This notion of a full-spectrum neoliberal pharmacopoeia suitable for any malady is fairly hard to grasp in the abstract, particularly when nature is being treated as slippery as society. Furthermore, one cannot extract a comprehensive example from any single neoliberal author or Hayekian encyclical: for instance, Hayek merely expressed an opinion that market processes would deal with environmental problems in the fullness of time;20 it took legions of specialists in the think-tank thought collective to come up with the component interlocking policies over multiple decades. Perhaps the easiest way to illustrate the neoliberal playbook is to briefly survey its deployment in the concrete case of global warming.
I think most people on the left don’t fully realize that the phenomena of “science denialism,” “carbon permit trading,” and the nascent science of “geoengineering” are not three unrelated or rival panaceas, but together constitute the full-spectrum neoliberal response to the challenge of global warming. The reason this array qualifies as neoliberal is twofold: initially, they were all proposals originating from within the array of think tanks and academic units affiliated with the Neoliberal Thought Collective; and then, if and when they come to be deployed in tandem, the net consequence is to leave the entire problem to be solved, ultimately not by the state, but rather by the market. The promotion of denialism buys time for the other two options; the financialization of carbon credits gets all the attention in the medium term, while appeals to geoengineering incubate in the wings as a techno-utopian deus ex machina to swoop down when the other options fail. At each step along the way, the neoliberals guarantee their core tenet remains in force: the market will arbitrate any and all responses to biosphere degradation, because it knows more than any of us about nature and society. As a bonus from the neoliberal vantage point, perhaps some segments of the left, operating under the quaint impression they can effectively oppose one or more of these options they find anathema by advocating another—say, aiming to defeat science denialism or geoengineering by taking up advocacy of carbon trading—end up being recruited as unwitting foot soldiers for the neoliberal long march.
Each component of the neoliberal response is firmly grounded in neoliberal economic doctrine, and as such, has its own special function to perform. As we have already learned from historians of the tobacco strategy such as Richard Proctor and historians of climate denialism such as Naomi Oreskes, the purpose of science denialism has been to quash all immediate impulses to respond to the perceived biosphere crisis, and to buy time for commercial interests to construct some other eventual market solutions to global warming. Denying the very existence of global warming is cheap and easy to propagate, can be fostered quickly, and tends to draw attention away from issues of appropriate responses to crisis. The neoliberal think tanks behind the denial of climate change don’t seriously believe they are going to win the war of ideas within academic science in the long run, just as the tobacco strategy never envisioned disproving the smoking-cancer link. Yet, nevertheless, even the existing denial of the science displays its neoliberal bona fides. The first response to a political challenge should always be epistemological, in the sense that the marketplace of ideas has to be seeded with doubt and confusion. This is the core of the agnotological project. Furthermore, human science will never fully comprehend nature in real time. Neoliberals have assumed the equivalent stance hostile to intellectuals dating back to Hayek’s attack in 1949, and no one gets more aggrieved about the lack of deference shown by the intelligentsia than your median neoliberal.21 Bashing pointy-headed elites lends them a certain populist caché; and it plays to an incipient fondness among the uneducated for the fuzzy conviction that wishing can make anything so. This is short-term politics in pursuit of short-term aims. Neoliberal doctrine maintains that anyone should be free to propound any wonky falsehood they may wish, because the final arbiter of truth is the market, and not some clutch of experts who represent sanctioned science. If it just so happens to resonate with the commercial propaganda interests of the oil companies, well, so much the better.
The project to institute markets in pollution permits is a neoliberal mid-range strategy, better attuned to appeal to neoliberal governments, NGOs, and the more educated segments of the populace, not to mention the all-important FIRE sector of the economy. In effect, this strategy is an elaborate bait-and-switch, where political actors originally bent upon using state power to curb emissions are instead diverted into the endless technicalities of the institution and maintenance of novel markets for carbon permits, with the not unintended consequence that the level of emissions continues to grow apace in the interim. Furthermore, professional economists are brought in to shill for this strategy, largely because they enjoy conflicts of interest in this area of a magnitude commensurate with those they have nurtured with the financial sector in general. The neoliberal genealogy of this approach is conventionally traced back to the MPS member Ronald Coase, who first proposed that pollution could be optimized by submitting it to a market calculus.22
The chequered history of traded carbon permits and their mind-numbing technicalities of the ways in which these markets were foisted upon well-meaning reformers has been explained in a number of excellent papers by Larry Lohmann, which deserve to be much better known among environmentalists and the left in general. For purposes of brevity, I will just summarize the case that trading carbon permits doesn’t work, and was never intended to do so.23 The major intentional stratagem is that, once the framework of permit trading is put into place, the full force of lobbying and financial innovation comes into play to flood the fledgling market with excess permits, offsets, and other instruments, so that the nominal cap on carbon emissions never actually stunts the growth of actual CO2 emissions.24 This, in turn, leads to persistent falls in prices of the permits, which continually trend toward utter collapse. This has happened a number of times in the European Emissions Trading System since its inception in 2005.25 Indeed, prices of the ETS dropped to zero in the first phase in 2007, and have been falling again, as demonstrated in Figure 6.1, even though concurrently emissions have risen more or less continuously, with a hiccup during the early phases of the financial crisis. But wild swings in the markets do not perturb neoliberals, since they take the longer view.
