The Answer to Climate Change is Democracy

Climate change is the symptom of an imbalance at the core of our economic system. Our world needs to make sense, not just money. To get past the failed ideology of neoliberalism, a renewed intelligence of Democracy is key.

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 in a practical way in order to provide results. If this was entirely true, however, the world should by now be well on its way to implement 100% renewable energy sources, have energy-efficient buildings, and sustainably manage 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 better than others but, on a global scale, we are far from having reached the necessary steps to achieve the goal set by the Paris Agreement, which is to maintain the global increase in temperatures by the end of the century below two degrees Celsius. Why? The immediate answer is the forceful lobbying of fossil fuel companies or of the agroindustry. Yet, this, in turn, has to be questioned. What kind of power could these companies have that would convince the rest of the world to do next to nothing in regard to 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 making sure 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 allowing to rig the market and undermine the 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. For those who enjoy it, it works like a silent but immediately effective asset to 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 warming process have mutually reinforced themselves for decades, 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 will take precedence over respecting the environmental conditions of a sustainable society. The groundwork for fighting climate change, consequently, is best defined by opposing the true values of Democracy to the power of money left to itself. As it happens, in our time this power has its ideology. What does neoliberalism entail and how can we, the people, get our power back?

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When it comes to economic growth, the common wisdom could be summed up by “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. Assimilated to the principle itself of trading, this abstract guideline is, nevertheless, intellectual baloney. One way or another, rules apply; simply because nothing exists out of context ever.

If rules do not come from a 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. It is a total abstraction that contradicts itself by denying 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. He never said, however, 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, full information, and rational actors are supposed to be ever-present and effective under all and any trading circumstances.

The answer to climate change is democracy - Free Trade

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 the benefit of all involved, such outcome will never occur. As the staggering income inequality experienced in many parts of the world today shows, those who have next to nothing to deal with aside from their work power can easily 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 as 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 an abstract scheme. 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 on her globally.

But, again, money is power. And this power has all interests in sacralizing profit-making and in ignoring the cost for those who are not at the high end of the game. This is why it prefers conveying the message that a market free of all pesky and useless regulations is the only path to sound business practice. To that effect and in order 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 being able to look 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 of government intervention, the government is there in the second instance only and just to prevent things from going too awry. In the U.S., Democrats will tend to grant government more leeway, and Republicans less—this political pattern between liberals and conservatives being pretty much identical everywhere else. But these political differences share the same principle that the government is by nature a hindrance vis-a-vis the proper functioning of a “free market”.

Big government vs Small government

The intellectual fallacy of “big government” consists in pretending that the freedom for corporations 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. The government does not “intrude” on the “free market”; it creates the market by giving the rules and being the referee on the market field. When, on the contrary, corporations write the law for themselves, mayhem systematically ensues in the form of severe economic inequality and social wretchedness. And why wouldn’t it, since the money needed to invest in public infrastructures for the sake of all is instead pre-distributed to corporations?1

Even in the most libertarian society, what would be allowed or not in business life would have to be formalized in order to maintain fair rules and practices. Additionally, 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.”

“The economic owning class is always the political ruling class.” (Eugene V. Debs) tweet it!

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 a necessity has some truth to it. It certainly does and no one, except for Lenin and Mao in their mausoleum, is seriously arguing that private trade should be banned. The confusion occurs because the expression “free market” is regularly used as a mantra to avoid any confrontation with how the economy really works. There was a time, not too long ago, when America was intent to invest in a highly-skilled working force and was proud of what it was producing. The economy was then considered as an activity geared toward the benefit of all stakeholders, as the increasing standard of living of a vast majority of the population benefited in turn the economic engine itself. The idea that the government had a say on the matter, consequently, simply made sense. Investing in the country through public education and government-funded infrastructures was seen as the bedrock of private success and national greatness, and certainly not as going against the expansion of a free market.

