What’s an ‘economic rationalist’?

Clive Hamilton has an attack on Tim Flannery in The Age here. The criticisms of Flannery are of interest and generally well made. It’s also interesting to see Hamilton’s attack on green groups that he thinks are going over to the enemy – a theme which was taken up at greater length in an attack on WWF in 2004 “Taming the Panda” (pdf).

I think he makes pretty telling points against Flannery’s economic naivete. Flannery – according to Hamilton, I’ve not read his book, is full bottle on mass personal commitment – we should all spend a lot of money getting solar cells and buying hybrid cars even though we don’t know if anyone else will and there are far more cost effective actions that can be taken to reduce greenhouse gas emissions (by producers in particular).

Two claims that stood out for me were these.

1 “The assignment of individual responsibility is consistent with the economic rationalist view of the world, which wants everything left to the market, even when the market manifestly fails.”

Well, if you want to use the expression ‘economic rationalist’ to mean ‘everything you hate about the Howard Government’ then I guess it’s economic rationalist. In any event, Clive decided long ago that economic rationalist was a ‘boo’ word that should be used as disparagingly as possible ritually.

But any reasonable economic rationalist, even very free market ones would know that the market cannot address the externalities of pollution. This is economics 101. So economic rationalists would broadly be in two camps. Those who don’t challenge the scientific consensus that greenhouse is a substantial problem and who would (therefore) support government action to internalise the costs – like a carbon tax. And those who don’t accept the scientific consensus who (therefore) don’t. In other words, those economists who oppose taking government action don’t have that view on the economics, but on the science.

Then there is this statement of Clive’s.

2 Flannery is an advocate of individual consumer action as the answer to environmental problems. Instead of being understood as a set of problems endemic to our economic and social structures.

So there you are – environmental problems are more than environmental problems. They’re ‘a set of problems endemic to our economic and social structures’. I think Clive wants to allow some people to read into his words the idea that we shouldn’t be trying to solve our environmental problems with simple and efficient economic instruments. We need to take them as a sign that we are called to higher level solutions. Me? I’d just like to work on any and all of the problems on their merits with the most efficient instruments at hand.

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derrida derider
derrida derider
15 years ago

I thought this was a ridiculous article – Hamilton seems to believe that opposing the government is more important than actually countering global warming. He should also be reminded that some things are true even if John Howard says them.

And of course people like Hamilton use the term “economic rationalist” in the same way Jo Bjelke-Petersen used the word “socialist” – as a term of abuse which lets him off having to engage with the actual views of the abused.

Steve Edney
15 years ago

Nick,

I wrote on this at LP. Flannery has been publically supporting carbon taxes and ratifying Kyoto quite vigorously not “when pressed” as Hamilton makes out. Hamilton seems upset because Flannery has said a couple of things that would apeal to John howard – supporting nuclear, and that individuals should try to make a difference.

My reading of Flannery is that if you are concerned about global warming you shouldn’t be waiting around for the government to fix the incentives or regulate when you can make a difference to your own emission in these ways. I think he is well aware that its insufficient which is why he supports actual government policy as well.

Ken Parish
Admin
Ken Parish(@ken-parish)
15 years ago

Thanks for that, Steve. I suspected that Clive Hamilton’s article was a gross misrepresentation of Tim Flannery’s position, because Hamilton’s characterisation of it seemed quite at odds with Flannery’s previous writings with which I was familiar. You have simply confirmed what I suspected. Hamilton is a bit like Mirko Bagaric: you shouldn’t assume without careful checking that anything either of them says is actually true. In Bagaric’s case it seems to be because he is intent on striking controversial poses and will make any assertion (however dubious or misleading) to support his chosen stance. With Hamilton, the willingness to distort and mislead is ideologically-driven. Hamilton is a zealot, which makes him considerably more dangerous than Bagaric.

Nevertheless, the appropriate response to both is simply to ignore them (as Nicholas correctly observed in relation to Bagaric when I recently used an article of his as a pretext for making an argument I wanted to advance in regard to criminal sentencing). Most blog-reading political observers are fairly “time poor”, and can’t afford to exhaustively “fact check” every assertion made by an op-ed author (or another blogger). I would like to think that this should result in readers gravitating over time towards reliance on authors who show themselves consistently to be both open-minded, rigorous and careful in the claims they make, and not impelled obsessively either by ideological fervour or tabloid sensationalism/attention-seeking. Unfortunately, my 4 years of experience suggests almost the opposite is the case. The great bulk of readers instead gravitate to extreme, shrill polemicists like Tim Blair (or some of his left-leaning equivalents) seemingly irrespective of how unreliable or blatantly unbalanced their writing is. Apparently most people would rather have their prejudices reinforced than challenged. However I still harbour a flickering hope that there is a modest minority who are not so inclined, and who may gravitate to blogs that strive for higher standards (even though we don’t always achieve them).

