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Monbiot on our misplaced faith in “the market”

Written By: - Date published: 11:22 am, April 25th, 2013 - 23 comments
Categories: activism, capitalism, class war, ETS - Tags: ,

Relevant in so many ways to current events in NZ, here are extracts from an excellent article by George Monbiot. Read the full piece in The Guardian or at monbiot.com.

This faith in the markets is misplaced: only governments can save our living planet

The European emissions trading system died last week. Why? Because of the lobbying power of big business

In other ages, states sought to seize as much power as they could. Today, the self-hating state renounces its powers. Governments anathematise governance. They declare their role redundant and illegitimate. They launch furious assaults on their own branches, seeking wherever possible to lop them off.

This self-mutilation is a response to the fact that power has shifted. States now operate at the behest of others. Deregulation, privatisation, the shrinking of the scope, scale and spending of the state: these are now seen as the only legitimate policies. The corporations and billionaires to whom governments defer will have it no other way.

Just as taxation tends to redistribute wealth, regulation tends to redistribute power. A democratic state controls and contains powerful interests on behalf of the powerless. This is why billionaires and corporations hate regulation, and – through their newspapers, thinktanks and astroturf campaigns – mobilise people against it. State power is tyranny, state power is freedom.

But the interchangeable middle managers who call themselves ministers cannot wholly dismiss the wishes of the electorate. They must show that they are doing something to protect what people value. They resolve the contradiction between the demands of the electorate and the demands of big business by shifting their responsibilities to something they call “the market”. This term is often used as a euphemism for corporations and the very rich.

To justify the policy of marketisation, they invest the market with magical capabilities. It can reach the parts that the ordinary scope of government can’t reach; it can achieve political miracles. I don’t believe that market mechanisms are always wrong. I do believe that they fail to solve the problem of power. In fact they tend to compound it.

Last week the European emissions trading system died. It was supposed to create a market for carbon, whose escalating price would force companies to abandon fossil fuels and replace them with less polluting alternatives. In principle it was as good a mechanism as any other. What it did not offer was a magical alternative to political intervention.

The scheme collapsed on Tuesday after the European parliament voted against an emergency withdrawal of some of the carbon permits whose over-supply had swamped the market. Why were too many permits issued? Because of the lobbying power of big business. Why did MEPs refuse to withdraw them? Because of the lobbying power of big business.  […]

When governments pretend they no longer need to govern, when they pretend that a world regulated by bankers, corporations and the profit motive is a better world than one regulated by voters and their representatives, nothing is safe. All systems of government are flawed. But few are as flawed as those controlled by private money.

23 comments on “Monbiot on our misplaced faith in “the market” ”

  1. ianmac 1

    ” When governments pretend they no longer need to govern, when they pretend that a world regulated by bankers, corporations and the profit motive is a better world than one regulated by voters and their representatives, nothing is safe.

    So true and it is happening in a place near you.

  2. just saying 2

    Another quote from the same piece, which I dedicate to Al Morrison, who was richly rewarded with an even perkier gig this week, for betraying the environment while being paid megabucks (purportedly)to protect it.

    This is an example of what happens in a market-based system: any clash between generating profit and protecting the natural world is resolved in favour of business, often with the help of junk science. Only those components of the ecosystem that can be commodified and sold are defended. Nature is worthy of protection when it is profitable to business. The moment it ceases to be so, it loses its social value and can be trashed. As prices fluctuate or crash, so do the fortunes of the ecosystems they are supposed to protect. As financial markets move in, with the help of the environmental bonds and securitisations the taskforce champions, the defence of nature becomes ever more volatile and uncertain. The living planet is reduced to a subsidiary of the human economy.

    • Peter 2.1

      This makes me think of Fonterra sponsoring DOC. Is that what you are referring to?

    • Alanz 2.2

      The Al Morrison, RadioNZ Political Editor of yore, would not have been able to recognise the Al Morrison of today rewarded with top SSC job.

      An interview now between the two on the radiowaves would have to be managed with very generous use of some serious psychiatric medication.

    • A classic example of this is Painted Apple moth which threatened our Pine forests was eradicated at a cost of $90 million but Kauri dieback which threatens the extinction of Kauri has had its $5 million funding cut. The Government are spending nearly this on saving Whanganui Collegiate …

      Interesting how one is a commercial crop and one is not ..

  3. Draco T Bastard 3

    All systems of government are flawed. But few are as flawed as those controlled by private money.

    QFT and yet that is precisely what our government has become over the last few years.

    • geoff 3.1

      QFT and yet that is precisely what our government has become over the last few decades.


  4. ghostrider888 4

    quote from the RNZ summary of report on DOC restructuring; “due to budget constraints (etc) the Department is likely to become less relevant in coming years”.

  5. RedLogix 5

    Almost finished an excellently readable book Whoops, why everybody owes everybody money and no-one can pay.

    The best value from this book is how well Lanchester conveys the bewildering raft of financial innovations which took place in the decades since Thatcher and Reagan took power, in a way non-financial people (us civilians) can actually understand. (Oh and it’s mordantly droll in places…)

    And why it all went so very wrong.

    A good interview.

  6. kiwicommie 6

    The problem is that they don’t understand what a free market even is, basically it is a market where:
    *There are no subsidies, taxes or regulations of any kind.
    *There are no corporations, governments or economic monopolies of any kind.
    *Courts are privately run, and the police are privately run i.e. there can be no monopoly even on the justice system.
    *Social contracts and binding legal contracts rather than laws run society.
    *No one can be coerced to buy or sell anything; or even participate in society.
    *There can be no intrusions into private property or privacy.

    That is just the beginning, National can’t even bring down unemployment let alone understand or establish a ‘free market’. Then again neo-liberals never seek to understand the free market, just exploit the term for use in their media spins.

  7. Macro 7

    Cap and Trade aka ETS were never going to work – essentially because the wide boys in the market were and are always looking for easy ways to make money. If we are to place a price on Carbon Emissions it has to be by government placing a tax upon it.

  8. Ad 8

    So now that Labour is showing it can do more than Left Melancholy, anyone here want to engage with Labour’s policy platform formation? Plenty of opportunity to do more than mewing Monbiot. Do it in real life and change the country.

    • Colonial Viper 8.1

      Notice how NZ Power, like Kiwi build, went through the normal consultative party membership policy development process, instead of being put together by just a small caucus group utilising a few specialist advisors.

  9. Ad 9

    Agreed. The three main policy platforms Labour has – asset sales, housing, and electricity – were barely mentioned in the new draft platform. But this is the time to engage hard should one feel inclined. It’s the first time that a policy platform will be binding upon caucus. The Auckland regional conference is coming up and there’s plenty of opportunity to engage hard.

    Monbiot is right to point out in the intro that the state is getting weaker. But the left has ganerated no alternative to state intervention in well over a century, so there is only the choice to engage or shout into the wind.

    • ghostrider888 9.1

      you gEnerate some interesting material though

    • Colonial Viper 9.2

      so there is only the choice to engage or shout into the wind.

      Quite wrong. For starters your premise is that the only choice is to engage with Labour.

      But the left has ganerated no alternative to state intervention in well over a century

      I reject outright the premise of your statement. If a sovereign does not act, intervene and accomplish a material difference every day then it is not required.

  10. Bill 11

    -sigh- Monbiots misplaced faith in ‘representative’ systems of governance versus misplaced faith in ‘the market’; it’s all so much bath water.

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