We know emissions are still rising.
We know that temperatures are increasing faster than expected. We have just had several months in which global average temperatures were over 1.5 degrees warmer….
We know governments such as those of Australia, the UK, the USA etc are still authorising new fossil fuel fields that can be described as “carbon bombs” that will either lock us into even greater emissions, or be abandoned at a huge loss to fossil fuel companies – no prizes for guessing which is most likely.
We know that it does not matter which country the fossil fuels are burnt, whatever governments argue about measurements of emissions, the burning will increase climate change for everyone.
We know that this increase is likely to lead to tipping points being triggered (such as runaway ice melts, Amazon forests dying, oceans dying, release of methane from under land and sea ice), which are likely to trigger even more tipping points, leading to irreversible ecological and climate change.
These events are likely to trigger agricultural collapse in at least some parts of the world, which could lead to mass human death, and human population movement.
In other words, while the best solution is to install governments that will listen to scientists and to the signs of collapse, the most likely result is that we will break the 1.5 degree limit.
One of the apparent tools to allow this emissions increase is economic models.
John Stuart Mill explicitly excluded a large number of human and social factors from economic analysis, in order to make it simple. In somewhat convoluted terms (skip if its too much of a headache) he wrote:
“Political Economy” …. does not treat the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means of obtaining that end…
Political Economy considers mankind as occupied solely in acquiring and consuming wealth; and aims at showing what is the course of action into which mankind, living in a state of society, would be impelled, if that motive, except in the degree in which it is checked by the two perpetual countermoves above adverted to [aversion to labour, and desire of the present enjoyment of costly indulgences,] were the absolute ruler of all their actions….
With respect to those parts of human conduct of which wealth is not even the principal object, to these Political Economy does not pretend that its conclusions are applicable. But there are also certain departments of human affairs, in which the acquisition of wealth is the main and acknowledged end. It is only of these that Political Economy takes notice….
Not that any political economist was ever so absurd as to suppose that mankind are really thus constituted, but because this is the mode in which science must necessarily proceed.Mill On the Definition of Political Economy and Method of Investigation Proper to It
He admits to massively simplifying human psychological complexity. He also simplified other matters, but the problem is that on the whole, most neoclassical neoliberal economics, ignores vital factors of life and forgets they are doing it, making their economics the whole of life.
Mill admits to his economics ignoring the psychology of markets, the ways we engage in self destruction, fantasy, self-justification for harms and scapegoat others. He ignores the ways that markets and information might shape our psycologies in ways which sabotage our ability to take action on the challenges facing us, and even to use economics to distract us from real problems.
It ignores the way economic action is part of politics. Markets are also structured by power and politics, and power and politics structure markets. It ignores the fact that inequalities of wealth lead to inequalities of action and influence, and that inequalities of wealth can reinforce those inequalities through the State its laws, regulations and procedures. Established economics will tend to support established political and riches arrangements, as those forms of economics will receive the awards, the funding and promotion.
It ignores the effects of economic action on the ecology and climate, and the effects of climate and ecology on economic action. The pricing mechanism is supposed to mean that if prices go up, then people change their usages, or are stimulated to produce more. It does not assume that ecological effects can link together, or be suppressed by politics until they cascade or hit like a tidal wave. It ignores the politics and ecological ‘side effects’ of the struggle for resources. Economics is locked into viewing ecology as passive and endlessly giving – if something dies off somewhere, the same can be produced elsewhere. Economists can even argue that because agricultural production is a small fraction of the gdp (<4%) it is largely unimportant, while most people can figure out that without that production the rest of the contemporary world economy would crash.
It ignores the effects of illth (pollution, dispersion, destructive extraction and harmful labour), rendering them externalities that do not have an effect on the economy or life. Essentially this leaves it to taxpayers to clean up the mess produced by business, and helps boost profit from destruction and the loss of vital materials. Economics ignores harms produced by its actions, as it tends to be about justifying riches and producing more riches.
It ignores the effects of technology and technological lock-in, other than through magical claims that needed technology will always appear through the market. Economics only considers technology beneficial if it makes money.
It ignores the importance of information systems for economies, and how those can be ‘corrupted’ or ‘distorted’ by politics, riches or over-plenty, so that the economy is functioning only at a level of fantasy, (and that the economics used to describe that action is also a consoling fantasy). Economics ignores the ways economic propaganda can create harms and fantasies to boost the wealth of people making the sales. This is because one of its fundamental assumptions is that only good information counts, every one has access to good information, or that the price system acts as a perfect information processor. Economics assumes that error is not normal, and that people will not buy rubbish like collateralized debt obligations, which will lead to economic harm.
Finally it assumes energy production is simple, and continuous with no harms or limits, dependent largely on money (which stores psychological energy to an extent), so that economies can grow forever. Economies can supposedly violate the laws of thermodynamics with ease.
There are undoubtedly other issues that mainstream economics dismisses or hides which are important.
It should be clear that by ignoring these factors economic models go about hiding the challenges of climate change and eco-destruction, and that is the subject of the next page.