Michael Hoexter: Naomi Klein’s “Hard-Money” Ideas Undermine Her Laudable Climate Action Goals

Lambert here: A long review for a long book. But especially if you are a member of “Blockadia,” well worth following the twists and turns.

By Michael Hoexter, a policy analyst and marketing consultant on green issues, climate change, clean and renewable energy, and energy efficiency. Originally published at New Economic Perspectives.

This is the first of at least two book reviews that I am planning to write about Naomi Klein’s important and occasionally frustrating, quite-large book (466 page) This Changes Everything: Capitalism vs. the Climate (which I will abbreviate as TCE). The reasons for more than one book review are several. TCE contains a number of important ideas and insights that are not tightly tied together in one argument. Naomi Klein happens to be one of the more politically-savvy and widely-read public intellectuals currently writing about social, political, and economic issues and TCE dives into a central complex of issues surrounding the gravest and most massive challenge we face as a species, the fight against human-caused climate change. Her previous work in Shock Doctrine and related articles, is “must-read” if you want to understand the predatory nature of neoliberal elites, a feature of our current age which she at least popularized, if not discovered. Naomi Klein is also a leading activist on this and other issues, including her work with 350.org and help in co-planning the People’s Climate March in September of this year. The book is varied in content and focus, therefore the plan to write more than one review of the book, rather than write one very long one.

As implied in the last sentence above, TCE is not tightly structured around her central argument, which shifts in its focus as well as in whom she is attempting to address. However what follows here is one, perhaps biased, overview of TCE’s main arguments.

Klein’s central thesis, pretty much stated in her title, is that the capitalist economic system, in particular minimally regulated neoliberal capitalism, and decisive climate action, as has not yet really been attempted, are incompatible. Furthermore, Klein sees a deeper cultural shift as the ultimate terrain for action; Klein views the fundamental evil to be overcome as the social and psychological system of “extractivism” [161], inclusive of both capitalism and state socialism, where humans have taken as a given a non-reciprocal relationship with nature, which we then view as a boundless source of need-satisfying objects. Klein traces the philosophical justifications for extractivism back to philosopher of science and scientist Francis Bacon in the 17th Century [170]. She then sees the use of fossil fuels as the critical enabler of both the industrial revolution and the institution of capitalist and state socialist extractivism [173]. Klein understands that, on a biological level, humans must extract from nature their livelihood but calls for a regenerative relationship with nature, regenerating non-human nature rather than simply taking from it or dumping toxins or chemicals into it without regard for their effects.

Despite the pervasive, long-term nature of the extractivist mindset and system, Klein recognizes that the climate crisis is an emergency, requiring emergency measures. In a rebuke to mainstream Big Green and the existing climate bureaucracy generated by the Kyoto Protocol cap and trade systems [218], Klein says that due to constraints of time as well as the nature of the climate challenge, a gradualistic approach to climate action is no longer feasible. Klein points out that emissions are still rising after 20 years of climate policy attempts. The policy of putting a gradually ascending price or gradually descending cap on carbon, where market forces would then create the new society under these constraints, are in Klein’s take too slow and not equitable enough. She calls the dominant carbon trading mechanism, aptly, a “jargon generator”[199], which obfuscates its own workings for the benefit of insiders and shields it from political pressure from outside.

Klein acknowledges that right-wing and denialist fears about the required climate actions leading to “left-wing” government intervention are generally correct, though entirely wrongheaded in their valuation of these actions [58]. She believes, that climate policies and climate policy advocates that attempt to the reassure the Right and right-leaning orthodox economists about the central role of the market in climate action are fundamentally misguided. Klein makes arguments both directed at the more traditional Left that they should take on the climate challenge and also towards climate “centrists” that they need to embrace the issues and concerns of the Left. While in some parts of the book, Klein attempts to emphasize the continuity between the traditional Left and her vision of climate action, she underlines that the Left cannot continue to focus only on the distribution of goods and bads within societies, as has been its general focus. Klein criticizes “progressive extractivism” [180] as witnessed by the Chavez and Correa governments in Latin America, which have emphasized social equity while engaging in similar or higher levels of natural resource/fossil fuel extraction than their more right-wing predecessor governments.

Klein is somewhat vague in terms of both her vision of the new post-extractivist society as well as the path to it. Klein recognizes that aspects of the current society must expand, which she terms the “caring economy” while the “careless economy” must shrink [93]. She also seems to support the green-left idealization of decentralization of control of the economy and polity for its own sake, while at the same time calling for more planning and the role of, what sounds like, a strong central government. Klein recognizes that climate action involves a large expansion of the public sector against the trend of fiscal austerity of the last several years throughout the developed world [103]. Klein has some kind words for not particularly decentralized Scandinavian social democracies, though pauses to point out that Norway is simultaneously a major oil and gas extractor/exporter [179]. Klein mentions worker-owned cooperatives as one model of a future, direct democratically controlled economy. She also sees a role for a strong government to ban certain activities of the fossil fuel industries, like fracking.

Klein spends a good portion of the latter part of her book, in a way that seemed to me to meander somewhat, in describing the various exploits of what she calls “Blockadia”, the various anti-fossil fuel movements that have arisen over the past decade or so. Some of these movements are rooted in or inspired by indigenous communities who resist the expansion of fossil fuel extraction projects. Klein chronicles the activities of some of these groups in a celebratory manner, without much in the way of political analysis. Klein understands that the transition to a post-fossil fuel society is not just going to emerge from heroic acts of blockading various fossil fuel infrastructure sites but she also holds out this existing movement as maybe one of the primary constituencies from which such a transition will emerge. In my opinion, she might have made clearer some of the limitations of the strategies of local groups that often are focused not on global warming per se but on the local effects of fossil fuel extraction, an extension of traditional environmentalism or the environmental justice movement. From my observation, these groups often lose the climate thread in their focus on the local damages of fossil fuel extraction that are specific to a particular method or place.

Klein’s cultural politics though are complex and perhaps a little bit contradictory. Klein realizes that she enjoys most of the benefits of the most privileged inhabitants of the metropolitan centers, including her treatments for infertility before the conception of her son, a mostly personal chapter in the book [419]. There are parts of her book that praise a “small is beautiful” what might be called a mild “neo-primitivist” lifestyle or are certainly signaling that she is sympathetic to those who cherish or identify with the ideal of tribal or indigenous life. There is no single “take-away” that Klein offers in this area and she may be politicking by appealing to a range of constituencies rather than offering a cultural-political “program”.

While Blockadia currently seems to be very far from realizing such a vision, Klein believes that a broad-based mobilization should emerge that will lead to governments “planning and banning” to achieve carbon emissions reductions and eventually to achieve some form of post-extractivist society. Also not clear on the details of local vs. national control, Klein seems to think that additionally local movements would create decentralized solutions but ultimately her book is not explicit and programmatic in this area. While Klein’s recommendations are diverse and multifaceted as would befit “changing everything’, she does in the book mention that a World War II style mobilization of resources and spending is the major political-economic first step for the climate movement [108] . In this latter area, I share this advocacy position and have sketched out some of the economic and technological implications of such a mobilization over the past year or so. Additionally, in this Klein is in agreement with just-launched groups like The Climate Mobilization.

