Mises Daily Articles
Government to Protect Us from the Falling Sky
Throughout my ethics class's viewing of Al Gore's An Inconvenient Truth, I was caught off guard by just how poor the case for human-caused global warming really is. Assuming every claim Gore makes in the movie is true, we are perfectly capable of dealing with things such as climate changes and rises in sea levels.
My surprise was partly due to a great oversight on my part. I tend to give the benefit of the doubt when I hear someone vociferously defend an opinion, since one would assume that to defend a position, a person can logically demonstrate its validity. At least, the opinion holder would believe he could.
In reality, I realize that while every action and argument presupposes some belief about cause and effect, it doesn't have to be a correct one. A socialist argues for socialism not because it is true, but because he believes it is true. It helps to hold such cynicism when dealing with politicians' views.
Plus, there's the simple fact that Al Gore is a political hack with a desire for hegemony. You only get to the position of vice president and then presidential candidate by steadfastly ignoring the laws of economics, ethics, and logic, and not because you can demonstrate them to millions of voters who have grown up in state schools with state science.
I'm no climatologist, but the evidence presented in An Inconvenient Truth in no way justifies the ferocity of Gore's global warming alarmism. There may be a case for human-caused global warming that I haven't investigated, but Gore has not offered it.
The trouble for Gore is that if it is man made, that's no matter. We face much more urgent matters which we must deal with constantly before dealing with those less urgent ones such as world poverty or pollution, such as eating food and drinking water. Why shouldn't we just call for compulsory eating programs? What if, when people aren't made to do something, they'll just starve? This is a far more pressing issue in the respect of collective action than global warming is, and yet it is constantly addressed without great fanfare.
Absent compulsory unification directing production and distribution of food and water, there simply is no problem of the allocation and production of these goods. Rather, there is constant recourse to economic calculation to address problems of allocation of goods. Private owners of resources employed to produce them have a basis for economic calculation both in prices and in the capital value of their property. That is the price of their property discounted against the future, since we value current goods more greatly than we do future goods. Entrepreneurs actively forecast the future to capitalize on the underestimations of other entrepreneurs of the desires of consumers and possible changes in conditions in order to increase the capital value of their firm. And it is this process which Gore is hostile to and ignorant of, which addresses all the seemingly disastrous scenarios for climate change that he envisions.
Given these simple tools for economic calculation, no psychological, moral, or mental changes are necessary for people to produce more and better quality food and drink. It's pathetic that such a basic fact of economics has to be demonstrated as if we are proving nothing at all, but it's true.
For instance, Gore hypothesizes that the snow that provides water for so much of the world from the Himalayan Mountains will soon be gone. This poses no problem unless you're thinking in a statist mindset in which adjustment to change is only by fiat because a few men at the top consider it beneficial, based on whatever political calculation at the moment makes their action expedient. The real danger is when there is no economic calculation and resources are publicly owned, but Gore has no interest in removing obstacles to prosperity and free entry into natural resource ownership.
For someone not well versed in economics, this may seem like a terrible problem. But economics trains us not to see merely with our eyes, but with reason. A politician looks at such a possible shortage of water and sees the need for forcing innocent people to pay more taxes in order to subsidize others to get water from other sources, such as oceans. As to precisely how much, what structure of production to use, how much to charge, how much pollution to acceptably emit, how much to pay for labor and capital goods, and what kind of loans to take, they haven't a clue. This is because their actions take place absent the voluntarily expressed desires of consumers and the actions of entrepreneurs, and have no basis in rational economic calculation.
As economists, we can see that this is merely one more change that entrepreneurs will adapt to in a world of ceaseless change. Gore is counting on you not to know this for his movie to be effective. For with private ownership and the ability to pocket the capital value of a firm, as the supply of water becomes less and less, and consequently, less can be sold, entrepreneurs will raise its price to maximize profits. They raise the price in the expectation that there will be a shortage of water. Gore simply hopes all these equilibrating forces will somehow come about by destroying the tools necessary for economic calculation. He ultimately tries to say that by making this a political issue, he hopes to divorce politics from global warming.
