Doughnuts and Degrowth

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Writing in a recent Capital Letter about degrowth — an ideology revolving around the reorientation of the global (particularly in richer parts of the world) economy away from the pursuit of growth — I wanted to stress that this is not an outlier viewpoint shared only by the straitjacketed, which could be safely ignored.

And so I modestly repeated a point I had made in an earlier article on degrowth:

[D]egrowth has made inroads into the thinking of a significant cohort of scientists, economists, NGOs, activists, and writers. Signs of interest in it, if only at the periphery, can be detected in both bureaucratic and political circles, including the European Union and the United Nation’s Intergovernmental Panel on Climate Change…[F]ormer Obama energy secretary (and Nobel laureate) Steven Chu…has argued for “an economy based on no growth or even shrinking growth.”

On July 2, the Guardian published an article by Olivier De Schutter. He is a Belgian academic, the UN Special Rapporteur on extreme poverty and human rights. He wants us to “shift our focus from growth to humanity.”

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Degrowth and De-Democracy

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The word “degrowth” was probably coined by an Austro-French philosopher — words to be thrilled by — during the eco-panic of the early 1970s, the time of The Population Bomb and all the rest. But the thinking behind the word contains elements that are far older, fantasies of timeless appeal and unchanging stupidity. There is a yearning for a lost Arcadia, a fetishization of “nature” (sorry, “Nature”), and a rejection of modernity. Some on the interwar far right with their faith in “organic” food, dislike of the urban, and distrust of free markets would have understood. Make of that what you will.

This nonsense is infinitely more toxic when intertwined with millenarian belief, another ancient failing. Our sins — overconsumption, greed, and technological overreach — have led to the “boiling” of the planet. Punishment is underway, with more to come unless averted by penance and the restoration of a more virtuous order.

And that’s where degrowth comes in.

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The War on Growth

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The industrial revolution is not yet canceled, but it has become “problematic.” When delegates arrived in Glasgow, Scotland, for Conference of the Parties 26, the 2021 edition of the U.N.’s climate jamboree, Britain’s then–prime minister, Boris Johnson, welcomed them with a speech in which, after some by-the-numbers apocalypticism (crops withering, locusts swarming, wildfires, cyclones, Miami underwater), he turned his attention to the industrial revolution: “It was here in Glasgow, 250 years ago, that James Watt came up with a machine that was powered by steam, that was produced by burning coal. . . . We’ve brought you to the very place where the doomsday machine began to tick.”

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Stranded: The False Promise of Electric Cars

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The more the state ‘plans,’” wrote Hayek, “the more difficult planning becomes for the individual.” This may resonate with the driver of an electric vehicle (EV) who has pulled up at a charging station in the middle of nowhere, only to find it broken.

In January last year, Carlos Tavares, the CEO of Stellantis, the world’s fifth-largest carmaker (it was formed by the merger of Fiat Chrysler and Peugeot), described electrification as “a technology chosen by politicians” and said it was “imposed” on the auto sector. By contrast, the triumph of the internal-combustion engine (ICE) over a century ago was organic. Human ingenuity and the power of markets led to a product that swept almost everything else off the road. EVs (which first had a moment around 1900) were not banned, and neither was the horse. In due course, ICE horseless carriages for the Astors were followed by the Model T and its kin. The automotive age had truly arrived…

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To Be Anti-ESG Is to Be against Free Market Capitalism? Not So Much.

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With environmental, social and governance (ESG) investing — a profoundly political “discipline” in which actual or prospective portfolio companies are measured against a varying selection of environmental, social and governance metrics — finally coming under the fire that it deserves, its advocates are rushing to its defense, many of them seemingly outraged that a political agenda has attracted the attention of elected politicians who disagree with it…

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Losing the Plot: Finance, Natural Gas, and ESG

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It’s a crowded field, but as an example of the destructive uselessness of ESG (an investment “discipline” based on analyzing how companies measure up against somewhat vague environmental, social, and governance standards), this story from Bloomberg takes some beating.

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The Costs of the Energy ‘Transition’ Won’t Be ‘Transitory’

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The appointment of Christine Lagarde as president of the European Central Bank was never going to bode very well for the way that the ECB is run. Lagarde is a politician, not a banker, and, as to her attitudes to rules, well, many of those who followed the euro zone crisis (a time when Lagarde was France’s finance minister) will remember her comments after those in charge approved the first Greek bailout.

Reuters (December 2010):

“We violated all the rules because we wanted to close ranks and really rescue the euro zone,” Lagarde was quoted as saying.

“The Treaty of Lisbon was very straight-forward. No bailout.”

Oh well.

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Adam (Smith) and EVs: Going in Different Directions

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Central planning is not exactly the best way of organizing an economy (#understatement). That’s true, whether we look at the colossal failures of communism or, for that matter, many less ambitious attempts to manage an economy by decree.

Central planning lite (or relatively lite) has been a feature of the energy “transition” now underway in much of the West for some time. As this transition proceeds, the difficulties flowing from its reliance on aggressive, unrealistic and arrogant directives from above are becoming all too apparent, from the woes associated with wind energy — a technology clearly not ready to fulfill the role assigned to it by the climate technocracy — to growing evidence that forcing people away from conventional autos into electric vehicles is going to lead to immense problems that appear not to have been anticipated. (This may a charitable explanation. Perhaps those in charge were well aware of the problems but were determined to press on regardless. Omelets, eggs, we know that script.)

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A Heretic in the Climate Church

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Scientists have traditionally tended to appreciate the usefulness of disagreement or, where necessary, to take it in stride and move on. (A flat Earth, you say? Oookay.) But in many faiths, dissent is heresy. The offender must be cast out, or worse.

Moral Money is, as its name implies, a particularly sanctimonious corner of the Financial Times. It is focused on the likes of ESG (a variant of “socially responsible” investing that measures actual or potential portfolio companies against environmental, social, and governance standards), “stakeholder capitalism,” and other facets of a kumbaya capitalism superior to the Gekko-hearted incumbent, or so the cleverly marketed corporatist story goes.

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A Victim of the Climate Wars: A Warning from the U.K.

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Shell’s decision to pull out of the Cambo North Sea oilfield-development project in early December — which could have also provided enough natural gas for 1.5 million homes for a year — may not seem like something that should concern Americans. Check a little more closely, though, and this grim tale begins to look a lot like an example of how our own oil and gas production is going to be — or is already starting to be — constrained, not necessarily by legislation but by a combination of regulatory overreach, activist agitation, and the increasingly malevolent influence of financial institutions. Many of those in the last group on that list are major institutional investors out to advance a socio-political agenda unconnected, whatever they may claim, to the generation of financial return for their clients. This agenda is often sold under the guise of “socially responsible investing” (SRI), and particularly these days, as “ESG,” a peculiarly virulent variant of SRI under which actual or prospective investments are not only assessed for the money they might make but also for how they score against certain environmental, social, and, much more reasonably, governance benchmarks.

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