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Figure 6.1: European ETS Prices, 2011
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Source: Bloomberg
The engineered glut of permits is not temporary, since in this system, unused permits can be “banked” for use in future years, although it might not be the most prudent course to hoard an asset of falling value. Indeed, trading systems tend to reinforce oligopoly power, since they always grandfather in the largest emitters, and tend to penalize new entrants. And it is well understood that trading systems tend to stifle further technological measures to curb emissions. Money that might have been used productively to alter the energy infrastructure instead gets pumped into yet another set of speculative financial instruments, leading to bubbles, distortions of capital flows, and all the usual symptoms of financialization.26
So “cap-and-trade” does not work at ameliorating global warming, primarily because it was never really intended to do so. But as that intentional consequence becomes clear, it gets displaced by the long-game neoliberal solution. The final neoliberal fallback is geoengineering, which derives from the core neoliberal doctrine that entrepreneurs, unleashed to exploit acts of creative destruction, will eventually innovate market solutions to address dire economic problems. This is the whiz-bang futuristic science fiction side of neoliberalism, which appeals to male adolescents and Silicon Valley entrepreneurs almost as much as do the novels of Ayn Rand. Geoengineering is a portmanteau term covering a range of intentional large-scale manipulations of the earth’s climate, often proposed to counteract existing man-made climate change, such as global warming. It proudly flaunts the neoliberal precept that if the economy screws up, just double down on the same sorts of things you have been doing already. It enc
ompasses such phenomena as Earth albedo enhancement through “solar radiation management” (injecting reflective particles into the stratosphere, space mirrors, desert covering); CO2 sequestration (through ocean seeding or churning, burying biochar, introduction of special genetically modified organisms, or CO2 extraction at point of emission); and direct weather modification (hygroscopic cloud seeding, storm modification).
Geoengineering has close ties to the Neoliberal Thought Collective. The American Enterprise Institute has a full-time geoengineering project, and a number of other neoliberal think tanks, such as Cato, the Hoover Institution, and the Competitive Enterprise Institute, have produced studies. Chicago School SuperFreakonomics has come out in hearty open endorsement. Of course, it might seem a bit tactless for units that have prior histories of support for climate denial now getting behind geoengineering; but that simply demonstrates that this is another component of a full-spectrum neoliberal project. The real objective is to get the idea injected into general political discourse; and one indication that they are succeeding is an article that appeared in The New Yorker in 2012, which actually treats the idea as a serious prospect.27 Unfortunately, this article somehow managed to skip over all the daunting reasons why the entire program is sheer lunacy: that there is no way it could be tested ahead of time; that it involves unilateral actions that violate many international treaties; that it imagines a few corporations might hold the entire globe hostage for the sake of some short-term profit; and last but not least, all of the variants of interventions could at best be short-term expedients, since none actually could rectify the true underlying problem, which is the careening acceleration of CO2 emissions worldwide. It gleefully diverts attention to Band-Aids while the patient is dying of heat exhaustion. But maybe that is the point of the exercise.
Like most neoliberal prescriptions, the most important fact concerning this tortured marriage of science and corporate commodification is that it often doesn’t work to ameliorate its stated target problem, although it does permit further amplification of the larger neoliberal political project. Permit me to relate one recent incident that illustrates this fact. For some inexplicable reason, the British Royal Society has been one of the biggest “insider” boosters of geoengineering. Partly for that reason, one of the earliest consortia of scientists seeking to mount a pilot program for injecting particles into the stratosphere has been the British Stratospheric Particle Injection for Climate Engineering project, or SPICE, headquartered at Bristol and Cambridge universities. SPICE announced in 2011 that it would use a weather balloon to lift a one-kilometer-high hose to spray an aerosol, as proof of concept.28
This provoked a great hue and cry in Britain, with more than fifty scientific organizations opposing even this limited test project. In the current neoliberal circumstances, mere political opposition resorting to reasoned arguments that this sort of “experimentation” was dangerous and ill-conceived was nowhere sufficient to stop a well-funded scientific cadre with some ceremonial credibility and political clout. No, what got the experiment canceled before it was finally carried out was a dispute among the team over intellectual property: two members of SPICE, Hugh Hunt and Peter Davidson, had filed for a patent for an “apparatus for transporting and dispersing solid particles into the Earth’s stratosphere by balloon, dirigible or airship” without informing the other members of the team. Other participants, learning of this, called the experiment to a halt. Just like in so many other areas of modern science, faculty here occupied dual roles as academic researchers and CEOs of their own startup firms: not just Hunt and Davidson, but the other participants as well. This speaks louder than any public relations claims about the nominal public-spirited character of the project: geoengineering is not really about saving the planet; it is instead mostly about laying claim to privatization of the global troposphere.
Once the relevant corporations and scientists get all their legal property claims in a row, and unless environmentalists can mount some further serious obstacles, I have no doubt something like SPICE will go forward. But in the meantime, temporary failure of this or that particular geoengineering project is entirely consistent with the success of the neoliberal political project. For the ultimate objective of the exercise is to rely upon the market, the only dependable source of knowledge concerning the roiling chaos of evolving nature, in the face of similar complexity of its interaction with society.