Klein’s Hard-Money Ideas, Typical of the Left

Climate action needs to happen very soon and as we live in a largely monetary economy, it will be via some form of payment that many types of projects to reduce emissions will take place.   There will be non-monetary behaviors and transactions based on ethical commitments and other motivations but these will still take place in the midst of a society that runs on the balanced reciprocity of exchanges of goods and services for money. Therefore how climate action integrates economics and money is a critical element to its actual realization.

One of the more policy-oriented parts of TCE but highly problematic is Klein’s theory of money and how the climate and energy transition will be financed. A section of TCE [110] and in a supporting article in the Guardian titled “Climate change: How to make the big polluters really pay”, Klein outlines what I would term a “hard-money” view of financing climate action that is pretty explicitly also an imagined retribution against the fossil fuel industries for their multiple wrongdoings. Klein states that governments have exhausted their supply of money in bailing out banks, while the fossil fuel industries have accumulated money from their profitable businesses. Via fines or taxes on fossil-fuel company profits, as major polluters, Klein sketches out via her “polluter pays” program that governments can then finance the climate mobilization and large-scale investments that she recommends. In a seemingly self-contradictory manner, Klein recognizes that governments have the capacity to create money and acknowledges that it would theoretically be possible for governments to institute “quantitative easing for the people” but she explicitly states her preference for extracting money from fossil fuel companies as if to finance government expenditure[110].

Of course, this is well-meaning economic freestyling on a number of different levels made to serve Klein’s, all-too-typical Left and liberal, preference to reduce economics to a simple morality play of victimizers and victims. For one, even within the terms of Klein’s stated policy preferences, Klein skims over that what she is proposing is akin to a complicated carbon tax, though Klein seems to think that this will be simply a matter of “taking” the fossil fuel industries’ ill-gotten gains as punishment. Klein seems to believe that fossil fuel companies will still continue to exist and function to a degree, generating profit and revenues, to in turn supply the money for climate action. In reality, not only would there be legal complexities in terms of corporate accounting and governance associated with such government actions but also the economic behavior of these companies and the fossil fuel sector overall after such fining or taxing is not explained in TCE.

More importantly, Klein’s scenario for financing climate action ignores that currency-issuing governments (unfortunately not the Euro-Zone countries) continually create money by spending (and destroy it by taxing), so Klein’s dismissal of fiat currency as second-best to “polluter pays” is a spurious distinction, at least on the national level. If it were possible to follow Klein’s format for climate finance, a tax would be imposed on fossil fuel company profits and then government spending for climate action would occur via fiat as a separate action. Local or regional governments that must use taxes to finance themselves could in part use some version of Klein’s mechanism but this might also expose these more vulnerable jurisdictions to the flight of the industry to more favorable tax regimes in other jurisdictions or a “race to the bottom” by local governments or “tax arbitrage”.

The amount of government spending for currency-issuers like the US and Canadian federal governments is, in reality, not dependent in amount upon the amount of taxation. Finally, the profits of fossil fuel companies, though very large in terms of corporate profits ($271 billion in the US and Canada in 2013) constitute not a particularly large slice of total energy industry revenues (somewhere between 5-10% for established oil giants and it appears many fracking operations operate entirely in the red) and are by no means enough to fund large-scale spending in the manner of a war mobilization to fight climate change. Such a mobilization in the US might easily require in the range of a trillion dollars or more of additional government spending in some peak years. The price-tag in the trillions is no problem for currency-issuing governments given the risks and incalculable real and subsequently monetary costs of insufficient or no action. Klein is well-aware of many of the government actions required, and I agree with many of the ideas for spending she puts forward but has chosen an unfortunate and problematic way to “finance” them.

I agree with Klein that one aspect of government climate policy should make the fossil fuel business become a less profitable and therefore a less financially attractive business on the way to its downsizing and orderly liquidation. There are many ways to achieve this, including the removal of subsidies, divestment and thereby raising the cost of capital, as well as reducing demand for oil, via a variety of government and other programs and measures including taxation, all of which Klein does or, I imagine, would support. However, utilizing the idea that governments, especially national governments “need” or should prefer to “use” the money in fossil fuel company bank accounts does not ultimately serve these goals.

Klein’s aesthetic preference for the “Robin Hood” style tax/fine-then-spend scenario for public spending is familiar to readers of New Economic Perspectives as well as observers of the contemporary neoliberal-era “Left”. Almost the entire, supposedly progressive, public sphere, inclusive of the Democratic Party, labors under the illusion that taxation must precede spending and the amount of the latter is dependent upon the amount of the former. The debate on the sustainability of government spending on Social Security as well as other social programs is almost entirely contained within the paradigm that the federal government can run out of money, and is dependent on the amount of taxation collected. Left-leaning Democrats are particularly focused, at least in rhetoric, on the taxation of the wealthy and corporations as the gateway to subsequent social spending, and display ignorance of or dismiss the relevance of the actual fiat monetary operations. Modern Money Theory shows that for currency-issuers this imaginary “conservation of currency” via tax-then-spend violates stock-flow consistent macroeconomic accounting in a growing economy with private sector savings/profits. For some reason, the neoliberal-era Left concedes to the political Right the entitlement to relatively unrestricted use of fiat spending for their favored purposes. Spending without regard for tax revenue is “allowed” to bailout the private financial elite and military spending, while “good” liberals blindly play the game of overzealous adherence to “covering” spending by taxation for the more socially- and economically-useful government spending they tend to advocate.   They are, alone, trying to win a virtue competition that their right-wing colleagues ignore, in this case with good reason. Bill Clinton is praised for running budget surpluses, one of the more economically damaging aspects of his Presidency, while George W. Bush is pilloried for one of the few bright spots of his awful Presidency, i.e. that he once again ran deficits.

I have encountered from other intellectuals of the Left similarly convoluted and homegrown hard-money beliefs that seem to be premised on the wealthy or corporations controlling and virtually owning the money system. In response to a blog post by a prominent left-wing academic and long-time political commentator in which he/she claimed that the US government was suffering from a dollar shortage and therefore diminished foreign influence, I sent him/her an explanatory email, including links demonstrating the fiat nature of US government spending, indicating that waning US international influence may have had other causes. The response I received did not engage with the content I had sent him but was simply a blithe reiteration of his own personal theory of money, tailored to the historical moment of his interest, that at the same time is a similar type of moralized monetary theory to that of Klein.

One of the problematic areas in terms of recognizing monetary realities for the Marxist, post-Marxist or liberal Left’s ideas about money is that economic and monetary theory is subordinated entirely to a moral vision, based on condemnation of existing inequalities. The wealthy are to feel guilty in the liberal version or in the Marxist are to be outright condemned, punished, and forcibly or legally transformed into the non-wealthy. An unfortunate side-effect of this vision that has some roots in Judeo-Christian ethics and the age of money based on coinage and precious metals, is that money is reified and its fiat dimension ignored or misunderstood. Money continues to be misunderstood as a finite collection of “money-things”, like gold coins, of which the wealthy, of course, possess more. Moral redemption in the liberal vision is then either the giving of charity or the payment of fines and higher taxes and in the Marxist or radical vision, the full-scale levelling of wealth differences and therefore the punishment of those who have become wealthy by exploiting or oppressing others. Klein and the aforementioned academic are holding fast to their view of money (and in case of the latter against proffered evidence) because they apparently have an attachment to a drama where the evil-doers will be punished monetarily with simultaneous rewards for the poor and working people, very much like the Robin Hood story.

