And [devotees of] all of the -isms tend to want to expand its influence. For that reason, some form of negative feedback is required to keep the bad parts in check. This is why there are regulations around profitmaking. (This is why there are regulations around anything.)

The Great Hippo wrote:The last two heads of the EPA (Scott Pruitt and Anthony Wheeler) both worked for the fossil fuel industry (and are both "climate change skeptics"). Because capitalism wants to transform the EPA into a marketing firm for the fossil-fuel industry -- and it looks like they've succeeded!
It's easy to blame capitalism for this, but I think that blame is in part misplaced. First, the immediate cause of this debacle is our Supreme Leader, duly elected in a flawed system (all voting systems are flawed in various ways) by a populace fallen victim to angry rhetoric. That's not capitalism's fault (despite the fact that our Supreme Leader is rich), it's the fault of complacency, on the part of politicians as well as on the part of citizens, both of which want easy answers to hard questions. And to the extent that it is "capitalism's fault", it's the same fault in all the other -isms - that the positive feedback loop of power begetting power, and sufficient power begetting corruption.

The Great Hippo wrote:Marketing is a product of capitalism (or, at least, has been thoroughly refined and "weaponized" by it).
Marketing has been weaponized by political propaganda machines too, in support of all the other -isms. Capitalism is not unique in adopting it. It's become much more powerful as a result of the pervasive surveillance state we have welcomed into our lives; admittedly marketing got us to embrace Big Brother and even pay to bring it into our home - what a coup! Capitalism made this easier, no doubt. But make no mistake; it would come anyway (in another form) under socialism, Marxism, communism, or any other -ism, because it's an example of a positive feedback loop gone awry, not of capitalism gone awry. That capitalism has positive feedback loops is not unique to it.

The Great Hippo wrote:But given how immensely powerful and caustic capitalism's influence is, I do think we need to stop thinking about it as a positive influence.
We need to stop thinking about it as an unmitigated positive influence. But nobody reasonable thinks that. True Scotsmen realze that its negative influences exist and need to be controlled in order for the positive influences to be of best benefit.

No -ism works well on its own. This is especially true when there is disagreement on what kind of society we want to live in (which is often a proxy for what kind of society we want others to live in).

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Re: How capitalist free markets can be used to save the environment

Postby The Great Hippo » Mon Jun 10, 2019 6:47 pm UTC

Zamfir wrote:Lots of points to respond to...let's see how far we get.

If you want to improve on or restrict on capitalism, I think it's crucial to get sharp which parts are working, and also which problems are not unique to it.

For example, I suspect that greenhouse gas emissions are a wider problem, and that any "modern world" system would struggle with it. Electricity production is not exactly the most capitalist endeavour even in very capitalist places, and its heavily polluting everywhere.
Maybe, but one of the largest challenges in addressing global warming in America is that a bunch of ultra-rich old men have spent billions of dollars on an extended decades-long campaign to misinform the public, install sympathetic bureaucrats in positions of power, and de-regulate any restrictions that address global warming (while pre-emptively prepping voters to vote against adding any more).

The physical mechanics of global warming might extend beyond the constraints of capitalism; there's lots of reasons to generate greenhouse gases. But the political problems of addressing it (at least in America) are intrinsically a product of capitalism's caustic influence. America has an aristocratic class based on wealth, and any comprehensive plan that addresses global warming would negatively impact the rate at which they acquire and concentrate their power.

America either needs to find a plan that still permits them to make more money (see: the Affordable Care Act) -- or stop respecting their desire to make more money when that desire means effectively obliterating the world's ecosystems.

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Re: How capitalist free markets can be used to save the environment

Postby Zamfir » Tue Jun 11, 2019 9:40 am UTC

Then again, the whole world is having the same debate, with fairly similar results. The US not an outlier when it comes to climate action.

A core question might be this: if an oil company is lobbying against climate action, is that a result of capitalism, or a nearly-unavoidable effect of oil production? Are there organizational forms of oil production that would not lobby against climate action?

Take Statoil as example. Norway is heavily pushing for climate action. It has the worlds most aggressive electric car program, in order to get rid of oil consumption. Its national investment fund (filled by Statoil) got political orders to divest from fossil fuels. But Statoil is pumping as hard as ever with no plans to stop until the fields run dry, just renaming itself to a more friendly Equinor. And it's a paid-up member of the American Petroleum Institute, among its other lobbying efforts.

We could say that Statoil (and every other state oil company) behaves mostly like a regular capitalist company, just with a country as shareholder. That is not entirely false, but it can be formulated the other way round as well: oil companies behave like oil companies, regardless of their ownership structure.

