George Monbiot, Voice of Reason

Stephen Pollard, whose site has a smart new design, noted last week the perplexing development that Guardian columnist George Monbiot had said something sensible, having come round to the idea that international trade wasn't an inherently bad thing:

[W]hile self-reliance may be feasible for the richer nations, most of the poorer countries simply do not possess a domestic market of sufficient size to make the manufacturing of complex products worthwhile.

Regular readers of Stephen's blog may recall - and I have referred to it since - a debate that he ran a few months ago between two anonymous correspondents on the issue of just how preposterous Monbiot's opinions on economics were. I was one, and my opponent was a well-known economics journalist whose work I would highly recommend if I had permission to disclose his name. Our argument hinged on the relative merits of Monbiot's campaign to bring down the US economy by backing the euro: I maintained that Monbiot was a peerless fathead, whereas my opponent argued that he was merely a rare fathead. We argued and argued, but a definitive resolution of this important question eluded us.

The day after Monbiot's article appeared last week, I received a message from my fellow-debater. The subject line comprised the single word 'gutted'; and I knew immediately what had caused this distress. Sure enough the message read:

Did you share my tremendous sense of sadness at George Madbiot's disappointingly sane rejection of economic localism in the Graun? Still, it is a comforting thought to know that there are uncharted wastelands of lunacy even beyond his outpost of madness.

He need not have worried, for I'm the one who has to forfeit the debate owing to this discovery. And as if my defeat were not heavy enough already, The Guardian ran a letter the same day from the economics spokesman of the Green Party, one Molly Scott Cato. It read:

A closer look at Green party policy would have shown George Monbiot that the Greens have not in fact fallen into "glaring contradictions" over localisation....

It appears George Monbiot is looking at a shorter time-scale than the Green party and is looking at trade and finance, rather than at economics as a whole. For example, when Green economics kicks in, there will be a drastic reduction of the world's need for raw materials, as "zero waste" economies develop.

The choice is not between an unfair and unsustainable scramble for economic dominance and a slightly fairer but still unsustainable scramble for economic dominance. We can choose either the kind of comprehensive and holistic model for a sustainable global economy that the Green party promotes, or other models that fall short in terms of either justice, or sustainability, or both.

Rather than have to make this choice, let alone attempt to think holistically, my correspondent and I spent the rest of the afternoon furiously debating whether ‘Molly Scott Cato’ was a made-up name. Whatever the truth of that matter, her views are there in black and white. Given enough geological time, the most inherently implausible events become possible: a solar system, the formation of planets, the evolution of life. But no amount of time would be sufficient to yield an idea more certain to reduce the developing world to famine and penury than 'zero-waste economies'.

The relationship between pollution and living standards is a complex one. Some economists believe it takes the form of an inverted U-curve, whereby pollution rises with growth in a developing country’s average per capita income, but then turns and declines as that country reaches a certain level of wealth. (This is technically an application of the Kuznets curve, which posits the same relationship between a poor country’s average per capita income and inequality in the distribution of income.) Others maintain that the observation of this type of curve in one country may reflect simply the transfer of polluting industries to another country – for example if heavy industrial plants in the US were to be shut down, and the equivalent output were then to be imported from new plants in Mexico.

In either case, there are beneficial outcomes. A genuine Kuznets curve would show the introduction of better and cleaner technology as we become wealthier. An apparent curve that reflected the transfer of polluting technologies would hasten economic development in the poorer country, which could then follow a similar pattern of growth before benefiting from the transfer of cleaner technology.

To the extent that economic policy reflects the Green aversion to economic growth and the anti-globalisers’ hostility to open trade and capital flows, it will make pollution worse. There is evidence that the presence of multinational companies (MNCs) in a developing country reduces the level at which the turning point in the environmental Kuznets curve occurs i.e. the environmental degradation that accompanies economic growth goes less far than it otherwise would. This happens where MNCs transfer to their developing-country operations their most advanced clean technologies. (The case is argued by Andre Dua and Daniel Esty in an online study of environmental protection and economic integration in Asia.)

So we’re left with the conclusion that a closed economy tends to generate greater pollution, and a localised economy would be the greatest polluter of all. An extreme example of a consistent application of localised economic strategies was China during the Great Leap Forward in the 1950s and 1960s, when every village had a small blast furnace that produced toxic fumes and substandard steel.

So what do the Greens do in the face of it? Why, they wish it away of course. Monbiot quotes a tantalising snippet from a letter of complaint he's received from the Green Party's press officer, Spencer Fitz-Gibbon (unfortunately professional responsibilities intervened and we didn’t have time to debate whether this too was a made-up name):

When, in June, I suggested that "localisation" (the proposal that everything which can be produced locally should be produced locally) would damage the interests of poorer nations, Dr Spencer Fitz-Gibbon, the press officer of the Green party, sent me a furious letter of complaint. Localisation, he insisted, would help the poor by permitting them to be self-reliant and by reducing trade's contribution to climate change. "We are advocating a world of relatively balanced, relatively self-reliant economies. That ultimately means the poorer country manufacturing its own frying pans and computers and pencils." It sounds sensible and obvious, until you take a moment to examine the implications.

It doesn't sound remotely sensible or obvious, but nonetheless I searched for the full text of this open letter and found it here. It's a minor classic of Pooterish indignation. It turns out that the Greens' policy documents were drafted by a man called Colin Hines, formerly responsible for international economic research at Greenpeace and more recently the author of a book entitled Localisation.