Of course, this theory is in part rooted in ideas from Marx, that politics and the State are part of a “superstructure” that rests upon the more fundamental economic class relations between the working classes and the ruling/ownership classes, the “base”.   Some non-Marxist Left, Marxist and neo-Marxist writers often tailor their theories of money to fit the notion that the capitalist class is pulling all the strings within government so they then elide that into a homespun “hard money” theory in which virtually “all the money” is owned by various corporations/members of the capitalist elite. This rather a-historical view, despite pretensions to historicism, ignores the roles of states in co-creating capitalism or at least many of it institutions, including fiat money. Furthermore, one can better describe the operations of even a highly unequal plutocracy-corporatocracy like our current one, i.e. during the financial meltdown of 2008, if one also accepts that politics and government institutions are also economic institutions but formally independent of and different from capitalist enterprises and financial institutions.

[Of course, Marxists will point out that Marx was sensitive to the problem of reification and commodity fetishism and in fact “wrote the book” about it 150 years ago. That Marx invented this terminology however does not mean that its role has been fully integrated into either off-the-cuff or more doctrinaire economic and political analyses of the Left. Furthermore, it might be argued that Marx’s inadequate theory of money and his even more inadequate theory of politics and the State have prevented those who follow in his footsteps from fully understanding the abstractions involved in monetary systems. Reification and commodity fetishism remain the basis of much Marxist and non-Marxist left cultural criticism but are not understood as dangers or phenomena in Marxist or Marxian political-economic analysis.]

The Ethical Problem of “The Polluters”

Before proceeding to the political problems of hard-money thinking in facing global warming, Klein’s and the broader anti-fossil fuel movements’ contention that the fossil fuel companies are “the polluters” and, by implication, the end-users of fossil fuels are “non-polluters” sets up an untenable ethical basis from which to build the movement’s political position, a position that in this case must be grounded on some of the soundest ethical foundations imaginable.   In other words, the naming of the producers and sellers of fossil fuels as “the polluters” without further modification, exonerates the buyers of those fuels and those who benefit from their use from any responsibility. This is not just Klein’s idea in her “polluter pays” format but is a direct expression of the attitudes of many in the anti-fossil fuel movements, including the tendency to date of 350.org, even though this might upon confrontation be “denied” or turned back on the questioners as their exoneration of the fossil fuel companies’ primary roles.

Klein, in a way that will be now familiar to readers of this book review, acknowledges a reality but then minimizes that reality. She points out in passing and implies that consumers and an “extractivist” attitude is widespread, especially in her accounts of how the island-nation of Nauru is undermining its own guano foundation and that “extractivist progressivism” is a problem. But Klein, in her central financing mechanism for climate action turns to a view that divides the world into polluters and, implicitly, innocent non-polluters. Earlier this year, I proposed an ethical framework that might have been useful to those grappling with these issues: I posit that there are approximately three levels of responsibility for catastrophic global warming, of which the group that Klein calls “the polluters” are in the group that I call “primarily responsible”. That said, the consumers of fossil fuels have a secondary degree of responsibility upon which they should feel ethically compelled to act at this point in history. Finally there is a very large group of people in the developing world who have a responsibility to choose or not choose a development path that does not depend on fossil fuels, though their responsibilities are less than the first two groups.

These ethical distinctions are not just a matter of abstract philosophical interest or the product of a commitment to an unrealistic moral perfectionism but feed directly into how one construes economic causality and therefore politics.   Those with secondary responsibility for the fossil fuel economy are many of them consumers in the developed and rapidly developing world, who together with manufacturers of fossil-fuel-requiring machinery (like internal combustion vehicles), continue to generate or increase demand for fossil fuels. Economic history has shown that demand is in most cases one of the most powerful drivers of the business cycle and also provides the fossil fuel industries the business and the ethical justification for their very existence. The recognition that the business cycle is demand-driven is most often attributed to John Maynard Keynes and the revolution he inspired within economics but remains disputed by neoclassical economists out of a combination of ignorance or some degree of acceptance of the antiquated Say’s Law.

In the area of fossil fuels, it is not so much that people want the fuels per se but they want the services enabled by fossil fuel use. Demand for them is also a function of a massive mechanical and physical infrastructure that requires both large amounts of supplemental energy and at the moment requires fossil energy or a combustible equivalent (for which biofuels are no likely or “green” substitute for fossil fuels). Each individual consumer in the developed and rapidly developing worlds is not substantially responsible for the continuing trajectory of global warming but neither are they without responsibility and, when organized together in political groups, not without influence.

Klein’s Hard-Money Fetishism is a Political Dead-End

Given that the financial operations of currency issuing governments are a focus among those who analyze economies with the help of Modern Money Theory like myself, some might interpret the above as nit-picking or smart-alec Besserwisserei (“knowing better” as a noun in German) based on seemingly arcane economic theoretical differences. However the political and therefore real-world consequences of Klein’s erroneous beliefs about money, transmitted to tens of thousands via her influence, are potentially catastrophic in their effect upon climate action as well as exceedingly dire in the fight against economic and social inequality. To hold only hard-money beliefs as climate activists is to almost certainly organize the defeat of rapid climate action, and, for that matter, the goals of other social movements for realizing the general public good that one might champion.

Besides being technically incorrect in terms of government financial operations and their capacity to adequately fund climate action, Klein’s hard-money views set up the anti-fossil fuel and anti-global warming movements to fail because her financing prescription perversely and in a financially imaginary manner, “deals in” the fossil fuel companies, their financial assets, and the legal status thereof, into the central mechanisms by which governments and peoples will start to free themselves from their fossil fuel addiction. Klein and I are in agreement that government financed public works will play a pivotal, though not an exclusive, role in the transition to a net-zero carbon society. It is not primarily via exacting retribution upon fossil fuel companies either financially or politically that such a non-fossil fuel dependent infrastructure for society will be built!

In this, Klein is reproducing or creating an economic model to justify the tendency of the leftward parts of the climate movement to conceive of climate action as largely various forms of opposition or non-violent resistance to the fossil fuel industries and, in actuality, the local dangers they present either via spills, non-GHG pollutant emissions, or explosions.  There is a focus on “NO” to the fossil fuel industry and alarmingly many activists become, what I view as, distracted by, the details of local fossil fuel-related pollution and the global effects as well as the “obsoleting” of fossil fuels are shifted to the background.  Activists and their political leaders become transfixed, hypnotized by that which they are opposing, which in addition means choosing a reactive rather than proactive political strategy.

The local anti-fossil fuel movement here in Northern California, in which I am active, has generally focused its politics on these local dangers and only in passing mentions the climate dangers associated with fossil fuel use. The movement, as in many other places, discusses how the fossil fuel industries extract, transport and process increasingly unconventional and “messier” fossil fuels but loses sight of the general fact that dependence on fossil fuels overall is the main problem of our societies. Much mental bandwidth is consumed in studying and casting scorn upon the various tactics and techniques of the fossil fuel industries, the industries of the past, while little attention is paid to the policies and technologies that might usher in the future. In the latter category, solar panels and renewable energy more generally are the main “placeholders” for what a climate solution might be, which is just scratching the surface of climate solutions. Some of the focus on local effects of the fossil fuel industry is justified by local movement activists as an effort to try to protect the most vulnerable or victimized people preferentially, while in other regards this is traditional environmental activism transposed to fossil fuel extraction techniques and their local, “dirty” pollution effects. Some have expressed to me the idea that their job is to convert the fossil fuel industry to clean technology, ignoring the role of public works by government and of “sunrise” clean-energy industries that already exist independent of the fossil fuel industry.

