Our Nemesis: The Misery of Industrial Pollution
First a quotation from the late economist Milton Friedman, his words in 1973:
When an executive decides to take action for reasons of social responsibility, he is taking money from someone else -- from the stockholders in the form of lower earnings or from the consumer in the form of higher prices.So believed Milton Friedman, and his ideas about responsibility were taught (and are still taught) to many thousands of MBAs. We have truly suffered the consequences, not only in industrialized countries, but even more so in developing countries around the world.
Most industries produce waste products that can pollute the air and the ground, or use materials in factories that can harm workers, and if we're to have an industrialized society, such consequences of industrialization are unavoidable. What is avoidable, however, is fooling the public into believing that pollution or potential harm is absent when it exists, hiding the dangers when science says they may be considerable, and cutting corners on environmental and worker protection in order to maximize shareholder profits.
The public problems concerning environmental hazards produced by industry are essentially problems of combating the junk science about pollution broadcast by industry and government, and the problem of defining and accepting the idea of corporate social responsibility.
Milton Friedman's idea, quoted above, that social responsibility costs money, is what I call "wimpy thinking" -- thinking weak and ineffective in logic, thinking with a superficial attitude often attached to an even more superficial philosophical precursor premise or set of premises. Such thinking in the hands of many executives in industry usually produces a posture that results in either hiding science or twisting science to achieve corporate ends.
A human society is a collection of individuals organized for mutual benefit but primarily for survival. When social interactions threaten survival of society, the main reason for the existence of society vanishes. The important conflict, apparently unrecognized by Friedman and others, is not between social responsibility and profits, but between short-term profits and long-term losses. In the limit, in the complete absence of social responsibility, society dies (including shareholders!) and there are no profits for anyone. The idea that the need for corporate social responsibility is a nuisance invented by activists is maybe the most dangerous idea in the ranks of industry in America and elsewhere.
The social sciences have a term for individuals who refuse social responsibility: They are called "free-riders."
But do "conservative" executives, economists, and politicians really believe that social responsibility is a waste of money? Apparently they do, all of it wimpy thinking, since their so-called "conservatism" does not extend to conserving the society that makes industry, business, and capital gain possible.
At least some of these people must understand they cannot kill society and still live in it. Maybe the general idea is to bleed society slowly, not enough to kill it, only enough to keep the profits rolling in while keeping the weakening creature alive long enough to at least secure the privileges of one's grandchildren. But as a business strategy, this is certainly too dangerous -- both for one's grandchildren and for the rest of society.
The image evoked is vampirism. But the classic vampire bleeds his victim with restraint in order to prevent the victim's death and the consequent loss of blood supply. Too often our industrial vampire seems confused about how much restraint is necessary, the result a stupid vampirism that sometimes kills the vampire himself after social discovery and enormous financial losses.
Meanwhile, ordinary people die, collateral damage in the rush for profits. Some die quickly and some die slowly, but they die like poisoned flies.
Adapted from Junk Science: How Politicians, Corporations, and Other Hucksters Betray Us. Dan Agin. St. Martin's/Thomas Dunne, 2006
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Kamal Meattle shows how an arrangement of three common houseplants, used in specific spots in a home or office building, can result in measurably cleaner indoor air.
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The fact that humans use intelligence to drive their own evolution may be the best evidence for arguing that life forms in general have played a calculative role in driving biological evolution from the beginning.
I want to thank everyone for their comments. I should add that the covert libertarian-conservative idea of "survival of the fittest", supposedly supported by Darwinism is a sophomoric fallacy when applied to considerations of health care in a society. Walk into any intensive care unit, consider the tubes, gadgets, wires, and so on, and what you are looking at is essentially a defection from classical Darwinian evolution. That's a paradox of the human species: evolution gave us a superior brain, and we use that brain to defect from the classical evolutionary regimes of biology. Of course, one can argue that our defection is itself an evolutionary process, but it's certainly far from the classical process. Saving life and extending life are new special qualities of the human species, and they make obsolete 18th and 19th century ideas about individualism and capitalism. Anyone should be free to find a desert somewhere and live alone in a tent. But if one wants to live in a society, you must live as a social being in partnership with everyone else. Thanks again.
