The climate crisis threatens to increase global temperatures beyond 1.5 degrees globally…
Increasingly we move from water abundance to water stress and from water stress to water scarcity, as our open “wastelands” and forests transform to congested and continuous settlements, as increasingly smaller percentage of people hold increasingly larger portions of the worlds wealth, my economist friends continue to assert that the markets are equipped to address all challenges.
“Doubling our economy, is the way to go”, they say.
“The faster we double the GDP, the faster the markets work. The market will fund and address every societal challenge”.
“Reduced supply raises prices and checks the demand”, my economist friends explain. “Excess supply reduces the prices and boosts demand. The price of commodities, regulated by the market, will solve all our problems”, they assert.
They believe, then, everything is a commodity that is either scarce or abundant. “Everything has a price. Surely, its price tells us about its abundance. The price, then, should correct the ills of consumption”, they state with smugness.
“The markets will deliver justice. They will protect our dignity. They will ensure equality. They give us our liberty. They will protect us from a 1.5 degree rise in temperature. From growing inequity. From water stress and water scarcity. From our disappearing open spaces and forest lands”.
The cost we pay is, then, the consequence of the markets. It is now no longer our responsibility to address the problems of the world.
The markets, we are told, will address them.
What they do not tell us is that a market is a relationship between the buyer and seller. It is not a relationship between a seller and the community. Communities are not buyers. If governments serve as proxies for communities, they do not buy the needs of the communities. Sellers is not in a market to serve the needs of community.
A seller is, at best, in the market to serve the needs of the buyer. At worst, to profit excessively from the exchange of the good or service.
More often to ensure increasing revenues. Sometimes to increase his or her net worth or create excess assets over liabilities. Increasingly the seller may even be in the market not to sell, but to increase the market value of their company!
When profits, revenues, net worth, or valuation drive the seller, there is absolutely nothing to ensure that it comes with no cost to the community. Even less so that the needs of the buyer overlap with the needs of the community.
If markets protected the needs of the community, we would not have been growing our energy demands at 8 percent or more year on year. We would not have been destroying our carbon absorbing trees at a rate of about 40 football fields of trees every minute. We would not have urbanisation growing at over 5% per anum. We would not have the share of national income going to the richest 1 percent continuing to increase.
We don’t have markets where communities buy reduction in energy demand, protection of trees, protection of open land, or distribution of income or wealth.
The needs of the community are not satisfied by markets because communities are not buyers, individuals or groups are. Our governments, who would be proxy to community buyers, don’t buy for the needs of the community.
Neither our governments nor markets suffer the same consequence as the community for their failure or success at reducing energy demand, protecting trees, protecting open land or distributing wealth and income. Very simply, they have no skin-in-the-game for the needs of the community. In fact, quite often, the consequences of the market to the community is completely the opposite of the consequence to its individual participants. Markets serve our individual needs of the short term. They do not understand the needs of the community or the Short Now, the lifetime of children born today.
Markets do not protect or even report our environmental assets: the oxygen store in our atmosphere and the tree cover capable of yielding oxygen every year, the fresh water reserve and the rivers and streams capable of yielding water every year, the carbon sinks capable of absorbing atmospheric carbon every year.
Markets do not protect or report our open spaces or our tree cover. Markets do not protect our report wealth or income equalities. They have no reason to.
When individuals feel they are better off, few are willing to sacrifice their individual need for the community. Markets, therefore, create a wicked structure. One where individuals benefit in the short term and the community suffers in the Short Now.
The faster our markets work, the faster our economy grows, the faster it doubles, the faster our problems become crisis. The faster our acute problems become chronic.
Do you still expect the markets to solve all our problems?
He can be reached @AnupamSaraph