Capitalist Nations Agree to 85-Year Central Economic Plan

Originally posted at The Savvy Street

Somewhere in Hell, apparatchiks who ran Gosplan are laughing and slapping each other on the back.

In the 1940’s and 1950’s, when the rulers of socialist economies still strove to demonstrate the superiority of the centrally planned economy, the Soviet Union’s national planning bureau, Gosplan, regularly imposed five-year plans: consumer goods and industrial priorities, use of all resources, all plans for new equipment, and production goals to be achieved. These plans quickly became a kind of sick joke inside and outside communist countries. Goals were never met, statistics grossly distorted to conceal failure, and consumer goods forever in desperately short supply, with endless grotesque anomalies such as triple supplies of pickles, but no wearable shoes.

The planned economy doesn’t work. That had been demonstrated in principle by economists such as Ludwig von Mises. Economic calculation—deciding how scarce resources should be directed to meeting consumer demand—is possible only with freely set prices, investment, and profits. In the period after WWII, when the United States, and even the devastated Western European economies, were performing miracles of recovery and ushering in an age of plenty for their citizens, the miserable people of the Soviet bloc were starving and Russia, the locomotive of socialist economic progress, was purchasing wheat from the United States and stealing every possible invention.

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Little has changed, since then, except that the Soviet Union collapsed of its own weight of economic contradictions in the early 1990s and the other great experiment with the planned economy, the so-called People’s Republic of China, has scrapped central planning in favor of the market economy—its rulers hoping that economic progress will postpone the day when its citizens demand political freedom.

So judge for yourself the level of comprehension, or perhaps the unadmitted motives, of the political leaders of the G7—billed as the “leading industrial nations”—who concluded their “summit” on June 8 with the announcement of an 85-year central economic plan.

Yes, an economic plan to which they commit their economies between now and the end of the century in 2100—85 years. The plan, fittingly reached after days of conferring in a Bavarian castle, commits these countries, including the United States, the largest Western European nations, and Japan, to “decarbonize the global economy in the course of this century.”

A nation’s energy, the fuel that drives its machinery and factories, keeps its transportation moving, heats its homes and runs their appliances—in short, keeps a modern economy running, keeps on the lights, and powers every conceivable productive and labor-saving device—is its life blood. Without it, it dies. The ramifications of energy in the economy are incalculable and untraceable; its sources of supply, refining, shipping, delivery, and use are worldwide and broadly interdependent. And everything depends upon it.

America’s economy, and every nation’s, depends today upon oil, coal, natural gas, and all their derivatives and products; no other sources of energy—nuclear, water power, solar, wind, geothermal—are even remotely close to taking the place of “carbon” fuels in our economy. Carbon-based fuels are the blood that courses through our arteries and where there is economic life, these fuels sustain it.

But meeting in Bavaria, Germany, with every conceivable issue before them—finance and banking, trade, labor, women in the workplace, global health, terrorism, and, of course, “human rights and democracy”—our rulers had time to consider and approve an 85-year economic plan to eliminate “fossil fuels.” What would replace them? The report, subtitled “Think Ahead, Act Together,” did not say. Not one word.

That’s a plan? Well, yes, it is a political plan. It dictates to an economy’s producers—its exploration geologists, technologists, engineers, investors, and entrepreneurs—what is not permitted. And leaves it to them to keep the economy alive—somehow. At the same time, in a humorous sideshow, if it were not so deadly serious, the G7 leaders committed themselves to a target for limiting global temperature change by 2050 and beyond. Yes, seven government leaders signing on the dotted line for what the global temperature change will be half a century or more from now. The poor amateurs of Gosplan are green with envy.

Do they means it? Are they serious? Your guess may be as good as mine. We know that politicians, including U.S. Presidents, look ahead as far as their re-election--consequences of their choices that occur after that are irrelevant. And so the G7 chieftains may have gotten a good laugh out of committing their countries to targets to be reached not only after their term of office but quite likely their lifetimes. Try to imagine how much Mr. Obama cares about what the global temperature will be in 35 years.