In economic terms, collateral damage is called an externality. An externality is a cost of doing business that is passed on to the external environment and spread out over the population so that individuals are unaware of the cost they are paying because it doesn't show up in the cost of the product or service but in other areas like increased medical costs, environmental costs, social costs, et al. This enables the owners and the shareholders to reap larger profits while the workers reap higher costs. Its a social ponzi scheme imho.
What many people don't understand about economics is that producers earn more money when products cost more money. For every dollar of spending, there's a dollar of income.
Of course, the distribution of income is important, but that's another post...
If the sustainable economy is more expensive than the industrial economy, that's a good thing for people who work for a living. That means we'll earn more income in the future, and that means that savers can confidently invest in our communities.
But the financial institutions that manage those savings don't want to invest in our communities. They want to invest in themselves, and they can only do that with confidence if their capital will command more labor in the future.
That's why the neoclassical capitalist wants to drive down costs. They want us to earn less income in the future so that their wealth accumulates more and more power over the productive economy.
We should not be afraid of higher costs. The race to the bottom is killing us. I admit this is an oversimplification, but it has to be said.
What the "great" defenders of invisible middle finger capitalism get that you are not pointing out in this interesting analysis is the following:
Externalization of costs reduces the amount needed to produce a specific amount of anything, meaning that those who externalize costs can keep more profits.
No healthcare for the workers? More profit for the corporation. No scrubbers on the smoke stacks? Less cost to produce a unit of electricity at the coal plant.
Long term it kills us all, but by then, these uberkapitalistas have moved on. Trouble is, finally, there is really no place else for them to go.
Very well put and much needed article, Dan. Thanks.
It would be great if our politicians were smart enough to understand what's in this article.
It would be great if the vast majority of the public could. Then we would have politicians that do.
The largest activist group promoting the poisoning of the palnet is the U.S. Chamber of Commerce. If you have a membership, cancel it. If you are thinking about it, refrain from it. There is no environmental regulation that they are not opposed to in any form.
Very good article. Thank you. It is thinking like this that has made Scandinavia such a model for responsible government.
No individual or corporation has the right to inflict overt harm for the goal of profits.
For a surprising way to attack vehicle pollution see the article: 5 Steps to Revive the Auto Industry and the Economy. Read it on the Aesop Institute website: http://www.aesopinstitute.org
The brief two pages outline little known breakthrough technology that opens paths to cars that need no fossil fuel or recharge.
Later, more advanced versions can turn cars into power plants, wirelessly able to sell power to the local utility when parked.
Imagine the impact of cars and trucks that emit no pollution and can pay for themselves, as well as end the need to build coal or nuclear power plants!
Visualize electric cars that need no recharge! Also, hybrids with engines that need only one gallon of water as fuel every 1,000 miles. As impossible as it sounds, these technologies are now on the horizon.
Rowan University recently published results of experiments that can only be explained by a new source of energy. Other laboratories can readily reproduce them. Skeptical scientists should see that these experiments are widely reproduced rapidly, so that they may form their own conclusions.
The experiments indicate that one barrel of water can equal 200 barrels of oil!
These revolutionary technologies hold promise of generating millions of green jobs.
They will change much of what is now believed about energy.
Capitalism is all about choice. I choose to maximize profits or I choose to emphasize other things. All the other economic systems take some or all of my "choice". Once you make the determination that there is an exigency requiring intervention backed by threat of force and punishment you are a fascist differentiated only by degree of regulation and intensity of punishment. No economist would deny alternative cost, everything involving scarcity is a" trade off".Who chooses is what it is all about. You might argue for more education or suggest people make "better choices".: but like all the other despots, everything would be fair and ok if only we stop being wimps and do what you tell us.
Thanks for your comment. I see no identity between the ideas of Milton Friedman and all theoretical capitalism, of which there are many versions. Fascism (the tight "bundling" of government and business--"fascis") is one version of capitalism. Simple Friedman laissez-faire completely unregulated law-of-the jungle capitalism is another version. Most capitalist countries are mixed economies, which means capitalism is regulated--in some cases highly regulated. In theory, an unregulated capitalist has no national allegiance and will sell weapons to the enemies of his own nation in order to maximize profits--or he will hatch Ponzi schemes like Bernard Madoff or sell you contaminated food without remorse. In principle, unregulated capitalim is too dangerous for any society, since it can lead to the destruction of that society. Even Adam Smith understood that. It's a pity too many people who claim to have read Smith don't remember his words.