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Re: How capitalist free markets can be used to save the environment

Postby Thesh » Tue Jun 11, 2019 2:21 pm UTC

If the oil is not owned by the producers or the countries, then there is nobody to profit - workers get paid a market rate like they would for any other job, and the only people who can benefit from oil are the consumers of that oil. Make it so that consumption of natural resources is limited to a sustainable level, and then compensate everyone in the world for their share of the consumption, and there is very little to gain. The problem is that people (or countries) can make money for nothing more than owning natural resources, which means they lobby for anything that will increase consumption, and their economy then becomes dependent on it.
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Re: How capitalist free markets can be used to save the environment

Postby The Great Hippo » Tue Jun 11, 2019 10:28 pm UTC

Zamfir wrote:Then again, the whole world is having the same debate, with fairly similar results. The US not an outlier when it comes to climate action.
Are many other developed nations outside the US genuinely arguing that climate change isn't happening? I don't know what's going on outside of US politics, but if most other countries don't even accept the literal existence of climate change (not even whether or not it's man-made; the very fact that climate change is occurring), then we're even deeper into this hole than I thought.
Zamfir wrote:A core question might be this: if an oil company is lobbying against climate action, is that a result of capitalism, or a nearly-unavoidable effect of oil production? Are there organizational forms of oil production that would not lobby against climate action?
Capitalism is a system by which wealth is concentrated into the hands of a few, who can then use this wealth to reinforce the systems by which wealth is concentrated into the hands of the few. So, to me, it sounds like you're asking: "If we got rid of over-concentrated wealth, would we really get rid of all the problems that result from over-concentrated wealth?"

And, I mean -- yes? It seems rather obvious that if oil companies didn't have billions of dollars with which to manipulate public sentiment and legislation in their favor, we wouldn't have the problem of oil companies burning billions of dollars to manipulate public sentiment and legislation in their favor.

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Re: How capitalist free markets can be used to save the environment

Postby somitomi » Wed Jun 12, 2019 9:26 am UTC

The Great Hippo wrote:
Zamfir wrote:Then again, the whole world is having the same debate, with fairly similar results. The US not an outlier when it comes to climate action.
Are many other developed nations outside the US genuinely arguing that climate change isn't happening? I don't know what's going on outside of US politics, but if most other countries don't even accept the literal existence of climate change (not even whether or not it's man-made; the very fact that climate change is occurring), then we're even deeper into this hole than I thought.

Bad news: I think I've seen the Hungarian government party dismissing climate change as a falsely overblown problem used to distract us from the real one (i.e. migration). I would like to think this is just Fidesz making everything about migration, but Hungary has opposed strict emission goals in the EU, mainly for their negative impact on German car manufacturers (and by extension, Hungarian economy). Meanwhile, Áder János (president of the republic) still promotes enviromental protection, so there's that.
This is of course just one tiny country out of about two hundred.
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Re: How capitalist free markets can be used to save the environment

Postby Zamfir » Wed Jun 12, 2019 6:33 pm UTC

Yeah, climate change denial is not just an American thing, even if it is strong in the US. Also, denial is just one strategy to avoid action. In countries where denial is rare, people employ other arguments for the same effect.

Hippo, I agree that concentrated wealth has a corrosive impact. I am less sure that it has a major impact on the climate change debate. Its politics are much more structural than personal. You ask, what if oil companies did not have billions? And I say, oil companies have billions because of the nature of the business. You can have them without billionaire owners, but you dont need those to be a political force. Thesh proposes some kind of consumer-cooperative oil company. Such organisations would still be a force to be reckoned with, with a strong interest in preserving fossil fuels as a cornerstone of the economy.

The benefits of fossil fuels are widespread, not deeply concentrated among oligarchs. Everyone is impacted by a phase-out, that's exactly why the topic is so tough. Of course, some industries stand to lose more than the average. Those tend to function as organizer, as nucleus for resistance against climate change. Here too, it's not just oligarchs who stand to lose! The rank-and-file knows perfectly well what happens, when an entire sector goes under.

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Re: How capitalist free markets can be used to save the environment

Postby Thesh » Wed Jun 12, 2019 6:49 pm UTC

I'm advocating for globally owned natural resources. If everyone owns the oil equally, then that translates into 80 million barrels per day at $70 per barrel with probably 10%-20% of that being profits divided by 7.7 billion people, or about ten cents per person per day if you compensate them for the price of the oil in the ground. It also works out that people who consume more than average would pay the people who consume less than average. There is very little to gain from consuming more oil unless that oil is concentrated in few hands, and consumers have other concerns like pollution and climate change. If things were consumer owned, we would probably not have problems with denying climate change.