This entire political/public relations charade was driven by the increasing political clout and “moral authority” of the environmental movement—specifically, the groups concerned with “climate change,” “climate catastrophe,” including one coalition of more than 350 advocacy groups calling for “the end of the fossil fuel age.”

In the series of enormously prescient essays collected into the book, The New Left: The Anti-Industrial Revolution, Ayn Rand half-a-century ago identified the agenda of the ideological environmentalists (as contrasted with conservationists), or “ecologists,” as destruction not only of capitalism but the economy resting on reason, science, technology, and industrialism. The motive of its ideological leaders, she said, was destruction of man-the-creator, man who must survive by adapting his environment to his needs. To the ideological environmentalists, that makes man the freak of the Universe, the only species that doesn’t “fit” by adapting to its environment—and so the enemy of the rest the planet. Man must go.

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More than half-a-century later, the movement that began by urging clean air in our cities, clean water in our rivers, and control of waste by recycling—demands that have met by the G7 countries to an extent few could have imagined (but not by communist China)—now demands as an absolute that the chief means of sustaining modern economies be banned without even a five-year Gosplan for replacing it. And the G7 leaders have complied. German Chancellor Angela Merkel, hailed as the “hero” of the plan, is under heavy political pressure from German’s powerful “green” movement.

The G7 leaders may view their commitment as too long-range to matter. If nothing else, they know that predicting the course of an economy in 10 years, never mind 85, is a fool’s game. But the “Climate Catastrophe” environmentalists are more serious. They responded to the G7 report with a curt nod of approval, but began to speak immediately of setting specific budgets (hundreds of billions), specific controls on industry, and specific political actions (closing down the Keystone pipeline once and for all) at a meeting later this year in Paris.

What, then, is important enough to mankind’s future to cause the world’s leaders to commit to closing down the motive power of the modern economy—that is, our lives, and all that technology has given us—with only an expectation that there may be alternatives to take its place?

What is important enough is the prediction that carbon dioxide produced by humans will warm the global climate over the next century enough to have catastrophic consequences in terms of rising sea levels, rain and drought, agriculture, extreme weather (e.g., hurricanes), and tropical diseases—to name but a few.

Ayn Rand, again, pointed out that the political left once had attacked capitalism as impoverishing an increasing percentage of workers (a prediction made nonsense by the market economies) and then that capitalist economies led to wars (made nonsense in WWII when National Socialist Germany and fascist Italy attacked the liberal democratic France and England). And so, the New Left, from which the environmentalist movement sprung, then attacked capitalism as polluting the air and water. The United States and other (semi-) market economies responded by investments that greatly slowed their economies but produced exemplary progress for clean air and clean water.

What to do now? Well, the charge that capitalism, the modern industrial economy, is going to lead to climate catastrophe perfectly fills the bill for the New Left. The supposed consequences of global warming, of climate change, are projected as far in the future; do not expect any obvious confirmation—or disconfirmation—in coming decades. But, meanwhile, begin to shut down the modern industrial economy, block new energy sources, limit fuel use, and stop innovations like fracking or exploitation of the Canadian oil sands. Start shutting it all down now. Save the world.

You may judge the scientific objectivity and openness to debate of the Climate Catastrophe clique by their constant use of the term “climate denier” for anyone who questions the dubious (to say the least) assertions about global climate catastrophe. The term, of course, is adapted from “Holocaust denier,” describing those who question that millions of Jews and others were exterminated in the Nazi death camps.

And so, those who question the thesis that carbon dioxide given off by industrial civilization, by human pursuits, is leading in the next century to a whole array of catastrophes are compared intellectually and morally to those who deny the evidence for what occurred 75 years ago in a specific place, at a specific time, and has been reported by both contemporary observers and victims and investigated repeatedly by historians.