This serves an essential purpose which plays out every day. Gore's scenarios of doomsday apply not only to how we should deal with climate change, but to any change. For the principles of adjustment and capitalization are the same everywhere.
The desire to offset the loss in sales with higher prices serves an essential purpose. First, it means that those who are most willing and able to get water will be able to get it. Had the price not risen, those otherwise marginal buyers who would have either foregone that particular brand of water or would have bought less now find it artificially more profitable to buy it and buy more of it.
Those who can't afford it or afford as much as they'd like will simply seek substitutes. In the case of water this may sound impossible, but that's not the case at all, since water isn't just used for drinking. It's used for all kinds of consumption and production, such as in industrial settings. The increased price will then mean that these firms will buy less of it and cut back on production. More water will be directed towards drinking since it is more urgently desired. No psychological or moral change in people is necessary or a part of this account. They simply need private property.
The corrective tendency of price changes brings further benefits, since the higher prices of water make it more profitable to sell water and invest in water production. Those marginal firms that, at the lower price, did not find it profitable to produce water will now enter the market for it, such as by getting drinkable water from oceans. They will now find it more profitable to research in new methods of water collection and purification. With more competitors for water sales, water firms compete for people's dollars by improving how water is delivered and its packaging, but they also compete by lowering prices.
Problem solved! Actually, wait a minute. We don't have private ownership of waterways or reservoirs, and the first law of government always seems to be to ignore the laws of economics. To the extent that we see private production of water, we see innovation and new niches.
No, for Al Gore and the rest of the parasites, this is a problem of psychology and of simply wanting to do good. Those who oppose him want to do bad. But this essay really isn't for the anti-social monopolists like him. As Bastiat says, economics and praxeology are defensive sciences in that they illustrate for the dupes why they should defend themselves from monopoly.
Absent economic calculation and respect for property rights, the government induces the crisis that it warns we must trust it to solve. Wherever government exists, it abolishes economic calculation. There is no such thing as the ability to pocket the capital value of a democratic government, which serves as a way of anticipating future changes. To the extent to which government provides anything there are external markets and private property, from which they siphon off resources.
Gore's claims aren't totally false in that there is a problem of how to deal with climate changes (and more broadly, any changes), but by even presenting an argument in favor of the need for compulsorily unifying the country and rest of the world against global warming, he completely reverses causation as to why this is problematic. It is only because men like him make it so.
He unintentionally describes democracy and government in general, very well, in an analogy he uses to rile our desire to fix climate change now. He first shows how a frog, if put in a pot of boiling water, will immediately jump right out of danger because of the heat. Next, he shows that the same frog, if put in a pot of room temperature water, has the temperature gradually raised until it comes to a boil, the frog doesn't notice because the change was too gradual. The frog dies.
What he actually tried to demonstrate with the analogy, in which it is alleged that absent government intervention, we will be like the frog coming to a slow burn. Yet, Gore's description of is perfectly apt at describing how government reacts to problems.
Some may object that the movie was apolitical and that this isn't necessarily just a call for governmental change. Aside from the fact that I and virtually everyone watching knows who Al Gore is and what he isn't (an economist), the only reason one could suppose there is any need to put on such a display of alarmism is because he believes change can only come through a violent monopoly. To go back to my previous analogy of food production, eating is a much dearer need than staving off global climate change. Yet there aren't (yet) nearly as many calls for food distribution and government food programs even though if we stopped eating, we'd be dead in a few days. That's because only private industry and the voluntary actions of consumers can deal with such a complex and essential matter.
Only supposing we need to violently direct all of society is there a need to affect in people's minds the need to put quotas on food production, fix prices, unionize labor, etc. Assuming private ownership of all resources, there is nothing uniquely problematic.
