A veil of morality

In the last two posts, I did no writing whatsoever. Instead, I typed up a memo that Larry Summers had passed around to other World Bank colleagues about how polluting "poor" countries is in the interest of these countries, as pollution can be welfare maximising. In response, The Economist, calls Summers's arguments "morally callous," yet, in the end, agree with Summers's suggestion.

I find this very sad for several reasons. It is unfortunate that this is what we have been taught--that the environment, the biophysical world that supports our very breaths and lives, can and ought to be polluted, at least to a certain extent, for human "welfare." (This of course comes from the human-environment dichotomy.) But, as we've seen in the US and Western Europe, it takes massive amounts of pollution and burning rivers and acid rain for even slightly effective laws to be put in place that reduce pollution, at least in the areas where the laws are enacted.

As we know, however, if our demands for the things that cause pollution don't die down, the pollution just migrates elsewhere under neoliberalism. Under this economic framework (the economy that the United States and powerful organisations such as the World Trade Organisation and the World Bank and most of the world subscribes to), the economic calculations that are the taken into account in these "environmental" laws result in the migration of polluting industry; such results are "logical," as Matthew and Andrew and Ethan have discussed with me. Summers wishes that pollution such as air pollution was indeed fully tradeable, just like "commodities" and material "resources." In neoliberal thinking, in a thinking that tends to maximise profit of money under a monetary economic framework, it is to the advantage of people to be able to trade as much as they can in the name of economic efficiency. Consequently, pristine environment and the value of human lives do not go hand in hand. Rather, the environment must be degraded to bring any value into the world, and, once we are rich enough, we will magically buy back what we've lost.

But what bothers me more, though, is The Economist's response. Indeed, it is patronising and debasing to anyone who truly cares about the Earth we live on. They go so far as to justify pollution, because the control of it is expensive. The response is industry's dream, and endorses wholeheartedly the legal and cultural framework we've created for ourselves. And if given all of laws in the US have only stopped three chemicals from being used, ever, of the many thousands, what chance would there be for the countries we dump these chemicals on to understand what they are trading away for their supposed "welfare"? In the end, from a neoliberal standpoint, it is the rich who stand to benefit, and the poor that stand much to lose--their clean air and water, their environment. Pollution is dangerous, especially because it is demonstrably unregulated, even in the so-called "rich countries," as The Economist calls them. (Think of the Toxic Substances Control Act, the Safe Water Drinking Act, and the toxins present in our bodies, which I wrote about here.)

The Economist's arguments are elitist, condescending, and patronising. When the magazine states that "Those who insist on 'clean growth everywhere' must either deny that there is ever a trade-off between growth and pollution control--or else argue that imposing rich-country standards for clean air worldwide matters more than helping millions of people in the third world to escape their poverty," they fail to recognise that it is the policies of imperialism and colonialism of the very nations that The Economist calls "rich" that have led to poverty and conflict in the global south.

What The Economist is arguing for is effectively a continuation of policies that have led to climate change and pollution and unsustainability, under a veil of moral superiority. The magazine says that we ought to be more humane and ethical, while at the same time promoting a way of thinking that systematically throws out ethical considerations. To Larry Summers's credit, at least he is unabashed and open about what he thinks: "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that."

"...under-populated countries in Africa are vastly under-polluted."

I want to focus the next few posts on neoliberal economics--how skewed, despicable, and inhumane it is, how major media outlets and major political figures subscribe to it, and what steps need to be taken to bring it crashing down. Today, I will share with you a an old leaked memo, written by Lawrence Summers (ex-Harvard president, ex-chief economist at the World Bank, ex-Secretary of the Treasury, and, so sadly, a man that President Obama appointed to direct his National Economic Council), to his colleagues at the World Bank.

Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the Lesser Developed Countries (LDCs)? I can think of three reasons:

(1) The measurement of the costs of health-impairing pollution depends on the forgone earnings from increased morbidity and mortality. From this point of view a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

(2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always thought that under-populated countries in Africa are vastly under-polluted; their air quality is probably vastly inefficiently low [sic] compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world-welfare-enhancing trade in air pollution and waste.

(3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income-elasticity. The concern over an agent that causes a one-in-a-million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under-5 mortality is 200  per thousand. Also, much of the concern over industrial atmospheric discharge is about visibility-impairing particulates. These discharges may have very little health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare-enhancing. While production is mobile the consumption of pretty air is a non-tradable.

The problem with the arguments against all of these proposals for more pollution is LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every bank proposal for liberalisation.