Ideology and Climate Change

If you’ve been watching this page, you know that this is the second part of a larger post. My first post was a brief discussion of the economist, David Ricardo and his views on the growth of inequality and how to tax it back into balance. 

If you read my post of a few days ago about the great economist Ricardo and his argument for progressive taxation, this will be something of a follow up to that. A “Part Two.”

He argued that since the amount of food-producing farmland in England always stay more or less the same size, but the population would always increase, then the value of land would go up because of its relative scarcity. And one class of people would become richer and richer, not because they created something or produced something (at least something more than what they were already producing), but simply because the demand for their product had gone up. And if this continues, it would skew the economy and do damage to those who did not have access to this resource.

So, he argued for something that we might call today a “Progressive Tax,” that is, increase the taxes on land to keep the land owners’ income more within the range of ordinary Brits.

This post today has some overlap with that, that’s why I am considering it the second part of a two-part, longer essay. Recently (Friday, September 13, 2014), Bill Moyers had on his show a climate scientist named Katherine Hayhoe. When he asked her why it was that so many people simply denied the science about climate change, she answered something like the following, with my additions and commentary.

She said that for Republicans (not to be confused with “Conservatives,” who share some of the same positions, but who do not have the restrictions of fund raising in influencing their opinions), there are two conflicting problems. For one, they strongly believe (or must claim they believe) that government is bad, and government programs do not work. That’s not totally true, of course. Most modern day Republicans will support government funds for the military and police and roads programs and a few other things. But generally speaking, as a broad philosophical position, they are the first to say that government is the problem (and the last to say that it is the solution) and that trust in the free market is the answer to most problems. On the other hand, Climate Change is a huge and global threat like nothing we have ever seen before. Left unchecked, it will destroy the globe and all of our children and children’s children. And, perhaps more importantly, it is something that simply cannot be addressed without massive government intervention. Your own personal recycling simply will not get us there.

So, how do they reconcile those two positions? They can’t deny the existence of government. They can’t deny the fact that it will take a major government action all over the planet to turn around the problem. So, what they wind up doing is denying the existence of the problem. They continue to claim that there is a debate about it when there actually is not, or that it’s true, but humans did not exacerbate it (and it will go away) or that there is nothing there at all and the problem is just a hoax.  

It’s a tragic paradox for them, but given the fact that they have to be re-elected and they have to maintain their belief that government cannot fix things, then they almost have to create this illusion that their denial of the science somehow has some legitimacy.

She was also asked by Bill Moyers her thoughts on climate science deniers “in the street.” She is a practicing Christian, so he put it pointedly: why do Christians believe this in such large numbers?

Her first answer was that most people just don’t know the research, but it was more complicated than that. People don’t have time to look up Climate Change and study the issues. So, they make up their minds by following people who they trust. And the guy (usually a guy) who they elected into office is one of those. When they don’t know how to look into it on their own, they trust their Congress person, and if he or she says there is no issue there, then they feel like they have to agree. It’s not malicious, it’s just the way that people have to be to make sense out of things that are above their abilities (and time).

It may well be that one of the reasons why Democrats or Liberals (also not always the same thing) tend to believe in the emerging climate disaster is because they tend not to be afraid of government. Democrats have historically had more trust in government programs, even while wanting to question or change a few of them along the way. Their openness to government’s abilities (admittedly spotty on occasion) allows them to look at the reality of the gradually disintegrating climate more clearly. Not because they are smarter, but because they are not hamstrung and held back by an anti-government ideology.

The connection between this and the comment about Ricardo is that both problems require government action (they can’t be fixed by waiting for the free market to fix them) and both problems are denied either relevance or reality by modern day Republicans. If Hayhoe’s theory is correct, then today's  Republicans simply cannot admit to the reality of either problem—or for that matter any problem that requires government action. We cannot support any new government action on anything, therefore we cannot believe in any problem that is so large that it requires government action. Now, that  is a problem that needs something other than Government help.

Ricardo and Progressive Taxation

I have two observations about ideology and crisis. The first one will be today and the second (or “Part Two?”) will be tomorrow. The first is about wealth and income inequality and the second is about Climate Change. No new ground being broken in either one, but just one observation that links the two (and probably other problems) together.

The first has to do with the great Portuguese and British economist, David Ricardo, who wrote in the late 18th and early 19th Century in England.

I confess that it’s been a long time since I have read Ricardo. (In fact, probably since graduate school, but I won’t go look that up because the embarrassment would be too high.) But I’m reading Thomas Piketty’s new book, Capital in the Twenty-First Century, and he makes an interesting observation about Ricardo, which I had totally missed or forgotten.

One of Ricardo’s important observations was that in England in the 19th Century, the population was going up and therefore demand for food (etc.) was going up, but the amount of available farmland was not. Therefore over time the value of farmland would feel more and more scarce, relative to the hungry mouths that needed to be fed from it and its value (and the wealth of its owners) would go up—way up. That’s usually called “Rent,” not like the rent on a house , but the difference between the value of the rise of supply relative to demand. That is, when your wealth goes up because there is more and more demand for your product--even if you didn’t put in any new labor or effort or costs--then that increase is your “rent.” And that was what was going on with land owners when their land was becoming increasingly in demand.

He believed that this growing share of national income that was going to the land owners and declining share that was going to poor people who needed food, upset the national equilibrium. Piketty, commenting on this, says that “For  Ricardo, the  only logically and politically acceptable answer was to impose a steadily increasing tax on land rents.”[1] That is, Ricardo was proposing a progressive tax. The higher the wealth and income of the land-owners, the higher should be their taxes because otherwise they would skew the economy. In my childhood reading of Ricardo, I had missed that. Unless I missed another great economist back there, he may be the first political economist to raise the idea of a progressive tax, the kind of tax we used to have in America, back when we believed that “all men (sic) were created equal.”

Now, as it happens, in the long run Ricardo was slightly wrong. The value of rent on food-producing farmland did not actually continue to go up. Over time, the value of other production in England (industrial products, for example) began to rise more rapidly, making the value of farmland rise more slowly relative to these other items. But his main point, I believe, was still accurate. When the “rent” (the non-labor-related income and wealth) rises faster than the labor or production-related income and wealth, it throws off the basic equilibrium of a society and causes dangerous inequality. And the best (though clearly not only) way to stop it is by a graduated tax that keeps that income and wealth closer to the center.

Check back tomorrow for part two.

[1] Capital, p. 11.