A combination of Klein’s idea that climate action will be financed by “polluter pays” and the predominant politics of the anti-fossil fuel movement to date would be, tragically, the climate movement, the shaper of humanity’s future, defining themselves by the fossil fuel industry’s finances and practices, not by either real macroeconomics or by the real technological and design features of a near-future, net-zero carbon society.  Out of misguided notions about movement heroism and perhaps “dragon-slaying”, Klein’s finance mechanism limits government spending that should be limited only by the availability of real resources to meet the climate emergency and the most efficient and rapid way to defuse that emergency.

The notion of politically and economically “going through” the fossil fuel industries is entirely unrealistic and diverts the political energies of activists into a narrow channel that is of marginal importance to building the future. The whaling industry in the United States was not curtailed by anti-whaling activists throwing themselves in front of whaling ships but by the discovery of oil and the use of fossil fuels instead of whale oil for light. Though we are on a more rigid timeline than the decline of whaling in the US, the fossil fuel industry may be slowed by anti-fossil fuel activism but ultimately public and private investment in non-fossil fuel dependent technologies and infrastructure systems will be the resolution and also terminally weaken the economic and, eventually, political power of the fossil fuel industries. Anti-fossil fuel infrastructure activism, like against the Keystone XL pipeline is a good rallying point but it must be paired with an achievable exit strategy from fossil fuel dependence. Demand and supply must be addressed simultaneously in movement politics.

The cast of political characters who will determine the future does not include the fossil fuel industries or bear substantially the imprint of their influence upon technology, economics or social organization. The central motives for climate action, if one thinks it through, are ethical commitment to this and future generations, to the human community, and the desire for self-preservation. Those who feel and express these impulses can agitate most forcefully and effectively in the polities of the world and via their political representatives, the domain where ethical commitments and human continuity can be realized into some form of effective action and the building of public sector institutions to realize them, of which Klein seems to be fully in support. Non-human corporations, let alone fossil fuel corporations are not representatives of ethical commitment to the human community beyond what would support their current and near-future business practices and fiduciary duty to their shareholders. Neither do non-human fossil fuel companies share the impulse towards human self preservation for the same reasons. We already know, and it seems that Klein sort-of knows, that governments create money for the public purpose and are the ultimate arbiters of the distribution of liquidity in society beyond boom-and-bust surges and drains upon economic liquidity due to private bank lending. The national polities of the world and their currency issuing governments or government institutions have no need to base the amount and type of absolutely vital public climate investment upon fossil fuel industry finances.

Of course, the fossil fuel industries, their paid political representatives, and the “free-market” ideologues that oppose climate action for a combination of economic, personality and ideological reasons, will attempt to one degree or another to stand in the way and will probably need to be battled continually. Many governments can be considered petro-states, including the United States federal government and the degree to which those governments are petro-states, they must be thoroughly transformed into non-petro-states. But the fundamental vision and policy instruments to create a net-zero emissions society will not come from a political conflict that invites these political groups in on the ground floor, either as advisors or as compulsory opponents, against which we are always reacting. They can be best defeated if we start with realistic policy proposals to save ourselves and then they attempt to interfere with those proposals to keep us bound to the fuels that are wrecking a livable planet for humanity. Their role as representatives of “energy” or an “energy industry” must be removed in all future-oriented energy and climate policy and politics.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


    1. bob

      It’s absolutely true, in what’s left of “the left” in the US.

      Calvinism without christ. “Burn! You’ve made earth mad, she’ll get even, and deserves to take her pound of flesh– hummer owners first!”

      I blame the 1st law of thermodynamics, with “money” being assumed to replace “energy”. Zero sum = gold standard = “hard money”

      “But it’s a law!!!” Yes, for thermodynamic modeling. There is no reason to believe, or facts to support, that it has any relation to money at all. “But, it’s all sciencey!”

      It also shows how low discourse has fallen on the left. Most major populist movements though history were about making money *not* “hard”. There’s no reason for it to be, other than to the benefit of the few over the many.

      It needs a lot more attention, and education. Good post.

      1. mmckinl

        @ bob

        First, “hard money” is a bastion of the right, libertarians and aristocracies and NOT typical of the left.

        Second, the “rule” is you can’t get infinite growth on a finite planet … the “low hanging fruit” is picked.

        1. Yves Smith

          Huh? Krugman, who defines the boundaries of acceptable leftie discourse in the US, thinks running deficits is OK only in the short term. He’d been making approving noises about how the deficits are declining, when less federal spending in an economy with a lot of slack amounts to fiscal drag.

          1. Bob Haugen

            I guess I am an unacceptable leftie then. I liked the article but had to hold my nose past the ad hominems against me and many other people I know, who would agree with the economic and money arguments but are (shall we say) a bit to the left of Krugman.

            1. Michael Hoexter

              “Ad hominem” means I am criticizing people because who they are not because of positions, actions or ideas they espouse. I don’t think there is one “ad hominem” criticism in this review. Please point one out if you find one….

            2. Michael Hoexter

              “Ad hominem” means that I would have criticized people because of some irrelevant characteristic of their persons rather than the ideas they espouse or actions they undertake relevant to the subject matter at hand. If you find any actual “ad hominem” comments here please point them out….

              1. kaplon

                Nothing ad hominem anywhere to be seen in this fine, informed and responsible review.

                People too often experience themselves as under attack when they identify with a point of view on things they usually cannot hope to fathom. But nearly anyone can be made to comprehend the need to clear the streets of fossil fuel cars and replace them with your bikeways, trams, scooters, community electric buses etc as you elaborate in your linked pdf file.

                Good job. Need for general mobilisation could not be
                more obvious and shouldnt be. ‘Hard Money’ may be (is) the most obdurate fossil in this mix, as it is of the human mind’s clinicly psychotic or primal defenses of ‘concretization’ at expense of abstraction, and (in other words) to mistake the ‘here and now’ or visible world for underlying reality with its huge potential for freedom of organized human action.

          2. NoFreeWill

            Nobody on the “left” thinks Krugman is anything other than a hack. Democrats and so-called Progressives are not leftists. The real Left could use more engagement with MMT, but generally doesn’t talk about money much. They do understand, however, that capitalism (not whatever she means by “extractivism” which was founded during the rise of capitalism anyways) is the problem and the only solution is revolutionary action and restructuring of the entire economy, though collapse/decline seems more likely.

            1. bob

              “but generally doesn’t talk about money much”

              No they don’t talk. They sneer at anything that didn’t come out of their econ 101 book.

              The general reception to the trillion dollar coin was exactly the same on the left as it was on the right.

              “it’s just nuts”. Annie Lowery and the fedora of fame would be proud.

            1. Yves Smith

              Oh I do know, but a lot of other people don’t get that, or maybe more accurately, that there are many protective colorings that neoliberals wear, depending on their target audience.

        2. bob

          “First, “hard money” is a bastion of the right, libertarians and aristocracies and NOT typical of the left.”

          That’s the issue being argued, not a *fact* to be presented. “the left” is just as hooked on bad economics as the right is.