Higher wisdom? You know what is best for me? You are going to protect me, even from myself? ..."an unregulated capitalist has no national allegiance..." I would think an unregulated capitalist could , in theory, be a patriot. Maybe you are confusing the words criminal and capitalist. Your certainty that the capitalist will always choose the evil option reminds me of the religious zealots who claim the atheist cannot be moral. And yet the atheist may do good acts without hope of redemption or afterlife; and the unregulated capitalist may choose charity to profit. Self interest is just that; the capitalist might selfishly choose to protect national parks for their children. Somehow you find it credible that a group can be formed less dangerous than the unregulated capitalist. You imply that there is a moral economic doctrine available and that people empowered to progress "it "can be screened for capitalist tendencies. Frankly, good men setting out to do good regulating scares the hell out of me.
Who chooses, indeed. If the "chooser" or "Decider" is motivated purely by short term greed, public goods become the chooser's hunting ground and we all lose. That's an exigency to you? And why should economics trump morality and ethics, compassion, and survival of the society? Don't you see that choosing to NOT be involved in economic choices of others has proven to be our undoing as a society? For it is a choice of fascism, as much as the one you are afraid of. It's just a fascism run by the biggest and greediest for short term profit, rather than a fascism run by a single political dictator.
I think Dan answered you well enough, but I thought if you heard from someone else, you might actually think about your assumptions rather than merely getting your back up.
What? I am unable to understand what point(s) you are making. I am not trying to be cute, I really do not understand your post. Dan, used a quote from MF to create a "straw dog" and I called him on it. It has been 35 years, and things may have changed, but not even the easiest teaching assistant at U.C. Berkeley would let us get away with such rhetorical b.s.. If you could hit me with your ideas again I will try to think about my assumptions and respond without getting my back up. Something you might find interesting is that some cities in UK and other places have removed all road regulations and signs from some very busy areas that were formally festooned with road regulations. They report fewer accidents, faster travel and less road user stress. If you write again I will pay attention and I hope you really can take my ideas to task.
What I am trying to say is that choice cannot safely be made without taking the rest of your environment and society into account. Personal responsibility is not merely for the individual but by the individual for his world, otherwise, it is irresponsibility. What we have in the US today is individualism run amok. Finding ideological justification for it is anathema to civil society. Calling any encroachment of normative pressure on the individual's right to make his own decisions fascism is, well, nonsense.
Is that clear enough for you now?
No, it is not clear enough for me. Maybe it would help if you gave me examples of a "civil society", (any time in history will do), one that is not running "amok". The "safely" made choice idea went right over my head. Here too an example might help. Next; personal responsibility is personal or its not personal responsibility. Next; this,"normative pressure"; does it include guns and jail cells for non compliance? Who and how is "normative" defined? What if I do not agree? Next, I wanted to mention that I like Dan"s writing, he is a catalyst for thought. And you are right that I couldn't lay a glove on him. He can certainly take of himself. Still if you are willing to continue to educate me, bring it on...
Fossil fuels are a fantastic source of energy but at what price. We have yet to pay that price. If sea levels rise, and there is credible evidence that says it will, we will lose at least 1/2 of our wealth becasue every major coastal city will flood or need incredibly expensive defense systems that will likely fail when put to the test. How stupid is that? Republican stupid becasue they'll own the engineering companies and sell the insurance industry before it goes belly up.
The image evoked is more like parasitism in my book. Vampires are less devious, less machiavellian,
Sadly, people who believe money can be made by skipping social welfare are looking at short term gain and long term pain. In the past, Quakers were merchants who could be counted on to never lie about their product. This had a short term cost but a long term gain. They were trusted and their sakles went up steadily. Corporations which off shored to avoid unions and social laws governing pollution had a short term gain but long term pain as the consumers who bought their goods are no longer able to since they have no well paid jobs. Even the lowly coffee break was hotly contested when unions fought for it. But it improved worker efficiency and productivity. Going green always pays though it takes a little longer to make a return. But it keeps on paying. People who oppose ethics in business simply don't understand good business.
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