What the “Climate Catastrophe” lobby seeks to do, by implication, is transfer the moral condemnation deserved by the Holocaust denier to anyone who might question their long-term weather prediction as the basis for enforcing radical suppression of economic growth. (By the same token, however, they greatly reduce the opprobrium of “Holocaust denier” by putting it in company with skepticism about ultra-long-term weather forecasting.)

Volumes have now been published on the climate change debate, a literature that has proliferated beyond the ability of any individual to address the arguments and counterarguments. One site, misnamed “skeptical science,” provides a list of 176 “climate denial” myths accompanied by one sentence refutations. Do you see the tactic? No one can cope with that volume of charges and counter charges. The reader feels: “What’s the use? Leave it to the scientists!”

But it isn’t the scientists. It is the New Left advocates, the “Greens” of every possible shade, who drive this debate. And to them the goal is not unclear: put the lid on what they view as the “moral obscenity” of mankind’s use of the Earth’s resources for human progress.

If you want to understand just how manipulative and shallow is the “science” of the Climate Catastrophe lobby, I recommend an excellent article published a couple years ago in Forbes magazine by Warren Meyer, "Understanding the Global Warming Debate". That it is not “current” is irrelevant; he goes to the heart of the controversy.

The basis of the moral bullying by the Climate Catastrophe lobby, its demand for the most extreme emergency actions, and its attempt to smear questioners as “climate deniers” is that “97 percent of climate scientists” accept the global warming “consensus.” What Mr. Meyer points out is that this consensus of opinion is typically based on agreement to only two broad propositions:

“1. When compared with pre-1800s levels, do you think that mean global temperatures have generally risen, fallen, or remained relatively constant?

2. Do you think human activity is a significant contributing factor in changing mean global temperatures?”

That’s it. Agreement to these is the overwhelming scientific consensus behind global warming. What Mr. Meyer points out with exceptional clarity is that the scientists and others who question the “Climate Catastrophe” tale for the most part agree with these two broad propositions. The disagreements, and they are many and cogent, relate to complex hypothetical “accelerators” that supposedly will multiply global warming, to the significance of human activity versus other causes of warming, to the positive versus the negative potential effects of global warming, and to major contradictions in measurement, sampling, and definition of the “normal” in the supposedly hard science of… well…long-term weather prediction.

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Mr. Meyer points out that when skeptical questions about these complex issues are raised, the Climate Catastrophe advocates go scurrying back to the two propositions and cry: “but 97 percent of scientists” agree about global warming. If you are understandably confused about the deliberately ambiguous claims for “global warming” and its consequences, check out Mr. Meyer’s article as a start.

No scientists as yet agree with the 85-year economic plan to abolish the world’s chief source of energy—because it was announced just days ago. But in response to the announcement, of course, a group called 350.org, formed to pressure the Obama administration into shutting down all long-term fossil-fuel infrastructure projects, announced:

“If President Obama wants to live up to the rhetoric we’re seeing out of Germany, he’ll need to start doing everything in his power to keep fossil fuels in the ground. He can begin by rejecting the Keystone XL pipeline and ending coal, oil and gas development on public lands.”

The G7 leaders signed onto an 85-year plan, which may give an impression of being safely distant. Canadian Prime Minister Stephen Harper, given Canada’s huge energy sector, and the innovations in accessing oil reserves that finally are challenging the OPEC monopoly, was expected to be an opponent of the planned, but in the end signed on. He said: "Nobody's going to start to shut down their industries or turn off the lights. We’ve simply got to find a way to create lower-carbon emitting sources of energy — and that work is ongoing."

For the Climate Catastrophe lobby, the shutdown of America’s energy industry begins NOW. And given Mr. Obama’s record on holding back fossil fuel exploration, production, and transportation this may be all the cover he needs to begin switching off the lights.

It is time for anyone who understands the historic, life-giving benefits of industrial civilization, and capitalism, to start “climate denying” like crazy.

Related podcast interview:
Michael Pettis on Why We Need a New Global Monetary System

About the Author

Writer on finance and political economy
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