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October 12, 2005
Johan Norberg is making a bit of a splash in Australia at the moment. He was here to give the John Bonython Lecture hosted by the Centre of Independent Studies. Norberg is the author of In Defence of Global Capitalism, which I haven't read.
So what is he arguing in Australia? How does he defend global capitalism and who does he defend it from? The lecture seems to be a defence of economic liberalism as Norberg begins the lecture by locating economic liberalism within the enlightenment tradition:
Enlightenment philosophers created the belief in the future in the 17th and 18th centuries, by letting us know that our rational faculties can understand the world, and that with freedom we can improve it. And economic liberalism proved them right. When Adam Smith explained that it's not from the benevolence of the butcher that we expect our meat, but from his self-interest, it was much more than an economic statement, it was a world view. It was a way of saying that the butcher is not my enemy. By cooperating and exchanging voluntarily, we both gain, and make the world a better place, step by step.
Since those days, mankind has made unprecedented progress, but astonishingly most of us don't see that, because of ancient mental mechanisms that were developed in much more dangerous days, when one man's gain was often another man's loss. Tonight I will discuss what they are and how to deal with them, and I think that a good place to start is with an ideology that has made the most of those mental mechanisms: Socialism.
Fair enough. Economic liberalism is a part of the enlightenment tradition. But I see that the objections to the Enlightenment are not dealt with, nor is rationality identified as an instrumental reason. The enlightenment tradition is taken as a given and as a good. Do we gave dogmatism here?
It is true that socialists argued that capitalism would create waste, inefficiency and poverty. Well, by the end of the 20th century socialism lost and capitalism won. Norberg is right there. So where does that leave social democracy? That political tradition does not exactly celebrate free markets and it is not the same as socialism. Norberg does not mention social democracy or the way that it constrained economic liberalismi.
Norberg says that ex-socialists can still oppose capitalism because its efficiency and wealth creation would destroy nature. This objection ought to be taken seriously given its impact in Australia re farming, water shortages in our cities and the destruction of our rivers. How does Norberg deal with this?
He says that:
This argument is as popular as it is false. First of all, the worst environmental problems in the world are not smokestacks. Much worse is that so many people burn wood, coal, crop waste and dung indoors for heating and cooking. Respiratory diseases kill about 1.6 million people every year. Sure, the modern production of energy creates environmental problems, but it doesn't kill someone every 20 th second, as this killer in the kitchen does. And diseases transmitted by water kill another 5 million people every year. Just the number of people who die from these two traditional environmental problems is 300 times the number of dead in war every year. These diseases also happen to be eliminated in every industrialised nation on earth.
But furthermore, when we get richer we can also deal with the new environmental problems that new industries create. When we have the resources to both save our children and our forests we begin to care about saving nature, and economic and technological progress gives us the means to do that. The environmental movement is a result of this shift in preferences .... Sure, we have big environmental problems ahead of us. But we have even bigger problems behind us, and we managed to deal with them thanks to more wealth, knowledge and technology, and I see no reason why we wouldn’'t be able to continue doing that.
No worries is the argument. Who says that the environmental objection is based on smokestacks in Australia? It is that in relation to global warming
Norberg strikes me as a bit too swift. Disease and the environment are separeate issues even though they can be intertwined, as in ecological disease. He does not giove any consideration to the argument that the economy depends on ecology--not water in the Murray-Darling Basin means no agricultural production. The economy of the region depends upon our rivers flowing.
Secondly, we may have the resources and technogical means, but we still don't do it. Saving the Murray-Darling Basin is not happening. Nor are we saving the Great Barrier Reef from downstream pollution from coastal sugar farms or global warming.
What about the economic power that prevents environmental reform in the Murray Darlign Basin and in our cities? It's ignored!
Norbery, it seems to me, is talking to the converted --to free market liberals. He is not really engaging with environmentalists or with environemtnal issues that we are forced to confront.
Update: 18th October
A key environmental issue in Australia is water shortage for our cities. A recent example in Victoria. Nowhere does Norberg deal with issues such as this.
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I have to agree with Norbery, on his environmental and economical views.
But I use another form of reasoning to achieve the same conclusion.
Before I post, I'm going to make the assumption that capitalism benefits the economical aspects of our lives. I am going to try to avoid any arguments between capitalism vs Socialism, because there have been ongoing debates for decades, and I have no interest in that subject at this moment.
Human lives, especially in a capitalistic government is focused on achieving some form of happiness. Now, economic achievements bring happiness to a certain extent, and environmental success also brings humans happiness. But because we live in a modern world such as this one, economical issues are more influencial in our lives than environmental ones. Because of that, I reason that economical achievements brings more happiness than environmental success.
Just as Norbery suggested, I believe that when environmental or economical issues conflict, economical progress should be of a higher priority.