        3. bob

          “Second, the “rule” is you can’t get infinite growth on a finite planet … the “low hanging fruit” is picked.”

          Which RULE is that? And WTF does that have to do with money? No fruit involved.

          You appear to be exactly the type of “lefty” I was ranting about. You ain’t left, your standing solidly in the footsteps of past Aristocracy and current “conventional wisdom”.

        4. Me

          “Second, the “rule” is you can’t get infinite growth on a finite planet”

          True of things made of natural resources. Not true of the financial economy or GDP (just adding up the market values of goods and services). Marx’s M-M’ transactions have no physical limits.

  1. Foppe


    That said, the consumers of fossil fuels have a secondary degree of responsibility upon which they should feel ethically compelled to act at this point in history.

    Agreed. One of the things that I find most puzzling about this book (and the movement in general), is the utter absence of any discussion of the importance of diet. Ever since the 2006 FAO report Livestock’s Long Shadow, every environmental organization can and should know that livestock is pretty much the biggest single contributor to global warming, even bigger than transportation is. Yet oddly, none of these organizations talks about this to their base/supporters (presumably because they fear donation losses). (The documentary Cowspiracy nicely illustrates this.) The same goes for TCE: Klein doesn’t mention the FAO report, and the importance of veganism anywhere in her book. Yet even if people don’t want to go vegan for moral reasons, going vegan is the best ‘single’ change you can make to reduce your carbon footprint, indirect fresh water use, arable land use (livestock feed), deforestation (the Amazon is mostly being cut down because of livestock raising and to make room for more soy intended for feed production), and whatever other metric you want to look at bar none; so it saddens me that the topic seems to be so taboo, or relegated to the sidelines, among climate activists.

    1. Laceration

      Unfortunatly Chris Hedges has joined your camp. Veganism is only a conciet of the neo-liberal bubble you live in. It does not have a cultural foundation or history. It is a non-natural alienated state of being for humans, much like ruminant animals eating gmo corn and soy instead of grass–That and its attendant Industrial Agriculture is the problem. Best to focus there and to not deny your primal urge to eat meat.

      1. Foppe

        So because it is “untraditional”, it should be rejected? Small wonder the world is in such a terrible shape.. Regardless of scale, agriculture causes problems; the fact that these aren’t always detectable in the short run doesn’t mean they aren’t there. The mindset that it is OK to ignore (self-described) “small”, “personal” contributions is precisely the conceit that is, in aggregate, causing the problems we’re facing.

  2. jcee

    A degree of contradiction is difficult to avoid so let’s be reasonable. Capitalist excesses that degrade the planet are the number one target of course – or should be – but activists who take a plane or who don’t always live up the highest levels of personal stewardship shouldn’t be lambasted too harshly. After all this is the world in which we live, sometimes getting from A to B or undertaking certain tasks involves more waste-related activities than we might wish. Not up on Klein’s hard money ideas so won’t comment on that (as I recycle the evening’s coffee grinds).

  3. Paul Tioxon

    It would seem Naomi Klein is traveling the well worn path of environmentalism that was established when Rachel Carson wrote her book, “SILENT SPRINT”. This book targeted the chemical industry and its promotion of pesticides, DDT in particular, as the silver bullet for the control of natural pests that could spread disease to people, livestock as well as crops. Although there were many others, this woman in particular championed the mindset that nature was not to be conquered and in the attempt to do so, we were hurting ourselves more so, because the place that was getting the full brunt of toxic chemical treatment was the same place we had to live in, breathe in, grow our food and draw our drinking water from. We couldn’t poison pests without poisoning ourselves. The Environmental Movement drew a simple, direct line from point A to point B to make its point. And there were massive changes in policy as a result.

    During this same time period, it became also obvious to academics who became public intellectuals by their voicing their conclusions from research to various media outlets, that a finite world of resources can not sustain infinite economic growth. Certainly, the high level of material consumption of American consumerism could not be sustained to growing middle classes of people all over the world. The growing world wide population would hit the limits to growth when it exceeded the carrying capacity of the environment to support human civilization with all of the water, arable land, fishing stocks, and other natural resources needed to manufacture modern everyday life as we know it.

    And capitalism, as the dominant and now exclusive global social system of transnational trade, had successfully made what ever adaptive changes over its 500 year history necessary to keep the unique market based economy alliance with the nation state intact, in order to sustain the pursuit of profits. And nothing promoted the pursuit of profits more than the strong centralized nation states of Europe issuing currency that had to be used to pay taxes. With a standard unit of accounting, wages could replace social obligations and great landed estates could be converted into money making farming enterprises. And profits could be realized in the portable currency, which with the help of bankers of Florence and Venice and Genoa and then other money centers, then be converted into currencies and transnational trade conducted with greater ease. Capitalism is not just money. There has money for thousands of years. It is not just a market, there have been markets for an even longer time. It is not the market as a virtual state because it “bought” the government. The states with continuing monarchies around the world include the wealthiest of the EU, England, Spain, Denmark, Norway, Sweden, Belgium, Netherlands, as well as Japan and more. The state made an alliance with growing new form of social organization that did not rely on defined social relations between rulers and ruled. A carve out of that social relationship was granted to the market based economy that paid wages, freeing people from social obligations, and royalty and their nobility for caring for the day to day lives of their subjects. Their subjects would become governed outside of the work they did to earn money and during their work day, they would be governed by whoever paid them for their labor. This system continues to this day with varying degrees of government regulation of work and profit making.

    And in no place more than the USA, founded without the dead weight legacy of royalty and its nobility, will you find the the most aggressive form of money making on the part of the private sector using the instrumentality of the market and money to define any and all relationships. The logical conclusion of shareholder value in stock price and the highest level of profits returned from investment is the only consideration of modern business, As Lee Iacocca said, I’m not here to make cars, I’m here to make money. And in order to make money, you need to have something to sell. A commodity with a suggested retail price tag on the open market. And in consumer society, mass consumer society, you need a lot of inputs, a lot of raw material. Cars need rubber for tires, glass for windows, steel, plastic, paint with anti rust inhibitors, gas, oil, break fluid and on and on. And a society with 100s of millions of cars needs roads to drive on. The modern American city gives over half of its land to road surfaces. That is is lot of concrete and asphalt. More petro by products, more rock quarried and crushed and mixed with tar for blacktop road surfaces. The extraction of minerals, oil, chemicals for just the auto industry alone is a staggering level of world wide consumption that cannot be sustained. But capitalism needs something to put out to market to sell to make money, to make a profit. And with more and more billions of people clamoring for more and more, just like they see on their iPhone screens, will demand more from their governments, their jobs and themselves, until they start getting more and more.

    It is a global system, being worldwide and systemic, means it is inescapable. Ethics ends when you have no where to go to not participate. The choice is taken from you at that tipping point of history. The growing solar industries will continue to grow, if not at the pace of the moral equivalent of war to transform the world systematically within a decade, like some crash program to the moon. They need your support. More than likely, whatever survives in a widespread capacity to generate electricity in the coming decades, will have the political support of the state down to its local governments. Net Zero housing and construction produces more energy than it uses. A combination of passive solar architecture, which can be promoted by zoning law changes, along with mandatory solar panels on new construction, just like mandatory toilets. Highly insulated homes do not need massive energy inputs. They lose heat very slowly in the winter and gain heat very slowly in the summer. Reducing the load, also know as conservation, along with LED and other energy sipping appliance can maintain a high standard of living, if not exactly looking like Norman Rockwell or an episode of FRIENDS.

