Trumpism understands this: climate change is the Waterloo of capitalism, which is why his administration’s attitude toward those who campaign to contain it, like climate activist Thunberg, is shocking and unpleasant.
A former finance minister of Greece, he is the leader of the MeRA25 party and a professor of economics at the University of Athens.
Athens. Steven Mnuchin, Secretary of the Treasury to US President Donald Trump, outraged liberal analysts at this year’s World Economic Forum meeting in Davos with a sarcastic comment directed at teenage climate activist Greta Thunberg. In response to Thunberg’s call for an immediate exit from fossil fuel investments, Mnuchin said the young woman should go to college to “study economics” and then “come back and explain it to us. Two days earlier, Trump had referred to climate scientists as “the heirs of the foolish soothsayers of the past.
The attitude of the Trump administration towards climate change, and those who campaign for drastic measures to contain it, is shocking, unpleasant and wrong. But behind the vulgarity and toxicity of Trump, Mnuchin and others is cold logic and brutal honesty: Their policy is the only authentic defence of contemporary capitalism. And, judging by Mnuchin’s condescending advice to Thunberg, they understand that traditional economics, unlike climate science, is their friend.
I, too, could not help myself after Mnuchin’s comment in Davos. “Mnuchin, sadly, is right,” I wrote in a tweet. “If Greta were to study traditional economics, she would spend several semesters studying market models in which neither a climate disaster nor an economic crisis is possible. It’s time to transform economic policy and economics!”
A lot of my fellow economists got annoyed with my tweet. One said, “I don’t know what curriculum you’re looking at, but all the basic economics courses I know include market failures, with climate change being the prime example. It’s true. But I’m afraid that’s irrelevant. While many models and concepts in economics courses would not hesitate to support Thunberg’s determination and equip her with convincing arguments against guys like Mnuchin and Trump, she would also be frustrated and ultimately undermined by the economy.
One reason is the structuring and default values of the discipline. We all know the power of predetermination or the baseline. In societies where organ donation is the default parameter – automatic without a written exclusion – the supply of organs for transplantation is substantially higher than in countries where people must carry donor cards. Structuring is crucial in all environments where the human mind and heart must be energized against some evil.
The economy is no exception. The economics textbooks that Thunberg would have to read begin with market models where it is mathematically proven that the drive for unlimited private profit serves the public interest. Only after she has learned these theorems, and practiced the mental gymnastics necessary to extract her mathematical proofs, will she be exposed to “exceptions” – for example, the “externalities” of production processes, such as pollution that induces climate change, that impose costs that are not fully absorbed by the polluter. The very framing of market failures as an “exception”, perhaps caused by some “externality”, is a huge propaganda campaign for the Trump and Mnuchin of this world.
Even worse, unlike organ donation, for which every society can decide to reverse the framework by making a donation the default parameter, university professors of economics cannot merely change the framework by teaching externalities and market failures as the general case and presenting perfectly competitive markets as exceptions. Iconic theorems of economics cannot be tested in the presence of externalities. Unfortunately, it is these tests that are instilled in students and the rest of society, especially those in power, and give economics teachers their discursive hegemony within the social sciences, not to mention the best part of public and private finance.
From this perspective, Mnuchin consciously (or instinctively) offered more than just a sarcastic noun. If Thunberg were to follow his advice, she would be weakened. A degree in economics, rather than science, politics or history, would crush her spirit or alienate her from ventures that could make her even more dangerous than she already is to the economic interests that Trump represents.
Some lament the Trump administration’s animosity towards young people and scientists who talk sense about a huge threat that we should be addressed through global cooperation. But Trump and his clique seem to understand something that his liberal critics don’t: you can’t admit the dangers of climate change, commit to doing what it takes to reverse it and continue to think of capitalism as a natural system that can be modified to provide green, shared prosperity.
Trump understands: climate change is the Waterloo of capitalism. There is simply no possible path to climate re-stabilization that is consistent with maintaining the main pillars of capitalism. The system in which we live, unlike the system described in university economics textbooks, sets in motion a pathological dynamic recycling mechanism: oligopolies extract an exhaustible value from humans and nature at breakneck speed, which is then solved by debt-fuelled financialization that in turn feeds the extractive oligopolies.
Trumpism, despite being rude and unpleasant, is an honest manifestation of the historical moment when late capitalism pushed humanity beyond a point of no return. Trump urges us to move forward, while Mnuchin suggests that Thunberg anaesthetize his soul with the opium of traditional economics. The only alternative to his policy of accelerated climate change is the general disintegration of today’s technostructure. Do we have the stomach for that?