Mainstream economics was once called “the dismal science.” Lately though, it’s been the “Pollyanna” science — positing that the invisible hand of the market, if left to itself, will solve any problem, including the looming difficulties of global warming and resource depletion, all while the economy continues to grow.
“Supply Shock” is one of several books that disputes this idea that we can grow our way out of our crises.
Author Brian Czech attempts a comprehensive survey of economic thought from the 1600s to the present to show where mainstream economics went wrong. He locates the original sin, so to speak, in deciding that land — i.e., nature — was just another kind of capital, subject to the laws of supply and demand rather than uniquely finite. You’ll never run out of most kinds of capital — buildings, machinery and the like — because you can produce a replacement. But humans can’t replace nature.
Czech argues that, just as the plants in an ecosystem can only support a smaller biomass of herbivores (plant-eaters) and those herbivores will only feed an even smaller number of carnivores, the ability to grow food for humans constrains and ultimately determines the size of our economy. And that ability is constrained by natural cycles and resources. This is a radical departure from modern economic thought, which judges the importance of agriculture according to its contribution to gross domestic product (GDP), around 3 percent in the United States.
While his underlying point is intuitively obvious — you have to be able to feed the people who don’t work in agriculture before they can do something else — he goes farther than that: He makes the intriguing assertion that the size of the existing agricultural surplus is related to the size of the economy. Unfortunately, like a lot of Czech’s assertions, he doesn’t take the trouble to develop the idea or to give evidence to prove his point.
In fact, a basic weakness of “Supply Shock” is that Czech rarely develops his points past the intuitively obvious. Instead, he simply takes it for granted that he’s won the argument. His discussion is a combination of argument, opinion and often irrelevant digression, as when he takes a couple of pages to slam New Age philosophy for its belief in technologic progress, with nary a footnote or name to clue in the reader as to which New Age thinkers he’s talking about. In the end, he offers a lot of interesting ideas but not a lot of proof.
Czech’s writing is peppered with awkward, over-the-top metaphors. He critiques Obama’s support of “green growth” with this gem: “[I]t must have been a sad day in the saddle when … Obama rode out onto the tantalizing trail of the win-win slippery slope,” continuing a page later to say Obama’s “gotten his foot muddied a bit … better than a full slide down the slippery slope of green growth rhetoric. That could be a legacy breaker.”
Furthermore, Czech doesn’t provide an economic alternative based on his ideas. His treatment of alternative economists like Marx is superficial and inaccurate, and his view of social movements are elitist, as when he calls 19th-century working-class radicals “ruffians.” He asserts these radicals, only interest in economic theory was a desire to “expropriate,” a statement breathtaking in its historical inaccuracy.
Czech advocates a steady-state economy, a reasonable prerequisite for sustainability. However, for all his study of economic theory, he expects this to happen without changing the capitalistic nature of our society. He never explains how such an economy can function without growing. Under capitalism, investment is predicated on growth. If production isn’t increasing, there is minimal demand for investment. Conversely, if investors can’t get a return on their money, they won’t invest. We have words for this situation: “depression” and “recession.”
Creating a steady-state economy should imply creating a radically different structure in which bringing economic growth to a halt doesn’t translate to economic disaster. But Czech eschews radical transformation. He compares reducing excess consumption to getting people to stop smoking, saying that we could successfully shame the 1 percent into consuming less. He proposes that population growth should be controlled by eliminating the tax deduction for dependents, as if people decide to have children based on how much it would reduce their income tax. His vision is a society pretty much like our own, with somewhat less differential between rich and poor, and more attention to making sure people have full employment, even as the economy stops growing.
It’s not hard to critique mainstream economics, which posits a world abstracted from political and social realities. It’s harder to create an economic system. Czech doesn’t do that hard work. Nor does he provide the vision that is needed for a society in which we could truly live sustainably on the earth.