Free market fundamentalism, on the other hand, invites us to forget about the government’s economic role and to blindly rely on shareholder value.2 This is how, since the end of the 1970s, the U.S. economy has gradually morphed into a money game with very little benefit to workers and to consumers themselves. Instead of finding its own balance for the sake of all, the market has followed its natural money-making impetus without the broader vision of what is good for the country. As a result, the chain-value of individuals grounding the economy and creating real assets by their skills and efforts has been ignored and replaced by faith in financial engineering and unbridled profit-making. It is not so difficult to see, then, that the “free market” king heralded with absolute wisdom has no clothes and that the whole story has never been about entrepreneurship or economic health but about idiotic greed.

The financialization of the economy is not exclusive to the U.S. Yet, it is tempting to bring back to mind a few direct illustrations of this money game in the country where “big government” is such an issue. One can think, for instance, of contract laws requiring mandatory arbitration before private judges selected by big corporations; securities laws designed to allow insider trading of confidential information; CEOs using stock buybacks to boost share prices when they cash in their own stock options; tax loopholes for hedge funds and private-equity funds; lower marginal income-tax rates on the highest incomes and reduced estate taxes on great wealth. The list could go on. These various forms of pre-distribution to entities and individuals already hoarding cash look furiously like inverted socialism—socialism for the rich. What about the beloved “free market”? At that stunning level of delusion and hypocrisy, only one thing is left standing: “free market” and “big government vs small government” are mere smokescreens intended to keep the public attention away from what really matters: A government for who?

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This question is obviously at the core of the fight against climate change. The choice is between a corporatocracy and a Democracy. In theory—and in many political speeches—liberalism is for small businesses to have a chance to thrive on their own merits. In practice and because good liberalism is supposed to be deregulated liberalism, competition is being killed by those who have enough clout and financial leverage to then impose their own rules. The blatant official favoritism of many governments toward the fossil fuel industry—more than 5 trillion U.S. dollars worldwide in direct and indirect subsidies each year3—is a case in point. Above all, this utter disregard for the existential threat of climate change confirms that the fate of humanity comes second after the pampering of already very fat cats. How is that even possible in supposedly civilized and democratic societies?

“The accepted ideas of any period are singularly those that serve the dominant economic interest.” (John Kenneth Galbraith) tweet it!

Greed does not explain everything. Such an aberrant situation needs an ideological background to sustain itself in the hearts and minds of people in charge of economic policies. Behind the catchphrases “free market” and “big government” used as convenient signposts for the masses lies the assumption that the general interest is not, as such, a relevant category for driving social and economic progress. Individuals are deemed to be better off on their own, free to prove themselves any way they want as long as they do not break the law. In this view, collective endeavors are for the most part irrelevant; only private initiatives can truly thrive and succeed since they have a natural incentive to do so. This, in a nutshell, is neoliberalism’s line of thinking.

In reality, of course, freedom under the sole rule of financial success brings out a very different kind of outcome for the general population and for those who can effectively leverage the power of money. By bending governments to their will, companies like Exxon or BP show the world who is the boss. But pointing at a contradiction between neoliberal theory and practice is far from enough. What matters is that ideas, whether valid or not, can shape the views of millions. If we uncritically follow neoliberal tenets and believe that the common good is just a by-result of individual freedom and not a guiding principle of policies, or that there is no society but just individuals and their families—as the late Margaret Thatcher once famously put it4—then the fight against climate change is over. No mobilization can take place at the required level if it is not seen as a meaningful collective endeavor, and this depends on whether or not we believe in society.

This is why “A government for who?” is such a fundamental question. By considering public concerns as dangerous lunacies, neoliberalism is the most serious obstacle to any cohesive and concerted global action against climate change. It is then worth examining how its ideological implications effectively contradict the democratic ideal.

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Some may remember Gordon Gekko character’s line in the 1987 movie Wall Street: “Greed, for lack of another word, is good! Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit!” That greed is good has been notably theorized by the economist Milton Friedman (1912–2006). In his mind this was not, indeed, an invitation to become evil people but the expression of the basic fact that, as himself repeatedly said, “The world runs on individuals pursuing their own interests.”

