Contrary to what economists think, there are no scarce resources. Public debt is a “social convention” as are public deficits. The physical world, however, is not infinite and constitutes the sine qua non condition of human existence. There is a scarce resource: land. Preserving humanity from climate change is therefore the supreme objective, to which all necessary resources must be sacrificed. These are the main arguments of The world the columnist Stéphane Foucart (see “Debt, a simple social convention, is seen as more dangerous than the irreversible deterioration of living conditions on Earth(“Debt, a simple social convention, is considered more dangerous than the irreversible deterioration of living conditions on Earth”), The worldJune 3, 2023).
This does not help the author to invoke John Kenneth Galbraitha forgotten today manager economist of the roaring 1960s.
There are many things missing in the journalist’s reasoning. A condition for the survival of humanity, other than in small numbers in caves or in hunter-gatherer tribes, is that individuals cooperate effectively. Consent is an essential component of the economic concept of efficiency. In commercial exchange and other voluntary relations, consent is easy to obtain: anyone who does not want to participate in an exchange has only to refuse. Political relations are different, and there is no justification for one part of humanity imposing its predictions or its fears on the rest. Environmental models only provide predictions, as old Malthusian fears show and 1970s scare, which did not materialize. From a liberal perspective, any collective action must be based on a kind of presumed unanimity, and there can only be unanimity on general rules, not on ad hoc acts of regimentation.
Think of an implication of rejecting this liberal principle. The supreme goal to be imposed by believers on non-believers would be the salvation of immortal souls created in the image of God. Infinite bliss for eternity has infinite value. Even the disbelievers will be happy throughout eternity that they were forced to obey God.
Except for those with infinite faith in the predictions of environmentalists (the new religion), compromises still have to be made. For example, will it be the current environmentalists through their taxes (and other forms of conscription), or their children by paying off the public debt, who will have to pay to save the earth?
Something else is also missing: understanding what “the finitude of the physical world” can really mean. There’s not a lot of land to grow food, yet 1.5% of the American workforce today produces far more food for far more people than 84% of workers at the start of the 19th century. century. Physical resources are certainly limited: there is so much land, steel or aluminum right now to build apartment buildings or wind turbines. But one resource is potentially almost infinite: human ingenuity, inventiveness and entrepreneurship. As Julian Simon arguedman is the ultimate resource, and “man” refers to individuals rather than bureaucratic structures and state coercion (see Simon The ultimate resource, nineteen eighty one). This is why the earth fed barely 220 million inhabitants, almost all poor, in the year zero of our era, and today we are 7.9 billion, of whom a large part are well nourished and relatively rich.
On dangerous environmental alarms, let me quote a recent Regulation my post:
Since the 1970s, environmentalists have been recycling the arguments of Thomas Malthus to argue that population stagnation or decline would be a good thing because it would prevent or reverse environmental disasters. In his 1968 book The population bomb, Stanford biologist Paul Ehrlich has warned that a exploding global population is facing resource constraints and that within a decade food and water shortages will lead to the deaths of one billion people or more. Governments, he estimated, should work towards an optimal world population of 1.5 billion, a target corresponding to 57% less than the actual population in 1968 and 81% less than the 7.9 billion. Today. In 1965 the New Republic announced that “world population has exceeded food supply” and that world hunger would be “the most important fact of the last third of the 20th century”. “Freedom to reproduce is intolerable,” pontificated environmentalist Garrett Hardin.
The “carrying capacity” of the planet is either a mistake or a hoax. In his book Capitalism, alone (2019), Branko Milanovic gives numerous illustrations of fallacy over the past two centuries. One example involved the British economist Stanley Jevons (1835-1882), who believed that the price of paper would soon explode due to the dwindling number of trees. He hoards paper in such quantities that, 50 years after his death, his children have not exhausted all his stock. Milanovic adds (pp. 200-201):
We are no smarter than Jevons. We too cannot imagine what could replace fuel oil, magnesium or iron ore. But we should be able to understand the process by which substitutions occur and to reason by analogy.
Resources, including those diverted by political authorities through deficits (or inflation), are real resources, not “social conventions”. They are no more social conventions than finite physical or human resources that serve to satisfy practically infinite human desires. Considered together, resources are limited, but substitutable and augmentable. Those that become relatively rarer are saved up as their prices rise, and other resources, including human ingenuity, substitute for the rarer ones.
If, and only if, the institutions conducive to individual freedom and prosperity are maintained or improved, it can be expected that (except perhaps in the event of a catastrophe such as an asteroid impact or war nuclear) human ingenuity continues, with limited resources, to produce more and more revenue. and wealth, which means increased possibilities of consumption or leisure at will; and, if needed, more resources to cope with or adapt to climate change.
All this does not necessarily mean that nothing should be done (with caution) now, but it does mean abandoning a soft view of society and the economy.