Paying the price for the green elite

In: Uncategorized

31 Mar 2008

Fund Strategy has run my review of James Heartfield’s Green Capitalism in today’s issue.

Terms such as “ethical”, “responsible” and “environmentally friendly” are used so often nowadays in the investment world that it almost seems churlish to question them. Who would want to present themselves as unethical, irresponsible or hostile to the environment?

Yet James Heartfield, a writer and lecturer based in London, puts a strong case for such terms to be interrogated. In “Green Capitalism” he argues that the rise of environmentalism and green consumerism are entirely negative trends. His logic is compelling even though it runs directly counter to the spirit of the times.

Heartfield’s starting point is that the global elite is facing its worst nightmare: cornucopia. Until recently the history of humanity was one of living in conditions of scarcity. But the virtual abolition of scarcity, at least in the developed West, has radically changed perceptions. The elite feels a desperate need to recreate scarcity artificially just as developed economies have overcome its constraints.

The origins of contemporary environmentalism go back to the economic crisis of the mid-1970s. At that time the Club of Rome, an organisation of top industrialists, sponsored a high-profile report on “The Limits to Growth”. It argued that the world economy was increasingly coming up against natural limits – although its predictions have proved ridiculously pessimistic over time. The backdrop to the report was the combination of economic crisis and industrial militancy of the time. Under such circumstances this early form of environmentalism helped make cuts in wages and a reduction in popular living standards more acceptable.

More recently, two developments have helped popularise green thinking. The first is what Heartfield calls “the retreat from production”. With the abolition of scarcity it became easier to prioritise other forms of economic activity besides industry. Financial markets took on an enormous importance; most strikingly in Britain.

Notions such as brands and the New Economy were elevated to the status of key concepts. Industry, in contrast, was increasingly viewed with disdain. It was often more associated with emerging economies, notably China and India, than the developed West.

The second development was the end of the Cold War and the demise of the Soviet Union in the late 1980s. This deprived the ruling elite of a focus as anti-communism had long played an important unifying role for the Western powers. It also led many disorientated radicals to support environmentalism.

This combination of factors has had perverse results. In particular it has meant that a misplaced belief in natural limits has come to the fore. For Heartfield there is no real shortage of natural resources in the world. Instead there is an ever increasing manufacturing of scarcity by the ruling elite.

An excellent contemporary example of this trend is the retirement of land from production. “Green Capitalism” points out that almost 19m square kilometres of land, more than the combined area of China and South-East Asia, are classified as protected. This amount has grown more than sevenfold since 1962.

Heartfield argues that this is the main cause of rising food prices. It is a problem of an artificial constraint on supply rather than growing consumer demand. The increasing area of land devoted to growing crops for biofuel is tiny in relative terms. If even a small proportion of “protected” land were harnessed for agricultural production, it is likely food prices would fall dramatically.

The trend towards organic food also helps to exacerbate rising prices. Since yields from organic farming are low – by definition it shuns modern farming methods – land cannot be used efficiently. Although the total consumption of organic food is relatively small, its popularity illustrates the disdain of the green elite for economic efficiency.

A particular irony is that the richest people in the world, in other words those who consume the most resources, tend to be the greenest. In Britain this includes the likes of Zac Goldsmith of the Ecologist magazine (an Old Etonian and an heir to the Goldsmith family fortune) and Lord Peter Melchett (another Etonian, and director of the Soil Association). In America the mould is set by Al Gore (the son of a senator and the owner of three homes, including a 20-room mansion).

It is tempting but misleading to accuse such people of hypocrisy. It would be closer to the mark to describe them as elitists. Their objection is not to consumption itself but to mass consumption. They see no problem with their own considerable appetite for resources but they believe that popular consumption is constrained by natural limits.

Indeed, this elitist view of consumption, Heartfield argues, is embodied more generally in green consumerism. The main role of green products – whether organic tomatoes or GM-free soya – is what he calls “status affirmation”. It is to mark the green consumer out from the bulk of society. In that way the green consumer can happily use resources while distancing himself from the consumption of the mainstream. Such expressions of ethics are in reality declarations of moral superiority. Their importance is symbolic rather than practical.

Another common expression of disdain for ordinary people, in Heartfield’s view, is the attitude greens typically take to the most valuable resource of all: human time. Their admonitions to recycle, not use standby buttons and save energy are free of any concerns for the time such actions take for the average household. Ordinary people are expected to expend enormous amounts of their energy on useless gestures.

It is a shame that “Green Capitalism” is not more widely available. Although its arguments are often counter-intuitive they represent a powerful critique of the pervasive outlook of environmentalism. An unexpected bonus is that it also provides insights into practical issues such as the surge in food prices.

Fortunately, through the power of the internet, it should be possible for those readers who are interested to get hold of a copy.

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