    The design science of modern technology will move slowly compared to the fossil fuel based economy that started at the beginning phases of industrial capitalism. Human beings only put out so many BTUs of work. Machine driven manufacturing fueled by wood, coal, oil and gas, produced more BTUs of output than humanity could ever have hoped to accomplished on its own power or with horses, mules and elephants. There is no comparison to the material transformation of civilization fueled industrial machinery and the previous eras of history. Take away the fossil fuels and what powers the machines? We may look at this period as one of an immense priming of humanity with a huge built environment that can last for hundreds of years without having to reproduce every generation. By that I mean, the subway only needs to be dug one time. The bridges, and the roads, required an initial explosion of work and effort expended, not equaled by maintenance. A lot has already been built that will last a long time is property maintained and adaptively reused. This will reduce the dependency on energy expenditures. Recycle, reuse, historically renovate, do not implode and tear down every time a building gets old. A lot of this is already going on in older cities around the world and here in the USA. All tactics need to used, no one is the silver bullet. I don’t believe there is a unified field theory of social relations. Brazil has replaced much oil with alcohol for cars. The Eagles sports stadium in Philadelphia has windmills and solar panels producing more electricity than it uses on game days. If they had installed any more panels over the ocean of parking spaces, they would have produced enough electricity to make them a utility under the governance of the Public Utility Commission. The solution is being built, just not fast enough. Political pressure is a tactic that must be pursued because of that unexpected X factor that tips people into forcefully demanding change and putting people into power to execute that change. I offer no false hope, or impossible lies but I would not give up on the dozens of tactics out there right now, operating without a United Front or Grand Strategy. Enough is going on, that soon enough the networks of social relations will emerge into power, may be enough for a United Front. But this time, I don’t want a race to the moon, I want a race to the SUN.

    1. James

      Wow! That was one hell of a piece! Although I don’t necessarily agree with your conclusions that it’s all gonna work, I agree that those technologies are probably our last best hope at this point. We’ve really painted ourselves into a corner by waiting so long.

      It is a global system, being worldwide and systemic, means it is inescapable. Ethics ends when you have no where to go to not participate. The choice is taken from you at that tipping point of history.

      I admire Klein’s idealism and writing style, but the critiques here are valid. She’s a little out of her depth when she begins proposing economic solutions, and her logic, accordingly, begins to go astray. The simple fact is that if AGW is as big a problem as the most dour of the doomers say it is then we’ve got a potential extinction event looming, the message of which might be even worse than the event itself. There’s a lot to be said for a little bit of sunny optimism in this case, in that we really don’t know the truth of our predicament just yet, and the options listed above might well be the only one’s we can possibly make at this point. That said, even if this all works out in the end, the transition’s certainly going to be no piece of cake.

    2. Carla

      Re: your hopes for solar and wind power, with an electromagnetic pulse (EMP), a solar flare could take out the global grid, and we are doing nothing to prepare:

      One Rocky Rawlins decided that in the event of such a catastrophe, the human race will need the (now-forgotten) skills that created industry prior to the electronic age, and began building the “Survivor Library” to preserve the knowledge that built the industrial infrastructure of the 19th and early 20th centuries:


      Rawlins points out that while life was very difficult in those days, it was not nearly as difficult as it was in 600 to 800 A.D., for example. Of course the electric grid could be protected with a relatively minimal investment but there is no political will to do this:

      “In spite of a special committee’s recommendation that Congress allocate funds to protect critical infrastructure, there’s been almost no progress in the US. (The Brits are a bit further ahead).

      “When you work with networks, one of the things you look for is single points of failure, points that, if they fail, they will take whole network down,” Rawlins said. “So you build in redundancies so that won’t happen. You can think of our infrastructure has a single point of failure: computer circuits that are not shielded.”

      Even with just a few billion dollars of preventative investment, Rawlins said, the US would be able to recover a lot more quickly if such an event were to occur. But inaction by politicians and by special interest groups has been frustrating.

      “When [the commission] reported to Congress in 2008, they said, ‘You need to do something right now,’ because the consequences for not acting are so utterly catastrophic that they’re almost inconceivable,” Rawlins said. “And they’ve done nothing. So when you see that, you see that they are responsible and should be doing something and won’t, there’s not a lot you can do.” (http://motherboard.vice.com/read/survivor-library)

      1. Paul Tioxon

        While not a completely irrelevant response to solar energy, the collapse of the grid is a real worry of the energy utilities right now. But from the micro grids from roof top installation as people and businesses go off the grid. It is similar to people cutting the cord from the cable tv distributors and using Roku or just an internet connection and Netflix. That is a collapse that is coming whether there is or isn’t solar flare. But that only takes into account the most popular form of solar. And by solar, it is well understood within the sustainable community, that all energy is solar for the purposes of civilization. The wind is made by the heat from the sun and differentials in temperatures from the solar basking earth surface and atmosphere which comes into contact with the convection currents of heat released by the solar mass of the earth. Not to mention wood and coal from photosynthesis.

        The point of origin of all energy and life is the Sun. NO doubt, at some point in time, we will harvest the solar flares and neutrinos along with all of the particles passing through. But in the mean time, practical matters are being handled by practical people.

        Here is a short video of an industrial scale commercial solar power plant in operation, in America as we speak. There are others, in Spain as well that you can view on utube.


        Of course, intermittency is the real problem because when the wind dies down and the sun sets, so does electrical production. What to do? Here are some answers.

        Now that last example falls along the lines of workable but may not ever actually happen on a global basis.

        However, the storage problem has been solved by this operating facility in Spain which produces electricity 24/7 using the thermal mass of molten salt as a thermal battery, producing the steam to generate electricity for a steam driven turbine, which is an off the shelf product of high efficiency.


        As you watch more roof top solar panels go up and more commercial solar power plants develop, preparation will meet opportunity if we are organized now to strike when the political crisis hits the fan. Or you can argue instead of discover the solutions surrounding us right now. Once you see a clear path, it is better to start walking down that direction, away from the crisis prone system we are all dominated by. If you want absolute certainty, I can’t offer that. But I can see real results and I’m willing to support them after careful thought and the need to come to a conclusion. It may not all come to pass in my life, but then, I lived on the accumulated capital of work, blood, sweat and tears of everyone before me. I hope to do the same for my granddaughter.

      1. Carla

        Yes, as I said: “Of course the electric grid could be protected with a relatively minimal investment but there is no political will to do this.” The first link in my comment above references a 2014 NASA report that we came very, very close to a catastrophic solar flare event in 2012.