The answer to climate change is democracy - Gordon Gekko
You got to love the suspenders!

The real problem with this view is not that it does provide an excuse to some insecure egos for effectively letting their greed run wild. The real problem is its superficiality. Like any ideology, neoliberalism is a popular intellectual doggy bag that never questions its own premises.

According to Friedman, individuals should pursue their own interests because their respective actions will always balance out in the best possible way if unfettered. But what if there is a natural world out there with its own balancing needs? And what if there are more fundamental characteristics defining mankind than greed? Chances are that by denying the practical and psychological importance of shared interest, neoliberalism puts itself out of the pale of genuine progress from the get-go. In order to figure this out, we have to question how Friedman’s preferred maxim stands in regard more particularly to the economic, psychological, and political dimensions of human life.

Economically speaking, neoliberalism assumes that the creation of wealth depends on those who know how to accumulate it for themselves, consequently creating opportunities for others. The reverse is true. Ford, for instance, did not become one of the largest U.S. companies during the twentieth century just because Henry Ford was, indeed, a business genius, but primarily because he fully recognized that the creation of wealth for his company could come only from its customers, and first among them Ford workers.

Money flows in the economy from the customers’ wallet, not from the CEOs’. Knowing this, Henry Ford did not wait for opportunities to create themselves in his wake. He forced them by giving his employees wages allowing to buy the cars they built, therefore taking the first step in bringing about the mass market he had always envisioned. If the story is well-known, its lesson is hardly ever acknowledged. Customers create economic wealth, companies seize opportunities.

“Be egoist: love each other.” (The Dalai-Lama) tweet it!

Psychologically speaking, pursuing our own individual interests necessarily defines boundaries to what we see as such. These interests are ours, not anyone else’s, and shine therefore in a particular and delimited place in our life context. But what is of true value is precisely what has no boundaries. No external goodie, be it a new car or a promotion at work, can in and by itself make us happy. As everyone knows through direct experience, happiness is an inner work totally foreign to the realm of what can be measured and compared. Enjoying the richness of being fully human and the immeasurable wonders of life is a much more genuine expression of what we truly seek. And like anything that has true value, it is all for free. Even though pursuing our own practical interests can be perfectly legitimate and is what actually drives the economy, believing that happiness can be achieved in a material and self-centered fashion is, on the other hand, highly delusional. Our real interest can neither be delimited nor limited.

On a collective level, moreover, the same way that considering the market as some kind of absolute reality contradicts the very possibility of competition, seeing the individual as the central unit of her personal achievements contradicts the possibility of her effective success. Whatever our individual merits can be, countless others have also contributed to our personal achievements in many different ways. In that sense, the most relevant metric for one’s success in any field is not our personal efforts but the accuracy with which we are able to recognize, honor, and take advantage of others’ legacy.

This co-dependent nature of success directly opposes the idea that the “survival of the fittest” is the commanding principle of human lives. Based on a flawed interpretation of Darwin’s theory of the evolution of species (not individuals), the “survival of the fittest” is a puny philosophical excuse to justify the exploitation of others. It has been used during the gilded age in the U.S. and now in the era of neoliberalism. Opposing this hazy theory, the fact of the matter is that any living system needs as many interconnections as possible to thrive, not less. Helping when and where help is needed to bring back one element into full functionality is more often than not a better bet than letting it stall. In society, this means that the freedom of achieving success on one’s own merits is intrinsically linked to shared progress.

Politically speaking, then, it is no wonder that “The world runs on individuals pursuing their own interests” refers to some democracy by default only. If the freedom of running aside from each other in our quest for more material goods and social recognition has obviously to be guaranteed, the democratic project itself is nevertheless much broader than that. Its humanistic ideal stems from the recognition that what defines our humanity is the capacity to learn from each other. Democracy, in that sense, was not instituted simply to prevent enslaving each other but for sharing the best of what humans can be and do.