MikeM
MikeM
15 years ago

There is a third class of economic rationalist who points out that internalising the costs of global warming will be expensive. If society wants to spend that much money, then there are better ways to spend it.

The Copenhagen Consensus supporters are the leading proponents of that view, Putting the world to rights

Admittedly, a convincing cost-benefit analysis is difficult when we have no idea what the ultimate cost of doing nothing about global warming might be.

Gaby
Gaby
15 years ago

A silly, and extraordinarily cynical, reading of a very good “popular science” book on global warming and climate change.

Anyone who reads it will come away feeling that they have an understanding of the science, the importance of the issues and their urgency. So tick, tick, tick given that these were three major goals of the book.

It’s cynical because Hamilton is trying to characterize Flannery as a handmaiden to Howard’s subterfuges. I know Ambrose Bierce defines a cynic as a blackguard who sees things as they are, not as he would like them to be, but Hamilton here is imputing motives to Flannery that are just not apparent from a reasonable reading of his book.

In fact, Flannery is quite caustic about the Government’s policy inertia and prevarications and very sarcastic about Robert Hill’s brinksmanship at Kyoto.

How Howard chooses to use Flannery’s views is surely a matter that redounds to Johnnie’s discredit?

The book is also self-professedly a call to action. And if the problem is so dire and all encompassing, what is wrong with asking us, in the favoured speak of consultants, to “own” it. To do what we can in other words. Such grass roots personal and community action can have large impacts and even overcome the gross inertia of a substantial mass of politicians.

I don’t have the book with me, but I think that Flannery’s first recommendation for action is to convince a pollie because they can fix it entirely or some such.

And I remember being in primary school and being taught how conservation and ecological issues were a matter for all of us and so we would be out planting trees, picking up litter etc. For that matter, I wonder how the “Keep SA Beautiful” campaign started. Government action or a groundswell of popular support.

I know we have to have pollies, and we get the ones that are spat out by political machines, but we must retain the hope that we can change them on the job.

Christina Macpherson
15 years ago

I’m really pleased to read that Clive Hamilton did answer Tim Flannery – only sorry that I missed this in The Age. I felt annoyed that The Age has given such prominence to celebrity Tim Flannery with his lopsided view of the environmental crisis, in which he spruiks for nuclear power.
Tim Flannery neglects some important factors in his praise if the nuclear industry. For one thing, the timing needed to make nuclear power start to be operational in Australia would be at least 20 years, – too late to combat global warming.
While Flannery pays lip service to renewable energy sources, he fails to see that the push for the nuclear industry is inevitably diverting interest, research and investment away from truly clean power. Wide, sunny, Australia is being left behind in the solar and wind energy markets.
Finally, as an environmentalist, can Flannery truly believe that it is OK to pollute Australian deserts, with their unique plants and animals – to treat them as dumps for poison, as the U.S. has done with Nevada,s deserts?
Christina Macpherson http://www.antinuclearaustralia.com

derrida derider
derrida derider
15 years ago

Well of course Nic. It’s also important that that consultants have a trade association backed by a suitable regulatory framework to control entry to the profession so that fees … er, oops, I mean standards can be maintained.

Gaby
Gaby
15 years ago

Re consultants: how about “standard fees” then, like a court scale for lawyers?…

Gaby
Gaby
15 years ago

Nicholas, on a consultant subsidy, but don’t the “stars” get to charge monopoly rents?

Steve Edney
15 years ago

the timing needed to make nuclear power start to be operational in Australia would be at least 20 years, – too late to combat global warming.

Is there any basis for this claim?

Construction time is about 3 years from start to loading fuel, give a few extra years for approval, delays, dragging away protesters and other issues and we are still no where near 20. Storage facilities can be built in parallel. I can’t see how it can take over ten if there is political will to enact the project.

Gaby
Gaby
15 years ago

What can I say Nicholas. What a way you have with words, not to mention illumination, I’m sure. Sort of anti-bathetic(?)….

Rafe Champion
Rafe Champion
15 years ago

Well as Matthew Arnold said,
“we are here as on a darkling plain
Swept with confused alarms of struggle and flight,
Where ignorant armies clash by night.”

Put out more stars (or consultants).

Gaby
Gaby
15 years ago

At the risk of being pedantic, Zsa Zsa was Hungarian. A former Miss H I think.