Gore's other main doomsday scenario is the rising of sea levels, which would displace millions of people. Given our explanation of economic calculation, we can pass over this more briefly, since the issue of keeping capital values high remain the same. Additionally, so long as the government does not subsidize living in these areas possibly prone to being flooded by rising sea levels, it is insurance companies that want to as carefully as possible rate risk and charge premiums to people based on those risks. Private road owners would be much less likely to build roads in such areas. Gore's complaint of right-wing politics clouding the issue would then fall by the wayside, since these insurance companies whose property rights are respected have a bottom line to worry about, and they would charge very high premiums to people deciding to live in such areas. Or, they wouldn't insure them at all.
Unfortunately, the situation with home and flood insurance doesn't resemble anything close to that today in the areas that need it most precisely because the government confiscates money from taxpayers to subsidize people to live in such areas at an artificially cheap rate, creating a de facto surplus of demand and a de facto shortage of supply. People will be perpetually trying to get these subsidies and wanting more of it, even though it provides far worse coverage and disasters than private insurance.
There simply is no responsible way to give out government insurance. It is this Gore should be most concerned about, since governments are necessarily more present oriented as opposed to future oriented. They are concerned with what they can expropriate now at the expense of what can be supplied later. Yet this complex understanding of causation is directly opposed to the livelihoods of politicians, who then stand poised to ask, "So, you're for letting these people drown?"
But this is all assuming what Gore says about the possibilities of climate change is true. There may be evidence for it, but it's too much to ask of any politician to present a rigorous, scientific argument for something.
Gore uses as evidence of man-made climate change the last few decades of rising temperatures as directly correlated to human pollution. But even the most mediocre climatologist will tell you that a few decades out of several billion years is a statistically insignificant sample. Weather phenomena is complex and has many causal forces working in many directions, and Gore makes no attempt in his film to address other possibilities, such as the fact that single volcanic eruptions alone can spew forth several thousand times all the man made pollutants in history.
The hole in the ozone layer over the Arctic is allegedly another catalyst for disaster, but Gore makes no mention of the fact that there is necessarily a hole in the ozone there during the winter seasons. This is because the ozone is created by the sun itself. More precisely, it's created by the suns ultraviolet rays hitting oxygen molecules, breaking them down, and they recombine to make O3, or ozone. The Arctic has the longest winters on earth because of its position on the earth's North Pole, when very little sunlight gets to it. It rebounds in the summer, as can be expected.
One may object that he looks at ice core samples going back millions of years for evidence of temperature changes and greenhouse gas emissions. This is still no argument, since he doesn't try to correlate human activity to changes in greenhouse gases back millions of years, but only attempts to for part of the 20th century. It would be futile to attempt to do so, and that's exactly my point, unless an environmentalist wants to claim that since we can isolate as directly problematic human pollution, we should emit pollution on levels that were on par centuries and millennia ago, when the world had a radically smaller population and lower quality of life.
After all, Gore predicts that we will have huge climate change akin to patterns that happened thousands of years ago. Any intellectually honest person must ask how such a change could occur absent human air pollution, whether that could be happening again now, and how does one possibly determine that human activity is the causal force bringing about climate change. We must acknowledge that historically it wasn't necessarily the case back then. So can't that possibly be the case again today? Don't expect an answer from a statesman.
None of this is necessarily to say that global warming isn't influenced by human pollution. The problem for Gore is we just can't trust anyone like him to help us in this inquiry.
Finally, Gore makes no mention of how property rights, if respected, mean greatly reducing and more effectively controlling who can pollute and by how much. Murray Rothbard summed up that position in the brilliant Law, Property Rights, and Air Pollution. It is government that has systematically eroded property rights and prevented us from enjoining polluters.
This is still all somewhat beside the point, anyways. If you've ever experienced the political process, you know it's not about finding truth through a rigorous, scientific process. Politics is ultimately about trying to defy all the rules of economics so that people will be under the delusion that the government can do something, or anything, which is productive or good. If that were the case, then we would certainly have to concede that economic law is not valid, and that the government actually isn't doing nearly enough to cure all our problems.