The 2022 United Nations Climate Change Conference was winding down in Sharm el-Sheikh, Egypt, as I write this article. Speaking at the conference, President Joe Biden advertised that the bill he disguised as inflation reduction was really a way to push the Left’s climate agenda, which is unpopular among many Americans, through Congress:
“We are racing forward to do our part to avert the ‘climate hell’ that the U.N. Secretary-General so passionately warned about earlier this week. … And this summer, the United States Congress passed and I signed into law my proposal for the biggest, most important climate bill in the history of our country — the Inflation Reduction Act.”
Mike Frost blames capitalism for creating the looming “climate hell” because, he wrote, “In order to exist, capitalism must expand without end.” That unrestrained growth destroys the environment and impoverishes the nations that climate change damages the most. The charge of unlimited growth and environmental destruction is Frost’s fourth indictment. I responded to Frost’s first three misconceptions about capitalism here, here and here.
Most people agree that being wealthy is better than being poor, all other things remaining the same. Frost complains that capitalists take that to the extreme by worshipping GDP (Gross Domestic Product) growth. Here are three points Frost got from Joel Kovel, a founder of eco-socialism:
- Capitalism tends to degrade the conditions of its own production.
- Capitalism must expand without end in order to exist.
- Capital leads to a chaotic world-system, increasingly polarized between rich and poor, which cannot adequately address the ecological crisis.
Of course, a Marxist would say such things. Marx wrote similar nonsense 150 years ago without any evidence, and there is still no evidence for them. But letting Marxists define capitalism is no different from atheists defining Christianity. Atheists could be no more honest than Marxists.
There is nothing in the writings of the theologians who distilled the principles of capitalism in the 16th century that requires endless growth. No one at that time thought economic growth was possible or that people could control it. That was God’s work. After all, standards of living had not changed from pre-history until the 16th century, so that must be how God wanted people to live.
The sudden explosion of wealth in the Dutch Republic of the 17th century surprised everyone: theologians, scientists, scholars and kings. Kings tasked their wisest people with finding out how the Dutch had achieved such wealth, while Spain had grown poorer despite stealing hundreds of shiploads of silver and gold from the Americas. Peter de la Court in Holland explained it, but few paid attention until Adam Smith wrote Wealth of Nations. Smith recognized that the Dutch had become wealthy by fully implementing his system of natural liberty over a century before.
Smith did not make growth a requirement of capitalism, but following his principles will cause growth. He wrote, “Little else is required to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things.”
Although growth isn’t necessary, capitalists see growth as good because it reduces poverty. Socialists claim they can reduce poverty, too, but 150 years of history prove that socialism has never done anything but impoverish everyone. Growth is less a goal than a test of capitalism: if we aren't growing, we must not be following the principles. But I have been unable to find any proponent of capitalism who saw growth as necessary. Still, there are limits to capitalist growth: savings drive growth, and the lack of savings kills it. Also, central bank manipulation of the money supply can halt growth when money printing generates unsustainable growth that ends in recessions.
I responded to Kovel’s third point about increasing inequality earlier. What about his environmental objection? After the collapse of socialism in the USSR and Eastern Europe and the exposure of the poverty in those states, socialists had to abandon their economic defense of socialism and put all of their hopes for advancing their ideology on environmentalism. If capitalism doesn’t take from the poor and give to the rich, and it doesn’t depend on endless growth, maybe Frost is right that it destroys the environment?
Wrong! There is a strong correlation between economic freedom (capitalism) and a clean environment. The nations with the worst pollution are former socialist ones or corrupt “emerging” market countries.
Capitalism has protected the environment with one principle: private property. People won’t tear up their own property; that’s human nature. But they will tear up the property of others. The worst environmental disasters in the U.S. have happened on government-owned properties such as military bases and national forests. Timber producers such as Weyerhaeuser don’t clear cut their own land, but they do clear cut government owned land. In countries where the state owns most of the land, loggers buy bureaucrats to look the other way while they destroy forests.
Freer countries, though not capitalist, like the U.S., enjoy such clean environments that socialists had to invent a new pollutant: CO2, the gas every human and animal exhales. According to them, our high standards of living produce massive amounts of CO2 that warm the planet and cause flooding and droughts. But the hysteria behind the fear of a “climate hell” hasn’t fooled many Americans, because some things are too obvious to miss.
For example, the climate has been warming since the last ice age when glaciers covered most of North America and Europe. Those glaciers retreated long before the Industrial Revolution. Sea levels have been rising for millennia. Here and here are two papers that prove that 99% of sea level increases happened before 1800. Archeologists have found several ancient cities built dozens of meters below the ocean’s surface.
Ten thousand years ago, the Sahara Desert was good farmland. A changing climate transformed it into desert long before the Industrial Revolution. Greenland was once hotter than it is today. Below the ice that covers it are the remains of Viking farms built around 1000 AD. I will become concerned about the temperature of the planet when Greenland’s ice cap melts.
Today, almost 8 billion people inhabit this planet, up from 1 billion in 1900. The additional 7 billion wouldn’t be alive today without the amazing productivity of capitalism to produce food and clothing. Economic growth was necessary to provide for them. Having eight times as many people on the planet could cause enormous pollution, but in the counties with the freest markets, capitalism has solved that problem as well.
Frost and Kovel are wrong on all three points. Capitalism doesn’t require unrestricted growth, but it is the only system to have ever lifted people out of poverty instead of pushing them down into worse poverty, as socialism does. And capitalism protects the environment better than any government has.
Roger McKinney is the author of Financial Bull Riding and God is a Capitalist: Markets from Moses to Marx.