“Interdependence is and ought to be as much the ideal of man as self-sufficiency.” (Mahatma Gandhi) tweet it!

This is why guaranteeing the same fighting chance in life for all appears as both a moral obligation and the best practical way to go as a society. And this is also why the concept of Democracy implies an intrinsic link between the citizens and their government, not just an external and formal one. On one hand, people are the unique legitimate source of political power; therefore the government is us—even if only by delegation. On the other hand, the intrinsic social dimension of human life and the mutual enrichment it provides need protection. Having a government is this protection, as long as it is a government of, by, and for the people.

By opposition, looking at the government as some kind of foreign entity neoliberalism implicitly claims a right to civic irresponsibility and effectively denies that a country can be anything more than a shopping mall. As with the notion of happiness, the flaw in this view is to consider individual freedom from an external standpoint only, assuming that it is defined by what we can see as the practical boundaries of our own life. The greater my freedom of movement, then, the freer I am. Restricted to my own self, freedom becomes an individualistic value.

This superficial view of the supremacy of the individual sums up neoliberalism’s political program. Believing that one’s freedom exclusively consists in making one’s own choices under any and all circumstances leads many innocent minds—especially in the U.S., where this is somehow a matter of national pride—to consider the government as the enemy. This fatal twist of logic against their most basic interests is vehemently justified by the idea that because they drive people to do things a certain way, social concerns and all forms of collective endeavors are infringements on my innate right to freedom. This toddler’s notion of freedom is another intellectual cheap trick used by companies and the political establishment alike to lure the public into a system where, in effect, people have no voice against the power of money. The pathetic dress-up of “freedom of choice” against Medicare for All is a prime example of that empty rhetoric at work in the U.S.

So far, it appears that when challenging its implications nothing stands under the idea that “The world runs on individuals pursuing their own interests”—neither at the economic nor at the psychological or at the political level. This does not mean that neoliberalism does not have its own coherence. And one thing that cannot be denied to Milton Friedman is that he is morally coherent. In his world, society is just a collection of individuals that have found more expedient to aggregate under common laws than to stay totally on their own. Fundamentally, we do not owe anything to each other. The freedom of each individual to fight for herself has to guide public policies, not empathy.

If most people spontaneously cringe when confronted with the idea that, as a society, we should be indifferent to the pleas of others, this is because, in Friedman’s mind, they do not understand what works. All that is needed is to respect the absolute liberty of the individual to thrive for herself, instead of redirecting the results of her efforts to the benefit of an undifferentiated crowd that did nothing to deserve it. This is also why raising taxes in order to keep the possibility of a fighting chance for all is, to Friedman, an attack on the personal freedom of those who have succeeded in finding their way ahead. Because of its cost and its implied view on society, a social net undermines the possibility for the best of us to show the way out of poverty and can just foster, on the contrary, a permanent state of resentment and class warfare.

Even though quite popular, notably in the U.S., this line of thinking is a pure abstraction and has, as such, led to the global economic, social, and environmental dead-ends the world finds itself into today. The notion stubbornly held by many U.S. lawmakers that people with a serious medical condition should pay higher premiums—meaning that if you cannot afford them you go either bankrupt or dead—is a pathetic illustration of this intellectual and moral wreckage. As a consequence and under the guise of individual freedom, millions of Americans are serenely deemed better off without any proper health coverage. People may die in misery but at least the absolute freedom of the absolute individual is safe!

[To be continued]

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Footnotes

  1. See: – Anand Giridharadas: Winners Take All: The Elite Charade of Changing the World (2018); – Robert B. Reich: The Common Good (2018); The System: Who Rigged It, How We Fix It (2020)
  2. See: – Mariana Mazzucato: The Value of Everything: Making and Taking in the Global Economy (2018); – Lynn Stout: The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public (2012)
  3. Fossil fuels are underpriced by a whopping $5.2 trillion, By Umair Irfan. Vox May 17, 2019.
  4. Interview by Douglas Keay for Woman’s Own magazine, 23 September 1987
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