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“THE ECONOMY, STUPID!” July 11, 2011

Posted by wmmbb in Environment.

According to Wikipedia, James Carville did say that. He actually wrote three lines: 1. Change versus more of the same. 2. The economy, stupid. 3. Don’t forget health care. And by some calculations since that was in 1992, it is all but a generation ago.

In the context of yesterday when the Prime Minister announces the Carbon Tax as the method to address the pollution of the global commons of the atmosphere and the oceans, with the suggestion we are among, if not the top, per capita polluters of the environment and destroyers of the ecology, the question arises: What has economics got to do with it?

The Guardian reports via Reuters:

Australia has unveiled its most sweeping economic reform in decades, including a plan to tax carbon emissions from the country’s worst polluters. As the largest emissions trading scheme outside Europe, it revives hopes of stronger global climate action.

The country’s prime minister, Julia Gillard, said 500 companies, including steel and aluminium manufacturers, would pay a A$23 (£15.40) per tonne carbon tax from next year, rising by 2.5% a year and moving to a market-based trading scheme in 2015.

“It’s time to get on with this, we are going to get this done,” Gillard said after a tough battle to win political support for a scheme that has polarised voters and business. A parliamentary vote on the scheme is expected before the end of the year.

Australia is the developed world’s worst per-capita greenhouse gas emitter because of its heavy reliance on cheap coal for power generation. Emissions are likely to rise in the booming economy without a carbon tax, the government says.

I wonder with all the exceptions and compensations whether the carbon tax will be effective in reducing emissions of Carbon Dioxide. It seems to be politically expedient to exclude whole swathes of the population as if they do not have to take responsibility for their behavior and its consequences on the ecology, the environment, current and future generations, not just on this continent but on the planet we share. ABC Online reports:

Australian households will be handed more than $15 billion in compensation to help offset the impact of the Government’s new carbon tax, Prime Minister Julia Gillard has confirmed.

Some 90 per cent of households will get tax cuts and/or extra payments when the $23 per tonne price kicks in on July 1 next year.

The Government says the package’s tax reforms and other compensation measures mean the average household will be 20 cents a week better off.

However households can expect to see consumer prices rise by an average of 0.7 per cent due to the effect of the carbon price on large emitters.

There will be extra payments for pensioners and families with children, while the tax reforms come with a guarantee that no-one will pay more income tax.

The Government says 4 million households will be better off after compensation, 6 million will be no worse off, and 8 million will receive partial compensation for the price rises.

Known as the Clean Energy Supplement, the Government says compensation will be equal to a 1.7 per cent increase in pensions, allowances and family payments.

The scheme also includes $9.2 billion over three years for trade-exposed industry, with emissions-intensive industries such as aluminium, zinc and steel manufacturing getting more than 94 per cent of their carbon permits for free.

The scheme is projected to cut 159 million tonnes of carbon pollution from the atmosphere by 2020 – the equivalent of taking 45 million cars off the road.

And so it goes. The more children you have, the more compensation you get. On the face, an example of the John Howard method of politics. Now of course, the context is changed with the role of independents in the House of Reps and the balance of power of the Greens in the Senate. Ken Parish at Club Toppo observes:

Julia’s skills at public communication aren’t as great as I’d hoped but she must be an awesome behind-the-scenes deal-maker, possibly the best Australia has seen. Moreover, given the disparate interests and personalities among the Greens and cross-bench Independents, the only way she would have achieved such an outcome is to have impressed all of them as a leader of great strength, integrity and fundamental decency. You don’t hold together people like Windsor, Oakeshott, Wilkie or the Greens by being mean and tricky.

Whether the inference can stand scrutiny is an open question, but is undoubtedly the case as a framer of the political debate the Prime Minister has an oratorical by-pass. It is better, I suppose to struggle than to descend into those parts of the paddock where the bulls have left their calling cards, or democratically debasing tactics of the Leader of the Opposition. A product, not matter how good, without effective presentation may not be sold. In popular parlance it is something like not being able to sell a cold beer during a heat wave.

Michael Pascoe declares in his Sydney Morning Herald piece (via Ken Parish) that ” it will not be the end capitalism as we know it”. But perhaps it should be. How did we get ourselves in the mess we now face as a global society in the first place? More particularly once the canaries started to sing in the coal mine, why did we dig ourselves further into the dead end. On the later point capitalism, both as an economic theory and practice, is surely not without culpability.The way the work works is a function of capitalism, inequality, violence, imperialism, international lawlessness, and environmental degradation, among other variables as any half-conscious, partly-attending observer of events might observe.

So it is the economy. As James Carville originally did, there are doubtless other point to be made. Looking ahead let us suppose ten generations and looking from a global and human perspective, what contingencies could be set so that can be further developed as events, such as innovations occur, what basis is there to provide commitment and determination? Some people have the cognitive capacity to cope with a twenty year horizon, so I thought the answer might be break time frame down, and push ahead in generational segments.

At Greanville Post, Patrice Greanville reviews Mindful Economics by Joel C. Magnuson. While it is true that I know very little about economic theory, I do take exception to Karl Marx’s proposition that it quoted here:

In Marx’s view—which I concur with—consciousness was always primarily political, for it was always the outcome of politic-economic circumstances. What one thinks of life, power, and self, for Marx, is always a product of ideological forces. He famously wrote, “It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness.”

Surely as human social animals, our consciousness might determine our being, if we set our minds to it. Or are we simply captives of our culture, our economic circumstances, even in the fact of a dire crisis presented by the pollution of the atmosphere and the land oceans to the point of extinction of the whole substratum of existence that made, and makes, human life possible?

Joel C Magnusson is quoted from Mindful Economics:

Under the capitalist mode of production [and consumption], the purpose of economic activity is to make and accumulate profits. Respect for nature and humanity—critical elements for any sustainable system—may or may not occur depending on whether it is consistent with profit-making. The historical evidence is overwhelmingly clear that these purposes are not consistent, and are in fact opposite. (ME, p. 344)

So what would a sustainable economy system look like? How might it be developed – a process perhaps requiring real growth of each of us and for the economy.

There is an interview (9 November 2008) with the author of Mindful Economics:

A shorter interview(24 November 2009) deals with practical alternatives:


The implementation of a levy on carbon dioxide pollution by the Australian Government is a start, and perhaps an achievement. That said, the Prime Minister might stop saying the coal industry has a bright future.



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