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An antidote to global salvationism Samuel Brittan The Financial Times 08/07/05 What is "global salvationism"? It is a new name invented by David Henderson, formerly head of economics at the Organisation for Economic Cooperation and Development, for a highly popular doctrine (Economics, Climate Change Issues and Global Salvationism, University of Westminster). Another name is New Millennium Collectivism. The doctrine has two aspects. One relates to the economic fortunes of poor countries for which "international capitalism" is blamed. The other is the doomster message that "the planet" is going to hell unless far reaching changes are made in official policies. The salvationist aspect is that simple effective remedies exist for these ills if only governments would accept them. But there is more to it. Global salvationists, he maintains, stand for things such as "sustainable development, positive human rights, corporate social responsibility, socially responsible investment, anti- discrimination, equal opportunity, diversity, social justice, anti-social exclusion, global social governance, the precautionary principle and participative democracy." All these find expression in collectivist measures designed to interfere with markets. The whole package is the accepted wisdom not only of pop stars but of most of the arts world as reflected in broadcast discussions and plays, films and novels. G8 leaders have been flirting with it; and many business leaders are afraid to criticise it. The Austrian-American economist, Joseph Schumpeter, wrote in the 1960’s of businessmen who were lions in the boardroom but lambs in the drawing room. He would now have to say that they were lambs on the platform or in television studios and often putty in the hands of their speech-writers. For someone who started off as an historian, there is nothing all that novel except in the detail. Businessmen and traders have rarely been loved. The Roman emperor Diocletian imposed the death penalty on those who sold at above controlled prices; the medieval Church made a virtue of its hostility to rising capitalism; and there is little that is now being said by present day opponents of capitalism that would have been new to 19th century social critics such as John Ruskin or William Morris. Somehow, however, business has managed to survive the hostile climate and bring benefits to the public, which the latter hardly acknowledge. The best way to tackle global salvationism is not to go to the other extreme and oppose the whole quoted package but to try to unpack it item by item. As my own ancestors did not oppress anyone in Africa; so let me concentrate on climate change. This is a highly technical subject and there is no point in trying to "get it up" with a few hours reading. The only thing I will say about the scientific discussion is that some of the key figures in it emit a whiff of intolerance of dissent reminiscent of the persecution of Galileo or of the Lysenko episode in the USSR. Knowledge is not advanced by resolutions and majority votes even of scientific academies, and least of all by ex-diplomats trying to bully us into accepting their version of what "the science" says. A non-specialist can, however, at least formulate some key questions about global warming. Few of the dissentient experts are denying its reality: The key questions are - How fast is it happening and where? What are the confidence limits around the suggested answers? How much damage is caused, to whom, and over what time span, again with confidence limits.? What are the costs and benefits of various ways of tackling it, including adaptation as well as prevention? Which depend on concerted international action and which can be beneficial if undertaken by a single country? Note that the contribution of human economic activity is not the central question. Global warming could be very harmful even if it was due to natural processes and it could be fairly benign, even if man-made. The relevance of the human contribution is in relation to the nature and cost of corrective policies. A level headed summary of these matters has just been provided by the House of Lords Economic Affairs Committee (The Economics of Climate Change). It is likely to infuriate zealots, even though its specialist adviser was a distinguished middle of the road environmental economist, and former chief Government adviser, Professor David Pearce. My own contribution is to suggest how to approach judgment when the evidence is fallible. This is to see if there are several different consideration pointing in the same direction. I shall call it the cumulative or confluence principle. Perhaps I can illustrate what I mean with an episode of recent British history. When the Conservative government of Margaret Thatcher took office in 1979 different reasons were given for dropping "incomes policies". Some ministers were against such policies, hook, line and sinker. There were others who thought that if a Labour government with its close links with the unions had not succeeded in making an incomes policy stick there was little chance of a Conservative government doing so. Neither argument on its own might have been sufficient to win the day. But the two together did the trick; and one of the early acts of the incoming government was to abolish all pay, price and dividend controls. In the case of reducing greenhouse gas emissions there are indeed at least three arguments pointing in its direction. There is not only climate change, but the need to reduce dependence on oil, and old fashioned environmentalism. The oil argument itself comes in two halves. There is the danger of the rest of the world being held to ransom by political developments in the Middle East; and there is also the growing pressure on energy supplies, from the emergence in the world economy of powers such as China and India. Last but far from least there is old-fashioned anti- pollution policy. This kind of environmental economics has been known for well over a century since A.C. Pigou published the first edition of Wealth and Welfare before World War One. The modern analysis of property rights has improved but not replaced his treatment. An illustration of its validity is the way that public figures on any side of the global warming argument will go to great lengths to find country retreats away from busy motorways or factories which emit foul gases. A verdict on such grounds in favour of energy saving cannot be for all kinds of savings and at all costs. A measure which seems to score most highly on all four criteria is a genuine carbon tax, which was unanimously endorsed by the Lords Committee in place of the British so-called Climate Change Levy which is not applicable to transport or to households - who no doubt imagine that because "industry" pays the bill it does not cost them anything. But even the increase in this Levy planned for September has once again been postponed on the pretext of the volatility of oil prices. British Treasury officials even boasted that fuel duties were now almost ten per cent lower in real terms than they were in 1999. Greenpeace reasonably responds that the decision just "beggars belief...The day before Tony Blair welcomes world leaders to Gleneagles to broker a deal on climate change he shows himself incapable of taking even the most modest and obvious steps here at home." Another conclusion of the Lords Committee, is that contribution of atomic power, which is one of the cleanest sources, needs urgent examination and at least the present level of UK capacity should be maintained. These ideas are just illustrations. The main point I want to make is that if three or four only moderately strong different arguments point in the same direction, then the case for action is much stronger than if they are considered, in time honoured official way, one by one. The basic idea is, when in doubt, look for a multiplicity of justifications - or objections.. If this multiplicity has enabled President Bush to go along with an energy-saving agenda so much the better.
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