How Capitalism Makes Catastrophes Non-Catastrophic (Key data point for energy/climate debate)
One of the greatest and most unheralded successes of industrial capitalism is making our climate eminently livable.
The mass-production of sturdy, weather-proof buildings … the universal availability of heating and air conditioning … the ability to flee the most vicious storms through modern transportation … the protection from drought through modern irrigation … the protection from disease through modern sanitation–all of these have led to a 99 percent reduction in the number of climate-related deaths over the last century.
Given how obsessed America is about climate change (or some intellectuals/politicians want us to be), these facts should be well-known and incorporated into every discussion of industrial policy. Those who claim to care about a livable climate for the future should strive to understand the mechanisms by which industrial capitalism has already created the most livable climate in history.
If they did so, they would learn from such thinkers as Ayn Rand and Ludwig Von Mises how capitalism, by permitting only voluntary associations among men, unleashes the individual human mind–and that millions of such minds, free to associate and trade however they choose, will engage in stupendously intricate, collaborative planning for everything from how to make sure they can always get groceries to how to account for nearly any conceivable weather contingency.
Armed with an understanding of individual freedom and individual planning, the climate-concerned would suspect that any preventable problem in dealing with weather–such as widespread vulnerability to flooding–is caused by government interference in voluntary trade, such as taxpayer-financed flood insurance that encourages people to live in high-flooding areas.
Center for American Regress?
Unfortunately, an understanding of capitalism and climate is sorely lacking at the Center for America Progress, the hottest left-wing think-tank today. On its blog, ThinkProgress, the Center recently ran a piece by Christian Parenti entitled Climate Action Opponents Are Ensuring the Outcome They Claim to Oppose: Big Government.
A little translation is in order. From an individualistic perspective, “climate action” refers to the actions that free citizens take to make their climate as livable as possible–the kinds of actions that decreased climate vulnerability 99% in the last century.
But from the collectivist, statist perspective of CAP, “Climate Action” refers to dramatic caps on energy generated from hydrocarbons–the energy source that runs the industrial capitalist system that has increased our life expectancy from 30 to 80 years.
How will banning the vast majority of modern energy production help us oppose “Big Government”? Because otherwise we would face so many catastrophic storms, the article argues, that the government would necessarily become a disaster-recovery Leviathan.
After all, Mr. Parenti takes as given, government is the only entity that can adapt to storms: “To adapt to climate change will mean coming together on a large scale and mobilizing society’s full range of resources. In other words, Big Storms require Big Government.”
Big Storms Require Limited Government
In fact, the larger-scale a problem, the more freedom is essential. As economist George Reisman brilliantly explains in his landmark essay on global warming economics,
Even if global warming is a fact, the free citizens of an industrial civilization will have no great difficulty in coping with it—that is, of course, if their ability to use energy and to produce is not crippled by the environmental movement and by government controls otherwise inspired. The seeming difficulties of coping with global warming, or any other large-scale change, arise only when the problem is viewed from the perspective of government central planners.
It would be too great a problem for government bureaucrats to handle (as is the production even of an adequate supply of wheat or nails, as the experience of the whole socialist world has so eloquently shown). But it would certainly not be too great a problem for tens and hundreds of millions of free, thinking individuals living under capitalism to solve. It would be solved by means of each individual being free to decide how best to cope with the particular aspects of global warming that affected him.
Individuals would decide, on the basis of profit-and-loss calculations, what changes they needed to make in their businesses and in their personal lives, in order best to adjust to the situation. They would decide where it was now relatively more desirable to own land, locate farms and businesses, and live and work, and where it was relatively less desirable, and what new comparative advantages each location had for the production of which goods. Factories, stores, and houses all need replacement sooner or later. In the face of a change in the relative desirability of different locations, the pattern of replacement would be different. Perhaps some replacements would have to be made sooner than otherwise. To be sure, some land values would fall and others would rise. Whatever happened, individuals would respond in a way that minimized their losses and maximized their possible gains. The essential thing they would require is the freedom to serve their self-interests by buying land and moving their businesses to the areas rendered relatively more attractive, and the freedom to seek employment and buy or rent housing in those areas.
Given this freedom, the totality of the problem would be overcome. This is because, under capitalism, the actions of the individuals, and the thinking and planning behind those actions, are coordinated and harmonized by the price system (as many former central planners of Eastern Europe and the former Soviet Union have come to learn). As a result, the problem would be solved in exactly the same way that tens and hundreds of millions of free individuals have solved greater problems than global warming, such as redesigning the economic system to deal with the replacement of the horse by the automobile, the settlement of the American West, and the release of the far greater part of the labor of the economic system from agriculture to industry.
We should be thankful that previous generations were not governed by the “ThinkProgress” philosophy of regarding government coercion as the solution to future changes, whether economic or environmental. Had they followed the near religious state-worship of Center for American Progress, we would have had the equivalent of Barack Obama or Christian Parenti dictating to millions of Americans when, how, or if they could transition to automobiles or go West or leave their farms. If we do indeed face worse weather ahead, then nothing is more important in preparing than more industry and more freedom.
Alex Epstein is a Principal at MasterResource and Founder of the Center for Industrial Progress.