The notion of a ‘self-reliant economy’ is usually termed autarky. We know what it leads to; the results are in; the evidence is the economic performance of post-independence Ghana and Tanzania and tragically large parts elsewhere of sub-Saharan Africa. But Hines's strategy of localisation is more extreme even than those cases. Localisation in this sense doesn't mean anything so unexceptionable as decentralised government. It's not about the common sense observation that many economic activities, especially those in the services sector, necessarily remain local rather than part of a global market. Localisation according to Hines's view envisages a basic economic unit of around 1,500-10,000 inhabitants – not even a city but a neighbourhood or village.

Well, if every neighbourhood produced its own frying pans, computers and pencils, it would forgo the benefits of specialisation, and of economies of scale and scope; and it would also produce entirely needless environmental degradation. As Philippe Legrain has noted in an outstanding economic analysis of globalisation, Hines's plans imply in effect a return to subsistence farming:

Such lunacy was not even tried in the Depression years of the 1930s, when countries, not localities, pursued autarky. A forced return to small-scale peasant farming would compound the misery.

As practised in Africa, subsistence farming consists in backbreaking work performed mainly by women, without benefit of mechanised power or even beasts of burden. It's environmentally catastrophic, as slash-and-burn farming produces so little food that it can’t sustain wildlife. But for the Green Revolution in high-yield agriculture, land that has in the past generation been returned to its natural state would be a wasteland. And get this – the Green Party in its agrarian fantasy-mode believes we can perfectly well adjust to having a choice of foods removed from us. The Green MEP Caroline Lucas declares blithely (quoted in Legrain):

[I]t is not necessary or healthy to consume some products in such quantities e.g. sugar, and livestock products.

Dr Spencer Fitz-Gibbon concludes his complaint against Monbiot thus:

[Y]ou've given ammunition to the neoliberal spindoctors who talk about "making globalisation work for the poor" when their mission is really to make it work for the rich. I can just imagine their line: "Even the highly respected radical George Monbiot now admits the Green Party's policies are 'coercive, destructive and unjust.'"

Well, if you insist.

Even the highly-respected radical George Monbiot now admits the Green Party’s policies are 'coercive, destructive and unjust.'

Comments

[Anthony C]

I was watching Adam Boulton's interview show thingummibob on Sky News over the weekend and Monbiot was on a panel of three (one of his companions being Caroline Spelman, the other being... some bloke with creepy hair whose name escapes me) discussing the WTO talks in Cancun. I have to say he came over quite well. Well I say quite well... it's all relative isn't it? Compared to previous Question Time appearences he came over quite well. The third bloke was completely nuts too, I mean literally barking mad, which might have helped cast Monbiot in a positive light.

[john b]

Scarily, Molly Scott Cato's doctorate is in economics. Spencer Fitz-Gibbon's is in military studies, which may explain some things.

[Ryan]

>"I searched for the full text of this open letter..."

If you read monbiot at his own site (www.monbiot.com), full references can often be found, including the one you were looking for. Maybe you knew, but I thought it worth pointing out.

[Franklin]

> The notion of a ‘self-reliant economy’ is usually termed autarky.

The North Korean communists call it "juche" and it's certainly worked wonders in that country ...

Hmm, maybe the Greens should also adopt "juche" as their official party policy.

[Daniel Calto]

Command economies, former Soviet Union, Poland, etc., of course, have a fantastic environmental record: Chernobyl, dumping toxins in the ground and water, and burning heavy metals in incinerators. I remember being shocked by the overwhelming levels of pollution in Prague when visting there in 1991.

And Juche for the poor countries of the world, as well as the wealthy ones, is a fantastic idea. It takes a village to destroy the world economy as we know it. Let's all make our own pencils and consumer electronics! I've had my eye on a Palm Pilot for a while now--but first, I gotta set up that aluminum smelter in my basement!

[Lewis Maskell]

I remember my Dad's description of the Green Party 10 or so years ago - a bunch of ninnies who want us to relive the worst parts of the Middle Ages. I have become moderately amazed to find out in the last few years that description seems basically accurate in all respects.

[Former Belgian]

Did you share my tremendous sense of sadness at George Madbiot's disappointingly sane rejection of economic localism in the Graun? Still, it is a comforting thought to know that there are uncharted wastelands of lunacy even beyond his outpost of madness.

ROTFL. Winston Churchill would have added this to his (exceedingly rich) catalogue of political invective.

[Chris Busby]

Well I enjoyed the invective, and also the jolly japes over made-up names. Keep up the entertainment. I am Science and Technology, also nuclear affairs (as in atomic) speaker for the Green Party. May I just add to the general feast my opinion that Molly Scott Cato is a person of tremendous verve, intelligence, beauty and wit whose opinions should not be dismissed so lightly. For example, you should know, if you have examined the issue of the Green Party utopia more deeply than looking obliquely at the surface as it shone at you suddenly that there are various levels of localisation which vary with the complexity of the operation, a version of the idea of subsidiarity. Clearly we are not expecting villagers to make palm computers. Incidentally, why would anyone need such a totally useless piece of crap unless it were being sold to them as a substitute for love by some corporation along with all the other rubbish that is being manufactured to sell in a cycle that will certainly destroy the planet and its inhabitants if left unchecked. This includes all the powerhouses of intellectual machinery that are responding to your interesting website.
God save the good work
Christo