Note well that each neoliberal component of the full-spectrum strategy does not by itself actually ameliorate global warming. Denialism postpones the issue; carbon permit trading does not actually reduce CO2 emissions in actual practice; and geoengineering just treats the symptoms of global warming without curtailing emissions. What might at first seem to be a serious defect of the neoliberal strategy is, in fact, the crux of its ultimate rationale. If nature and society evolve in complex and impenetrable ways, then humanity should be prevented from joining together to impose unilateral policies to deal with the perceived root problem. For which humans can actually understand where the market is taking us? Better to defer all political action to the market, which will come to some eventual accommodation to the transformation of nature in good time. But this would never happen under pure passive laissez-faire. Instead, neoliberals must mobilize to capture the state and impose the spectrum of interim “solutions” so that people can come to believe that something is being done to stem the crisis, even if, strictly speaking, no such thing has occurred.
The full-spectrum neoliberal response is the double truth doctrine in action.
B) The Neoliberal Response to the Economic Crisis
The fundamental contrast between the dynamic chaotic character of nature and society and the immutable solidity of the market turns out to be the Rosetta Stone for understanding the response of neoliberals to the Great Economic Crisis of the twenty-first century, as well as explaining their response to climate change. To a first approximation, it accounts for their often eccentric position that the crisis cannot be understood as revealing any flaws in markets whatsoever. For neoliberals, the manifestation of an economic crisis is never traceable to any defects in their own previous policies (say, the deregulation of finance, or the quasi-privatization of the securitization function with regard to newer classes of debt, the breakdown of private-label debt issuance, or deindustrialization); rather, it is a consequence of the unstoppable evolution of nature and society (of which their interventions are a significant component), which can never be fully comprehended by mere human intelligence. The demonization of the government becomes one salient corollary of this fundamental precept: in their version of events, nothing was ever intrinsically wrong with the mortgage market or CDOs or the megabanks or the shadow banking sector or trade imbalances between China and the rest of the world; the snafu came when governments sought to rein them in, encourage them, or call them to account. The bureaucrats had presumed to control something they could never fully comprehend. Nothing about the market had changed, it was only the hubris of the governing class that brought the system to the precipice of collapse. The changes that had occurred in the run-up to 2007 were deemed eminently natural; all that was required was the humility to realize that evolution often appears chaotic to the informationally challenged and preternaturally impetuous, and the patience to wait for the market to come to adequate accommodation of the trends.
But, of course, when it looks to all the world like the global economy is collapsing, the public wants action, and wants it now, not passive acquiescence.29 Fools rush in, say the neoliberals, and therefore a full-spectrum response is needed to counter the palliatives of their opponents. And, with benefit of hindsight, that is precisely what happened in the five years following the crash. Conveniently, the spectrum of policies can be arrayed more or less in parallel with the spectrum of responses to global warming outlined above, because the rough structure of short-, middle-, and long-term responses are essentially the same. Indeed, pointing out the similarities suggests that the neoliberal poli
tical project has by now attained a kind of efficient stability and coherence, rolling out many of the same time-tested responses in widely varying contexts. In the case of the global economic crisis, they comprise denialism, market-based rescue of banks, and financial innovation. This full-spectrum neoliberal response can serve to organize and clarify many of the ideas and incidents related in previous chapters into a single narrative that ultimately answers the question: How did the neoliberals emerge from the crisis stronger than when it began?
The phenomenon of denialism as regards the profession of economics in the crisis has been surveyed in detail in chapter 4. In the case of global warming, think tanks mobilized various protagonists to deny the science, which had suggested that global average temperatures were increasing and that human carbon emissions were the primary cause. In the case of the economic crisis, the spin was slightly different: economists had noted that nothing in their orthodox theories had anything whatsoever to say about the global crash, but nevertheless, various protagonists were encouraged to deny that this implied that the theories were contravened or impugned in any fashion. In the former case of climate change, the suggestion was floated that existing science did not correctly comprehend nature; in the latter of economic crisis, the suggestion was that, contrary to all evidence of the senses, economists did nonetheless understand the crisis. The former was fomenting denial on the part of outsiders, the latter emboldened denial on the part of insiders. While the valence of the claims was reversed, it is important to frame the phenomenon in both instances as a commensurate political intervention on the part of the neoliberals. The purpose of denialism in both cases has been not actually to influence the relevant science over the long run—recall that most neoliberals of a Hayekian persuasion have never been terribly enamored of neoclassical economic theory—but rather to sow doubt and confusion in the general public concerning the causes and significance of the crisis in question. The mantra here, from Ezra Klein to Andrew Haldane to Gary Gorton, is that it is just all too complex to understand.30 If tense issues are presented in a nominally “fair and balanced” manner as rife with uncertainty, then most of the tyro public will just tune out. The deployment of agnotology is a major hallmark of the neoliberal collective, as we have repeatedly argued throughout this volume.
Never Let a Serious Crisis Go to Waste Page 45
