It's Greed and Fear, Stupid!

I really can't avoid this damn subject at the moment. It's my job, it's my children's future, it's my wife's present - it's everything I care about. And what you should really know is that I hate numbers. I studied Film and Literature at university. I always wanted to be a writer.

Now all I can write about is the baldest of economics. I only studied economics to "A" level. Even then, most of the time we spent talking about the world. Instead of studying mathematical models.

I hated maths.

People say it's not greed or fear but systemic. The problem is systemic and so that explains it all away. I don't agree. I think the problem is both systemic and a question of greed and fear. In fact, I think I'd go further - it's systemised greed and fear. I was thinking about the subject at work today, whilst I should've been getting my head down. Let me explain why. I work for one of the banks which has just been bailed out. One of those big banks you thought was always going to be there. It's not easy to work for a bank you thought was always going to be there which is being bailed out. Working for a bank is boring stuff - unless, of course, you work for an investment bank. But - on the plus side - you always said to yourself: "There's a job for life."

Well. Not any more.

I read this in New Scientist today on the subject of the credit crunch and the environment. It's exactly how I feel. The externalities that have crashed the banking system are now the least of our worries. As Fred Pearce argues:

We greens have been saying for decades that the way the global economy is operated ignores the cost to the overall system (ie the planetary life-support system and the survival of humanity) of growing pollution and declining stocks of key natural resources. "Natural capital", as some call it.

And most economists have been patting us on the head and telling us that greenies don't understand how the hidden hand of capitalism will figure all this out and head off any danger.

Well, their bluff now stands exposed in the starkest possible terms. Their notion of a self-sustaining, self-regulating economic system is rotten to the core. Building a new system will require regulation based on attention to the externalities that the market does not correct for.

And he concludes thus:

The big secret is out. Unfettered markets bring disaster. We need government too. Governments may be preoccupied right now with rescuing banks and reviving financial liquidity. But environmentalists need to use the new language of externalities and systemic risk to shout loud and long that politicians must act soon to protect natural capital. Or it may not just be the finance system that hits the rocks next time, it may be our species' entire life-support system.

So we need a green socialism too. But not the sort that only hijacks green issues because the Berlin Wall has now fallen - thus leaving its exponents with nowhere else to go.

Not that sort.

Not the 20th century dinosaur sort.

Rather, a 21st century fix.
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Further reading: more on natural capital