Large scale climate change denial requires powerful people with a lot to gain.
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Re: How capitalist free markets can be used to save the environment

Postby The Great Hippo » Wed Jun 12, 2019 10:23 pm UTC

somitomi wrote:Bad news: I think I've seen the Hungarian government party dismissing climate change as a falsely overblown problem used to distract us from the real one (i.e. migration). I would like to think this is just Fidesz making everything about migration, but Hungary has opposed strict emission goals in the EU, mainly for their negative impact on German car manufacturers (and by extension, Hungarian economy). Meanwhile, Áder János (president of the republic) still promotes enviromental protection, so there's that.
This is of course just one tiny country out of about two hundred.
Well, that's shitty.
Zamfir wrote:Hippo, I agree that concentrated wealth has a corrosive impact. I am less sure that it has a major impact on the climate change debate. Its politics are much more structural than personal. You ask, what if oil companies did not have billions? And I say, oil companies have billions because of the nature of the business. You can have them without billionaire owners, but you dont need those to be a political force. Thesh proposes some kind of consumer-cooperative oil company. Such organisations would still be a force to be reckoned with, with a strong interest in preserving fossil fuels as a cornerstone of the economy.

The benefits of fossil fuels are widespread, not deeply concentrated among oligarchs. Everyone is impacted by a phase-out, that's exactly why the topic is so tough. Of course, some industries stand to lose more than the average. Those tend to function as organizer, as nucleus for resistance against climate change. Here too, it's not just oligarchs who stand to lose! The rank-and-file knows perfectly well what happens, when an entire sector goes under.
But do you really think the oligarchs are representing the industry's interests, here?

If what you're saying is that capitalism is not the only vector through which political power is exerted, I agree; I can also see how my focus on capitalism implies that I think capitalism is the only obstacle here (I don't). Global warming is complex, and involves balancing the concerns of the oil industry with the concerns of the environment! But the thing is -- the people running these companies are not concerned with either!

Don't mistake the investors' interests with the interests of the industry: People like the Koch brothers don't give one flying fuck about these plants. They're here to make money, and they'll make whatever decisions make them the most money. If burning every oil refinery down to the ground makes them more money, that's what they'll do -- they've got liquidity. They can just start over somewhere else. The rank-and-file like me? We're the ones stuck here.

I've worked in a plant that's been on the threshold of shutting down -- not because it was unprofitable, but because the investors running it thought it wasn't profitable enough. Think about that: "This plant makes money, sure; but it's not making enough money. So, we've got absolutely no choice but to shut it down and put everyone out of a job. What's that? All your families will lose medical coverage and your homes? That's a shame, but what can I do? It's more profitable for me to take my money elsewhere." -- Can you understand how obscene this is? And under capitalism, that's the person who's speaking on my industry's behalf. It took the union pushing to find companies to buy (and convincing them we could still be immensely profitable) to save the plant. Investors didn't protect the industry; workers did. Because the investors and oligarchs aren't part of the industry -- they're just tourists here to make a buck.

You're right that there's a lot of interests to balance here, and that it's a complex issue -- but right now? The conversation isn't "How can we best refit the oil industry so as to stop global warming while allowing the rank-and-file to continue working?". It's: "How can we let these investors squeeze as much money out of these plants before they're forced to shut down?" I have no idea whether or not Thesh's solution would work. But at least it would mean the conversation wouldn't be about maximizing returns for investors -- but rather, how to keep these plants operating while not cooking the planet.

The conversation needs to include the interests of those impacted by the industry, yes -- but because of capitalism, it's dominated just by the people profiting from it.

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Re: How capitalist free markets can be used to save the environment

Postby Zamfir » Fri Jun 14, 2019 3:24 pm UTC

But do you really think the oligarchs are representing the industry's interests, here?

I would say there are two stages here. In the first stage, yes, the oligarchs have roughly the same interests as the wider industry. Stick to the status quo, don't take climate action, keep burning fossil fuel. Your story underlines that unions and workers have as strong drive to keep plants running.

Now, if there were a political agreement to phase out fossil fuels (and especially if the goal is to phase out fast)? Then you get stage 2 where the interests start to diverge. Investors want compensation. Workers want other jobs, good jobs. These goals are not in direct conflict, but they are different and it matters who is at the table doing the asking.

Now, AFAICT, most people do not believe that this will happen fully. And they believe this with good reason. Climate action is expensive enough, and the rest of the people are not going to be overly generous when they themselves are facing higher prices and higher taxes. Governments will arrange some compensations and job programs, but not enough to offset the losses.

The German federla governmen recently decided to phase out coal. They did invite many interested parties, in particular investors, unions and local governments of affected areas. They put a pot of federal gold on the table to soften the blow, and basically told the affected parties to divide the pot between them if they could agree on a phase-out schedule. That is not a bad way to do it, but the final plan still runs to 2038, and no one is happy.

Which means that both investors and the rest of the industry have good reason to stretch stage 1 as long as possible.


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