Why “overthrowing capitalism” would not avert climate change
This has given rise to the fashionable idea that climate change is a specifically capitalist problem, most famously expressed by Naomi Klein in her bestselling book This Changes Everything. Klein is particularly hostile to the idea that climate change can be averted by using relatively simple, market-compatible measures, such as carbon taxes or emissions trading schemes. To anti-capitalist climate activists, such measures represent a mere tinkering around the edges. They are doomed to fail, because all they do is change incentives within capitalism, when the root cause of the problem is capitalism itself.
Similarly, George Monbiot also dismisses pricing mechanisms as a distraction. Only wholesale system change will do. The other week, a video in which he claimed that “we have to go straight to the heart of capitalism, and overthrow it” went viral.
And in the New Statesman, the Marxist economist Grace Blakeley asserted:
“The only way to halt climate change is to challenge the logic of capitalism itself […]
Dealing with the existential threat humanity is facing requires the kind of radical state intervention that no liberal government would consider […]
This would mean […] democratic public ownership over most of the economy, dramatic increases in state spending, and […] controls on capital mobility”
Do those anti-capitalist environmentalists have a point? Is reducing emissions feasible within a capitalist economy? What is the best way to limit climate change – carbon pricing, or a socialist revolution?
How effective can e.g. a carbon tax be? The answer is very simple: it depends on the rate. A carbon tax of £1 per tonne of CO2 would have no discernible effect. A carbon tax of £10 per tonne of CO2 would have a noticeable effect. A carbon tax of £100 would have a huge effect. And a carbon tax of £1,000 would bring most carbon-based economic activity to a halt.
So effectiveness is not the issue. You can, in principle, reduce carbon emissions (or at least, those emissions over which we have control) by 100% with a carbon tax alone. But any reductions in carbon emissions come at a cost, namely, a reduction in living standards. That is not a reason not to do it, but the trade-off exists.
In contrast, what would happen to carbon emissions if people like Grace Blakeley got their way, and most of the economy was nationalised, turning us into the Democratic People’s Republic of Great Britain? The answer is: nothing. If you nationalise a private company with a carbon footprint of, say, 10 tons of CO2, then that company will still have a carbon footprint of 10 tons of CO2. Sure, you can now add “The People’s” to the company’s name, and a hammer and sickle to its logo. But on the ground, nothing has changed. It is still be the exact same company, using the exact same production methods and the exact same production facilities.
Of course, after nationalisation, those companies would be run by politicians and bureaucrats (or in socialist mythology, they’d be collectively run by The Working Class). Their goals and priorities will differ from those of entrepreneurs. They may, for example, decide to cut production in order to reduce emissions. But then, that could also have been achieved with a carbon tax, and without nationalisation. Or they could ramp up investment in energy efficiency, even if the cost of that investment exceeds the savings in energy costs, and raise their prices correspondingly. But, again, a carbon tax could also have pushed them to do that. Or they could switch to costlier, low-carbon energy sources, and raise their prices correspondingly. But, once again, this could also have been achieved with a carbon tax. It certainly does not require a government takeover.
Either way – the trade-offs are still exactly the same as before. Reducing carbon emissions requires reductions in living standards. That is true in a capitalist economy, it is true in a socialist economy, it is true in a mixed economy, and it is true in any other type of economy. “Smashing the system” changes nothing, in this respect.
Trendy Marxists see power relations and class struggles where there are really just old-fashioned economic trade-offs that are common to all economic systems. Climate change has not been caused by the “greed” of “the corporate elite”. The truth is much more mundane. Companies produce goods and services that people want, and carbon emissions are an unfortunate byproduct of that. We happily buy their goods and services, all the while condemning the companies supplying them for “destroying the planet” with their “greed”.
Climate change is something to be worried about, but it is not something to be angry about. Because there are no culprits, and there are no villains in this story. There are just trade-offs. The righteous rage of the climate protesters is entirely misplaced.
Anti-capitalist environmentalists see themselves as the brave nonconformists, who tell us some extremely uncomfortable, inconvenient truth that most of us are too afraid to face. Nothing could be further from the truth. It is incredibly easy to blame “the corporations”, or “the system” in the abstract. It is incredibly easy to talk about “overthrowing capitalism” or “public ownership over most of the economy”, thus obscuring the existence of trade-offs. The truth is that we all want “more action” on climate change, but we don’t want it to cost us anything. The only reason why environmental taxes and quasi-taxes are not higher than they are now is that they are unpopular (remember the hated Fuel Duty Escalator?).
And so we all cheer on the student protesters, the green activists and the fashionable “radicals”, but not the politician who wants to hike our fuel and energy costs. “Let’s smash capitalism!” guarantees rapturous applause, and countless invitations to speak on panels alongside the great and the good. “I’ll quadruple your bills” – less so.
“Inconvenient” truths have never been so convenient.