Energy and Environment

Standard socialist fallacies #1: “Socialism is good for the environment”

On 1 December, I participated in a panel discussion at the Indian Embassy. Is there a third way between socialism and capitalism? That was the question. The third way was represented by Dattatreya Hosabale, an advocate of “integral humanism”, a political philosophy originally developed by Deen Dayal Upadhyaya in the mid-20th century. I represented capitalism. And Andrew Harrop, the head of the Fabian Society, made the case for socialism.

It was an enjoyable occasion. Most debates are narrowly defined. Should the government lift the public sector pay cap?  Should it adopt unilateral free trade upon leaving the customs union? That kind of thing. It was good to get the opportunity to tackle the big questions head on.

Beyond its being a third way between capitalism and socialism, I am afraid I didn’t come to understand integral humanism. It favours local democracy and rejects the materialism that its advocates take to be inherent to capitalism. But that is all I came away with. The philosophy seems to be closely associated with Hindu traditions, and I suspect I lack the cultural grounding to “get it”.  The audience, most of whom were Indian, probably understood Hosabale’s position better than I did.

By contrast I understood Andrew Harrop very well. This is not only because he was admirably clear and open. It is also because all the familiar modern left-wing ideas were there in what he said. Socialism is good because it promotes equality, including gender equality. (He lamented the absence of a woman on the panel.) The failed socialist experiments of history provide no evidence that socialism is a bad idea. Everyone in society should have equal power, but those with more money have more power. European social democracies are more successful societies than the UK. Only the state can provide the population with skills. Capitalism harms the environment, as global warming shows. The policies of democratically elected governments cannot be coercive. And so on and on.

The organisation that arranged the event, Vichaar Manthan, also filmed it and I guess it will soon be available on their website. I recommend it to anyone who seeks a distilled exposition of the modern left-wing worldview. I will probably need to refer to it myself. Because I have been inspired by the event to write a series of blog posts exposing the error in each of Mr Harrop’s ideas, and I am, for now, working from memory.

Because I have already used up half of this post, I will begin with an easily explained mistake. It is not an erroneous belief but an error of reasoning. As mentioned, one of Mr Harrop’s complaints about capitalism is that it has caused global warming. Let’s not argue about the facts to date. Let’s accept that the climate has indeed warmed over the last 50 years and that this has been caused primarily by man-made emissions of CO2.

Why complain about it? The standard answer is that sea levels will rise and swamp coastal cities, crops will fail, fish will die in a warming ocean … Global warming will be calamitous.

But this is only a prediction, and an uncertain one at that. Even the IPPC claims no certainty about the path and effects of global warming. What we actually observe, as opposed to predict, is that the Earth now supports more people at a higher standard of living than ever before. Perhaps calamitous global warming will be upon us one day. Then Mr Harrop can appeal to it in arguments. But not yet.

Nor would global warming be relevant to the debate between capitalism and socialism, even if it could legitimately be appealed to. Suppose CO2 emissions really will cause calamitous global warming. Then they are an example of negative externalities. People emit too much CO2 because they do not bear all the cost of doing so. The Tuvalu islander whose home is washed away also bears the cost.

The best remedy is a matter of debate. But, again, let’s accept the standard view of anti-global warming campaigners that CO2 emissions should be taxed at a rate equal to their external cost.  A market liberal need have no objection to such “Pigouvian” taxes on actions with negative externalities. After all, most market liberals think that state coercion (including taxation) can be justified when it stops people from harming third parties.

Nor is there any reason to believe that a socialist government will be more inclined to protect the environment. If a government owns the coal power station that emits the CO2, will it be more or less inclined to impose emissions taxes?

Understandably, Mr Harrop wants to ignore the actual history of socialist regimes – a condition he put on the discussion at the start of his remarks. But if he were willing to take a glimpse, he would see that they have not been kind to their environments. The Soviet Union’s industrialisation, for example, involved astonishing damage to the environment and the health of Soviet citizens.

It is unsurprising. The problem of externalities arises when the decision-maker does not face all the costs and benefits of his decisions. It is an unavoidable problem when there is more than one person on Earth. But it is minimised by private property. If I damage land that I own, I suffer the cost of it through a reduction in its market value. In socialist regimes, the people who make the decisions do not own the land they affect. So they have little incentive to protect it.

Socialists such as Mr Harrop may genuinely care about the environment. But they favour a system in which those whose decisions affect the environment will have little reason to care about it. “Sharing is caring”. This may be true for children and toys. For grown-up decision makers, owning is caring.


Former Director of Research

Jamie Whyte is the former Research Director at the Institute of Economic Affairs. Prior to joining the IEA, Jamie was the leader of ACT New Zealand as well as the Head of Research and Publishing at Oliver Wyman Financial Services. He has previously worked as a management consultant for the Boston Consulting Group, as a philosophy lecturer at Cambridge University and as a foreign currency trader.

2 thoughts on “Standard socialist fallacies #1: “Socialism is good for the environment””

  1. Posted 11/12/2017 at 11:09 | Permalink

    “Within climate change against capitalism -pushing hard to decarbonise as rapidly as possible in ways that set the stage for a sustainable socialist society”. Says a PhD in Political Science at Yale, with an MSc from Oxford and a BA from Stanford –

  2. Posted 12/06/2018 at 15:14 | Permalink

    Can we also refer to ‘Capitalist regimes’ ?

    Unfortunately a lot of people are like sheep and they will believe this drivel.

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