        1. Paul Tioxon

          This is a real problem. The solar events can cause catastrophic consequences for our economy due to the reliance on electricity, radio waves etc. And, it could happen in our lifetime. The enormous investment in the power plants, the vast grid that transmits the power generated is not being protected. You would think, with such a substantial investment that the investors and the money managers or somebody connected to these utility holdings would protect their investments. If you have observed the gradual degradation of the quality of servicing the telephone poles, the transformers, the sub-stations that are no longer redundant, you will also see a de-industrialized region and now nation. General Electric was at one point in time, a very large scale employer within the city of Philadelphia. And in the surrounding area as well. Along with other large scale commercial and electric customers, the absolute demand that the electricity would stay on most of the time and be very quickly brought back within hours of a disruption would be today’s generation demand for the internet to be up 99.9999% of the time, no excuses. Electricity was that important and Fortune 500 industrial companies had that kind of clout, AND the utilities responded with top notch service, fleets of bucket trucks with the Electric Co logo on side patrolled the streets. Today, entire townships and counties can lose power for days or weeks at a time, after a sever thunderstorm. It’s not like Mainline suburbanites will leave the region in protest, as factories left for cheaper more dependable electricity in the Southwest and South, along with leaving unions and other high costs behind. I am saying that the big industrial era electric grid is being hollowed out, because the big customers who matter are gone and home owners and shop keepers can not bring the pressure to bear on utilities the way that GE in conjunction with other manufacturers could in times past. You can see the disinvestment in keeping the grid strong or modernized. The lack of securing it from solar flare disruption may be addressed with the hardening of the grid on the Eastern Seaboard as a result of Sandy, if we’re lucky. But the grid is about as important as industrial manufacturing and is treated poorly with minimal upgrades and modernizing upgrades.

          1. Carla

            Yeah. Pretty ironic that GE morphed into a finance company (along with almost everybody else, of course). I’m curious about your statement “the grid is about as important as industrial manufacturing.” I would think it’s considerably more important (even though I think mfg. is vital).

    3. Me

      Efficiency has grown leaps and bounds since the Industrial Revolution, yet so has resource consumption, pollution, etc. So, what makes the future different? Ever hear of Jevon’s Paradox? I don’t see any reason to think that technology alone will allow us to escape that. We have to figure out the limits to consumption and pollution or we are toast. Radical changes are needed, I don’t think we should pretend otherwise.

      Look at what the US has done to India and China at the WTO over solar panels. Look what India is doing now in response. They are angry at the US’s hypocrisy and might challenge some US states’ support for local solar panel producers. The logic that rules international trade and economic policy is insane, has nothing to do with our collective good.

  4. george finch

    Excellent review. He hits the major problems of Marx and Marxian thought, an adequate theory of the state and the creation of money. Of course, this does not take away from Marx’s general description of the logic of capitalism. In general the “left” rooted in Marxain thought seems to be divided on whether to target the state as some see it as a tool of the economic structure and also most do not seem to tackle the creation of money.

  5. george finch

    Excellent review. He hits the major problems of Marx and Marxian thought, an adequate theory of the state and the creation of money. Of course, this does not take away from Marx’s general description of the logic of capitalism. In general the “left” rooted in Marxain thought seems to be divided on whether to target the state as some see it as a tool of the economic structure and also most do not seem to tackle the creation of money.

  6. casino implosion

    The last time we had a “WW2 style mobilization of resources and spending” it led directly to the world that Naomi Klein hates.

    1. James

      Very true. That’s what makes dealing with AGW so difficult for the western mindset. It will require in large point a mobilization of undoing or not doing (leave the stuff in the ground) vs our traditional mode of simply producing more, more, more. Can we do that? I’m not so sure.

      1. wbgonne

        Yes, Westerners are not good at not-doing. Unless a viable substitute for a carbon-based economy is conceived, leaving the carbon in the ground will be like asking a heroin addict not to touch the dope in his cabinet.

        I’m not an economist and have no opinion on the hard money question. My only note is that I have personally seen hard money routinely promoted by Libertarians, not Leftists (other than Klein, now).

        As for the Manhattan Project-esque mobilization, this is not new. The Green Party’s Green New Deal provides a comprehensive blueprint for building a sustainable economy that benefits many more people than at present. It is doable. In fact, Obama could have done it in 2008.

    2. sufferin' succotash

      Not all mobilizations are alike. Mobilizing resources to turn out tanks by the thousands is not like mobilizing resources to breed thousands of horses (necessary in previous wars). Building a non-fossil fuel energy regime would involve turning out thousands of solar panels–to take an example–rather than thousands of internal combustion engines. It goes without saying that the switchover will have to depend heavily on fossil fuels, but there’s nothing unusual about that. England’s industrial revolution relied initially on a very traditional energy source–water power–and only gradually moved over to steam power.
      Incidentally, it occurred to me that when it comes to monetary matters a good many people on the Left may be less sophisticated than their spiritual forebears more than a century ago. The bimetallists of the 1890s seem to have had a greater appreciation of the artificial nature of money than do Naomi Klein et al.

      1. wbgonne

        Yes, that is a logical fallacy. Like saying we can’t have democracy because it failed the first time it was attempted. And I’m not sure that the Manahattan Project failed (in fact, it didn’t) or that Klein blames the Manhattan Project for the world’s ills anyway. Which makes it a straw man argument besides.

  7. DanB

    Really, without consideration of the phenomenon of peak oil, the discussion of climate change is elliptical. This pops up in a number of assumptions: for example, 1) a monetary system will continue to function; 2) the fossil fuel industry will continue to profit -and is currently actually doing well (it’s actually cannibalizing itself); humanity can maintain its current level of social and technological complexity without fossil fuels fossil fuels.

  8. H. Alexander Ivey

    A book review as “bullshit”. A nice posting of extra-ordinary strings of adjectives and adverbs, long-winded asides, and personal “here is what I think the author meant” words. Unfortunately, all that the posting signifies is the personal standing of the reviewer, not what Ms. Kleins wrote, or the validity of her ideas.

    1. Foppe

      Please (try to) provide substantive arguments as to why you think Hoexter is misreading Klein. I’m really not all that interested in your analysis of the mindset of the reviewer; all it signifies, etc.

    2. Michael Hoexter

      I would suggest that your comment is more in the genre of discourse that you ascribe to my review, than is my review. You seem to be using words randomly and aggressively to describe my review of Klein, which pretty fairly and appreciatively represents a portion of what Klein lays out in her book. My characterizations of her book are almost completely in agreement with many reviewers of the book, though some are more celebratory than mine. I have particular concerns about how Klein’s work interacts with reality, which is my primary concern in writing the book review in the first place. I suggest that you acquaint yourself with the book review genre in general, as well as the content of Klein’s book before you throw words around like you do, without an understanding of and/or care for their meaning.

  9. Paul Lebow

    Hoexter’s lament (as well as Foppe’s comment regarding the total disregard of the overwhelming role that animal agriculture plays in global warming) really is symptomatic of a much more fundamental problem: we humans are driven more by emotional prejudices and desires than reason. For Hoexter, it is Klein’s compulsion to frame the fossil fuel industry as THE sole villain along with the hard cash myth; for Froppe (and me), its also the flesh-eating craving of society that clings tightly to its meat-addiction, even at the expense of the survival of the ecosystem.

    The beef I have with the MMT intellectual community is the inability and maybe lack of interest in crafting the message so as to be accessible to us lay people. L. Randall Wray will often dismiss the fact that MMT is not having any impact on mainstream economic policy as merely a “political” issue. But “its the politics, stupid”. To expect Naomi Klein to be any more enlightened in this regard than the rest of society makes no sense. Hoexter sums up the solution perfectly when he says, “…government spending … should be limited only by the availability of real resources to meet the climate emergency”. Yes, The world, other than MMT’ers, believes that the “resources” are limited by hard money. Until there is a massive PR campaign to dispel the “federal budget = household budget” equivalence in the mind of the public, MMT may remain an interesting thought experiment.

