this post was submitted on 21 Jul 2024
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Capitalism can't do green. If you were to make an accounting of all of the environmental damage that capitalist industry has done to the ecosystem, the cost to clean it all up would dwarf the revenue. Capitalist economists are incapable of calculating such "negative externalities" because they don't understand basic thermodynamics. I used to work in environmental remediation and am happy to talk more about this if there is interest.
Goldman Sachs would argue otherwise. There are enormous rents to extract from an energy source that's functionally boundless. And as the capital costs plunge, investment soars.
Oh sure. Repairing the harm that the fossil fuel industry has done would require an incalculable amount of capital and labor. And there's some stuff we're never getting back. Millions of species driven to extinction, for instance. How do you even put a price tag on that?
Capitalist participants don't need to calculate long term tail risks and external costs precisely because they're external. Even the most environmentally conscious investor is only really interested in the 40 years between when they start making serious investments and they retire. C-levels who only plan to stick around for 5 years, maybe 10 years at the longest, have even less concern for the long term consequences of their decisions.
But that problem isn't unique to capitalism. Soviet economies were also incredibly short-sighted during their early iterations. The Russians were notoriously sloppy in their industrial development. China's only refocused on ecology in the last fifteen years (hat tip to President Xi Jinping). Cuba's ecology is more a consequence of the embargo than their eco-socialist philosophy. Vietnam's industrialization has carried a huge cost to the native wilderness and ocean space.
Still, a real five / twenty / fifty / one-hundred year economic plan gets you a lot farther than "How much money can we print inside the next fiscal quarter?" hyper-capitalist mentality. Government bureaucracies that seek to reproduce themselves indefinitely need to crunch the numbers on this in a way that fly-by-night businesses do not.
But if you're just looking to industrialize green at a rapid pace, capitalist economics does the job as well as any other system.
Sure, no arguments there. I guess it's the "green" label I take issue with. Carbon-free capitalism is definitely possible as long as there are enough critical elements to produce all of the necessary solar panels and wind turbines (and I guess fusion reactors if we're really ambitious about printing money 🤑). I do wonder about rent collection long-term though, especially with such decentralized energy sources. Overproduction will also come sooner than everyone thinks. But I guess these are much better problems to have than imminent eco-catastrophe.