Climate change signs the failure of the “free market” ideology. In the transition from old neoliberal individualism to an economy embedded in people and nature’s shared destiny, a new intelligence of democracy is key.
Introduction
One could think that answering the issue of climate change mostly requires some level of economic and technical re-engineering. Practical matters have to be dealt with practically to provide results. If this were entirely true, however, the world should by now be well on its way to implementing 100% renewable energy sources, having energy-efficient buildings, and sustainably managing the remaining forests it has. The alleged scope and emergency of the issue would have commanded it. Apparently, the world did not get the memo.
Some countries do definitely better than others but, on a global scale, we are far from having reached the necessary steps to achieve our governments’ solemn goal of 1.5 degrees Celsius maximum rise in temperatures by the end of this century. Why? The immediate answer is the forceful lobbying of fossil fuel companies. Yet, this, in turn, has to be questioned. What kind of power could these industries have that would convince the rest of the world to do next to nothing regarding the seriousness of a runaway global warming threat? None. More appropriately, just the one we allow them to have. Corporate interests can only do so much in financing disinformation campaigns, bribing politicians, and ensuring that the mass media they support with advertising money keep in line and remain “neutral.” The responsibility is primarily ours as citizens.
It is an upward battle because money is power and any occasion to foster legal privileges to influence the economy’s management and undermine political institutions will be taken. Compared to other basic forms of power that can turn into tyranny, such as personal dictatorship and ideology or religion, money is without any doubt the most insidious and the most efficient. It works like a silent but immediately effective asset for those who enjoy it and can rewrite the rules in their favor.
This confrontation between moneyed interests and the democratic ideal of governance is not new. What is new is that climate change has turned it into an opposition between life and death on a global scale. It is now common knowledge that the cumulative effects of this global warming process have mutually reinforced themselves for decades,1 fed all the while by our collective addiction to fossil fuels and deep-seated indifference for the indispensable balance of nature.
Simply put, this existential threat will be upon us as long as profit-making takes precedence over respecting a sustainable society’s environmental conditions. Therefore, the groundwork for fighting climate change is in the opposition of the true values of democracy to the power of money left to itself. Neoliberalism is, in our time, the ideology predicated on spontaneous economic wisdom and the eventual positive social outcomes of the market. Climate change signs the failure of this ideology. To constructively fight for our future, we, the people, need to unwrap neoliberalism’s intellectual pretense and assess how power can get back—and remain—where it belongs.
1. Defining neoliberal fantasies
a/ Free market and big government
The prevailing global economic wisdom could be summed up as “The freer the market, the better.” It has forged national and international economic policies since the end of the 1970s, almost systematically presented as the holy grail of a modern and prosperous world.2 Assimilated to the principle itself of trading, this abstract guideline is empty talk. One way or another, rules apply; simply because nothing exists out of context ever. And if rules do not come from collective consent, they will come from the wants of those who already have an edge in a given situation. Saying that the market is neutral and should be free of regulations is akin to saying that a football match would be better played without any delimitation regarding what can and cannot be done on the field. This, obviously, contradicts the very possibility of competition; if there are no rules to the game, there is no game.
What about the invisible hand of the market, then? Adam Smith was right in the sense that the norm for mutual enrichment is to let demand and offer find their own balance to the satisfaction of all parties. However, he never said that this balance could occur regardless of a set of necessary conditions. The problem with free-market fundamentalism is that the relativity of such conditions is simply ignored. Perfect competition, complete information, and rational actors are supposed to be ever-present and effective under all and any trading circumstances.
But postulating that all trading parties will always have the same proportionate bargain power is just wishful thinking. Without proper rules to guarantee, as well as humanly possible, that the market operates to benefit all involved, such an outcome will never occur. As the staggering income inequality experienced in many parts of the world today shows, those who have virtually nothing to deal with aside from their work power can quickly become “working poor,” i.e., economic slaves. Eventually, and because of the strains of a low income, they are cut off from any real possibility to enrich themselves and, in turn, the economy at large.
Reality works as a whole, and the world of economics is a non-linear, turbulent, and chaotic system of systems. We can make sense of it by discerning how different layers of reality relate to each other, not by decreeing absolute “laws” forcing this world into a mere view of the mind. Such methodological blindness, unfortunately, has served as a blueprint for unsustainably exploiting resources, be it people forced into hopeless misery or nature now needing six planets Earth to cope with the recycling rate forced upon her.
But, again, money is power. And this power has all interests in sacralizing profit-making and ignoring the cost for those who are not at the high end of the game. This is why it prefers conveying that a market free of all pesky and useless regulations is the only path to sound business practice. To that effect and to get people distracted from the real issues of income inequality or environmental unsustainability, the trick is to repeatedly use slogans that speak to the imagination. Along with the wants of a “free market,” “big government” vs. “small government” is undoubtedly one of the most popular in the U.S. What does it mean?
The first thing to note is that wherever one might stand politically, not looking beyond the opposition of “big government” vs. “small government” implies that the market knows best anyway. In this view, whether you favor more or less government intervention, the government is there in the second instance only and just to prevent things from going too awry. Democrats will tend to grant government more leeway and Republicans less—this political pattern between liberals and conservatives being pretty much identical in every part of the world. What is important is that both camps share the same principle that the government is by nature a hindrance vis-a-vis the proper functioning of a “free market.”
The intellectual fallacy of “big government” consists of pretending that corporations’ freedom to choose the best course of action should translate in the absence of rules. If you tend to fall for this hocus-pocus intellectual gig, just remember that rules are the matrix of the game. In modern democracies, such rules emanate from legislatures, administrative agencies, and courts. Far from “intruding on the market,” the government creates the market. Its indispensable role is to enounce the rules and act as the referee when needed. When, on the contrary, corporations write the law for themselves, mayhem systematically ensues in the form of severe economic inequality and social wretchedness. To top this off, whatever public money is left might very well be pre-distributed to them rather than re-distributed to public agencies monitoring the public good.3
Even in the most libertarian society, what would be allowed or not in business life would have to be formalized to maintain fair rules and practices. And none other than public institutions acting in the name of all through a genuine democratic process could be in a position to do this. “Yet, says Robert Reich in his book Saving Capitalism: for the many, not the few, the interminable debate over whether the “free market” is better than “government” makes it impossible for us to examine who exercises this power [of writing the rules], how they benefit from doing so, and whether such rules need to be altered so that more people benefit from them.”
That’s the point. Somehow the government is never too big when bailing out grossly mismanaged companies that are “too big to fail,” spying on virtually all citizens against their constitutional rights or lavishly spending hundreds of billions of dollars each year for the military. Behind the fake rejection of “big government,” the message to the masses is: be dumb and forget that the government is none other than you, through representatives you elected and who are accountable to you.
But surely, one might think, the assertion that a free market is necessary has some truth to it. It certainly does and no one, except for Lenin and Mao in their mausoleum, would be seriously arguing that private trade should be banned. The confusion occurs because the expression “free market” is regularly used as a mantra to avoid further scrutiny of what it is supposed to mean.
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Philippe Roussel has long been interested in studying the power structures defining our increasingly unsustainable and undemocratic world. This website serves as the primary platform where he presents his ideas and findings to an international audience.