    I believe the veganism solution may be having more of a success in breaking through to the public consciousness (e.g. look notice the proliferation of “v’s” on restaurant menus these days). Veganism is a true “movement”, MMT is not there yet.

  10. DJG

    Hmmm. A little too much of this therein: “Of course, this is well-meaning economic freestyling on a number of different levels made to serve Klein’s, all-too-typical Left and liberal, preference to reduce economics to a simple morality play of victimizers and victims.” At least he didn’t write “kabuki.” Right now, I’m in the Blockadia part of Klein’s book. I think that the main service that Klein is providing is a Confucian rectification of names. This was the case with The Shock Doctrine, in which she named the phenomenon and dismissed much of the jargon that apologized for it (“laissez-faire” and “de-regulation” and such). Klein’s essay isn’t so much an economic treatise as a manual for action. I think that she is aware of that, because she keeps pointing out that people have to think about solutions that they want rather than giving in because of the despair of the existential threat of climate change.

  11. susan the other

    Naomi Klein and the fallacy of hard money. There is so much here it makes my head spin. I always appreciate Hoexter’s clarity on money and here he makes his point that it doesn’t take a balanced budget to mobilize for a war on pollution. It takes the opposite. But even Hoexter lacks a vision. He is just less paralyzed mentally that most people. Why can’t we stop manufacturing cars? Because it would disrupt a fragile market. Well, let’s manufacture public transportation and electric busses. Bicycles. Bike cabs. Why can’t we reverse mobilize the MIC? Build the new infrastructure asap? Why can’t we reverse mobilize the military itself. We need an organization with the capacity to clean up some very big messes, many of them the military’s own crap. Why can’t we decommission all our nuclear facilities and bury the toxic crap left behind? Why can’t we give up war altogether? If we retooled our MIC it would make an enormous difference globally. If we stopped making and driving cars it would be just as dramatic. Why the hell are we so head-in-the-sand about the stuff we really need to do?

    1. Left in Wisconsin

      My simplistic answer is that most working people are either supportive or agnostic about the need to address climate change but are much more immediately and intensely aware of the problems that come from being put out of a job, and less convinced that they have any ability to truly influence climate change. And the respectable left does nothing to assuage these concerns, like committing to full employment.

      1. susan the other

        I absolutely agree with this. Before we whiplash into climate mode we need to insure that everyone is protected by a job or a safety net.

  12. juliania

    I tend to think Ms. Klein is more correct than Mr. Hoexter. I attempted to make his comparison between the whale oil/ fossil oil transition then and now, but was left peering upwards at the towers that are the energy corporations today, whose wealth exceeds that of many countries. Whittling those down to the size of the whaling fleet of yore seems a formidable task. At this point I don’t think they can be out-unspent, if you follow my drift. (Darn, that whaling comparison is hard to shake.)

    Then I thought, if citizens in a community pay taxes to support local schools, why not start whittling with taxes? The reason those companies are so huge is they are not paying for the environmental damage they cause, long or short term.

    I say, let the whittling begin! Seriously, if there are serious consequences for the planet when these extractive practices are not actually being compensated for, let the consequences be built into the tax system. Gosh, if people are going to be taxed for not signing up to private health insurance, what’s stopping us?!! (I know, it’s not about the people any more – just making a rhetorical point.)

    And why are the local uprisings getting such short shrift? People are energized on a local level, sure thing; but you can’t tell me that doesn’t all contribute to the weltgeist, and pretty speedily at that. Small flocks of sandhill cranes are flying south over my house as I type, calling to one another. They’ll all meet up in the Bosque, and then – oh my!

  13. Charles Fasola

    ‘taxation must precede spending and the amount of the latter is not dependent upon the amount of the former.’

    Correct, however, in reality, borrowing must proceed spending; due to the existing legislative constraints placed upon governmental spending. Almost all money is created by private banks through the issuance of debt. And not directly by the Government. Why cannot MMT acknowledge that?

    “currency-issuing governments (unfortunately not the Euro-Zone countries) continually create money by spending (and destroy it by taxing),”

    Once again, you make a statement that is not completely true. Our Government either borrows or issues debt in order to spend. Most of the debt which is issued is held by private banks or other sovereign nations. Please provide proof that money collected via taxes is destroyed. Because I believe operationally this is not true. And that is supported by many respectable economists who are not among the mainstream ones you rant against.

    MMT fails to acknowledge the constraints placed upon or the realities involved with government spending in the US. You’re assessments could be correct if they were accompanied by necessary monetary reforms. Which would require the passing of new legislation supporting the direct issuance of money by the Treasury or a fully controlled Central Bank. Wouldn’t it be great if it were so. Imagine the things that could be accomplished? Things serving public purpose and public good rather than narrow, wealthy interests. Ms. Klein writes pretty words, very well. She happens to offer not much in the way of real life solutions.

    1. MRW

      Correct, however, in reality, borrowing must proceed spending; due to the existing legislative constraints placed upon governmental spending. Almost all money is created by private banks through the issuance of debt. And not directly by the Government. Why cannot MMT acknowledge that?

      Because it’s wrong. Federal government spending comes first by congressional appropriation. The US Treasury authorizes the Federal Reserve to increase vendors’ bank accounts by the amount Congress authorized, thereby increasing the money supply with new money. Only after that does the US Treasury issue treasury securities–essentially government CDs–that will restore the increase in the money supply from the appropriation to balance on the books. The Fed calls this “reserve add before reserve drain.”

      This issuing of treasury securities is what you call by the popular misnomer: “Borrowing.” It isn’t. It is the issuance of new financial assets into the economy to satisfy the need and desire of the public to net save in US dollars (not to mention provide a safe haven for bank accounts with more than USD250Gs in them, a number when reached that the FDIC will no longer insure.)

      The deposits (money) created by bank loans is credit money. It comes with interest, requires collateral, and must be paid back on an agreed upon time schedule. You create money at this level every time you use a credit card. Everyone’s asset at this level, however, is someone else’s liability, and it all nets to zero.

      Not so the federal government. It creates new real money with no interest required of those who receive it. In fact, it pays people interest to make the treasury securities transaction, which it pays for with the issuance of more treasury securities in the amount of interest needed which is calculated every year.

      Read Fran Newman’s Freedom From National Debt. He was Deputy Secretary of the US Treasury. He explains it in a short book. Your understanding is incorrect.

  14. seenoevil

    “…currency-issuing governments… create money by spending (and destroy it by taxing)…”

    WTF? Money is destroyed when a debt is paid or defaulted on. That’s it. Double-entry accounting. How can someone misunderstand how the world works at such a fundamental level?

    1. MRW

      When taxes are paid, they are removed from your bank’s checking account at the Fed, called a reserve account (only banks and govts can bank there). These reserves are removed from the economy. They are extinguished. They do not go back in circulation. The federal government does not use taxes as revenue. When Congress appropriates, it appropriates new dollars only.

    2. MRW

      Non-federal government debts, private sector debts, debts owed to banks, are different. The money is paid back to lender from borrower. If the debt is not paid back, or defaulted on, someone is out a lot of money.

      The federal government does not act like a state of local govt, business, or household. It is the issuer of the currency, not the user.

  15. financial matters

    Very well written. These ideas resonate well with Wray and Mazzucato. Ms. Klein definitely has some good ideas to add to the mix.

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